Subject: sec information / earnings restatement
today we released additional information about our related party and off - balance sheet transactions . we have made this information available both on our website and in a form 8 - k filing with the securities and exchange commission ( sec ) .
the information provides further details about :
- - the $ 1 . 2 billion charge to shareholders ' equity announced in the third quarter and the transactions related to that charge ;
- - a restatement of prior years ' financial statements to reflect this reduction in shareholders ' equity , the consolidation of three entities and prior year proposed audit adjustments and reclassifications ;
- - the special committee appointed by the enron board of directors to review transactions between enron and related parties ;
- - the ljm limited partnerships , including a discussion of transactions between enron and ljm entities ; and
- - transactions between enron and other enron employees .
this information addresses a number of concerns that have been raised by our shareholders and the sec . as our board ' s new special committee continues its review of various matters , we will continue to cooperate fully with the sec in its investigation , and we will continue to respond to investor requests so that they can evaluate , appreciate and appropriately value the strength of our core businesses .
restatement of earnings
based on information that we have recently obtained , enron and its auditors determined that certain off - balance sheet entities should have been included in enron ' s consolidated financial statements pursuant to generally accepted accounting principles . as a result , enron will restate its financial statements from 1997 to 2000 and for the first and second quarters of 2001 . these restatements have no material effect on enron ' s current financial position . here are some details included in the filing :
net income for each period will be impacted by the retroactive consolidation of joint energy development investments ( jedi ) and chewco beginning in november 1997 , the consolidation of an ljml subsidiary for 1999 and 2000 and prior year proposed audit adjustments . enron ' s current assessment indicates that the restatement will include :
- - a reduction of approximately $ 96 million in 1997
- - a reduction of approximately $ 113 million in 1998
- - a reduction of approximately $ 250 million in 1999
- - a reduction of approximately $ 132 million in 2000
- - an increase of approximately $ 17 million for the first quarter of 2001
- - an increase of approximately $ 5 million for the second quarter of 2001
- - a reduction of $ 17 million for the third quarter of 2001 .
the consolidation of jedi and chewco also will increase enron ' s debt by approximately $ 711 million in 1997 , $ 561 million in 1998 , $ 685 million in 1999 and $ 628 million in 2000 .
the restatement will have no material impact on enron ' s reported earnings for the nine - month period ending september 2001 .
you can obtain more detailed information on the items described above by accessing the form 8 - k filing at .
we will continue to review our strategic , operational and financial position , and we will continue to keep you updated on any developments .