From Dynegy call on Monday

 -----Original Message-----
From: 	Morris, Brandi
Sent:	Tuesday, November 13, 2001 3:53 PM
To:	Smith, Mark
Subject:	FW: Analyst call

 -----Original Message-----
From: 	Neyman, Jesse
Sent:	Tuesday, November 13, 2001 3:39 PM
To:	Lydecker Jr., Richard; Enerson, John; Johnson, Patrick; Morris, Brandi; Drummond, Christine
Subject:	FW: Analyst call

This is a brief of the referenced conference call.  Notes were taken by our assistant from Producer Finance.

jempy

 -----Original Message-----
From: 	Boudreaux, Jay
Sent:	Tuesday, November 13, 2001 2:02 PM
To:	Neyman, Jesse; Biggerstaff, Finley; Helfrich, Christopher A.
Subject:	FW: Analyst call

 -----Original Message-----
From: 	Stork, Colette
Sent:	Tuesday, November 13, 2001 11:03 AM
To:	Childers, Craig; Boudreaux, Jay
Subject:	Analyst call

Just received this.

Subject:	Highlights from this morning's ENE/DYN analyst conference call

Listened in on the analyst call this morning.  Here are my notes.  Did not yet have a chance to organize them, so they're simply in chronological order.

The call began with Watson, Bergstrom, and Whalley reading from prepared statements.  Watson spoke for c. 10 minutes, Bergstrom for 5, and Whalley spoke for perhaps 30 seconds.  Dynegy management was noticeably in control of the call.  Enron executives spoke when questions were directed to them.

Specific points:
EES will be a part of the new company.
Enron assets will be revalued at closing.
The investment in Northern Natural takes the form of convertible preferred.  If the merger does not go through, Dynegy has the right to acquire Northern for 'very little' additional consideration.  If DYN terminates the merger and ENE 'has sufficient liquidity', ENE has right to repurchase the convertible preferred.
Debt/equity of combined company expected to be <45%.
Both companies will remain on RatingsWatch negative.
ChevronTexaco will hold 169MM shares out of a total 650MM shares of the post-merger entity.
Watson reiterates that going forward, the new entity will be run with a focus on transparent and clear financial structure and disclosure, with a significant reduction in on- and off-balance-sheet leverage.
In what was termed a "new approach", the new entity will be run with a focus on cash flow rather than earnings.
Rumors that Dynegy did the deal because of an unhedged exposure to Enron are not true.  Dynegy owed Enron <$50MM.
Lay says that Enron had other options, 'particularly financial'.
All of the discussion and activity has taken place over the last two weeks.
Lay acknowledges that the number for exposure to securities lawsuits may be 'pretty big', but that the companies feel they're able to appropriately value this exposure.
Lay says we have nothing else to hide, but internal investigation still under way.
Lay:  had the SPEs been capitalized with perhaps $30MM more of risk capital, there would have been no question that they would have qualified for off-balance-sheet treatment and there would have been no need to restate earnings last week to reflect consolidation of the SPEs.
Dynegy says that 'several' internal investigations continue at Enron, and thus DYN/ENE cannot say with certainty that there's absolutely nothing else out there.
Doty (Dynegy CFO) says that late last week, ENE had 'close to a billion' in cash.
Osprey will be unwound late next summer. Marlin will be unwound after closing.
Many of the off-balance-sheet structures, including the credit-linked notes, are expected to be unwound/redeemed or at least significantly reduced prior to closing.
With regard to ENE asset dispositions, these will be accelerated to the extent possible.  However, Doty says that 'our backs are not against the wall', and the company will continue to focus on getting value for its assets as well as cash.
ENE will renew its 364-day facility (believe this is the $3Bn facility that we drew down a couple of weeks ago) within the next 6-8 weeks.
BBB-flat most likely rating for combined entity, according to initial comments from ratings agencies.
McMahon says 'no comment' to WSJ article indicating that ENE's banks are preparing to make an equity infusion into ENE in the next few weeks.
Consolidation of trading activity: Mid- and back-office consolidation will see substantial progress prior to closing, such that only the front office / trading books will need to be combined at closing.  EES, NNG and TW have no real overlap with existing DYN activity, so there won't be much integration work required there.  The big integration effort will be ENA.
Watson says that the 'creative financing' surrounded non-core assets.  Doty adds that, 'frankly', DYN assigned zero economic value to non-core businesses in their valuation model.  They bracketed the maximum expected exposure from the non-core assets/businesses and left it at that.
Watson mentions that DYN would not have gotten involved with Enron had they not been approached by 'Enron's top three executives', who said that they thought a combination with Dynegy made the most strategic sense for both companies.  Says that their approach evidenced a  willingness to work with DYN to integrate the two companies that made a big difference in Dynegy's deliberations on proceeding with the merger.
Watson/Doty said that they're NOT 100% sure that no surprises remain in Enron's books--but that the risk/reward offered by the combination was compelling.
The deal does have material-adverse-change outs for Dynegy, covering any MAC regarding Enron's assets or businesses.  Dynegy's lawyers indicated that the MAC language was a 'blunt instrument' under which it would be difficult to bring a case, so Dynegy inserted a specific paragraph that gives Dynegy the right to terminate the merger if the Enron's total legal liability (from any source or cause of action) tops $3.5Bn prior to closing.
McMahon adds that there 'could' be more restatements, but he 'does not expect' there to be more restatements.
ENE international hard assets definitely on the asset disposition list.
The merger structure calls for a new entity to take over Enron.
Enron is planning to hold an Enron-specific conference call in the next few days, tentatively scheduled for Wednesday.
Initial reaction of ratings agencies 'very positive' to combined entities.
McMahon acknowledges that Enron would have had to have an additional equity infusion prior to year-end, had the merger not materialized.
Dynegy's earnings guidance places Enron-related earnings accretion at $0.90-0.95, which represents a '25% haircut' to Enron internal estimates.  Doty says that this is all operating earnings--figure does not include any amounts from expected synergies.
Doty says that both Enron and Dynegy's books, as far as he understands, are relatively short-term in weight, and this will continue to be the weighting of the new entity.  Says a 'very very substantial' portion of future trading earnings will be expected to be cash.
ChevronTexaco's investment in Dynegy was calculated at a 5% discount to public prices on the date of negotiation (not disclosed).  Given the runup in Dynegy stock last week, ChevronTexaco's investment is now at a 'more substantial' discount to market prices.  ChevronTexaco has provision to get 'different prices at closing if those prices are substantially better'.  (No further clarification given).
Whalley believes that 'we'll retain' the Enron traders and marketers. They're used to being part of a winning team, and the combined entity will definitely be a winner.  They have talked with most of the Enron business leaders, and they are 'very excited' by the combination.  They will be working with the Enron business leaders to ensure talent is retained.  Whalley was asked if there will be any key employee retention provisions.  He says that 'to the extent necessary, yes.'
Watson says that the trading strategy of the combined entity will be a combination of DYN and ENE--there will be more of an asset-backed trading focus, but by the same token the new Dynegy will be involved in much more financial market-making trading than the Dynegy of today.
Watson says that if there were to be any change in culture, he's a strong team player.  He does not want to see an individual do well if the company or division does not do well.


FYI,
We have replaced several printers and added 2 new color printers "Newport &
San Diego". Printers Catalina and Savannah are out of service until further
notice. We will continue to replace older printers over the next few days, so
please be patient as we go through this process.
Please run the "NTPrint" icon on your desktop to get the latest changes.

Thanks,
Mike


Ben,

The total MW on the California assets increased by 41.


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BW2073  JAN 17,2002       5:00 PACIFIC      08:00 EASTERN

( BW)(TX-INDUSTRIAL-INFO-RES) Capital Spending for the Semiconductor
Industry Shows Positive Signs Moving Into 2002, in an Advisory by
Industrialinfo.com

    Business/Energy Editors

	   HOUSTON--(BUSINESS WIRE)--Jan. 17, 2002--An advisory from
Industrialinfo.com (Industrial Information Resources Incorporated;
Houston). Despite worldwide employment losses in the semiconductor
industry, new economic data may suggest an upturn in the industry
during the second quarter of 2002. According to the recently released
Semiconductor Billings Report produced by the Semiconductor Industry
Association (SIA) and the Semiconductor Equipment and Materials
International (SEMI) association, November 2001 global chip sales
increased by 1.5%.
	   Typically, fourth quarter sales are normally high inline with the
holiday season and though 2001 fourth quarter sales may still lag
behind historical figures, any consecutive rise in semiconductor sales
may indicate that a bottom has formed and a recovery may be near. Over
the next few months, consumer demand will dictate whether or not the
upswing in sales will continue. Currently, the two biggest consumers
of tech products relative to semiconductors are multinational
corporations and telecommunications companies. It is estimated that
global spending for hardware and software by consumers will reach $600
billion in 2002. Any further investments will be dictated by the
future state of the economy.
	   During 2001, most semiconductor manufacturers scaled back
production to reduce inventory levels while demand remained weak. Many
companies announced employee layoffs that will continue through 2002.
For example, one of the largest employment losses came from Motorola.
The company announced in December yet another layoff of 9,400
employees. By mid 2002, total losses for the company will account for
over 150,000 jobs since August 2000. NEC announced plans to suspend
chip production in Scotland and lay off 1,260 employees by April of
2002. Several domestic production plants of NEC have also been scaled
back because of the economic downturn. Santa Clara, Calif.-based
Applied Materials Inc. recently announced that approximately 450
positions at their Silicon Valley fab facility and roughly 600
positions at their Austin campus would be cut. Although the list
continues, employment data always lags behind other indicators. These
manufacturers are simply reducing costs during a period of
uncertainty.
	   As the year unfolds, semiconductor sales still remain in question.
Capital spending for the industry is expected to be down. Some
semiconductor manufacturers may continue to invest in process
automations to stay ahead of the competition. The next wave of
production technology automation will come from the transition to
300mm silicon wafer production. Semiconductor equipment vendors are
pushing hard for manufacturers to modernize into new processes. This
could come soon. Industry experts are forecasting a recovery by mid
year 2002 spurred by consumer confidence. If so, semiconductor
manufacturers may increase 2002 capital investments. With inflation
under control, combined with eleven consecutive interest rate cuts
that have made borrowing more attractive, corporations have the right
formula to move forward with automation and technology investments
that will drive semiconductor manufacturers to expand.
	   Industrialinfo.com is a leading provider of information in the
industrial markets, including the semiconductors industry. For 2002,
industrialinfo.com released the 2002 Industrial Outlook
(http://www.industrialinfo.com/indoutlook.htm) that outlines in detail
issues and trends including spending forecast for the industrial
markets. For more information on the 2002 Industrial Outlook and other
products supporting the industrial markets send inquiries to
industrialmanufacturinggroup@industrialinfo.com or visit us at
www.industrialinfo.com.

    --30--AA/ho* as/na

    CONTACT: Industrialinfo.com, Houston
             Michael Bergen, 713/783-5147

    KEYWORD: TEXAS CALIFORNIA UNITED KINGDOM INTERNATIONAL EUROPE
    INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS ENERGY MANUFACTURING
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I've just received your fax and am having it messengered down to an online
officer for signature.  I'll fax you a copy when I get it back signed.

	Ken Zito <kzito@unitedfuels.com>
	01/24/2001 02:29 PM

		 To: "'Tana.Jones@enron.com'" <Tana.Jones@enron.com>, Ken Zito
<kzito@unitedfuels.com>
		 cc: Bob.Shults@enron.com
		 Subject: RE: NDA - United Fuels International Inc.

have faxed signed NDA.  please execute on Enron's behalf and send me copy.
I look forward to discussing potential business initiative.

-----Original Message-----
From: Tana.Jones@enron.com [mailto:Tana.Jones@enron.com]
Sent: Monday, January 22, 2001 11:37 AM
To: kzito@unitedfuels.com
Cc: Bob.Shults@enron.com
Subject: NDA - United Fuels International Inc.

At the request of Bob Shults, I am enclosing our proposed form of
Non-Disclosure Agreement.  If you have any comments or questions you would
like to discuss with me, do not hesitate to call me at (713) 853-3399.  If
the NDA meets with your approval, please return a copy to me via fax no.
(713) 646-3490.  We look forward to hearing from you.

(See attached file: united fuels.doc)


Attached is a revised Credit Watch listing for the week of 3/19/01.
If there are any personnel in your group that were not included in this
distribution, please insure that they receive a copy of this report.
To add additional people to this distribution, or if this report has been
sent to you in error, please contact Veronica Espinoza at x6-6002.
For other questions, please contact Bill Bradford at x3-3831, Russell Diamond
at x5-7095, or Brant Reves at x3-9897.


For your review.
---------------------- Forwarded by Kay Mann/Corp/Enron on 06/08/2000 05:04
PM ---------------------------

Jeff Blumenthal@ECT
06/06/2000 06:44 PM
To: Kay Mann/Corp/Enron@ENRON, Brian D
Barto/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Peggy Banczak/HOU/ECT@ECT, Steve Irvin/HOU/ECT@ECT, Marc
Sabine/NA/Enron@ENRON

Subject: RE: language for Withholding (Section 5.2.2)

Kay and Brian,

In reply to Tim Lederach's e-mail below to Jeff Smith on June 6th, I have the
following comments:

1.  Regarding Tim's addition of the second and third sentences to my original
suggested language, it appears that there may be a misunderstanding.  Under
Mexican tax law, EEIM would be obligated to withhold tax on any payments it
makes to GE that are subject to Mexican withholding tax.  EEIM would submit
such amounts directly to the Mexican tax authorities and, in exchange, would
receive an official receipt (Official Form 37-A) that it could then forward
to GE.  It appears that Tim wants to ensure that GE obtains a copy of the
official receipt so that GE can claim a foreign tax credit on its U.S. income
tax return for any withholding tax to which payments it receives are subject
under Mexican tax law.  Tim's suggested additional language therefore needs
to modified to reflect that EEIM would pay the tax and could then provide GE
with the receipt.  I'd be glad to visit with Tim to discuss this matter.

2.  The language that I have proposed should be inserted in both the onshore
agreement and the offshore agreement.  Tim is proposing that it be inserted
(with his additional suggestions) only in the onshore agreement.

Please contact me at ext. 35777 if you have any questions.

Best regards,

Jeff

	From:  Kay Mann @ ENRON                           06/06/2000 06:09 PM

To: Jeff Blumenthal/HOU/ECT@ECT, Peggy Banczak/HOU/ECT@ECT
cc:
Subject: RE: language for Withholding (Section 5.2.2)

---------------------- Forwarded by Kay Mann/Corp/Enron on 06/06/2000 06:08
PM ---------------------------

jeffreye.smith@ps.ge.com on 06/06/2000 06:08:59 PM
To: Kay.Mann@enron.com
cc: Brian.D.Barto@enron.com, tim.lederach@ps.ge.com,
john.schroeder@ps.ge.com, karl.siverling@ps.ge.com

Subject: RE: language for Withholding (Section 5.2.2)

Kay,
See the proposed wording, below.  This is the only contract text issue I am
aware of.
Other than the items mentioned in my e-mail of June 1st/2nd (on the
consolidation agreement) and finalization of the "letter agreement" (you got
my fax), we are there.
Implied in the above, is that at this point I think the split agreement
approach would get us to closure faster.
Regards,
Jeff Smith

-----Original Message-----
From:   Lederach, Timothy P (PS, Finance)
Sent:   Tuesday, June 06, 2000 4:12 PM
To:   Smith, Jeffrey E (PS, CommOps)
Subject:   RE: language for Withholding (Section 5.2.2)

I have no problem with their proposed addition as it applies to the onshore
contract.  However, I would recommend modifying it as follows:

      If Purchaser is obligated to make any payment to Seller that
is subject to any withholding tax, then Purchaser shall remit the
appropriate withholding tax to the proper governmental authorities, and
Purchaser shall then remit the net amount of the payment (i.e., the gross
payment minus the applicable withholding tax) to Seller.  Seller agrees to
provide Purchaser with an original tax receipt, in Seller's name, indicating
remittance by the Purchaser of the amounts withheld.  Failure to provide
this receipt within a reasonable period of time will result in the amount
withheld becoming payable to the Seller.
Regards

Tim Lederach
GEPS Taxes

      -----Original Message-----
      From:   Smith, Jeffrey E (PS, CommOps)
      Sent:   Tuesday, June 06, 2000 2:43 PM
      To:   Lederach, Timothy P (PS, Finance)
      Subject:   FW: language for Withholding (Section 5.2.2)
      Importance:   High

      Tim,
      Enron wants to add this to the end of Clause 5.2.2.
Attached is the latest version of the On-Shore Contract for reference.
      Please let me know your opinion.
      We can talk to Enron about this if appropriate.
      Thanks,
      Jeff Smith
          << File: VITRO5-on-r1b.wpd >>

      -----Original Message-----
      From:   Brian D Barto [mailto:Brian.D.Barto@enron.com]
<mailto:[mailto:Brian.D.Barto@enron.com]>
      Sent:   Tuesday, June 06, 2000 2:23 PM
      To:   jeffreye.smith@ps.ge.com
      Subject:   language for Withholding (Section 5.2.2)

      If Purchaser is obligated to make any payment to Seller that
is subject to any withholding tax, then Purchaser shall remit the
appropriate withholding tax to the proper governmental authorities, and
Purchaser shall then remit the net amount of the payment (i.e., the gross
payment minus the applicable withholding tax) to Seller.


I have no objection, assuming John approves it. Jim

-----Original Message-----
From: Evans, Mark (London Legal)
Sent: Tuesday, November 27, 2001 12:37 PM
To: Ale, John; Derrick Jr., James
Subject: FW: Wessex Water

John, Jim,

are we happy for Clifford Chance to act commercially on the other side of the table from Enron. I have no problem with this from my side.

I'd be grateful to hear from you. This appears to be urgent for CC.

					Mark

J. Mark Evans
Enron Europe Legal Department
tel: 44 207 783 5424
fax: 44 207 783 8287
email: mark.evans@enron.com
outlook: evans, mark (London Legal)

-----Original Message-----
From: Kersten.Schenck@CliffordChance.com
[mailto:Kersten.Schenck@CliffordChance.com]
Sent: 26 November 2001 10:14
To: Evans, Mark (London Legal)
Cc: Andrew.Forryan@CliffordChance.com
Subject: Wessex Water

Dear Mark,

Do you have any news re our acting for a client in acquiring an equity stake
in Wessex Water? I am being chased by my partners about obtaining clearance
for them to act.

Please excuse me for in turn chasing you about this; I certainly appreciate
that you will have more important matters at your hands to deal with these
days, but for us accepting or refusing mandates from clients or would-be
clients time is of the essence; I am sure that you will understand this.

With best regards

Kersten von Schenck
Clifford Chance P?nder
Partnerschaftsgesellschaft von Rechtsanw?lten,
Wirtschaftspr?fern, Steuerberatern und Solicitors
Mainzer Landstrasse 46
D-60325 Frankfurt am Main
Tel.:    +49 69 7199-01
          +49 69 7199-1511 direct
          +49 171 971 0651 mobile
Fax:    +49 69 7199-4000
<mailto:kersten.schenck@cliffordchance.com>
<http://www.cliffordchance.com>

*******

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Start Date: 1/11/02; HourAhead hour: 9;  No ancillary schedules awarded.  No variances detected.

    LOG MESSAGES:

PARSING FILE -->> O:\Portland\WestDesk\California Scheduling\ISO Final Schedules\2002011109.txt


Lou, are there concerns that I am not aware?  From an economic point of view,
it is clearly not in our interest to aggregate residential or small customers
who have retail choice; however, standard office service (like the UI deal)
is clearly a customized, wholesale/all -requirements sale of significant size
negotiated with the utility and the puc.

Regards
Delainey

---------------------- Forwarded by David W Delainey/HOU/ECT on 11/29/2000
02:58 PM ---------------------------

	Enron North America Corp.

	From:  Lou L Pai @ EES                           11/29/2000 11:44 AM

Sent by: Anita Llamas-Granado@EES
To: David W Delainey/HOU/ECT@ECT, Janet R Dietrich/HOU/ECT@ECT, Mark S
Muller/HOU/EES@EES, Harold G Buchanan/HOU/EES@EES, Vicki Sharp/HOU/EES@EES,
Scott Gahn/HOU/EES@EES, Gene Lockhart/HOU/EES@EES, Bill Jacobs/HOU/EES@EES
cc: Kay Chapman/HOU/ECT@ECT, Christy Chapman/HOU/ECT@ECT, Tanya
Leslie/HOU/EES@EES, Beverly Aden/HOU/EES@EES, Leasa Lopez/HOU/EES@EES, Lily
Guerra/HOU/EES@EES, Carolyn Rothfeld/TNPC/EES@EES, Marion Doyle/HOU/EES@EES
Subject: MTG: How to Handle Utility Default Proposals

Please attend the above subject matter meeting Monday, December 4th @ 2
O'clock in EB872.


Finding out cause of blast
The Northern Echo, 08/24/01
UK: Electric work behind lethal Teesside blast-Enron.
Reuters English News Service, 08/24/01
"We Built a Heck of a Business"; Enron's former CEO Jeffrey Skilling is vague about the "balanced life" he wants but adamant that the company is in great shape
BusinessWeek Online, 08/24/01
Enron's Ken Lay: "There's No Other Shoe to Fall"; As the energy giant's stock tumbles after Jeffrey Skilling's sudden resignation, the interim CEO tries to reassure investors
BusinessWeek Online, 08/24/01
POWER POINTS: Skilling Moves On To Charities, Family
Dow Jones Energy Service, 08/24/01
New Ontario Power Market Date Not Firm Enough - Industry
Dow Jones Energy Service, 08/24/01
Jeffrey Skilling's Surprising Split from Enron; The CEO's abrupt resignation has some investors wondering what's behind the trickle of execs leaving the company
BusinessWeek Online, 08/15/01

Finding out cause of blast

08/24/2001
The Northern Echo
03
Copyright (C) 2001 The Northern Echo; Source: World Reporter (TM)

DETAILS have been officially released on the cause of the fatal electrical explosion at the Enron power station which killed three workers.
Health and Safety Inspectors have completed the first stage of their investigation into the explosion on August 8 at the Teesside site.
The investigation has revealed that during a planned maintenance programme, part of the power station was shut down and the electrical power was redistributed to support the rest of the station.
The voltages in one of the electrical systems was adjusted so a circuit breaker could be closed.
At the time of the shutdown, employees were working to alter the voltage across a large transformer and the two operations at the same time resulted in an explosion and fire. The plant was shut down and did not resume producing electricity until Sunday, August 19.
The next stage of the investigation will consider whether any lessons can be learnt from the accident to prevent it happening again.
One man is still in hospital with serious burns following the explosion.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

UK: Electric work behind lethal Teesside blast-Enron.

08/24/2001
Reuters English News Service
(C) Reuters Limited 2001.

LONDON, Aug 24 (Reuters) - An explosion that killed three men earlier this month at one of Britain's largest gas-fired power stations occurred during electrical switching, the plant's operators Enron said on Friday.
"The explosion and fire at Teesside Power Station on 8 August occurred during a process to close a circuit breaker on an electricial transformer", the U.S. energy group said in a statement citing initial findings by the country's Health and Safety Executive (HSE).
A fourth Enron employee at the 1,875 megawatt power station remains seriously ill in hospital being treated for burns.
"We are compiling a report for the Coroner", a spokesman for the HSE, the country's safety watchdog, told Reuters on Friday. He added that no report would be published ahead of inquests into the three deaths.
"A decision on whether there might be a prosecution will also be made after the inquests", he added.
The inquests were opened and adjourned last week.
The HSE also said it was making assessments on whether there were any lessons the electricity industry should learn from the accident.
HSE inspectors concluded their on-site investigation last week and the plant restarted operations at the weekend. On Friday Enron said the power station, commissioned in 1992, was currently operating at "planned generation levels."

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Investing
"We Built a Heck of a Business"; Enron's former CEO Jeffrey Skilling is vague about the "balanced life" he wants but adamant that the company is in great shape

08/24/2001
BusinessWeek Online
(Copyright 2001 McGraw-Hill, Inc.)

More than a week after announcing his startling resignation from energy giant Enron Corp. for undisclosed personal reasons, former CEO Jeffrey K. Skilling, 47, says he has no regrets about leaving after only six months at the helm. Replacing him in the interim is Enron Chairman Kenneth Lay, who previously served as CEO for 15 years before Skilling stepped in. (See BW Online, 8/24/01, "Enron's Ken Lay: "There's No Other Shoe to Fall")
So why did he quit? Skilling still isn't saying. A divorced father of three who's now engaged to be married anew, Skilling, like Lay, insists Enron is in great shape, with a deep bench of talent, despite a 50% drop in the company's stock this year. Indeed, Skilling is brimming with plans for his future. Before leaving for a whitewater rafting trip in Idaho with his 11-year-old son, he chatted on Aug. 23 with Dallas Bureau Chief Wendy Zellner. Here are edited excerpts from their conversation:
Q: I have to start with the obvious question: Why are you leaving so abruptly?
A. The answer we gave is exactly right. I left for personal reasons. Yeah, of course lots of things go on when you're making that decision. Sure, you watch the stock price and all the rest of that. But that wasn't the reason. The reason was, it was time.... I've worked very, very hard for a very long time. When you do that, something has to give. You kind of lead an unbalanced life and, at some point, you just decide, "Hey, there's a lot more to life than just working."
Q: Why didn't you decide that before you became CEO [in February of this year]?
A: That's another thing that bugs me a little bit. I came to Enron from McKinsey & Co. in 1990. I came over as chairman and chief executive officer of Enron Finance Corp. and went on to build our nonregulated merchant business. For most of my career at Enron, I was chairman and CEO of Enron Capital & Trade, and today it's 80% to 90% of net income of the company.... When people say this is surprising when you just became CEO, I've been CEO of businesses within Enron for a long, long time. I'm not sure I ever aspired to being CEO. I aspired to building a business. We built a heck of a business, and I'm very proud of that. Some people would even argue that it changed an industry.
Q: You were quoted as saying that if the stock had been going in the other direction, you might not have felt the pressure to leave. Is that right?
A: There are some things I need to do in my personal life, and I need to do them now. I don't think that [the stock going up] would have made a difference.
Q: Is it some kind of family crisis? Is it about you personally or about other members of your family?
A: I can't deal with that. I really can't explain it.... I'm looking forward now. I'm looking for things that I want to do, and there are a lot of things I'm very interested in right now.
Q: What do you do next?
A: I'll give you just a list of things. First, there are a number of personal and family things that are very important to me, and that's going to take a big chunk of my time.
Another one that I think is important is the whole city of Houston and what has happened. The last couple of years, everyone has been blinded by Silicon Valley. I don't think they've realized...there are some very fundamental powerful things happening here.... We have fundamentally adopted and taken advantage of the power of the Internet, the power of computers in ways I don' t think any other industry and any other part of the country has really figured out. There are things I think I can do to be of assistance there.... There are some models there that other people ought to be looking at.
I firmly believe that the model that Enron has created, this model where, over time, you use markets rather than vertical integration to tie together organizations and build services and products for customers, that's the future of business. It's happening more and more, but it has been masked by all this noise that has surrounded the dot-coms.
Q: Are you talking about consulting? Or would you invest in some kind of technology-related business?
A: I'm not sure yet. A number of people have sought me out for points of view, and I will continue to do that. I've even, believe it or not, been contacted about potentially being dean of a business school.
Q: Which one?
A: I can't say. I'm not leaving Houston, Texas. This is the place to be right now. The other thing I want to do is...spend some time on what I call hands-on charity.... There's a certain therapeutic value in going out and building a house for someone or cleaning up a park.... The other thing I'm hoping I have an opportunity to do is to help articulate the value of markets. When you look at something like the whole California thing, the problems in California were not a failure of the market -- they were a failure of political leadership.
Q: You've said that you took the falling stock price personally. In hindsight, what do you think you did wrong or could have done differently?
A: Anybody that had a high [price-to-earnings] multiple has been hammered. I think part of that was legitimate because...people had probably an unrealistic expectation of the effect technology would have on economic growth and productivity.... I put Enron in the same class as a lot of companies that are excellent companies that had very high p-e's, and that was adjusted by the market.
Q: What will it take for Enron's stock to bounce back?
A: You've got to get the stock price back the old-fashioned way. You've got to earn more money. If, quarter-in, quarter-out, the company continues to perform as it has, at some point, unless p-e multiples go negative, the stock goes up a lot.
Q: Why didn't you wait a few more months to meet the timetable for having a $2 million company loan forgiven, at least?
A: I'm lucky. I've done very well.... It has given me a luxury that 99.9% of the population doesn't have. I can do what I need to on the personal side. Two million in the grand scheme of things compared to living your life...I'm almost 48 years old. I started working full time when I was 14.... Now it's time to focus on things that put a little more balance in my life.
Q: You've said Enron is in great shape and has surmounted most of its issues. Do you really believe that?
A: I absolutely believe that.... The whole California thing [where Enron and others have been investigated amid allegations of manipulating markets after power prices soared last year] is pretty much done. In India [where Enron is in a payment dispute with the government over its $3 billion power plant there], I think we're making good progress.... I will say that broadband [Enron's new business for trading high-speed communications capacity] did surprise me.... It turned from a glut [in the industry] to a meltdown.
As late as four or five months ago, it seemed that everything was on plan. It was evolving the way we expected it to evolve. And then the bottom just fell out. Suddenly, it was pretty hard to do business because anyone you did business with you didn't know if they could perform on their contracts. Huge credit problems. That was a frustrating experience to have called it right and still not have been able to create the kind of business that I know we will ultimately create there.... I think it set us back at least a couple of years.
Q: What about reports that there was some unhappiness on your part about Chairman Ken Lay being too involved in the business again?
A: I can absolutely, unequivocally say that is not the case. Ken Lay is a good friend. We've worked together closely for 16 years. Ken and I have always gotten along great.
Q: When we talked as you were becoming CEO, I asked you what setbacks or failures you'd ever had in your life. You said none. Do you consider this to be your first failure?
A: Maybe this will sound awful, but I don't. I remember when there were three of us on the 39th floor at Enron, when we got this whole nonregulated side of the business going. Like I said, I am very proud of what I and others accomplished at Enron. We built a company that, 10 years from now, 20 years from now, is going to be a factor to be reckoned with. I can probably say I have no regrets.
Q: Were you surprised that your leaving drove the stock price down some more?
A: Yes, because I firmly believed that everything was in good shape. I said to Ken, this is the time to do it if I'm going to do it because everything is in good shape.... Probably people are afraid there's another shoe to drop, but it's just not the case.
Q: Do you ever want to be CEO of a company again some day?
A: I won't say never. There are a couple of things I have got to get done over the next year or two. At the end of a year or two, I don't know. I'll kind of take it as it comes. I tend to be a very enthusiastic, optimistic kind of person. I've almost never gone more than 30 days without having some sort of earth-shattering idea, most of them probably pretty crazy. But over the next couple of years, while I'm doing what I need to do, I'll probably come up with some new ideas.... You probably haven't seen the last of me.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Investing
Enron's Ken Lay: "There's No Other Shoe to Fall"; As the energy giant's stock tumbles after Jeffrey Skilling's sudden resignation, the interim CEO tries to reassure investors

08/24/2001
BusinessWeek Online
(Copyright 2001 McGraw-Hill, Inc.)

Enron Corp.'s Jeffrey K. Skilling dropped a bombshell on Aug. 14, when he abruptly resigned as the company's president and CEO, citing "entirely personal reasons (see BW Online, 8/15/01, "Jeffrey Skilling's Surprising Split from Enron"). Skilling has since allowed that the precipitous 50% drop in the Houston-based energy giant's stock this year had something to do with his decision. Meanwhile, Enron's stock has fallen an additional 14%, to around $36, following Skilling's resignation (for a Q&A with the former CEO, see "We Built a Heck of a Business").
Enron immediately named its chairman, Kenneth L. Lay, as Skilling's interim replacement. Lay is no stranger to the job, having served as CEO from 1985 until Skilling became CEO in January. During Lay's 15 years at the helm, he transformed Enron from a regional natural-gas pipeline company into the world's largest energy-trading company -- guided in part by Skilling, who he was grooming as a successor.
Enron's market capitalization under Lay increased from $2 billion to $70 billion, and Enron's shareholders received a total return three times that of the S&P 500. The company, which had revenues of $101 billion in 2000, markets electricity and natural gas, delivers physical commodities, and provides financial and risk-management services to customers around the world. It has also developed an intelligent network platform to facilitate online business.
In an exclusive interview on Aug. 20 with BusinessWeek Dallas Correspondent Stephanie Anderson Forest, Lay discussed Skilling's resignation, the search for a permanent successor, and the future of Enron. Here are edited excerpts from their conversation:
Q: Since his official resignation announcement Aug. 14, Mr. Skilling has since added that one of those personal reasons included Enron's falling stock price on his watch. A declining stock price doesn't seem like a very personal reason.
A: I believe the stock price played a role in his decision. He was probably feeling quite a bit of pressure from the stock price decline, from California [where state regulators are asking Enron and other power companies to refund billions in alleged energy overcharges], from India [Enron is involved in a high-profile, costly fight with the Indian government over its $3 billion Dabhol power plant], and other issues. I think all of those kinds of things impacted his decision.
Q: There has been some concern among investors that perhaps there is more to his resignation than meets the eye, perhaps accounting or other issues that have yet to come to light. Is there anything more?
A: There are absolutely no problems that had anything to do with Jeff's departure. There are no accounting issues, no trading issues, no reserve issues, no previously unknown problem issues. The company is probably in the strongest and best shape that it has ever been in.
There are no surprises. We did file our 10-Q [with the Securities & Exchange Commission] a few days ago [Aug. 14]. And, if there were any serious problems, they would be in there. If there's anything material and we're not reporting it, we'd be breaking the law. We don't break the law.
Q: Did he disclose these personal reasons to you?
A: Yes...and they are very legitimate, personal reasons that Jeff will have to disclose when and if he sees fit. He says he wants to keep those reasons private and I respect that. I can say, these are situations that needed to be addressed now. These are things that he can't put off dealing with for two to three years.
Q: Are these personal issues related to his health?
A: No.
Q: When did he tell you he wanted to resign and what was your reaction?
A: I don't recall the exact date. It was a few days before the board meeting. I called several of the board members before the meeting to let them know what was going on. I do remember I was in my office when he told me. I had been out of town on a business trip and had just gotten back the night before. The next morning he came over to my office and said he had a few things on his mind. We went over several business items for about 20 to 30 minutes. Then he said, "I've decided I need to step down as president and CEO and leave the company."
I said, "You're going to do what?" I was very surprised. I asked him if there was anything I or the board had or had not done that led him to this decision. He said no. I then asked him if there was anything I or the board could do to persuade him to stay. He said his mind was made up. That was on a Friday.
The following Monday, we talked again. I asked him if he had changed his mind. He said no. Over the next few days, I tried three or four times to talk him out of it, but he had his mind made up. He needed to deal with these [personal] issues right away, not two or three years from now.
Q: These issues couldn't have waited a few months? I ask because according to the [2000] proxy, had Mr. Skilling stayed on through the end of the year, his $2 million debt to the company would have been forgiven. [According to the proxy, in 1997 Enron loaned $4 million to Skilling, who repaid $2 million of that in 1999. His employment contract, which ran through the end of 2003, called for the balance of the loan to be forgiven if he stayed on until December 31, 2001.]
A: Jeff knew full well what he was walking away from. Again, he needed to deal with this right away. [Note: Skilling also relinquished severance pay by walking away voluntarily. Had he been forced out, Skilling would have been eligible to receive a single severance payment of at least $19.9 million, not including the value of the options received in 2000, according to Enron's 2000 proxy statement. Also, the nonvested portion of the 2.4 million stock options he owns immediately would have become vested, the proxy statement says.]
Q: Judging by the stock's performance since the announcement, investors appear to still be skeptical.
A: Yes, and I understand that. Investors don't like uncertainty. When there's uncertainty they always think there's another shoe to fall. There is no other shoe to fall.
Q: Is the door open for Mr. Skilling to return to the CEO post after he has resolved these personal issues?
A: It's always a possibility. But he understands that we've got to move ahead, and I assume for now we will be moving on without him. He will be dealing with these other issues for at least a year or two.
Q: What will the new management team look like?
A: Clearly, there will be changes in the office of the chairman. Jeff and I had shared responsibility in that office since 1997 and, from time to time, we have had one other person in that office. I'll be looking for some help now. We will appoint one or two people to that office within the next few days.
Q: Who are the likely candidates?
A: Any slots at the senior level, including CEO or other slots, will be filled internally. That tells you how confident we are in the talent we have. We have a a number of senior executives qualified to serve in this capacity. We have many large businesses in Enron, any one of which would be ranked rather high as a standalone. Anyone of the top two people in any of these businesses or our CFO, chief accounting officer or chief of staff would be qualified. [That pool of executives include: CFO Andrew S. Fastow, Chief Accounting Officer Richard A. Causey, Chief of Staff Steven J. Kean, Chairman and CEO of Enron Energy Services Dave Delainey, Chairman and CEO of Enron Wholesale Services Mark A. Frevert, CEO Enron Global Assets & Services Kevin P. Hannon, and Chairman and CEO Stanley C. Horton of Enron Transportation Services Co.].
Q: Despite having a deep bench of talented executives, some analysts say few Enron executives are as seasoned as Skilling was. Is that a concern?
A: No, because the ones I'm looking at are very seasoned, though some are more seasoned than others. They are all very strong candidates who understand our business and our culture. In every case, [the candidates] have been here several years, and, in some cases, 11 or 12 years. These are not unseasoned people.
Q: So, whoever makes it to the office of the chairman has a shot at being Enron's next CEO?
A: Yes, but I have made it very clear that although they certainly will be on the list of people to be the CEO, they're not guaranteed to be the CEO.
Q: What qualities will you and the board be looking for in Enron's next CEO?
A: We'll be looking for a good, strong leader, a very effective leader [who] really knows our business -- all our businesses, not just what they're running today. We're also looking for a good people person who is able to motivate others and get strong performances out of people. We need someone who is a strong representative of our value system.
That someone would also be very intelligent, very creative, and able to develop successful strategies. Being a good communicator is also very important. Clearly, to be a good leader you need to be a good communicator.
Q: How involved will you be with the company until a new CEO is found?
A: I've extended my contract with the company through 2005 and have reassumed the CEO and president positions [both previously held by Skilling]. I have told the board I will stay as long as necessary to get our next level of succession ready and to get the board and investors comfortable with that person. I didn't expect to be CEO again, but I'm happy to be doing it.
Q: Will Mr. Skilling's departure bring a new shift or focus in Enron's business strategy?
A: There won't be any refocus. [Since turning over the CEO reins in January], I have stayed actively involved and working full-time as Jeff asked me to. More importantly, the current direction of the company was jointly decided by both of us in the last several years.
Q: And, the fundamentals of the business strategy remain solid?
A: Yes. We think the company is on solid footing, and we're looking forward to continued strong growth. We had a very, very strong first half, including second-quarter net income up 40%, earnings per share up 32%, and operational physical volume delivery up 60%. In the last five years, we have had 25% per year compounded annual growth in earnings per share.
I think you'll continue to see strong growth in all of our business areas. Our revenues and income quarter-to-quarter continues to be strong and we have strong momentum. We think that will be sustained, and eventually, if we continue to do that, investors will recognize and reward us for that.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

POWER POINTS: Skilling Moves On To Charities, Family
By Mark Golden
Of DOW JONES NEWSWIRES

08/24/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

NEW YORK -(Dow Jones)- Jeff Skilling will be spending the next few years working with charities in Houston and spending time with family, the former chief executive of Enron Corp. (ENE) said in an interview.
The 47-year-old Skilling, who resigned abruptly from Enron after the company's board meeting Aug. 14, repeatedly said he had left - as stated - for personal reasons. Wall Street has been skeptical of the explanation, and several analysts have said they're waiting for "the other shoe to drop." The company's stock price fell 14% in response to the announcement last week - a loss of about $4.5 billion in shareholder value - and hasn't recovered this week.
But the former chief executive said the stock price will recover once investors see that his departure isn't a precursor to more bad news for the company.
"I've spent the last 34 years working really hard," said Skilling, who requested the interview with Dow Jones Newswires. "There are a lot of things that I haven't been doing - personal interests, spending time with family. There are a number of charitable things that I haven't spent the time on that I believe I should. I don't mean fundraising, but hands on, getting out and doing things, building houses, helping individuals."
Skilling, who has been involved with a multiple sclerosis charity for years, said he plans to get involved in promoting the City of Houston.
"It's massively underrated as a place to work and live," he said. "It's a great city, and I think I can do a lot to get that across."
Though insistent that there is nothing more to his departure than personal reasons, Skilling said little to reveal why a talented executive would surrender the top spot of the country's largest energy trading company just six months after taking the job. Skilling had been Enron's No. 2 executive from 1997 until this year, and he's generally credited with the success of Enron's wholesale trading operations, which comprise about 80% of the parent's earnings.
He confirmed there's no crisis in his family, and his health is fine. Skilling, who assumed the chief executive title on Feb. 12, also denied that he was suffering under the strain of the job.
Late last week, Chairman Kenneth Lay and other Enron executives in New York told Wall Street analysts that Skilling had been going "kind of nuts" under the pressure of being chief executive, one analyst said.
"It's not true that I was cracking up," he said. "Do I sound like someone who is cracking up? The representation of me as thick-skinned is a reasonable representation."
When asked if his departure could have been handled more smoothly so as not to alarm investors, Skilling said that perhaps the mechanics could have been better, but said that is hindsight.
"We thought it through and thought we were going about it in the right way," he said. "I don't know what we could have done differently. It will turn out, in retrospect, fine, as soon as people see that there's nothing else."
About One Week's Notice

The former chief executive totally disagreed with speculation in this column last week that Enron Chairman Kenneth Lay, who immediately resumed the role of chief executive, may have wanted to regain day-to-day control of the company and pushed Skilling out.
"I think the world of Ken. You can't find a bigger fan of his than me," he said. "I was not forced out. Personal and family reasons are 100% of the story. I guess it's kind of mundane, and I'm sorry it doesn't have as much drama and suspense as a lot of people would like it to have, but that's what the deal is."
Skilling said he spoke with Lay about wanting to do other things many times over the years. The first serious discussion of his imminent departure came about a week before the announcement, said Skilling, whose recollection of his giving notice to Lay was somewhat cloudy.
"The board knew what was going on, and that was the point (the Aug. 14 board meeting) where the decisions were going to be made," he said.
The decisions?
"I guess to accept my resignation," Skilling said.
Enron refused to release a copy of the minutes of the Aug. 14 board meeting, which was regularly scheduled. The company doesn't generally release board-meeting minutes, spokeswoman Karen Denne said.
The former chief executive continues to work as a paid adviser to Enron. A clause in his contract prevents him from competing with the company through the end of 2003, and he has no plans to work outside the energy industry.
That might sound like a big comedown from running the country's most aggressive energy company, but Skilling said the move fits.
"Some people say 'Well, you were working and aspiring so long to become CEO of Enron.' That's not true. I was working to build a business, and we did," said Skilling, who is credited with transforming the company into a trading powerhouse.
"The company I built is doing great. My life is moving on."
He also said the company will do fine without him. Some analysts have expressed concern about Enron's ability to retain its top talent. Skilling's predecessor as Enron's No. 2 executive, Richard Kinder, for example, left the company in 1996 after Lay announced that he would be retaining the chief executive spot for another five years. Kinder went on to buy Enron's small liquids pipeline business and turned that company into Kinder-Morgan Inc. (KMI).
Enron's current management, Skilling said, has a "very deep bench." For example, he described Enron Energy Services Chief Executive Dave Delaney as "awesome."
"Dave created the Canadian business in Enron," Skilling said.
-By Mark Golden, Dow Jones Newswires; 201-938-4604; mark.golden@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

New Ontario Power Market Date Not Firm Enough - Industry

08/24/2001
Dow Jones Energy Service
(Copyright (c) 2001, Dow Jones & Company, Inc.)

CALGARY -(Dow Jones)- Power brokers called on Ontario to set a firm date for its electricity market opening - and stick to it, after provincial agencies pointed to a March 1, 2002, deadline this week.
The new timetable - the fourth adjusting of dates since 1999 - will increase costs for established firms and could further erode interest of potential investors, energy representatives said Friday.
"Our major concern is the historical pattern of delays that we've had with Ontario market opening," Ron Milnthorp, president of Enron Canada said.
"We can't invest capital on a conditional basis, and, therefore, we need an unconditional market opening."
Earlier this year, Enron Canada put a C$200-million power plant project for southwestern Ontario on hold after Premier Mike Harris set back an expected May market opening indefinitely.
The revamped market readiness testing schedule released by the Independent Electricity Market Operator and the Ontario Energy Board Tuesday extends retail and wholesale testing to December and February, and includes fines of up to C$10,000 a day for late completion.
"We are doing out best to meet what we think is a realistic deadline," IMO spokesman Kevin Dove said.
Milnthorp said Enron Canada now is more optimistic the government will stick to a spring 2002 date.
Technical difficulties were blamed in setting back deregulation from May to this November, and from fall of 2000.
Critics also say the California crisis, which saw electricity prices skyrocket in that state, caused the Ontario government to delay deregulation to placate nervous consumers. The uncertainty has cost an estimated C$3 billion from proposed power plants being put on hold,
"Any further delay will have severe implications on investor confidence in the market," TransAlta (T.TA) spokesman Adam White warned from Toronto.
This summer TransAlta (T.TA), Canada's largest investor-owned power generator, said it would defer any new investment in Ontario because of market uncertainty.
Work on the corporation's C$400-million Sarnia cogeneration plant continued, however, and it will start producing power in spring of 2002. The latest market delay just means TransAlta won't have the benefit of watching the market and trading in it before commissioning the plant, White said.
Smaller retail distributors are being blamed in part for the delay because of difficulties setting up new billing and accounting systems.
Toronto Hydro has offered to help other retailers set up their systems to get deregulation up and running.
"Every day we don't have market-opening date, we have money going out," spokesman Stephen Andrews said. "It is a significant cost in terms of opportunity."
Final approval for market opening will have to be given by the provincial government, which so far has refused to set a firm date.
-By Dina O'Meara, Dow Jones Newswires; 403-531-2912; dina.omeara@dowjones.com

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.

Technology
Jeffrey Skilling's Surprising Split from Enron; The CEO's abrupt resignation has some investors wondering what's behind the trickle of execs leaving the company
By Stephanie Anderson Forest in Dallas

08/15/2001
BusinessWeek Online
(Copyright 2001 McGraw-Hill, Inc.)

The steady drip of executive departures continues at Houston energy giant Enron (ENE). After the close of markets on Aug. 14, Jeffrey K. Skilling, the company's hard-charging president and CEO, shocked the investment community by unexpectedly resigning. In a conference call with investors, Skilling, said he was leaving for personal reasons, which would remain private. Prior to taking over the CEO post in February, Skilling had been chief operating officer. While it looks for a successor, Enron says Skilling's duties will be assumed by longtime Chairman Kenneth Lay. "I want to thank Ken Lay for his understanding of this purely personal decision," Skilling said in a statement.
The 47-year-old Skilling joined Enron in 1990 after leading McKinsey's energy and chemical consulting practices. Under his leadership, Enron pioneered the use of risk-management products and new contracting structures in the natural-gas industry. He has since applied similar concepts in electricity, bandwidth, metals, and a range of other commodity products. Along with Lay, Skilling helped transform Enron from a natural-gas pipeline company into an energy-trading powerhouse.
Skilling has predicted that Enron will surpass $200 billion in revenue this year, making it the second-largest U.S. energy company behind ExxonMobil. Last year, Enron earned $979 million on revenue of $101 billion. While the company has 25,000 miles of gas pipeline and merchant power plants in the U.S. and abroad producing 9,000 megawatts of electricity, Enron recently has been shedding many energy assets, including its natural-gas and crude-oil drilling unit, to pursue its goal of becoming the industry's leading middleman, bringing together buyers and sellers of energy products.
BLOCKBUSTER BUST. Skilling's tenure in the No. 2 position has been tumultuous -- marred by a huge and costly fight with the Indian government over payment for construction of Enron's $3 billion Dabhol power-plant project and the nasty breakup of a video-on-demand broadband Internet deal with Blockbuster. Skilling's push into broadband has produced lackluster results. The upshot: Enron's stock has fallen from a 52-week high of $90.56 on August 23, 2000, to $42.93 on Aug. 14, ahead of the announcement.
The company didn't immediately comment on what led Skilling to quit, but a spokesman insists it has nothing to do with Enron's stock performance. "We regret Jeff's decision to resign, as he has been a big part of our success for over 11 years," Lay said in a statement. "But we have the strongest and deepest talent we have ever had in the organization, our business is extremely strong, and our growth prospects have never been better."
Indeed, the company says it plans to look for Skilling's successor within the ranks, though it declined to name possible candidates. But some analysts and investors say Enron may have trouble landing a replacement. "Rarely do you find those kinds of organizational and management capabilities embodied in one individual," says analyst Robert L. Christensen Jr. of First Albany in New York. "There's no clear second in command. It's purely a guessing game at the moment."
MURKY DEPTH CHART. Skilling's departure likely won't sit well with investors, who are concerned about Enron's losing a number of key executives recently, including Vice-Chairman J. Clifford Baxter and Kenneth D. Rice, chairman and CEO of Enron Broadband Services. "Three years ago, the [management] depth chart was very apparent. The company had started to look like the General Electric of the energy logistics business," says one investor. "Now, I'm not too sure."
Skilling, who wasn't immediately available for comment following the conference call, will remain as a consultant. Lay, who was also unavailable, served as Enron's CEO from 1985 until Skilling's election earlier this year. He has agreed to extend his employment agreement through 2005. Said Lay during the call: "I'm prepared to stay here as long as it takes to get to our next level of succession." If the skeptics are right, that could turn out to be longer than Lay expects.

Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.


Angela,

Further to our conversation please see the attached comments draft.  I look
forward to working with you.

Best regards,
Debra Perlingiere
Enron North America Corp.
Legal Department
1400 Smith Street, EB 3885
Houston, Texas 77002
dperlin@enron.com
Phone 713-853-7658
Fax  713-646-3490


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(You know you haven't sent me any funnies in a while either.  I'll let it go
for now since you're working so hard...but you're going to have to deliver at
some point.)

 1. Question: If you could live forever, would you and why?
    Answer:  "I would not live forever, because we should not live forever,
because if we were supposed to live     forever, then we would live forever,
but we cannot live forever,  which is why I would not live
  forever."                  ---Miss Alabama in the 1994 Miss USA contest

  2. "Whenever I watch TV and see those poor starving kids all over the
 world, I can't help but cry. I mean I'd love to be skinny like that but
 not with all those flies and death and stuff."
                  ---Mariah Carey

  3. "Researchers have discovered that chocolate produces some of the
 same reactions in the brain as marijuana.  The researchers also discovered
 other similarities between the two, but can't remember what they are."
                ---Matt Lauer on NBC's Today Show, August 22

  4.  "I haven't committed a crime. What I did was fail to comply with the
law."
               ---David Dinkins, New York City Mayor, answering accusations
that he failed to pay his taxes.

  5. "Smoking kills. If you're killed, you've lost a very important part of
your life."
   ---Brooke Shields, during an interview to become spokesperson for a
federal anti-smoking campaign.

  6.  "I've never had major knee surgery on any other part of my body."
           ---Winston Bennett, Univ. of KY basketball forward

  7.  "Outside of the killings, Washington has one of the lowest crime rates
in the country."
   ---Mayor Marion Barry, Washington, DC

  8.  "We're going to turn this team around 360 degrees."
       ---Jason Kidd, upon his drafting to the Dallas Mavericks

  9.  "I'm not going to have some reporters pawing through our papers. We are
the president."
              ---Hillary Clinton commenting on the release of subpoenaed
documents.

  10. "China is a big country, inhabited by many Chinese."
              ---Former French President Charles De Gaulle

  11. "That lowdown scoundrel deserves to be kicked to death by a jackass,
and I'm just the one to do it."
              ---A Congressional Candidate in Texas

  12.  "It isn't pollution that's harming the environment. It's the
impurities in our air and water that are doing it."
              ---Former U. S. Vice-President Dan Quayle

  13. "Without censorship, things can get terribly confused in the public
mind."
              ---General William Westmoreland

  And last but not least -- a parting word from
 Dan Quayle:

  14. "I love California.  I practically grew up in Phoenix."


No interns.  As long as my group stays intact I won't need anyone in August.
I think Anne will stay past her 1 year and everyone else is relatively new.
I do like having analysts though and think we would rather be long than short.

DG

DG

Jeffrey C Gossett
04/12/2001 01:32 PM
To: Kam Keiser/HOU/ECT@ECT, David Baumbach/HOU/ECT@ECT, Darron C
Giron/HOU/ECT@ECT, Phillip M Love/HOU/ECT@ECT, Errol
McLaughlin/Corp/Enron@ENRON
cc:
Subject: RE: Needs assesment for Analyst and Associate pool

Let me know your needs in this area so I can return this ASAP.  I will assume
none of you want a Summer intern,  unless I hear otherwise.  I am mainly
interested in what you think each of your groups will need in August.

Thanks
---------------------- Forwarded by Jeffrey C Gossett/HOU/ECT on 04/12/2001
01:31 PM ---------------------------
From: Hector McLoughlin/ENRON@enronXgate on 04/12/2001 01:29 PM
To: Jeffrey C Gossett/HOU/ECT@ECT, Bob M Hall/NA/Enron@Enron, Leslie
Reeves/HOU/ECT@ECT, Beth Apollo/ENRON@enronXgate, James
Scribner/Corp/Enron@Enron, Shona Wilson/NA/Enron@Enron, Sheri
Thomas/HOU/ECT@ECT, Thresa A Allen/HOU/ECT@ECT, Kim S Theriot/HOU/ECT@ECT,
Jeff Kinneman/ENRON@enronXgate, Craig Chaney/HOU/ECT@ECT, Kimberly
Friddle/NA/Enron@ENRON, Bill Haggerty/HOU/EES@EES, Bruce
Harris/NA/Enron@Enron, Paul Pizzolato/ENRON@enronXgate
cc: Sunjay Arya/ENRON@enronXgate, John Blaylock/ENRON@enronXgate, Frank De
Jesus/ENRON@enronXgate, Janet De La Paz/ENRON@enronXgate, Toni
Graham/ENRON@enronXgate, Dave Hill/ENRON@enronXgate, Molly
Magee/ENRON@enronXgate, Kathy Neal/ENRON@enronXgate, Melissa
Prihoda/ENRON@enronXgate, Ryan Seleznov/ENRON@enronXgate, Norma
Yeverino/ENRON@enronXgate
Subject: RE: Needs assesment for Analyst and Associate pool

The Associate and Analyst program will be brining both summer interns and
full time hires in the near future.     They would like your help in placing
new hires.    Additionally, they are in the process of planning for next
year's recruiting needs and will also need an indication of the business
units requirements for the 2001-2002 hiring cycle.  The AA Program would like
your best indication by April 17th.  A suggested format is outlined below:

Summer Interns:  May 21 -August 27

Business Unit  Supervisor Analyst Needs  Associate Needs

Fall Hires:  August arrival

Business Unit  Supervisor Analyst Needs  Associate Needs

2001-2002 AA Program Hiring Expectations:

Business Unit  Supervisor Analyst Needs  Associate Needs

Please forward your estimates to Frank and me by 4/17/01.

Hector G. McLoughlin, PHR
Human Resources
Enron Net Works
Office: 713-853-6703
Cell: 713-854-0839

 -----Original Message-----
From:  Seleznov, Ryan
Sent: Thursday, April 12, 2001 1:06 PM
To: McLoughlin, Hector; De Jesus, Frank
Subject: FW: Needs assesment for Analyst and Associate pool

 -----Original Message-----
From:  Bland Jr., Ted C.
Sent: Tuesday, April 10, 2001 1:14 PM
To: Oxley, David; Jones, Robert W.; Pieper, Kalen; Barnard, Marla; Schaffer,
Brian; Walton, Sheila
Cc: Lemmons, Billy; Warner, Traci; Butler, Shelly; Giovannini, Jana; Buckley,
Karen; Trieschman, Paul; Vasut, Tony
Subject: Needs assesment for Analyst and Associate pool

All- As you are aware the AA Program will be bringing in both summer interns
and full time hires in the near future.  To better serve your business unit
needs and properly place both the summer interns and full time hires, we need
to know the specific needs for each of your business units for Analysts and
Associates.  Would you please poll your busines unit heads for their AA
requirements so we can place the incoming hires as soon as possible?  We
would like to get your best indication by April 17 so we can respond to your
needs and correspond with the new hires as to their initial rotation.  Also,
if you have a specific request (by name) please include that in your summary.

Additionally, we are in the process of planning for next year's recruiting
needs and we will also need an indication of the business units requirements
for the 2001-2002 hiring cycle.  A suggested format is outlined below:

Summer Interns:  May 21 -August 27

Business Unit  Supervisor Analyst Needs  Associate Needs

Fall Hires:  August arrival

Business Unit  Supervisor Analyst Needs  Associate Needs

2001-2002 AA Program Hiring Expectations:

Business Unit  Supervisor Analyst Needs  Associate Needs

Please respond back to Jana Giovannini for ETS and EWS and to Shelly Butler
for EBS and EES.  Once we have received your data we will distribute a list
of AA's back to you to assist in your planning and placement.  Thanks for
your help.  Ted


Hi Carolyn.  I'm running the numbers and the rest of you, team, are
responsible
for the strategy and interpretation of the numbers for case 2.  Case 1 was
fine.
I have a few questions for our beloved professor and when she responds I'll
e-mail out my spreadsheet models.

**********************************************
Mark D. Guinney, CFA
Consultant
Watson Wyatt Investment Consulting
345 California Street, Ste. 1400
San Francisco, CA  94104
(415) 733-4487 ph.
(415) 733-4190 fax


Tana:

This was the Clickpaper Credit approval.  Is there going to be an EOL
approval today as well?

Leslie


Its a monthly nom for 413447

you're right - the swing deal 413462 needs to be extended to match the term
of 413447, as does the buyback 413472

Daren J Farmer
10/18/2000 03:48 PM
To: Lee L Papayoti/HOU/ECT@ECT
cc:
Subject: Chevron - Winter

Lee,

On deal 413447 (Chevron @ Olefins), we have a flex nom of 6,000 to
12,000/day.  Is this a monthly nom or daily nom?  Will we have a swing deal
with them for the winter?  The current swing deal is for Oct only.  For Oct,
they have pulled an average of 16,000/day.

D


Good afternoon!

Attached is the list of Associate Candidates to whom offers have been
extended from Super Saturday IV.  Please feel encouraged to call or e-mail to
congratulate them!

Let me know if you have any questions (ext. 3-6176).

Thank you for all your help!
Elizabeth Boudreaux

PS-  I have also included the "no offer" list, just FYI.


Attached is the updated exposure report for California.  There are four
spreadsheets: 1) PG&E Corp and affilate exposure, 2) Edison International and
affiliate exopsure, 3) CAISO and Cal PX exposure, and 4) Enron business unit
combined CA exposure.  We are continuing to make progress on the mitigation
of PG&E non-regulated exposures.  Please give me a call if you have any
specific questions on the numbers.

Bill
3-3831

Please note:
The numbers for the PX Credit have increased based on a more complete
valuation.
The P/X Credit MTM exposures are not netted against EES payables of T&D (with
netting there would be an estimated $200mm reduction in PX Credit exposure)
All MTM numbers are valued at the Mid Curves.
Enron Wind numbers are being reviewed.
Portland General, ISO and PX exposures are estimates from last week and need
to be updated.

---------------------- Forwarded by William S Bradford/HOU/ECT on 01/18/2001
06:26 PM ---------------------------

From:  Wendy Conwell @ ENRON
           01/18/2001 07:23 PM

To: William S Bradford/HOU/ECT@ECT
cc:
Subject: California Exposure Table

Per your request attached is the latest California Exposure Report.

Wendy


CALENDAR ENTRY:	REMINDER

Description:
	Larry- out of office (Surgery)

Date:		3/18/2001
Time:		7:00 AM (Central Standard Time)

Chairperson:	Lynn Blair

Detailed Description:


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