Press Release

ENRON ANNOUNCES STRONG THIRD QUARTER RESULTS: $0.27 RECURRING EARNINGS PER SHARE

HOUSTON – Enron Corp. announced today a 33 percent increase in net income to $223 million for the third quarter of 1999, compared to $168 million in the third quarter of 1998. Enron also announced a 13 percent increase in earnings per diluted share to $0.27 for the most recent quarter, compared to $0.24 a year ago. These results exclude the net benefit of nonrecurring items in the third quarter of 1999. Revenues increased to approximately $12 billion for the third quarter of 1999.

“The scale and scope of Enron’s wholesale businesses provide tremendous competitive advantages in the rapidly growing, deregulating energy markets, enabling Enron to consistently achieve strong earnings growth. Our new retail energy network has similar operating advantages and continues to exceed our own expectations both for signing long-term outsourcing contracts and for profitability,” said Kenneth L. Lay, Enron chairman and chief executive officer. “We are extending our network skills to the high bandwidth communications market and are pursuing a market-oriented, low asset approach, patterned after our very successful global energy business.”

Enron’s businesses are reported as Wholesale Energy Operations and Services (including Enron’s communications business), Retail Energy Services and Transportation and Distribution.

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 Energy Assets and Investments (investing in, developing, constructing and operating energy assets).

Income before interest, minority interest and taxes (IBIT) in the wholesale business increased 36 percent in the third quarter of 1999 to $378 million from $277 million a year ago.

Third quarter 1999 earnings in the Commodity Sales and Services business increased to $172 million from $152 million in the third quarter of 1998. Enron continues to have strong market franchises in the worldwide wholesale energy markets. Third quarter 1999 volumes of 33 trillion British thermal unit equivalents (TBtue) per day compare to 34 TBtue per day a year ago. Total natural gas volumes increased almost 19 percent in the third quarter, including increases in every area of Enron’s wholesale operations. Total power volumes for the third quarter of 1999 exceeded both first and second quarter levels, but were down from the unusually high third quarter level last year. The third quarter 1999 volume reduction is primarily attributable to Enron’s North American power business which, in spite of lower volumes, contributed very strong performance. Also, during the third quarter, Enron significantly increased energy deliveries and contracting activity in the U.K., continental Europe and South America. For the first nine months of 1999, Enron increased total physical deliveries of energy commodities 18 percent over the prior year.

Enron’s Energy Assets and Investments business reported $240 million of IBIT in the third quarter of 1999 compared to $160 million in the third quarter of 1998. The recent quarter’s strong results reflect:

• increased operating income from Enron’s worldwide energy assets,

• a significant contribution from Enron’s diverse energy and communications investments relative to a year ago, and

• continued stable revenues from the sale of interests in energy infrastructure assets.

Retail Energy Services: With nationwide commodity and service delivery capabilities and risk management expertise, Enron Energy Services offers energy outsourcing products to business customers throughout the U.S. During the third quarter of 1999, Enron Energy Services entered into contracts representing $2.5 billion of customers’ future expenditures for energy services, or three times the $850 million contracted in the third quarter a year ago. The current quarter’s results include the largest contract signed to date - a more than $1 billion ten-year outsourcing agreement with Owens Corning for total energy management services at 20 major U.S. manufacturing facilities. Enron Energy Services is expected to meet or exceed its target of signing $8 billion of contracts in 1999 for future energy needs of its customers, which will be more than double the value of contracts signed during a very successful 1998.

Enron Energy Services has been building a strong sales and execution team to capture a lead position in the U.S. retail energy market. Third quarter 1999 results were significantly improved over all prior quarters, with a loss before interest and taxes of $18 million compared to a $23 million loss for the same period in 1998. Enron Energy Services’ business plan is firmly on track to make a positive contribution to Enron’s earnings during the fourth quarter of 1999.

Transportation and Distribution: This group includes Enron’s Gas Pipeline Group and Portland General Electric. Transportation and Distribution generated $137 million of IBIT in the third quarter of 1999, compared to $130 million last year. Both businesses provide predictable earnings and cash flow to fuel growth across Enron. The Gas Pipeline Group pursues selective growth opportunities, and two concurrent expansions of Florida Gas Transmission are underway. Portland General continued to steadily increase its customer base to 714,000 in the third quarter of 1999.

Including nonrecurring items, Enron reported a 73 percent increase in third quarter 1999 net income to $290 million, compared to $168 million in the third quarter of 1998. Enron reported third quarter 1999 earnings per diluted share of $0.35, compared to $0.24 last year.

Third quarter 1999 results included a nonrecurring after-tax gain of $345 million, or $0.44 per diluted share, reflecting Enron’s sale of its ownership in Enron Oil & Gas Company. Enron has integrated the remaining exploration and production operations in India and China into its wholesale businesses in those regions.

Also included in the reported results is a nonrecurring, after-tax charge of $278 million, or $0.36 per diluted share, related to Enron’s MTBE asset. With the charge, Enron has adjusted the MTBE asset to its estimated fair value to reflect a reduction in expected future demand for MTBE resulting from material changes in state and federal rules on MTBE content in gasoline. Enron’s remaining investment in the MTBE asset is minimal.

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 political developments in foreign countries, the ability to penetrate new retail natural gas and electricity markets in the United States and Europe, 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, and conditions of the capital markets and equity markets during the periods covered by the forward looking statements.

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Please see attached tables for additional financial information.

For additional information please contact:

Karen Denne

713-853-9757