RE: Charges

The story is:

These are charges which are incurred for the setup of new countries on EnronOnline.

The charges were communicated to each of the business units - and agreed to by representatives of those units before we commenced due diligence.

EnronOnline receives cost allocations from legal and these charges are intended to defray those costs.

(of course, this last point is a bit weak - the business units could also claim that they receive legal cost allocations as well - so if we are charging them, it is a bit like paying for it twice. In addition, EnronOnline costs are allocated out as well - so to the extent that we are allocated legal costs and then allocate those costs back to the business units, it could be argued that the business units are being charged on several fronts for the same thing. We will probably want to reduce our allocated charges by the amount of each due diligence charge. This means that this is not truly "revenue" - but it helps to ensure that we are only working on things which are really value-added).

Dave

From: Andy Zipper/ENRON@enronXgate on 02/14/2001 09:29 AM
To: David Forster/Corp/Enron@Enron
cc:

Subject: RE: Charges

what is our story ? let's make sure we have it straight.

-----Original Message-----
From: Forster, David
Sent: Tuesday, February 13, 2001 3:31 PM
To: Zipper, Andy
Subject: Re: Charges

Andy,

Looks like we will be charging out around $300,000 for adding new countries, including $150,000 to metals.

Chile Metals
Peru Metals
South Africa Coal
Hong Kong Metals
Taiwan Metals
Israel Seafreight
Latvia LPG
Russia Metals
Greece Seafreight
Monaco Metals
Slovakia Continental Power
Turkey Seafreight

I will authorise invoices in the next few days. We might get some push-back as even though they agreed to the charges, we have not actually levied them before now.

Dave