Enron Case Presentation

Group Members: 1. Dumea Alina Angela 2. Pepmarku Mimoza 3.Rudakova Anna 4. Luteganya Deusdedith Fidelis Background Company Facts Assets Miles of pipeline Gatekeepers Corporate Gov. Reforms championship Model $ 47.3 billion 30,000 Miles of part optic cable Countries where active Employees Headquaters Formed 1985 Merging 15,000 40+ >20,000 Houston Houston Natura gas & InterNorth afterwards industry deregulation Enron entered derivatives business and other complicated monetary transactions. Jeff Skilling transformed Enron emphasing on financial assets thus deviating from the core business. some of the deals and debts exposures were concealed to stake stopers using complicated financial structure. When the truth was revealed, cable falled, finally ended into world bankruptcy history. Background Gatekeepers Corporate Gov. Reforms Business Model Financial Structure 1997-2001, Enron engaged in deals with huge number of SPEs Income generating assets were interchange to SPEs and sales were recognised as income & CFs by Enron. SPEs were designed to hold 3% of Equity at pretend, this enabled Enron to enjoy off balance wheel sheet transactions and non consolidation. Income was overstated by $1.5bil & understatement of debt by $885Mil.

south allowed Enron to use mark-to-market accounting (MtM). This posed high downside risk on Enron financial assets. Background Gatekeepers Corporate Gov. Reforms Business Model Financial Structure LJM1,LJM2 & CHEWCO With M-t-M risk exposure, LJM1 & LJM2 was created to hedge Enron and were managed by CFO (Fastow). LJM1- hedged against RhythmsNet LJM2 3% impartiality to 4 Raptors used to hedge Enron. Enron funded SPEs with its own shares meaning NO HEDGING! CHEWCO was created (1997) to buy interest of CalPERS in JEDI. Enron wanted to drop out CalPERS for another deal. Because of CHEWCO transactions , 2001 Auditor made restatement of books. This... If you want to undertake a full essay, order it on our website: Orderessay

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