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Response To Objectives for 2000

Response To Objectives for 2000.

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Response To Objectives for 2000

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  1. Response To Objectives for 2000 [Europe]1. Generate at least $200m of gross margin outside of the U.K. 2. Financially close and monetise three infrastructure projects3. Decrease Eastern exposure by $250m[North America & Europe]4. Execute more commodity intermediation business via Enron Online than through traditional means

  2. 2000 Objectives 1. “Generate at least $200m of gross margin outside of the U.K.” • During 2000 Enron Europe diversified its product and geographical mix away from the original UK Power and Gas businesses. These new areas generated $240m of Gross Margin. • Overall volumes in power and gas trading also increased during 2000 by over 100%.

  3. 2000 Objectives 2. “To financially close and monetise three infrastructure projects” Infrastructure based monetisations Sutton Bridge (April 2000) Divestment of equity interests in Sutton Bridge power station to London Electricity in exchange for $270m cash. National Power (June 2000) Novation of the TPL PPA from National Power resulted in a cash receipt of $760m, and increases the possibility of future restructuring of TPL. Poland, Turkey, Italy Powerstation Balance Sheet Restructure (July 2000) Partial refinancing of Nowa Sarzyna, Sarlux & Trakya raised $125m thereby providing liquidity to Whitewing (off balance sheet investing vehicle) and passing certain operations risks in these assets on to third parties. ETOL FAS 125 (November 2000) Sale of rights to ETOL’s future dividend stream for consideration of cash $100m and loan notes $105m (also retained potential upside). Non infrastructure based monetisations Sale of Equity interest in Margaux which owns Sarlux, Trakya (Q4 2000) Sale of rights to future dividend flows associated with Enron’s investment in Margaux vehicle (also retained potential upside). Expect gain of $35m in Q4. Metals Balance Sheet Restructuring (Q3/4 2000) Sale of Metals inventory to reduce Metals balance sheet debt approx. $1.3bn. Also $100m prepay to reduce Metals related debt on Europe balance sheet.

  4. 2000 Objectives 3. “Decrease Eastern exposure by $250m.” • Exhaustive research was carried out during 2000 to determine the most cost effective method of reducing the Eastern exposure. This included research into Monetizations, Credit Linked Notes, Credit Derivatives, Insurance Products and a Private Placement. • Management decided to approach TXU Europe Group PLC directly and obtain increased guarantees with additional covenants that will allow Enron’s claim to be cleanly hedged. This will not be completed until Q1 2001.

  5. 2000 Objectives [North America & Europe]4. “Execute more commodity intermediation business via Enron Online than through traditional means” • EnronOnline is currently generating approximately 52% of total transactions during 2000 compared with 25% in 1999. • In less than one year, EnronOnline has grown into the world’s largest e-commerce website surpassing the $250 billion mark in November representing over 450,000 transactions. • EnronOnline completes more than 3,000 transactions per day worth over $ 2.3 billion. • EnronOnline offers the greatest breadth of commodity products on the Internet. • EnronOnline offers a more efficient channel for customers to transact with Enron and a simple alternative to more traditional means like the telephone.

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