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- CONFIDENTIAL - as of I 023/2001 8:15 AM

ENRON Corp
Investor Concerns
Conference Call Information
Time: 8:30 am (Central)
  9:30 am (Eastern)
Dial In (719) 457-2633
Website: www.enron.com: Click - Investor Relations
Replay: (719) 457.0820 Code 627675 (available until midnight on October 30)
Introductions

  Ken Lay, Chairman and Chief Executive Officer
Mark Frevert, Vice Chairman
  Greg Whalley, President & Chief Operating Officer
  Rick Causey, Executive VP and Chief Accounting Officer
Andy Fastow, Executive VP and CFO
  Steve Kean, Executive VP and Chief of Staff
Mark Koenig, Executive VP, Investor Relations
Ben GIisan, Managing Director and Treasurer
1
  Good morning, this is Ken Lay. Thank you for joining us on today's investor call.

  We decided yesterday to * dsscal to address questions and concerns raised over the
last few days. We aredisappointed with our stock price, but our businesses are
performing very well, and we are conducting business as usual. We recognize, however,
that these are uncertain times in the capital markets, and we will continue to hold
additional investocalls as needed to proactively communicate essential information to
ours arc lders.

  There has been a lot of recent attention to transactions n ously entered into with
LJM, a private equity parme tp. Let me reiterate a couple of things:
   We c Early heard investor concerns earlier this year, and Andy Fastow, Enron's
CFO, ceased all affiliations with LJM; and, as reported in our second quarter I0Q
filing, LJM is no longer a related party.
   During the third quarter, we took additional steps and terminated the finance
arrangements with LJM.

CONFIDENTIAL TREATMENT
REQUESTED By XENNETH LAUNDER FOIA

XH042-00204

GOVERNMENT
EXHIBIT
  3687
  Crim. No. H-04-25 (S-2)


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SEC Inquiry

We announced yesterday that we received a request for information from the SEC
regarding certain related party transactions. As we said yesterday, .

   We welcome this request, and the opportunity it provides us to put these
matters to rest;
   We are cooperating fully with the SEC; and
   We believe everything that needed to be considered and done in connection
with thesetraEpch was cow, and do f1~ D ra if,*V .< v~ b
ok I A li; mt~
As you can a we t sa mu .
However, a number of other, unrelated questions have been raised, and we will do our
best to address those here.

Equity Reduction

Our third quarter earnings conference call last Tuesday included information associated
with a 51.2 billion reduction in shareholders' equity that would ordinarily have been
disclosed in our 10Q, to be filed in mid November. There have been a number of
questions surrounding the equity adjustment since the call, so we want to take the
opportunity to clearly spell out the basis of the adjustment.

A structured finance vehicle, in which LIM was an investor, was established to mitigate
volatility associated with certain of Enron's merchant investments, including investments
in The Now Power Company, technology and other investments of Enron.

In conjunction with the recent termination of these vehicles, Enron recorded a S 1.2
billion reduction in shareholders' equity and a corresponding reduction in notes
receivables. These adjustments were the result of Enron's termination of obligations to

deliver n~siares in future periods. Although this obligation equated to 62 million
shares ands reflected in our fully diluted shares outstanding, the obligation to issue
shares in tFte future no longer exist and, as such, the shares will no longer be factored into
our EPS calculation. The1OQ will reflect the final, proper reduction of 62 million shares,
as calculated using Enron's actual share prices during the third quarter..

If you have additional questions on these adjustments, I will address them at the end of
the call. Now I will turn the discussion over to our CFO, Andy F ow to di our
current liquidity position and t rating. T sit J,t d t

LialridltvlCredit Rating ~,j~~,
c'

We have received questions recently about both our liquidity and the outlook for the
Enron Corp. credit.

CONFIDENTIAL TREATMENT UNDER FOIA
REQUESTED BY KENNE'T'H LAY

042-00205


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Regarding liquidity, Enron expects to have sufficient liquidity to conduct normal
operations and meet all of our projected capital requirements.
   We have committed credit facilities with domestic and foreign banks, which
provide for an aggregate of $3.35 billion in credit These bank lines are undrawn
but act as the backstop for the company's issuance of commercial paper.
   Additionally on a consistent basis, the company utilizes uncommitted lines in
excess of $500 million.

Currently, our commercial paper balance is approximately $1.95 billion (net, after
consideration of cash balances on deposit) resulting in approximately $1.5 billion of
liquidity available from committed sources today.
   . We continue to issue commercial paper and we have not drawn on our bank
revolvers.
   Additionally, we have not experienced a material increase in our funded CP
balances over the past two weeks.
   Our policy of maintaining liquidity levels under committed lines that are a
multiple of our projected cash requirements remains in effect.

In addition to the $1.5 billion in unused commitments, we t~peC-~'hwiMied rrr- o 6 ~
8l1ii~/ to receive it tx ,,
a lssa~+i.ww~y-$ 90 million in proceeds from asset sales discussed in the third quarter
conference call. These proceeds should be realized in the fourth quarter, perhaps as soon
as within thirty days. I would like to remind everyone that we have entered into a
definitive agreement to sell Portland General to Northwest Natural Gas for approximately
$1.9 billion and the assumption of $1.1 billion in Portland General debt. Subject to
normal regulatory review, the transaction is scheduled to close by the end of 2002.

  We have spoken to our key banks and, based on these conversations, we expect to have
their continued support.

  Let me also address the credit ratings:
   Both Standard & Poor's and Fitch have confirmed our BBB+ rating.
   Moody's has not downgraded Enron, but they placed us on review. We are
currently rated Baal at Moody's. Immediately following last week's conference
call, we were notified, and Moody's announced, that they have placed us on
review. We are now actively working with them to address specific questions in
order to facilitate their review.

We understand that our credit rating is critical to both the capital markets as well as our
counterparties.

  Core Business

  As we discussed in the earnings conference call last week, our third quarter ree ~..~
operating results were outstanding, with a 26% increase in recurring earnin (65%
increase in physical volumes. These results reflect the superb performance o our core

CONFIDENTIAL TREATMENT UNDER FOIA
REQUESTED BY KENNETH LAY

<H042-00206


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wholesale, retail and pipeline businesses. We are continuing to stay focused on our
businesses and remain well positioned for continued success.
  Pi. ICop,.A o r" vt v5Vl o't 5

Say this after the Q&A:

As we said in the release yesterday, we are focused on our core businesses and delivering
value to our customers around the world. But, we also want to take the time we need to
keep you informed. We will set up another call in the next couple of weeks.
Additionally, we will be posting on our website frequently asked questions and answers
in order to get information out to you quickly.
stss3::-: s -r~~

Thank you for your time and attention today.

CONFIDENTIAL TREATMENT UNDER FOIA
REQUESTED BY KENNETH LAY

d

KH042-00207