Spreadsheet: mary_fischer__25749__CalPERS-OTP Transaction
Sheet: Note1

Gain Computation--OTPPB and CalPERS Buyout
EMW = EMW Energy Services Corp.
EES = Enron Energy Services, LLC
EMW is a subsidiary of EES
PHASE I:  In 1999 EMW issues additional common voting shares and warrants (investor and special)
The issuance reduces EES's interest from 100% to 75%
Per Unit Value Allocation
Common Stock |  | 2226.52
Special Warrant |  | 591.16
Investor Warrant |  | 0
 |  |  | Special Warrants |  |  | Common Stock
Warrants and Common Stock Issued to EES and Outside Investors |  |  | Number |  |  | Number
EES's interest in EMW after additional issuance |  |  | 225000 |  |  | 75000
EMW Shares sold to outside investors |  |  | 75000 |  |  | 25000
SAB 51 Gain on Common Stock Issuance
No gain recognized on warrants.
Value of 25K newly issued shares to outside investors
Ownership % retained by Parent (EES) |  |  | 0.75
Less: Unidentified BOOK Expenses |  |  | 433250
Gain BOOKS recognized under SAB 51
Less: Issuance Expenses incurred but not billed |  |  | 1500000
Net BOOK Gain--Booked on 51V in 1999
BOOK basis per unit Computation:
SAB 51 Gain/Total Shares Controlled
TAX Treatment
SAB 51 gain not recognized by TAX-- deferred tax liability established.
EES's disposal of its common shares in EMW and its booking of its
share of EMW's reported losses will reverse the temporary
difference between BOOK and TAX.
EES deducted the $1,500,000 of transaction expenses--deferred tax liability established
Deferred Tax Liability
Net BOOK Gain  $39,814,000* 35%
Transaction Expenses:  $1,500,000 * 35%
PHASE II:  EES distributes some of its EMW common shares and special warrants
to buyout CalPERS and OTPPB's interest in EES.
EES distributed appreciated property. Triggers tax gain when distributed to outside investors.
Assumed no BOOK gain was recorded in this phase.
 |  |  | Special Warrants |  |  | Common Stock
OTPPB Buyout Steps |  |  | Number |  |  | Number
EES distributes EMW warrants and common stock to:
[NAME] exchanges with OTPPB |  |  | 9655 |  |  | 4566
OTPPB |  |  | 529 |  |  | 250
JEDI II (will be used in CalPERS buyout) |  |  | 390 |  |  | 184
Less: JEDI  II (will be used in CalPERS buyout)
Total EMW warrants and common stock from EES used for OTPPB Buyout
CalPERS [NAME]
EES distributes EMW warrants and common stock to:
Enron/Enron exchanges w/ CalPERS |  |  | 3617 |  |  | 1154
CalPERS |  |  | 69 |  |  | 22
ECM II & III/ ECM II & III sell to Enron/Enron exchanges w/ CalPERS |  |  | 69 |  |  | 22
JEDI distributes EMW interest from OTPPB Buyout to:
CalPERS |  |  | 195 |  |  | 92
ECM II and III --sell to Enron-- exchanges w/ CalPERS |  |  | 195 |  |  | 92
Total EMW warrants and common stock from EES used for CalPERS Buyout
Total Warrants and Common Shares issued for [NAME]
BUYOUT SUMMARY |  |  |  |  |  |  |  | Permanent |  | Temporary
OTPPB Buyout |  |  | Number |  |  | Tax Gain |  | Difference |  | Difference | Note 1.
Warrants through Enron
Warrants directly from EES (Dividends)
Common Stock thourgh Enron
Common Stock directly from EES
CalPERS
Warrants through Enron
Warrants directly from EES (Dividends)
Common Stock thourgh Enron
Common Stock directly from EES
DEFERRED TAX LIABILITY--Dr/(Cr)  on 51V
SAB 51 BOOK Gain * 35%--Established in 1999 |  |  |  |  |  | Note 1:  Computation of Temporary Adjustments for Common
Transaction Expenses * 35%--Established in 1999 |  |  |  |  |  | (Common Shares/75,000)*BOOK gain per SAB 51
Turning Event:
Temporary Gain from Buyout * 35%