All,

The following are highlights of today's Integration Team meeting:

All areas are on track for a successful legal closing of 2/8/02 and
1st day trading of 2/11/02.

Canada:  Three open issues.
	Parent Guarantee
	Some legal entity issues
	Capital/funding requirements

A work plan is in place for all three issues, but may not be
completed by 2/11/02. Worst case, only a few days delay in start
trading. This has NO IMPACT on day one trading in the U.S.

United States:  No "show stoppers" in U.S to prevent Legal Close or
First Day Trading.  Open issues are:

	Legal:  Status Green. Clients must have a Master Agreement or
Adoption Agreement or General terms and Conditions (GTC) in place
before trading can commence.  Getting agreements in place is slow
process (2 weeks to 2 months).  Legal and Credit Risk are working
hard to approve as many clients as possible from "Energy LLC"
approved list of 166. This impacts the number of clients that can
trade on day one.  Business expectations have been set for day one.

	Business:  Status Green.  No additional issues/concerns from
Louise Kitchen, COO, UBS Warburg Energy LLC.  No additional issues
from CFI, or Pat O'Donnel.

	Credit Risk:  Status Green.  For Day one, traders will not have
access to credit information. Credit Risk will distribute list of
approved clients to traders and traders will have to call for credit
approval.

	Mkt. Risk:  Status Green.  Walter Stuerzinger needs to approve
VAR models.  2/7/02 EBK briefing on VAR is important.

	FCD:  Status Green.  Some open issues surrounding SEC
requirements but they are being addressed.  An expedited approval
process will be used to resolve Day one exposure issues if they occur.

	Operations:  Status green.  Lead-time for templates used for
counterparty approvals is 24 hours.  Lead-time for confirmation
templates is 48 hours.  Impact: "don't make lead-time, don't trade
with this client".  IR/Derivative settlement process not ready yet,
but being worked by Ops/Credit.

	Corp Comm:  Status Green.  WEB site "look and feel" and contents
complete. Need sign off by legal/business (louise Kitchen).  Day one
communications to clients/employees ready.

There will be a conference call on Thurs February 7th at 10:00 EST
where the
"Go"/ "No-Go" decision will be made for the Day 0 "Legal Closing".
Dial in 19-337-0070, PIN 553815

There will be a conf call on Friday, February 8th, at 10:00 EST,
where the
"Go"/ "No-Go" decision will be made for the Day 1 "Commercial
Integration"
on Monday, February, 11th.  Same dial in number/pin


Thanks,
Mark
x6633


 - Status Report02_05_02.xls 

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