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Enron Mail |
=20 BUSINESS HIGHLIGHTS EBS Joins EWS Effective, July 12, EBS has become a business unit within Enron Wholesale S= ervices. All EBS commercial support functions will be integrated into thos= e units within EWS, which enables us to better manage the resources and cos= ts of the support functions. All EBS commercial functions have been consolidated into the following unit= s: Europe - headed by Matthew Scrimshaw Asia - headed by Anthony Duenner Americas - headed by Rich DiMichele Additionally, the North American EBS origination teams have been consolidat= ed into one group, led by Stewart Seeligson. North American trading and ri= sk management will continue to report to Paul Racicot. Paul will also over= see the global portfolio from a risk management perspective. Global Network Operations will continue to report to the EBS Office of the = Chairman. All EBS asset positions will continue to be reviewed and repositioned to mo= st effectively meet the future needs of EBS and the Portland office will be= closed by October 1. Global Strategic Sourcing Effective July 1, a number of measures and recommendations have been implem= ented to reduce expenditures associated with, among other things, travel an= d entertainment, and professional services. Global Strategic Sourcing ("GS= S") will undertake this very important initiative and they would like to en= list your support in the implementation of these new procedures. This message will focus on Travel and entertainment. Next week's message w= ill focus on professional services. Travel and Entertainment - Enron has a tremendous opportunity to save on tr= avel and entertainment expenditures by making some relatively painless adju= stments. ?=09Air Travel - Air transportation is the single largest component in the = travel mix. In recognition of this fact, a number of significant discounts= have been negotiated with all of the major carriers. There are two separa= te channels available to employees to access the Enron-negotiated fares. T= he first is Travel Agency in the Park ("TAP"), or the GSS-approved preferre= d travel agency for your location, and the second is the new Enron-managed = online travel booking service, ClickTrip, located at <http://clicktrip.enro= n.com/enron<. Over the coming weeks, GSS will be promoting training and usage of ClickTri= p, as the primary method of booking domestic U.S. travel for a number of re= asons. First, excluding proprietary carriers like Southwest Airlines, Clic= kTrip provides employees easy access to all travel and pricing options for = their destination, including the Enron-negotiated fares. Second, industry = data shows that employees will generally make the most cost-effective trave= l decision when presented with the relevant facts. Conservatively speaking= , we estimate that a 20% savings in airfare is attainable through the use o= f this tool alone. Third, it is relatively painless to use. Fourth, Click= Trip is accessible 24X7 from any internet-enabled personal computer and aft= er-hours telephone support is available. If you have travel-related questio= ns, please contact Tracy Ramsey at ext. 6-8311. =20 One final air travel reminder worth promoting: For employees who fly in the= United States, use of non-refundable coach tickets generally runs 65 perce= nt less than refundable tickets and can usually be changed by simply paying= a $100 fee. ?=09Lodging and Car Rental - GSS has also negotiated preferred rates at a n= umber of hotel chains in many cities worldwide to accommodate your business= unit's individual hotel policy. Additionally, preferred car rental rates i= ncluding insurance coverage with National (U.S. and Canada) and Alamo (U.S.= ) have been negotiated for your use. More detailed information is availabl= e regarding both programs through our travel site located at <http://travel= .enron.com<. Enron Industrial Markets - Forest Products EIM began trading in the physical markets for Forest Products (newsprint, p= ulp, recycled paper, and lumber) in August, 2000 and Steel in January, 2001= . Since then EIM has handled over 140,000 tons of recycled paper, 180,000 = tons of newsprint, 150,000 tons of pulp, 160 million board feet of lumber, = and 210,000 tons of steel. Currently on a weekly basis, EIM is moving appr= oximately 20,000 tons of forest products (newsprint, pulp and recycled pape= r), 3 million board feet of lumber, and 10,000 tons of steel products throu= ghout the world. =20 Due to much larger volumes of forward trading, EIM is expanding its physica= l product delivery capabilities around the world to physically handle 5 mil= lion tons per year. The EIM Logistics Group coordinates the activities of = customer service, supply and demand matching, scheduling of owned assets, a= nd physical transport and warehousing. These activities are primarily coor= dinated through the Houston office, with additional resources in London and= Singapore. Additionally, EIM owns paper mills in Quebec City and New Jersey which have= a combined production capacity of 750,000 tons of newsprint per month, and= a cold rolling steel mill in Arkansas with capacity of 400,000 tons per ye= ar. Each of these facilities includes Logistics resources that are coordin= ated through the EIM Logistics Group. Enron Global Markets - LNG Enron Global LNG has enhanced its Atlantic Basin LNG supply portfolio with = volumes from Nigeria LNG Limited (NLNG). Enron Global LNG recently signed = a Memorandum of Understanding with NLNG for delivery of 1 BCM/ year (billio= n cubic meters) or (97,000 Mcf/day) from the NLNG Plus Project. This is a = two train expansion of NLNG's existing Bonny Island LNG production facility= . The expansion is scheduled for completion in 2005. This deal represents= a major step in the establishment of Enron's global LNG network. EGM - Finance & Structuring On June 29, 2001, Enron Global Markets - LNG Group successfully completed t= he divestiture of its 100% equity interest in Progasco, to CHDR, Inc. via a= n all cash transaction. Progasco sells and distributes LPG to commercial a= nd industrial clients, and independent resellers, through a fleet of tanker= trucks, bobtail trucks and 13 filling plants throughout Puerto Rico. CHDR= , Inc. is the record and beneficial owner of all of the issued and outstand= ing shares of stock of Tropigas de Puerto Rico, Inc. ("Tropigas"). Upon co= mpletion of this transaction, Tropigas, hitherto the 3rd largest market pla= yer will operate the newly consolidated entity and control a 35% market sha= re, becoming the 2nd largest Puerto Rican LPG marketer.=20 The sale proceeds of approximately $14.3 million, have been split between P= rotane (a wholly owned Enron Corp. Delaware subsidiary) and San Juan Gas (S= JG), and were used to pay down inter-company debt owed to SJG and Pro Carib= e. The net (pre-tax) gain recorded on the transaction was $3.9 million.=20 The profitable sale of this strategic asset allows EGM to exit the retail p= ropane business it inherited through the 1985 merger of three companies: Pr= otane, Petrolane and Imperial Gas, and will enable Enron to better deploy t= he cash received and more efficiently manage its Puerto Rican human resourc= es.=20 EGM - Weather The Weather group just completed a deal with People's Energy to protect the= m against lower gas prices during a warmer than normal winter. This innova= tive winter protection was structured to manage People's exposure to both t= he volume and price of natural gas. Greg Penman and Bob Beyer, from the Ch= icago office, were the lead dealmakers for this transaction. Simlar deals = with other counterparties are expected to come over the winter season. Also, the Weather Group has started exploring new opportunities with EES. = To support this effort, Elsa Piekieniak has joined the group. Elsa is look= ing for several people to help her with this initiative. If you're interes= ted in a position, please contact Elsa. WELCOME New Hires EGM - Chevondra Auzenne, Anuj Gupta, Lois Stone, Rich Friedman EIM - Brian Gaughan, Jennifer Basinski ENA - Juli Salvagio, Pepi Beltran, Oliver Jones Transfers (to or within) ENA - Jinsung Myung, Russell Diamond, Chris Helfrich, Jerry Farmer, Kenton= Erwin EGM - Meredith Campbell, Martin Gleason, Maritta Mullet, Dorothy Burrell, L= uis Castillo, James Posway, Ted Behrens, Michael Mitcham EnronOnline Statistics Below are the latest figures for EnronOnline as of July 17, 2001: =09Total Life to Date Transactions < 1,214,000 =09Life to Date Notional Value of Transactions < $711 billion NEWS FROM THE GLOBAL FLASH UPDATE ON ENRON EUROPE'S CONTRIBUTION TO 2ND QUARTER RESULTS Congratulations to all staff for your contribution to another fantastic qua= rter! =20 By now we hope you will have had an opportunity to read about Enron's Q2 ea= rnings, which were released to the investment community in Houston on Thurs= day, 12th July. Overall the business has seen continued strong growth with= revenues increasing to over $100 million in the first half of the year up = from $30 million for the same period last year. Earnings per share this qu= arter also exceeded analyst expectations and came in at $0.45 for the quart= er up from $0.34 for the same period last year. Equally important, however, is the vital role Enron Europe played this quar= ter in contributing to the company's overall results. We are seeing some = terrific trends here in Europe - notably, on the wholesale side, the Contin= ental, UK and Nordic power and gas teams keep going from strength to streng= th as we see exceptional growth in volumes and transactions continue this q= uarter. Total physical and financial settled volumes for gas and power in = Europe have seen an increase of 172% in the first six months of the year co= mpared to the first six months in 2000 and the total number of transactions= per day has risen to 604 from 272 last year. Specifically, UK power volum= es are up 204% to 147 TWh in the first six months of 2001 from 48 TWh in th= e same period last year. Continental gas volumes have grown from 351 Bbtue= /day in 2000 to 1,390 Bbtue/day in 2001 - a 296% increase - and Continental= power volumes have seen growth of 360% with volumes rising from 18 TWh in = the first six months of 2000 to 83 TWh for the same period this year. The = growth in volumes is not simply limited to the UK and Continental markets, = however, as Nordic power volumes have increased by 153% from 29 TWh to 73 T= Wh in the first half of 2001. The success stories are not just limited to gas and power trading, however,= and abound throughout the business: Enron Energy Services The retail business has experienced a real boost this quarter with the clos= ing of EES' first, major "marquis" brand energy outsourcing transaction wit= h supermarket giant, J. Sainsbury plc. Of equal importance, Enron Direct's= business continues to grow with total customers now in excess of 160,000. = The success of Enron Direct's business model has translated into the devel= opment of new business on the Continent in the Netherlands and Spain and, m= ore recently in North America, with the 2nd quarter opening of Enron Direct= Canada. =20 Enron Credit A year after Enron Credit's launch, the total life to date notional value o= f transactions has surpassed $11.8 billion and in the 2nd quarter alone, En= ron Credit generated $10.4 million in EBIT. Further, more than 20,000 read= ers per week view the Enron Cost of Credit (ECC) through independent public= ations. =20 Enron Australia With 2nd quarter power volumes up 177% from the first three months this yea= r, Enron Australia is gearing up for a strong growth year. With the develo= pment of a physical power position key to expanding Enron's power trading i= n Australia, work began this quarter to identify and begin the initial purs= uit of asset development projects. Other businesses undergoing significant= expansion this quarter were coal, renewable energy credits and weather der= ivatives.=20 Spain: Arcos The Arcos asset development project in Spain continues to make great progre= ss with third party access to gas supplies for the power project being succ= essfully negotiated this quarter, plus the project achieved another milesto= ne in the permit/government approvals arena with the granting of its water = concession in Q2. UK: ETOL ETOL, a long-standing contributor to Enron Europe's earnings, generated yet= another profitable transaction this quarter with the signing of a series o= f deals with chemical giant Du Pont for supplies at Wilton International. T= he transaction further strengthens Enron's relationship with Du Pont, one o= f ETOL's largest customers, and will extend the current steam and power sup= ply contract through 2010. =20 Enron Metals A year after entering the metals business, Enron Metals has seen increased = volumes of 130% in its merchant and financial trading operations this quart= er with volumes up to over 3.5 million tonnes as compared to just over 1.5 = million tonnes in the 2nd quarter last year. Not only has the team seen po= sitive growth in volumes this quarter, but they have increased their share = of trading on the LME by 50% and are making significant progress with Proje= ct Salem - a major IT and systems improvement project that will streamline = deal capture and risk management for metals transactions. Finally, the met= als team achieved a true home run this quarter when they closed a major ten= -year origination transaction that, through the addition of smelting assets= , will enable the metals team to improve its trading position. The transac= tion proved to be the perfect opportunity to leverage all of Enron's tradin= g and origination capabilities and involved input from a number of groups a= cross Enron. =20 Looking to the future, we have every expectation that the strong growth we'= ve witnessed in Europe for the first half of the year will continue through= end 2001. So, in the words of Solomon Smith Barney analyst, Ray Niles, wh= en talking about Enron's European wholesale operations results this quarter= , "Europe is kicking butt and it's about a quarter of [Enron's] activity, n= early double what it was last year. And, that is a new market that is the = size of the US." =20 LEGAL STUFF The information contained in this newsletter is confidential and proprietar= y to Enron Corp. and its subsidiaries. It is intended for internal use onl= y and should not be disclosed. <Embedded Paintbrush Picture<
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