Mary-

I am currently working on implementing these answers into the file- but I wanted you to have an electronic copy of all of this information also- so you can pass on to who ever takes this entity over.

Shanna
---------------------- Forwarded by Shanna Husser/HOU/EES on 08/20/2001 09:14 AM ---------------------------
   
	Enron Energy Services  From:  Carrie Chaffin                           08/15/2001 12:34 PM	
		


To:	Shanna Husser/HOU/EES@EES
cc:	 
Subject:	RE: Tax related questions on 20R

Here's my answers to your questions.  If you want to meet to discuss, just let me know.
---------------------- Forwarded by Carrie Chaffin/HOU/EES on 07/25/2001 08:56 AM ---------------------------

Shanna Husser
07/12/2001 05:23 PM


To:	Carrie Chaffin/HOU/EES@EES
cc:	 
Subject:	RE: Tax related questions on 20R

Carrie-

As you know- I took over the tax work of this entity in June.  I am still trying to work out some details on this company and make sure I have a complete understanding of the G/L- in order to be better equipped to make tax decisions.

1.   From looking at last year's tax return, it looks like there is some difference between how book and tax handles the the information being held in SAP account# 62000000 Interest Income- Third party.

Can you please provide some type of schedule for that account that is comparable to what was provided last year.  Last year the account was broken out into 3 parts:  interest income on assets owned by EES, interest income on assets not owned by EES, and interest on loans/notes. 

I would be happy to fax you a copy of what I am looking at- if it helps clear up any confusion.

I have attached a spreadsheet that details the current year activity in the interest income account.  Currently, the only interest income following through 20R is Interest on our Owens Corning Sale-Leaseback, Interest on the TRW Credit Reimbursement and Interest on Excelsior's Capital Project Reimbursement (essentially a loan).  There is no construction interest like there was last year - this is all recorded on Company 15A.


 

2.  I also have a note in the file saying that for the year 2000, books incorrectly booked the Quebecor $5 million promotional fee as a loan and calculated interest income on this loan.  Was this error corrected in the year 2001?  Or- should I see interest income from this $5 million Quebecor promotional fee in the breakout of the SAP account# 62000000 Interest Income- Third party?

This error was corrected in 2001.

3.  The next issue is book amortization.  Where is this being recorded on the income statement?-Is it still in 51009000?  There seems to have been confusion about if this was going to change.

This is still recorded in account 51009000 - other COS.  We had tried to move it to amortization expense, but Wade wanted it moved back above the line in COS.  This makes sense as really this amortization is a cost to the Deal.  Here's a schedule that details out the amortization activity for 2001:

 

	I have the following listed as companies that have separate amortization issues:

	Browns
	Giants
	Owens Corning
	Advanced Glass
	Owens Canada
	Extended Promo License (extension of Owens Corning)
	Quebecor
	Giants Equipment

	I already have received completed book amortization schedules for the first three from you (provided to Angie last year)- can you provide the amortization 	schedules for the rest?  	It is my understanding that on the last 5- no book amortization was recorded in 2000- and that the amount that should have been 	recorded in 2000 will be 	caught up along with the booking of the 2001 numbers.  Can you please verify that this is true and that the recording of the 2000 has 	occured?

	Also- could you please provide information for any other new deals that have occured in 2001 that books is calculating amortization for?

	I am open to any suggestions that would make this easier to track.

    

4.  The next major issue is deferred debits.  Can a get a detail of what makes up deferred debits as of 6/30/01?

Here's a breakout of deferred debits at 6/30/01.  One thing I know will change is the Owen's Canada Promotional Payment should actually be charged against the Owen's Corning deal.  This will be changed in July.

 

5.  Can I also have a detailed  breakdown of what is making up SAP acct# 45019000 Other Revenues Third Party?

While I was reviewing this account for 6/30/01, I found quite a few errors in the account, so I corrected these in July.  I think it would be easier for me to send you a schedule as of 7/31/01 with the breakdown of this account.  I am working on this schedule this week and will forward it to you by Friday.

Would it be possible to get all of this information by the end of the month?  Please call me if you want to discuss- or if it would be easier to just meet in person.

Thanks-
Shanna  





I found a few more accounts that I need detail for that explains the balances as of 6/30/01:

1.  25145100  Deferred Asset Development Cost - The eschedule should help you with this.  Basically this account was all of our "deferred debit" activity that was moved from the MSA system.  This month (August) we are actually going to move all construction costs to this account and leave all other "deferred debit" activity in 25149100.  See the above reconciliation - this details both accounts.
2.  33603000  Deferred Revenue/Gains - This is where we record Remedial/Replacement capital.  Currently we have replacement capital for Springs, Simon, & Tyco.  Let me know if you need further explanation on replacement capital.
3.  33605000  Deferred Credits- Other	(there is only one entry in this account and SAP says it was made by you)  This is a deferred Liability relating to the Pilkington contract.  We have agreed to pay them 1.5mm through credits on their next 12 invoices.  This was expensed in June and this liability was established.  The credits on the invoice will be debited against this liability.
4.  30700000  Current Liabilities- Other	The balance is in this account represents our cost accruals for June.
5.  45019000  Other Revenues- Third Party - See above

(If this is in e-schedule form- that is great.  Unfortunately, I currently don't have access to the folder on the J drive where EES posts the e-schedules.  I am trying to get access.)

I have attached the eschedule: