HPL Close

GREAT JOB TO ALL!! We made it from contract execution to financial close in 5 months. This success is a testament to the effort put forth by all of you and your colleagues in finalizing the transaction, including:

1. Setting an industry record for responding to a 2nd request from the Dept. of Justice and securing their approval.
2. Expediting the analysis and repair of a 60 mile segment of the A/S pipeline.
3. Transitioning HPL's hardware and software infrastructure from Enron to AEP
4. Unwinding four complex monetizations related to the assets with a value of over $150MM
5. Separating HPL's business process, work flow, from Enron (after 75 years of integrated operation)
6. Segregating property between leased and purchased facilities
7. Collecting and sorting over 14,000 boxes of books and records
8. Moving over 250 people from 4 different Enron entities into a new location while keeping the pipeline operating.
7. Accounting for the transfer of PRM assets, CWIP, leased assets, purchased assets, imbalances, payables and receivables.

The transaction freed up approximately $725MM of capital that Enron can put to work earning higher rates of return in its newer businesses, but the work on HPL is not over yet. There are a number of follow up activities that we need to complete in order to maximize the value of the HPL transaction. Jim Coffey will be managing these activities on an ongoing basis, including:

1. Collecting outstanding accounts receivable and working with AEP to resolve imbalances.
2. Closing out accounting entries for property, work orders, external accounts payable, and internal charges.
3. Eliminating and mitigating any impact from retained assets and liabilities.
4. Fully transitioning HPL systems, facilities, and books/records to AEP.

Again, thank you for your effort - and if I have inadvertently missed anyone please pass along my appreciation to them as well. We will be hosting a lunch for the Enron/HPL employees who worked on the transaction on the 15th of June at 12:00 in the Imperial Ballroom at the Hyatt Regency Hotel. Please attend if your schedule permits.

Regards,
Brian