9.=09MINORITY INTERESTS

=09Enron consolidates a limited partnership (the Limited Partnership), for =
which the consolidated third party's ownership interest is reflected in min=
ority interests on Enron's balance sheet in the amount of $691 million at S=
eptember 30, 2001. The Limited Partnership assets include a $690 million n=
ote payable from Enron and certain merchant investments, both domestic and =
international. Enron anticipates the receipt of $250 million from the sale=
of one of the Limited Partnership's investments, a local gas distribution =
company in Brazil, upon the closing of the sale which is pending certain re=
gulatory and other approvals. Enron may be required to use the net proceed=
s upon the closing of the sale, or a portion thereof, to repay a portion of=
the note payable. =20

=09The November 12, 2001 downgrade in Enron's senior unsecured debt rating =
to BBB- by Standard & Poor's has caused a ratings event related to the Limi=
ted Partnership. This ratings event started a nine business day period dur=
ing which Enron has the right, until November 26, 2001, to either post an u=
nsecured letter of credit equal to Enron's note payable, repay the note pay=
able with the Limited Partnership investing such proceeds in permitted inve=
stments, or to purchase the investors' interest in the Limited Partnership.=
To the extent that Enron does not satisfy this requirement by November 26=
, 2001, the investors have the right to immediately begin to liquidate the =
Limited Partnership assets. Additionally, as a result of the rating downgr=
ade, the investors, subject to certain actions, are able to accelerate and =
assign the note payable. Consistent with the restructuring plan discussed =
in Note 2, Enron is currently working with the lenders to develop a mutuall=
y acceptable amendment or waiver to the transaction documents in order to a=
void an early Enron payment obligation. =20

=09Either as a result of the restructuring plan discussed in Note 2 or to r=
aise cash to repay Enron's obligation discussed above, Enron may sell the L=
imited Partnership assets for amounts below their carrying values. The net=
proceeds from the sale of such assets can be used to repay Enron's obligat=
ion. Accordingly, Enron may be required to record asset writedowns, possib=
ly as early as the fourth quarter of 2001.

=09It is not possible to predict whether Enron will be able to favorably co=
mplete the actions described above. In the event that Enron fails to pay a=
ny debt obligations when due, including when such obligations may be accele=
rated, or is unable to refinance or obtain a waiver of its obligation, a se=
ries of events would begin which could impact Enron's compliance with the t=
erms of its Revolving Credit Agreements and certain other obligations, incl=
uding bank debt facilities. =20

Louise Kitchen
Chief Operating Officer
Enron Americas
Tel: 713 853 3488
Fax: 713 646 2308