IN: ENE: Adjust Historical EPS As Per Restatements; Lower 4Q & 2002 Ests. * We adjust Enron's historical EPS for the restatements filed in their 8K published on November 8th. * We revise our stand-alone 2002 EPS estimates to $1.50 from $2.15. We think this could prove conservative, but await further data on Enron's ongoing performance in their energy trading & marketing business. * Enron is currently trading at a relatively large 20% discount to their implied merger value of $12.40. We think this spread could contract as certainty improves over accounting issues, stand-alone earnings power, and the scope of hurdles to merger completion. <<ENE EPS adjustments 11-14-01.pdf>> <<ENE EPS adjustments 11-14-01.doc>>

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OUT: ENE: Adjust Historical EPS As Per Restatements; Lower 4Q & 2002 Ests.

IN: Louise Kitchen, who is now the President & CEO of Enron Net Works and I had a conversation about the space located at EB2801. Louise had no objection to RAC occupying this space since her buildout could not occur until May. The space rental should be allocated to 011/100068 and 011/100052 equally. Rick

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OUT: Info Central Space

IN: Anne, I just got another phone call from Palo Alto. They still have not received three of their confirms from deals done around the 20th of July. They have ceased to do additional business with us until they receive these confirms. thanks,

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OUT: Palo Alto Confirms

IN: The Board decided in today's meeting to delay the effective date for adoption of the goodwill and intangible asset portion of the business combinations exposure draft to fiscal years beginning after December 15, 2001, permitting early adoption for fiscal years beginning after March 31, 2001 if financial statements for the first quarter have not yet been reported. This means that goodwill amortization will continue through year-end. Discussion is continuing on when the first impairment analysis will be required given the new adoption date and whether or not initial impairments may be reported as a change in accounting principle. Adoption of the business combinations portion of the exposure draft is still anticipated to be required for acquisitions subsequent to June 30, 2001. The main implication of this is that more excess purchase price is expected to be allocated to identifiable intangible assets rather than goodwill for acquisitions completed after this date. The pooling-of-interests method of accounting for business combinations is still anticipated to be eliminated as of June 30, 2001.

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OUT:
Goodwill Exposure Draft