IN: Do you like golf? Do you like kids? How would you like to put the two together, AND earn a free day-pass to the 2001 Fred Meyer Challenge at The Reserve Vineyards & Golf Club?

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OUT: Fred Meyer Challenge, August 5-7 at The Reserve

IN: Mark Taylor, who is in Amsterdam this week, just left me a voicemail reflecting a conversation he just had with Dave Forster, and asked me to relay the following information to you (don't kill me, I'm just the messenger)... With respect to your form of online GTC: It need to be revised, per Dave Forster by Monday, to be expanded to include the provisions necessary that will enable a non-Australian based counterparty (a counterparty could be U.S., Canadian, European or other country based), who may or may not have an ISDA Master Agreement in place, and may or may not have credit in place, to do a financial power transaction with Enron Australia. In that regard I am attaching as a template, our form of online "Deemed ISDA" GTC (for a weather transaction, the only type of financial transaction where we adopt the ISDA documentation instead of using our own form of confirmation). As you can see when you look at our "Deemed ISDA" form of confirmation, there are a number of provisions that our Deemed ISDA form of confirmation includes, such as authority and tax representations, "arm's length transaction" reps, acting as a principal rep, the deletion of section 2(c)(ii) of the ISDA Schedule (netting "in respect of the same transaction"), no language that each party has a copy of the ISDA form and has read it and understands it, your deletion of language re: written confirmations, definition of "Transaction" meaning the GTC+ISDA form+website terms, "Website" (uppercased) is a defined term under the Password Application, we usually say "Loss" instead of "Market Quotation", also, Market Quotation and Second Method will apply for the purposes of Section 6(e), a question, do we need the word "integrated" with respect to the rerenced that the documents contain a "single agreement" to fall under the U.S. bankruptcy swap protection?, no ducment conflict provisions, missing our "severability" and "setoff" language, no adoption of the 1991 or 1993 Commodity definitions, business day defined as Sydney only, etc. Of course, you do not have these in your form of GTC, because they are or will be covered in your executed ISDA Master Agreement, but it is likely counterparties outside of Australia may not have a master swap agreement in place. I spoke to Steve Douglas in Tax, who is out of town today and was going to talk to Susan Musch about the tax issues and I hope to hear from him tomorrow. After all the above, I just have to say...we really do appreciate your help resolving all these issues...

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OUT: Online Trading Australian Financial Power GTC

IN: Good Monday Morning! Abbreviated Edition. IMPACT CALLS Internet Security Israel Hernandez Company Updates/Rating Changes q Investment Conclusion: Below are specific company updates and our views on each company in our coverage universe. Reiterating our thoughts published on September 17, we believe last week's attacks are likely to cause numerous short-term disruptions that put the September quarter at risk for all the security software vendors, particularly those vulnerable to discretionary spending cuts or large deals. In light of recent events, we are adjusting our ratings on two companies. We are raising our rating on VeriSign from a 2-Buy to 1-Strong Buy based on good earnings visibility amid a generally uncertain outlook for most software vendors. We are also lowering our rating on Internet Security Systems from a 1-Strong Buy to 2-Buy to adjust for these uncertainties and lack of visibility. While valuations for many of the companies are starting to look interesting, as a whole, we remain somewhat cautious on the security software vendors given the uncertainties introduced into the market over the last two weeks which could lead to more downward revisions in the September and December quarters and spill over in the first quarter of 2002. Internet Secuirty Systems Israel Hernandez Downgrading from Strong Buy to Buy 2 - Buy / $13.00 (USD) q We are downgrading ISSX from a 1- Strong Buy to a 2-Buy rating to reflect the lack of near-term visibility, and changing economic backdrop that increases the likelihood of a potential shortfall to our Q3 forecast. q Given the events of the past two weeks, we believe ISS and other security software vendors may run into difficulty closing business in a back-end loaded September quarter. q We are lowering our price target from $35 to $20, or 4 x FY01 revenues of $223M, to reflect the increased economic uncertainty in the current environment. VeriSign Inc Israel Hernandez Upgrading to Strong Buy from Buy 1 - Strong Buy / $38.30 (USD) q Given VeriSign's strong revenue visibility in a period of global economic uncertainty, we are raising our rating from 2-Buy to 1-Strong Buy making it our top pick in the sector. q In light of the global slowdown, we believe VeriSign provides investors with exceptional earnings visibility given its services model and strong deferred revenue balance. This visibility should enable VeriSign to sustain a premium valuation and outperform most technology stocks, even in a contracting environment. q We believe new value added services laid on top of a relatively fixed cost structure will provide significant margin expansion, currently at 14.6% and growing to the low thirties in the next 2 years. Oil & Gas: Exploration & Production Thomas R. Driscoll Some E&P Shares Now Appear Attractive q We are lowering our natural gas price forecasts as well as revising target prices and codes for the large-cap oil exploration and production companies we cover. We now believe that several companies we cover offer compelling values today. As a result we are upgrading our ratings on the shares of EOG Resources (EOG), Noble Affiliates (NBL) and Pioneer Natural Resources (PXD) from 2-Buy to 1-Strong Buy. We are also downgrading our code on the shares of Devon Energy (DVN) from 2-Buy to 3-Outperfrom to reflect heightened concerns about the increased debt load that will result from recently announced acquisitions. We are also downgrading our codes on Vintage Petroleum (VPI) from 1-Strong Buy to 2-Buy. AOL Time Warner Holly Becker Fund. Remain Strong In Unstable Environm 2 - Buy / $29.25 (USD) q The economic and advertising slowdown has obviously been compounded by recent tragic events. AOL Time Warner remains the premier integrated media company with a uniquely valuable portfolio of assets. While near-term estimates may need to come down further, we view the stock's pullback as a compelling buying opportunity. q AOL Time Warner's core businesses offer investors superior earnings power and growth, while new cross-platform initiatives should propel the company's long-term growth rate to above industry norms. q Advertising represents only 25% of revenue, considerably lower than comparable companies including Viacom (45%) and Disney (30%). Gaming & Lodging Joyce Minor Rich Bottom Fishing, But Dangerous Water q The gaming and lodging sectors saw huge downside moves last week, with the large cap gaming stocks down an average of -33% and the lodging stocks down an average of

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OUT: The Morning Market Call - Monday September 24th, 2001.

IN: Brent, Attached are the templates that we use for our financial power transactions. As was discussed in the conference call regarding this confirmation review, Diane Anderson will be providing the templates used for our gas transactions as they are maintained by the Houston documentation department. Please call me if you have any questions.

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OUT:
Financial Templates