IN: This is an email
Here are my notes from today's call. As with Monday, I've focused on getting them out as quickly as possible rather than taking extra time to re-organize them by subject. Enron's business has been grouped into three buckets: Core, Non-core, and Under Review. Core: Wholesale energy business in North America and Europe, retail energy, pipelines Non-core: Broadband, water, and international assets (i.e. EGAS). Enron has approx. $8Bn in investments in these assets, and they have produced 'dismal' returns. Enron will be exiting these businesses and will attempt to wind them up in an orderly fashion. An aggressive divestiture program has been set in motion for these assets. Under Review: EGM, EIM. These businesses are being closely examined to determine whether they have a reasonable chance of long-term viability. Required resource levels are being carefully studied. Following review, Enron will move the different portions of these businesses to core or non-core as the analysis dictates. Approximately $800MM of asset sales are under contract and expected to close in the fourth quarter. These include a gas LDC in Brazil, EcoElectrica, and our Indian E&P assets. Enron is in active pursuit of an additional private equity infusion of $500MM-1Bn. Given the current environment, raising equity in the public markets would be 'inefficient', McMahon says. Short-term liquidity is provided by the $3Bn of credit drawn upon a few weeks ago, the $1Bn of new debt, and the $1.5Bn equity infusion from Dynegy. Longer-term, the proceeds from the sale of PGE will provide liquidity. Asset sales over the next year will be used to pay down debt. McMahon described the major off-balance-sheet vehicles: Marlin was set up to hold Azurix assets. It was initially capitalized with $950MM of 144a debt and $125MM of equity (raised from Enron and institutional investors). The debt is supported by the equity and by Azurix' assets. Enron is obligated to cover any deficit at the time the debt becomes due on 3/17/03 (the 'Enron topup' obligation). The 3/17/03 date is accelerated in the event that Enron is rated below-investment-grade by any one of the three major agencies. The primary asset of Marlin is Wessex Water. As long as Wessex is worth at least $2.6Bn, there will be no Enron topup required. If we take a 25% haircut to present book value, Enron will have to provide $650MM in consideration upon retirement of the debt. This $650MM would hit Enron cash, income, and equity balances. Osprey contains energy-related assets and 'other assets'. It was initially capitalized with $2.4Bn of 144a debt and $220MM in equity (ENE and institutionals). As with Marlin, the entity is an asset-backed structure with an Enron topup guarantee. The debt is supported by a) the assets; b) $1Bn of convertible preferred ENE (convertible into 50MM shares of ENE common); and c) additional ENE common as needed for topup. Assuming the same 25% hypothetical haircut to current book value, Enron would have to deliver approx. $600MM of topup funds--which would hit ENE cash, income, and equity. The debt must be retired by 9/17/02, with the same cut-to-junk early trigger provision as Marlin.

What is the subject?

OUT: Highlights from ENE Analyst Conference Call 11/14
QUESTION: Joe, FYI, you were invited to our off-site because we felt that our businesses were so linked together and that we could all get on the same page with regard to updates, vision and relationship building. We also invited Paul and Thor as the only other non-EGM people. If you can make it would be great but we do know how difficult it is to make it over. Cheers,
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ANS: EGM offsite
USA: UPDATE 1-PG&E utility gives Calpine debt priority status. 07/06/2001 Reuters English News Service (C) Reuters Limited 2001. (changes 1st paragraph, adds details, company statement) SAN JOSE, Calif., July 6 (Reuters) - Independent power generator Calpine Corp. said on Friday that its contracts with Pacific Gas and Electric Co. will be altered, ensuring that Calpine will continue to supply power to the bankrupt California utility and that it will get paid more than $250 million for power already sold. Calpine stocks rose more than 14 percent, or more than $5, to $43 after the announcement. As part of the contract modification, the $267 million, with interest, that the utility, a unit of PG&E Corp , owes Calpine in past due receivables under the contracts, will be elevated to "administrative priority status," a claim which is paid before any other general unsecured creditors. Calpine will get the money, in a lump sum, as soon as PG&E has a confirmed reorganization plan, which can take as long as four to six months from now, Calpine said. The move is also a step in the process of untangling California's energy crisis, which stemmed from a flawed deregulation plan that has hit the state with a series of rolling blackouts. Under the agreement, Calpine will continue to receive its contractual capacity payments, but it has also set up a fixed rate contract for the next five years of about 5.37 cents per kilowatt-hour. The contracts are known as qualifying facility contracts because Calpine's power plants are qualifying facilities. These types of facilities represent more than 20 percent of the state's power supply and sell power generated from renewable energy sources to the regulated utilities. "Calpine is the first power company to modify its QF contract with PG&E to ensure that Northern California consumers will continue to benefit from these affordable and reliable energy resources," Calpine senior vice president James Macias said in a statement.
Q: What is a potential subject line for this email?
answer: PG&E utility gives Calpine debt priority status.
Tammie, Please don't forget that I will be out of the office tomorrow and Thursday. I have elected to have an amnio done. My appointment with the high risk doctor is at 8:45 am tomorrow morning. They will do an ultrasound for about 1 hour and then do the amnio. I have been told that I need to be a "couch potato" for 24 hours. This is why I will be out on Thursday as well. John has asked that you sit in at my desk tomorrow. My passwords have stayed the same. You should be able to add me as a viewer of your email and access it from my pc. My Lotus Notes password is lipstick1. John has a flight Thursday afternoon and a driver has already been arranged. If you double-click on the entry on his calendar you will see the details as well as a phone number for reference if there should be a problem. He will be out on Friday. Please let me know if you have any questions. I will have a second doctors appointment tomorrow at 10:00 with my regular OB/GYN so I should be home around noon. Please feel free to call me if you need anything. Kim
Answer: Tomorrow - 5/30
QUESTION: Tom: EGLI is holding a $420,000 LC that expires 12/21/01 covering a deal with Energy Service Providers LLC. According to our records, this deal has terminated. Have we been paid? Are we owed anything? Would we have any grounds for drawing prior to the expiry date?
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ANS:
LC's