Confidential Transaction Support Hub Prepared for EDS March 07, 2001.

Confidential

Transaction Support HubTransaction Support Hub

Prepared for EDSPrepared for EDS

March 07, 2001March 07, 2001

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EnronOnline is EnronOnline is the the world’sworld’s largest e-commerce largest e-commerce websitewebsite..

• Total Life to Date Transactions > 655,000Total Life to Date Transactions > 655,000

• Average Daily Transactions > 3,700Average Daily Transactions > 3,700

• Life to Date Notional Value of Transactions > $400 billionLife to Date Notional Value of Transactions > $400 billion

• Daily Notional Value Approximately $2.6 billionDaily Notional Value Approximately $2.6 billion

• Average number of Logged in Users 3,500Average number of Logged in Users 3,500

EnronOnlineEnronOnline

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5,001

60,044

115,000

149,964

222,676

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

4Q99 1Q00 2Q00 3Q00 4Q00

QuarterlyQuarterly

Transactions via EnronOnlineTransactions via EnronOnline

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Daily Customers(Average) 3,000

2,427

1,227

22444

Daily Products Offered

(Average)

Q499 Q100 Q200 Q300 Q400

1,157

909

623

323

53

Q499 Q100 Q200Q300 Q400

EnronOnline’s Growth EnronOnline’s Growth

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Markets Available on EnronOnlineMarkets Available on EnronOnline

Commodity Types Commodity Types

• Argentine Natural GasArgentine Natural Gas• Asian Crude & ProductsAsian Crude & Products• Asian MetalsAsian Metals• Australian & Japanese Australian & Japanese

WeatherWeather• Australian PowerAustralian Power• Austrian PowerAustrian Power• BandwidthBandwidth• Belgian Natural GasBelgian Natural Gas• Canadian Natural GasCanadian Natural Gas• Canadian PowerCanadian Power• Credit DerivativesCredit Derivatives• Dutch PowerDutch Power• Dutch AluminumDutch Aluminum• EmissionsEmissions

• Sea FreightSea Freight• Spanish PowerSpanish Power• Swiss PowerSwiss Power• UK MetalsUK Metals• UK Natural GasUK Natural Gas• UK PowerUK Power• US Gas Pipeline CapacityUS Gas Pipeline Capacity• US LumberUS Lumber• US MetalsUS Metals• US Natural GasUS Natural Gas• US PowerUS Power• US SteelUS Steel• US WeatherUS Weather

• European CoalEuropean Coal• European WeatherEuropean Weather• German PowerGerman Power• International CoalInternational Coal• Japanese AluminumJapanese Aluminum• LME Metals ContractsLME Metals Contracts• LPGLPG• Nordic PowerNordic Power• Oil & Refined Oil & Refined

ProductsProducts• PetrochemicalsPetrochemicals• Plastics Plastics • Pulp & PaperPulp & Paper

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Transaction Support HubTransaction Support Hub

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Transaction Support HubTransaction Support Hub

Hub’s Mission:Hub’s Mission:

To facilitate the “Straight Through Processing” To facilitate the “Straight Through Processing” (STP) of energy and other commodity transactions, (STP) of energy and other commodity transactions, beginning with EnronOnline generated beginning with EnronOnline generated transactions.transactions.

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Value PropositionValue Proposition

• Reduce errors Reduce errors • Elimination of key-strokes Elimination of key-strokes reduces the riskreduces the risk of of

expensive data input errors. expensive data input errors. • Catching Catching just one error pays for the entire projectjust one error pays for the entire project• Companies devote substantial contingencies in their Companies devote substantial contingencies in their

budgets to account for errorsbudgets to account for errors

• Efficiency (Time Saving)Efficiency (Time Saving)• Customers have large staffs (mid-office, back-office, Customers have large staffs (mid-office, back-office,

settlements) devoted to the input and checking of trade settlements) devoted to the input and checking of trade data.data.

• Real time trade data enables better controlsReal time trade data enables better controls• Price riskPrice risk• Credit riskCredit risk• Enables Enables real timereal time position management position management

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Proposed SolutionProposed Solution

Transaction Support Hub, along with Transaction Transaction Support Hub, along with Transaction Data Feeds will allow clients to: Data Feeds will allow clients to:

• Upload transaction data information directly into Upload transaction data information directly into existing back-office systemsexisting back-office systems

• Eliminate redundant data entry and data entry Eliminate redundant data entry and data entry errors.errors.

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Target MarketTarget Market

EnronOnline has active traders in its Customer EnronOnline has active traders in its Customer base in need of these type of services.base in need of these type of services.

Customer ProfileCustomer

Base*Average

Transactions/ monthLarge 30 1,295

Medium 33 300Small 60 100

* This is not the total number of EnronOnline’s registered customers. * This is not the total number of EnronOnline’s registered customers. It only represents approximate number of target customersIt only represents approximate number of target customers

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Upside for EDS/ Why Partner?Upside for EDS/ Why Partner?

“We believe that this deal enables the Hub operator to gain substantial first mover advantage in the race to digitize energy commerce

and provide processing services to the industry.”

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What will Partners bring ?What will Partners bring ?

Partners will bring:Partners will bring:

• Experience and InfrastructureExperience and Infrastructure

• Neutrality to customers interestsNeutrality to customers interests

• Strong relationships with the target customer Strong relationships with the target customer groupgroup• Sales process will be faster and more credible Sales process will be faster and more credible • In many cases, you are already familiar with In many cases, you are already familiar with

customer’s systemscustomer’s systems

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EnronOnline's AdvantagesEnronOnline's Advantages

EnronOnline is uniquely positioned, by a wide EnronOnline is uniquely positioned, by a wide margin, to offer this service:margin, to offer this service:

• EnronOnline captures 40% of the daily transactions in EnronOnline captures 40% of the daily transactions in the Wholesale Energy Market.the Wholesale Energy Market.

• EnronOnline generates between $2-4B transaction EnronOnline generates between $2-4B transaction value EACH dayvalue EACH day

• EnronOnline customers include all the major industry EnronOnline customers include all the major industry players of a large customer baseplayers of a large customer base

• EnronOnline offers a large diversity of commodities.EnronOnline offers a large diversity of commodities.

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Why Partner with EnronOnline?Why Partner with EnronOnline?

• Substantial first mover advantageSubstantial first mover advantage

• Exclusive right to distribute EnronOnline transaction Exclusive right to distribute EnronOnline transaction datadata

• EnronOnline’s transactions and brand are the EnronOnline’s transactions and brand are the cornerstones for success in this space. Creates a cornerstones for success in this space. Creates a compelling proposition for other exchanges to compelling proposition for other exchanges to participate.participate.

• Next generation business opportunities greatly Next generation business opportunities greatly increasedincreased

• Ongoing revenue channel via TDFOngoing revenue channel via TDF

• Significant integration revenuesSignificant integration revenues

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Business PropositionBusiness Proposition

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Assets of LLC:Assets of LLC:

• Five year exclusive license to EnronOnline Five year exclusive license to EnronOnline transaction datatransaction data

• API and connectivity to EnronOnlineAPI and connectivity to EnronOnline

• Options on next generation servicesOptions on next generation services

• Five year support and maintenance contract Five year support and maintenance contract with EnronOnlinewith EnronOnline

• Utilization of the EnronOnline brandUtilization of the EnronOnline brand

Enron owns 100% of LLCEnron owns 100% of LLC

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Divesture Rationale:Divesture Rationale:

• Third-party neutralityThird-party neutrality

• Encourage other Encourage other platforms to participateplatforms to participate

Expectations:Expectations:

• Significant valueSignificant value

• Enron retains portion of Enron retains portion of revenues in addition to revenues in addition to equityequity

New Investor/Operator

Enron

Expected Equity Structure

EDS Buys Controlling Interest of LLCEDS Buys Controlling Interest of LLC

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You

Considerations while valuing LLCConsiderations while valuing LLC

Revenue sources to Hub Co:Revenue sources to Hub Co:

• Revenues from customers for Revenues from customers for services services

• Revenues from PlatformsRevenues from Platforms

• Revenues from System Revenues from System IntegratorsIntegrators

• Next Generation Services Next Generation Services MUST MUST be considered (ie. Processing)be considered (ie. Processing)

Revenue source to You:Revenue source to You:

• Revenues from System Revenues from System Integration work (significant)Integration work (significant)

LLC$$$

$$$

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TimelineTimeline

STAGESSTAGES

1. Concept Introduction1. Concept Introduction

2. Solicit License Fee Structure and 2. Solicit License Fee Structure and BidsBids

3. Selection of System Integrators3. Selection of System Integrators

4. Product Testing 4. Product Testing

5. Implementation5. Implementation

6. Commercial “Roll-Out”6. Commercial “Roll-Out”

DATES*DATES*

February 5th to 23rdFebruary 5th to 23rd

February 26th toFebruary 26th toMarch 16thMarch 16th

March 23rdMarch 23rd

April 2nd to 6thApril 2nd to 6th

April 9th to 30thApril 9th to 30th

May 1stMay 1st

*Dates are subject to change*Dates are subject to change