An Open Letter From Our CEO

"We write this in a year of prosperity and challenge, and I would like to use this communication to tell you about who IE is today and what our positions are on a very critical issue for your future."

2000 was a year of exceptional business performance. It was a year that saw us  acquire and integrate several new businesses; and a year that renewed our commitment to our customers, our people and our environment.

• Revenues rose 17% to $132.2 billion—a record.
• Net income rose 18% to a record $14.1 billion, with 14 of IE's top 20 business units posting double-digit earnings increases.
• Earnings per share increased 18%.
• Cash generated from our operations was a record $14.6 billion—up 28%, or $2.9 billion from 1999.
• Ongoing operating margin—a key measure of business performance—rose to nearly 17%—this from a Company that traditionally posted 10% margins.

The Company made significant business acquisitions for the second consecutive year and moved quickly to acquire Aeros Electricale, whose business is a perfect  fit with our growing South American businesses. Aeros share holders approved the merger in March, and we are working with regulatory agencies to close the transaction as early as possible in 2001.

Substantial progress was made in 2000 in further diversifying IE's leadership. I am proud to be one of only a small number of female CEOs of companies in the Fortune 100. 23% of the Company's top executives are now women and minorities, and over $39 billion of our revenues were generated by business units led by female and minority operating managers.

IE continued to be the world's most honored company on many fronts—awarded for the first time in 2000  Enterprise Magazine's  "Most Respected Company in America," as well as, for the third time, "The Scientific Leader" honor by the Benchmark Studies Foundation.

Our future will be based on the  values that drive us today: trust, environmental respect, and the unending quest for the world's best ideas and best people. But the IE of the future will be a more nimble, bolder global presence whose actions will make the Company of today appear plodding and tentative by comparison. It will be an IE whose employee's will understand that success comes from through an unshakeable commitment to the success of our customers.

It will be an IE that will continue to be, as it is today, committed to a better world, powered for the betterment of all our lives.

I must address the current environmental concerns in both the Ramford Shores and El Tajon manufacturing areas. We find ourselves in agreement with certain elected officials, government representatives and citizens appointed by the U.S. Environmental Protection Agency to advise them on issues related to River Reassessment and Recovery initiatives. Commonly, these efforts are called "The Dredging Plan". IE believes that The Dredging Plan is "the wrong answer" - a potential environmental disaster which demonstrates no benefit to the affected areas, their wildlife or local communities.

"Members of EPA's Governmental Liaison Committee are local elected officials who are compelled to take action against threats to our constituents' health, safety and general welfare," said Paula Lavendar, vice-chair of that organization. "There is no larger threat to our community's well-being than EPA's ill-advised and unjustified dredging campaign. That's why the elected leaders of many river communities are not confident that the current dredging plan has their best interests in mind and thus we have joined with IE in speaking out against against dredging." 

I believe, as do our scientific thought leaders inside the company that, our research doesn't justify an enormous dredging project. Our combined data show that dredging will not reduce PCB levels in fish faster than what is already happening. Yet we know that dredging will cause major disruption to local communities, our economy and the river's environment. It makes no sense to proceed with this project at this time, when conditions in the river and affected areas are better than they ever have been.

IE, and I, remain committed to meeting our responsibilities to the environment, to the communities and customers we serve, and to our stock holders. International Energy is "Powering Life" in new directions and with new approaches to a better tomorrow.

Ann Peer-Wattage
Chief Executive Officer
International Energy