Presentation on theme: "Confidential Transaction Support Hub Prepared for EDS March 07, 2001."— Presentation transcript:
Confidential Transaction Support Hub Prepared for EDS March 07, 2001
Confidential 2 EnronOnline is the worlds largest e-commerce website. Total Life to Date Transactions > 655,000Total Life to Date Transactions > 655,000 Average Daily Transactions > 3,700Average Daily Transactions > 3,700 Life to Date Notional Value of Transactions > $400 billionLife to Date Notional Value of Transactions > $400 billion Daily Notional Value Approximately $2.6 billionDaily Notional Value Approximately $2.6 billion Average number of Logged in Users 3,500Average number of Logged in Users 3,500 EnronOnline EnronOnline
Confidential 3 Quarterly Transactions via EnronOnline
Confidential 5 Markets Available on EnronOnline Commodity Types Argentine Natural GasArgentine Natural Gas Asian Crude & ProductsAsian Crude & Products Asian MetalsAsian Metals Australian & Japanese WeatherAustralian & Japanese Weather Australian PowerAustralian Power Austrian PowerAustrian Power BandwidthBandwidth Belgian Natural GasBelgian Natural Gas Canadian Natural GasCanadian Natural Gas Canadian PowerCanadian Power Credit DerivativesCredit Derivatives Dutch PowerDutch Power Dutch AluminumDutch Aluminum EmissionsEmissions Sea FreightSea Freight Spanish PowerSpanish Power Swiss PowerSwiss Power UK MetalsUK Metals UK Natural GasUK Natural Gas UK PowerUK Power US Gas Pipeline CapacityUS Gas Pipeline Capacity US LumberUS Lumber US MetalsUS Metals US Natural GasUS Natural Gas US PowerUS Power US SteelUS Steel US WeatherUS Weather European CoalEuropean Coal European WeatherEuropean Weather German PowerGerman Power International CoalInternational Coal Japanese AluminumJapanese Aluminum LME Metals ContractsLME Metals Contracts LPGLPG Nordic PowerNordic Power Oil & Refined ProductsOil & Refined Products PetrochemicalsPetrochemicals PlasticsPlastics Pulp & PaperPulp & Paper
Confidential 7 Transaction Support Hub Transaction Support Hub Hubs Mission: To facilitate the Straight Through Processing (STP) of energy and other commodity transactions, beginning with EnronOnline generated transactions.
Confidential 8 Value Proposition Reduce errorsReduce errors Elimination of key-strokes reduces the risk of expensive data input errors.Elimination of key-strokes reduces the risk of expensive data input errors. Catching just one error pays for the entire projectCatching just one error pays for the entire project Companies devote substantial contingencies in their budgets to account for errorsCompanies devote substantial contingencies in their budgets to account for errors Efficiency (Time Saving)Efficiency (Time Saving) Customers have large staffs (mid-office, back-office, settlements) devoted to the input and checking of trade data.Customers have large staffs (mid-office, back-office, settlements) devoted to the input and checking of trade data. Real time trade data enables better controlsReal time trade data enables better controls Price riskPrice risk Credit riskCredit risk Enables real time position managementEnables real time position management
Confidential 9 Proposed Solution Transaction Support Hub, along with Transaction Data Feeds will allow clients to: Upload transaction data information directly into existing back-office systemsUpload transaction data information directly into existing back-office systems Eliminate redundant data entry and data entry errors.Eliminate redundant data entry and data entry errors.
Confidential 10 Target Market EnronOnline has active traders in its Customer base in need of these type of services. * This is not the total number of EnronOnlines registered customers. It only represents approximate number of target customers
Confidential Upside for EDS/ Why Partner? We believe that this deal enables the Hub operator to gain substantial first mover advantage in the race to digitize energy commerce and provide processing services to the industry.
Confidential 12 What will Partners bring ? Partners will bring: Experience and InfrastructureExperience and Infrastructure Neutrality to customers interestsNeutrality to customers interests Strong relationships with the target customer groupStrong relationships with the target customer group Sales process will be faster and more credibleSales process will be faster and more credible In many cases, you are already familiar with customers systemsIn many cases, you are already familiar with customers systems
Confidential 13 EnronOnline's Advantages EnronOnline is uniquely positioned, by a wide margin, to offer this service: EnronOnline captures 40% of the daily transactions in the Wholesale Energy Market.EnronOnline captures 40% of the daily transactions in the Wholesale Energy Market. EnronOnline generates between $2-4B transaction value EACH dayEnronOnline generates between $2-4B transaction value EACH day EnronOnline customers include all the major industry players of a large customer baseEnronOnline customers include all the major industry players of a large customer base EnronOnline offers a large diversity of commodities.EnronOnline offers a large diversity of commodities.
Confidential 14 Why Partner with EnronOnline? Substantial first mover advantageSubstantial first mover advantage Exclusive right to distribute EnronOnline transaction dataExclusive right to distribute EnronOnline transaction data EnronOnlines transactions and brand are the cornerstones for success in this space. Creates a compelling proposition for other exchanges to participate.EnronOnlines transactions and brand are the cornerstones for success in this space. Creates a compelling proposition for other exchanges to participate. Next generation business opportunities greatly increasedNext generation business opportunities greatly increased Ongoing revenue channel via TDFOngoing revenue channel via TDF Significant integration revenuesSignificant integration revenues
Confidential 16 Assets of LLC: Five year exclusive license to EnronOnline transaction dataFive year exclusive license to EnronOnline transaction data API and connectivity to EnronOnlineAPI and connectivity to EnronOnline Options on next generation servicesOptions on next generation services Five year support and maintenance contract with EnronOnlineFive year support and maintenance contract with EnronOnline Utilization of the EnronOnline brandUtilization of the EnronOnline brand Enron owns 100% of LLC
Confidential 17 Divesture Rationale: Third-party neutralityThird-party neutrality Encourage other platforms to participateEncourage other platforms to participateExpectations: Significant valueSignificant value Enron retains portion of revenues in addition to equityEnron retains portion of revenues in addition to equity New Investor/ Operator Enron Expected Equity Structure EDS Buys Controlling Interest of LLC
Confidential 18 You Considerations while valuing LLC Revenue sources to Hub Co: Revenues from customers for servicesRevenues from customers for services Revenues from PlatformsRevenues from Platforms Revenues from System IntegratorsRevenues from System Integrators Next Generation Services MUST be considered (ie. Processing)Next Generation Services MUST be considered (ie. Processing) Revenue source to You: Revenues from System Integration work (significant)Revenues from System Integration work (significant) LLC $$$
Confidential 19TimelineSTAGES 1. Concept Introduction 2. Solicit License Fee Structure and Bids 3. Selection of System Integrators 4. Product Testing 5. Implementation 6. Commercial Roll-Out DATES* February 5th to 23rd February 26th to March 16th March 23rd April 2nd to 6th April 9th to 30th May 1st *Dates are subject to change