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Enron Mail |
ENA BA&R is currently in the process of preparing the 12/31/99 financial
statements to be filed with the NYMEX by July 21st in order to keep our trading seat. These financial statements reflect all of the North America trading operations. ECTEG1 is ENA's legal rollup within Hyperion and should reflect all of the North American trading (i.e., price risk management) activity. Therefore, Consolidated Reporting, with the assistance of Trading Accounting and Tax, prepared the financial statements with ECTEG1 activity. These financial statements are complete and ready for BA&R management review and reflect $722MM in earnings. However, as of 6/29, we were notified by the Tax department that three companies were included in ECTEG1 as of 12/31/99 that were no longer legal owned by ENA. In addition, there was one company that became ENA owned during 1999. The companies are as follows: Improperly Included: ECM Treasury Consolidated (Company 969) ECT Retail Services (Company 1Q6) ECT Power Marketing, Inc. - Retail (Company 890) Improperly Excluded: Enron Gas Liquids, Inc. (Company 104) I have corresponded with Tana Jones from the Legal department, Johnson Leo in Corporate Reporting, and Julie Gartner from the Tax department to determine if the financial statements that we prepared reflected accurate and complete North America trading activity. These discussions confirmed that the Hyperion legal structure was not accurately reflecting ENA's actual legal ownership. In addition, the three companies have $192MM in trading activity income that would be removed from the bottom line. This activity should probably be reported to the NYMEX (regardless of legal structure) as it represents price risk management activity. The primary issue is accuracy of the financial statements. We are prepared to have to restate the compiled financials as soon as we are notified where we can retrieve accurate ledger information. The other main issue is timing. We need to file these financial statements no later than July 21st. Before that can happen they need to be reviewed by several levels of management in several departments. The Legal department is currently reviewing the NYMEX requirements in order to determine the proper activity to report. As soon as that is determined, we can proceed with data retrieval. Please contact me if have any questions, concerns or comments. DT
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