fw dynegy vs enron tale two companies come point r original message issuealert scientech com mailto issuealert scientech com sent wednesday october 24 2001 12 19 pm issuealerthtml listserv scientech com subject dynegy vs enron tale two companies today issuealert sponsors scientech currently interviewing 1 500 utilities cis crm customer care united states canada determine leading software providers drivers utility technology decisions analysis license sales versus asp sales new market opportunities growing shrinking software markets download sample prospectus introduction new survey contact jon brock 505 244 7607 details electric power system natural gas system maps available scientech inc click full descriptions prices electric gas maps october 24 2001 dynegy vs enron tale two companies mcnamara director electric industry analysis facts dynegy inc nyse dyn beat expectations third quarter reporting earnings rose 286 million 85 cents per diluted share 177 million 55 cents per diluted share period 2000 represented 22 percent increase 3 q 2000 boosted company 2001 earnings estimate dynegy market capitalization 14 5 billion stock currently trading 43 52 week high 59 although important note year end 2000 company stock one top performers among standard dynegy hand believes ownership physical assets set goal could ultimately establish company owning one largest generation arsenals industry let look companies separately discuss enron first since older two enron readily admits strategy difficult define close approximation enron literally creates commodity markets deliver physical commodities customers participation success commodity markets according enron necessitate ownership physical assets fact company routinely sold physical assets considered strategic wholesale business rather enron concentrated developing new philosophy risk management excellence merely buy sell commodities needs participate trading venues example enron bought portland general owns 2 000 mw generation 41 600 kilometers electric lines 1996 way launch penetration west coast power markets competition fizzled region enron put portland general back sales block sale portland general northwest natural pending writing likewise europe one prominent trading companies enron disposed generation assets sutton bridge england unlike u competitors refrained buying additional generating units opening countries germany italy according recent 10 k report filed securities exchange commission enron owns controls 2 015 mw generating capacity including joint ownerships drastically lower average among companies operating power trading sector dynegy approach market crystal clear radically different enron words ceo chuck watson dynegy long term strategy focus marketing trading around physical assets supports earnings sustainability ever since going public 1995 dynegy acquisition binge purchase significantly increasing generation capability dynegy presently owns controls 27 000 mw generating capacity united states 26 gas processing plants 14 000 miles pipelines located geographically competitive areas company goal control 70 000 mw 10 percent u market within next five years sometimes dynegy acquired assets partnerships companies nrg energy often purchased assets independently notably dynegy acquired illinova early 2000 purchase doubled dynegy generating capacity dynegy attempting replicate approach europe presently planning purchase natural gas storage facilities england dynegy executives argued natural gas storage best way back natural gas trading operation question approach working 286 million dynegy reported third quarter 263 million came company main wholesale business issue asset ownership probably central defining difference enron dynegy significance overlooked difficult make case supports dynegy approach owning physical assets often enables trading company gain information course operating power plants help company gauge markets anticipate small changes price words controlling actual output generation instead involved buys sells trader dynegy theoretically know load going particular region much power produced meet load shortages might occur addition markets short infrastructure may difficult trader participate market unless actually ownership physical assets region token companies control physical assets often greater communication grid operators possible insight spreads difference various energy prices fact dynegy ceo watson fully acknowledges company excels able trade around volatility price capable resolving balances shortages exist may difficult company enron accomplish physical generation meet discrepancies power bids dynegy strategy acquiring natural gas pipelines power plants also gives flexibility trade commodities side argument case could made enron approach provides flexibility reacting trading volatility certainly investing less power generation facilities enron less capital line compared company like dynegy scenario market prices suddenly drop company enron heavy capital invested power generation could actually fare better asset laden company enron face pressure meet fixed payments generation facility asset heavy companies also may find earnings could impacted investment generation facilities times extreme price volatility industry becomes increasingly focused bottom line results could seen potential concern investors would argue enron approach establishing purchasing contracts various parties meet buy sell requirements rough equivalent owning generation facility enron gains approach presumed flexibility tied specific generation unit able build portfolio consequently issue asset ownership perhaps considered great debate among power traders however although dynegy overall performance third quarter better enron necessarily provide clear endorsement dynegy strategy toward acquiring new generation facilities keep mind enron 3 q losses resulted primarily non recurring charges related non core businesses broadband water particular without charges enron core wholesale trading business continues perform well point ceo ken lay quick reiterate investors 26 percent increase recurring earnings per diluted share shows strong results core wholesale retail energy businesses natural gas pipelines lay said continued excellent prospects businesses enron leading market position make us confident strong earnings outlook moreover perhaps even ownership physical assets key issue played role current disparity dynegy enron earnings third quarter companies approach developing new lines business telecom perfect example illustrate point enron prides usually gaining first strike advantage plunged telecom sector well ahead energy companies leadership ceo jeffrey skilling enron sunk large sums capital purchasing broadband capacity expectation market would quickly become lucrative lay admits company could gotten broadband business less capital enron spent much soon sector nevertheless enron recorded 80 million non recurring write restructuring broadband unit third quarter presently attempting stop bleeding sector reducing future costs sector 40 million quarter dynegy took much cautious approach toward expanding telecom sector made comparatively small amount investment compared enron dynegy likewise impacted slowdown telecom sector third quarter took 15 million loss broadband business compared 80 million loss enron reported however dynegy clearly specializes marketing trading two commodities electricity natural gas seems add businesses methodical way merely supplements core business also important note enron gained first strike advantage developed enrononline electronic trading exchange fact enron first create exchange energy space well ahead competitors dynegy later followed trend creating dynegydirect two exchanges different terms trading standards important acknowledge particular case enron successful launching electronic trading space well ahead competitors latest available information indicates enrononline recorded transactions exceed 590 notional value since inception november 2000 dynegydirect recorded 33 billion notional transactions juncture dynegy enron different regard approaches toward financial reporting enron often accused providing balance sheet investors currently struggling serious image problem securities exchange commission pursues investigation possible mishandling funds enron cfo recollection one ever accused dynegy providing balance sheet thus company status investors arguably solid expect either company radically alter competitive strategy time soon projection least near term continue see wide disparity wall street performance dynegy enron say anyone count enron game noted company core business wholesale business remains strong clearly tainted impact non core businesses mean enron permanently find way strike better balance businesses best businesses former ceo jeffrey skilling believed advantageous many ways comparison dynegy enron rather like tortoise hare parable sure guess company tortoise hare analogy race two far although dynegy taking lead point based methodical approach fascinating observe companies continue adapt changes marketplace possibly modify point adamantly espoused philosophies _ _ _ _ _ correction statement 10 23 issuealert european trading according news report reuters u owned entergy koch trading listed publicly traded company informed contact entergy entergy koch trading limited partnership company publicly traded apologize confusion error might caused _ _ _ _ _ archive list previous issuealerts available www scientech com encourage readers contact us comments look forward hearing nancy spring reach thousands utility analysts decision makers every day company schedule sponsorship issuealert contacting jane pelz advertising opportunities also available website staff comprised leading energy experts diverse backgrounds utility generation transmission distribution retail markets new technologies renewable 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