Enron trial takes a day off; resumes Monday…AAA Texas says retail gasoline prices down slightly from previous week…Miami judge tentatively approves $1 billion settlement with ExxonMobil involving wholesale motor fuel discounts…
Testimony will resume Monday in the trial of the founder of Enron and one of its top officials. A Houston jury has heard a tape in which a former Enron official mocked people who questioned the company’s financial reports. Some jurors laughed when they heard former CEO Jeffrey Skilling thank a hedge-fund worker for his concerns, then call him an obscene name. Skilling’s lead defense lawyer says he isn’t worried about the tape. Daniel Petrocelli says he would have played it himself.
“You know, the jury has to listen to the tapes and we want all the tapes to be playedand I think that’s been abundantly obvious. We made that clear in opening statement. We want the tapes played. We want all the tapes played. We want all the earnings releases read. We do not want these things to be clipped and edited. It is not an accurate rendition of the records.”
Skilling and Enron founder Ken Lay are accused of fraud and conspiracy in the spectacular collapse of Enron in 2001. Petrocelli, with Skilling standing beside him, told reporters he’s pleased with the trial. That prompted a silent gesture by Skilling, who pointed to himself and mouthed the words “I’m not!”
“I’m enjoying this trial. I don’t like that my client is on trial. (laughter as Jeff skilling points to himself and mouths ‘I’m not!’) But I think we have a really terrific jury. They’re taking notes. They’re listening. The judge is doing a great job of refereeing a very difficult trial. But so far, so good.”
Earlier in the week, Enron’s former investor relations manager testified that Skilling failed to disclose losses by Enron’s retail Energy Division. Mark Koenig says analysts were not told about $726 million in contract losses during one six-month period.
Retail gasoline prices are down slightly this week from last week. The weekly AAA Texas gas price survey out today says retail prices of regular unleaded self-serve gasoline average $2.27 per gallon. That’s down about a penny a gallon from the week before. The costliest gasoline continues to be in Dallas, where regular self-serve averages $2.29 per gallon. That’s down almost a penny. Corpus Christi still has the cheapest gas, averaging $2.15 per gallon. That’s down two cents. The national average is almost $2.36 per gallon–up almost two cents. But auto club spokeswoman Rose Rougeau says there’s still downward pressure on gas prices in Texas. But she says that’s likely to end near the end of the month, when prices should begin climbing again.
A 14-year battle between ExxonMobil and over 10,000 of its service station dealers may finally be over. A federal judge in Miami has tentatively approved an over $1 billion settlement involving discounts for wholesale motor fuel. The agreement was reached in December, and the judge is scheduled to issue a final ruling April 5th. The service station dealers went to court in 1991, saying ExxonMobil never gave promised discounts for fuel and fraudulently hid its failure to pay. A jury found in favor of the dealers in 2001. An ExxonMobil spokeswoman says the company has “always contested liability” in the lawsuit, but will pay as a “legal obligation.” If the agreement gets final approval, the plan is to hold the money in a bank while each individual claim is evaluated.
Senator Kay Bailey Hutchison of Texas is asking the White House to include Texas in its request to Congress for emergency war and hurricane relief funds. Hutchison is reminding Office of Management and Budget Director Josh Bolten of the state’s generosity to Hurricane Katrina victims–only to be hammered by Hurricane Rita. Texas took in about 500,000 people who fled Hurricane Katrina, and many have remained in the state, with their children enrolled in Texas schools. Texas has received millions in compensation and for housing and education–but state officials say more is needed. Katrina slammed the Gulf Coast in late August. Rita made landfall September 24th in Southeast Texas. President Bush next week is due to send Congress his 2007 budget proposal.
The Labor Department says the unemployment rate fell in January to 4.7 percent. With the two-tenths-of-one-percent decline, that’s the lowest level since the summer of 2001. The government says payrolls expanded by 193,000 jobs last month. While that increase isn’t as large as expected, December payrolls growth was revised to 140,000 jobs, up more than 30,000 from the previous estimate. This latest snapshot of the job market may help to address some of the recent concerns about weaker-than-expected growth in the fourth quarter of last year. The Federal Reserve this week opted to hike interest rates once again and could decide to remain on that path.
Some Cuban officials today invited U.S. firms to lobby against the American trade embargo with the communist country. Cuban authorities at the Mexico City business meeting also urged U.S. companies to invest in the island country’s energy sector. Cuba officials announced plans to double their drilling capacity and vastly explore the Caribbean waters. Representatives of some U.S. companies, including Irving-based ExxonMobil and San Antonio-based Valero Energy, are meeting with Cuban government officials–to talk about oil. The meeting, through tomorrow, is sponsored in part by the U.S./Cuba Trade Association, Valero Energy, the Port of Corpus Christi and others.
Dallas-based Energy Transfer Equity debuted on the New York Stock Exchange today–and its shares climbed nine percent over its initial public offering price of $21. The company sold 21 million limited partnership units at the high end of its expected price range set by its underwriters–UBS, Wachovia Securities and Credit Suisse First Boston. ETE owns a general partnership stake and incentive distribution rights in another publicly traded limited partnership, Energy Transfer Partners. That partnership, which went public in 1996, transports and stores natural gas and operates a retail propane business. The shares sold in ETE’s IPO represent about 15 percent of the limited partnership interests in Energy Transfer Partners. For the three months that ended November 30th, Energy Transfer’s revenue nearly tripled to $2.4 billion. Income from continuing operations tripled to $39.6 million.
Two Nebraska plants and one in Texas are among 15 sites that Conagra Foods plans to sell as it sheds its refrigerated meats business. The Nebraska plants are in Hastings and Omaha. A Conagra spokeswoman says the list also includes a plant in Lufkin. The sale, announced yesterday, includes about 6,000 employees of the Omaha-based company. Conagra plans to part with its Armour, Butterball and Eckrich brands. The company expects most of those 6,000 workers will become employees of the new owner after the sale, which is expected to take up to one year. The proposed sale of the refrigerated meats business will not affect Conagra’s Healthy Choice, Hebrew National, Brown ‘n Serve, Slim Jim or Pemmican brands. Conagra earlier announced it’s selling Cook’s, a smoked-meat business, to Smithfield Foods.