UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 1-3423
ENRON CORP.
(Exact name of registrant as specified in its charter)
Delaware 47-0255140
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Enron Building
1400 Smith Street
Houston, Texas 77002
(Address of principal executive (Zip Code)
offices)
(713) 853-6161
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at October 31, 1996
Common Stock, $0.10 Par Value 254,445,710 shares
1 of 25
<PAGE>
ENRON CORP. AND SUBSIDIARIES
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statement of Income - Three
Months Ended September 30, 1996 and 1995 and
Nine Months Ended September 30, 1996 and 1995 3
Consolidated Balance Sheet - September 30, 1996
and December 31, 1995 4
Consolidated Statement of Cash Flows - Nine
Months Ended September 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 24
ITEM 6. Exhibits and Reports on Form 8-K 24
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $3,225,207 $2,185,805 $9,240,127 $6,639,100
Costs and Expenses
Cost of gas and other products 2,471,436 1,556,549 7,123,870 4,726,462
Operating expenses 378,377 277,313 956,004 769,637
Oil and gas exploration expenses 23,537 17,654 61,877 60,629
Depreciation, depletion and
amortization 116,394 111,050 345,853 321,290
Taxes, other than income taxes 29,109 28,363 98,786 85,373
3,018,853 1,990,929 8,586,390 5,963,391
Operating Income 206,354 194,876 653,737 675,709
Other Income and Deductions
Equity in earnings of
unconsolidated subsidiaries 34,495 21,225 105,799 48,952
Interest income 8,462 4,827 32,299 19,293
Other, net 12,232 18,400 149,872 97,263
Income Before Interest, Minority
Interests and Income Taxes 261,543 239,328 941,707 841,217
Interest and Related Charges, net 65,229 75,863 200,315 213,790
Dividends on Company-Obligated
Preferred Stock of Subsidiaries 8,125 8,513 24,083 24,209
Minority Interests 16,914 11,003 54,988 34,285
Income Taxes 48,401 43,366 209,956 179,355
Net Income 122,874 100,583 452,365 389,578
Preferred Stock Dividends 3,979 3,777 11,946 11,405
Earnings on Common Stock $ 118,895 $ 96,806 $ 440,419 $ 378,173
Earnings Per Share of Common Stock
Primary $ 0.48 $ 0.40 $ 1.79 $ 1.55
Fully Diluted $ 0.45 $ 0.37 $ 1.68 $ 1.45
Average Number of Common Shares
Used in Primary Computation 246,773 243,940 245,601 243,667
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 104,530 $ 114,917
Trade receivables 863,961 1,115,709
Other receivables 412,555 310,790
Transportation and exchange gas receivable 58,689 149,659
Inventories 123,100 111,463
Assets from price risk management activities 679,597 579,749
Other 342,886 344,620
Total Current Assets 2,585,318 2,726,907
Investments and Other Assets
Investments in unconsolidated subsidiaries 1,805,964 1,216,474
Assets from price risk management activities 2,009,412 1,197,029
Other 1,501,216 1,230,090
Total Investments and Other Assets 5,316,592 3,643,593
Property, Plant and Equipment, at cost 11,163,452 11,107,181
Less accumulated depreciation, depletion
and amortization 4,244,277 4,238,746
Net Property, Plant and Equipment 6,919,175 6,868,435
Total Assets $14,821,085 $13,238,935
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousands)
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 995,646 $ 1,020,599
Transportation and exchange gas payable 83,051 144,141
Accrued taxes 75,354 121,192
Accrued interest 62,123 51,692
Liabilities from price risk management
activities 683,734 708,353
Other 470,684 386,015
Total Current Liabilities 2,370,592 2,431,992
Long-Term Debt 3,563,208 3,064,839
Deferred Credits and Other Liabilities
Deferred income taxes 2,199,909 2,185,748
Deferred revenue 150,909 202,217
Liabilities from price risk management
activities 1,287,294 590,302
Other 636,350 673,223
Total 4,274,462 3,651,490
Minority Interests 628,324 548,648
Company-Obligated Preferred Stock of
Subsidiaries 391,750 376,750
Shareholders' Equity
Second preferred stock, cumulative,
$1 par value 137,178 137,550
Common stock, $0.10 par value 25,596 25,386
Additional paid in capital 1,891,384 1,791,151
Retained earnings 1,929,062 1,650,949
Cumulative foreign currency translation
adjustment (150,489) (153,563)
Common stock held in treasury (75,394) (92,642)
Other (including Flexible Equity Trust) (164,588) (193,615)
Total 3,592,749 3,165,216
Total Liabilities and Shareholders' Equity $14,821,085 $13,238,935
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities
Reconciliation of net income to net cash
provided by (used in) operating activities
Net income $ 452,365 $ 389,578
Depreciation, depletion and amortization 345,853 321,290
Oil and gas exploration expenses 61,877 60,629
Amortization of deferred contract reformation
costs 9,145 19,068
Deferred income taxes 163,185 127,631
Gain on sale of assets (177,331) (123,174)
Regulatory, litigation and other contingency
adjustments (38,669) (32,168)
Changes in components of working capital 110,922 (478,671)
Deferred contract reformation costs (11,327) (14,376)
Amortization of production payments (32,538) (32,418)
Price risk management activities (239,858) (196,256)
Other, net (158,091) 1,028
Net Cash Provided by Operating Activities 485,533 42,161
Cash Flows From Investing Activities
Proceeds from sale of assets and investments 347,554 186,938
Additions to property, plant and equipment (515,048) (531,315)
Equity investments (664,171) (90,660)
Other, net (60,377) (42,496)
Net Cash Used in Investing Activities (892,042) (477,533)
Cash Flows From Financing Activities
Issuance of long-term debt 172,265 639,538
Net increase in short-term borrowings 466,151 227,933
Decrease in long-term debt (142,484) (245,631)
Acquisition of treasury stock (110,281) (89,523)
Issuance of treasury stock 91,227 47,639
Issuance of company-obligated preferred stock
of subsidiaries 15,000 -
Issuance of common stock 101,933 19,806
Dividends paid (206,220) (190,382)
Other, net 8,531 -
Net Cash Provided by Financing Activities 396,122 409,380
Decrease in Cash and Cash Equivalents (10,387) (25,992)
Cash and Cash Equivalents, Beginning of Period 114,917 132,336
Cash and Cash Equivalents, End of Period $ 104,530 $ 106,344
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein
have been prepared by Enron Corp. (Enron) without audit
pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, these statements reflect
all adjustments (consisting only of normal recurring
entries) which are, in the opinion of management, necessary
for a fair statement of the financial results for the
interim periods. Certain information and notes normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
Enron believes that the disclosures are adequate to make the
information presented not misleading. These consolidated
financial statements should be read in conjunction with the
financial statements and the notes thereto incorporated into
Enron's Annual Report on Form 10-K for the year ended
December 31, 1995 (Form 10-K).
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results
could differ from those estimates.
Certain reclassifications have been made in the 1995
amounts to conform with the 1996 presentation.
"Enron" is used from time to time herein as a collective
reference to Enron Corp. and its subsidiaries and
affiliates. In material respects, the businesses of Enron
are conducted by the subsidiaries and affiliates whose
operations are managed by their respective officers.
2. SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income taxes for the first nine months of
1996 and 1995 was $78.1 million and $6.0 million,
respectively. Cash paid for interest expense for the same
periods, net of amounts capitalized, was $205.4 million and
$212.8 million, respectively.
Changes in components of working capital are as follows
(in thousands):
<TABLE>
<CAPTION>
First Nine Months
1996 1995
<S> <C> <C>
Receivables $ 234,921 $ (51,602)
Inventories (11,637) 11,085
Prepayments 19,047 (22,917)
Payables (86,044) (178,908)
Accrued taxes (45,839) 27,246
Accrued interest 10,431 4,308
Other (9,957) (267,883)
$ 110,922 $(478,671)
</TABLE>
3. LITIGATION AND CONTINGENCIES
As reported in the Form 10-K, in 1995 several parties
(the Plaintiffs) filed suit in Harris County District Court
in Houston, Texas against Intratex Gas Company (Intratex),
Houston Pipe Line Company and Panhandle Gas Company
(collectively, the Enron Defendants), each of which is a
wholly-owned subsidiary of Enron. The Plaintiffs were
either sellers or royalty owners under numerous gas purchase
contracts with Intratex, many of which have terminated.
Early in 1996, the case was severed by the Court into two
matters to be tried (or otherwise resolved) separately. In
the first matter, the Plaintiffs alleged that the Enron
Defendants committed fraud and negligent misrepresentation
in connection with the "Panhandle program," a special
marketing program established in the early 1980s. This case
was tried in October 1996 and resulted in a verdict for the
Enron Defendants. In the second matter, the Plaintiffs
allege that Intratex violated state regulatory requirements
and certain gas purchase contracts by failing to take the
Plaintiffs' gas ratably with other producers' gas at certain
times between 1978 and 1988. The Court has certified a
class action with respect to these ratability claims. The
Enron Defendants have appealed the court's decision to
certify a class action. The Enron Defendants deny the
Plaintiffs' claims and have asserted various affirmative
defenses, including the statute of limitations. The Enron
Defendants believe that they have strong legal and factual
defenses, and intend to vigorously contest the claims.
Although no assurances can be given, Enron believes that the
ultimate resolution of these matters will not have a
materially adverse effect on its financial position or
results of operations.
In connection with a Power Purchase Agreement between
Dabhol Power Company, Enron's 80%-owned subsidiary, and the
Maharashtra State Electricity Board (MSEB), Dabhol Power
Company has been developing Phase I of an electricity
generating power plant south of Bombay, State of
Maharashtra, India (the Project). On August 3, 1995, after
construction had begun, a new coalition government in the
State of Maharashtra announced the State government's
intention to terminate the Project, and construction ceased
on August 8, 1995. Enron believes that such actions were in
clear violation of the contract and in response to these
actions, Dabhol Power Company commenced arbitration
proceedings in London against the State government for the
actions it has taken to terminate the Project. Dabhol Power
Company seeks to recover all of its construction and other
expenses, in addition to lost profits. After the arbitration
proceedings had begun, Dabhol Power Company began
renegotiating the Power Purchase Agreement with MSEB and the
Maharashtra state government. Such renegotiations, which
are complete pending final lender approvals, have resulted
in a restructured transaction (that includes both Phase I
and Phase II and that increases the planned capacity of the
facility) on terms that are acceptable to Enron. The parties
are working together in good faith and Enron anticipates
final lender approval in the near future. Although the
outcomes of the arbitration and the renegotiation processes
cannot be predicted with certainty, based on currently
available information, Enron believes that the ultimate
outcome of the Project will not have a materially adverse
effect on its financial position.
On March 29, 1996, Enron and two of its wholly-owned
subsidiaries filed suit in the state district court of
Harris County, Texas seeking a ruling that the Capacity
Reservation and Transportation Agreement (CRTA) dated
September 10, 1990 between Teesside Gas Transportation
Limited (TGTL), an Enron subsidiary, and the "CATS" parties
has terminated due to consistent material breaches of that
agreement by the CATS parties. The suit has been removed to
the federal district court in Houston, Texas. Proceedings
in the Houston lawsuit have been enjoined by an English
court and Enron is appealing the injunction. In April 1996,
TGTL, reserving its position in the Houston lawsuit,
notified the CATS parties in accordance with the provisions
of the CRTA that as a result of their failure to make
available the Transportation Service (as defined in the
contract) by April 1, 1996, the CRTA was terminated. The
CATS parties were to have provided transportation under the
CRTA to ship gas through the Central Area Transmission
System (CATS) pipeline, owned by the CATS parties. In a
separate lawsuit filed in the English court, the CATS
parties are suing TGTL and Enron (on the basis of its
guarantee of TGTL's obligations under the CRTA) for
allegedly failing to make quarterly "send-or-pay" payments
under the CRTA. TGTL has refused to make these payments for
the same reason that it terminated the CRTA: the
Transportation Service (as defined in the CRTA) has not been
available. Termination of the CRTA leads to termination of
the "J-Block Contracts". Trial on these matters commenced
in the English court on October 28, 1996.
The "J-Block Contracts" are long-term gas contracts that
Enron entered into in March 1993 with Phillips Petroleum
Company United Kingdom Limited, British Gas Exploration and
Production Limited and Agip (U.K.) Limited to purchase
future gas production from the J-Block field which is
located in the North Sea offshore the United Kingdom. Such
agreements provided for Enron to take or pay for the gas at
a fixedprice (with possible escalations throughout the
contract period). The agreements provided that gas paid
for, but not taken, could be recovered in later contract
years. In September 1995, Enron announced that, in
accordance with its contractual rights, it had notified the
J-Block sellers that Enron's nominations for gas from the J-
Block fields were estimated to be zero from the first
delivery date through September 30, 1997. In addition, in
accordance with its contractual rights, Enron made no
estimated nominations for J-Block gas under the J-Block
Contracts for the contract year ending September 30, 1998.
While not challenging these actions, the J-Block sellers
have, in a proceeding commenced in English court on March
29, 1996, sought a declaration that Enron should have agreed
to a "Commissioning Date" (which might trigger Enron's take-
or-pay obligations) of earlier than September 25, 1996, the
date set forth in the J-Block Contracts as the Commissioning
Date in the absence of an agreement by the parties on an
earlier Commissioning Date. In October 1996, an English
Court of Appeal ruled that Enron was not obligated to agree
on an earlier Commissioning Date. This ruling is being
appealed to the House of Lords by the J-Block sellers.
Enron continues to believe that there are many reasons for
the parties to resolve any contract issues commercially, but
efforts have not been successful to date. Although no
assurances can be given, based upon the foregoing and other
information currently available, Enron does not anticipate
that the ultimate outcome of the J-Block matter will have a
materially adverse effect on its financial position.
The Environmental Protection Agency (EPA) has informed
Enron that it is a potentially responsible party at the
Decorah Former Manufactured Gas Plant Site (the Decorah
Site) in Decorah, Iowa, pursuant to the
provisions of the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA, also commonly known
as Superfund). The manufactured gas plant in Decorah ceased
operations in 1951. A predecessor company of Enron
purchased the Decorah Site in 1963 to connect its natural
gas pipeline to the local distribution pipeline system
serving the city of Decorah. Enron's predecessor did not
operate the gas plant and sold the Decorah Site in 1965.
The EPA alleges that hazardous substances were released to
the environment during the period in which Enron's
predecessor owned the site, and that Enron's predecessor
assumed the liabilities of the company that operated the
plant. Enron contests these allegations. Historically,
manufactured gas plants, such as the one at Decorah,
produced tars as a residue, some of which may have come to
be located on site when the plant was operating. The EPA is
interested in locating subsurface tars at the Decorah Site.
Enron has entered into a consent order with the EPA by which
it has agreed, although admitting no liability, to replace
affected topsoil in certain areas of the tract where the
plant was formerly located, and to take deep soil samples in
those areas where subsurface contamination would most likely
to be located. To date, the EPA has identified no other
potentially responsible parties with respect to this site.
Enron believes that expenses incurred in connection with
this matter will not have a materially adverse effect on its
financial position or results of operations.
4. PROPOSED MERGER
Enron announced on July 22, 1996 that it had signed an
agreement to merge with Portland General Corporation (PGC)
in a stock-for-stock transaction. PGC is an electric
utility holding company, serving retail electric customers
in northwest Oregon as well as wholesale electricity
customers throughout the western United States. Enron
proposes to issue approximately 51 million common shares to
shareholders of PGC in a one for one exchange of shares, as
a result of which Enron will be the surviving corporation.
Enron will account for the transaction on a purchase
accounting basis.
In separate shareholder meetings held on November 12,
1996, 75% of Enron common shares and 77% of PGC common
shares were voted in favor of the merger. Under the terms
of the merger agreement, the "collar" provisions, which had
provided both companies with the right to terminate the
merger agreement upon specified changes in Enron's common
stock price, expired on the day of the shareholder meetings.
The merger is conditioned, among other things, upon the
completion of regulatory procedures at the Oregon Public
Utilities Commission and the Federal Energy Regulatory
Commission. Final regulatory approval is expected in mid-
1997.
5. POSSIBLE SALE OF LIQUIDS ASSETS
Enron is considering the sale of the stock of the wholly-
owned subsidiary that is the general partner and owner of
its 15% interest in Enron Liquids Pipeline, L.P., as well as
the sale of certain other natural gas liquids assets. If no
acceptable offers are submitted, Enron will continue to own
these assets and operate the facilities. The disposition of
any or all of these assets would not be material to Enron's
consolidated business.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ENRON CORP. AND SUBSIDIARIES
RESULTS OF OPERATIONS
Third Quarter 1996
vs. Third Quarter 1995
The following review of Enron's results of operations
should be read in conjunction with the Consolidated
Financial Statements.
CONSOLIDATED NET INCOME
Enron's third quarter 1996 net income increased to $123
million as compared to $101 million during the third quarter
of 1995. Net income in the third quarter of 1996 benefited
primarily from strong performances in the transportation and
operation and domestic gas and power services segments and
decreased interest expense. These increases were partially
offset by increased minority interests and income taxes.
Earnings per share rose to $0.48 in the third quarter of
1996 from $0.40 in the same period in 1995.
INCOME BEFORE INTEREST, MINORITY INTERESTS AND INCOME TAXES
The following table presents income before interest,
minority interests and income taxes (IBIT) for each of
Enron's operating segments (in millions).
<TABLE>
<CAPTION>
Third Quarter Increase
1996 1995 (Decrease)
<S> <C> <C> <C>
Transportation and Operation $ 98 $ 83 $15
Domestic Gas and Power Services 74 60 14
International Operations and
Development 37 40 (3)
Exploration and Production 50 53 (3)
Corporate and Other 3 3 -
Total $262 $239 $23
</TABLE>
TRANSPORTATION AND OPERATION
The transportation and operation segment includes Enron's
interstate natural gas pipelines, construction of power,
pipeline and liquids projects, management and operation of
pipelines and clean fuels plants and Enron's investment in
crude oil marketing and transportation operations conducted
by EOTT Energy Partners, L.P. (EOTT) and liquids pipeline
operations. The segment's IBIT increased $15 million in the
third quarter of 1996 as compared to the same period in
1995. The following discussion analyzes the significant
changes in the various components of IBIT for the
transportation and operation segment.
REVENUES
Revenues of the transportation and operation segment
declined $19 million (10%) during the third quarter of 1996
as compared to the same period in 1995. Increased
engineering and construction revenues were offset by
decreased revenues related to gathering facilities sold in
1995 and the first quarter of 1996 and reduced sales revenue
at Northern Natural Gas Company (Northern Natural) as that
pipeline is now exclusively a transporter of natural gas.
COSTS AND EXPENSES
The cost of gas and other products sold by the
transportation and operation segment decreased by $10
million (79%) during the third quarter of 1996 compared to
the same period in 1995 primarily as a result of decreased
gas purchases by Northern Natural as that pipeline is now
exclusively a transporter of natural gas.
Operating expenses in the transportation and operation
segment declined $14 million (18%) during the third quarter
of 1996 as compared to the same period in 1995. The decline
primarily reflects lower operating expenses on the
interstate pipelines primarily as a result of reduced
expenses related to gathering facilities sold during 1995
and the first quarter of 1996.
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
increased $8 million to $13 million in the third quarter of
1996 as compared to the same period in 1995 primarily as a
result of higher earnings realized by EOTT as compared with
the 1995 period, which included a charge to reflect the
discontinuance of EOTT's West Coast processing and asphalt
marketing operations.
DOMESTIC GAS AND POWER SERVICES
Enron Capital & Trade Resources (ECT) conducts Enron's
energy commodity marketing, purchasing and financing
activities and the management of the portfolio of
commitments arising from these activities. ECT's services
can be categorized into three business lines: Cash and
Physical, Risk Management and Finance. The domestic gas and
power services segment's IBIT for the third quarter of 1996
increased $14 million from the same period in 1995. The
following discussion analyzes the contributions to IBIT for
each of these business lines.
Statistics for ECT (including intercompany amounts) are
as follows:
<TABLE>
<CAPTION>
Third Quarter
1996 1995
<S> <C> <C>
Natural Gas and Crude Oil
Physical/Notional Quantities (BBtue/d) (1)
Firm (2) 5,851 4,601
Interruptible 3,635 2,525
Transport Volumes 600 745
Subtotal 10,086 7,871
Financial Settlements (Notional) 35,965 29,681
Total 46,051 37,552
Production Payments and Financings
Arranged (In Millions) $174.5 $65.1
Fixed Price Contract Originations
(TBtue) (3) 328 1,542
Electricity (Thousand Megawatt hours)
Owned Production 791 945
Transaction Volumes Marketed 18,713 2,336
<FN>
(1) Billion British thermal units equivalent per day.
(2) Commitments to deliver a specified volume of gas at a
fixed or market responsive price.
(3) Trillion British thermal units equivalent.
</TABLE>
The cash and physical operations include earnings from
physical contracts of one year or less involving marketing
and transportation of physical natural gas, liquids,
electricity and other commodities, earnings from the
management of ECT's contract portfolio and earnings related
to the physical assets of ECT. Also reported in this
business are the effects of actual settlements of ECT's long-
term physical and notional quantity-based contracts. The
cash and physical operations' earnings before overhead
expenses were $19 million in the third quarter of 1996 and
$36 million in the same period in 1995. The earnings from
this business unit decreased in the third quarter of 1996
primarily due to lower earnings from ECT's natural gas
assets, partially offset by increased earnings from
commodity marketing.
The risk management operations consist of market
origination activity on new long-term contracts
(transactions greater than one year) and restructuring of
existing long-term contracts. Third quarter earnings before
overhead expenses from this unit were $40 million in 1996
compared to $31 million in 1995. Earnings from this unit
increased primarily due to increased originations for
liquids and long-term contracts with utilities.
ECT's finance operations provide capital to customers
through various product offerings. The finance operations
had earnings before overhead expenses of $42 million in the
third quarter of 1996 as compared to $19 million in 1995.
The 1996 increase in earnings relates primarily to the
increased value of ECT's equity investments.
ECT's overhead expenses such as rent, systems expenses
and other support group costs were $27 million in the third
quarter of 1996 and $26 million in the same period in 1995.
INTERNATIONAL OPERATIONS AND DEVELOPMENT
The international segment includes earnings from the
development and promotion of natural gas pipeline and power
projects, commercial power generation activities outside of
North America and activities of Enron Global Power &
Pipelines L.L.C. The segment's third quarter IBIT decreased
$3 million from 1995 to 1996. The following discussion
analyzes the significant changes in the segment's results.
NET REVENUES
Revenues net of cost of sales for the international
segment decreased by $17 million in the third quarter of
1996 as compared with 1995. This decrease is primarily due
to the recognition in the third quarter of 1995 of revenues
of $24 million as a result of the satisfaction of Enron's
support obligations related to the formation of Enron Global
Power & Pipelines L.L.C. and net revenues associated with
marketing operations transferred to the domestic gas and
power services segment beginning in January 1996. These
decreases were partially offset by net revenues in the third
quarter of 1996 of $15 million from the promotion of a
portion of Enron's interest in its power assets at Teesside
in the United Kingdom, reducing Enron's equity ownership
interest in the project to 28%.
COSTS AND EXPENSES
Operating expenses decreased $8 million in the third
quarter of 1996 compared with the same period in 1995 due
primarily to the transfer of marketing operations to the
domestic gas and power services segment.
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
improved from $15 million in the third quarter of 1995 to
$20 million in the same period in 1996 due primarily to
increased earnings from Enron's interests in Teesside and
other international power and pipeline projects.
EXPLORATION AND PRODUCTION
The exploration and production segment's IBIT decreased
to $50 million in the third quarter of 1996 from $53 million
in the same period of 1995. Enron's exploration and
production activities are conducted by Enron Oil & Gas
Company (EOG). The following discussion analyzes the
significant changes in the segment's results.
Wellhead volume and price statistics (including
intercompany amounts) are as follows:
<TABLE>
<CAPTION>
Third Quarter
1996 1995
<S> <C> <C>
Natural Gas Volumes (MMcf/d) (1)
North America (2) 670 657
Trinidad 104 112
Total 774 769
Average Natural Gas Prices ($/Mcf)
North America (3) $1.70 $1.24
Trinidad 1.00 0.97
Composite 1.60 1.20
Crude Oil/Condensate Volumes (MBbl/d) (1)
North America 10.8 12.0
Trinidad 4.5 5.9
India 2.4 2.3
Total 17.7 20.2
Average Crude Oil/Condensate Prices ($/Bbl)
North America $21.29 $16.57
Trinidad 19.73 15.76
India 19.60 16.10
Composite 20.67 16.28
<FN>
(1) Million cubic feet per day or thousand barrels per day,
as applicable.
(2) Includes 48 MMcf per day for the three-month periods
ended September 30, 1996 and 1995 delivered under the
terms of a volumetric production payment agreement
effective October 1, 1992, as amended.
(3) Includes an average equivalent wellhead value of
$0.91/Mcf and $0.62/Mcf for the three-month periods ended
September 30, 1996 and 1995, respectively, for the
volumes described in note (2), net of transportation
costs.
</TABLE>
NET REVENUES
The exploration and production segment's revenues net of
gas sold in connection with natural gas marketing increased
$6 million (4%) during the third quarter of 1996 as compared
to the same period in 1995. Net revenues from natural gas
production increased $22 million in the third quarter of
1996 as compared with the third quarter of 1995, primarily
due to a 33% increase in average wellhead natural gas
prices. Third quarter 1996 wellhead crude oil and condensate
average prices were up 27% from the third quarter of 1995,
while wellhead crude oil and condensate volumes decreased
12%, reflecting a 24% reduction in Trinidad volumes.
The increase in production-related revenues is partially
offset by a decrease in gains on commodity price swap
transactions designated as hedges in the third quarter of
1996 compared with the same period in 1995. EOG recognized
a gain of $13 million on commodity price swap transactions
designated as hedges in the third quarter of 1996 compared
to $21 million during the third quarter of 1995. Gains
related to hedges placed by Enron on open commodity
positions not hedged by EOG decreased from $16 million in
the third quarter of 1995 to $5 million in the same period
in 1996.
COSTS AND EXPENSES
Oil and gas exploration expenses increased $6 million
(34%) due primarily to increased exploratory drilling
activities.
Depreciation, depletion and amortization (DD&A) expense
increased $3 million (6%), reflecting a slight increase in
the average DD&A rate.
Taxes other than income were $2 million higher in the
third quarter of 1996 compared to the same period in 1995
primarily reflecting lower applicable exploration cost
deductions in Trinidad and higher taxable United States
revenue resulting from higher average prices.
CORPORATE AND OTHER
The corporate and other segment realized IBIT of $3
million in both the third quarter of 1996 and the same
quarter of 1995. The third quarter 1996 results include an
$11 million gain from the sale of 0.6 million EOG shares
held by Enron Corp.
MINORITY INTERESTS
Minority interests increased to $17 million in the third
quarter of 1996 from $11 million in the comparable prior
period, primarily due to aggregate sales in December 1995
and the first nine months of 1996 of 34.2 million shares of
EOG common stock held by Enron, which resulted in a
reduction of Enron's ownership interest in EOG from 80% to
59%.
INCOME TAXES
Income taxes increased during the third quarter of 1996
as compared to the third quarter of 1995 primarily as a
result of increased pretax income.
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1996
vs. Nine Months Ended September 30, 1995
The following review of Enron's results of operations
should be read in conjunction with the Consolidated
Financial Statements.
CONSOLIDATED NET INCOME
Enron's net income for the first nine months of 1996
increased to $452 million as compared to $390 million during
the same period in 1995. The $62 million increase in
consolidated net income reflects improved IBIT for the
transportation and operation and domestic gas and power
services segments. This increase was partially offset by
lower IBIT for the exploration and production and corporate
and other segments combined with increased minority
interests and income taxes. Earnings per share rose to $1.79
in the first nine months of 1996 from $1.55 in the same
period in 1995.
INCOME BEFORE INTEREST, MINORITY INTERESTS AND INCOME TAXES
The following table presents IBIT for each of Enron's
operating segments (in millions).
<TABLE>
<CAPTION>
Nine Months Increase
1996 1995 (Decrease)
<S> <C> <C> <C>
Transportation and Operation $432 $333 $ 99
Domestic Gas and Power Services 224 158 66
International Operations and
Development 117 115 2
Exploration and Production 156 196 (40)
Corporate and Other 13 39 (26)
Total $942 $841 $101
</TABLE>
TRANSPORTATION AND OPERATION
The transportation and operation segment realized a $99
million increase in IBIT for the first nine months of 1996
as compared to the same period in 1995. The following
discussion analyzes the significant changes in the various
components of IBIT for the transportation and operation
segment.
REVENUES
Revenues of the transportation and operation segment
decreased $52 million (8%) during the first nine months of
1996 as compared to the same period in 1995. The decrease
in revenues primarily reflects decreased revenues related to
gathering facilities sold in 1995 and the first quarter of
1996 and reduced sales revenue at Northern Natural as that
pipeline is now exclusively a transporter of natural gas.
COSTS AND EXPENSES
The cost of gas and other products sold by the
transportation and operation segment decreased by $23
million (75%) during the first nine months of 1996 compared
to the same period in 1995 primarily as a result of
decreased gas purchases by Northern Natural as that pipeline
is now exclusively a transporter of natural gas.
Operating expenses in the transportation and operation
segment declined by $51 million (20%) during the first nine
months of 1996 as compared to the same period in 1995. The
decline primarily reflects lower operating expenses on the
interstate pipelines primarily as a result of favorable
resolution related to previously incurred environmental
costs, combined with reduced expenses related to gathering
facilities sold during 1995 and the first quarter of 1996
and a decrease in amortization of deferred contract
reformation costs by Northern Natural.
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
increased by $22 million to $34 million during the first
nine months of 1996 as compared to the same period in 1995,
reflecting increased earnings from EOTT as previously
discussed, partially offset by decreased earnings from
Trailblazer Partnership due to the recognition in 1995 of
income from a settlement with a transportation customer.
Other income, net increased $55 million to $130 million,
primarily due to gains related to the disposition of non-
strategic natural gas processing and gathering facilities.
DOMESTIC GAS AND POWER SERVICES
The domestic gas and power segment had a $66 million
increase in income before interest, minority interest and
income taxes for the nine months ended September 30, 1996 as
compared to the same period in 1995. The following
discussion analyzes the contributions to IBIT by each of the
business lines in this segment.
Statistics for ECT (including intercompany amounts) are
as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Natural Gas and Crude Oil
Physical/Notional Quantities (BBtue/d) (1)
Firm (2) 6,345 5,197
Interruptible 2,445 2,308
Transport Volumes 536 599
Subtotal 9,326 8,104
Financial Settlements (Notional) 33,513 31,509
Total 42,839 39,613
Production Payments and Financings
Arranged (In Millions) $646.5 $168.6
Fixed Price Contract Originations
(TBtue) (3) 1,407 5,055
Electricity (Thousand Megawatt hours)
Owned Production 2,363 2,599
Transaction Volumes Marketed 39,589 4,656
<FN>
(1) Billion British thermal units equivalent per day.
(2) Commitments to deliver a specified volume of gas at a
fixed or market responsive price.
(3) Trillion British thermal units equivalent.
</TABLE>
The cash and physical operations' earnings before
overhead expenses were $149 million and $85 million in the
first nine months of 1996 and 1995, respectively. The
earnings from this business unit increased in the first nine
months of 1996 primarily due to earnings from higher margins
for natural gas and increased earnings from electricity
marketing. Earnings from the management of ECT's portfolio
of contracts also increased in 1996. These increases were
partially offset by a decrease in earnings from natural gas
assets.
Earnings before overhead expenses for the risk management
business were $100 million in the first nine months of 1996
and $115 million in the same period in 1995. Earnings from
this unit decreased primarily due to lower originations from
long-term contracts with utilities and independent power
plants, which were partially offset by increased
originations for electricity and originations in the
European market.
ECT's finance operations had earnings before overhead
expenses of $56 million in the first nine months of 1996
compared with $36 million for the same period in 1995. The
1996 earnings relate primarily to the increased value of
ECT's equity investments, while 1995 includes earnings
associated with the restructuring of long-term gas supply
contracts with an independent power plant.
ECT's overhead expenses were $81 million in the first
nine months of 1996 and $78 million in the same period in
1995.
INTERNATIONAL OPERATIONS AND DEVELOPMENT
The international segment's IBIT increased $2 million in
the first nine months of 1996 compared to the same period in
1995. The following discussion analyzes the significant
changes in the segment's results.
NET REVENUES
Revenues net of cost of sales for the international
segment decreased by $55 million (37%)in the first nine
months of 1996 as compared with 1995. The 1996 results
included revenues of approximately $31 million from the
promotion of Enron's interest in its power assets at
Teesside in the United Kingdom. Included in 1995 were $24
million from the promotion of a portion of Enron's interest
in its power assets at Teesside and net revenues from the
marketing operations in Europe. In addition, revenues of
$48 million were recognized in the first nine months of 1995
as a result of the satisfaction of Enron's support
obligations related to the formation of Enron Global Power &
Pipelines L.L.C.
COSTS AND EXPENSES
Operating expenses decreased $17 million during the first
nine months of 1996 as compared to the first nine months of
1995 due to the transfer of marketing operations to the
domestic gas and power services segment beginning in January
1996, partially offset by increased international
activities.
OTHER INCOME AND DEDUCTIONS
Equity in earnings of unconsolidated subsidiaries
increased $28 million to $65 million in the first nine
months of 1996, primarily as a result of increased earnings
from Teesside and other international power and pipeline
projects.
EXPLORATION AND PRODUCTION
The exploration and production segment's IBIT decreased
to $156 million in the first nine months of 1996 from $196
million in the same period of 1995. The following
discussion analyzes the significant changes in the segment's
results.
Wellhead volume and price statistics (including
intercompany amounts) are as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Natural Gas Volumes (MMcf/d)
North America (1) 695 609
Trinidad 126 110
Total 821 719
Average Natural Gas Prices ($/Mcf)
North America (2) $1.72 $1.28
Trinidad 1.00 0.97
Composite 1.61 1.23
Crude Oil/Condensate Volumes (MBbl/d)
North America 11.0 11.5
Trinidad 5.6 4.8
India 2.8 2.3
Total 19.4 18.6
Average Crude Oil/Condensate Prices ($/Bbl)
North America $20.09 $17.01
Trinidad 18.95 16.16
India 19.09 16.82
Composite 19.62 16.77
<FN>
(1) Includes 48 MMcf per day for the nine-month periods ended
September 30, 1996 and 1995 delivered under the terms of
a volumetric production payment agreement effective
October 1, 1992, as amended.
(2) Includes an average equivalent wellhead value of
$0.86/Mcf and $0.76/Mcf for the nine-month periods ended
September 30, 1996 and 1995, respectively, for the
volumes described in note (1), net of transportation
costs.
</TABLE>
NET REVENUES
The exploration and production segment's revenues net of
cost of gas sold decreased $2 million during the first nine
months of 1996 as compared to the same period in 1995.
Higher wellhead natural gas prices and production volumes
increased net revenues in the first nine months of 1996 as
compared to the previous year period, offset by lower
results from commodity price swap transactions and a
decrease in gains on sales of oil and gas reserves and
related assets. Average wellhead natural gas prices for the
first nine months of 1996 were up 31% from the comparable
period in 1995 and wellhead natural gas volumes increased
14%. The increase in North America wellhead natural gas
volumes was primarily the result of eliminating voluntary
curtailments in the United States during 1996 due to
significant increases realized in average wellhead natural
gas prices. Wellhead crude oil and condensate average
prices increased 17% over the first nine months of 1995 and
crude oil and condensate wellhead volumes increased 4% from
the comparable period a year ago. Gains on sales of
reserves and related assets totaled $20 million in the first
nine months of 1996 compared with $63 million in the same
period in 1995.
EOG recognized a gain of $8 million on commodity price
swap transactions in the first nine months of 1996 compared
to $63 million during the first nine months of 1995. Gains
related to hedges placed by Enron on open commodity
positions not hedged by EOG decreased from $43 million in
the first nine months of 1995 to $6 million in the same
period in 1996.
COSTS AND EXPENSES
Operating expenses for the exploration and production
segment increased $4 million (4%) during the first nine
months of 1996 as compared to the same period in 1995
primarily reflecting continually expanding operations and
increases in production activity.
DD&A expense increased $24 million (15%) primarily
reflecting increased production volumes.
Taxes other than income were $7 million (28%) higher in
the first nine months of 1996 compared to the same period in
1995 primarily due to higher state severance taxes
associated with higher United States taxable wellhead
revenues as well as lower applicable exploration cost
deductions in Trinidad in 1996.
CORPORATE AND OTHER
The corporate and other segment's IBIT decreased $26
million to $13 million in the first nine months of 1996 as
compared to the first nine months of 1995. The 1996 amount
includes gains of $56 million related to the sale of 3.2
million shares of EOG stock held by Enron Corp., partially
offset by a $25 million reserve established for litigation
contingencies. The 1995 results include amounts recognized
following the resolution of certain litigation in 1995.
MINORITY INTERESTS
Minority interests increased to $55 million in the second
nine months of 1996 from $34 million in the comparable prior
period, primarily due to the sale in December 1995 and the
first nine months of 1996 of 34.2 million shares of EOG
common stock held by Enron.
INCOME TAXES
Income taxes increased during the first nine months of
1996 as compared to the first nine months of 1995 primarily
as a result of increased pretax income.
FINANCIAL CONDITION
Cash provided by operating activities totaled
approximately $486 million during the first nine months of
1996 as compared to $42 million during the same period last
year. The increase in cash provided by operating activities
reflects decreased working capital requirements.
Cash used in investing activities totaled $892 million
during the first nine months of 1996 as compared to $478
million during the same period in 1995. The increase
primarily reflects higher equity investments primarily in
Joint Energy Development Investments (JEDI) and
international power and pipeline operations, partially
offset by increased proceeds from the sale of assets and
investments.
Cash provided by financing activities totaled $396
million during the first nine months of 1996 as compared to
$409 million during the same period in 1995. During the
first nine months of 1996, net issuances of short- and long-
term debt totaled $496 million. Proceeds from these
issuances were used primarily to fund capital and other
expenditures.
Enron is able to fund its normal working capital
requirements mainly through operations or, when necessary,
through the utilization of credit facilities and its ability
to sell commercial paper and accounts receivable.
Total capitalization at September 30, 1996 was $8.2
billion. Debt as a percentage of total capitalization was
43.6% at September 30, 1996 as compared to 42.8% at year-end
1995 and 42.3% at June 30, 1996. The increase from year-end
primarily reflects increased debt. Assuming the mandatory
conversion in late 1998 of 10.5 million Exchangeable Notes
into EOG shares held by Enron, the proforma debt to
capitalization percentage would be approximately 41.6% at
September 30, 1996.
INFORMATION REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward
looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Although Enron believes that its
expectations are based on reasonable assumptions, it can
give no assurance that its goals will be achieved. Important
factors that could cause actual results to differ materially
from those in the forward looking statements herein include
political developments in foreign countries, the pace of
deregulation of retail natural gas and electricity markets
in the United States, the timing and extent of changes in
commodity prices for crude oil, natural gas, electricity and
interest rates, the extent of EOG's success in acquiring oil
and gas properties and in discovering, developing and
producing reserves, the timing and success of Enron's
efforts to develop international power, pipeline and other
infrastructure projects and conditions of the capital
markets and equity markets during the periods covered by the
forward looking statements.
<PAGE>
PART II. OTHER INFORMATION
ENRON CORP. AND SUBSIDIARIES
ITEM 1. Legal Proceedings
See Part I. Item 1, Note 3 to Consolidated Financial
Statements entitled "Litigation and Contingencies," which is
incorporated herein by reference.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 11 Calculation of Earnings Per Share
Exhibit 12 Computation of Ratio of Earnings to
Fixed Charges
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
ENRON CORP.
(Registrant)
Date: November 12, 1996 By: Robert H. Butts
Robert H. Butts
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
<TABLE>
Exhibit 11
ENRON CORP. AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
(in thousands, except share and per share amounts)
<S> <C> <C> <C> <C>
Primary Earnings Per Share
Earnings on common stock
Net income $122,874 $100,583 $452,365 $389,578
Preferred stock dividends (3,979) (3,777) (11,946) (11,405)
$118,895 $ 96,806 $440,419 $378,173
Average number of common shares
outstanding 246,773 243,940 245,601 243,667
Primary earnings per share of
common stock $ 0.48 $ 0.40 $ 1.79 $ 1.55
Fully Diluted Earnings Per Share
Adjusted earnings on common stock
Net income $122,874 $100,583 $452,365 $389,578
Preferred stock dividends (3,980) (3,777) (11,946) (11,405)
Add back:
Dividends on convertible
preferred stock 3,980 3,777 11,946 11,405
$122,874 $100,583 $452,365 $389,578
Average number of common shares
outstanding on a fully diluted basis
Average number of common shares
outstanding 246,773 243,940 245,601 243,667
Additional shares issuable upon:
Conversion of preferred stock 18,729 19,005 18,751 19,071
Exercise of stock options reduced by the
number of shares which could have been
purchased with the proceeds from
exercise of such options 5,789 6,227 5,629 5,883
271,291 269,172 269,981 268,621
Fully diluted earnings per share of
common stock $ 0.45 $ 0.37 $ 1.68 $ 1.45
</TABLE>
Exhibit 12
<TABLE>
ENRON CORP. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES
(In Thousands)
(Unaudited)
<CAPTION>
Nine Months
Ended Year Ended December 31,
9/30/96 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Earnings available for fixed charges
Net income $ 452,365 $ 519,694 $ 453,410 $332,522 $328,800 $232,146
Less:
Undistributed earnings and
losses of less than 50% owned
affiliates (8,362) (13,505) (9,453) (20,232) (32,526) (8,890)
Capitalized interest of
nonregulated companies (6,922) (8,315) (9,007) (25,434) (66,401) (36,537)
Add:
Fixed charges (1) 322,075 435,681 487,258 471,278 452,014 454,607
Minority interest 42,477 27,260 29,600 27,605 17,632 7,210
Income tax expense 224,480 310,264 190,081 148,104 88,630 105,859
Total $1,026,113 $1,271,079 $1,141,889 $933,843 $788,149 $754,395
Fixed Charges
Interest expense (1) $ 291,710 $ 385,995 $ 444,768 $436,211 $430,406 $425,945
Rental expense representative
of interest factor 30,365 49,686 42,490 35,067 21,608 28,662
Total $ 322,075 $ 435,681 $ 487,258 $471,278 $452,014 $454,607
Ratio of earnings to fixed charges 3.19 2.92 2.34 1.98 1.74 1.66
<FN>
(1) Amounts exclude costs incurred on sales of accounts receivables.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 104,530
<SECURITIES> 0
<RECEIVABLES> 1,276,516
<ALLOWANCES> 0
<INVENTORY> 123,100
<CURRENT-ASSETS> 2,585,318
<PP&E> 11,163,452
<DEPRECIATION> 4,244,277
<TOTAL-ASSETS> 14,821,085
<CURRENT-LIABILITIES> 2,370,592
<BONDS> 3,563,208
0
137,178
<COMMON> 25,596
<OTHER-SE> 3,429,975
<TOTAL-LIABILITY-AND-EQUITY> 14,821,085
<SALES> 6,515,670
<TOTAL-REVENUES> 9,240,127
<CGS> 7,123,870
<TOTAL-COSTS> 8,586,390
<OTHER-EXPENSES> (287,970)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 200,315
<INCOME-PRETAX> 662,321
<INCOME-TAX> 209,956
<INCOME-CONTINUING> 452,365
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 452,365
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 1.68
</TABLE>
