Message-ID: <25583328.1075852805086.JavaMail.evans@thyme> Date: Wed, 24 Oct 2001 05:44:16 -0700 (PDT) From: jeffrey_fountain@bankone.com To: kenneth_lay@enron.com, ken_lay@enron.com, k_lay@enron.com Subject: Yesterday's Call: Feedback Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: jeffrey_fountain@bankone.com@ENRON X-To: Kenneth_Lay@enron.com, Ken_Lay@enron.com, K_Lay@enron.com X-cc: X-bcc: X-Folder: \KLAY (Non-Privileged)\Inbox X-Origin: Lay-K X-FileName: KLAY (Non-Privileged).pst Ken, Thanks for having the call yesterday. I am a believer in Enron and we are buying your debt. Here's short feedback on the call. I give the call a B-/C+ grade. If you want a good example of a company call listen to the tougher calls So Cal Ed had for investors. They talked with investors twice weekly for months. There is an honestness and openness about the calls that worked to keep investors informed. The angry exchange with the short seller was a blunder. No matter what the question, no matter how stupid or obnoxious, the Enron answer should always be empathetic and pointedly factual. Yes, you will have to open the kimono more than Enron ever has to restore confidence. ENE has become more a financial institution, and less an energy company with hard assets. You are in a confidence game pure and simple. Any attempt at keeping things close to the vest will backfire and exacerbate the current crisis. If you want to see disclosure in financials, look at Citi's... ENE is having an encounter session with the entire investment community. This is not a time to be aggressive and smart. It is a time to be open, honest and self-effacing. Third party confirmation will go a long way in restoring confidence which means 1) Moody's maintains their rating or limits the change to a one-notch downgrade (bond rating) with stable outlook restored (the Moody's analyst is pissed you surprised with the write-off), 2) the SEC gives ENE a fairly clean report (no self-dealing found) on their transactions with private equity partnerships, 3) no more large surprise write-offs, 4) outside auditors continue with unqualified audit reports, 5) operating earnings targets are met for this year and next, and 6)fuller disclosure is made in quarterly releases. Of course, if any fraud or malfeasance is found, you guys and ENE are history. I have my ass on the line because I believe in ENE. We have made investments. ENE is in the shitter because of ENE's past communication and behavior mistakes. Be humble, be smart, and change. Good Luck! Jeff P.S. You state there is a Chinese wall between LJM and ENE. Why in the world then would you have the same guy, Fastow, play key controlling roles in both organizations? If you want to pay him, pay him. Keep it simple. I am glad Skilling is gone. I wouldn't touch your company's debt while he was there. I hated him and his attitude?.and my past exposure to him was extremely limited. This transmission may contain information that is privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, or use of the information contained herein (including any reliance thereon) is STRICTLY PROHIBITED. If you received this transmission in error, please immediately contact the sender and destroy the material in its entirety, whether in electronic or hard copy format. Thank you.