enron

 enron Composition

DardenBusinessPublishing: 210838

UVA-F-1299

Rev. Feb. eight, 2011

This kind of document is authorized to be used only simply by Mattia Tenaglia at Tecnologico de Monterrey. Please tend not to copy or perhaps redistribute. Contact [email protected] com for concerns or additional permissions.

ENRON CORPORATION'S WEATHER CONDITION DERIVATIVES (A)

Everybody discusses the weather, although nobody really does anything about it. 1

In October 2000, Mary W, the chief economic officer of Pacific Northwest Electric (PNW), a computer program servicing the Pacific Northwest area of the United States, analyzed the monetary plan for PNW's 2000–01 forthcoming winter season. Winter season temperatures afflicted the business's revenues: the colder the season, the greater the electricity use. She remembered that the last few years had presented a warmer-than-average winter weather, resulting in adverse financial outcomes for PNW. The weather, combined with rapid deregulation in PNW's market area, meant that the firm reported substantially not any EPS expansion from 95 to 99, in an in any other case buoyant financial setting. PNW's stock price had experienced accordingly. On her behalf desk was a report coming from a weather-advisory service forecasting another unseasonably warm wintertime. Watts kept in mind a recent conversation with Mike James, an agent of Enron Corporation. Adam had shown a new " weather-derivative” item from Enron that this individual claimed may minimize PNW's weather-related amount risk. Watts wondered just how these derivatives worked, and exactly how they might be used to help bring back PNW's reliability in the capital markets. Should certainly she consider purchasing Enron's weather-protection goods for the upcoming winter season? She would ought to decide soon about the use of these derivatives if the girl wanted to set up a hedge for the winter months in advance.

Pacific Northwest Electric powered

PNW was a significant developer of electric electric power, with main coverage in some parts of Oregon, Washington, Upper California, Idaho, and Montana. Its income in 1999 were $11 billion dollars; net income was $800 mil. Earnings every share had been $1. 04 in 1999, up from $1. 03 in 1

Charles Dudley Warner, in an content in the Hartford Courant, 1897.

This case was prepared coming from field study by Mari Capestany and Professors Robert Bruner and Samuel Actual. It is intended to serve as a basis to get class discussion rather than to demonstrate effective or perhaps ineffective managerial decision making. Specific names, specifics, and monetary data had been disguised to preserve confidential information and/or touch up the managerial issues in the case. The ensuing presentation, however , reasonably demonstrates the actual managerial setting. The help and assistance of Enron Corporation is usually gratefully recognized. Copyright В© 2000 by the University of Virginia Darden School Base, Charlottesville, VETERANS ADMINISTRATION. All legal rights reserved. To order copies, send an e-mail to [email protected] com. No component to this distribution may be reproduced, stored in a retrieval system, used in a spreadsheet, or perhaps transmitted in any form or by any kind of means—electronic, physical, photocopying, recording, or otherwise—without the agreement of the Darden School Basis.

Page 1 of 12

DardenBusinessPublishing: 210838

This record is certified for use simply by Mattia Tenaglia for Tecnologico para Monterrey. Make sure you do not copy or redistribute. Contact [email protected] com to get questions or perhaps additional permissions.

-2-

UVA-F-1299

1995. Remembering the quite simply flat EPS trend to get PNW and expressing matter for the firm's gross coverage, investments analysts were reluctant to advocate possessing PNW's shares. Thus, the utility's discuss price underperformed broad industry indexes and indexes of the utility industry. Watts estimated that the warmer-than-usual weather from the past several years experienced accounted for regarding two-thirds of the firm's underperformance in revenue. PNW was a capital-intensive organization, spending about $1 billion a year in capital...

Syncretism in the united states, Africa, India, and Cina Essay

Danny Perry AIU HUMA215 - 1302B - 16 Syncretism as identified by Merriam-Webster is the mix of different types of belief or practice or the fusion…...

Read..

What Is Bullwhip Effect? Article

Precisely what is Bullwhip result? Bullwhip Impact can in short be referred to as the variability in orders in a supply chain system moving up coming from consumers…...

Read..
 A Gun Up Your Ass: An Interview with Rick Jarmusch Dissertation

A Gun Up Your Ass: An Interview with Rick Jarmusch Dissertation

A Gun Up Your Ass: A job interview with Rick Jarmusch. (Cineaste 1996 ) By Jonathan Rosenbaum Several years ago, the moment his second feature, " Stranger Than Paradise", catapulted…...

Read..

Social Conversation in Everyday Life Essay

Social Interaction in Everyday Life Sociable interaction: the task by which persons act and react in relation to others. Status: a social position a person keeps Status…...

Read..

Exxon Valdez Oil Spill Essay

Exxon Valdez Essential oil Spill FUZY In March of 1989, the Exxon Valdez oil tanker went aground on Bligh Reef in Prince William Sound, Alaska. An…...

Read..

Letter several: What Is an American? Essay

Positioned between Of india and Asia, Burma is known as a southeast Cookware nation Visit our website: В Burma has a inhabitants 75 mil with the Muslim population…...

Read..