Enron Overview Jeff Skilling April 3, 2001. 2 UB-SMETHODIST-0301 Enron Annual Revenues 20.3B 31.3B...

Enron Overview

Jeff SkillingApril 3, 2001

2UB-SMETHODIST-0301

Enron Annual Revenues

1997 1998 1999 2000

20.3B31.3B

100.8B

40.1B

+ 54% + 28% + 151%

3UB-SMETHODIST-0301

1997 1998 1999 2000

$0.87$1.00

$1.47

$1.18

+ 15% + 18% + 25%

Earnings Performance(Recurring Per Diluted Share)

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

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

6UB-SMETHODIST-0301

Enron Price/Earnings Ratio

1997 1998 1999 2000

23.928.5

37.6

56.6

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

8UB-SMETHODIST-0301

Enron Corp

Enron Transportation Services

Enron Wholesale Services

Enron Energy Services

Enron Broadband Services

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

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


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


• 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


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


Expansion of Existing Business

Weather

• Over 7,500 TBtue Avg. Daily Deliveries

• 240 Customers in 46 Countries

• Over 100,000 Tonnes Avg. Daily Deliveries


• Over $1.5 Million (Notional) Average Daily

Contracts


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)


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


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


1997 1998 1999 2000

$1.2B

$3.8B

$8.5B

$16.0B

Enron Energy ServicesExecuted Contracts


Enron Energy ServicesExecuted Contracts

StructureStructure

TodayToday

19971997


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


EnronOnline Efficiency Gains

Marginal Cost Per Transaction

(Indexed)

25

100

Transactions Per Market Maker

1999 2000

672

3,084

1999 2000

EnronOnline

Enron Net Works

®

Clickpaper.com

Deal Bench

CommodityLogic

EnronOnline V2.0

Enron Credit


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

Enron Overview Jeff Skilling April 3, 2001. 2 UB-SMETHODIST-0301 Enron Annual Revenues 20.3B 31.3B...

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