FW: FYI

-----Original Message-----
From: jpekarsky <josh-pekarsky@KEKST.COM<@ENRON
Sent: Tuesday, November 20, 2001 6:00 PM
To: Denne, Karen; Palmer, Mark A. (PR)
Subject: FYI

In case you missed it, here's a transcript from Floyd's appearance this
afternoon on CNNfn. Also, for what it's worth, our view is that you have
nothing to lose by putting out the word that you've got a 14-day extension
on the $690 million. It buys a little time if nothing else.

Please let us know what else we can do to help.

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CNNfn-STREET-SWEEP-14
Enron Analysis, CNNfn

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL
FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNNfn ANCHOR, STREET SWEEP: Shares of Enron
(Company: Enron Corporation; Ticker: ENE; URL:
http://.www.enron.com/) losing steam again today. The stock closing
down $2.07 at $6 99 cents a share. A nearly 10-year low. Investors
apparently concerned about a potential cash crunch at the embattled
energy firm. Joining us with more on Enron`s troubles is Floyd
Norris, financial editor with ``The New York Times.''
Welcome to the program.
FLOYD NORRIS, FINANCIAL EDITOR, ``THE NEW YORK TIMES'': Thank
you.
ROMANS: This has been a fascinating story and stock to watch
develop. First off, what is the latest that drove this stock down
more than 20 percent again today?
NORRIS: Well, yesterday, after the close, they filed a report
with the Securities and Exchange Commission, and as people studied
it overnight, they were quite surprised. And it got worse this
morning. They disclosed that they have $690 million in debt. So
they may have to pay next week if they can`t either come up with
collateral, which will not be easy, or persuade the lenders to
renegotiate. And what was shocking about that wasn`t that the debt
existed, that was known, it was that they had to pay it so quickly.
It turns out, according to what people are telling analysts, that
Dynegy (Company: Dynegy Inc.; Ticker: DYN; URL:
http://www.dynegy.com/), which agreed to buy them only a week or
two ago, didn`t know about this. They had not told them,
apparently, Enron didn`t realize they had this problem.
ROMANS: OK, wait. There seems to be a lot of things that Wall
Street didn`t know was going on. And every sort of revelation is a
big blow to the stock. Who is watching what`s happening here and
how can there be so many surprises. That`s confusing to a lot of
folks who are following this.
NORRIS: Well, it`s-the fact Wall Street is surprised isn`t
necessarily surprising, but the fact that Enron seems to have been
surprised is surprising. They`ve had a lot of turnover. It
reinforces the suspicion that Jeff Skilling, the chief executive
officer who quit in mid-year, and perhaps the treasury and chief
financial officer, both of whom were ousted within the last month
as this crisis grew, may have been the only people who really
understood what was going on there; and that makes you wonder what
else might yet come out.
ROMANS: Well, what about auditors and what about the board
governing this firm. And what about Ken Lay, I mean he is sort of
the statesman of the industry, isn`t he? and he`s running this
company again?
NORRIS: Well, he`s back running the company. The suspicion is,
and Lay denies it, he says he knows what`s going on, my suspicion
is that he didn`t know the details. He trusted. He understood the
company was overvalued, probably. This is a man who was taking out
hundreds of millions of dollars by selling stock, exercising stock
options and selling stock. But I suspect he didn`t understand all
of the details and now they are coming back to haunt him. The other
thing that is bothering people today is these numbers show the
company is burning through cash at an amazing rate. And Enron has
not really given us a good understanding of why they are burning
through the cash that fast. But it raises questions about whether
the company can continue operating until its supposed to be taken
over by Dynegy by next September. And, of course, the way the stock
is trading, it`s obvious that a lot of people on Wall Street doubt
that deal will go through or at least doubt that it will go through
on the announced terms.
TRACY EICHLER, UBS PAINEWEBBER: Floyd, my question regarding
shareholder lawsuits. It seems like there`s some validity there.
Any new news on the SEC investigation and the magnitude to those
lawsuits?
NORRIS: There`s no news on the SEC investigation. There are, of
course, huge shareholder lawsuits. They`re filed against Enron,
they`re filed against the current and former officers of the
company. And they`re filed against Arthur Andersen, which audited
this company. The accounting regulators are already starting to
check in again on Arthur Andersen, which used to be the class of
the accounting business and has had a string of recent
embarrassments.
ROMANS: All right, Floyd Norris for ``The New York Times,''
thank you so much for joining us .
NORRIS: Thank you.
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AP-NY-11-20-01 1846EST

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