International Businesses Weather Pulp FX Interest Equities Bonds Softs Metals Global Liquids Coal Credit derivatives North American Gas and Power European Gas and Power

Weather Pre 2000 Houston risk book, London originators European transactions booked in ECTRIC through EEFT with back to back to ENA Services agreement between ECTRIC and EEFT (cost + 5%) Post 2000 Main risk book in Houston, small risk books in Oslo and Sydney, London origination Oslo originated transactions booked in ECTRIC Norway branch with back to back to ENA [check] London originated transactions booked in ECTRIC through EEFT with back to back to ENA Sydney originations [check] Services agreement between ECTRIC and EEFT for London origination activity (cost + 10%) and [Sydney] Review of business changes quarterly

Pulp Pre 2000 Houston risk book, London originators London originated financial transactions booked in ECTRIC through EEFT with back to back to ENA Services agreement between ECTRIC and EEFT (cost + 5%) Post 2000 Main risk book in Houston, small risk book in London, plus origination Services agreement between ECTRIC and EEFT for London origination activity (cost + 10%) Review of business changes quarterly

FX [interest] Pre 2000 Houston risk book, London and Sydney originators London originated transactions booked in ENA through agent EEFT. Sydney originated transactions booked in ENA through agent Enron Australia Finance Pty Ltd (“EAFPL”) Services agreement between ENA and EEFT, and ENA and EAFPL (cost + 5%) Post 2000 Main risk book in Houston, possibly small risk books in London and Tokyo (relocated from Sydney) Services agreement between ENA and EEFT for London origination activity and ENA and EAFPL (cost + 10%) Review of business changes quarterly

Equities and bonds Pre 2000 No transactions executed outside of the US Equities and bonds books in ECT Investments Inc Post 2000 Structure for London based bonds and equities business is currently under discussion Separate risk books for Houston and London, some trades expected between the books * Agent v CFC acting as principal * Regulatory issues

Softs Post 2000 Proprietary softs business in Houston Former Rudolf Wolff softs business in London conducts brokerage and financing business – future development of the business under commercial review (proprietary trading out of London ?) * Regulatory issues

Metals Post 2000 Financial – risk book in London (MGL). Agents in NY and Tokyo enter into trades on behalf of MGL. Book is passed. Compensation by way of commission. Physical – risk book in London (MG MCC Ltd). Agents in NY and Montreal enter into trades on behalf of MG MCC Ltd. Copper concentrates – risk book in NY (MG MCC Corp). Business changes expected * brokerage * financing business * proprietary trading * Regulatory issues

Global Liquids Pre and Post 2000 Separate risk books for * Houston * London * Singapore * Global Arb books Financial and Physical transactions booked to the same product risk book eg. London Gasoil Regulatory issues * EEFT agency compensated by commission agreement Business changes – move to global books ?

Coal Pre 2000 Separate risk books for Physical coal * Houston – N America * London – rest of world Origination in Australia and India, compensated by commission agreement Post 2000 London - Creation of European coal future market via EOL London - Creation of Physical (ECSL) and Financial (ECTRIC) freight risk books London - creation of new desk for transportation of domestic coal (rail freight, port throughput) Australia - separate risk book for Australian originated transactions Regulatory issues

Credit derivatives Post 2000 Single risk book in London (EnronCredit.com Ltd) Trades involving the support of the Houston based personnel booked in ENA and backed into EnronCredit.com Ltd * ENA compensated under services agreement Regulatory issues in Europe

North American Gas and Power Pre and Post 2000 Separate risk books in US (ENA) and Canada (ECT Canada Inc) Trades between the risk books

European Gas and Power Pre and Post 2000 Separate risk books * Physical UK (ECTRL) * Financial UK (ECTRI/EEFT) * Continental Physical (ECTRL) * Continental Financial (ECTRI/EEFT) * Scandinavian Physical and Financial (ECTRIC Norway) Trades between the risk books Regulatory issues Centralised management of risk in London (except Norway) with European origination * hub and spoke * origination compensated on cost plus

Transfer pricing approach Tax Dept.’s response to Global books APA Services agreements versus trading profit allocation Effective coordination Recent tax developments