Enron Trial Hears Skilling Lose It in Wall Street Conference Call

The Houston Chronicle reports that Enron's head of investor relations Mark Koenig drew blood in his testimony yesterday in the Enron trial:

Koenig said that in an April 2001 phone call with analysts and investors, Skilling didn't disclose $230 million in first-quarter retail division losses, and that in July 2001 Skilling didn't disclose the then-$726 million debt for the half year. Instead, Skilling told investors the division was doing "great."

You don't need a CPA to understand that losing $230 million in three months does not make for a "great" quarter.
The court also heard a tape of the infamous April 2001 conference call in which Skilling lost his composure:

"You know, you are the only financial institution that can't produce a balance sheet or a cash flow statement with their earnings," [stock analyst Richard] Grubman said. Skilling, laughing, shot back, "Thank you very much, we appreciate it ... asshole."

Skilling used to be dismissive of those who didn't "get it" but Enron's failure to provide a balance sheet and cash flow statement made it more difficult for investors to uncover the techniques the company used to hide losses and make its numbers to keep Wall Street happy. Holding off on publishing complete financial statements gave Enron extra time to cover its tracks and maintain the fiction that the company was making money, when the actual cash flow from operations told a very different story.