Enron Mail

Subject:Re: Earnings
Date:Mon, 20 Nov 2000 11:36:00 -0800 (PST)


Obviously I am not searching for any additional write-offs. It is clear to
me that you have not come to terms with the problems we have already
identified. We are only trying to make sure that we have accurately
quantified those problems already identified. As I am sure you know, we
estimate that there is no remaining value in the portfolio and more than
likely material write-offs. Therefore, to make earnings we are going to have
create positive incremental value. Trading will produce no positive
incremental value in this quarter. On a go forward basis we have losses we
must recognize to clean up the portfolio and move on.

The Lightrade deal involved selling pooling points that could be considered
somewhat central to our success as a bandwidth trading organization - we were
willing to do this to help EBS make short term earnings. If we did not burn
up in excess of $500 million this year, accomplishing virtually nothing, then
we would not be in this position.

You have never considered prudent write-offs, why start now.



Kevin Hannon
11/20/00 06:16 PM

To: Jim Fallon/Enron Communications@Enron Communications
Subject: Earnings


The latest budget numbers still show us approx $100mm behind plan with not
much more than one full month to go in the year. If the Lightrade deal is
truly off ,which I believe it is, this only makes our job harder. "Bad News
Barry" is apparently trying to drop that title because he confessed to me
today that you were looking for further write-offs. This obviously is going
in the opposite direction from where we need to be. I am happy to consider
any prudent write-offs to the extent we can offset them with earnings
sufficient to allow us to still reach our target. However, seeking out
potential write-offs this quarter when we are clearly struggling is puzzling
and seems to send all the wrong signals to the organization. Please let me
know if I am missing something here.