Garden State Paper LLC Quarterly Report to Executive Committee and Board of Directors Q3 2001

1. Garden State Paper LLCQuarterly Report to Executive Committee andBoard of DirectorsQ3 2001

2. Garden State Paper $ million Note: Cash Flow Excludes Change in Working Capital 1

3. Garden State Paper 2001 Forecast $ million Q3 2001 $ million Note: Cash Flow Excludes Change in Working Capital 2

4. GSP Cost Per Ton Newsprint Note: “MEU” denotes Materials, Energy, and Utilities 3

5. GSP Income Statement Q3 2001 $ million 2001 Forecast $ million Revenue $29.7 COGS ($28.8) Depreciation & Amortization ($1.8)SG&A ($2.0)Operating Profit ($2.9) Other Income (Expenses) $0.0 Current tax $0.0Deferred tax $0.0NET INCOME ($2.9) Revenue $125.0 COGS ($119.8) Depreciation & Amortization ($7.1)SG&A ($9.0)Operating Profit ($10.9) Other Income (Expenses) $15.1 Current tax $0.0Deferred tax $0.0NET INCOME $4.2 4

6. GSP Cash Flow Statement Q3 2001 $ million 2001 Forecast $ million Net Income ($2.9) Depreciation & Amortization $1.7 Other Non-Cash Items $0.0 Change in Working Capital $6.7 Purchase/Sale of Assets $0.0 Financing Activities $0.0Capital Expenditures ($2.1)NET CASH FLOW $3.4 NA 5

7. GSP Balance Sheet September 30, 2001 $ million December 31, 2001 Forecast $ million ASSETS Current Assets $20.2 Fixed Assets $65.9 Other Assets ($5.8)Total Assets $80.3 LIABILITIES & EQUITY Current Liabilities $12.8 Long-Term Liabilities $0.0 Deferred Credits $1.3 Equity $66.2Total Liabilities & Equity $80.3 NA 6

8. GSP Legal Issues Q3 2001 • Media General Dispute: Garden State Paper Company (GSP) had been a Participating Employer in the Media General (MG) parent defined benefit pension plan prior to the acquisition of GSP by Enron. MG have refused to transfer assets “allocable to” GSP employees who were participants in the MG Parent Plan to a Successor Plan established by GSP. MG’s position is that GSP, by changing its corporate form from a corporation to a limited liability company immediately prior to the acquisition, has ceased to have standing under the MG Parent Plan to demand such an asset transfer. In addition, MG argues that GSP employees who were not vested at the time of the acquisition would have no rights to benefits under the MG Plan. GSP has established a Successor Plan pursuant to which non-vested employees have been credited with years of service prior to the acquisition. MG proposes that GSP employees who were vested in the MG Parent Plan would continue to participate in that Plan. In effect, such vested GSP employees would be participants in two plans: the MG Parent Plan and the GSP Successor Plan. Outside counsel have advised that GSP has a very strong case if it were to seek the transfer of assets from the MG Parent Plan, both from a reading of the MG Parent Plan documents and under ERISA. • Overfunding Issue: MG’s refusal to transfer assets to the GSP Successor Plan has two financial impacts. First, we suspect that the MG Parent Plan may have been substantially overfunded, and that MG’s refusal to transfer assets is motivated by their desire not to transfer an allocable portion of that overfunded amount to the GSP Successor Plan. (Overfunded amounts reduce the amount of annual contributions an employer must make to a defined benefit plan.) While we have no definite figure as to what the allocable portion of that overfunded amount may be, we have estimated the amount to be between $464,000 to $2,683,000. Outside counsel has estimated our ability to recover an allocable portion of the overfunded amount at no better than 50%. • Univested Employee Issue: GSP has decided to credit with years of service GSP employees who were not vested in the MG Parent Plan as of the date of acquisition. Total cost for these benefits is estimated between $300,000 to $400,000. Outside counsel estimates the probability of our ability to recover these amounts from MG to be between 75-80%. 7

9. GSP Legal Issues Q3 2001 (continued) • AMEC Consulting Agreement: Enron entered into, and assigned to GSP, an Operating and Maintenance Consulting Services Agreement (the “Agreement”) with AGRA Simons (renamed AMEC) on August 25, 2000 pertaining to consulting services at GSP. The Agreement provides for bonuses and penalties to be paid based on GSP meeting certain performance metrics. The Agreement states that GSP may terminate the Agreement if GSP fails to meet the minimum performance metrics for two consecutive calendar quarters. GSP has determined that the mill has failed to achieve the minimum performance metrics for each of Q2 and Q3 2001. On October 17, 2001, GSP notified AMEC that it was terminating the Agreement effective immediately. Based on meetings and communications with AMEC before and after delivery of the termination notice, it would appear likely that AMEC will contest GSP’s termination of the Agreement on the basis that its recommendations for process improvements and cost reductions were not followed by GSP management. • Litigation Summary: GSP has experienced a number of accidents involving employees of vendors. One accident preceded the acquisition of GSP by Enron, and that case has been tendered to Media General’s insurance carrier for defense and assumption of liability. Of the three other accidents that occurred since the acquisition date, one has been settled and the other two matters have been referred to Enron’s excess liability carrier for resolution. With respect to these latter matters, formal litigation has not been commenced against GSP. 8