=============
Page 1 of 1
=============

Phillip Lord To: Kevin Hannon/Enron Communications@Enron Communications
03/12/2001 12:10 AM cc:
  Subject: Revised Plan II

EXH009-00871

Kevin, we have taken a long look at the suggested changes and I think in the absolute best case (before
considering the impact of a structured transaction to reduce depreciation) we could cut out about $170
million. This amount is based on some pretty aggressive assumptions including stretching depreciable
lives on equipment from five to ten years, transferring all the suggested functions to Corp. and receiving
only $5 million in chargebacks (including Networks charge), and transferring all computer equipment and
furniture and fixtures to Networks and Corp., respectively. It also assumes Kelly's group consists of only 7
people, whereas she has 30 in the budget (10 for Mends, 20 for PR) and that we cut our bonus accrual in
half (my personal favorite).

Attached is a rough schedule outlining where the money comes from. I'll get something more presentable
to you tomorrow that compares Revised Plan I to Revised Plan II. Let me know if you have any questions.

Phillip

  ~k7
Savings.xls

GOVERNMENT
EXHIBIT
  3044
  Crim. No. H-04-25 (S-2)