Canadian Tax Mitigation

FYI/action
---------------------- Forwarded by David W Delainey/HOU/ECT on 11/15/2000
04:00 PM ---------------------------

Rob Milnthorp
11/13/2000 08:55 AM
To: David W Delainey/HOU/ECT@ECT
cc: John J Lavorato/Corp/Enron@Enron
Subject: Canadian Tax Mitigation

Dave, we have come up with a structure that creates approx a C$45MM tax loss
to offset our year-end projected C$50MM Taxable Income position. By doing
this, we avoid cutting the government a cheque for roughly C$20MM. It seems
to me that we should be able to recognize that $20MM as gross margin. We are
meeting with Wes on Tuesday to discuss further but I thought that I should
keep you in the loop as it is a significant transaction that you may want on
your radar screen for your discussions with Wes.

Regards
Milnthorp