Aren't you being a little rough on her on a problem that really doesn't make any difference to Dynegy?
-----Original Message-----
From: Saunders, James
Sent: Thursday, November 15, 2001 12:34 PM
To: '
heather.l.mueck@us.andersen.com'
Cc: Hayslett, Rod; Chandler, Bob;
roger.d.willard@us.andersen.comSubject: RE: FW: "NNG 240" Acctg classification issue -update
i don't think a detailed cash flow request is relevant. with respect to my simple yes...ene and dyn have investment grade credit ratings, positive cash flows, and indirect backing by chevron and and as such have tapped liquidity to the tune of $billion. As such they have the ability. parent dividend policy normally extinguishes intercompany notes, and that is why we have agreed to classify the amount as a contra equity, but the subscription agreement states that nng can not declare dividends that cause the intercompany note to fall below 240mm...i interpret that to mean that be that nng will have a long term intercompany note of 240... and perhaps its reasonable to reflect it a such on the balance sheet.
pehaps you could ck w your peers on the dynegy account and see if they agree with classifying the 240 has negative equity. if your peers agree with your classification of the 240 then i believe i have sufficient support to tell my dynegy peer the same
-----Original Message-----
From:
heather.l.mueck@us.andersen.com[mailto:
heather.l.mueck@us.andersen.com]
Sent: Thursday, November 15, 2001 12:01 PM
To: Saunders, James
Cc: Hayslett, Rod; Chandler, Bob;
roger.d.willard@us.andersen.comSubject: RE: FW: "NNG 240" Acctg classification issue -update
Importance: High
A simple "yes" is not sufficient evidence. I think this will be a very big
task, so you may want to put Enron Corp. Treasury on notice. I want to see
where the money will come from that is not needed in other areas of Enron
to satisfy obligations of Enron as a whole. This cannot include money from
NNG and TW operations, debt transactions, and Dynegy money sent to NNG. If
this is the exercise, it may take more than 24 hours for treasury to
prepare and us to audit.
To: Heather L. Mueck@ANDERSEN WO,
Rod.Hayslett@enron.comcc:
Bob.Chandler@enron.com, Roger D. Willard@ANDERSEN WO
Date: 11/15/2001 10:57 AM
From:
James.Saunders@enron.comSubject: RE: FW: "NNG 240" Acctg classification issue -update
yes
-----Original Message-----
From:
heather.l.mueck@us.andersen.com[mailto:
heather.l.mueck@us.andersen.com]
Sent: Thursday, November 15, 2001 9:40 AM
To: Hayslett, Rod; Saunders, James
Cc: Chandler, Bob;
roger.d.willard@us.andersen.comSubject: Re: FW: "NNG 240" Acctg classification issue -update
Bob gave me the subscription agreement this morning.
Our one question still remains - does Enron have the ability to pay
this?
In order to remain as an asset rather than contra-equity, can you
demonstrate that Enron has sufficient funds (other than NNG and TW
operations, debt transactions, and Dynegy money sent to NNG) to repay
the
$240 million to NNG if NNG were to call upon it. If Enron doesn't, then
the $240 should be as a contra-equity account for GAAP purposes whether
or
not you have a subscription agreement.
Let me know when you have a minute.
Thanks,
Heather
---------------------- Forwarded by Heather L. Mueck on 11/15/2001 09:32
AM
---------------------------
To:
James.Saunders@enron.comcc:
Date: 11/14/2001 01:48 PM
From: Heather L. Mueck, Houston, (713) 237 / 4995
Subject: Re: FW: "NNG 240" Acctg classification issue -update
Is this somewhere in the merger agreement that we could see? I think
the
issue for classifying it as equity is where would the funds come from.
I
know this is something Roger and Rod discussed. Is there some other
source
of funds (other than NNG and TW operations, debt transactions, and
Dynegy
money) that we can point to as a source of funds that could be
distributed
to NNG if NNG called on it from Corp.?
To: Heather L. Mueck@ANDERSEN WO
cc:
Date: 11/14/2001 01:13 PM
From:
James.Saunders@enron.comSubject: FW: "NNG 240" Acctg classification issue -update
fyi (i dropped an "a" from your name the first time i tried to send this
< -----Original Message-----
< From: Saunders, James
< Sent: Wednesday, November 14, 2001 11:14 AM
< To: Chandler, Bob; 'hether.l.mueck@us.andersen'
< Cc: Hayslett, Rod
< Subject: FW: "NNG 240" Acctg classification issue -update
< Importance: High
<
< Rod indicated that (associated w the new nng debt) $240mm of the notes
< from parent will NOT be able to be extinguished via a dividend.
<
< That would suggest that perhaps the nng $390mm should in part ($240mm)
< be classified back in assets from its current classification as a
< contra equity amount. (???) <This is also Dynegy's unofficial
< position<
<
< -----Original Message-----
< From: Saunders, James
< Sent: Wednesday, November 14, 2001 10:14 AM
< To: Howard, Kevin A.; Hayslett, Rod
< Cc: Chandler, Bob; '
heather.l.mueck@us.andersen.com'
< Subject: "NNG 240" Acctg classification issue
< Importance: High
<
< I have had a couple conversations w Dynegy accounting personnel on nng
< financials and they ref a "$240mm note". (?)
< As it relates to the 9/30 nng interim financials,they believe note
< from parent amounts or a portion thereof, that andersen has requested
< we show as a reduction to equity be classified as a current asset.
<
< Rod, Kevin, do you have more info on the $240mm that is being
< referenced?????
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