Enron Europe All Staff Update 20 July 2000 E-mail your questions to Enron Europe Office of the Chairman prior to and during the presentation or dial direct into the Auditorium - ext 30550

Agenda 10:00 Introduction & Enron Joe Gold Europe Update 10:10 Enron Corp Ken Lay - Business Highlights 10:25 New Procurement to Beth Apollo, Payment (P2P) Initiative Sam Kemp 10:35 Q & A Ken Lay, Joe Gold

How to Submit a Question Joe Gold How to Submit a Question E-mail your questions to Enron Europe Office of the Chairman during the presentation Dial direct into the Auditorium - ext 30550 ...OR …Shout out at the end - don’t be afraid!

Second Quarter Review Enron Europe Limited Joe Gold Second Quarter Review Enron Europe Limited Joe Gold

Enron’s European Network Strategy Joe Gold Enron’s European Network Strategy Natural Gas Coal Crude & Products Pulp and Paper Power Weather Metals Establish Europe’s Leading Energy Network Capture Sustainable First Mover Advantage Extend the Network Strong, Competitive Position in High Growth Markets Exploit the Network Create Significant Value to Enron and its Customers

Snapshot of Enron Europe Accomplishments Joe Gold Snapshot of Enron Europe Accomplishments Acquisition of MG plc Metals  Sale of Sutton Bridge Power Station Landmark coal supply contract with British Energy UK  Live web-cast coverage of Wimbledon Tennis Championship EBS  1 July launch of Enron Directo in Spain Acquisition of ERPAG EES  Strategic alliance with Swiss CityPower A.G. Arcos de la Frontera awarded environmental permit and administrative authorisation Continental 

Volume and Transaction Growth No. of Transactions per day Joe Gold Enron Europe Volume and Transaction Growth Total Volumes* (BBtue/d) Power Volumes* (BBtue/d) Gas Volumes (BBtue/d) No. of Transactions per day 3,725 Power Gas 9,640 Continent Nordic Region U.K. 206 5,915 190 95 63 6,980 4,552 2,428 40 34 4,051 1,550 2,501 1,236 66 87 24 2,269 77 2 1,033 25 17 10 25 14 1998 1999 Q1 2000 Q2 2000 1998 1999 Q1 2000 Q2 2000 1998 1999 Q1 2000 Q2 2000 1998 1999 Q1 2000 Q2 2000 * Physical and Financial Note: In the U.K and parts of Europe, volumes are physically transported by the national grid operators and financially settled by energy service providers.

New Procurement to Payment (P2P) Initiative Beth Apollo / Sam Kemp New Procurement to Payment (P2P) Initiative Beth Apollo / Sam Kemp

Procurement Process Strategy Buying Beth Apollo / Sam Kemp Procurement Process Strategy Buying Work with Enron Europe units to determine needs Consolidate vendors where possible Negotiate advantageous terms for Enron with vendors Policy Setting Contract and maintain portfolio of preferred providers Work with Houston group to ensure European Benefits Achieve greater cost transparency Electronic Commerce Transaction/Processing oriented Invoice Consolidation Promote use of purchase orders Paperless Approvals Process Order Taking Goods Receipt Regular communication with the entire company on opportunities to save!

Why a Dedicated Procurement Organisation? Beth Apollo / Sam Kemp Why a Dedicated Procurement Organisation? Enron Europe has reached cost “Critical Mass” Improve cost / price transparency throughout the organisation Attention on “New Economy” practices including purchasing tools and paperless office.

“Critical Mass” Beth Apollo / Sam Kemp * includes both forecasted capital and expense amounts

Potential Opportunity Within Travel Beth Apollo / Sam Kemp Potential Opportunity Within Travel Area of Focus: Continental Airlines Houston/London Route Current Spend/Background: $2,800,000 per year 73% Business class, average costs £3,500 27% Coach, average cost £1,000 Quick wins Pre-purchased Business class tickets £2,500 (potential savings of £300k+) Early bookings for flights and hotels

Improving Cost / Price Transparency Beth Apollo / Sam Kemp Improving Cost / Price Transparency Develop improved processes, systems and policy Review key supplier relationships: Within Enron Europe Integrate with Global Strategic Sourcing group Help employees make informed buying decisions Improve accountability and ownership

New Economy Practices Launch eAPW (Accounts Payable Workflow) Beth Apollo / Sam Kemp New Economy Practices Launch eAPW (Accounts Payable Workflow) Develop and launch eBUY

eAPW (Accounts Payable Workflow) Beth Apollo / Sam Kemp eAPW (Accounts Payable Workflow) Paperless / Invoice imaging / Automated authorisation / SAP integrated eAPW has been developed in-house with outside assistance Timetable:

eBUY Materials management Beth Apollo / Sam Kemp eBUY Materials management Paperless / Desktop / Web based requisition and approval / SAP integrated eBUY has been developed in-house with outside assistance Timetable:

Q & A E-mail your questions to Enron Europe Office of the Chairman during the presentation Dial direct into the Auditorium - ext 30550 ...OR …Shout out at the end - don’t be afraid!