Thanks to all of you, Enron North America has had an outstanding year in 
2000.  Some of the more notable accomplishments include:
a) 100% plus increase in EBIT from 1999 actuals to 2000 forecast;
b) significant rationalization of the balance sheet including the sale of the 
(i) Wind River/Powder River gathering assets, (ii) East Coast Power 
generating assets, (iii) HPL and (iv) five of the six Eastern Peakers;
c) ENA is the leading energy merchant by a factor of two;
d) physical electricity volume grew by 34% YTD 1999 to YTD 2000 forecast;
e) natural gas volumes grew by 82% YTD 1999 to YTD 2000 forecast;
f) 500% growth in daily transactions from November 1999 to November 2000 due 
to the highly successful Enron OnLine distribution channel; and
g) ENA reaching its 25% ROCE target.

These are truly outstanding accomplishments and our expectations for growth 
and opportunity in Enron North America for 2001 are consistent with that 
success.  In order to reach these goals, we felt it necessary to re-align a 
number of our organizations. A number of these changes are completed.  The 
goals of such re-alignment include:
a) increase overall productivity with the goal to ensure that every employee 
is in a position to contribute regardless of skill set;
b) increase overall market coverage, deal flow and information generation 
with the goal to increase bid/offer income, increase the velocity of deal 
flow, improve customer coverage and promote quality information transfer to 
our trading organization;
c) increase deal quality and earnings quality with the goal to (i) allocate 
our resources towards the best transactions and (ii) significantly increase 
our &mid-market8 originated transactions in our portfolio;
d) promote real time decision making and a closer tie between our trading and 
origination (mid-market and structured) organizations in order to better 
align those functions to reduce the amount of un-productive internal focus;
e) increase the overall velocity of the capital being utilized consistent 
with our goal of a 25% plus return on capital employed; and
f) identify and recognize a host of new leaders in the organization that are 
critical to meeting our goals next year.

With these objectives in mind, patterned after the successful business models 
in Calgary and Portland, effective immediately the following changes are 
being implemented:
a) East Power ) a single East Power Team incorporating trading, mid-market 
and origination will be formed under the co-leadership of Kevin Presto and 
Janet Dietrich who will report to the Enron Americas - Office of the Chairman 
(EA OOC).  This team will have one income statement, one book and a joint 
accountability. However, a clear delineation of responsibilities inside these 
teams will continue to exist in which the trading organization will manage 
the risk, income statement and product development aspects of the 
partnership. The originators will have the primary responsibility to generate 
origination income, provide coverage, deal flow, lead strategy formulation, 
provide information and generate strategic positions.  Overall, the team will 
be rewarded based upon increasing the value of the book, meeting 
coverage/deal flow targets and meeting its strategic/growth goals in the 
Eastern power markets. The team will be responsible for covering the IOU,s, 
muni,s/co-ops, industrials and IPP,s and will utilize all ENA,s product 
capabilities including the power commodity, assets and capital. The team will 
further be broken down into several key strategic regions and business units 
including: 
  (i) ERCOT ) managed by Doug Gilbert Smith and Bruce Sukaly;
  (ii) NE ) managed by Dana Davis and Jeff Ader;
  (iii) Midwest ) managed by Fletch Sturm and Ed Baughman;
  (iv) SE ) managed by Rogers Herndon and Ozzie Pagan;
  (v) East Power Development ) managed by Ben Jacoby;
  (vi) East Power Structuring  - managed by Bernie Aucoin; and
  (vii) East Power Fundamentals and the &Genco8 ) managed by Lloyd Will
   
b) West Power ) there will be no changes to the Portland office which is 
managed by Tim Belden and Chris Calger .  Both Tim and Chris will continue to 
report to the EA OOC.
c) Canada and Mexico ) there will be no changes to the Canadian or Mexican 
offices which are managed by Rob Milnthorp and Max Yzaguirre respectively.  
Both Rob and Max will continue to report to the EA OOC.
d) U.S. Natural Gas ) there are several changes anticipated in this business 
consistent with the goals and objectives described above. The changes 
primarily affect the East, Central, West and Texas gas regions. Each region 
will consist of a single gas team incorporating trading, mid-market and 
origination. Each team will have one income statement, one book and a joint 
accountability. However, a clear delineation of responsibilities inside these 
teams will continue to exist in which the trading organization will manage 
the risk, income statement and product development aspects of the 
partnership. The originators will have the primary responsibility to generate 
origination income, provide coverage, deal flow, lead strategy formulation, 
provide information and generate strategic positions. Overall, the team will 
be rewarded based upon increasing the value of the book, meeting 
coverage/deal flow targets and meeting its strategic/growth goals in the 
Eastern, Western, Central and Texas gas markets.  The team will be 
responsible for covering the LDC,s, muni,s/co-ops, industrials, IOU,s, IPP,s 
and the producers.  There will be an increasing focus on the upstream side of 
the business including the producers, transporters and storage providers in 
addition to market area opportunities. The team will utilize all of ENA,s 
product capabilities including the gas commodity, assets and capital. Each of 
these groups will report directly to the EA OOC;
East Gas ) a single East Gas Team incorporating trading, mid-market and 
origination will be formed under the co-leadership of Scott Neal and Frank 
Vickers who will be returning from Portland to join this team.  
West Gas  ) in a similar manner, a West Gas Team will be formed co-managed by 
Phillip Allen and Barry Tycholiz, who will be joining us in Houston from the 
Canadian team. The Denver office under Mark Whitt will be integrated under 
this team.
Central Gas )  in a similar manner, a Central Gas Team will be formed 
co-managed by Hunter Shively and Laura Luce. The Chicago office will be 
integrated into this team.
Texas Gas ) the Texas Gas Team will be managed by Tom Martin. This team will 
continue to manage the gas trading business around HPL until the pending sale 
is concluded in Q2 2001.  After the sale of HPL, this team will build a Texas 
gas business without ownership of the HPL assets.  
Financial ) this group will continue to be managed by John Arnold with no 
significant changes.
Derivatives ) this group, lead by Fred Lagrasta, will offer derivative and 
financial mid-market products and services to the natural gas market 
specifically targeting CFO,s and treasury departments.  Fred will continue to 
maintain certain existing mid-market accounts with a number of producer and 
industrial accounts where relationships are well formed. Otherwise, 
mid-market coverage will gravitate to the regions. The New York office gas 
marketing efforts will continue to be managed by Fred.
Upstream Products ) this group, lead by Jean Mrha, will develop several 
distinct product offerings for the upstream segment of the gas market.  This 
group will develop and market the product in conjunction with the regions. 
This is consistent with our desire to have a broader product offering and 
greater market penetration in the upstream segment.  These products include 
producer outsourcing, similar to our successful Petro-Canada and Suncor 
relationships in Canada, physical storage re-engineering, compressor 
services, wellhead liquidity products and offshore asset and capital 
products.  In addition, Jean will manage our Bridgeline joint venture with 
Texaco.  
Gas Structuring ) this group will be lead by Ed McMichael, reporting to Frank 
Vickers, will provide structuring and deal support to all the gas teams.
Gas Fundamentals ) this group will be lead by Chris Gaskill, reporting to 
Hunter Shively, will provide fundamentals to all the gas teams.    

Julie Gomez will continue to support the gas floor through several identified 
projects including long-term supply/demand analysis and, natural gas 
transportation capacity trading opportunities.
 
There is an expectation of some customer overlap between the gas and power 
groups; for example, the combination utilities and the IPP,s.  The teams will 
coordinate with regard to the combination utilities like Con. Edison or 
PG&E.  With regard to the IPP,s, to the extent that the product offering 
involves an underlying power position, the power teams will manage. We have 
asked Janet Dietrich to coordinate such overlaps between the two 
organizations in Houston. 

e) Technical/Restructuring - In the effort to consolidate and centralize our 
technical resources (engineering, development, operations, pipeline) to 
ensure that this skill base is available to all ENA groups and utilized 
productively across the organization, Brian Redmond will form and manage the 
Technical Services Group.  This group will manage ENA,s technical risks and 
will provide, on a cost basis, technical services for the entire ENA 
organization. This group will manage the interface with EE&CC and OEC.  In 
addition, the Restructuring Group, currently managed by Dick Lydecker, will 
report to Brian Redmond.  This group is currently monetizing a large portion 
of the merchant investment portfolio given our current strategies.  This 
group will have continuing responsibility to manage troubled commodity and 
capital transactions that need considerable time and attention to manage risk 
and monetize. 

In addition to these responsibilities, Brian will manage the pending sale and 
transition of the HPL asset over the next couple quarters as regulatory and 
securities approvals are obtained in order to complete the sale.  Brian will 
report to the EA OOC.

f) Principal Investing  )  with the departure of Jeff Donahue to new 
opportunities in EBS, ENA,s venture capital function will be managed by 
Michael L. Miller.  This group makes small investments in distributed 
generation, power quality and technology companies that can benefit from 
Enron,s distribution channels and expertise.  Michael will report to the EA 
OOC.

g) Corporate Development ) Tim Detmering will assume the corporate 
development responsibilities for ENA as Jeff transitions to his new role and 
will report to the EA OOC.

h) Generation Investments ) there will be no changes to this group managed by 
Dave Duran. Dave will continue to report to the EA OOC.

i) Energy Capital Resources ) there will be no changes to this group 
currently lead by C. John Thompson and Scott Josey.  John and Scott will 
continue to report to the EA OOC.

As a final note in the interest of keeping things simple, Enron Americas will 
have two operating divisions  - Enron North America and Enron South America.  
As a result, we will continue to conduct business under these two operating 
companies; therefore, eliminating the need to change legal entities et al.  
If you are currently a commercial employee of ENA or ESA you will continue to 
conduct business in that company. 

We look forward to another exciting year in the North American energy 
market.  This is certainly a company unrivaled in the marketplace with the 
most talented employees.  The opportunities are endless.  We wish you and 
your family a very happy and safe holiday season.