Enron Corp and Subsidiaries Consolidated Income Statement In millions except

Enron Corp. and Subsidiaries Consolidated Income Statement (In millions, except per share amounts) Revenues Natural gas and other products Electricity Metals Other Total revenues Costs and Expenses Cost of gas, electricity, metals and other products Operating expenses Depreciation, depletion and amortization Taxes, other than income taxes Impairment of long-lived assets Total costs and expenses Operating Income Other Income and Deductions Equity in earnings of unconsolidated equity affiliates Gains on sales of non-merchant assets Gains on the issuance of stock by TNPC, Inc. Interest income Other income, net Income Before Interest, Minority Interests and Income Taxes Interest and related charges, net Dividends on company-obligated preferred securities of subsidiaries Minority interests Income tax expense Net income before cumulative effect of accounting changes Cumulative effect of accounting changes, net of tax Net Income Preferred stock dividends Earnings on Common Stock Earnings Per Share of Common Stock Basic Before cumulative effect of accounting changes Cumulative effect of accounting changes Basic earnings per share Diluted Before cumulative effect of accounting changes Cumulative effect of accounting changes Diluted earnings per share Average Number of Common Shares Used in Computation Basic Diluted 2000 $ 50,500 33,823 9,234 7,232 100,789 Year ended December 31, 1999 $19,536 15,238 5,338 40,112 1998 $13,276 13,939 4,045 31,260 94,517 3,184 855 280 98,836 1,953 34,761 3,045 870 193 441 39,310 802 26,381 2,473 827 201 29,882 1,378 87 146 121 212 (37) 2,482 838 77 154 434 979 979 83 896 309 541 162 181 1,995 656 76 135 104 1,024 (131) 893 66 827 97 56 88 (37) 1,582 550 77 77 175 703 703 17 686 $ $ $ $ $ $ $ 1.22 1.22 1.12 1.12 736 814 1.36 (0.19) $ 1.17 1.27 (0.17) $ 1.10 705 769 $ $ $ $ $ $ 1.07 1.07 1.01 1.01 642 695 Enron Corp. and Subsidiaries Consolidated Statement of Comprehensive Income (In millions) Net Income Other comprehensive income: Foreign currency translation adjustment and other Total Comprehensive Income 2000 979 (307) 672 Year ended December 31, 1999 $ 893 (579) $ 314 1998 $ 703 (14) $ 689 ENRON ANNUAL REPORT 2000 $ $ The accompanying notes are an integral part of these consolidated financial statements. 31 Enron Corp. and Subsidiaries Consolidated Balance Sheet December 31, (In millions, except shares) ASSETS Current Assets Cash and cash equivalents Trade receivables (net of allowance for doubtful accounts of $133 and $40, respectively) Other receivables Assets from price risk management activities Inventories Deposits Other Total current assets Investments and Other Assets Investments in and advances to unconsolidated equity affiliates Assets from price risk management activities Goodwill Other Total investments and other assets Property, Plant and Equipment, at cost Natural gas transmission Electric generation and distribution Fiber-optic network and equipment Construction in progress Other Less accumulated depreciation, depletion and amortization Property, plant and equipment, net Total Assets The accompanying notes are an integral part of these consolidated financial statements. 2000 1999 $ 1,374 10,396 1,874 12,018 953 2,433 1,333 30,381 $ 288 3,030 518 2,205 598 81 535 7,255 5,294 8,988 3,638 5,459 23,379 5,036 2,929 2,799 4,681 15,445 6,916 4,766 839 682 2,256 15,459 3,716 11,743 $65,503 6,948 3,552 379 1,120 1,913 13,912 3,231 10,681 $33,381 32 ENRON ANNUAL REPORT 2000 December 31, 2000 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Accounts payable Liabilities from price risk management activities Short-term debt Customers’ deposits Other Total current liabilities Long-Term Debt Deferred Credits and Other Liabilities Deferred income taxes Liabilities from price risk management activities Other Total deferred credits and other liabilities Commitments and Contingencies (Notes 13, 14 and 15) Minority Interests Company-Obligated Preferred Securities of Subsidiaries Shareholders’ Equity Second preferred stock, cumulative, no par value, 1,370,000 shares authorized, 1,240,933 shares and 1,296,184 shares issued, respectively Mandatorily Convertible Junior Preferred Stock, Series B, no par value, 250,000 shares issued Common stock, no par value, 1,200,000,000 shares authorized, 752,205,112 shares and 716,865,081 shares issued, respectively Retained earnings Accumulated other comprehensive income Common stock held in treasury, 577,066 shares and 1,337,714 shares, respectively Restricted stock and other Total shareholders’ equity Total Liabilities and Shareholders’ Equity 2,414 904 2,430 1,000 1999 $ 9,777 10,495 1,679 4,277 2,178 28,406 8,550 $ 2,154 1,836 1,001 44 1,724 6,759 7,151 1,644 9,423 2,692 13,759 1,894 2,990 1,587 6,471 124 1,000 8,348 3,226 (1,048) (32) (148) 11,470 $65,503 130 1,000 6,637 2,698 (741) (49) (105) 9,570 $33,381 33 ENRON ANNUAL REPORT 2000 Enron Corp. and Subsidiaries Consolidated Statement of Cash Flows (In millions) Cash Flows From Operating Activities Reconciliation of net income to net cash provided by operating activities Net income Cumulative effect of accounting changes Depreciation, depletion and amortization Impairment of long-lived assets (including equity investments) Deferred income taxes Gains on sales of non-merchant assets Changes in components of working capital Net assets from price risk management activities Merchant assets and investments: Realized gains on sales Proceeds from sales Additions and unrealized gains Other operating activities Net Cash Provided by Operating Activities Cash Flows From Investing Activities Capital expenditures Equity investments Proceeds from sales of non-merchant assets Acquisition of subsidiary stock Business acquisitions, net of cash acquired (see Note 2) Other investing activities Net Cash Used in Investing Activities Cash Flows From Financing Activities Issuance of long-term debt Repayment of long-term debt Net increase (decrease) in short-term borrowings Net issuance (redemption) of company-obligated preferred securities of subsidiaries Issuance of common stock Issuance of subsidiary equity Dividends paid Net disposition of treasury stock Other financing activities Net Cash Provided by Financing Activities Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year Changes in Components of Working Capital Receivables Inventories Payables Other Total The accompanying notes are an integral part of these consolidated financial statements. 2000 Year ended December 31, 1999 1998 $ 979 855 326 207 (146) 1,769 (763) (104) 1,838 (1,295) 1,113 4,779 $ 893 131 870 441 21 (541) (1,000) (395) (756) 2,217 (827) 174 1,228 $ 703 827 87 (82) (233) 350 (628) 1,434 (721) (97) 1,640 (2,381) (933) 494 (485) (777) (182) (4,264) (2,363) (722) 294 (311) (405) (3,507) (1,905) (1,659) 239 (180) (104) (356) (3,965) 3,994 (2,337) (1,595) (96) 307 500 (523) 327 (6) 571 1,086 288 $ 1,374 $(8,203) 1,336 7,167 1,469 $ 1,769 1,776 (1,837) 1,565 852 568 (467) 139 (140) 2,456 177 111 288 1,903 (870) (158) 8 867 828 (414) 13 89 2,266 (59) 170 111 $ $ $ (662) (133) (246) 41 $(1,000) $(1,055) (372) 433 761 $ (233) 34 ENRON ANNUAL REPORT 2000