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Enron Mail |
Here is a 19-month template for the forecast that is due tomorrow at 9:00 am
The numbers in the sheet represent what was shown to the DIP lenders last weekend in order to obtain financing. In many cases all revenues and other items were completely eliminated leaving only operating expense and capital expenditures. We were trying to be as conservative as possible but also show a viable entity going forward. I hope we were not to far off. What we would like you to do is populate this format with the numbers you believe to be true going forward based on the recent changes. We also need a detailed explanation of what is in the numbers. A few things to remember are: This estimate should contain no allocations except for what you believe you salaries and wages would be post reduction (normally paid by Corp) Operating expenses includes salaries, outside services, benefits, employee expenses and any other items normally in operating expenses including non employee expenses and taxes other than income taxes. Please provide as much detail as possible. There is space for detailed opex at the bottom of the page.Call me if you have questions. Although in Chapter 11 interest and income taxes are not paid, please provide these to the extent your business unit pays them. We will adjust for entities that are in the filing. I understand there is a big global effort to identify assets for sale but please provide your best estimate to date along with the detail and we will compare to the global effort. Capex and investing should be mandatory only. Please provide detail back up. To the extent your business has any financing activities please provide. again we will adjust for filing entities. We need this as soon as possible but no later than Friday morning 9:00 am. This should be a realistic view of your business unit as run under Chapter 11. We are only focused on CASH items now. Please provide backup detail for any item you think needs it or is not self evident. Please do not hesitate to call myself 3-3887 or Mike Deville at 5-7852 with questions. -----Original Message----- From: Westbrook, Sharron On Behalf Of Causey, Richard Sent: Tuesday, December 04, 2001 3:34 PM To: Colwell, Wes; Hayslett, Rod; Gunther, Dave; Selzer, Howard; Lindsey, Mark E.; Beck, Sally; Stubblefield, Wade; Lindsey, Mark E.; Perkins, Mary; Marlow, Keith; Saunders, James; Harris, Kim; Myers, Thomas; Castleman, Kent; Sommers, Jeffrey E.; Geaccone, Tracy; Davis, Rachel A.; LaBaume, Wanda; Roper, Kerry; Nelson, Kimberley; West, Terry; Garcia, Paul; Bowen, Todd; Delainey, David W.; Dietrich, Janet; Fallon, Jim; Horton, Stanley; Hughes, James A.; Kitchen, Louise; Lavorato, John; Mcconnell, Mike; McMahon, Jeffrey; Shankman, Jeffrey A.; Whalley, Greg; Myer, Karen; Valdez, Christina; Hinojosa, Esmeralda; Oxley, David Cc: Tijerina, Shirley; Myer, Karen; Campos, Kathy; Reyes, Sonnia; Valdez, Christina; Schiller, Marsha; Chapman, Kay; Marshall, Lucy; Stark, Cindy; Blackwood, Connie; Schoppe, Tammie; Hillis, Kimberly; Brooks, Loretta; Phillips, Cathy; Burns, Jennifer; Taylor, Liz; Deville, Mike; Clyatt, Julie Subject: CASH & REORG FINANCIAL REPORTING Re: CHAPTER 11 REORGANIZATION FINANCIAL REPORTING REQUIREMENTS Many people have questions regarding how Enron will be operating under Chapter 11 bankruptcy proceedings. This memo addresses the financial reporting requirements Enron will have to its various constituents. During the reorganization, the Company will continue its GAAP reporting, with a breakout of pre and post petition liabilities, as well as historical management/operational reporting, consistent with past practices. In addition, the Company will have an added responsibility to report cash flows to the bankruptcy court and its various constituents. Specifically, Enron will be required to report projected cash receipts and cash disbursements by business unit on a weekly basis. The court and our new debtor-in-possession ("DIP") lenders require a rolling 13 week projection of cash flows plus monthly projections thereafter to obtain a full year of projected cash flows. The budgeted weekly projections will then be compared to actual results to determine how well each business unit is operating compared to the projections. The weekly and monthly forecasts will be adjusted each week pursuant to revised or improved information on forecasted cash flows. Thus this process will be an ongoing one, with constant updating of information to ensure we generate the most accurate reports possible. The initial weekly and monthly projections will be critical to the determination of the amount that the DIP lenders will be willing to make available to the Company. In addition, the cash flows for the entities that are included in the bankruptcy proceedings will be utilized by the bankruptcy court and DIP lenders to constantly review and react to the cash flow situation at Enron. However, all Enron business units (not just ones in bankruptcy) will need to conform to these new requirements, because additional entities are likely to be included in the bankruptcy filing and because it is extremely important for Enron management to be able to see the totality of cash flow requirements for the entire Company. The weekly cash flow projection project will be overseen by Mike Deville (x 57852) and Greg Adams (x 33887). In addition, Enron has retained Batchelder & Partners, Inc., a financial advisory firm, to assist us in this and other reorganization efforts. We will be having a group meeting with the CAO's and/or their designees from the various business units responsible for the cash projections on Wednesday, December 5 at 2:00 PM in the Boardroom on the 50th floor to further explain this process and answer any questions you may have. We will then be meeting on an individual basis with the business units to discuss specific business unit requirements. Attached is a template of the financial statement projection format that will be required . Please review this template in advance of the Wednesday meeting to determine any questions you have on the reporting format. Obviously the requirements may change, which will require us to reformat and/or obtain additional information on short notification. Thank you in advance for your cooperation. We look forward to your attendance on Wednesday.
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