Footnote 8

(3) The Prepaid Oil Swaps.577. In December 2000, CSFB participated in an Enron prepay transaction, the December2000 Prepay Oil Swap (the “December Swap”), with ENA and Morgan Stanley. The Insidersproposed the swap to CSFB on December 11, 2000, with the requirement that it close and fund byDecember 15, 2000. Like other Enron prepay transactions, the December Swap consisted of acircular structure of three swaps: one between CSFB USA Int’l and ENA, one between CSFB USAInt’l and Morgan Stanley, and one between ENA and Morgan Stanley. Like other Enron prepaytransactions, circular obligations built into this one effectively removed all commodity risk from thetransaction, making it substantively a loan. The swaps were financially settled and, at the end of theday, CSFB USA Int’l paid ENA $150 million and nine months later – in September 2001 – ENAwas required to repay CSFB Int’l approximately $158 million. Morgan Stanley simply served asthe pass-through entity.578. In September 2001, CSFB and the Insiders entered into a related prepay transaction.First, ENA repaid CSFB Int’l approximately $153 million under the December Swap. At the sametime, it entered into a new prepay, the September Prepay Oil Swap (the “September Swap”),between another CSFB subsidiary – CSFB – and Barclays. The September Swap was structuredidentically to the December Swap, except this time CSFB advanced the money, approximately$149 million, to ENA. Like the December Swap, the September Swap was structured to eliminatecommodity risk by virtue of offsetting swaps, making it, in substance, a loan.579. Consistent with their practice, the Insiders accounted for the approximately$150 million derived from the December Swap and the September Swap as cash flow fromoperations rather than from financing, and reported the liabilities under the swaps as “price riskmanagement activities” rather than as debt on Enron’s financial statements. By accounting for the604041v1/007457-193-