1. Enron Net Works Opportunity Valuation May 2001 STRICTLY CONFIDENTIAL

2. Enron Net WorksPage 1 CONFIDENTIAL Valuation methodDiscounted cash flow model (DCF) Source of revenueLicensing private label versions of platform Not Considered in this modelPull-through revenues from other products Revenues from professional services Value of Enron brand Transaction tax benefits The valuation method used is a discounted cash flow model based on software license revenues. Private Label Cash Flow Model Valuation

3. Enron Net WorksPage 2 CONFIDENTIAL The Private Label Cash Flow valuation is based on logical assumptions. Revenue Assumptions Number of U.S. Licenses Sold203, over 6 years One-Time License Fees $3 to $12 Million per customer based on customer revenues Annual Recurring Fees20% of one-time fee yearly License Fee Reduction25% over six years Licenses per Customer CompanyOne license per customer International Opportunities Similar to U.S. Other Financial Assumptions Operational Margin50% Discount Rate 10.6% Transaction Tax Benefits Not Considered Private Label Cash Flow Model: Assumptions Valuation

4. Enron Net WorksPage 3 CONFIDENTIAL We narrowed a list of one million companies to an addressable market of 13,200 sales prospects with an average hit rate of 1.5%. Private Label Cash Flow Model: U.S. Licenses Sold 2.5% 0.5% 0.25% 6 % 1% 1.5 % 1% 1.75% One Million Companies with sales over $1 million/year Industry Receptivity LowAverageHigh Very High 4 % 2.5 % 2 % Co. Revenue Over $2 billion $400 MM to $2 billion $100 MM to $ 400 MM 1,000,000 U.S. Companies 13,200 Prospective companies 203 Expected Licensees Likelihood of licensing 6 5 18 21 8 30 2 15 14 28 21 35 Eliminate smaller Companies Rank by industry receptivity Licenses sold by category Valuation Apply probabilities over 6 years

5. Enron Net WorksPage 4 CONFIDENTIAL Industries were classified based on their commoditization potential and transaction needs. Private Label Cash Flow Model: Industry Receptivity None Agricultural services Contractors Leather products Machinery Merchandise stores Auto repair stores Motion pictures and recreation services Health, legal and education services Public Administration High Livestock production Coal Paper products Plastics and synthetic materials Basic steel products Secondary non-ferrous metals Electronic components Trucking Sea Shipping Pipelines Communication Commercial banks Utilities Medium Food and kindred products Lumber and wood products Fabricated metal products Freight forwarding Insurance Fishing Railroad transportation Advertising Low Forestry Apparel Furniture and fixtures Printing and publishing Rubber products Electric and electronic equipment Transportation equipment Real Estate Very High Grain production Mining Non-metallic minerals Industrial inorganic chemicals Oil and oil products Primary non-ferrous metals Commodity traders Investment banks Natural gas Valuation

6. Enron Net WorksPage 5 CONFIDENTIAL Customers are added over a 6-year time frame. Private Label Cash Flow Model: Customer Acquisition Rate Valuation

7. Enron Net WorksPage 6 CONFIDENTIAL Licensing fees increase with company revenue and decrease with time. Higher than $10 billion Company Revenue One-Time License Fee Annual Recurring Fee Between $2 and $10 billion Between $0.5 and $2 billion Between $100 and $500 million $12 Million $9 Million $6 Million $3 Million $2.4 Million $1.8 Million $1.2 Million $0.5 Million License Fee Reduction 200120022004200320052006 100%95%85%90%80%75% Year License is sold License Fee Multiplier Private Label Cash Flow Model: License Fees Valuation

8. Enron Net WorksPage 7 CONFIDENTIAL The business opportunity valuation results in a net present value of approximately $1 billion. Present Value of Operating Profit$1.05 billion Valuation Result Valuation

9. Enron Net WorksPage 8 CONFIDENTIAL Adjusting for risk, the enterprise value is around $250 million. Present Value of Operating Profit$1.05 billion Execution risk adjustment(-75%) - customer acquisition - customer implementation Risk-adjusted valuation$263 million Valuation Result Valuation