Draft Internal Distribution Only Confidential Enron Global Markets

Draft Internal Distribution Only ® Confidential Enron Global Markets Briefing Document April 2001

Enron Global Markets New business unit focusing on global markets and commodities outside Enron’s traditional gas and power markets – – – – – Global Crude, Products, Petchems, and LPGs Coal and Emissions Shipping LNG Currency, Equities and Interest Rates Freight Insurance Weather Agricultural EGM provides a true network for market making opportunities related to commodities that are highly liquid in physical or financial terms and are enormous in market size EGM leverages the value of Enron’s existing network and international asset positions EGM’s operations will coordinate and leverage with our North American, European, Australian, and Japanese businesses MM_0301_B-1 1

Key Accomplishments New focused organization has added significant intellectual capital and earnings to wholesale group – Gross margin for Q 1 00 to Q 1 01 increased 36% to $100 million – Added $84 million of gross margin in Q 4 2000 and $100 million Q 1 2001 Started 2 new businesses: Agriculture and Freight markets without losing focus EGM businesses now see themselves as “core” with a full appreciation of their impact on Enron corporation – For example: Incremental $200 million EBIT = $135 million after tax times 52 multiple = EPS - $. 16; $8. 30/share and over $6 billion in market cap Each business focused on their balance sheet, ROE & funds flow targets The transfer of the Enron wholesale market making model will be illustrated in the growth in these businesses by year end “Go Big or Go Home” philosophy MM_0301_B-2 2

EGM - Gross Margin 1998 -2001 ($ millions) Actual 1998 Gross Margin Actual 1999 Actual 2000 Plan 2001 $116 $186 $206 $497 Gross Margin $497 $206 $186 $116 Note: Puerto Rico, Middle East and LNG EBIT included in 4 Q 2000 and 2001 only. MM_0301_B-3 3

EGM - Earnings Growth 1998 -2001 ($ millions) Actual 1998 EBIT Actual 1999 $30 $81 Actual 2000 $67 Plan 2001 $270 EBIT $270 $81 $67 $30 Note: Puerto Rico, Middle East and LNG EBIT included in 4 Q 2000 and 2001 only. MM_0301_B-4 4

EGM’s Wholesale Business Natural Gas Coal & Emissions Global Crude & Products Financial Trading Weather Agriculture LNG Insurance Freight & Shipping Pulp & Paper MM_0301_B-5 Power Merchant Investments 5 Metals

EGM’s Wholesale Business Crude & Products Coal LNG Emissions EGM Weather Shipping Insurance Freight FX/Rates/ Equities MM_0301_B-6 Agribusiness 6

Enron Global Markets Creating New Markets in Global Commodities Offices Houston London Oslo Singapore Seoul Puerto Rico New York MM_0301_B-7 Tokyo Sydney Panama Dubai Johannesburg Frankfurt Coal Activities Europe China Australia USA Korea South Africa Japan India Colombia Venezuela Indonesia Poland Russia Crude and Product Activities USA UK (Europe) Singapore Australia Panama Korea Japan Argentina 7 Weather USA Europe Japan Australia LNG Activities India Puerto Rico Venezuela Georgia Louisiana China Australia Korea Oman Abu Dhabi Bahamas Indonesia Malaysia LNG Ships

Developing High Growth Wholesale Business Coal - $40 Billion Market Crude & Products - $3 Trillion Market Crude and products (gasoline, heating oil, jet, gasoil, residue) MTBE, petrochemicals, plastics and LPGs Largest domestic coal market maker Largest importer of coal into U. K. Expanding into Asia Actively transacting online Coal, emissions and dry-bulk freight markets online Geographic product expansion Leader in risk management products Largest petrochemical risk management portfolio in the world Growing presence in global freight markets Enron Global Markets Weather - $1+ Trillion Market LNG - $18 Billion Market Leading market maker Creating a global network of LNG supplies, transportation, terminals and markets Products offered in every state and 10 countries on 4 continents Developing an online market making network Successfully transacting on Enron. Online Growing Enron’s LNG shipping business Product offering covers entire developed world Leverage Enron. Online, North American, Asian, and European Networks MM_0301_B-8 8

Enron Global Markets Office of the Chairman Mike Mc. Connell - President & Chief Executive Officer Jeff Shankman - Chief Operating Officer Global Crude & Products John Nowlan VP Freight Dan Reck VP MM_0301_B-9 Coal, Emissions & Freight George Mc. Clellan MD Weather Mark Tawney VP Global Risk Markets Per Sekse VP LNG & Middle East Rick Bergsieker MD Fundamentals Jen Frasier Director Finance & Structuring Larry Lawyer VP 9 LNG Eric Gonzales VP Accounting Brent Price VP & CAO Financial Trading Gary Hickerson MD Legal Alan Aronowitz VP & GC

Crude and Products Key Trading Areas Offices Largest non-integrated petrochemical marketer in the world Business includes crude and products (gasoline, heating oil, jet, gasoil, residue) MTBE, petrochemicals, plastics and LPGs Transacted 378 million physical bbls in 2000 Actively transacting all products on Enron. Online - Currently only platform with global coverage MM_0301_B-10 Growth will be accelerated through increased marketing, penetration of online markets, geographic & product expansion and greater physical presence in key markets 10

2001 Milestones Generate $150 million gross margin & $ 83 million EBIT Reorganize to better focus on key business areas Create global mid marketing function Develop origination group to identify and close transactions to build structure within the business Expand EOL product offering and transactions MM_0301_B-11 11

Key Business Areas Crude Oil l l Expand international crude trading, targeting 100, 000 BBLS/day Close refinery thruput deal (i. e. Orion, Western, Farmland) LPG l l Expand physical presence in USA Expand business into Asia – Korea & Japan target markets Gasoline l l Expand ARB business Exploit Grade/Spec opportunities Petchems l l l MM_0301_B-12 Expand into physical polyolefins Develop strategy partner, JV, or acquisition to accelerate growth Exploit EOL position 12

Coal Key Active Areas Coal Offices Largest domestic coal market maker tons in 2000 Traded 142 million Leader in risk management products and services, producer finance, e. Commerce and OTC markets MM_0301_B-13 Combines producer finance, marketing, trading, transportation and emissions technology to provide services to its customers 13 Growing business via electronic platform on Enron. Online. Currently making markets online in emissions, coal and freight Conduit into transportation market making Expanding into Asian markets

Coal 2001 Plan: $75 million gross margin; $55 EBIT Goal is to be acknowledged as the market making leader in coal, vessel and emissions Group Domestic Tons Traded (millions) – 2000 - 142 – 2001 - 189 (projected) International Coal Tons Traded (millions) – 2000 - 47 – 2001 - 100 (projected) International Vessel Tons Traded (millions) – 2000 - 37 – 2001 - 80 (projected) Coal Group Tons Shipped (millions) – 2000 - 44 – 2001 - 67 (projected) MM_0301_B-14 14

Shipping Leading market maker of vessel freight Providing transparency, liquidity and long dated market making to the international freight market Actively transacting products through Enron. Online Creating markets in long dated shipping capacity up to 5 years Traded 44 million vessel tons in 2000 Currently making an online market for 3 liquid markets (1) Colombia to Europe (2) South Africa to Europe (3) US Gulf to Japan MM_0301_B-15 15

LNG Key Active Areas & Contracts Offices Creating a global Enron network of LNG supplies, transportation, terminals and markets to maximize optionality Marketing and optimizing the use of Lakshmi, Hoegh Galleon and Excalibur LNG vessels Developing online market making network and creating an Asian hub Gaining access to a broader network of terminals MM_0301_B-16 16

Top Objectives - 2001 Generate $60 million in gross margin & $50 million EBIT Close financing on Jose LNG project/generate significant near-term income via either mark-to-market or other monetization mechanisms Work out Dabhol LNG supply and shipping problems in a manner that protects Enron, enhances relationships with Oman and Abu Dhabi, and optimizes the value of surplus Dabhol LNG supplies in the Enron system Position Enron to be a leading player in LNG e-commerce through the development of a LNG trading hub with Petronas affiliates and by extending the scope of Enron online to include LNG Ensure that the three Enron-controlled LNG carriers (Lakshmi, Hoegh Galleon and Excalibur) are built to contract specifications and delivered on time; optimize the utilization of all three ships Execute Master Spot/Term Agreements with a portfolio of suppliers that balance/cover our shipping and terminalling positions while at the same time provide maximum optionality to Enron MM_0301_B-17 17

Weather Key Weather Transaction Areas Offices Active Online Markets Largest weather market maker in the world Transacted in all lower 48 states and 10 countries on 4 continents MM_0301_B-18 Enron. Online’s success will continue to be an important platform for growth Product offerings cover entire developed world Enron is the largest aggregator of positions naturally exposed to cold winters and hot summers via our retail organization Extensive growth expected by new product and new market development Establish strong holds in Europe, Japan and Australia 18

Weather Vision and Strategy VISION To be the dominant market presence in all facets of the maturing weather risk management industry including trading (volumes and profit), marketing (noteworthy deals and dealflow), new product development, and research (internal and external). STRATEGY Leverage two of Enron’s key advantages, scale and scope, to accomplish our vision. Our scale advantage stems from the resources Enron has amassed due to the overwhelmingly significant role weather plays in our core energy businesses. Our scope advantage results from our global presence and the diversity of the backgrounds of our personnel. Develop new weather driven indices and products that eliminate basis risk and translate weather exposure into “comfort language” for those industries. In doing so, increase the liquidity of the weather market. MM_0301_B-19 19

Enron Freight Markets Entering domestic intermodal, truckload trucking international container and LTL transportation markets Offering traditional transportation intermediary services to shippers, carriers, and third-party logistics companies Creating a liquid trading market for transportation capacity and diesel fuel with standardized contracts and risk management products Developing technology to reduce costs and improve efficiency of back office processes Monthly Transactions Growing Dramatically MM_0301_B-20 20

Risk Markets - Insurance Identify, transform & transfer risks from Enron’s core markets into more efficient insurance market Create products that both extend Enron’s market making model and creates new market opportunities Leverage financial capital, core competencies and industry knowledge to create contingent capital distribution/trading channels and solutions Opportunities for highly structured transactions that require specialized skill sets that can be managed effectively by Enron Currently marketing in 3 promising areas: contingent calls, upstream and power MM_0301_B-21 21

New GRM Ventures for 2001 YEAR-END GOAL: GRM will be recognized as the lead provider of nonconventional risk solutions. 1. Insurance claims trading 2. Creating insurance forward curves for premium trading 3. Using an insurance vehicle for lending arbitrage MM_0301_B-22 22

Financial Trading Key Offices Financial Trading group provides risk management activities in foreign exchange, interest rates and equities Manages $4. 2 billion (NPV) global portfolio of commodity cash flow Structured over 1, 500 financial transactions in 50 countries this year Provides global financial risk management products, financial engineering services and 24 hour execution capability MM_0301_B-23 23 Operates state-of-the-art web-based equity trading system with real-time position management and straight through processing Exploring origination and e. Commerce opportunities in agriculture Growing Enron’s “Softs” brokerage group in London - 3 rd largest on LIFFE exchange

Financial Trading Summary of Businesses Interest Rate & Currency Trading – Manage Drift associated with commodity portfolios – Advise, structure and execute transactions for all Enron entities – Proprietary Trading – Global Product Coverage Equity Trading – Proprietary Trading – Relative Value (long/short) Equity Fund – Convertible Arbitrage Fund – Sectors: Commodities, Technology, Financial Agriculture Trading – Origination and Trading – e. Commerce – Sectors: Softs, Grains, Meats Operations and IT Support – Strong staff, infrastructure and controls – Broad capabilities and evolving state-of-the-art systems MM_0301_B-24 24

Equity Trading 2001 Goals Produce $90 million income Increase Limits and Sectors Establish London Office - Part II – Staff and Trading Establish Tokyo Office Implement Utility Trading Model Expand Convertible Arbitrage Implement 3 rd/4 th Generation Equity Trading System – MM_0301_B-25 Web-Based, PDA’s 25

Fundamentals Research Provide industry and commodity research for EGM units Build commodity expertise of analysts and associates in order to move them into origination/trading roles Centralize information and communication across commodity groups around the world Provide unique content to Enron Online (Research reports and market outlooks) Analyze cross-market and cross-commodity arbitrage opportunities (LNG vs. NG, Distillates/Fuel Oil vs. NG) MM_0301_B-26 26