============= Page 1 of 4 ============= Draft - CONFIDENTIAL - as of I 023/2001 8:15 AM ENRON Corp Investor Concerns Conference Call Information Time: 8:30 am (Central) 9:30 am (Eastern) Dial In (719) 457-2633 Website: www.enron.com: Click - Investor Relations Replay: (719) 457.0820 Code 627675 (available until midnight on October 30) Introductions Ken Lay, Chairman and Chief Executive Officer Mark Frevert, Vice Chairman Greg Whalley, President & Chief Operating Officer Rick Causey, Executive VP and Chief Accounting Officer Andy Fastow, Executive VP and CFO Steve Kean, Executive VP and Chief of Staff Mark Koenig, Executive VP, Investor Relations Ben GIisan, Managing Director and Treasurer 1 Good morning, this is Ken Lay. Thank you for joining us on today's investor call. We decided yesterday to * dsscal to address questions and concerns raised over the last few days. We aredisappointed with our stock price, but our businesses are performing very well, and we are conducting business as usual. We recognize, however, that these are uncertain times in the capital markets, and we will continue to hold additional invest„ocalls as needed to proactively communicate essential information to ours arc lders. There has been a lot of recent attention to transactions n ously entered into with LJM, a private equity parme tp. Let me reiterate a couple of things: • We c Early heard investor concerns earlier this year, and Andy Fastow, Enron's CFO, ceased all affiliations with LJM; and, as reported in our second quarter I0Q filing, LJM is no longer a related party. • During the third quarter, we took additional steps and terminated the finance arrangements with LJM. CONFIDENTIAL TREATMENT REQUESTED By XENNETH LAUNDER FOIA XH042-00204 GOVERNMENT EXHIBIT 3687 Crim. No. H-04-25 (S-2) ============= Page 2 of 4 ============= SEC Inquiry We announced yesterday that we received a request for information from the SEC regarding certain related party transactions. As we said yesterday, . • We welcome this request, and the opportunity it provides us to put these matters to rest; • We are cooperating fully with the SEC; and • We believe everything that needed to be considered and done in connection with thesetraEpch was cow, and do f1~ D ra if,*V .< v~ b ok I A li; mt~ As you can a we t sa mu . However, a number of other, unrelated questions have been raised, and we will do our best to address those here. Equity Reduction Our third quarter earnings conference call last Tuesday included information associated with a 51.2 billion reduction in shareholders' equity that would ordinarily have been disclosed in our 10Q, to be filed in mid November. There have been a number of questions surrounding the equity adjustment since the call, so we want to take the opportunity to clearly spell out the basis of the adjustment. A structured finance vehicle, in which LIM was an investor, was established to mitigate volatility associated with certain of Enron's merchant investments, including investments in The Now Power Company, technology and other investments of Enron. In conjunction with the recent termination of these vehicles, Enron recorded a S 1.2 billion reduction in shareholders' equity and a corresponding reduction in notes receivables. These adjustments were the result of Enron's termination of obligations to deliver n~siares in future periods. Although this obligation equated to 62 million shares ands reflected in our fully diluted shares outstanding, the obligation to issue shares in tFte future no longer exist and, as such, the shares will no longer be factored into our EPS calculation. The1OQ will reflect the final, proper reduction of 62 million shares, as calculated using Enron's actual share prices during the third quarter.. If you have additional questions on these adjustments, I will address them at the end of the call. Now I will turn the discussion over to our CFO, Andy F ow to di our current liquidity position and t rating. T sit J,t d •t LialridltvlCredit Rating ~,j~~, c' We have received questions recently about both our liquidity and the outlook for the Enron Corp. credit. CONFIDENTIAL TREATMENT UNDER FOIA REQUESTED BY KENNE'T'H LAY 042-00205 ============= Page 3 of 4 ============= Regarding liquidity, Enron expects to have sufficient liquidity to conduct normal operations and meet all of our projected capital requirements. • We have committed credit facilities with domestic and foreign banks, which provide for an aggregate of $3.35 billion in credit These bank lines are undrawn but act as the backstop for the company's issuance of commercial paper. • Additionally on a consistent basis, the company utilizes uncommitted lines in excess of $500 million. Currently, our commercial paper balance is approximately $1.95 billion (net, after consideration of cash balances on deposit) resulting in approximately $1.5 billion of liquidity available from committed sources today. • . We continue to issue commercial paper and we have not drawn on our bank revolvers. • Additionally, we have not experienced a material increase in our funded CP balances over the past two weeks. • Our policy of maintaining liquidity levels under committed lines that are a multiple of our projected cash requirements remains in effect. In addition to the $1.5 billion in unused commitments, we t~peC-~'hwiMied rrr- o 6 ~ 8l1ii~/ to receive it tx ,, a lssa~+i.ww~y-$ 90 million in proceeds from asset sales discussed in the third quarter conference call. These proceeds should be realized in the fourth quarter, perhaps as soon as within thirty days. I would like to remind everyone that we have entered into a definitive agreement to sell Portland General to Northwest Natural Gas for approximately $1.9 billion and the assumption of $1.1 billion in Portland General debt. Subject to normal regulatory review, the transaction is scheduled to close by the end of 2002. We have spoken to our key banks and, based on these conversations, we expect to have their continued support. Let me also address the credit ratings: • Both Standard & Poor's and Fitch have confirmed our BBB+ rating. • Moody's has not downgraded Enron, but they placed us on review. We are currently rated Baal at Moody's. Immediately following last week's conference call, we were notified, and Moody's announced, that they have placed us on review. We are now actively working with them to address specific questions in order to facilitate their review. We understand that our credit rating is critical to both the capital markets as well as our counterparties. Core Business As we discussed in the earnings conference call last week, our third quarter ree ~..~ operating results were outstanding, with a 26% increase in recurring earnin (65% increase in physical volumes. These results reflect the superb performance o our core CONFIDENTIAL TREATMENT UNDER FOIA REQUESTED BY KENNETH LAY