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-----Original Message----- From: Herndon, Rogers Sent: Tuesday, May 22, 2001 9:59 AM To: Presto, Kevin; Lavorato, John Subject: RE: P&L Impact of Volumetric True-Up Joh/Kevin I am sorry, but I cannot believe what I read below. Arch of Chicago - multiply by EXPECTED number of accounts?????? Suiza - How do we measure milk production, we cannot even manage energy consumption - Got Milk????? Packaged Ice - ??? I hope we don't have any ice facilities in California. Conclusion - I do not expect that we will do any more deals like this anytime soon. Rogers To: Rogers Herndon/HOU/ECT@ECT cc: Neil Hong/HOU/EES@EES, Meredith M Eggleston/HOU/EES@EES Subject: RE: P&L Impact of Volumetric True-Up The brief synopsis on causality of the losses are as follows: Arch of Chicago The deal was originally priced (in 1998) with one account and the results were multiplied by the expected number of accounts. We have re-priced the deal with actual volumes from our billing system (to capture all active volumes). Suiza The revenue is based on a production index (gallons of milk). We have updated the revenue from the Consumption Desk and re-priced costs with data from our billing database. In addition, we have worked with the Account Manager to segregate pass-through vs. active volumes. Packaged Ice The revenue is based on a production index (bags of ice). We have updated the revenue with data from the Account Manager and the Consumption Desk. We have also re-priced costs with data from the our billing system. Conclusion The losses are amalgamation of structured vs. actual volume differences, production index revision and initial modelling error. If I can be of further assistance to you, I can be reached at 3-1902. Thank you. Best regards, Mike Kim --------------- Michael - Are these changes in the forward volumes (unrealized losses). Can you explain the reason for these adjustments? How much more exists that we need to address? Thanks, Rogers From: John J Lavorato/ENRON@enronXgate on 05/22/2001 07:28 AM To: Rogers Herndon/HOU/ECT@ect cc: Subject: RE: P&L Impact of Volumetric True-Up 20 Million !!!!!! Is this back money or forward money. Why did the volumes change so much. -----Original Message----- From: Herndon, Rogers Sent: Monday, May 21, 2001 6:53 PM To: Lavorato, John; Presto, Kevin Subject: P&L Impact of Volumetric True-Up FYI ---------------------- Forwarded by Rogers Herndon/HOU/ECT on 05/21/2001 06:52 PM --------------------------- << OLE Object: Picture (Device Independent Bitmap) << Wade Stubblefield@EES 05/21/2001 05:35 PM To: Rogers Herndon/HOU/ECT@ect cc: Subject: P&L Impact of Volumetric True-Up FYI ---------------------- Forwarded by Wade Stubblefield/HOU/EES on 05/21/2001 05:35 PM --------------------------- << OLE Object: Picture (Device Independent Bitmap) << Enron Energy Services From: Michael Kim 05/21/2001 03:20 PM Phone No: 713-853-1902 To: Neil Hong/HOU/EES@EES, Meredith M Eggleston/HOU/EES@EES, Wade Stubblefield/HOU/EES@EES, Don Black/HOU/EES@EES cc: Subject: P&L Impact of Volumetric True-Up We have re-priced Suiza, Packaged Ice, and Arch of Chicago with updated volume information from our billing system. The impact is as follows: << OLE Object: Picture (Metafile) << The impact will be recognized on the DPR and G/L, pending Accounting Department's "green light." Thank you. Best regards, MSK
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