To: firstname.lastname@example.org', 'email@example.com', 'firstname.lastname@example.org'
Subject: officialized books for portfolio accounting
As Marina and I discussed this morning, accounting requests that we officialize several books weeks after they have been calced in order for them to run reports. We do not officialize these post ids daily for two reasons: 1) The deals in these post ids are related to transport hedges that are captured in our transport model(not in ERMS). If we were to officialize these post ids and report them on the VAR, we would then be only capturing half of the picture, since the transport model in our P&L is not in ERMS. 2) All of the deals in these books are book to book and do not involve third parties. To keep this action from disrupting your group, the risk leads will forward an email to you when we officialize these post ids at accounting's request. The following is the list Rachel Crowell in Acctg. asked us to officialize on 3/12/01: 1054100 1054684 1054685 1054686 1054689 1055194 1055195 1055196 Please shout with any questions, thanks. PL.
Date: 2001-10-25 20:13:21-07:00
Subject: HPL and Pan Nat accounting
"A follow up to your questions on the accounting for the above: HPL - when Gosset began marking the position 9\30, our balance sheet gave your book the $33 Million annuity that we held as the difference between the $2.34 (original swap price with B of A) and the market price at the time of the bammel unwind. He obviously needed this amount to keep your book whole when he began marking it. Included in the $33 was the original $1.2 bid\offer spread. On October 1, when Jeff pulled the total marked value off of schedule C and recognized the income, he recognized the bid\offer spread as well. All Accounting looks clean! Pan Nat - The day 1 booking of the arbitration changes resulted in a $18 MM loss that we booked to the office of the chair. Since that time I am told that all of the related resid positions that you now hold are marked everyday and taken into income. Again accounting looks fine. The only two items that remain in the ""Wes Colwell"" accrual book are the (1) mark of the Napoleonville pad gas and the related hedge (scheduled to begin the withdrawls 8\02) and (2) the hedge of the financial obligation to fill the Enron 1 cavern with financial gas. You locked in the capital contribution for about $20 million with the hedge. The hedge began liquidating in September and we began paying Bridgeline. The payments take place for 4 months. Call me with any questions".
1 of 4 duplicates
Date: 2000-11-22 23:31:00-08:00
To: email@example.com', 'firstname.lastname@example.org', 'email@example.com'
Subject: Debt Trading Losses
We have discovered two positions in the Debt Trading book which were not being marked to market. The current mark of the 2 positions results in approximately $4.7 million loss. The details are in : The primary control issues are: ? Trader did not adjust price to reflect the effect of market movements ? Operations did not perform monthly price verification processes ? Desk management failed to recognize that the marks on these two trades had not moved over the term of the transactions (Q1 '00 - Nov 15th) The losses have been recognized and a full review of the book is ongoing by Operations. The trader has been relieved of his responsibilities and we will implement the steps agreed with Operations to ensure that we have a robust approach to controls for the Debt Trading book going forward..
Date: 2001-09-07 07:59:25-07:00
Subject: Accrual Book Procedures
"The procedures for ensuring that all accrual books are known and captured by the appropriate parties is as follows: Current inventory of accrual books and their contents will be provided to Financial Operations and Risk Controls by Risk Management Risk Management will cc: accrual book requests to Financial Operations to ensure that they are aware when new books are created Risk Controls will maintain a library of accrual books in RisktRAC Financial Operations will communicate with Risk Management whenever disclosures are being made related to accrual positions to ensure that all books are included -----Original Message----- From: Colwell, Wes Sent: Wednesday, September 05, 2001 8:37 AM To: White, Stacey W.; Gossett, Jeffrey C. Cc: Lavorato, John; Kitchen, Louise; Presto, Kevin M.; Belden, Tim; Beck, Sally; Hodges, Georganne Subject: Hey guys, I would like to get with you to discuss our hedge policies. I am concerned about the recent accounting around the wind hedge (and not necessarlily the outcome in this particular case!). If the outcome had been reversed (ie. a loss on the hedges existed) we would have had no choice but to book it. The issue is that nobody commmunicated or documented the designation of these positions as hedges of the ""wind"" PPA. It occurs to me that we do not have any process that requires coodination when you set up an accrual book. As you know the designation criteria are rigid for acctg purposes. If we miss it, we can't cure it and the acctg would be MTM for the life of the contracts. I will set a metting to discuss. Wes".
Date: 2001-06-27 13:46:04-07:00
To: firstname.lastname@example.org', 'email@example.com', 'firstname.lastname@example.org', 'r..email@example.com', 'firstname.lastname@example.org', 'c..email@example.com', 'firstname.lastname@example.org', 'email@example.com'
Subject: Enron Direct Canada - Gas book
We intend to start officializing a gas book for our Enron Direct business starting July 3rd. From this officialized book credit, VAR, cashflows and positions can be pulled. It will be a relatively flat book because every deal with a 3rd party has been backed with our trading desk. The name of the book in FT-CAND-DIRECT. There will be a consolidated price and basis book and an index book. The portfolio code is 6*. The currrent MTM of the portfolio is approx $1M USD and is comprised of about 10 different counterparties. The positions and VAR should be reported under McKay. Kathy Please call if you have any questions (403-974-675).
Date: 2000-12-03 15:01:00-08:00
Rick, With the recent burst of the Internet and communications bubble in the public equity markets, I wanted to send you an email describing our position, exposure and ongoing strategy. Our aggressive use of accounting management vehicles, and early sales of positions has significantly reduced our accounting volatility and economic exposure. Hopefully, the following points will address the appropriate issues. Currently we have invested $108 million in 22 companies. Of that, approximately $80 million still has accounting exposure. The other $28 million invested has either been hedged or already written down. Our disciplined use of Fair Value accounting has allowed us to minimize accounting risk by not writing up investments simply because of improving market conditions. Specifically - Avici, Sycamore, and FastForward have generated approximately $180 million in earnings this year. DEN, Salus Media, and IAM.com have combined for $9 million in writeoffs. Recently, I have done a review of our portfolio and I believe our accounting loss exposure for 2001 is limited. Over 80% of our portfolio companies have raised enough capital to sustain them through all of 2001. So, if the markets (private and public) are closed, I do not believe these companies will risk bankruptcy during 2001. Also, our discipline of only co-investing with big partners helps assure these companies will continue to get funding. Going forward, we are making certain revisions to our strategy to take compensate for, and take advantage of, the weak markets. Limiting venture investments to technology companies that we have a competitive advantage in assessing the technology risk. Also, moving our venture effort earlier stage to take more technology risk and less market risk. We are beginning to look at other types of private equity investments. There are many public companies, whose stock prices are at 10% or less of their highs. I still believe that the fundamentals of the industries indicate that the vast majority of these companies will go bankrupt. However, there will be a select few that will survive and will end up with reduced competition and big markets. These companies will be big winners. We are carefully looking for these. I will keep you informed as this develops. If you have any other questions, please let me know. Thanks, Kevin Garland.
1 of 4 duplicates
Date: 2000-09-27 05:06:00-07:00
Joe: I just wanted to run this past you... John ---------------------- Forwarded by John Arnold/HOU/ECT on 09/27/2000 12:05 PM --------------------------- To: John Arnold/HOU/ECT@ECT cc: Joseph Deffner/HOU/ECT@ECT, Tim DeSpain/HOU/ECT@ECT Subject: Re: John: I don't mind cleaning up their books at quarter end. However, at year end I will want to keep the debt off of my books. As we approach year-end this year could you please coordinate with Joe Deffner so that we take advantage of the margin lines we have available in order to minimize the debt on our books. Thanks, Ben John Arnold 09/26/2000 07:12 PM To: Ben F Glisan/HOU/ECT@ECT cc: Subject: Ben: Jeff Shankman gave me your name. I have assumed Jeff's old responsibilities as head of the natural gas derivatives trading group. Our broker, EDF MAN, supplies us with $50 million of margin financing every night. They are trying to clean up their books for end of quarter and/or year on Sep 30. They have asked if we can post the $50 million overnight on the 30th. We did this last year as well. Please advise, John.
1 of 3 duplicates
Date: 2000-06-30 01:01:00-07:00
Subject: Physical Hedge Strips
Can you come and see me when you get in. We need to do more to tie out the risk in our physical book than agree on the number of molecules we are long or short. My model breaks out the positions by every type of risk profile. We need to produce a report from the Intra-month book that we can use to tie out. If that doesn't exist we should talk systems about creating it. Hopefully this will prevent any future blow ups. Thanx, Chris.
1 of 2 duplicates
Date: 2001-11-16 12:25:16-08:00
"Hi John, Attached is the marks we are using to mark our books as of Nov 15th. Please have your guys drop in your marks for the same day and send back to us. This should clear up 90% of our differences. In addition, your help on some 3rd party book outs would help us reduce our overall position size. We were working on one with Williams, when Kevin Presto objected unless he was able to earn the bid/offer. We would like to do the following: MS sells to Enron Enron sells to Williams Williams sells to MS ----100 mw of ""Into SOCO"" all at the current markt price. Thanks for your help. Regards, Joe Delaney - 1_MarkComparison.xls".
1 of 2 duplicates
Date: 2002-01-29 07:11:04-08:00
To: firstname.lastname@example.org', 'email@example.com', 'w..firstname.lastname@example.org'
Subject: RE: Food for thought
What do you guys think about this.....assuming we can put a fix in port calc that will allow us to true-up the current day (correctly), we could simply recalc the books the following morning (after last day of month) after indeces have been posted, then adjust the financial numbers in the vlookup according to the new top pages?! -----Original Message----- From: Postlethwaite, John Sent: Monday, January 28, 2002 4:25 PM To: Evans, Casey; White, Stacey W. Subject: Food for thought Since 99% of the deals that we did in Calgary were financial, one of the biggest problems we encountered was the last day of true ups at month end. Because we cannot capture the last day of the month right now, as the volume of financial deals grow (assuming it will), it is possible we could be dealing with fairly large PMA adjustments. We may need to start thinking about a way that we could capture these numbers. John.