UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
Commission File Number 1-3423
ENRON CORP.
(Exact name of registrant as specified in its charter)
Delaware 47-0255140
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Enron Building
1400 Smith Street
Houston, Texas 77002
(Address of principal executive (Zip Code)
Offices)
(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.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at July 31, 1994
Common Stock, $.10 Par Value 251,624,615 shares
1 of 25
<PAGE>
ENRON CORP. AND SUBSIDIARIES
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statement of Income - Three
Months Ended June 30, 1994 and 1993 and
Six Months Ended June 30, 1994 and 1993 3
Consolidated Balance Sheet - June 30, 1994
and December 31, 1993 4
Consolidated Statement of Cash Flows - Six
Months Ended June 30, 1994 and 1993 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 24
2
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues $1,897,762 $1,907,115 $4,347,488 $3,764,570
Costs and Expenses
Cost of gas sold 904,278 925,738 2,246,940 1,771,621
Cost of other products sold 467,264 450,988 906,996 861,566
Operating expenses 249,884 250,563 472,269 447,892
Amortization of deferred contract
reformation costs 20,528 19,269 44,896 44,078
Oil and gas exploration expenses 22,233 14,829 38,283 27,703
Depreciation, depletion and amortization 109,825 108,011 224,873 218,228
Taxes, other than income taxes 22,834 26,943 54,170 58,179
1,796,846 1,796,341 3,988,427 3,429,267
Operating Income 100,916 110,774 359,061 335,303
Other Income and Deductions
Equity in earnings of unconsolidated
subsidiaries 23,473 27,461 37,678 46,762
Interest income 8,064 4,723 17,492 12,465
Other, net 36,250 8,716 90,538 25,393
Income before Interest, Minority Interest
and Income Taxes 168,703 151,674 504,769 419,923
Interest and Related Charges, net 67,401 76,621 137,090 148,308
Dividends on Preferred Stock of Subsidiary 4,275 - 8,550 -
Minority Interest 6,842 6,705 12,894 12,746
Income Taxes 14,584 7,103 97,571 51,396
Net Income 75,601 61,245 248,664 207,473
Preferred Stock Dividends 3,721 4,295 7,443 8,815
Earnings on Common Stock $ 71,880 $ 56,950 $ 241,221 $ 198,658
Earnings Per Share of Common Stock
Primary $ 0.30 $ 0.24 $ 0.99 $ 0.84
Fully diluted $ 0.28 $ 0.23 $ 0.93 $ 0.78
Average Number of Common Shares Used in
Primary Computation 243,546 237,832 242,986 237,702
Average Number of Common Shares Used in
Fully Diluted Computation 267,092 264,962 266,769 265,456
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
(Unaudited)
<CAPTION>
June 30, December 31,
1994 1993
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 120,024 $140,240
Trade receivables 482,004 783,603
Other receivables 69,116 205,956
Transportation and exchange gas receivable 114,786 102,887
Inventories 119,031 197,737
Deferred contract reformation costs 75,932 103,520
Assets from price risk management activities 390,232 279,715
Other 199,078 204,952
1,570,203 2,018,610
Investments and Other Assets
Investments in and advances to unconsolidated
subsidiaries 1,011,992 697,084
Deferred contract reformation costs 142,426 168,479
Assets from price risk management activities 1,045,616 887,342
Other 1,051,870 1,010,028
3,251,904 2,762,933
Property, Plant and Equipment, at cost 10,832,148 10,886,858
Less accumulated depreciation, depletion
and amortization 4,232,259 4,164,086
6,599,889 6,722,772
Total Assets $11,421,996 $11,504,315
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
(Unaudited)
<CAPTION>
June 30, December 31,
1994 1993
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 694,769 $ 1,477,290
Transportation and exchange gas payable 94,830 98,569
Accrued taxes 86,357 88,837
Accrued interest 50,964 53,292
Liabilities from price risk management
activities 623,504 609,403
Other 326,694 348,198
1,877,118 2,675,589
Long-Term Debt 3,206,185 2,661,240
Deferred Credits and Other Liabilities
Deferred income taxes 1,819,996 1,860,237
Deferred revenue 278,391 327,802
Liabilities from price risk management
activities 355,055 330,209
Other 675,383 615,839
3,128,825 3,134,087
Minority Interests 196,465 196,275
Preferred Stock of Subsidiary Company 213,750 213,750
Shareholders' Equity
Preferred stock, cumulative, $100 par value - -
Preference stock, cumulative, $1 par value - -
Second preferred stock, cumulative, $1 par
value 141,719 149,668
Common stock, $0.10 par value 25,149 24,910
Additional paid in capital 1,756,035 1,707,938
Retained earnings 1,249,752 1,104,986
Cumulative foreign currency translation
adjustment (147,801) (138,704)
Other, including Flexible Equity Trust (225,201) (225,424)
2,799,653 2,623,374
Total Liabilities and Shareholders' Equity $11,421,996 $11,504,315
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
5
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1994 1993
<S> <C> <C>
Cash Flows From Operating Activities
Reconciliation of net income to net cash
provided by (used in) operating activities
Net income $ 248,664 $ 207,473
Depreciation, depletion and amortization 224,873 218,228
Oil and gas exploration expenses 38,283 27,703
Amortization of deferred contract
reformation costs 44,896 44,078
Deferred income taxes 50,137 (2,940)
Gain on sale of assets (43,563) (4,181)
Regulatory, litigation and other contingency
adjustments (26,275) 8,444
Changes in components of working capital (433,488) (364,098)
Deferred contract reformation costs (34,502) (96,649)
Deferred revenues (4,249) 6,273
Net assets from price risk management
activities (229,844) (5,568)
Other, net 9,561 (173,791)
Net Cash Used in Operating Activities (155,507) (135,028)
Cash Flows From Investing Activities
Proceeds from sale of assets and investments 219,374 149,196
Additions to property, plant and equipment (269,710) (253,834)
Amortization of production payment (21,494) (46,643)
Equity investments (216,018) (280,048)
Other investments (34,888) (11,920)
Net Cash Used in Investing Activities (322,736) (443,249)
Cash Flows From Financing Activities
Issuance of long-term debt 27,278 197,673
Net increase in short-term borrowings 651,620 722,441
Decrease in long-term debt (134,202) (208,236)
Acquisition of treasury stock (724) (77,949)
Issuance of treasury stock - 14,046
Issuance of common stock 27,776 5,576
Dividends paid (113,721) (93,353)
Decrease in other long-term obligations - (22,758)
Decrease in receivable from ESOP - 10,000
Net Cash Provided by Financing Activities 458,027 547,440
Decrease in Cash and Cash Equivalents (20,216) (30,837)
Cash and Cash Equivalents, Beginning of Period 140,240 141,689
Cash and Cash Equivalents, End of Period $ 120,024 $ 110,852
<FN>
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
6
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein
have been prepared by Enron Corp. (Enron) without audit
pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, these statements reflect
all adjustments (consisting only of normal recurring
entries) which are, in the opinion of management, necessary
for a fair statement of the financial results for the
interim periods. Certain information and notes normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
Enron believes that the disclosures are adequate to make the
information presented not misleading. These consolidated
financial statements should be read in conjunction with the
financial statements and the notes thereto incorporated into
Enron's Annual Report on Form 10-K for the year ended
December 31, 1993 (Form 10-K).
Certain reclassifications have been made in the 1993
amounts to conform with the 1994 presentation.
"Enron" is used from time to time herein as a collective
reference to Enron Corp. and its subsidiaries and
affiliates, which are from time to time referenced herein
for reporting purposes as business segments. In material
respects, the businesses of Enron are conducted by the
subsidiaries and affiliates whose operations are managed by
their respective officers.
2. SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes for the first half of 1994 and
1993 was $29.5 million and $61.1 million, respectively.
Cash paid for interest expense for the same periods, net of
amounts capitalized, was $126.7 million and $134.1 million,
respectively.
Changes in components of working capital for the first
half of 1994 and 1993 are as follows (in thousands):
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Receivables $ 20,783 $(458,477)
Inventories (7,273) 23,656
Prepayments 3,516 (38,850)
Payables (340,300) 194,898
Accrued taxes 7,629 (7,515)
Accrued interest (2,328) (464)
Other (115,515) (77,346)
$(433,488) $(364,098)
</TABLE>
7
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Concluded)
ENRON CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. LITIGATION
As reported in the Form 10-K, TransAmerican Natural Gas
Corporation (TransAmerican) has filed a petition against
Enron Corp. and Enron Oil & Gas Company (EOG) alleging
breach of confidentiality agreements, misappropriation of
trade secrets and unfair competition with respect to four
tracts in Webb County, Texas, which EOG leased for their oil
and gas exploration and development potential.
TransAmerican seeks actual damages of $100 million and
exemplary damages of $300 million. EOG has filed claims
against TransAmerican and its sole shareholder alleging
common law fraud, negligent misrepresentation and breach of
state antitrust laws. On April 6, 1994, Enron Corp. was
granted summary judgment, wherein the court ordered that
TransAmerican take nothing on its claims against Enron Corp.
As to EOG, the trial date, which was most recently set for
September 12, 1994, has been continued and there is no
current setting. Although no assurances can be given, Enron
Corp. and EOG believe that TransAmerican's claims are
without merit. Enron Corp. believes that the ultimate
resolution of this matter will not have a materially adverse
effect on its financial position or results of operations.
As reported in the Form 10-K, a pipeline company in which
an Enron affiliate has a minority interest and for which an
Enron affiliate has served as operator, has filed a petition
against Enron and certain affiliates alleging an unspecified
amount of damages relating to the operation of such pipeline
company. Based upon information currently available, it is
not possible to predict the outcome of such litigation;
however, Enron believes that the result will not have a
materially adverse effect on Enron's financial position or
results of operations.
4. EOTT ENERGY PARTNERS, L.P.
During March 1994, EOTT Energy Corp. (EOTT), a wholly-
owned subsidiary of Enron, sold its crude oil trading and
transportation operations to EOTT Energy Partners, L.P. (the
EOTT Partnership) in exchange for common and subordinated
units in the EOTT Partnership. EOTT continues to own 42.4%
of the EOTT Partnership. Accordingly, the EOTT
Partnership's results of operations are reflected as equity
in earnings of unconsolidated subsidiaries.
5. SUBSEQUENT EVENT
During August 1994, Enron Capital Resources, L.P., a
Delaware limited partnership in which Enron Corp. is the
sole general partner, issued 3 million shares of 9%
Cumulative Preferred Securities, Series A at a price to the
public of $25.00 per share. Net proceeds of approximately
$72.6 million were loaned to Enron by Enron Capital
Resources, L.P. and used by Enron to reduce indebtedness and
for other corporate purposes.
8
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ENRON CORP. AND SUBSIDIARIES
RESULTS OF OPERATIONS
Second Quarter 1994
vs. Second Quarter 1993
The following review of Enron's results of operations
should be read in conjunction with the Consolidated
Financial Statements.
CONSOLIDATED NET INCOME
Enron's second quarter 1994 net income increased to
approximately $76 million as compared to approximately $61
million during the second quarter of 1993. Net income in
the second quarter of 1994 benefited from strong
performances in the gas services segment as well as lower
interest expense. These increases were partially offset by
lower income before interest, minority interests and income
taxes for the domestic gas processing and international
segments. Earnings per share rose to $0.30 in the second
quarter of 1994 from $0.24 in the same period in 1993.
INCOME BEFORE INTEREST, MINORITY INTERESTS AND INCOME TAXES
The following table presents income before interest,
minority interests and income taxes (IBIT) for each of
Enron's operating segments (in millions).
<TABLE>
<CAPTION>
Second Quarter Increase
1994 1993 (Decrease)
<S> <C> <C> <C>
Transportation and Operation $ 74 $ 73 $ 1
Gas Services 49 21 28
Gas Processing (2) 4 (6)
Exploration and Production 38 32 6
International Gas and Power Services 13 19 (6)
Corporate and Other (3) 3 (6)
Total $169 $152 $17
</TABLE>
TRANSPORTATION AND OPERATION
The transportation and operation segment includes Enron's
regulated natural gas pipelines, construction, management
and operation of pipelines, liquids plants and power
facilities and Enron's investment in crude oil marketing and
transportation operations and liquids pipeline operations.
The segment realized a $1 million increase in IBIT for the
second quarter of 1994 as compared to the same period in
1993. The increase was due primarily to increases in IBIT
realized by the regulated natural gas pipelines offset by
decreases in earnings from Northern Border Pipeline and EOTT
Energy Corp. (EOTT), resulting from changes in ownership
interest discussed below. Subsequent to the second
9
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
quarter of 1993, Enron contributed its investment in
Northern Border Pipeline (Northern Border) to Northern
Border Partners, L.P., a master limited partnership (the
Northern Border Partnership) and subsequently sold a portion
of its interest in the Northern Border Partnership.
Additionally, in the first quarter of 1994 EOTT, a wholly-
owned subsidiary of Enron, sold its crude oil trading and
transportation operations to EOTT Energy Partners, L.P. (the
EOTT Partnership). EOTT continues to own 42.4% of the EOTT
Partnership. The following discussion analyzes the
significant changes in the various components of IBIT for
the transportation and operation segment.
REVENUES
Revenues of the transportation and operation segment
decreased approximately $101 million (33%) during the second
quarter of 1994 as compared to the same period in 1993. The
decrease in revenues primarily reflects reduced sales
revenue at Northern Natural Gas Company (Northern Natural)
as that pipeline is now primarily a transporter of natural
gas. Northern Natural's sales volumes decreased from 343
million cubic feet per day (Mmcf/d) to 73 Mmcf/d and total
transport volumes increased from 3,747 Mmcf/d to 4,256
Mmcf/d when comparing the second quarter of 1993 to the same
period in 1994. Additionally, revenues decreased as a
result of decreased ownership interest in the EOTT
Partnership.
COST OF GAS AND OTHER PRODUCTS SOLD
The cost of gas and other products sold by the
transportation and operation segment decreased by $60
million (83%) during the second quarter of 1994 compared to
the same period in 1993 primarily as a result of decreased
gas purchases by Northern Natural as that pipeline is now
primarily a transporter of natural gas.
OPERATING EXPENSES
Operating expenses in the transportation and operation
segment declined 32% during the second quarter of 1994 as
compared to the same period in 1993. The decline primarily
reflects lower operating expenses of the regulated natural
gas pipelines due to system modernization and lower
transmission, compression and storage cost of gas purchased
for resale as a result of the previously discussed
transition to being primarily transporters of natural gas.
Additionally, operating expenses decreased as a result of
decreased ownership interest in the EOTT Partnership.
Depreciation expense for the transportation and operation
segment decreased $5 million (17%) during the second quarter
of 1994 as compared to the same period in 1993 primarily as
a result of a the sale of certain assets, full depreciation
of certain offshore pipeline assets and decreased ownership
interest in the EOTT Partnership.
10
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
remained unchanged during the second quarter of 1994 as
compared to the same period in 1993 reflecting reduced
earnings from Northern Border as a result of Enron's
decreased ownership interest in the Northern Border
Partnership offset by increased earnings from Citrus Corp.
as a result of increased allowance for funds used during
construction related to the Phase III expansion of Florida
Gas Transmission's pipeline system (Phase III) and the
formation of the EOTT Partnership. Other income, net
decreased $4 million for the second quarter of 1994 compared
to the same period in 1993. The decrease was primarily due
to the inclusion in 1993 of adjustments to certain
regulatory reserves partially offset by establishment of
reserves in connection with the implementation of the
Federal Energy Regulatory Commission's Order 636. Interest
income increased $4 million for the second quarter of 1994
compared to the same period in 1993 due to carrying charges
associated with recoverable deferred transition costs.
GAS SERVICES
Enron's Gas Services segment (EGS) had a $28 million
(133%) increase in IBIT for the second quarter of 1994 as
compared to the same period in 1993. This increase was due
primarily to increased earnings from the Power sector
reflecting significant contract originations from selling
natural gas to power plants, as well as increased earnings
in the Gas sector and Clean Fuels portion of the Liquids
sector. Offsetting these increases was a decline in
earnings associated with EGS' finance activities. The
following discussion analyzes the contributions from the
Gas, Power, Finance and Liquids business units.
Volume and price statistics (including intercompany
amounts) are as follows:
<TABLE>
<CAPTION>
Second Quarter
1994 1993
<S> <C> <C>
Physical/Notional Quantities (BBtu/d) (1)
Firm (2) 6,237 3,756
Interruptible (3) 433 923
Transport Volumes 624 602
Financial Settlements (Notional) 9,992 2,904
Total 17,286 8,185
Production Payments and Financings
Arranged (In Millions) $198.3 $164.1
Fixed Price Contract Originations
(TBtue) (4) 1,608 956
Liquids Marketing (MMgal) (5)
Domestic NGL Marketed 502 620
International NGL Marketed 127 132
MTBE Marketed 73 52
11
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
<FN>
(1) Billion British thermal units per day.
(2) Commitments to deliver a specified volume of gas at a
fixed or market responsive price.
(3) Deliveries of gas on a best-efforts basis.
(4) Trillion British thermal unit equivalent.
(5) Million gallons.
</TABLE>
The Gas operations include price risk management and
origination activities as well as physical natural gas
trading and transportation activities. The earnings from
these activities increased in the second quarter of 1994
primarily as a result of increased earnings from contract
originations and other risk management activities.
EGS' Power sector includes activities in North America
such as providing natural gas contract services to the power
industry, managing power-related assets and marketing and
supplying electricity. Earnings increased significantly for
1994 due to the completion of long-term contracts related to
supplying natural gas to gas-fired power plants.
Although total production payments and financings
arranged in the Finance business were greater in 1994 than
1993, earnings were lower in the second quarter of 1994
primarily due to differences in the types of transactions
originated in each of these periods and the timing of the
income recognition from those transactions.
The Liquids business of EGS includes the natural gas
liquids (NGL) marketing activities and the Clean Fuels
business, which consists of the methanol and methyl tertiary
butyl ether (MTBE) businesses. Earnings increased in 1994
due to success and development of new products and service
offerings as well as increased market prices in the Clean
Fuels business. This increase was partially offset by
decline in the domestic NGL marketing activities due to
lower product prices.
EGS' net unallocated expenses such as rent, systems
expenses and other support group costs increased in 1994 as
compared to 1993 due to continued expansion into new
markets, system upgrades, and overhead associated with
operational asset management.
GAS PROCESSING
The gas processing segment's IBIT decreased $6 million
primarily due to decreased margins and volumes.
Volume and price statistics (including intercompany
amounts) are as follows:
<TABLE>
<CAPTION>
Second Quarter
1994 1993
<S> <C> <C>
Total Production Volumes (MMgal) 295 321
Processing Margin ($/Gal) $0.072 $0.098
</TABLE>
12
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
The following discussion analyzes the significant changes
in the segment's results.
MARGINS
Margins of the gas processing segment decreased when
comparing the second quarter of 1994 to the same period last
year. The decline primarily reflects lower product prices
resulting from lower crude oil prices. Production levels
were also reduced due to unfavorable margins.
EXPLORATION AND PRODUCTION
The exploration and production segment's IBIT increased
to $38 million in the second quarter of 1994 from $32
million in the same period of 1993. The following
discussion analyzes the significant changes in the segment's
results.
Volume and price statistics (including intercompany
amounts) are as follows:
<TABLE>
<CAPTION>
Second Quarter
1994 1993
<S> <C> <C>
Wellhead Volumes
Natural Gas (MMcf/d) (1)(3) 760 695
Crude Oil and Condensate (MBbl/d) (1) 12.3 9.5
Natural Gas Liquids (Mbbl/d) (1) 0.6 0.5
Wellhead Average Prices
Natural Gas ($/Mcf) (2)(4) 1.65 2.02
Crude Oil and Condensate ($/Bbl) (2) 15.80 17.51
Natural Gas Liquids ($/Bbl) (2) 10.34 12.55
Other Natural Gas Marketing
Volumes (MMcf/d) (1)(3) 334 277
Average Gross Revenue ($/Mcf) (2) 2.37 2.61
Associated Costs ($/Mcf) (2)(5) 2.08 2.38
Margin ($/Mcf) (2) 0.29 0.23
<FN>
(1) Million cubic feet per day or thousand barrels per day,
as applicable.
(2) Dollars per thousand cubic feet or per barrel, as
applicable.
(3) Includes 48 MMcf per day and 103 MMcf per day for the
three-month periods ended June 30, 1994 and 1993,
respectively, delivered under the terms of volumetric
production payment and exchange agreements effective
October 1, 1992, as amended.
(4) Includes an average equivalent wellhead value of
$1.24/Mcf and $1.58/Mcf for the three-month periods ended
June 30, 1994 and 1993, respectively, for the volumes
described in note (3), net of transportation costs.
(5) Including transportation and exchange differentials.
</TABLE>
REVENUES
The exploration and production segment's gross revenues
increased slightly during the second quarter of 1994 as
compared to the same period in 1993. The increased revenues
are attributable to a 9% increase in wellhead natural gas
volumes, despite the curtailment of United States production
by as much as 15% to 20%, offset by an 18% decrease in
average wellhead natural gas prices. Crude oil and
condensate volumes increased 29%, reflecting production from
Trinidad, while average prices for crude oil and condensate
decreased 10%.
13
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
COSTS AND EXPENSES
The cost of gas sold in connection with other natural gas
marketing activities remained unchanged from the second
quarter of 1993 compared to the same period in 1994 due to
9% lower average associated costs per Mcf combined with a
21% increase in other natural gas marketing volumes.
Operating expenses for the exploration and production
segment increased $10 million (24%) during the second
quarter of 1994 when compared to the same period in 1993
primarily reflecting increased international operations and
an unsuccessful well drilled in the Gulf of Mexico.
Depreciation, depletion and amortization (DD&A) expense
increased $4 million reflecting an increase in production
volumes partially offset by an average DD&A rate decrease
from $0.85 per thousand cubic feet equivalent (Mcfe) in the
second quarter of 1993 to $0.82 per Mcfe in the second
quarter of 1994. The DD&A rate decrease is primarily due to
production from Trinidad operations at an average DD&A rate
significantly less than the North American operations
average DD&A rate.
Taxes other than income decreased approximately $6
million primarily due to a $4 million reduction in state
franchise taxes and reductions in state severance taxes due
to lower taxable United States wellhead volumes and lower
average prices.
Other income, net increased $11 million due primarily to
gains on sales of oil and gas properties.
INTERNATIONAL GAS AND POWER SERVICES
The international segment includes international power,
gas liquids processing and pipeline operations. The
segment's IBIT decreased $6 million. The following
discussion analyzes the significant changes in the segment's
results.
REVENUES
Revenues for the international segment decreased
primarily due to the transfer of the international gas
liquids marketing operations to the Gas Services segment in
the second quarter of 1994, partially offset by revenues
from gas liquids processing at the Teesside liquids plant
which became operational during the third quarter of 1993.
COSTS AND EXPENSES
The cost of gas and other products sold by the
international segment decreased as a result of the transfer
discussed above. Operating expense increased primarily as a
result of increased international activities.
14
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
declined by $4 million during the second quarter of 1994
compared to the same period in 1993 reflecting reduced
earnings from Enron Americas, Inc.'s investment in Madosa, a
Venezuelan manufacturing operation. Other income, net
increased $13 million primarily due to foreign currency
exchange gains realized by Enron Americas, Inc.
INTEREST AND RELATED CHARGES, NET
Interest and related charges, shown net of capitalized
interest, decreased from approximately $77 million in the
second quarter of 1993 to $67 million in the second quarter
of 1994. The decrease in interest expense is primarily due
to lower interest rates.
DIVIDENDS ON PREFERRED STOCK OF SUBSIDIARY COMPANY
Dividends of $4.3 million on preferred stock of
subsidiary company are related to the issuance of 8.55
million shares of Enron Capital L.L.C. 8% Cumulative
Guaranteed Monthly Income Preferred Shares in November 1993.
INCOME TAXES
Income taxes increased during the second quarter of 1994
as compared to the second quarter of 1993 primarily as a
result of increased pretax income, an increase in the
corporate Federal tax rate from 34% to 35% and a decrease of
approximately $9 million in tight gas sand Federal tax
credits.
15
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
RESULTS OF OPERATIONS
Six Months Ended June 30, 1994
vs. Six Months Ended June 30, 1993
The following review of Enron's results of operations
should be read in conjunction with the Consolidated
Financial Statements.
CONSOLIDATED NET INCOME
Enron's net income for the first six months of 1994
increased to approximately $249 million as compared to
approximately $207 million during the same period in 1993.
The $42 million increase in consolidated net income
primarily reflects improved income before interest, minority
interests and income taxes for all of Enron's operating
segments except domestic gas processing as well as lower
interest and related charges. This increase was partially
offset by dividends on preferred stock of subsidiary and
increased income tax expense. Earnings per share rose to
$0.99 in the first six months of 1994 from $0.84 in the same
period in 1993.
INCOME BEFORE INTEREST, MINORITY INTERESTS AND INCOME TAXES
The following table presents income before interest,
minority interests and income taxes (IBIT) for each of
Enron's operating segments (in millions).
<TABLE>
<CAPTION>
Six Months Increase
1994 1993 (Decrease)
<S> <C> <C> <C>
Transportation and Operation $226 $204 $ 22
Gas Services 111 71 40
Gas Processing (15) 20 (35)
Exploration and Production 80 64 16
International Gas and Power Services 63 52 11
Corporate and Other 40 9 31
Total $505 $420 $ 85
</TABLE>
TRANSPORTATION AND OPERATION
The transportation and operation segment realized a $22
million increase in IBIT for the first half of 1994 as
compared to the same period in 1993. The following
discussion analyzes the significant changes in the various
components of IBIT for the transportation and operation
segment.
16
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
REVENUES
Revenues of the transportation and operation segment
decreased approximately $211 million (29%) during the first
half of 1994 as compared to the same period in 1993. The
decrease in revenues primarily reflects reduced sales
revenue at Northern Natural as that pipeline is now
primarily a transporter of natural gas. Northern Natural's
sales volumes decreased from 448 Mmcf/d to 106 Mmcf/d and
total transport volumes increased from 3,979 Mmcf/d to 4,559
Mmcf/d when comparing the first half of 1993 to the same
period in 1994. Additionally, the decreased ownership
interest in the EOTT Partnership in March 1994 contributed
to the decline in revenue.
COST OF GAS AND OTHER PRODUCTS SOLD
The cost of gas and other products sold by the
transportation and operation segment decreased by $154
million (78%) during the first half of 1994 compared to the
same period in 1993 primarily as a result of decreased gas
purchases by Northern Natural as that pipeline is now
primarily a transporter of natural gas and the decreased
ownership interest in the EOTT Partnership.
OPERATING EXPENSES
Operating expenses in the transportation and operation
segment declined 23% during the first quarter of 1994 as
compared to the same period in 1993. The decline primarily
reflects lower operating expenses of the regulated natural
gas pipelines due to system modernization and lower
transmission, compression and storage cost of gas purchased
for resale as a result of the previously discussed
transition to become primarily transporters of natural gas.
Additionally, operating expenses decreased as a result of
the decreased ownership interest in the EOTT Partnership.
Depreciation expense for the transportation and operation
segment decreased $9 million (17%) during the first half of
1994 as compared to the same period in 1993 primarily as a
result of a the sale of certain assets, full depreciation of
certain offshore pipeline assets and a decreased ownership
interest in the EOTT Partnership.
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
declined by $6 million (26%) during the first half of 1994
as compared to the same period in 1993 reflecting reduced
earnings resulting from the decreased ownership interest in
the Northern Border Partnership partially offset by
increased earnings from Citrus Corp. as a result of
increased allowances for funds used during construction
related to the Phase III expansion. Other income, net
increased $17 million primarily due to the continued
resolution of regulatory and contractual matters on Enron's
interstate natural gas pipelines. Interest income increased
due to carrying charges associated with recoverable deferred
transition costs.
17
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
GAS SERVICES
Enron's Gas Services segment (EGS) had a $40 million
(56%) increase in income before interest, minority interest
and income taxes for the six months ended June 30 as
compared to the same period in 1993. This increase was due
primarily to significant contract originations from selling
natural gas to power plants, as well as increased earnings
in the Gas sector and Clean Fuels portion of the Liquids
sector. Offsetting these increases was a decline in
earnings associated with EGS' finance activities. The
following discussion analyzes the contributions from the
Gas, Power, Finance and Liquids business units.
Volume and price statistics (including intercompany
amounts) are as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1994 1993
<S> <C> <C>
Physical/Notional Quantities (BBtu/d) (1)
Firm (2) 6,603 3,756
Interruptible (3) 574 784
Transport Volumes 599 522
Financial Settlements (Notional) 12,148 3,031
Total 19,924 8,093
Production Payments and Financings
Arranged (In Millions) $ 210.7 $187.9
Fixed Price Contract Originations
(TBtue) (4) 3,008 1,789
Liquids Marketing (MMgal) (5)
Domestic NGL Marketed 1,165 1,281
International NGL Marketed 218 334
MTBE Marketed 138 111
<FN>
(1) Billion British thermal units per day.
(2) Commitments to deliver a specified volume of gas at a
fixed or market responsive price.
(3) Deliveries of gas on a best-efforts basis.
(4) Trillion British thermal unit equivalent.
(5) Million gallons.
</TABLE>
Earnings from gas and power related activities increased
for the first six months of 1994, primarily as a result of
origination earnings related to the execution of long-term
contracts and other risk management activities.
18
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
Although total production payments and financings
arranged in the Finance business were greater in 1994 than
1993, earnings were lower in the first six months of 1994 as
compared to 1993 primarily due to differences in the types
of transactions originated in each of these periods and the
timing of the income recognition from those transactions.
Earnings for the Liquids business of EGS increased in
1994 as compared to 1993 due to contract originations
associated with new product offerings, commodity price risk
management activities and the reflection of Clean Fuels
contractual commitments at market value. This was slightly
offset by a decrease in the domestic NGL marketing
activities due to lower product prices.
EGS' net unallocated expenses such as rent, systems
expenses and other support group costs increased in 1994 as
compared to 1993 due to continued expansion into new
markets, system upgrades and overhead associated with
operational asset management.
GAS PROCESSING
The gas processing segment's IBIT decreased $35 million
primarily due to decreased margins and volumes.
Volume and price statistics (including intercompany
amounts) are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Total Production Volumes (MMgal) 565 652
Processing Margin ($/Gal) $0.062 $0.109
</TABLE>
The following discussion further analyzes the significant
changes in the segment's results.
MARGINS
Margins of the gas processing segment decreased when
comparing the first half of 1994 to the same period last
year. The decline primarily reflects lower product prices
resulting from lower crude oil prices. Production levels
were also reduced due to unfavorable margins.
EXPLORATION AND PRODUCTION
The exploration and production segment's IBIT increased
to $80 million in the first half of 1994 from $64 million in
the same period of 1993. The following discussion analyzes
the significant changes in the segment's results.
19
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
Volume and price statistics (including intercompany
amounts) are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Wellhead Volumes
Natural Gas (MMcf/d) (1)(3) 779 700
Crude Oil and Condensate (MBbl/d) (1) 11.5 9.6
Natural Gas Liquids (MBbl/d) (1) 0.6 0.6
Wellhead Average Prices
Natural Gas ($/Mcf) (2)(4) 1.78 1.89
Crude Oil and Condensate ($/Bbl) (2) 14.42 17.53
Natural Gas Liquids ($/Bbl) (2) 9.28 12.45
Other Natural Gas Marketing
Volumes (MMcf/d) (1)(3) 337 283
Average Gross Revenue ($/Mcf) (2) 2.45 2.57
Associated Costs ($/Mcf) (2)(5) 2.21 2.31
Margin ($/Mcf) (2) 0.24 0.26
<FN>
(1) Million cubic feet per day or thousand barrels per day,
as applicable.
(2) Dollars per thousand cubic feet or per barrel, as
applicable.
(3) Includes 48 MMcf per day and 103 MMcf per day for the six-
month periods ended June 30, 1994 and 1993, respectively,
delivered under the terms of volumetric production
payment and exchange agreements effective October 1,
1992, as amended.
(4) Includes an average equivalent wellhead value of
$1.42/Mcf and $1.62/Mcf for the six-month periods ended
June 30, 1994 and 1993, respectively, for the volumes
described in note (3), net of transportation costs.
(5) Including transportation and exchange differentials.
</TABLE>
REVENUES
The exploration and production segment's gross revenues
increased 6% during the first half of 1994 as compared to
the same period in 1993. The increased revenues are
attributable to a 11% increase in average wellhead natural
gas volumes partially offset by a 6% decrease in average
wellhead natural gas prices and 18% lower average prices for
crude oil and condensate. Crude and condensate volumes rose
20% during the first half of 1994 reflecting production from
operations in Trinidad.
COSTS AND EXPENSES
The cost of gas sold in connection with other natural gas
marketing activities increased $3 million (6%) from the
first half of 1993 compared to the same period in 1994 due
to 4% lower average associated costs per Mcf combined with
an 19% increase in other natural gas marketing volumes.
Operating expenses for the exploration and production
segment increased $17 million (21%) during the first half of
1994 when compared to the same period in 1993 primarily
reflecting increased international operations and an
unsuccessful well drilled in the Gulf of Mexico.
20
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
DD&A expense increased $9 million reflecting an increase
in production volumes partially offset by an average DD&A
rate decrease from $0.86 per Mcfe in the first half of 1993
to $0.82 per Mcfe in the first half of 1994. The DD&A rate
decrease is primarily due to production from Trinidad
operations at an average DD&A rate significantly less than
the North American operations average DD&A rate.
Taxes other than income decreased approximately $6
million primarily due to a $4 million reduction in state
franchise taxes and reductions in state severance taxes due
to lower taxable United States wellhead volumes and prices.
Other income, net increased $18 million due primarily to
gains on sales of oil and gas properties.
INTERNATIONAL GAS AND POWER SERVICES
The international segment's IBIT increased $11 million.
The following discussion analyzes the significant changes in
the segment's results.
REVENUES
Revenues for the international segment decreased
primarily due to the transfer of the international gas
liquids marketing operations to gas services in the second
quarter of 1994. The decline was partially offset by
revenues from the promotion on the sale of certain liquids
processing facilities at Teesside, as well as revenues from
liquids processing activities.
COSTS AND EXPENSES
The cost of gas and other products sold by the
international segment decreased primarily as a result of the
transfer of liquids marketing operations discussed above,
partially offset by product costs incurred in connection
with liquids processing activities.
Operating expenses increased $4 million during the first
half of 1994 as compared to the same period in 1993
primarily as a result of increased international activities.
Depreciation expense increased $4 million as a result of
increased investment in certain international natural gas
liquids assets. Gross margin increased $21 million
primarily due to promotion on the sale of certain liquids
processing facilities.
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
declined $3 million primarily as a result of lower earnings
from Madosa. Other income, net increased $5 million due
primarily to foreign exchange gains realized by Enron
Americas partially offset by decreased other income from the
Argentina pipeline.
21
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CORPORATE AND OTHER
The corporate and other segment's IBIT increased $31
million in the first half of 1994 as compared to the first
half of 1993. The increase reflects a $15 million gain from
the formation of the EOTT Partnership and general and
administrative expense reductions, including benefits
related to the renegotiation of certain lease obligations.
INTEREST AND RELATED CHARGES, NET
Interest and related charges, shown net of capitalized
interest, decreased from approximately $148 million in the
first half of 1993 to $137 million in the first half of
1994. The decrease in interest is primarily due to lower
interest rates.
DIVIDENDS ON PREFERRED STOCK OF SUBSIDIARY COMPANY
Dividends of $8.6 million on preferred stock of
subsidiary company are related to the issuance of 8.55
million shares of Enron Capital L.L.C. 8% Cumulative
Guaranteed Monthly Income Preferred Shares in November 1993.
INCOME TAXES
Income taxes increased during the first six months of
1994 as compared to the first six months of 1993 primarily
as a result of increased pretax income, an increase in the
corporate Federal tax rate from 34% to 35% and a decrease of
approximately $14 million in tight gas sand Federal tax
credits.
FINANCIAL CONDITION
Cash used in operating activities totaled approximately
$156 million during the first half of 1994 as compared to
$323 million during the same period last year. The increase
in cash used in operating activities reflects increased
working capital requirements and increased cash used in
price risk management activities.
Cash used in investing activities totaled $160 million
during the first half of 1994 as compared to $443 million
during the same period in 1993. The decrease primarily
reflects decreased expenditures in connection with Enron's
investment in Argentina and investments in connection with
Teesside and other power projects and higher proceeds from
asset sales, primarily related to the formation of the EOTT
Partnership and oil and gas property sales. These factors
were partially offset by increased development drilling
activities by the exploration and production segment.
22
<PAGE>
PART I. FINANCIAL INFORMATION - (Concluded)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Concluded)
ENRON CORP. AND SUBSIDIARIES
Cash provided by financing activities totaled $458
million during the first half of 1994 as compared to $547
million during the same period in 1993. During the first
half of 1994, net issuances of short- and long-term debt
totaled $545 million. Proceeds from these issuances were
used primarily to fund capital and other expenditures and to
meet working capital requirements.
Enron is able to fund its normal working capital
requirements mainly through operations or, when necessary,
through the utilization of credit facilities and its
ability to sell commercial paper and accounts
receivable.
Total capitalization at June 30, 1994 was $6.42 billion.
Debt as a percentage of total capitalization was 50.0% at
June 30, 1994 as compared to 46.7% at year-end 1993. The
increase from year-end primarily reflects the increase in
debt levels as discussed above.
23
<PAGE>
PART II. OTHER INFORMATION
ENRON CORP. AND SUBSIDIARIES
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 11 Calculation of Earnings Per Share
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges
(b) Reports on Form 8-K
Current Report on Form 8-K dated August 3, 1994
containing certain documentation in connection with the
offering by Enron Capital Resources, L.P. of 9% Cumulative
Preferred Securities, Series A.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
ENRON CORP.
(Registrant)
Date: August 12, 1994 By: Jack I. Tompkins
Jack I. Tompkins
Senior Vice President and
Chief Information, Administrative
and Accounting Officer
(Principal Accounting Officer)
25
Exhibit 11
<TABLE>
ENRON CORP. AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
(in thousands, except share and per share amounts)
<S> <C> <C> <C> <C>
Primary Earnings Per Share
Earnings on common stock
Net income $ 75,601 $ 61,245 $248,664 $207,473
Preferred stock dividends (3,721) (4,295) (7,443) (8,815)
$ 71,880 $ 56,950 $241,221 $198,658
Average number of common shares
outstanding 243,546 237,832 242,986 237,702
Primary earnings per share of
common stock
$ 0.30 $ 0.24 $ 0.99 $ 0.84
Fully Diluted Earnings Per Share
Adjusted earnings on common stock
Net income $ 75,601 $ 61,245 $248,664 $207,473
Preferred stock dividends (3,721) (4,295) (7,443) (8,815)
Add back:
Dividends on convertible
preferred stock 3,721 4,295 7,443 8,815
$ 75,601 $ 61,245 $248,664 $207,473
Average number of common shares
outstanding on a fully diluted basis
Average number of common shares
outstanding 243,546 237,832 242,986 237,702
Additional shares issuable upon:
Conversion of preferred stock 19,352 22,891 19,589 23,515
Exercise of stock options reduced by the
number of shares which could have been
purchased with the proceeds from
exercise of such options 4,194 4,239 4,194 4,239
267,092 264,962 266,769 265,456
Fully diluted earnings per share of
common stock $ 0.28 $ 0.23 $ 0.93 $ 0.78
</TABLE>
Exhibit 12
<TABLE>
ENRON CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES
(In Thousands)
(Unaudited)
<CAPTION>
Six Months
Ended Year Ended December 31,
6/30/94 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Earnings available for fixed charges
Net income $248,664 $332,522 $328,800 $232,146 $202,180 $226,109
Less:
Undistributed earnings and losses
of less than 50% owned affiliates (12,140) (20,232) (32,526) (8,890) (15,468) 5,809
Capitalized interest of nonregulated
companies (5,465) (25,434) (66,401) (36,537) (8,145) (5,107)
Add:
Fixed charges (1) 212,243 471,278 452,014 454,607 425,177 428,579
Minority interest 12,894 27,605 17,632 7,210 7,129 335
Income tax expense 102,871 148,104 88,630 105,859 62,739 71,850
Total $559,067 $933,843 $788,149 $754,395 $673,612 $727,575
Fixed Charges
Interest expense (1) $192,146 $436,211 $430,406 $425,945 $400,548 $405,013
Rental expense representative of
interest factor 20,097 35,067 21,608 28,662 24,629 23,566
Total $212,243 $471,278 $452,014 $454,607 $425,177 $428,579
Ratio of earnings to fixed charges 2.63 1.98 1.74 1.66 1.58 1.70
<FN>
(1) Amounts exclude costs incurred on sales of accounts receivables.
</TABLE>
