Epilogue
Dangerous Ambitions
Enron needed to reinvent itself—again. Ken Lay and Richard Kinder’s 1995 promise to investors to double the size and profitability of Enron in five years was in keeping with the (nominally) torrid pace of the previous eight. By 2000, Enron was supposed to be valued at $20 billion, with annual profits of $1 billion and cash flow double that.
New profit centers would be necessary. Enron Oil & Gas was being sold down. Gas margins at Enron Capital & Trade Resources had narrowed. The interstate pipelines were rate regulated and otherwise market constrained. International was listing. And a major entry into the reformulated-gasoline market had soured.
Enron 2000, as the financial plan was called, was a way station toward achieving the new corporate vision. The self-declared world’s first natural gas major was going to become the world’s leading energy company, the fourth company reorientation under Ken Lay.
Three Eras
The decade prior to 1995 had been long and eventful. In 1984, the new chairman and CEO of Houston Natural Gas Corporation (HNG) transformed the Texas-centered company by purchasing two interstate pipelines: Transwestern Pipeline and Florida Gas Transmission. HNG’s previous management had rejected a lucrative takeover, and some investors were suing. Lay’s pricey acquisitions were no cure for that problem, however. Though doubled in size, the reconstituted company had less market valuation at the end of 1984 than the year before.1
Lay ended ...
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