Enron Mail

From:enron.announcements@enron.com
To:ena.employees@enron.com
Subject:Re-Alignment
Cc:joe.kishkill@enron.com, orlando.gonzalez@enron.com, brett.wiggs@enron.com,remi.collonges@enron.com, jeffrey.shankman@enron.com, mike.mcconnell@enron.com, jeffrey.mcmahon@enron.com, raymond.bowen@enron.com, louise.kitchen@enron.com, philippe.bibi@enr
Bcc:joe.kishkill@enron.com, orlando.gonzalez@enron.com, brett.wiggs@enron.com,remi.collonges@enron.com, jeffrey.shankman@enron.com, mike.mcconnell@enron.com, jeffrey.mcmahon@enron.com, raymond.bowen@enron.com, louise.kitchen@enron.com, philippe.bibi@enr
Date:Wed, 20 Dec 2000 18:02:00 -0800 (PST)

Thanks to all of you, Enron North America has had an outstanding year in=20
2000. Some of the more notable accomplishments include:
a) 100% plus increase in EBIT from 1999 actuals to 2000 forecast;
b) significant rationalization of the balance sheet including the sale of t=
he=20
(i) Wind River/Powder River gathering assets, (ii) East Coast Power=20
generating assets, (iii) HPL and (iv) five of the six Eastern Peakers;
c) ENA is the leading energy merchant by a factor of two;
d) physical electricity volume grew by 34% YTD 1999 to YTD 2000 forecast;
e) natural gas volumes grew by 82% YTD 1999 to YTD 2000 forecast;
f) 500% growth in daily transactions from November 1999 to November 2000 du=
e=20
to the highly successful Enron OnLine distribution channel; and
g) ENA reaching its 25% ROCE target.

These are truly outstanding accomplishments and our expectations for growth=
=20
and opportunity in Enron North America for 2001 are consistent with that=20
success. In order to reach these goals, we felt it necessary to re-align a=
=20
number of our organizations. A number of these changes are completed. The=
=20
goals of such re-alignment include:
a) increase overall productivity with the goal to ensure that every employe=
e=20
is in a position to contribute regardless of skill set;
b) increase overall market coverage, deal flow and information generation=
=20
with the goal to increase bid/offer income, increase the velocity of deal=
=20
flow, improve customer coverage and promote quality information transfer to=
=20
our trading organization;
c) increase deal quality and earnings quality with the goal to (i) allocate=
=20
our resources towards the best transactions and (ii) significantly increase=
=20
our =01&mid-market=018 originated transactions in our portfolio;
d) promote real time decision making and a closer tie between our trading a=
nd=20
origination (mid-market and structured) organizations in order to better=20
align those functions to reduce the amount of un-productive internal focus;
e) increase the overall velocity of the capital being utilized consistent=
=20
with our goal of a 25% plus return on capital employed; and
f) identify and recognize a host of new leaders in the organization that ar=
e=20
critical to meeting our goals next year.

With these objectives in mind, patterned after the successful business mode=
ls=20
in Calgary and Portland, effective immediately the following changes are=20
being implemented:
a) East Power =01) a single East Power Team incorporating trading, mid-mark=
et=20
and origination will be formed under the co-leadership of Kevin Presto and=
=20
Janet Dietrich who will report to the Enron Americas - Office of the Chairm=
an=20
(EA OOC). This team will have one income statement, one book and a joint=
=20
accountability. However, a clear delineation of responsibilities inside the=
se=20
teams will continue to exist in which the trading organization will manage=
=20
the risk, income statement and product development aspects of the=20
partnership. The originators will have the primary responsibility to genera=
te=20
origination income, provide coverage, deal flow, lead strategy formulation,=
=20
provide information and generate strategic positions. Overall, the team wi=
ll=20
be rewarded based upon increasing the value of the book, meeting=20
coverage/deal flow targets and meeting its strategic/growth goals in the=20
Eastern power markets. The team will be responsible for covering the IOU=01=
,s,=20
muni=01,s/co-ops, industrials and IPP=01,s and will utilize all ENA=01,s pr=
oduct=20
capabilities including the power commodity, assets and capital. The team wi=
ll=20
further be broken down into several key strategic regions and business unit=
s=20
including:=20
(i) ERCOT =01) managed by Doug Gilbert Smith and Bruce Sukaly;
(ii) NE =01) managed by Dana Davis and Jeff Ader;
(iii) Midwest =01) managed by Fletch Sturm and Ed Baughman;
(iv) SE =01) managed by Rogers Herndon and Ozzie Pagan;
(v) East Power Development =01) managed by Ben Jacoby;
(vi) East Power Structuring - managed by Bernie Aucoin; and
(vii) East Power Fundamentals and the =01&Genco=018 =01) managed by Lloyd=
Will
=20
b) West Power =01) there will be no changes to the Portland office which is=
=20
managed by Tim Belden and Chris Calger . Both Tim and Chris will continue =
to=20
report to the EA OOC.
c) Canada and Mexico =01) there will be no changes to the Canadian or Mexic=
an=20
offices which are managed by Rob Milnthorp and Max Yzaguirre respectively. =
=20
Both Rob and Max will continue to report to the EA OOC.
d) U.S. Natural Gas =01) there are several changes anticipated in this busi=
ness=20
consistent with the goals and objectives described above. The changes=20
primarily affect the East, Central, West and Texas gas regions. Each region=
=20
will consist of a single gas team incorporating trading, mid-market and=20
origination. Each team will have one income statement, one book and a joint=
=20
accountability. However, a clear delineation of responsibilities inside the=
se=20
teams will continue to exist in which the trading organization will manage=
=20
the risk, income statement and product development aspects of the=20
partnership. The originators will have the primary responsibility to genera=
te=20
origination income, provide coverage, deal flow, lead strategy formulation,=
=20
provide information and generate strategic positions. Overall, the team wil=
l=20
be rewarded based upon increasing the value of the book, meeting=20
coverage/deal flow targets and meeting its strategic/growth goals in the=20
Eastern, Western, Central and Texas gas markets. The team will be=20
responsible for covering the LDC=01,s, muni=01,s/co-ops, industrials, IOU=
=01,s, IPP=01,s=20
and the producers. There will be an increasing focus on the upstream side =
of=20
the business including the producers, transporters and storage providers in=
=20
addition to market area opportunities. The team will utilize all of ENA=01,=
s=20
product capabilities including the gas commodity, assets and capital. Each =
of=20
these groups will report directly to the EA OOC;
East Gas =01) a single East Gas Team incorporating trading, mid-market and=
=20
origination will be formed under the co-leadership of Scott Neal and Frank=
=20
Vickers who will be returning from Portland to join this team. =20
West Gas =01) in a similar manner, a West Gas Team will be formed co-manag=
ed by=20
Phillip Allen and Barry Tycholiz, who will be joining us in Houston from th=
e=20
Canadian team. The Denver office under Mark Whitt will be integrated under=
=20
this team.
Central Gas =01) in a similar manner, a Central Gas Team will be formed=20
co-managed by Hunter Shively and Laura Luce. The Chicago office will be=20
integrated into this team.
Texas Gas =01) the Texas Gas Team will be managed by Tom Martin. This team =
will=20
continue to manage the gas trading business around HPL until the pending sa=
le=20
is concluded in Q2 2001. After the sale of HPL, this team will build a Tex=
as=20
gas business without ownership of the HPL assets. =20
Financial =01) this group will continue to be managed by John Arnold with n=
o=20
significant changes.
Derivatives =01) this group, lead by Fred Lagrasta, will offer derivative a=
nd=20
financial mid-market products and services to the natural gas market=20
specifically targeting CFO=01,s and treasury departments. Fred will contin=
ue to=20
maintain certain existing mid-market accounts with a number of producer and=
=20
industrial accounts where relationships are well formed. Otherwise,=20
mid-market coverage will gravitate to the regions. The New York office gas=
=20
marketing efforts will continue to be managed by Fred.
Upstream Products =01) this group, lead by Jean Mrha, will develop several=
=20
distinct product offerings for the upstream segment of the gas market. Thi=
s=20
group will develop and market the product in conjunction with the regions.=
=20
This is consistent with our desire to have a broader product offering and=
=20
greater market penetration in the upstream segment. These products include=
=20
producer outsourcing, similar to our successful Petro-Canada and Suncor=20
relationships in Canada, physical storage re-engineering, compressor=20
services, wellhead liquidity products and offshore asset and capital=20
products. In addition, Jean will manage our Bridgeline joint venture with=
=20
Texaco. =20
Gas Structuring =01) this group will be lead by Ed McMichael, reporting to =
Frank=20
Vickers, will provide structuring and deal support to all the gas teams.
Gas Fundamentals =01) this group will be lead by Chris Gaskill, reporting t=
o=20
Hunter Shively, will provide fundamentals to all the gas teams. =20

Julie Gomez will continue to support the gas floor through several identifi=
ed=20
projects including long-term supply/demand analysis and, natural gas=20
transportation capacity trading opportunities.
=20
There is an expectation of some customer overlap between the gas and power=
=20
groups; for example, the combination utilities and the IPP=01,s. The teams=
will=20
coordinate with regard to the combination utilities like Con. Edison or=20
PG&E. With regard to the IPP=01,s, to the extent that the product offering=
=20
involves an underlying power position, the power teams will manage. We have=
=20
asked Janet Dietrich to coordinate such overlaps between the two=20
organizations in Houston.=20

e) Technical/Restructuring - In the effort to consolidate and centralize ou=
r=20
technical resources (engineering, development, operations, pipeline) to=20
ensure that this skill base is available to all ENA groups and utilized=20
productively across the organization, Brian Redmond will form and manage th=
e=20
Technical Services Group. This group will manage ENA=01,s technical risks =
and=20
will provide, on a cost basis, technical services for the entire ENA=20
organization. This group will manage the interface with EE&CC and OEC. In=
=20
addition, the Restructuring Group, currently managed by Dick Lydecker, will=
=20
report to Brian Redmond. This group is currently monetizing a large portio=
n=20
of the merchant investment portfolio given our current strategies. This=20
group will have continuing responsibility to manage troubled commodity and=
=20
capital transactions that need considerable time and attention to manage ri=
sk=20
and monetize.=20

In addition to these responsibilities, Brian will manage the pending sale a=
nd=20
transition of the HPL asset over the next couple quarters as regulatory and=
=20
securities approvals are obtained in order to complete the sale. Brian wil=
l=20
report to the EA OOC.

f) Principal Investing =01) with the departure of Jeff Donahue to new=20
opportunities in EBS, ENA=01,s venture capital function will be managed by=
=20
Michael L. Miller. This group makes small investments in distributed=20
generation, power quality and technology companies that can benefit from=20
Enron=01,s distribution channels and expertise. Michael will report to the=
EA=20
OOC.

g) Corporate Development =01) Tim Detmering will assume the corporate=20
development responsibilities for ENA as Jeff transitions to his new role an=
d=20
will report to the EA OOC.

h) Generation Investments =01) there will be no changes to this group manag=
ed by=20
Dave Duran. Dave will continue to report to the EA OOC.

i) Energy Capital Resources =01) there will be no changes to this group=20
currently lead by C. John Thompson and Scott Josey. John and Scott will=20
continue to report to the EA OOC.

As a final note in the interest of keeping things simple, Enron Americas wi=
ll=20
have two operating divisions - Enron North America and Enron South America=
. =20
As a result, we will continue to conduct business under these two operating=
=20
companies; therefore, eliminating the need to change legal entities et al. =
=20
If you are currently a commercial employee of ENA or ESA you will continue =
to=20
conduct business in that company.=20

We look forward to another exciting year in the North American energy=20
market. This is certainly a company unrivaled in the marketplace with the=
=20
most talented employees. The opportunities are endless. We wish you and=
=20
your family a very happy and safe holiday season.