-----Original Message-----
From: Stevens, Kirk 
Sent: Tuesday, August 21, 2001 2:58 PM
To: Hayslett, Rod; Enron.ENE.Tracy Geaccone
Cc: Piro, Jim; FOWLER, PEGGY
Subject: Q3 Earnings - PGG


Rod, per your request, attached is an analysis to use in your discussion
tomorrow with Stan Horton regarding PGG's expected financial results for Q3. 
More specifically, I laid out a plan as to how we might cover our current
overview gap of $19.5m (IBIT) from where our latest forecast came out.  As you
will see, several of these items will need to get AA&Co buy-in (items noted as
either Accouting Changes or Changes in Management Position).  I think we have
a good case for all of these, but we still need to go through the process with
them at the appropriate time.

In addition, I've note "Other Risks/Opportunities" for the quarter that could
have significant impacts on our ultimate results.  We will keep an eye on
these and manage them as appropriate.  We'll also try to keep you updated on
these as we progress through the Qtr.

Let me know if you have any questions.