<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 1-3423-01
ENRON CAPITAL TRUST II
(Exact name of registrant as specified in its charter)
Delaware 76-6122939
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Enron Bldg.
1400 Smith Street
Houston, Texas 77002
(Address of principal executive offices) (Zip code)
(713) 853-6161
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes [ ] No
As of March 31, 1997, the Registrant had an aggregate of 6,000,000
8 1/8% Trust Preferred Securities and 186,000 8 1/8% Trust Common Securities
outstanding.
Page 1 of 5 Pages
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ENRON CAPITAL TRUST II
FORM 10-Q
INDEX
Page No.
--------
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements (see Note below) 3
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (see Note below) 3
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings 4
ITEM 2. Changes in Securities 4
ITEM 3. Defaults upon Senior Securities 4
ITEM 4. Submission of Matters to a Vote of Security Holders 4
ITEM 6. Exhibits and Reports on Form 8-K 4
SIGNATURES 5
Page 2 of 5 Pages
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Part I Financial Information
Item 1. Financial Statements (see Note below)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (see Note below)
Enron Capital Trust II (the "Trust") is a statutory business trust
created under the Delaware Business Trust Act, as amended (the "Trust Act"),
pursuant to an amended and restated declaration of trust (the "Declaration") and
the filing of a certificate of trust with the Secretary of State of the State of
Delaware. On January 16, 1997, the Trust completed its initial public offering
of the Trust Preferred Securities described below, as a result of which the
Trust's sole assets are 6,186,000 8 1/8% Partnership Preferred Securities
($25 liquidation amount per security) representing an 85% limited partnership
interest in Enron Preferred Funding II, L.P., a Delaware limited partnership
(the "Partnership"). Ownership of the assets of the Trust is evidenced by an
aggregate of 6,000,000 8 1/8% Trust Preferred Securities (the "Trust Preferred
Securities"), which are listed and traded on the New York Stock Exchange under
the symbol "ENE PrR", and 186,000 Trust Common Securities (the "Trust Common
Securities," and, together with the Trust Preferred Securities, the "Trust
Securities"), all of which are owned by Enron Corp., a Delaware corporation
("Enron"). The Trust makes distributions on the Trust Securities to the extent
it receives distributions from the Partnership on the Partnership Preferred
Securities. Payments on the Partnership Preferred Securities represent the
sole source of revenue for the Trust. Distributions on the Trust Securities
are guaranteed by Enron, but only to the extent that the Trust has available
funds to pay such distributions. The Trust was created for the sole purpose
of issuing the Trust Securities, investing the proceeds of such issuance in
the Partnership Preferred Securities and engaging in only those other
activities necessary or incidental thereto. The Trust Securities are subject
to redemption at any time on or after March 31, 2002 and earlier in the event
of certain tax law changes or other events.
The general partner of the Partnership is Enron, which owns a 15%
general partnership interest in the Partnership. Since completion of the
offering of the Trust Preferred Securities on January 16, 1997, the assets of
the Partnership have been invested primarily in a $136,450,000 principal amount
7.75% Subordinated Debenture due 2016, Series II of Enron (the "Enron
Debenture") and $21,836,000 principal amount 7.75% Debentures due 2016, Series
II, of each of Enron Capital & Trade Resources Corp. and Enron Pipeline Company
(the "Subsidiary Debentures" and, together with the Enron Debenture, the
"Debentures"), each of which is a wholly owned subsidiary of Enron. The
obligations under the Subsidiary Debentures are guaranteed by Enron. The
respective issuers of the Debentures have certain rights to elect to defer any
payments of principal and interest on the Debentures for up to five years at a
time. In addition to the Debentures, the Partnership owns an aggregate of
approximately $1,851,000 in short-term, investment grade debt securities (the
"Eligible Debt Securities"). Under certain circumstances, upon repayment of one
or more of the Debentures, the assets of the Partnership may be reinvested in
one or more debt securities of Enron or its subsidiaries. Payments of interest
and principal on the Enron Debenture and the Subsidiary Debentures (or the
guarantees thereof) and the Eligible Debt Securities are the sole source of
revenue for the Partnership. The Partnership pays distributions to the Trust as
holder of the Partnership Preferred Securities when as and if Enron, as the
general partner, determines to do so, although Enron has no obligation to do so.
NOTE: Because the Trust and the Partnership are special purpose financing
entities with no separate business operations, the only assets of the Trust are
the Partnership Preferred Securities, and substantially all of the assets of the
Partnership consist of a debt security of Enron and debt securities of
subsidiaries of Enron that are guaranteed by Enron, the Trust does not believe
that financial statements for the Trust or the Partnership are meaningful.
Accordingly, financial statements and related financial information have not
been included in this Form 10-Q. For further information concerning Enron and
its subsidiaries, including financial statements and other financial
information, see the Enron Annual Report on Form 10-K for the year ended
December 31, 1996, and Enron Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997, as filed with the Securities and Exchange
Commission, copies of which may be obtained from the Corporate Secretary of
Enron at the address listed on the cover of this Form 10-Q.
Page 3 of 5 Pages
<PAGE> 4
Part II Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
4.1 Certificate of Trust (incorporated by reference to Exhibit
4(a) of the Registration Statement on Form S-1 of the
Trust (No. 333-18669)).
4.2 Amended and Restated Declaration of Trust dated as of January
13, 1997 (incorporated by reference to Exhibit 4.2 to Enron
Capital Trust II Form 10-K for the year ended December 31,
1996 ("Form 10-K")).
4.3 Amended and Restated Agreement of Limited Partnership of the
Enron Preferred Funding II, L.P. dated as of January 16, 1997
(incorporated by reference to Exhibit 4.3 to Form 10-K).
4.4 Trust Preferred Guarantee Agreement dated as of January 16,
1997 (incorporated by reference to Exhibit 4.4 to Form 10-K).
4.5 Partnership Preferred Guarantee Agreement dated as of
January 16, 1997 (incorporated by reference to Exhibit 4.5
to Form 10-K).
4.6 Indenture dated as of January 16, 1997 relating to the Enron's
7.75% Subordinated Debentures due 2016, Series II
(incorporated by reference to Exhibit 4.6 to Form 10-K).
4.7 Indenture dated as of January 16, 1997 relating to Enron
Pipeline Company's 7.75% Debentures due 2016, Series II
(incorporated by reference to Exhibit 4.7 to Form 10-K).
4.8 Indenture dated as of January 16, 1997 relating to the Enron
Capital & Trade Resources Corp. 7.75% Debentures due 2016,
Series II (incorporated by reference to Exhibit 4.8 to Form
10-K).
4.9 Guarantee Agreement of Enron dated as of January 16, 1997
relating to Enron Pipeline Company's 7.75% Debentures due
2016, Series II (incorporated by reference to Exhibit 4.9
to Form 10-K).
4.10 Guarantee Agreement of Enron dated as of January 16, 1997
relating to Enron Capital & Trade Resources Corp. 7.75%
Debentures due 2016, Series II (incorporated by reference to
Exhibit 4.10 to Form 10-K).
4.11 Form of certificate representing Trust Preferred Securities
(included in Exhibit 4.2).
27 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
Page 4 of 5 Pages
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENRON CAPITAL TRUST II
(Registrant)
Date: May 14, 1997 By: /s/ Keith A. Crane
-------------------
Name: Keith A. Crane
Title: Regular Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated as of May 14, 1997.
Name Title
- ---- -----
/s/ Keith A. Crane Regular Trustee
- -------------------------
Keith A. Crane
/s/ Susan K. Hodge Regular Trustee
- -------------------------
Susan K. Hodge
/s/ Phillip M. Sisneros Regular Trustee
- -------------------------
Phillip M. Sisneros
Page 5 of 5 Pages
<PAGE> 6
EXHIBIT INDEX
27 -- Financial Data Schedule
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
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<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
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<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
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<LOSS-PROVISION> 0
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<INCOME-PRETAX> 0
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</TABLE>
