Enron's Ken Lay
Investor's Business Daily, 12/12/00
Enron CFO Sold 52,080 Company Shares In November
Dow Jones News Service, 12/12/00

Team Management Approach Improves Wachovia Funds' Rank
Dow Jones News Service, 12/12/00

Stocks mixed Tuesday as investors wary about earnings, election
Associated Press Newswires, 12/12/00





Leaders & Success
Tuesday, December 12, 2000
Enron's Ken Lay 
Focus On Finding The Best People Helps Keep His Energy Company At The Top 
By David Saito-Chung
Investor's Business Daily
Many good chief executives put large amounts of trust in their employees. But 
few go as far as Houston-based Enron Corp.'s Ken Lay.
Louise Kitchen, the top natural gas trader at the energy marketer's London 
office, had an idea: Rather than trade energy commodities over the phone, why 
not do it online?
In early 1999, Kitchen and her co-workers started to build an Internet 
marketplace. A few months later, the team grew to more than 300 people spread 
across many countries. The project had cost millions of dollars. A possible 
problem: No one had told the top brass about it yet.
Chairman and CEO Lay and President Jeff Skilling were briefed on EnronOnline 
five months into the project. They saw the risks, but liked its potential and 
gave the green light.
The site went live in November 1999, and growth has been nonstop. The global 
platform logs on average $2.5 billion to $3 billion in transactions a day in 
products ranging from natural gas supply deals to financial instruments that 
let snowmobile makers hedge against warm winters. The system keeps growing 
because it cuts transaction costs, improves price transparency and expands 
liquidity.
Kitchen is now chief executive of Enron's networks group and a member of 
Enron's Executive Committee.
"EnronOnline came from the bottom up," said Lay, 58. "There wasn't any 
planning, no decision made at the top. The good news is we didn't stop it."
When Lay joined Enron as CEO in 1986, most of its revenue came from its 
natural gas pipeline. Today, it continues to pioneer new markets, not only in 
natural gas but also in wholesale trading, energy services and risk 
management products. Sales have grown from $5.6 billion in 1991 to $40.1 
billion last year. Over the same period, earnings have grown from 54 cents a 
share to $1.16 a share.
How does Lay spur a strong spirit of innovation inside a global company of 
18,000 employees? He tries to get the best talent around the world.
In 1990, Enron formed the associate analyst pool to attract new MBAs from top 
business schools, going head-to-head against big banks and consulting firms. 
But Enron was the only energy firm with such a program.
The strategy has worked. When Greg Whalley came across Enron's job posting at 
Stanford Business School back in 1992, he did a double take. How could a gas 
pipeline firm, he thought, offer such opportunities? Recruiters told him he 
would have the chance to begin a new business within the company.
After several interviews, he landed in Houston with 10 other analysts. There, 
he rotated from the finance group to derivatives marketing and finally to the 
gas trading floor.
"It was an interesting place to be ) in a company that's ready to recognize 
and promote people that (are) brought in at relatively junior levels," 
Whalley said. At 38, he's now president and chief operating officer of Enron 
Wholesale Services, a major profit center.
Despite the tight labor market, the associate analyst program now brings in 
300 to 400 new MBAs every year. Enron has also achieved an employee attrition 
rate of just 4% the past few years.
"Getting the best and brightest people is in fact the key to any successful 
company," Lay said. "It's a matter of creating a culture where they feel like 
they do have a lot of authority and flexibility in how they do their jobs, as 
long as they do them well. I also think bright, creative people like to be 
around bright, creative people."
Lay's success also stems from his belief in the power of markets. When the 
Missouri native went to work as an economist at the Federal Energy Regulatory 
Commission in the 1970s, he battled against a system that fixed prices at 
artificially high levels and restricted pipelines from sending natural gas to 
places that actually needed it.
At Transco Energy Co. in the 1980s, he helped pioneer the spot market for 
natural gas.
As the natural gas industry began to deregulate in the 1980s, prices fell 
fast. But Lay and Skilling took advantage of the changes by creating a 
wholesale market to buy and sell natural gas across the nation's pipeline 
network.
Lay expects co-workers to do the same in other markets. To spread the 
message, every elevator inside Enron's office tower has TV screens that 
stream announcements, live news and slogans to encourage employees, such as:
"Join the fight against innovation's greatest obstacle: SILENCE." 
"Your name doesn't have to be Catherine or Alexander to achieve greatness."
"EVERYONE is the next CEO until proven otherwise."
Many have taken the words to heart. David Cox, who once worked in the office 
basement as a $5-an-hour graphics clerk, developed a financial product so 
that newspaper publishers could hedge against volatile paper prices. It's now 
a multi-billion-dollar market. Another employee pioneered a market for 
utilities to trade pollution rights.
But when a team fails on a new project, Lay avoids punishment. Instead, he 
dares team members to try again and again until they succeed.
In 1997, Enron bought Portland, Ore.-based power distributor Portland General 
Electric in hopes of selling power to residential customers in the 
deregulated California market. But the Enron Energy Services team's strategy 
didn't work, and Enron has put PGE up for sale, a move Lay admitted was 
highly embarrassing.
No one got fired. Lay asked team members to apply their strategy to something 
else.
The team worked on selling power to manufacturers and commercial firms. It 
also came up with an idea to promise customers lower energy costs by 
providing a 100% outsourcing service. Enron would be willing to buy a 
company's energy assets, absorb employees and make new investments. The 
strategy worked. Today, the energy-outsourcing concept produces the majority 
of Enron's new contracts.
"(Energy Services) took what was initially a strategy that failed and turned 
it into a different strategy which succeeded, which led to still a different 
strategy that appears to be just a great success," Lay said.

Enron CFO Sold 52,080 Company Shares In November

12/12/2000
Dow Jones News Service
(Copyright (c) 2000, Dow Jones & Company, Inc.)

WASHINGTON -(Dow Jones)- Enron Corp. (ENE) Executive Vice President and Chief 
Financial Officer Andrew S. Fastow sold a total of 52,080 shares of the 
company's common stock last month, according to a Form 4 released by the 
Securities and Exchange Commission. 
Fastow sold the shares from Nov. 1 to Nov. 7 for $83 a share. At the end of 
the month he directly held 29,336 shares and indirectly held a total of 
9,123.46 shares.
Enron's shares recently traded at $77.13 a share. 
Houston-based Enron is a utilities and communications company. 
-By Marc A. Wojno; Federal Filings Business News; 202-628-9792

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

Team Management Approach Improves Wachovia Funds' Rank
By Christiane Bird
Of DOW JONES NEWSWIRES

12/12/2000
Dow Jones News Service
(Copyright (c) 2000, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Switching to a team management approach has helped 
Wachovia Funds outperform its peers, its managers say. 
In 1997, the company's flagship fund, the large-cap Wachovia Equity Fund, 
returned 25.1% - a respectable enough number, but in that high-flying year it 
placed the fund in only the 74th percentile among its peers, according to 
Morningstar Inc.
This year, although the fund has returned a mere 1.72% through Dec. 11, it 
has risen into the 19th percentile slot. 
Chalk up the improvement, the company says, to a switch from the traditional 
senior manager/junior analyst portfolio structure to one in which managers 
and analysts work together on an equal footing in cooperative teams. 
"Our 1997 performance was not superlative and so we took a look at our core 
equity product, and found that there was just too much information for one 
manager to get his mind around," said Timothy Swanson, head of equities for 
Wachovia Funds. "The fruit that came out of that was a new management 
structure" instituted in mid-1998. 
The Wachovia fund now uses a six-team system, with each team covering one 
segment of the market -- technology, finance, industrials, health care, 
resources-oriented companies and consumer staples and telecommunications. The 
teams work primarily on the Wachovia Equity Fund, but their research is 
applied to the company's nine other equity funds as well. 
Coordinating the teams is Swanson, and overseeing all the Wachovia funds is 
Steven Reynolds, the company's chief investment officer. 
"They've clearly been doing something right -- they've been in the right 
places," said Catherine Hickey, an analyst at Morningstar, who follows the 
Wachovia Balanced Fund and the Wachovia Special Values Fund. Both funds were 
up in 1998 and 1999, she noted, but are not performing so well this year. 
Wachovia's new structure allows managers and analysts to develop greater 
expertise in their respective sectors and come up with better ideas, its 
managers claim. "The stock selection process is where this structure has its 
competitive edge," said Swanson. 
The team approach also works well in different types of markets, he noted. 
Last year, when technology stocks were skyrocketing, the fund returned 
26.15%, placing it in the 21st percentile among its peers, according to 
Morningstar. And in this year's volatile marketplace, the fund has done well 
because it no longer relies on just one manager. "It's as if we have six 
different funds," Swanson said. "Over time, each team plays a hot hand and we 
have more hot hands than any one manager could." 
To develop its six teams, Wachovia used existing personnel but made its 
overall organization more sector-focused. There was some resistance among 
various managers and analysts at first, but "almost out of the starting gate 
we saw a meaningful improvement in performance," Reynolds said. 
When looking at companies, the Wachovia teams take a bottom-up approach. They 
seek out firms that are in the top half of their respective sector and pull 
back if the company falls into the bottom half. 
Since adopting its new management structure, the number of names in the 
Wachovia fund has dropped to about 75 from 110, while the turnover rate has 
dropped to 40% from between 50% to 60%. "The reason for both those drops is 
strength of conviction of stock choices," said Swanson. 
One company that has performed especially well for the fund this year is the 
network-data-storage firm Network Appliance Inc. (NTAP). Wachovia bought 
Network Appliance back in mid-1999 when it was trading in the low teens, saw 
it rise to $152 and then fall back to $50 after the Nasdaq correction. The 
fund sold off some of its position at about $100 when the stock was on the 
way up, but still holds the company, which is now trading at about $90. 
Other companies that have performed well for the fund this year include the 
computer-networking firm Cisco Systems Inc. (CSCO), the drugstore company CVS 
Corp. (CVS) and utility firms Duke Energy Corp. (DUK) and Enron Corp. (ENE). 
The Wachovia fund bought Enron in August 1998 at about $26 and now holds it 
in a 1.3% position, with the stock trading at $82. 
One company that did not perform so well for Wachovia is the consumer 
electronics retailer Circuit City Stores Inc. (CC). The fund bought Circuit 
City for $44 in January at a 0.3% position and gradually increased that 
position to 1.2%, before selling off the stock in September for $26. 
Wachovia plans to introduce two new funds, the Wachovia New Horizons Fund and 
the Blue Chip Value Fund, on Dec. 20. The two new funds will also utilize the 
team-management system. 
Wachovia Funds is a unit of Wachovia Asset Management, Alexandria, Va. 
-By Christiane Bird, Dow Jones Newswires; 201-938-2046; 
christiane.bird@dowjones.com

Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved. 

Stocks mixed Tuesday as investors wary about earnings, election
By AMY BALDWIN
AP Business Writer

12/12/2000
Associated Press Newswires
Copyright 2000. The Associated Press. All Rights Reserved.

NEW YORK (AP) - Stocks were mixed Tuesday as anxiety about high-tech earnings 
and the election deadlock resurfaced on Wall Street. 
Technology issues rose smartly late last week after Federal Reserve Chairman 
Alan Greenspan said he was inclined to lower interest rates early next year. 
High-techs also advanced Monday, but investors are too worried about poor 
earnings to extend the rally, analysts said.
"There was some initial euphoria in the wake of Alan Greenspan's clear 
message that he is poised to rescue the economy if it heads toward recession, 
but there are still some concerns especially in the chip sector that earnings 
will be disappointing," said Alan Skrainka, chief market strategist for A.G. 
Edwards & Sons Inc. in St. Louis. "So we are seeing a shift to some of the 
defensive, more stable stocks." 
The Dow Jones industrial average rose 92.91 to 10,818.71. 
Broader indicators were lower. The Nasdaq composite index was down 39.82 at 
2,975.28, and the Standard & Poor's 500 index was off 2.84 at 1,377.36. 
"Some people feel that 3,000 in the Nasdaq is an important level. So, we are 
seeing some profit taking," Skrainka said. "Clearly, the short-term is 
dominated by worries about the political situation and fourth-quarter 
earnings." 
Investors awaited a decision expected later in the day from the U.S. Supreme 
Court on whether to allow Florida to recount its election ballots to 
determine whether Vice President Al Gore or Texas Gov. George W. Bush will be 
president. 
Wall Street considered the protracted political uncertainty as a reason to 
sell tech stocks and retreat to blue chips. 
Chip makers were mixed after Advanced Micro Devices warned Monday that weak 
demand for personal computers would lead to lower-than-expected 
fourth-quarter earnings. AMD inched up 25 cents to trade at $17.56, but 
Intel, which issued a similar warning last week, tumbled $2.38 to $35.06. 
Microsoft slid $2.19 to $55.88. Network equipment maker Cisco fell 50 cents 
to $54.31. 
The Dow saw big price changes and heavy trading in two of its most well-known 
components. 
General Electric was significantly lower despite an upbeat outlook delivered 
Monday by CEO Jack Welch to analysts. GE, which also announced it will take a 
$4 billion charge for its acquisition of Honeywell, fell $1.38 to $53.94. 
But General Motors rose $2.13 to $53.69 after the automaker announced it will 
phase out its Oldsmobile division. 
So-called defensive buys traded higher. Banker J.P. Morgan soared $3.19 to 
$159.94, and drug maker Johnson & Johnson rose $1.25 to $96.88. 
Energy stocks were mixed after industry economists told the Senate that 
natural gas and heating-oil prices will be high this winter. They cited 
soaring demand, low inventories and forecast for colder weather. Enron was 
down 81 cents at $75.69, but Exxon Mobile was up 63 cents at $86.38. 
The Russell 2000 index was down 3.84 at 483.39. 
Declining issues outnumbered advancers 4 to 3 on the New York Stock Exchange 
where volume was 493.10 million shares, down from Monday's 522.67 million. 
--- 
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Copyright , 2000 Dow Jones & Company, Inc. All Rights Reserved.