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Enron Overview
Jeff SkillingApril 3, 2001
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2UB-SMETHODIST-0301
Enron Annual Revenues
1997 1998 1999 2000
20.3B31.3B
100.8B
40.1B
+ 54% + 28% + 151%
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3UB-SMETHODIST-0301
1997 1998 1999 2000
$0.87$1.00
$1.47
$1.18
+ 15% + 18% + 25%
Earnings Performance(Recurring Per Diluted Share)
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4UB-SMETHODIST-0301
Management Efficiency
Source: msn-MoneyCentral © 2001
55,000
32,000
43,836
5.6 Mil
894,0941.1 Mil
Income per Employee Revenue per Employee
Enron Industry S&P Utilities Enron Industry S&P Utilities
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5UB-SMETHODIST-0301
Enron Market Value*
1997 1998 1999 2000
12.8B
18.9B
62.5B
31.8B
*Uses basic shares outstanding at 12/31
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6UB-SMETHODIST-0301
Enron Price/Earnings Ratio
1997 1998 1999 2000
23.928.5
37.6
56.6
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7UB-SMETHODIST-0301
Total Return to ShareholdersJan 1, 1990 to February 28, 2001
200
1600
1400
1200
1000
800
600
400
-200
0
Dec 97Dec 96Dec 95Dec 94Dec 93Dec 92Dec 91Dec 90
Enron Corp.
S&P 500
Pipeline Avg.
Utility Avg.
E&P Avg.
1,151%
354%
571%
246%
183%
Dec 00Dec 99Dec 98
Note: Calculated to February 28, 2001
Jan 01 Feb 01
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8UB-SMETHODIST-0301
Enron Corp
Enron Transportation Services
Enron Wholesale Services
Enron Energy Services
Enron Broadband Services
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9UB-SMETHODIST-0301
Enron Opportunity
Traditional Model
New Model
• Asset intensive• Vertically integrated• Slow moving and rigid• Hierarchical
• Brain power intensive• Networked• “Real options” oriented• Fast moving & entrepreneurial
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10UB-SMETHODIST-0301
Changes in the Marketplace• Interaction costs declining due to streamlining,
standardization and automation
• Cost/benefit of vertical integration and consolidation significantly reduced
• Efficient sourcing and packaging produces lowest cost product
–Legal
–Research
–Documentation
–Logistics
– Sales
– Procurement
– Credit
– Inventory
– Settlement
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11UB-SMETHODIST-0301
Enron’s Network Advantages
Significant Competitive Advantages for Entering New Markets
• Access to Physical Product
• Delivery Logistics Expertise
• Leading Market-Making Capabilities
• Risk Management Expertise
• Ability to Structure Complex Customized Solutions
• Well-Developed E-commerce
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12UB-SMETHODIST-0301
• Robust, Flexible Network
• Scope and Scale
• Liquidity
• Market-Making
• Risk Management
• Technology
• Finance
Enron’s Advantage
Wholesale Merchant Opportunities
• Commodity Risk Management
• Benefits of Regional Arbitrage
• Cross Commodity Arbitrage
• Long-Term Origination
• Wholesale Outsourcing
• Asset Restructurings
• Structured Finance
Enron’s Capabilities Enable Unique Value Creation
High Value Applications
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13UB-SMETHODIST-0301
17,970
Power and Other Gas
Physical Volumes(BBtue/d)
99,337
Financial Settlements(BBtue/d)
1997 1997
27,30832,429
51,715
196,148
75,266
49,082
Wholesale Services
1998 1999 2000 1998 1999 2000
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14UB-SMETHODIST-0301
Expansion of Existing Business
Weather
• Over 7,500 TBtue Avg. Daily Deliveries
• 240 Customers in 46 Countries
• Over 100,000 Tonnes Avg. Daily Deliveries
• 190 Customers in 17 Countries
• Over $1.5 Million (Notional) Average Daily
Contracts
• 30 Customers in 8 Countries
1997 1998 1999 2000
16
305 321
1,629
Crude and Products
5,099
7,4358,305
9,158
1997 1998 1999 2000
(Transactions)
Coal
1997
46250
715
3,111
1998 1999 2000
(Transactions) (Transactions)
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15UB-SMETHODIST-0301
Enron–Accelerating Market Development
1985 1990 1995 20001991 1992 1993 1994 1996 1997 1998 19991986 1987 1988 1989
Commodity
Product
Financial
Australian Power & Gas
Bandwidth
Metals
NaturalGas
Electricity
UK Power & Gas
Financials (interest rate, equity)
Emissions
Plastics
Scandinavian Power & Gas
Weather
Coal
Pulp & Paper
Currencies
* Lighter shading indicates a developing market Darker shading indicates a mature market
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16UB-SMETHODIST-0301
ConsultantsConsultants
Software VendorSoftware Vendor
Controls Manufacturers
Architects
Engineers
Mechanical ContractorsMechanical Contractors
HVAC Svc CompaniesHVAC Svc Companies
Specialty ContractorsSpecialty Contractors
UtilitiesUtilities
Internal TreasuryInternal Treasury
LendersLenders
Electrical ContractorsElectrical Contractors
In-house Coordination
EnronOutsourcing
Approach
Equipment Manufacturers
Commodity ManagementCommodity Management
Energy Information
Management
Energy Information
Management
CapitalManagement
CapitalManagement
Energy AssetManagement
FacilitiesManagement
FacilitiesManagement
• Improved Core Business Focus
• Redeployment of Capital
• Reduced Operating Costs
• Access to World-Class Capabilities
CustomerReceives
• Conditioned Air
• Light
• Managed Facilities
Enron Energy Services
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17UB-SMETHODIST-0301
1997 1998 1999 2000
$1.2B
$3.8B
$8.5B
$16.0B
Enron Energy ServicesExecuted Contracts
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18UB-SMETHODIST-0301
Enron Energy ServicesExecuted Contracts
StructureStructure
TodayToday
19971997
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19UB-SMETHODIST-0301
EnronOnline – Changing the Way Energy Is Traded
Free, Reliable Transaction System with Enron as Principal
Transactions per day
11/29/99
12/10/99
12/21/99
01/01/00
01/12/00
01/23/00
02/03/00
02/14/00
02/25/00
03/07/00
03/18/00
03/29/00
04/09/00
04/20/00
05/01/00
05/12/00
05/23/00
06/03/00
06/14/00
06/25/00
07/06/00
07/17/00
07/28/00
08/08/00
08/19/00
08/30/00
09/10/00
09/21/00
10/02/00
10/13/00
10/24/00
11/04/00
11/15/00
11/26/00
12/07/00
01/31/01
02/28/01
Free, Reliable TransactionSystem with Enron as Principal
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20UB-SMETHODIST-0301
EnronOnline Efficiency Gains
Marginal Cost Per Transaction
(Indexed)
25
100
Transactions Per Market Maker
1999 2000
672
3,084
1999 2000
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EnronOnline
Enron Net Works
®
Clickpaper.com
Deal Bench
CommodityLogic
EnronOnline V2.0
Enron Credit
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22UB-SMETHODIST-0301
Commitment to Technology
1,380
1,882
$358
$522
1999
People Expenditures (Millions)
2000 2001E
1,154
1999 2000 2001E
$291
New E-commerce Initiatives
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®