IN: Vasant, A quick update on a number of on-going projects: 1. JCC Forward Curve/Hedging Strategy (Enron Japan) h An update of the historical P&L model was completed and included both commodity and foreign exchange risks. The standard deviation of historical simulations for single month swaps was significantly reduced with the foreign exchange hedging strategy (two long yen/$ positions and 1 short yen/$ position). h Enron Japan, in cooperation with Enron London, developed an alternative hedging strategy based on Brent $ value. No P&L historical P&L simulations were conducted for the alternative strategy. h The original Brent hedge ratios were based on an average of 3 monthly preliminary JCC values offered by METI. Presumably, the swap will be settled off of the finalized METI JCC price which is released two months after the fact. Rousseau forwarded those numbers from 1998 to present this morning. Unfortunately, our model uses historical JCC values going back to August 1991. Rousseau will hopefully obtain the required historical JCC time series early next week. h I haven't yet heard about Jeff Shankman's response to the memo that was forwarded on Wednesday. 2. Ethanol Forward Curve (Enron Global Markets) h A meeting was held with Marc de la Roche, Darren Maloney, and Sanjay Patel to discuss the development of a forward curve for ethanol. A first-cut curve based on NYMEX unleaded gasoline, NYMEX WTI crude, and EIA fuel ethanol inventories was constructed and backtested. Rolling monthly backtesting (using data from 2000 to 2001) suggested that, on average, the modeled and actual ethanol prices were off only by a few cents for time periods up to 6 months (e.g., 6 month swap). Unfortunately, the 1 SD value for the historical projections was quite large (+/- $0.30 on a $1.40/gal commodity). h The changing dynamics of the ethanol market offer the greatest challenge to forward curve construction. That is, ethanol will likely replace MTBE as the fuel oxygenate of choice over time, which will probably signal a stronger relationship with unleaded gas price. Unfortunately, the current model uses historical data from 1998 to present which do not necessarily reflect such a strong relationship. These concerns have been noted to the ethanol guys. h The ENE ethanol pricing index has been updated with August, September, and October prices and continues to generally track other industry publication values (e.g., Oxy-fuel news). h Marc and Darren are in talks with Petrous as a potential counterparty for an ethanol swap. h An ethanol status meeting will be held Wednesday or Thursday of next week with Randy Maffett. 3. Plastics Forward Curves (Enron Global Markets) h Mauricio Mora and I have focused on the development of forward curves for a suite of plastics including propylene, ethylene, polypropylene, HDPE, and LLDPE (see earlier email for details). h Initial models for each of these plastics have been completed and will be compared to the current model forward curves and Alan Engberg's expected values. Alan did forward the most recent curves and personal outlooks to us today. h Note that the methologies behind the creation of the old forward curves are not known. Evidently, one can use various rankings (say 1 to 5 depending on market conditions) to manipulate the model forward curve--I don't know whether regression was involved in these forward curve constructions.

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OUT: Work Update
IN: This is an email
Now is the best time in years to purchase an aircraft! Pre-owned jet aircraft prices are at historic lows. Now more than ever safety, security, control . . . Omni offers the following aircraft priced to sell! Full pictures, specifications and price are at: WWW.OMNIJET.COM Astra s/n 16 Beechjet 400 s/n RJ-7 Beechjet 400A s/n RK-126 Beechjet 400A s/n RK-136 Citation I/SP s/n 32 Citation II s/n 667 Citation S/II s/n 125 Citation V Ultra s/n 422 Citation 500 s/n 110 Diamond 1A s/n 57 Diamond 1A s/n 6 Gulfstream II/SP s/n 51 Gulfstream II/SP s/n 81 Gulfstream II s/n 94 Gulfstream IIB s/n 199 Gulfstream III s/n 483 Gulfstream V s/n 522 Hawker 400F s/n NA763 Hawker 600F s/n 256015 Hawker 700 s/n NA0338 Hawker 700 s/n NA0213 Hawker 800 s/n NA0422 Jetstar 731 s/n 5054 Learjet 31A s/n 128 Learjet 31A s/n 220 Learjet 35A s/n 220 Lear 35A s/n 627 Sabre 65 s/n Westwind 1 s/n 281 Westwind 2 s/n 374 Westwind 1124 s/n 204 Conquest 1 s/n 143 Gulfstream I s/n 156 King Air F90 s/n LA-168 WE WANT OFFERS! Click here to go to WWW.OMNIJET.COM

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OUT: Jet Aircraft - Priced to sell
QUESTION: We will meet for thirty minutes before our 3:30 fundies meeting. 1. EOL market making - Lavo has asked us to increase basis liquidity. Janie has mentioned general theme of market, "why trade on EOL 5000/d and risk moving the market". We are becoming market framers. I think Frank Ermis is a pioneer. 2. Deal confirmations - Anne Bike misbooked a deal for me from March, cost $3.5 million. How do we deal with this issue of confirmations missing deals. 3. Vacation and work hours - Discuss vacation schedules for the rest of the year. We need to do a good job of coordinating when we are out. Mike
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ANS: Meeting today at 3:00
UBS have organized an important meeting will be held tomorrow for all employees who : 1) have accepted offers or 2) intend to accept offers ( to the best of their knowledge) but who have issues that are being resolved All employees in these categories should attend Buses will be provided for those who do not have their own transport and will pick up from the south side of the north building - please assemble in the Java plaza area from 8.30am to 9.30am ( last bus leaves @ 9.30 am ) The meeting will last until approximately 1pm and will be presented by senior managers from UBS on the firm and it's strategy. There will be breakfast available at the Hotel from 9am to 10am and there will be sandwiches afterwards. If traveling independently please make sure you leave sufficient time to park (it will be very busy) and get to the Grand ballroom Employees need to bring their id's or drivers license with them to gain access to the meeting I'm sorry for the short notice on this - please call out to anyone who should be attending who will not get this message in time Tammie Schoppe on behalf of UBS HR
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answer: URGENT REQUIRES IMMEDIATE ACTION : Welcome to UBS meeting tomorrow 10.15 am @ the Houstonian
Gerald: I have been contacted by Kim Torres of the Assumption Parish Police Jury inquiring as to the status of this sale. Please call me regarding my 8/29/01 e-mail to you at your earliest convenience. Keith
Answer: Sale of Napoleonville, LA property, Our file ENR-02
Q: Heather, Attached is an Excel file containg deals with Dow over the last three years. Please call me with any questions ypu may have. Thanks,
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A:
Dow Mark to Market in Financial Books