=============
Page 1 of 3
=============

a

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

UNITED STATES OF AMERICA,
Plaintiff,
V.

PAULA RIEKER,
Defendant.

Cr. No. H-04-192

Exhibit A to Plea Agreement

  The following factual statement by defendant Paula Rieker is submitted to provide
a factual basis for her plea of guilty to one count of insider trading, in violation of 15
U.S.C. §§ 78j and 78ff, and 17 C.F.R. § 240.10b-5, as charged in the above-captioned
Information:

  1. Enron Corp. ("Enron") was an Oregon corporation with its headquarters in
Houston, Texas. Among other businesses, Enron was engaged in the purchase and sale of
natural gas, construction and ownership of pipelines and power facilities, provision of
telecommunication services, and trading in contracts to buy and sell various commodities.
Enron stock was publicly traded on the New York Stock Exchange ("NYSE").

i 2. Beginning in 1998 and continuing through January 2000, I was employed by
Enron as the company's Vice President for Investor Relations. In January 2000, I became
the Managing Director of Investor Relations. In both positions, I reported directly to the
head of Enron's investor relations group. My responsibilities included the compilation
and drafting of earnings releases and internal scripts for conference calls with analysts to
review quarterly financial results. As part of my duties, I periodically worked with
various units of Enron, including Enron Broadband Services ("EBS"), and assisted in the
compilation of EBS and other business unit information for use with investors.

  3. Enron's code of ethics prohibited directors, officers, and employees from
trading in Enron securities based on material, nonpublic information. Specifically, the

FXHnC,1_nn4Qn


=============
Page 2 of 3
=============

a

code of ethics stated in part:

No director, officer, or employee of Enron Corp.... shall, directly or
indirectly, trade in the securities of Enron Corp.... while in the possession
of material non-public information relating to or affecting any such
company, disclose such information to others who may trade, or
recommend the purchase or sale of securities of a company to which such
information relates.

  4. In early 2001, Enron provided "guidance" to financial analysts and investors
regarding the anticipated performance of certain business units, including anticipated .
losses in EBS. On or about January 25, 2001, Enron reported that it expected EBS to lose
approximately $65 million in income before interest and taxes ("IBIT") during 2001.

  5. In its earnings release for the first fiscal quarter of 2001, Enron reported a $35
million IBIT loss for EBS. Enron's second quarter earnings announcement was
scheduled to be released on July 12, 2001.

  6. During Enron's second fiscal quarter of 2001 (the quarter ending June 30,
2001), 1 became aware that EBS was experiencing significant financial problems and was
experiencing losses greater than had been previously disclosed to analysts and investors.
In addition, on or about July 2, 2001, I learned that during the second quarter of 2001
EBS had suffered losses in the first six months of 2001 that exceeded the $65 million
guidance figure for the entire year which had previously been projected by the company.

  7. On or about July 5, 2001, 1 learned that Enron would report in its earnings
release that EBS had lost $102 million during the second quarter, an amount significantly
greater than the total amount of EBS losses that had been forecast for the entire year.

j

  8. On July 5, 2001, shortly after learning that Enron intended to announce these
losses for EBS, I exercised options to purchase 18,380 shares of Enron stock at $15.51
per share. Simultaneously, as part of the same transaction, I directed the sale of that stock
on the open market. My broker subsequently sold the Enron stock on July 5 at $49.77 per
share. The information in my possession at the time I sold this stock was material and
nonpublic. I made the decision to sell my Enron stock on the basis of the information I
had learned regarding EBS.

-2-

EXH063-00491


=============
Page 3 of 3
=============

a

  9. On or about July 12, 2001, Enron issued its earnings release for the second
quarter of 2001. Regarding EBS, the release stated in part:

Broadband Services: Enron Broadband Services reported a $102 million
MIT loss for the second quarter compared to a loss of $8 million in the
same period a year ago. This quarter's loss reflects significantly lower
revenues and comparable operating expenses from a year ago. Enron
expects to significantly modify the cost structure of its broadband business
in the near-term to reduce future losses associated with a lower revenue
outlook. Priorities include focusing on the intermediation business and
retaining the option value associated with the network and content services
business in a cost effective manner.

On July 13, 2001, the day after the earnings release was issued, Enron's stock closed
down at $48.78 per share.

  The preceding statement is a summary, made for purpose of providing the Court
with a factual basis for the guilty plea to the sole count of the Information. It does not
include all of the facts known to me concerning illegal activity related to Enron. I make
this statement knowingly and voluntarily and because I am in fact guilty of the crime
charged.

  £,-1/ D,5/ j `7 / 0
Paula Rieker Date

-3-

EXH063-00492