============= Page 1 of 3 ============= DRAFT July 18`h- 1:30pm ENRON REPORTS SECOND QUARTER EARNINGS OF $0 34 PER DILUTED SHARE FOR IMMEDIATE RELEASE: Monday, July 24, 2000 HOUSTON -- Enron Corp. announced today a 26 percent increase in earnings to $0.34 per'diluted share for the second quarter of 2000. Net income increased 30 percent to $289 million during the quarter. Enron also reported a 75 percent increase in revenues to $16.9 billion for the second quarter. "Enron has completed another excellent quarter," said Kenneth L Lay, chairman and CEO of Enron. "Customers are increasingly relying on Enron to serve their energy needs, as evidenced by an almost 40 percent increase in wholesale energy volumes. EnronOnline, our web-based transaction system, registered a 85% increase in volume and a 92% increase in transactions over the first quarter Profitability of Enron Energy Services continued to escalate, and new contracts totaled $3.9 billion. Also, during the quarter, Enron Broadband executed an exclusive, 20-year, first-of-its-kind contract with Blockbuster to stream on-demand movies " PERFORMANCE SUMMARY Enron's businesses are reported as Wholesale Energy Operations and Services, Retail Energy Services, Transportation and Distribution, and Broadband Services. Wholesale Energy Operations and Services. Enron's wholesale group consists of two primary lines of business: Commodity Sales and Services (marketing energy commodities and services and managing the associated contract portfolios) and Assets and Investments (investing in, developing, constructing and operating energy-related and other assets)._ Reflecting accelerating strength in Enron's wholesale energy commodity business, income before interest, minority interests and taxes (IBIT) reported by the wholesale group increased 17 percent in the second quarter to $418 million. Earnings reported by the Commodity, Sales and Services business increased to $436 million in the second quarter of 1999. Enron continued tremendous volume growth, as physical energy deliveries totaled 46.7 trillion British thermal unit equivalents per day (TBtue/d) compared to 33.7 TBtue/d in the second quarter of 1999. Enron's liquidity, speed of execution, and access to assets allow Enron to uniquely package products and services for wholesale customers. The large gains in natural gas and power volumes reflect significant increases in all regions where Enron operates. Natural gas volumes increased to 26.6 TBtue/d in the second quarter of 2000 compared to 14.2 TBtue/d in the same period last year. The substantial increase in volumes was ECi000731939 EXH009-00521 GOVERNMENT EXHIBIT 2996 Crim. No. H-04-25 (S-2) ============= Page 2 of 3 ============= driven by a 77 percent increase in North America. In addition, volumes in Enron's European operation nearly tripled, primarily related to increased activity in the United Kingdom. Physical power volumes were up 42 percent in the second quarter to 137 million megawatt hours, reflecting a 31 percent increase in Enron's North American power business Reflecting more than a ten fold expansion, Enron's power activity on the European continent increased substantially to 12 million megawatt hours Enron is experiencing a rapid increase in the utilization of its very successful electronic platform, EnronOnline. Currently, almost 60% of Enron's wholesale transactions are conducted through EnronOnline More than 800 products are now offered online and, since its launch in November 1999, over 197,000 [update] transactions have been executed, representing over $94 billion [update] in gross transaction value. IBIT attributable to Energy Assets and Investments declined in the second quarter to $43 million due to significant decreases in sales of interests in power projects and in the value of the merchant investment portfolio Retail Energy Services Enron Energy Services reported IBIT of $24 million in the second quarter compared to a $26 million loss in the same penod last year. Revenues more than doubled to $807 million Enron Energy Services continues to sustain new, higher levels of contracting, as evidenced by $3.9 billion executed in the second quarter. Contracting activity in the quarter includes a $ I billion, I0-year agreement with Quebecor, covering more than 65 facilities in 28 states. Enron Energy Services is firmly on track to achieve the expected full year contracting target of $16 billion. Transportation and Distribution: This group, which includes Enron's Gas Pipeline Group and Portland General Electric, reported a strong second quarter IBIT of $139 million compared to $128 million a year ago The Gas Pipeline Group, which provides stable earnings and cashflow, continues to provide innovative services to its customers, such as the introduction of pipeline capacity auctions onto the EnronOnline platform during the second quarter. Portland General reported IBIT of $62 million for the quarter, reflecting continued strong operations. The sale of Portland General Electric remains on schedule to close near year-end. Broadband Services: Enron Broadband Services is deploying a global broadband network and providing bandwidth management and content delivery services to wholesale customers, enterprises, application service providers and content providers. Financial results for the quarter included revenues of $151 million and an IBIT loss of $8 million. During the second quarter, Enron Broadband sold a portion of its U.S. dark fiber to balance capacity in key regions across the U.S. Enron's bandwidth intermediation business continues to accelerate. Enron Broadband is actively quoting prices for bandwidth capacity between 28 major cities in the U.S., Europe and Asia and transacting over 75% of its activity off-net, or on third party capacity. During the quarter, Enron ECi000731940 EXH009-00522 ============= Page 3 of 3 ============= executed significant contracts to deliver content services, including an exclusive, 20-year worldwide agreement with Blockbuster to stream on-demand movies. Please see attached tables for additional financial information This press release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Enron believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include the timing and extent of changes in prices for crude oil, natural gas, electricity and interest rates, the timing and success of Enron's efforts to develop international power, pipeline and other infrastructure projects, political developments in foreign countries, the ability to penetrate new retail natural gas and electricity markets, including the energy outsource market, in the United States and Europe, further development of Enron's broadband services network and customer contracting activity, and conditions of the capital markets and equity markets during the periods covered by the forward looking statements ECi000731941 EXH009-00523