April 11, 2006 3:54 p.m. EDT
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Skilling Tells Jurors There
Was By GARY
MCWILLIAMS and JOHN R. EMSHWILLER
April 11, 2006 3:54 p.m. HOUSTON -- In his second day of testimony, former Enron Corp. Chief Executive Jeffrey Skilling1 told jurors2 that the Houston energy firm was profitable and growing in 1999, leaving no reason for wrongdoing. Prosecutors in the trial, now in its 11th week, alleged that the Mr. Skilling and former Enron Chairman Kenneth Lay3 conspired to inflate the company's earnings in order to profit personally. As Skilling attorney Daniel Petrocelli4 walked through the government indictment against his client, Mr. Skilling testified that he never asked subordinates to improperly boost earnings in 2000, the year before the company's collapse. Prosecution witnesses who have pleaded guilty to Enron-related crimes testified earlier in the trial that Mr. Skilling sought to improperly meet or beat analysts estimates to avoid damaging the company's stock price. (Read excerpts from Mr. Skilling's testimony5.) ![[Jeffrey Skilling]](Skilling Testimony II WSJ 041106_files/HC-GH352_Skilli_20060329125245.gif)
Mr. Skilling said he couldn't recall being warned that January that Enron was poised to miss analysts' fourth-quarter per share estimate by a penny. "I absolutely have no recollection of that at all," he testified. At another quarter, he said the company's business was performing better than expected, resulting in the higher profit. The government's use of an Enron draft earnings release to show that a penny was added the night before a January earnings release reflected only the hectic process involved in finalizing the numbers, he said. Prosecutors argued that Mr. Skilling padded profits to prop up the company's stock price. However, Mr. Skilling also said there were no "dire consequences" for missing earnings estimates. "If you had any reasonable explanation, the market would be just fine with that." Mr. Skilling told jurors that he relied on subordinates to approve the numbers released and to prepare earnings announcements. He first reviewed prepared scripts that were delivered to investors the morning they were delivered, he said. "I'm relying on the system we put in place, the control and reporting system to ensure that those are done properly," he said. Mr. Skilling is expected to testify all week, followed by a handful of character witnesses. Mr. Lay is expected to take the stand later this month. Mr. Skilling is charged with 28 counts of fraud, conspiracy, insider trading and lying to auditors, while Mr. Lay faces six counts of fraud and conspiracy. Write to Gary McWilliams at gary.mcwilliams@wsj.com28 and John R. Emshwiller at john.emshwiller@wsj.com29 | ||||||
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