<PAGE> 1
Filed Pursuant to Rule 424(b)(2)
Registration No. 033-53877
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY 15, 1994)
$150,000,000
[ENRON CORP. LOGO]
8 1/2% NOTES DUE FEBRUARY 1, 2000
---------------------------
INTEREST PAYABLE FEBRUARY 1 AND AUGUST 1
---------------------------
The 8 1/2% Notes due February 1, 2000 (the "Notes") will bear interest from
February 2, 1995 at the rate of 8 1/2% per annum, payable semiannually on
February 1 and August 1, commencing August 1, 1995. Enron Corp. ("Enron") may
redeem the Notes in whole or in part, on any interest payment date, at the
option of Enron on or after February 1, 1997, at their principal amount together
with accrued interest thereon to the date of redemption. See "Description of
Notes."
---------------------------
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 SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
===================================================================================================
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note.................................. 99.639% .450% 99.189%
- ---------------------------------------------------------------------------------------------------
Total..................................... $149,458,500 $675,000 $148,783,500
===================================================================================================
</TABLE>
(1) Plus accrued interest, if any, from February 2, 1995.
(2) Enron has agreed to indemnify the Underwriters against certain liabilities,
including liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses payable by Enron estimated to be approximately
$100,000.
---------------------------
The Notes are offered subject to prior sale, when, as and if accepted by
the Underwriters. It is expected that delivery of the Notes will be made through
the facilities of the Depository Trust Company on or about February 2, 1995,
against payment therefor in next day funds.
---------------------------
LEHMAN BROTHERS CITICORP SECURITIES, INC.
January 26, 1995
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
CAPITALIZATION
The following table sets forth the summary consolidated capitalization of
Enron and its consolidated subsidiaries as of September 30, 1994, and as
adjusted to give effect to the issuance of the Notes offered hereby, and the
issuance on December 19, 1994 of $150 million principal amount of 8.10% Notes
due 1996, the net proceeds of which are to be used principally to retire
short-term debt which has been previously reclassified as long-term debt. See
"Use of Proceeds."
<TABLE>
<CAPTION>
AS
ACTUAL ADJUSTED
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt
Notes payable................................................... $ -- $ --
Current maturities of long-term debt............................ -- --
---------- ----------
Total short-term debt................................... -- --
---------- ----------
Long-term debt
Enron:
Amount reclassified from short-term debt..................... 1,119,919 821,587
Notes due 1996-2020 (7.15% to 10.75%)........................ 1,150,441 1,150,441
Senior debentures due 2023 (7%).............................. 100,000 100,000
Notes due 1996 (8.10%)....................................... -- 150,000
Notes due 2000 (8.50%)....................................... -- 150,000
Subsidiary companies:
Notes due 1995-2005 (6.875% to 12.125%)...................... 570,000 570,000
Notes due 1995-1999 (floating rates)......................... 81,000 81,000
Other........................................................ 54,040 54,040
Enron:
Senior subordinated debentures due 2005-2012 (6.75%-8.25%)... 350,000 350,000
Unamortized debt discount and premium........................... (7,736) (8,277)
---------- ----------
Total long-term debt.................................... 3,417,664 3,418,791
---------- ----------
Minority interests................................................ 202,646 202,646
---------- ----------
Preferred Stock of Subsidiary Company............................. 288,750 288,750
---------- ----------
Shareholders' equity
Convertible preferred stock..................................... 141,078 141,078
Common stock.................................................... 25,251 25,251
Additional paid-in capital...................................... 1,785,840 1,785,840
Retained earnings............................................... 1,294,861 1,294,861
Cumulative foreign currency translation adjustment.............. (151,225) (151,225)
Other, including Flexible Equity Trust.......................... (224,955) (224,955)
---------- ----------
Total shareholders' equity.............................. 2,870,850 2,870,850
---------- ----------
Total capitalization............................... $6,779,910 $6,781,037
========== ==========
</TABLE>
S-2
<PAGE> 3
USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby will be used
principally to repay short-term indebtedness. As of January 25, 1995 the
weighted average interest rate on Enron's outstanding short-term indebtedness
was approximately 5.89%.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, -------------------------------------
1994 1993 1992 1991 1990 1989
------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............. 2.38 1.98 1.74 1.66 1.58 1.70
</TABLE>
RECENT DEVELOPMENTS
On January 26, 1995, Enron announced revenues of $8.9 billion and $8.0
billion for the fiscal years ended December 31, 1994 and 1993, respectively. Net
income was $453.4 million and $386.5 million, respectively, for the same
periods. The 1993 net income figure is exclusive of a primarily non-cash charge
to 1993 income of $54.0 million to adjust accumulated deferred tax liabilities
due to the increase in the corporate federal income tax rate from 34% to 35%.
For the three months ended December 31, 1994 and 1993, revenues were $2.6
billion and $2.3 billion, respectively. Net income for such periods was $108.8
million in 1994 and $104.1 million in 1993.
Enron Global Power & Pipelines L.L.C., a Delaware limited liability company
("EPP"), has been recently formed by Enron to own and manage all of Enron's
operating power plant and natural gas pipeline business conducted outside the
United States, Canada and Western Europe, and to expand such business through
acquisitions. EPP's initial assets consist of interests contributed by Enron in
two power plants in the Philippines (with 226 megawatts of aggregate net
generating capacity), a power plant in Guatemala (with 110 megawatts of net
generating capacity) and a 6,548 kilometer (4,069 mile) natural gas pipeline
system in Argentina. The public offering of common shares of EPP was completed
in November 1994. Enron owns approximately 52% of the common shares of EPP.
Enron formed EPP to attract public equity capital to emerging market
infrastructure projects, to enable public investors to better evaluate and
participate directly in the growth of Enron's operating power plant and natural
gas pipeline activities in emerging markets and to generate additional capital
for Enron to reinvest in future development efforts and for other corporate
purposes.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby (referred to in the Prospectus (the "Prospectus"), which this Prospectus
Supplement accompanies, as the "Offered Debt Securities") supplements, and to
the extent inconsistent therewith replaces, the description of the general terms
and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made.
GENERAL
The Notes will be limited to $150,000,000 aggregate principal amount and
will mature on February 1, 2000. The Notes will bear interest at the rate per
annum shown on the front cover of this Prospectus Supplement from February 2,
1995 or from the most recent interest payment date to which interest has been
paid or provided for, payable semi-annually on February 1 and August 1 of each
year, commencing on August 1, 1995, to the person in whose name the Note (or any
predecessor Note) is registered at the close of business on the January 15 or
July 15, as the case may be, next preceding such interest payment date.
S-3
<PAGE> 4
Enron may redeem the Notes in whole or in part, on any interest payment
date, at the option of Enron on or after February 1, 1997 at their principal
amount together with accrued interest thereon to the date of redemption. The
Notes are not entitled to any sinking fund. With certain exceptions and pursuant
to certain requirements set forth in the Indenture, Enron may discharge its
obligations under the Indenture with respect to the Notes as described under
"Description of Debt Securities -- Discharge of the Indenture" in the
Prospectus. Prospective investors are urged to consult their own advisors as to
the tax consequences of any such action.
The Notes will be issued only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated January 26, 1995, Enron has agreed to sell to each of the Underwriters
named below, and each of the Underwriters has severally agreed to purchase, the
principal amount of Notes set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
----------- -----------
<S> <C>
Lehman Brothers Inc.................................... $ 90,000,000
Citicorp Securities, Inc............................... 60,000,000
------------
$150,000,000
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to purchase all of the Notes offered hereby if any
are purchased.
The Underwriters propose to offer the Notes in part directly to the public
at the public offering price set forth on the cover page of this Prospectus
Supplement and in part to certain securities dealers at such price less a
concession of .30% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed .25% of the
principal amount of the Notes to certain other dealers. After the Notes are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the Underwriters.
The Notes are a new issue of securities with no established trading market.
Enron does not intend to apply for listing of the Notes on a national securities
exchange. Enron has been advised by the Underwriters that they intend to make a
market in the Notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of or any trading market for the Notes.
Enron has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make in respect
thereof.
The Underwriters and their affiliates have provided investment banking
and/or commercial banking and financial advisory services to Enron and its
affiliates for which they have received customary compensation and expense
reimbursement.
VALIDITY OF THE NOTES
The validity of the Notes will be passed upon for Enron by James V.
Derrick, Jr., Senior Vice President and General Counsel of Enron. Mr. Derrick
owns substantially less than 1% of the outstanding shares of Common Stock of
Enron. The validity of the Notes 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 as outside counsel on matters
unrelated to the issuance of the Notes.
S-4
<PAGE> 5
PROSPECTUS
[ENRON CORP LOGO]
DEBT SECURITIES
SECOND PREFERRED STOCK
COMMON STOCK
WARRANTS TO PURCHASE COMMON STOCK
WARRANTS TO PURCHASE DEBT SECURITIES
------------------------
Enron Corp. ("Enron") may offer from time to time (i) secured or unsecured
debt securities ("Debt Securities") consisting of debentures, notes or other
secured or unsecured evidences of indebtedness in one or more series, (ii)
shares of second preferred stock, par value $1.00 per share ("Second Preferred
Stock"), in one or more series, which may be represented by depositary shares
("Depositary Shares") evidenced by depositary receipts, (iii) warrants to
purchase Debt Securities ("Debt Warrants") and Debt Securities issuable upon
exercise of Debt Warrants, or (iv) any combination of the foregoing, at an
aggregate initial public offering price not to exceed $600,000,000, at prices
and on terms to be determined at or prior to the time of sale. In addition,
Enron or certain selling stockholders (the "Selling Stockholders") may offer
from time to time up to 7.5 million shares of Enron common stock, par value $.10
per share ("Common Stock"), at prices and on terms to be determined at or prior
to the time of sale. Enron may offer from time to time warrants to purchase up
to 7.5 million shares of Common Stock ("Stock Warrants") and Common Stock
issuable upon exercise of Stock Warrants, at prices and on terms to be
determined at or prior to the time of sale.
Specific terms of the securities in respect of which this Prospectus is
being delivered ("Offered Securities") will be set forth in an accompanying
Prospectus Supplement ("Prospectus Supplement"), together with the terms of the
offering of the Offered Securities, the initial price thereof and the net
proceeds from the sale thereof. The Prospectus Supplement will set forth with
regard to the particular Offered Securities, without limitation, the following:
(i) in the case of Debt Securities, the specific designation, aggregate
principal amount, authorized denomination, maturity, rate (which may be fixed or
variable) or method of calculation of interest and dates for payment thereof,
and any exchangeability, conversion, redemption, prepayment or sinking fund
provisions and any listing on a securities exchange, (ii) in the case of Second
Preferred Stock, the designation, number of shares or fractional interests
therein, liquidation preference per share, initial public offering price,
dividend rate (or method of calculation thereof), dates on which dividends shall
be payable and dates from which dividends shall accrue, any redemption or
sinking fund provisions and any listing on a securities exchange and (iii) in
the case of Common Stock, whether the seller thereof is Enron or one or more
Selling Stockholders. If shares of Second Preferred Stock are to be represented
by Depositary Shares, the Prospectus Supplement will set forth the fraction of a
share of such Second Preferred Stock represented by one Depositary Share. With
regard to Stock Warrants and Debt Warrants, if any, the Prospectus Supplement
will contain a description of the Common Stock and Debt Securities,
respectively, for which each warrant is exercisable and the offering price, if
any, exercise price, duration, detachability, call provisions, and other
principal terms of the warrants.
As part of the Offered Securities, Enron Capital Resources, L.P. ("Enron
Capital Resources"), a Delaware limited partnership of which Enron is the
general partner, may also offer from time to time limited partner interests
designated as preferred securities, preferred units or preferred shares or
having such other designation as Enron shall establish ("Preferred Securities").
The Preferred Securities may be offered in one or more series, at an aggregate
initial public offering price not to exceed $600,000,000 at the time of sale. In
connection therewith, Enron may offer back-up undertakings ("Backup
Undertakings") with respect to the Preferred Securities, as described in this
Prospectus under "Enron Capital Resources, L.P." Enron Capital Resources exists
solely for purposes of issuing Preferred Securities and lending the net proceeds
thereof to Enron. If Enron fails to make interest payments on the loans, Enron
Capital Resources will have insufficient funds to make distributions to holders
of Preferred Securities. The terms of the Backup Undertakings, the rights of
holders of Preferred Securities to cause acceleration of the loans and other
rights of the holders of Preferred Securities will be set forth in the related
Prospectus Supplement. The term "Offered Securities" as used herein shall also
refer to such Preferred Securities and any related Backup Undertakings. Any
issue of Preferred Securities and related Backup Undertakings shall
correspondingly reduce the amount of other Offered Securities available for
offer and sale hereunder.
Enron and/or Enron Capital Resources may sell the Offered Securities
directly, through agents designated from time to time or through underwriters or
dealers. See "Plan of Distribution". If any agents of Enron and/or Enron Capital
Resources or any underwriters or dealers are involved in the sale of the Offered
Securities, the names of such agents, underwriters or dealers and any applicable
commissions and discounts will be set forth in the related Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
------------------------
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.
------------------------
The date of this Prospectus is July 15, 1994.
<PAGE> 6
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
IN A PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ENRON OR
ENRON CAPITAL RESOURCES. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT
CONSTITUTES AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE HEREUNDER
OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF OR THEREOF.
AVAILABLE INFORMATION
Enron is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (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, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and New York Regional Office, 7 World Trade Center, 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. Enron's Common Stock and Cumulative
Second Preferred Convertible Stock are listed on the New York and Midwest Stock
Exchanges, and Enron's Common Stock is also listed on the Pacific Stock
Exchange. 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 Registration Statements on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statements") filed with the Commission under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Securities. This Prospectus does
not contain all of the information set forth in such Registration Statements,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Reference is made to such Registration Statements and to the
exhibits relating thereto for further information with respect to Enron and the
Offered Securities. Any statements contained herein concerning the provisions of
any document filed as an exhibit to any of the Registration Statements 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.
No separate financial statements of Enron Capital Resources have been
included herein. Enron and Enron Capital Resources do not consider that such
financial statements would be material to holders of Preferred Securities of
Enron Capital Resources because Enron Capital Resources is a newly organized
special purpose entity, has no operating history and no independent operations
and is not engaged in, and does not propose to engage in, any activity other
than the issuance of its securities and the lending of the proceeds thereof to
Enron. See "Enron Capital Resources, L.P." Enron Capital Resources is a limited
partnership organized under the Delaware Revised Uniform Limited Partnership
Act. Enron is the general partner of Enron Capital Resources, and a wholly owned
subsidiary of Enron is its organizational limited partner. All of the general
and limited partner interests in Enron Capital Resources are beneficially owned
by Enron or its wholly owned subsidiary, and upon the sale of Preferred
Securities, the wholly owned subsidiary will withdraw as a limited partner so
that thereafter all of such limited partner interests will be owned by holders
of Preferred Securities.
2
<PAGE> 7
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Enron (File No.
1-3423) pursuant to Section 13(a) of the Exchange Act are incorporated herein by
reference as of their respective dates:
(a) Annual Report on Form 10-K for the year ended December 31, 1993;
and
(b) Quarterly Report on Form 10-Q for the quarter ended March 31,
1994.
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 Offered Securities 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).
3
<PAGE> 8
BUSINESS OF ENRON CORP.
Enron Corp. ("Enron"), a Delaware corporation organized in 1930, is an
integrated natural gas company with headquarters in Houston, Texas. Essentially
all of Enron's operations are conducted through its subsidiaries and affiliates
which are principally engaged in the gathering, transportation and wholesale
marketing of natural gas to markets throughout the United States and
internationally through approximately 44,000 miles of natural gas pipelines; the
exploration for and production of natural gas and crude oil in the United States
and internationally; the production, purchase, transportation and worldwide
marketing of natural gas liquids and refined petroleum products; the independent
(i.e., non-utility) development, promotion, construction and operation of
natural gas-fired power plants in the United States and internationally; and the
non-price regulated purchasing and marketing of long-term energy related
commitments.
INTERSTATE PIPELINES. Enron and its subsidiaries operate domestic
interstate pipelines extending from Texas to the Canadian border and across the
southern United States from Florida to California. 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 Florida Gas, the
State of Florida. In addition, Enron holds a 13% interest in Northern Border
Partners, L.P. and operates the Northern Border Pipeline system, which
transports gas from Western Canada to delivery points in the midwestern United
States. Also, Enron has a 15% interest in Enron Liquids Pipeline, L.P., which is
engaged in pipeline transportation of natural gas liquids, refined petroleum
products and carbon dioxide and is operated by a wholly owned subsidiary of
Enron.
GAS SERVICES. Enron Gas Services Corp. and its affiliated companies ("EGS")
purchase natural gas, gas liquids and power through a variety of contractual
arrangements, including both short and long term contracts, the arrangement of
production payment and other financing transactions, and other contractual
arrangements, and market these energy products to local distribution companies,
electric utilities, cogenerators and both commercial and industrial end-users.
EGS also provides price risk management services in connection with natural gas,
gas liquids and power transactions through both physical delivery and financial
arrangements.
EGS offers a broad range of non-price regulated natural gas merchant
services by tailoring a variety of supply and marketing options to its
customers' specific needs. EGS's strategy is to provide predictable pricing,
reliable delivery and low cost capital to its customers. EGS provides these
services through a variety of financial instruments, including forward
contracts, swap agreements, options and other contractual commitments.
GAS PROCESSING. Certain Enron subsidiaries are engaged domestically in the
extraction of natural gas liquids ("NGLs") (ethane, propane, normal butane and
isobutane and natural gasoline). NGLs are typically extracted from natural gas
in liquid form under low temperature and high pressure conditions. Ethane,
propane, normal butane, isobutane and natural gasoline are used as feedstocks
for petrochemical plants in the production of plastics, synthetic rubber and
other products. Normal butane and natural gasoline are used by refineries in the
blending of motor gasoline. Isobutane is used in the alkylation process to
enhance the octane content of motor gasoline and is also used in the production
of MTBE, which is used to produce cleaner burning motor gasoline. Propane is
used as fuel for home heating and cooking, crop drying and industrial facilities
and as an engine fuel for vehicles, and ethane is used as a feedstock for
synthetic fuels production.
INTERNATIONAL GAS AND POWER SERVICES. Enron's international activities
principally involve the development, acquisition, promotion and operation of
natural gas and power projects and the marketing of natural gas liquids. As is
the case in the United States, Enron's emphasis is on businesses in which
natural gas or its components play a significant role. Development projects are
focused on power plants,
4
<PAGE> 9
gas processing and terminaling facilities and gas pipelines, while marketing
activities center on fuels used by or transported through such facilities.
Enron's international activities include management of ownership interests and
operation of power plants in England, Germany, Guatemala and the Philippines; a
3,800-mile pipeline system in southern Argentina; retail gas and propane sales
in the Caribbean basin; processing of natural gas liquids at Teesside, England;
and marketing of natural gas liquids worldwide.
EXPLORATION AND PRODUCTION. Enron's natural gas and crude oil exploration
and production operations are conducted by its subsidiary, Enron Oil & Gas
Company ("EOG"). Enron currently owns 80% of the outstanding common stock of
EOG. EOG is one of the largest independent (non-integrated) oil and gas
companies in the United States in terms of domestic proved reserves. EOG is
engaged in the exploration for, and development and production of, natural gas
and crude oil reserves primarily in major producing basins in the United States
and, to a lesser extent, in Canada, Trinidad and selected other international
areas. At December 31, 1993, EOG had estimated net proved natural gas reserves
of 1,772 billion cubic feet and estimated net proved crude oil, condensate and
natural gas liquids reserves of 20.9 million barrels, and at such date,
approximately 78% of EOG's proved reserves (on a natural gas equivalent basis)
was located in the United States, 16% in Canada and 6% in Trinidad.
Enron, a Delaware corporation, has its principal executive offices at 1400
Smith Street, Houston, Texas 77002, and its telephone number is 713-853-6161.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities will be added to
Enron's general funds and are expected to be used to retire existing
indebtedness and for general corporate purposes.
RATIOS OF ENRON'S EARNINGS TO FIXED CHARGES
AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ----------------------------------------
1994 1993 1992 1991 1990 1989
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.......... 3.19 1.98 1.74 1.66 1.58 1.70
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends................. 3.05 1.88 1.64 1.54 1.47 1.57
</TABLE>
The ratios of earnings to fixed charges and earnings to fixed charges and
preferred stock dividends are based on continuing operations. "Earnings"
represent the aggregate of (a) the pre-tax income of Enron and its majority
owned subsidiaries, (b) Enron's share of pre-tax income of its 50% owned
companies, (c) any income actually received from less than 50% owned companies,
and (d) fixed charges, net of interest capitalized. "Fixed Charges" represent
interest (whether expensed or capitalized), amortization of debt discount and
expense and that portion of rentals considered to be representative of the
interest factor. "Fixed Charges and Preferred Stock Dividends" represent fixed
charges (as described above) and preferred stock dividend requirements of Enron.
5
<PAGE> 10
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate (the "Offered Debt Securities"). The particular
terms of the Offered Debt Securities and the extent, if any, to which such
general provisions may apply to the Offered Debt Securities will be described in
the Prospectus Supplement relating to such Offered Debt Securities.
The Offered Debt Securities will be secured or unsecured obligations of
Enron. Any such unsecured obligations will be issued under an Indenture (the
"Indenture") between Enron and Harris Trust and Savings Bank, as Trustee (the
"Trustee"), dated as of November 1, 1985. The following statements are summaries
of certain provisions contained in the Indenture, the form of which is filed as
an exhibit to the Registration Statements of which this Prospectus is a part.
Reference is hereby made to the Indenture for full and complete statements of
such terms and provisions, including the definitions of certain terms used
herein. Wherever reference is made in the following statements to a particular
section of the Indenture, such section shall be deemed to be incorporated in
such statements as a part thereof. If Offered Debt Securities will be secured
obligations of Enron, they will be issued under a separate indenture, which will
be described in the Prospectus Supplement relating to such Offered Debt
Securities.
GENERAL
The Indenture does not limit the aggregate principal amount of unsecured
debentures, notes or other evidences of indebtedness of Enron (the "Indenture
Securities") which may be issued thereunder from time to time in one or more
series by Enron, and Enron may in the future issue additional Indenture
Securities (in addition to the Offered Debt Securities) under the Indenture. At
April 30, 1994, an aggregate of $1,043,000,000 principal amount of Indenture
Securities of Enron was issued and outstanding under the Indenture. Reference is
made to the Prospectus Supplement for the following terms of the Offered Debt
Securities: (i) the title of the Offered Debt Securities; (ii) any limit upon
the aggregate principal amount of the Offered Debt Securities; (iii) the date or
dates on which the principal of the Offered Debt Securities is payable; (iv) the
rate or rates (which may be fixed or variable), or the method by which such rate
or rates shall be determined, at which the Offered Debt Securities shall bear
interest, if any, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the interest payment
dates on which such interest shall be payable and the regular record date for
the interest payable on any interest payment date; (v) the place or places where
the principal of (and premium, if any) and interest on Offered Debt Securities
shall be payable; (vi) the period or periods within which, the price or prices
at which and the terms and conditions upon which Offered Debt Securities may be
redeemed, in whole or in part, at the option of Enron, if Enron is to have that
option; (vii) the obligation, if any, and the option, if any, of Enron to
redeem, purchase or repay Offered Debt Securities pursuant to any sinking fund
or analogous provisions or at the option of a holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Offered Debt Securities shall be redeemed, purchased or repaid in
whole or in part, pursuant to such obligation or option; (viii) any trustees,
paying agents, transfer agents or registrars with respect to Offered Debt
Securities; and (ix) any other terms of the Offered Debt Securities (which terms
shall not be inconsistent with the provisions of the Indenture). (Section 301.)
Enron will maintain in each place specified by it for payment of any series
of Offered Debt Securities an office or agency where Offered Debt Securities of
that series may be presented or surrendered for payment, where Offered Debt
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon Enron in respect of the
Offered Debt Securities of that series and the Indenture may be served.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or integral multiples thereof.
(Section 302.) No service charge will be made for any transfer or exchange of
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<PAGE> 11
such Offered Debt Securities, but Enron may require payment of a sum sufficient
to cover any tax or other governmental charge payable in relation thereto.
(Section 305.)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
principal amount. Special federal income tax, accounting and other
considerations applicable to any such Original Issue Discount Securities will be
described in any Prospectus Supplement relating thereto. "Original Issue
Discount Security" means any security which provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof as a result of the occurrence of an Event
of Default and the continuation thereof. (Section 101.)
LIMITATIONS ON MORTGAGES AND LIENS
The Indenture provides that so long as any of the Indenture Securities
issued under the Indenture (including the Offered Debt Securities) are
outstanding, Enron will not, and will not permit any Subsidiary (as defined in
the Indenture and herein) to, pledge, mortgage or hypothecate, or permit to
exist, except in favor of Enron or any Subsidiary, any mortgage, pledge or other
lien upon, any Principal Property (as defined in the Indenture and herein) at
any time owned by it, to secure any indebtedness (as defined in the Indenture),
unless effective provision is made whereby outstanding Indenture Securities
(including the Offered Debt Securities) will be equally and ratably secured with
any and all such indebtedness and with any other indebtedness similarly entitled
to be equally and ratably secured. This restriction does not apply to prevent
the creation or existence of: (a) mortgages, pledges, liens or encumbrances on
any property held or used by Enron or a Subsidiary in connection with the
exploration for, development of or production of, oil, gas, natural gas
(including liquified gas and storage gas), other hydrocarbons, helium, coal,
metals, minerals, steam, timber, geothermal or other natural resources or
synthetic fuels, such properties to include, but not be limited to, Enron's or a
Subsidiary's interest in any mineral fee interests, oil, gas or other mineral
leases, royalty, overriding royalty or net profits interests, production
payments and other similar interests, wellhead production equipment, tanks,
field gathering lines, leasehold or field separation and processing facilities,
compression facilities and other similar personal property and fixtures; (b)
mortgages, pledges, liens or encumbrances on oil, gas, natural gas (including
liquified gas and storage gas), other hydrocarbons, helium, coal, metals,
minerals, steam, timber, geothermal or other natural resources or synthetic
fuels produced or recovered from any property, an interest in which is owned or
leased by Enron or a Subsidiary; (c) mortgages, pledges, liens or encumbrances
(or certain extensions, renewals or refundings thereof) upon any property
acquired before or after the date of the Indenture, created at the time of
acquisition or within one year thereafter to secure all or a portion of the
purchase price thereof, or existing thereon at the date of acquisition, whether
or not assumed by Enron or a Subsidiary, provided that every such mortgage,
pledge, lien or encumbrance applies only to the property so acquired and fixed
improvements thereon; (d) mortgages, pledges, liens or encumbrances upon any
property acquired before or after the date of the Indenture by any corporation
that is or becomes a Subsidiary after the date of the Indenture ("Acquired
Entity"), provided that every such mortgage, pledge, lien or encumbrance (1)
shall either (i) exist prior to the time the Acquired Entity becomes a
Subsidiary or (ii) be created at the time the Acquired Entity becomes a
Subsidiary or within one year thereafter to secure all or a portion of the
acquisition price thereof and (2) shall only apply to those properties owned by
the Acquired Entity at the time it becomes a Subsidiary or thereafter acquired
by it from sources other than Enron or any other Subsidiary; (e) pledges of
current assets, in the ordinary course of business, to secure current
liabilities; (f) deposits to secure public or statutory obligations; (g) liens
to secure indebtedness other than Funded Debt (as defined in the Indenture and
herein); (h) mortgages, pledges, liens or encumbrances upon any office, data
processing or transportation equipment; (i) mortgages, pledges, liens or
encumbrances created or assumed by Enron or a Subsidiary in connection with the
issuance of debt securities the interest on which is excludable from gross
income of the holder of such security pursuant to the Internal Revenue Code of
1986, as amended, for the purpose of financing the acquisition or construction
of property to be used by Enron or a Subsidiary; (j) pledges or assignments of
accounts receivable or conditional sales contracts or chattel mortgages and
evidences of indebtedness secured thereby, received in connection with the sale
by Enron or a
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<PAGE> 12
Subsidiary of goods or merchandise to customers; or (k) certain other liens or
encumbrances. (Section 1007.)
Notwithstanding the foregoing, Enron or a Subsidiary may issue, assume or
guarantee indebtedness secured by a mortgage which would otherwise be subject to
the foregoing restrictions in an aggregate amount which, together with all other
indebtedness of Enron or a Subsidiary secured by a mortgage which (if originally
issued, assumed or guaranteed at such time) would otherwise be subject to the
foregoing restrictions (not including secured indebtedness permitted under the
foregoing exceptions), does not at the time exceed 10% of the Consolidated Net
Tangible Assets (total assets less (a) total current liabilities, excluding
indebtedness due within 12 months, and (b) goodwill, patents and trademarks) of
Enron, as shown on the audited consolidated financial statements of Enron as of
the end of the fiscal year preceding the date of determination. (Section 1007.)
The holders of at least 50% in principal amount of the outstanding
Indenture Securities under the Indenture (including the Offered Debt Securities)
may waive compliance by Enron with the covenant contained in Section 1007 of the
Indenture (and certain other covenants of Enron). (Section 1009.)
The Indenture defines the term "Subsidiary" to mean a corporation all of
the voting shares (that is, shares entitled to vote for the election of
directors, but excluding shares entitled so to vote only upon the happening of
some contingency unless such contingency shall have occurred) of which shall be
owned by Enron or by one or more Subsidiaries or by Enron and one or more
Subsidiaries. The term "Principal Property" is defined to mean any oil or gas
pipeline, gas processing plant or chemical plant located in the United States,
except any such property, pipeline or plant that in the opinion of the Board of
Directors of Enron is not of material importance to the total business conducted
by Enron and its Subsidiaries. "Principal Property" does not include any oil or
gas property or the production or any proceeds of production from an oil or gas
producing property or the production or any proceeds of production of gas
processing plants or oil or gas or petroleum products in any pipeline. (Section
101.)
The term "indebtedness", as applied to Enron or any Subsidiary, is defined
to mean bonds, debentures, notes and other instruments representing obligations
created or assumed by any such corporation for the repayment of money borrowed
(other than unamortized debt discount or premium). All indebtedness secured by a
lien upon property owned by Enron or any Subsidiary and upon which indebtedness
any such corporation customarily pays interest, even though such corporation has
not assumed or become liable for the payment of such indebtedness, is also
deemed to be indebtedness of any such corporation. All indebtedness for money
borrowed incurred by other persons which is directly guaranteed as to payment of
principal by Enron or any Subsidiary is for all purposes of the Indenture deemed
to be indebtedness of any such corporation, but no other contingent obligation
of any such corporation in respect of indebtedness incurred by other persons is
for any purpose deemed indebtedness of such corporation. Indebtedness of Enron
or any Subsidiary does not include (i) amounts which are payable only out of all
or a portion of the oil, gas, natural gas, helium, coal, metals, minerals,
steam, timber or other natural resources produced, derived or extracted from
properties owned or developed by such corporation; (ii) any amount representing
capitalized lease obligations; (iii) any indebtedness incurred to finance oil,
gas, natural gas, helium, coal, metals, minerals, steam, timber, hydrocarbons or
geothermal or other natural resources or synthetic fuel exploration or
development, payable, with respect to principal and interest, solely out of the
proceeds of oil, gas, natural gas, helium, coal, metals, minerals, steam,
timber, hydrocarbons or geothermal or other natural resources or synthetic fuel
to be produced, sold and/or delivered by Enron or any Subsidiary; (iv) indirect
guarantees or other contingent obligations in connection with the indebtedness
of others, including agreements, contingent or otherwise, with such other
persons or with third persons with respect to, or to permit or ensure the
payment of, obligations of such other persons, including, without limitation,
agreements to purchase or repurchase obligations of such other persons,
agreements to advance or supply funds to or to invest in such other persons or
agreements to pay for property, products or services of such other persons
(whether or not conferred, delivered or rendered) and any demand charge,
throughput, take-or-pay, keep-well, make-whole, cash deficiency, maintenance of
working capital or earnings or similar agreements; and (v) any guarantees with
respect to lease or other similar periodic payments to be made by other persons.
(Section 101.)
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<PAGE> 13
The term "Funded Debt" as applied to any corporation means all indebtedness
incurred, created, assumed or guaranteed by such corporation, or upon which it
customarily pays interest charges, which matures, or is renewable by such
corporation to a date, more than one year after the date as of which Funded Debt
is being determined; provided, however, that the term "Funded Debt" shall not
include (i) indebtedness incurred in the ordinary course of business
representing borrowings, regardless of when payable, of such corporation from
time to time against, but not in excess of the face amount of, its installment
accounts receivable for the sale of appliances and equipment sold in the regular
course of business or (ii) advances for construction and security deposits
received by such corporation in the ordinary course of business. (Section 101.)
The foregoing limitations on mortgages, pledges and liens are intended to
limit other creditors of Enron from obtaining preference or priority over
holders of the Indenture Securities issued under the Indenture, but are not
intended to prevent other creditors from sharing equally and ratably and without
preference ("pari passu") over the holders of such Indenture Securities. While
such limitations on mortgages and liens do provide protection to the holders of
the Indenture Securities, there are a number of exceptions to such restrictions
which could result in certain assets of Enron and its Subsidiaries being
encumbered without equally and ratably securing the Indenture Securities issued
under the Indenture. Specifically, the restrictions apply only to pledges,
mortgages or liens upon "Principal Property" (as defined in the Indenture and
herein) to secure any "indebtedness" (as defined in the Indenture and herein),
unless effective provision is made whereby outstanding Securities will be
equally and ratably secured with any such indebtedness and with any other
indebtedness similarly entitled to be equally and ratably secured. There are
certain exceptions to the definition of "indebtedness," which are enumerated in
the Indenture and herein. In addition, the restrictions do not apply to prevent
the creation or existence of mortgages, pledges, liens or encumbrances on
certain types of properties or pursuant to certain types of transactions, all as
enumerated in the Indenture and above. Also, up to 10% of Consolidated Net
Tangible Assets (as defined in the Indenture and herein) is not subject to the
mortgage and lien limitations contained in the Indenture.
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture provides that, with the consent of
the holders of not less than 50% in principal amount of all outstanding
Indenture Securities (including, where applicable, the Offered Debt Securities)
affected thereby, Enron and the Trustee may enter into a supplemental indenture
for the purpose of adding to, changing or eliminating any of the provisions of
the Indenture or of modifying in any manner the rights of the holders of
Indenture Securities under the Indenture. Notwithstanding the foregoing, the
consent of the holder of each outstanding Indenture Security affected thereby
will be required to: (a) change the Stated Maturity (as defined in the
Indenture) of the principal of, or any installment of principal of or interest
on, any Indenture Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
change any Place of Payment (as defined in the Indenture) where, or change the
coin or currency in which, any Indenture Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date, as defined in the Indenture); (b)
reduce the percentage in principal amount of the outstanding Indenture
Securities of any series, the consent of whose holders is required for any
supplemental indenture or for any waiver provided for in the Indenture; or (c)
with certain exceptions, modify any of the provisions of the sections of the
Indenture which concern waivers of past defaults, waivers of certain covenants
or consent to supplemental indentures, except to increase the percentage of
principal amount of Indenture Securities of any series, the holders of which are
required to effect such waiver or consent, or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of
the holder of each outstanding Indenture Security affected thereby. The
Indenture provides that a supplemental indenture which changes or eliminates any
covenant or other provision of the Indenture which has expressly been included
solely for the benefit of one or more particular series of Indenture Securities,
or which modifies the rights of the holders of Indenture Securities
9
<PAGE> 14
of such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the holders of Indenture
Securities of any other series. (Section 902.)
EVENTS OF DEFAULT AND RIGHTS UPON DEFAULT
Under the Indenture, the term "Event of Default" with respect to any series
of Indenture Securities, means any one of the following events which shall have
occurred and is continuing: (a) default in the payment of any interest upon any
Indenture Security of that series when it becomes due and payable or default in
the payment of any mandatory sinking fund payment provided for by the terms of
any series of Indenture Securities, and continuance of such default for a period
of 30 days; (b) default in the payment of the principal of (or premium, if any,
on) any Indenture Security of that series at its maturity; (c) default in the
performance, or breach, of any covenant or warranty of Enron in the Indenture
(other than a covenant or warranty a default in the performance of which or the
breach of which is otherwise specifically dealt with in the Indenture or which
has been expressly included in the Indenture solely for the benefit of one or
more series of Indenture Securities other than that series), and continuance of
such default or breach for 60 days after there has been given to Enron by the
Trustee, or to Enron and the Trustee by the holders of at least 25% in principal
amount of all outstanding Indenture Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" under the Indenture; or (d) certain events involving
Enron in bankruptcy, receivership or other insolvency proceedings or an
assignment for the benefit of creditors. (Section 501.)
If an Event of Default described in clause (a) or (b) in the foregoing
paragraph has occurred and is continuing with respect to Indenture Securities of
any series, the Indenture provides that the Trustee or the holders of not less
than 25% in principal amount of the outstanding Indenture Securities of that
series may declare the principal amount of all of the Indenture Securities of
that series to be due and payable immediately, and upon any such declaration
such principal amount shall become immediately due and payable. If an Event of
Default described in clause (c) or (d) of the foregoing paragraph occurs and is
continuing, the Trustee or the holders of not less than 25% in principal amount
of all of the Indenture Securities then outstanding may declare the principal
amount of all of the Indenture Securities to be due and payable immediately, and
upon any such declaration such principal amount shall become immediately due and
payable. (Section 502.)
A default under other indebtedness of Enron is not an Event of Default
under the Indenture, and an Event of Default under one series of Indenture
Securities will not necessarily be an Event of Default under another series.
At any time after such a declaration of acceleration with respect to
Indenture Securities of any series (or of all series, as the case may be) has
been made and before judgment or decree for payment of the money due has been
obtained by the Trustee, the holders of a majority in principal amount of the
outstanding Indenture Securities of that series (or of all series, as the case
may be) may rescind and annul such declaration and its consequences, if, subject
to certain conditions, all Events of Default with respect to Indenture
Securities of that series (or of all series, as the case may be), other than the
non-payment of the principal of the Indenture Securities due solely by such
declaration of acceleration, have been cured or waived and all payments due
(other than by acceleration) have been paid or deposited with the Trustee.
(Section 502.) With certain exceptions, the holders of not less than a majority
in principal amount of the outstanding Indenture Securities of any series, on
behalf of the holders of all the Indenture Securities of such series, may waive
any past default described in clause (a) or (b) of the first paragraph of this
heading "Events of Default and Rights Upon Default" (or, in the case of a
default described in clause (c) or (d) of such paragraph, the holders of a
majority in principal amount of all outstanding Indenture Securities may waive
any such past default), and its consequences, except a default (a) in the
payment of the principal of (or premium, if any) or interest on any Indenture
Security, or (b) in respect of a covenant or provision of the Indenture which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Indenture Security of such series affected. (Section
513.)
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<PAGE> 15
The holders of not less than a majority in principal amount of the
Indenture Securities of any series at the time outstanding are empowered under
the terms of the Indenture, subject to certain limitations, to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee. (Section
512.)
The Indenture further provides that no holder of an Indenture Security of
any series may enforce the Indenture except in the case of failure by the
Trustee to act for 60 days after notice of a continuing Event of Default with
respect to the Indenture Securities of that series and after request by the
holders of not less than 25% in principal amount of the outstanding Indenture
Securities of such series and the offer to the Trustee of reasonable indemnity,
but this provision will not prevent a holder of any Indenture Security from
enforcing the payment of the principal of, and interest on, such holder's
Indenture Security. (Sections 507 and 508.)
The Indenture requires that Enron deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officer's Certificate, stating whether to
the best knowledge of the signers thereof Enron is in default in the performance
and observance of certain of the terms of the Indenture and, if so, specifying
each such default and the nature and status thereof of which the signers may
have knowledge. (Section 1008.)
DISCHARGE OF INDENTURE
With certain exceptions, Enron may discharge its obligations under the
Indenture with respect to any series of Indenture Securities by (i) paying or
causing to be paid the principal of (and premium, if any) and interest on all
the Indenture Securities of such series outstanding, as and when the same shall
become due and payable; (ii) delivering to the Trustee all outstanding Indenture
Securities of such series for cancellation; or (iii) entering into an agreement
in form and substance satisfactory to Enron and the Trustee providing for the
creation of an escrow fund and depositing in trust with the Trustee, as escrow
agent of such fund, sufficient funds in cash and/or Eligible Obligations and/or
U.S. Government Obligations, maturing as to principal and interest in such
amounts and at such times as will be sufficient to pay at the Stated Maturity or
Redemption Date all such Indenture Securities of such series not previously
delivered to the Trustee for cancellation, including principal (and premium, if
any) and interest to the Stated Maturity or Redemption Date. (Section 401.)
The Indenture defines "Eligible Obligations" to mean interest bearing
obligations as a result of the deposit of which the Indenture Securities are
rated in the highest generic long-term debt rating category assigned to legally
defeased debt by one or more nationally recognized rating agencies. (Section
101.)
For federal income tax purposes, there is a substantial risk that a legal
defeasance of a series of Indenture Securities by the deposit of cash, Eligible
Obligations or U.S. Government Obligations in a trust would be characterized by
the Internal Revenue Service or a court as a taxable exchange by the holders of
the Indenture Securities of that series for either (i) an issue of obligations
of the defeasance trust or (ii) a direct interest in the cash and/or Eligible
Obligations and/or U.S. Government Obligations held in the defeasance trust. If
the defeasance were so characterized, then a holder of an Indenture Security of
the series defeased would be: (i) required to recognize gain or loss (which
would be capital gain or loss if the Indenture Securities were held as a capital
asset) at the time of the defeasance as if the Indenture Security had been sold
at such time for an amount equal to the amount of cash and the fair market value
of the Eligible Obligations and/or U.S. Government Obligations held in the
defeasance trust; (ii) required to include in income in each taxable year the
interest and any original issue discount or gain or loss attributable to either
such defeasance trust obligations or such securities, as the case may be; and
(iii) subject to the market discount provisions of the Internal Revenue Code as
they may pertain to such defeasance trust obligations or such securities. As a
result, a holder of an Indenture Security may be required to pay taxes on any
such gain or income even though such holder may not have received any cash
therefrom. Prospective investors are urged to consult their own advisors as to
the tax consequences of an actual or legal defeasance, including the
applicability and effect of tax laws other than federal income tax law.
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<PAGE> 16
CONCERNING THE TRUSTEE
Harris Trust and Savings Bank is the Trustee under the Indenture. Such bank
also acts as a depository of funds for, makes loans to, and performs other
services for, Enron in the normal course of business, including acting as
trustee under other indentures of Enron.
The Indenture contains the provisions required by the Trust Indenture Act
of 1939 with reference to the disqualification of the Trustee if it shall have
or acquire any "conflicting interest", as therein defined. (Section 608.) The
Indenture also contains certain limitations on the right of the Trustee, as a
creditor of Enron, to obtain payment of claims in certain cases, or to realize
on certain property received by it in respect of any such claims, as security or
otherwise. (Section 613.)
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder, the
number of shares of Common Stock which may be regarded as beneficially owned by
such Selling Stockholder and the maximum number of shares which may be offered
hereby by such Selling Stockholder as of the date hereof.
<TABLE>
<CAPTION>
NUMBER OF
SHARES NUMBER OF
BENEFICIALLY SHARES
SELLING STOCKHOLDER OWNED(1) OFFERED
------------------- ------------ ---------
<S> <C> <C>
Enron Corp. Flexible Equity Trust.................................. 7,500,000 (2)
Enron Corp. Savings Plan........................................... 7,277,011 (2)
</TABLE>
- ---------------
(1) Amounts shown reflect record ownership. The Enron Corp. Flexible Equity
Trust and the Enron Corp. Savings Plan have been established in connection
with Enron's employee benefit programs.
(2) The aggregate number of shares of Common Stock to be offered hereby by the
Selling Stockholders and Enron shall not exceed 7.5 million shares.
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<PAGE> 17
DESCRIPTION OF ENRON CORP. CAPITAL STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
At June 15, 1994, the authorized capital stock of Enron was 616,500,000
shares, consisting of:
(a) 1,500,000 shares of Preferred Stock, par value $100 per share (the
"Preferred Stock"), of which no shares were outstanding;
(b) 5,000,000 shares of Second Preferred Stock, par value $1 per share
(the "Second Preferred Stock"), of which 1,417,183 shares of Cumulative
Second Preferred Convertible Stock (the "Convertible Preferred Stock") were
outstanding;
(c) 10,000,000 shares of Preference Stock, par value $1 per share (the
"Preference Stock"), of which no shares were outstanding; and
(d) 600,000,000 shares of Common Stock, par value $.10 per share (the
"Common Stock"), of which 251,139,993 shares were outstanding.
In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in the order listed
above. The Board of Directors of Enron is empowered, without approval of the
stockholders, to cause the Preferred Stock, Second Preferred Stock and
Preference Stock to be issued in one or more series, with the numbers of shares
of each series and the rights, preferences and limitations of each series to be
determined by it. Among the specific matters that may be determined by the Board
of Directors are: the annual rate of dividends; the redemption price, if any;
the terms of a sinking or purchase fund, if any; the amount payable in the event
of any voluntary liquidation, dissolution or winding up of the affairs of Enron;
conversion rights, if any; and voting powers, if any, in addition to those
described below. The descriptions set forth below do not purport to be complete
and are qualified in their entirety by reference to the Restated Certificate of
Incorporation of Enron, as amended (the "Restated Certificate of
Incorporation").
No holders of any class of Enron's capital stock are entitled to preemptive
rights.
SECOND PREFERRED STOCK
The following is a general description of the terms of the Second Preferred
Stock of Enron. The particular terms of any series of Second Preferred Stock
offered hereby ("Offered Second Preferred Stock") will be set forth in the
Prospectus Supplement relating thereto. The rights, preferences, privileges and
restrictions, including dividend rights, voting rights, terms of redemption and
liquidation preferences, of the Offered Second Preferred Stock of each series
will be fixed or designated pursuant to a certificate of designations adopted by
the Board of Directors or a duly authorized committee thereof. The description
of Second Preferred Stock set forth below and the description of the terms of a
particular series of Offered Second Preferred Stock that will be set forth in a
Prospectus Supplement do not purport to be complete and are qualified in their
entirety by reference to the certificate of designations relating to such
series.
The Offered Second Preferred Stock shall rank on a parity with the
Convertible Preferred Stock, but in all respects, regardless of series, the
Offered Second Preferred Stock shall rank in preference to the Common Stock as
to payment of dividends and as to distribution of assets of Enron upon the
liquidation, dissolution or winding up of Enron. Upon issuance against full
payment of the purchase price therefor, shares of Offered Second Preferred Stock
will be fully paid and nonassessable.
DIVIDENDS. Holders of Offered Second Preferred Stock will be entitled to
receive, when, as and if declared by the Board of Directors of Enron out of any
funds legally available for that purpose, dividends in cash at such respective
rates, payable on such dates in each year and in respect of such dividend
periods, as stated in Enron's Restated Certificate of Incorporation or the
certificate of designations for such series of Offered Second Preferred Stock,
before any dividends may be declared or paid or set apart for payment upon the
Common Stock or any other class of stock ranking junior to such series of
Offered
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Second Preferred Stock. No dividend may be declared or paid on any series of
Offered Second Preferred Stock unless at the same time a dividend in like
proportion to the respectively designated dividend amounts shall be declared or
paid on each other series of Preferred Stock then issued and outstanding ranking
prior to or on a parity with such particular series with respect to the payment
of dividends. Dividends on Offered Second Preferred Stock may be either
cumulative or non-cumulative.
The annual rate of dividends payable on shares of the Convertible Preferred
Stock is the greater of $10.50 per share or the dividend amount payable on the
number of shares of Common Stock into which one share of Convertible Preferred
Stock is convertible (currently 13.652 shares). Such dividends are payable
quarterly on the first days of January, April, July and October. These dividend
rights are superior to the dividend rights of the Common Stock and will rank
equally with the dividend rights on the Offered Second Preferred Stock.
LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution or
winding up of Enron, whether voluntary or involuntary, holders of Offered Second
Preferred Stock of each series (if any shares thereof are then issued and
outstanding) will be entitled to payment of the applicable liquidation price or
prices plus accrued dividends, out of the available assets of Enron, in
preference to the holders of the Common Stock or any other class of stock
ranking junior to such series of Offered Second Preferred Stock upon
liquidation, dissolution or winding up. Enron's Restated Certificate of
Incorporation provides that the sale, conveyance, exchange or transfer of all or
a part of the property or assets of Enron or a consolidation or merger of Enron
with one or more corporations shall not be deemed to be a liquidation,
dissolution or winding up of Enron.
The amount payable on shares of the Convertible Preferred Stock in the
event of any involuntary or voluntary liquidation, dissolution or winding up of
the affairs of Enron is $100.00 per share, together with accrued dividends to
the date of distribution or payment. The liquidation rights of the Convertible
Preferred Stock will rank equally with the liquidation rights of Offered Second
Preferred Stock.
REDEMPTION AND CONVERSION. Each series of Offered Second Preferred Stock
will be subject to redemption, if applicable, on such terms, at such prices and
on such dates as may be set forth in the applicable certificate of designations.
The Offered Second Preferred Stock will not be convertible.
The Convertible Preferred Stock is redeemable at the option of Enron at any
time, in whole or in part, at a redemption price of $100.00 per share, together
with accrued dividends to the date of distribution or payment. Each share of
Convertible Preferred Stock is convertible into 13.652 shares of Common Stock at
any time at the option of the holder.
VOTING RIGHTS. The holders of the Second Preferred Stock (including the
Offered Second Preferred Stock) have no voting rights except as specifically
required by statute and except for certain voting rights specifically provided
in Enron's Restated Certificate of Incorporation and the certificates of
designations creating the various series of such stock. Enron's Restated
Certificate of Incorporation provides that the vote or consent of the holders of
at least a majority of the then outstanding shares of Second Preferred Stock
(including the Offered Second Preferred Stock), irrespective of series, is
required to effect (a) any change in the Restated Certificate of Incorporation
or bylaws which affects adversely the voting powers, rights or preferences of
the Second Preferred Stock (if only certain series are affected, separate votes
by the series affected are required); (b) the authorization or creation of, or
increase in the authorized amount of, any stock of any class, or any security
convertible into stock of any class, ranking prior to the Second Preferred
Stock; (c) the voluntary dissolution, liquidation or winding up of the affairs
of Enron, or the sale, lease or conveyance by Enron of all or substantially all
of its property or assets; (d) the purchase or redemption of less than all of
the Second Preferred Stock unless the full dividend on all shares of Second
Preferred Stock has been paid or declared and a sum sufficient for payment
thereof set apart; (e) the increase of the authorized amount of Second Preferred
Stock or the authorization or creation of or the increase in the authorized
amount of any stock of any class, or any security convertible into stock of any
class, ranking on a parity with the Second Preferred Stock; (f) any merger or
consolidation of Enron, except under certain conditions. Further, in the event
dividend payments on the Second Preferred Stock shall be in default in an amount
equivalent to six full quarterly
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dividends, then the holders of Second Preferred Stock, voting separately as a
class, shall be entitled to elect two directors of Enron until such time as such
dividends shall have been paid or funds sufficient therefor deposited in trust.
Holders of Convertible Preferred Stock are entitled to vote together with
the Common Stock on all matters submitted to a vote of Enron stockholders, with
each share of Convertible Preferred Stock having a number of votes equal to the
number of shares of Common Stock into which one share of Convertible Preferred
Stock is convertible (currently 13.652 shares).
Voting rights of the holders of the Convertible Preferred Stock and Common
Stock are, and the voting rights of the Offered Second Preferred Stock will be,
non-cumulative.
OTHER PREFERRED STOCK
The holders of the Preferred Stock and Preference Stock, when and if
issued, will have no voting rights except as specifically required by statute
and except for certain voting rights specifically provided in Enron's Restated
Certificate of Incorporation and the certificates of designations creating the
various series of such classes of stock. In general, a vote of at least
two-thirds of a class, voting as a class, will be required to effect (a) any
change in the Restated Certificate of Incorporation or bylaws which affects
adversely the voting powers, rights or preferences of such class (if only
certain series are affected, separate votes by the series affected are
required); (b) the authorization or creation of, or the increase in the
authorized amount of, any stock of any class, or any security convertible into
stock of any class, ranking prior to such class; (c) the voluntary dissolution,
liquidation or winding up of the affairs of Enron or the sale, lease or
conveyance by Enron of all or substantially all of its property or assets; or
(d) the purchase or redemption of less than all of the shares of such class
unless the full dividend on all such shares has been paid or declared and a sum
sufficient for payment thereof set apart. In addition, the vote of a majority of
a class, voting as a class, is required (i) to increase the authorized amount of
such class, or to authorize or create or to increase the authorized amount of,
any stock of any class, or any security convertible into stock of any class,
ranking on a parity with such class; or (ii) to approve mergers or
consolidations, except under certain conditions. Further, in the event dividends
payable on any such class shall be in default in an amount equivalent to six
full quarterly dividends, then the holders of such class, voting separately as a
class, shall be entitled to elect two directors of Enron until such time as such
dividends shall have been paid or funds sufficient therefor deposited in trust.
COMMON STOCK
So long as any shares of Preferred Stock, Second Preferred Stock or
Preference Stock shall be outstanding, no dividends, whether in cash or
property, shall be paid or declared, nor shall any distribution be made, on the
Common Stock, nor shall any shares of any Common Stock be purchased, redeemed or
otherwise acquired for value by Enron, nor shall Enron permit any distribution
to be made on any Common Stock or shares of Common Stock purchased, redeemed or
otherwise acquired by any subsidiary, unless all dividends on the Preferred
Stock, Second Preferred Stock and Preference Stock of all series for all past
quarterly dividend periods and for the then current quarterly period shall have
been paid or declared and a sum sufficient for the payment thereof set apart,
and unless Enron shall not be in arrears with respect to any sinking fund
requirement for any such shares. The foregoing provisions shall not, however,
apply to a dividend payable in Common Stock or the acquisition of shares of
Common Stock in exchange for or through application of the proceeds of the sale
of shares of Common Stock.
Subject to the prior rights of the Preferred Stock, the Second Preferred
Stock and the Preference Stock, the shares of Common Stock of Enron: (a) are
entitled to such dividends as may be declared by the Board of Directors out of
funds legally available therefor; (b) are entitled to one vote per share; (c)
have no preemptive or conversion rights; (d) are not subject to, or entitled to
the benefits of, any redemption or sinking fund provision; and (e) are entitled
upon liquidation to receive the assets of Enron remaining after the payment of
corporate debts and the satisfaction of the liquidation preferences of the
Preferred Stock, Second Preferred Stock and Preference Stock.
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CERTAIN OTHER PROVISIONS OF ENRON'S RESTATED CERTIFICATE OF INCORPORATION
The Restated Certificate of Incorporation of Enron limits the liability of
directors of Enron (in their capacity as directors but not in their capacity as
officers) to Enron or its stockholders to the fullest extent permitted by
Delaware law. Specifically, directors of Enron will not be personally liable for
monetary damages for breach of a director's fiduciary duty as a director, except
for liability (i) for any breach of the director's duty of loyalty to Enron or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived an improper personal benefit.
Enron's Restated Certificate of Incorporation contains a "fair price"
provision which generally requires that certain mergers, business combinations
and similar transactions with a "Related Person" (generally the beneficial owner
of at least 10 percent of Enron's voting stock) be approved by the holders of at
least 80 percent of Enron's voting stock, unless (a) the transaction is approved
by at least 80 percent of the "Continuing Directors" of Enron, who constitute a
majority of the entire board, (b) the transaction occurs more than five years
after the last acquisition of Enron voting stock by the related person or (c)
certain "fair price" and procedural requirements are satisfied. Enron's Restated
Certificate of Incorporation defines "Business Transaction" as (a) any merger or
consolidation involving Enron or a subsidiary of Enron, (b) any sale, lease,
exchange, transfer or other disposition (in one transaction or a series of
transactions), including without limitation a mortgage or any other security
device, of all or any substantial part of the assets either of Enron or of a
subsidiary of Enron, (c) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the assets of an entity to Enron
or a subsidiary of Enron, (d) the issuance, sale, exchange, transfer or other
disposition by Enron or a subsidiary of Enron of any securities of Enron or any
subsidiary of Enron, (e) any recapitalization or reclassification of Enron's
securities (including without limitation, any reverse stock split) or other
transaction that would have the effect of increasing the voting power of a
Related Person, (f) any liquidation, spinoff, splitoff, splitup or dissolution
of Enron, and (g) any agreement, contract or other arrangement providing for any
of the transactions described in this definition of Business Transaction.
Continuing Director is defined to mean a director who either was a member of the
Board of Directors of Enron prior to the time such Related Person became a
Related Person or who subsequently became a director of Enron and whose
election, or nomination for election by Enron's stockholders, was approved by a
vote of at least 80 percent of the Continuing Directors then on the Board,
either by a specific vote or by approval of the proxy statement issued by Enron
on behalf of the Board of Directors in which such person is named as nominee for
director, without an objection to such nomination; provided, however, that in no
event shall a director be considered a "Continuing Director" if such director is
a Related Person and the Business Transaction to be voted upon is with such
Related Person or is one in which such Related Person otherwise has an interest
(except proportionately as a stockholder of Enron).
GENERAL
The foregoing statements are summaries of certain provisions contained in
the Restated Certificate of Incorporation of Enron, the form of which is filed
as an exhibit to the Registration Statements of which this Prospectus is a part.
They do not purport to be complete statements of all the terms and provisions of
the Restated Certificate of Incorporation, and reference is hereby made to the
Restated Certificate of Incorporation for full and complete statements of such
terms and provisions, including the definitions of certain terms used herein.
Whenever reference has been made to the Restated Certificate of Incorporation,
such Restated Certificate of Incorporation shall be deemed to be incorporated in
such statements as a part thereof, and such statements are qualified in their
entirety by such reference.
The transfer agent and registrar of the Convertible Preferred Stock and the
Common Stock is First Chicago Trust Company of New York.
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DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Enron may, at its option, elect to offer fractional interests in the
Offered Second Preferred Stock. In the event such option is exercised, Enron
will offer depositary shares ("Depositary Shares"), each of which will represent
a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Offered Second Preferred Stock) of a share of a particular
series of Offered Second Preferred Stock as described below.
The Offered Second Preferred Stock of any series represented by Depositary
Shares will be deposited under a deposit agreement (the "Deposit Agreement")
between Enron and a bank or trust company selected by Enron having its principal
office in the United States and having, alone or together with its affiliates, a
combined capital and surplus of at least $50,000,000 (the "Depositary"). Subject
to the terms of the Deposit Agreement, each registered holder of a Depositary
Share will be entitled, in proportion to the applicable fraction of a share of
Offered Second Preferred Stock represented by such Depositary Share, to all the
rights and preferences of the Offered Second Preferred Stock represented thereby
(including dividend, voting, redemption and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts ("Depositary
Receipts") issued pursuant to the Deposit Agreement. Depositary Receipts will be
distributed to those persons purchasing the fractional interests in Offered
Second Preferred Stock in accordance with the terms of the offering set forth in
the applicable Prospectus Supplement. A copy of the form of Deposit Agreement is
filed as an exhibit to the Registration Statements of which this Prospectus is a
part, and the following summary is qualified in its entirety by reference to
such exhibit.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all dividends or other cash distributions
received in respect of the Offered Second Preferred Stock to the record holders
of Depositary Shares relating to such Offered Second Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash or rights, preferences or
privileges upon the Offered Second Preferred Stock, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto in proportion to the number of such Depositary Shares owned by
such holders, unless the Depositary determines that such distribution cannot be
made proportionately among such holders or that it is not feasible to make such
distribution, in which case the Depositary may, with the approval of Enron, sell
such securities or property and distribute the net proceeds from such sale to
such holders or adopt such other method as it deems equitable and practicable
for effecting such distribution.
WITHDRAWAL OF THE OFFERED SECOND PREFERRED STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Depositary (unless the related Offered Second Preferred Stock or Depositary
Shares have previously been called for redemption), and upon payment of the
charges provided in the Deposit Agreement and subject to the terms hereof, the
holder of the Depositary Shares evidenced thereby is entitled to delivery at
such office to or upon his order the number of whole shares of Offered Second
Preferred Stock and any money or other property represented by such Depositary
Shares. If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Offered Second Preferred Stock to be withdrawn, the
Depositary will deliver to such holder at the same time a new Depositary Receipt
evidencing such excess number of Depositary Shares. Holders of Offered Second
Preferred Stock thus withdrawn, and any subsequent holders of those shares, will
not thereafter be entitled to deposit such shares under the Deposit Agreement or
to receive Depositary Shares therefor.
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REDEMPTION OF DEPOSITARY SHARES
Upon redemption of Offered Second Preferred Stock represented by Depositary
Shares, the Depositary will redeem as of the same redemption date the number of
Depositary Shares representing Offered Second Preferred Stock so redeemed,
provided Enron shall have paid in full to the Depositary the redemption price of
the Offered Second Preferred Stock to be redeemed (which redemption price shall
include an amount equal to any accrued and unpaid dividends thereon to the date
fixed for redemption). The redemption price per Depositary Share will be equal
to the applicable fraction of the redemption price and any other amounts per
share payable with respect to the Offered Second Preferred Stock. If fewer than
all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by the Depositary by lot or pro rata or by any other
equitable method, in each case as may be determined by Enron.
VOTING OF THE OFFERED SECOND PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Offered
Second Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares. Each record holder of such Depositary Shares on the record
date (which will be the same date as the record date for the Offered Second
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of Offered Second Preferred Stock
represented by such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Offered Second Preferred
Stock represented by such Depositary Shares in accordance with such
instructions, and Enron will agree to take all reasonable action which may be
deemed necessary by the Depositary in order to enable the Depositary to do so.
The Depositary will abstain from voting Offered Second Preferred Stock (but, at
its discretion, not from appearing at any meeting with respect to such Offered
Second Preferred Stock) to the extent it does not receive specific instructions
from the holders of Depositary Shares representing Offered Second Preferred
Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Enron and the Depositary. However, any amendment which materially and
adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding.
The Deposit Agreement may be terminated by Enron upon not less than 60
days' notice, whereupon the Depositary shall deliver or make available to each
holder of Depositary Receipts, upon surrender of the Depositary Receipts held by
such holder, such number of whole or fractional shares of Offered Second
Preferred Stock represented by such Depositary Receipts. The Deposit Agreement
will automatically terminate if (i) all outstanding Depositary Shares have been
redeemed, or (ii) there has been a final distribution in respect of the Offered
Second Preferred Stock in connection with any liquidation, dissolution or
winding up of Enron and such distribution has been made to the holders of
Depositary Receipts.
CHARGES OF DEPOSITARY
Enron will pay all transfer and other taxes and governmental charges
arising solely from the existence of the Depositary arrangements. Enron will pay
the fees and expenses of the Depositary in connection with the performance of
its duties under the Deposit Agreement, to the extent specified in the Deposit
Agreement. Holders of Depositary Receipts will pay transfer and other taxes and
governmental charges.
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MISCELLANEOUS
Enron will forward to holders of Depositary Shares any reports and
communications that it sends to holders of Offered Second Preferred Stock.
Neither the Depositary nor Enron will be liable if it is prevented from or
delayed in, by law or any circumstances beyond its control, performing its
obligations under the Deposit Agreement. The obligations of Enron and the
Depositary under the Deposit Agreement will be limited to performing their
duties thereunder without negligence or willful misconduct, and Enron and the
Depositary will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Shares or any Offered Second Preferred Stock unless
satisfactory indemnity is furnished. Enron and the Depositary may rely on advice
of counsel or accountants, on information provided by holders of Depositary
Shares or other persons believed to be authorized or competent and on documents
believed to be genuine.
In the event the Depositary shall receive conflicting claims, requests or
instructions from any holders of Depositary Receipts, on the one hand, and
Enron, on the other hand, the Depositary shall be entitled to act on such
claims, requests or instructions received from Enron.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Enron notice of its
election to do so, and Enron may at any time remove the Depositary, any such
resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having, alone or together with its affiliates, a combined
capital and surplus of at least $50,000,000.
DESCRIPTION OF WARRANTS TO PURCHASE COMMON STOCK
The following statements with respect to the Stock Warrants are summaries
of, and subject to, the detailed provisions of a warrant agreement ("Stock
Warrant Agreement") to be entered into by Enron and a warrant agent to be
selected at the time of issue (the "Stock Warrant Agent"), and having the terms
described in the Prospectus Supplement relating thereto.
GENERAL
The Stock Warrants, evidenced by warrant certificates (the "Stock Warrant
Certificates"), may be issued under the Stock Warrant Agreement independently or
together with any Offered Securities and may be attached to or separate from
such Offered Securities. If Stock Warrants are offered, the Prospectus
Supplement will describe the terms of the warrants, including the following: (1)
the offering price, if any; (2) the number of shares of Common Stock purchasable
upon exercise of one Stock Warrant and the initial price at which such shares
may be purchased upon exercise; (3) the date on which the right to exercise the
Stock Warrants shall commence and the date on which such right shall expire; and
(4) any other terms of the Stock Warrants. The shares of Common Stock issuable
upon exercise of the Stock Warrants will, when issued in accordance with the
Stock Warrant Agreement, be fully paid and nonassessable.
EXERCISE OF STOCK WARRANTS
Stock Warrants may be exercised by surrendering to the Stock Warrant Agent
the Stock Warrant Certificate signed by the warrantholder, or his duly
authorized agent, indicating the warrantholder's election to exercise all or a
portion of the Stock Warrants evidenced by the certificate. Surrendered Stock
Warrant Certificates shall be accompanied by payment of the aggregate exercise
price of the Stock Warrants to be exercised, as set forth in the Prospectus
Supplement, which payment may be made in the form of cash or a check equal to
the exercise price. Certificates evidencing duly exercised Stock Warrants shall
be delivered by the Stock Warrant Agent to the transfer agent for the Common
Stock.
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Upon receipt thereof, the transfer agent shall deliver or cause to be delivered,
to or upon the written order of the exercising warrantholder, a certificate
representing the number of shares of Common Stock purchased. If fewer than all
of the Stock Warrants evidenced by any certificate are exercised, the Stock
Warrant Agent shall deliver to the exercising warrantholder a new Stock Warrant
Certificate representing the unexercised Stock Warrants.
ANTIDILUTION PROVISIONS
The exercise price payable and the number of shares of Common Stock
purchasable upon the exercise of each Stock Warrant will be subject to
adjustment in certain events, including (1) the issuance of a stock dividend to
holders of Common Stock or a combination, subdivision or reclassification of
Common Stock; (2) the issuance of rights, warrants or options to all holders of
Enron's Common Stock entitling the holders thereof to purchase Common Stock for
an aggregate consideration per share less than the current market price per
share of Common Stock; or (3) any distribution by Enron to the holders of its
Common Stock of evidences of indebtedness of Enron or of assets (excluding cash
dividends or distributions payable out of consolidated earnings and earned
surplus and dividends or distributions referred to in (1) above). In lieu of
adjusting the number of shares of Common Stock purchasable upon exercise of each
Stock Warrant, Enron may elect to adjust the number of Stock Warrants. No
adjustment in the number of shares purchasable upon exercise of the Stock
Warrants will be required until cumulative adjustments require an adjustment of
at least 1% thereof. Enron may, at its option, reduce the exercise price at any
time. No fractional shares will be issued upon exercise of Stock Warrants, but
Enron will pay the cash value of any fractional shares otherwise issuable.
Notwithstanding the foregoing, in case of any consolidation, merger or sale or
conveyance of the property of Enron as an entirety or substantially as an
entirety, the holder of each outstanding Stock Warrant upon exercise thereof
shall have the right to the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number of
shares of Common Stock for which such Stock Warrant was exercisable immediately
prior thereto.
NO RIGHTS AS STOCKHOLDERS
Holders of Stock Warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of Enron or any other matter or to exercise any rights whatsoever as
stockholders of Enron.
DESCRIPTION OF WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the Debt Warrants are summaries
of, and subject to, the detailed provisions of a warrant agreement (the "Debt
Warrant Agreement") to be entered into by Enron and a warrant agent to be
selected at the time of issue (the "Debt Warrant Agent"), and having the terms
described in the Prospectus Supplement relating thereto.
GENERAL
The Debt Warrants, evidenced by warrant certificates (the "Debt Warrant
Certificates"), may be issued under the Debt Warrant Agreement independently or
together with any Offered Debt Securities and may be attached to or separate
from such Offered Debt Securities. If Debt Warrants are offered, the Prospectus
Supplement will describe the terms of the warrants, including the following: (1)
the offering price, if any; (2) the designation, aggregate principal amount and
terms of the Debt Securities purchasable upon exercise of the warrants; (3) if
applicable, the designation and terms of the Debt Securities with which the Debt
Warrants are issued and the number of warrants issued with each such Debt
Security; (4) if applicable, the date on and after which the Debt Warrants and
the related Debt Securities will be separately transferable; (5) the principal
amount of Debt Securities purchasable upon exercise of one Debt Warrant and the
price at which such principal amount of Debt Securities may be
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purchased upon exercise; (6) the date on which the right to exercise the Debt
Warrants shall commence and the date on which such right shall expire; (7)
federal income tax consequences; (8) whether the warrants represented by the
Debt Warrant Certificates will be issued in registered or bearer form; and (9)
any other terms of the Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the Debt
Warrant Agent, which will be listed in the Prospectus Supplement relating
thereto, or at such other office as may be set forth therein. Warrantholders
will not have any of the rights of holders of Debt Securities (except to the
extent that the consent of warrantholders may be required for certain
modifications of the terms of an Indenture and the series of Debt Securities
issuable upon exercise of the Debt Warrants) and will not be entitled to
payments of principal of and interest, if any, on the Debt Securities.
EXERCISE OF DEBT WARRANTS
Debt Warrants may be exercised by surrendering the Debt Warrant Certificate
at the corporate trust office of the Debt Warrant Agent, with the form of
election to purchase on the reverse side of the Debt Warrant Certificate
properly completed and executed, and by payment in full of the exercise price,
as set forth in the Prospectus Supplement relating thereto. Upon the exercise of
Debt Warrants, the Debt Warrant Agent will, as soon as practicable, deliver the
Debt Securities in authorized denominations in accordance with the instructions
of the exercising warrantholder. If less than all of the Debt Warrants evidenced
by the warrant certificate are exercised, a new Debt Warrant Certificate will be
issued for the remaining amount of Debt Warrants.
ENRON CAPITAL RESOURCES, L.P.
GENERAL
Enron Capital Resources is a limited partnership organized under the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act"). Enron is
the general partner of Enron Capital Resources (the "General Partner"), and a
wholly owned subsidiary of Enron is its organizational limited partner. All of
the general and limited partner interests in Enron Capital Resources are
beneficially owned by Enron or its wholly owned subsidiary, and upon the sale of
the Preferred Securities the wholly owned subsidiary will withdraw as a limited
partner so that thereafter all of such interests will be owned by holders of
Preferred Securities. Enron Capital Resources' executive offices are located at
1400 Smith Street, Houston, Texas 77002, and its telephone number is (713)
853-6161. All of the business and affairs of Enron Capital Resources are
conducted by Enron, as General Partner. Enron Capital Resources exists solely
for the purpose of issuing limited partner interests designated as Preferred
Securities and lending the net proceeds thereof to Enron.
PREFERRED SECURITIES
Enron Capital Resources may from time to time issue limited partner
interests designated as Preferred Securities, in one or more series, having
terms described in the Prospectus Supplement relating thereto. The Preferred
Securities may be designated as preferred securities, preferred units or
preferred shares, or may have such other designation as Enron shall establish,
as described in the Prospectus Supplement relating thereto. Under Enron Capital
Resources' agreement of limited partnership (the "Partnership Agreement"),
Enron, as General Partner, may establish the terms of each series of Preferred
Securities, including distribution, redemption, voting and liquidation rights
and such other preferred, deferred or other special rights or such restrictions,
as Enron may determine, such terms to be set forth in the related Prospectus
Supplement. Upon the first issuance of Preferred Securities, the wholly owned
subsidiary of Enron that serves as organizational limited partner will withdraw
as a limited partner, and thereafter holders of Preferred Securities will be the
only limited partners of Enron Capital Resources. The Preferred Securities of
Enron Capital Resources offered hereby will be guaranteed by Enron to the
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limited extent set forth below under "Guarantee" and may also be entitled to the
benefits of certain undertakings of Enron as described below under "Backup
Undertakings". Any special federal income tax, accounting and other
considerations applicable to any offering of Preferred Securities and related
Backup Undertakings will be described in the Prospectus Supplement relating
thereto.
GUARANTEE
Enron will irrevocably and unconditionally agree (the "Guarantee"), to the
extent set forth herein, to pay in full, to the holders of Preferred Securities
of any series, the Guarantee Payments (as defined below), as and when due,
regardless of any defense, right of set-off or counterclaim which Enron Capital
Resources may have or assert. The Guarantee will constitute a guarantee of
payment and not of collection and may be enforced by holders of Preferred
Securities directly against Enron. The following payments to the extent not paid
by Enron Capital Resources (the "Guarantee Payments") will be subject to the
Guarantee (without duplication): (i) any accumulated arrears and accruals of
unpaid distributions which have been declared on the Preferred Securities of any
series out of moneys legally available therefor, (ii) the redemption price
including all accumulated arrears and accruals of unpaid distributions payable,
out of moneys legally available therefor, with respect to any Preferred
Securities of any series called for redemption, (iii) upon a liquidation of
Enron Capital Resources, the lesser of (a) the aggregate of the liquidation
preference and all accumulated arrears and accruals of unpaid distributions
(whether or not declared) on the Preferred Securities of any series to the date
of payment and (b) the amount of assets of Enron Capital Resources remaining
available for distribution in liquidation to the holders of Preferred Securities
of such series, and (iv) any additional amounts payable by Enron Capital
Resources as described in the accompanying Prospectus Supplement. In addition,
the Prospectus Supplement relating to a series of Preferred Securities will
describe the rank of the Guarantee and any additional covenants or other terms
of the Guarantee of Enron with respect to such series, including any additional
amounts payable under the Guarantee with respect thereto.
BACKUP UNDERTAKINGS
Enron will guarantee the payment of any liabilities incurred by Enron
Capital Resources (other than obligations to holders of Preferred Shares)
pursuant to an amendment to the Partnership Agreement or a separate agreement
between Enron and Enron Capital Resources. Such agreement will be for the
benefit of, and enforceable by, third parties to whom Enron Capital Resources
owes such obligations.
In connection with any series of Preferred Securities, Enron may enter into
additional arrangements with Enron Capital Resources, including intercompany
loan agreements and amendments to the Partnership Agreement, that operate
directly or indirectly for the benefit of holders of the Preferred Securities.
The Guarantee described above under "Guarantee", any intercompany loan
agreements, the agreement described in the previous paragraph and any such other
arrangements are herein collectively referred to as "Backup Undertakings" of
Enron and will be described in the Prospectus Supplement relating to any series
of Preferred Securities to which they apply.
THE PARTNERSHIP AGREEMENT
The following paragraphs are a summary of certain provisions of the
Partnership Agreement. A copy of the Partnership Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. Any
amendments to the Partnership Agreement, including those that relate to a series
of Preferred Securities, will be described in the Prospectus Supplement relating
to such series of Preferred Securities. Enron Capital Resources will provide to
prospective investors a copy of the form of such agreement and any such
amendment upon request at no charge. The following discussion is qualified in
its entirety by reference to the Partnership Agreement as it may be amended.
PURPOSE. The purpose of Enron Capital Resources under the Partnership
Agreement is limited to issuing one or more series of Preferred Securities and
loaning the net proceeds thereof to Enron. The
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General Partner is authorized to perform all acts deemed necessary to carry out
such purposes and to conduct the business of Enron Capital Resources.
COMPENSATION TO GENERAL PARTNER. The Partnership Agreement provides that
the General Partner is not entitled to receive any compensation for its services
as general partner of Enron Capital Resources.
AMENDMENT OF PARTNERSHIP AGREEMENT. The Partnership Agreement may be
amended by the General Partner, except as otherwise described in a Prospectus
Supplement relating to Preferred Securities.
MEETINGS; VOTING. Holders of Preferred Securities who are record holders of
Preferred Securities on the record date set pursuant to the Partnership
Agreement will be entitled to notice of, and to vote at, meetings of holders of
Preferred Securities and to act with respect to matters as to which approvals
may be solicited. The General Partner does not anticipate that any meeting of
holders of Preferred Securities will be called in the foreseeable future.
LIMITED LIABILITY. Assuming that a holder of Preferred Securities does not
participate in the control of the business of Enron Capital Resources, within
the meaning of the Delaware Act, and that he otherwise acts in conformity with
the provisions of the Partnership Agreement, his liability under the Delaware
Act will be limited generally to the amount of capital he is obligated to
contribute to Enron Capital Resources in respect of his Preferred Securities
plus his share of any undistributed profits and assets of Enron Capital
Resources. Enron Capital Resources will operate in such manner as the General
Partner deems reasonable and necessary or appropriate to preserve the limited
liability of holders of Preferred Securities. Under the Delaware Act, a limited
partnership may not make a distribution to a partner to the extent that at the
time of the distribution, after giving effect to the distribution, all
liabilities of the partnership, other than liabilities to partners on account of
their partnership interests and nonrecourse liabilities, exceed the fair value
of the assets of the limited partnership. The Delaware Act provides that a
limited partner who receives such a distribution and knew at the time of the
distribution that the distribution was in violation of the Delaware Act shall be
liable to the limited partnership for the amount of the distribution for three
years from the date of the distribution. Under the Delaware Act, an assignee who
becomes a substituted limited partner of a limited partnership is liable for the
obligations of his assignor to make contributions to the partnership, except the
assignee is not obligated for liabilities unknown to him at the time he became a
limited partner and which could not be ascertained from the partnership
agreement.
TERMINATION AND DISSOLUTION. Enron Capital Resources will continue until
December 31, 2084, unless sooner terminated pursuant to the Partnership
Agreement. Enron Capital Resources will be dissolved in certain events,
including upon (i) the election of the General Partner to dissolve Enron Capital
Resources, if approved by the holders of at least a majority of the voting power
of the Preferred Shares, (ii) the bankruptcy or dissolution of the General
Partner or (iii) under certain circumstances, withdrawal or removal of the
General Partner.
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PLAN OF DISTRIBUTION
Enron, Enron Capital Resources and/or the Selling Stockholders may sell the
Offered Securities (i) through underwriters or dealers; (ii) directly to
purchasers; (iii) through agents; or (iv) from time to time at prevailing market
prices on the New York Stock Exchange, in the case of sales of Common Stock. The
Prospectus Supplement with respect to the Offered Securities will set forth the
terms of the offering of the Offered Securities, including the name or names of
any underwriters or agents, the purchase price of the Offered Securities and the
proceeds to Enron, Enron Capital Resources and/or the Selling Stockholders from
such sale, any delayed delivery arrangements, any underwriting discounts and
commissions and other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Securities, Enron, Enron
Capital Resources and/or the Selling Stockholders will sell such Offered
Securities to the dealers as principals. The dealers may then resell such
Offered Securities to the public at varying prices to be determined by such
dealers at the time of resale.
The Offered Securities may be sold directly by Enron, Enron Capital
Resources and/or the Selling Stockholders or through agents designated by Enron,
Enron Capital Resources and/or the Selling Stockholders from time to time. Any
agent involved in the offer or sale of the Offered Securities in respect to
which this Prospectus is delivered will be named, and any commissions payable by
Enron, Enron Capital Resources and/or the Selling Stockholders to such agent
will be set forth, in the Prospectus Supplement relating thereto. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
Common Stock offered by Selling Stockholders may be sold from time to time
on the New York Stock Exchange at prevailing market prices. The terms of any
such sales will be described in the Prospectus Supplement, if any, relating
thereto.
If so indicated in the Prospectus Supplement, Enron, Enron Capital
Resources and/or the Selling Stockholders will authorize agents, underwriters or
dealers to solicit offers from certain types of institutions to purchase Offered
Securities from Enron, Enron Capital Resources and/or the Selling Stockholders
at the public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a specified
date in the future. Such contracts will be subject only to those conditions set
forth in the Prospectus Supplement, and the Prospectus Supplement will set forth
the commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements with
Enron, Enron Capital Resources and/or the Selling Stockholders to
indemnification by Enron or Enron Capital Resources against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such agents, dealers or underwriters may be
required to make in respect thereof. Agents, dealers and underwriters may be
customers of, engage in transactions with or perform services for Enron in the
ordinary course of business.
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The Offered Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Offered
Securities.
VALIDITY OF SECURITIES
The validity of the Offered Securities will be passed upon for Enron and
Enron Capital Resources 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.
EXPERTS
The consolidated financial statements and schedules included in Enron's
Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by
reference in this Prospectus, have been audited by Arthur Andersen & Co.,
independent public accountants, as indicated in their reports with respect
thereto. The consolidated financial statements and schedules referred to above
and such reports have been incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing 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, 1993, 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.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE
PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY
THE PROSPECTUS AND THIS PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY ENRON OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THE PROSPECTUS OR THIS
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER OR HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF ENRON SINCE THE DATE HEREOF. THE PROSPECTUS AND THIS PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
---------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Capitalization......................... S-2
Use of Proceeds........................ S-3
Ratio of Earnings to Fixed Charges..... S-3
Recent Developments.................... S-3
Description of Notes................... S-3
Underwriting........................... S-4
Validity of the Notes.................. S-4
PROSPECTUS
Available Information.................. 2
Incorporation of Certain Documents by
Reference............................ 3
Business of Enron Corp. ............... 4
Use of Proceeds........................ 5
Ratios of Enron's Earnings to Fixed
Charges and Earnings to Fixed Charges
and Preferred Stock Dividends........ 5
Description of Debt Securities......... 6
Selling Stockholders................... 12
Description of Enron Corp.
Capital Stock........................ 13
Description of Depositary Shares....... 17
Description of Warrants to Purchase
Common Stock......................... 19
Description of Warrants to Purchase
Debt Securities...................... 20
Enron Capital Resources, L.P. ......... 21
Plan of Distribution................... 24
Validity of Securities................. 25
Experts................................ 25
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</TABLE>
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$150,000,000
[ENRON CORP. LOGO]
8 1/2% NOTES DUE FEBRUARY 1, 2000
---------------------------
PROSPECTUS SUPPLEMENT
JANUARY 26, 1995
---------------------------
LEHMAN BROTHERS
CITICORP SECURITIES, INC.
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