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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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