Subject: RE: EOTT Conference Call - Enron related questions
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked], [email-masked], [email-masked]
Date: Thu, 8 Nov 2001 04:28:25 -0800 (PST)

Comments below.

 -----Original Message-----
From: 	Mayeux, Gay  
Sent:	Wednesday, November 07, 2001 10:08 PM
To:	Hayslett, Rod; Eickenroht, Robert; Causey, Richard; Butts, Bob
Cc:	Horton, Stanley
Subject:	EOTT Conference Call - Enron related questions

On Tuesday we will have an EOTT conference call with investors to discuss EOTT's third quarter earnings.  I am concerned about some questions that may be asked relating to Enron.  Here is my stab at answering certain questions.  Please review and let me have your comments as soon as you can.  I would like to distribute on Friday the complete conference call script and Q&A that will include these answers.  Thanks

1.  Why did Enron sell its stake in EOTT?
Enron decided in September of 2001 to monetize its ownership in EOTT (other than its 2% general partner ownership) which consisted of 3.3 million common units, 7 million subordinated units and $9.3 million additional partnership units. The monetization was recognized as a sale for book purposes and a financing for tax purposes.  Enron retained voting and dispositive power with respect to these interest.  Enron, being deemed a control person, filed the appropriate SEC documents with repect to this transaction.

2.   Does Enron still have an economic reason to care about the price of EOTT stock?
As the general partner, Enron has a fiduciary responsiblity to act in the best interest of the unitholders of the partnership.    [I like your answer for simplicity sake, however in the interest of full disclosure here's more:  the pricing of the transaction was based upon a floor price with a final price for the units to be established at the conversion date of the sub units and the apis.    So besides the fiduciary responsibility, there is the fact that the final pricing on the deal has not occurred yet.]

3.  What is Enron's ownership of EOTT?
From a voting and dispositive power standpoint, it is 39%.

4.  Is the general partnership for sale? 
You will need to ask Enron that question.
[Enron filed a 13D on September 6, 2001, stating the following:
"It is Enron's intention to review the disposition of and to possibly dispose of all or a portion of its direct and indirect interest in the partnerhip (including the common units and its interest in the general partner)."]

5.  What impact does Enron's current situation have on EOTT?
[Two areas need to be addressed here - the tolling agreement and EOTT's ability to obtain three party bank financing.  I have EOTT to address these two questions.]

  

_________________________
Gay Mayeux
Vice President, Investor Relations
Enron Corp.
1400 Smith Street, EB 4931a
Houston, Texas 77002

Phone:  713-853-9905
Cell:      713-416-8821
Fax:      713-646-3002
email:    [email-masked]