El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Energy Corporation Reports Record First Quarter Earnings
Houston, Texas, April 23, 1999-El Paso Energy Corporation (NYSE:EPG) announced
today that 1999 first quarter diluted earnings per share rose 21 percent to $0.58 compared
to $0.48 in the year ago period, excluding the cumulative effect of an accounting change
implemented in the first quarter of 1999. The change relates to the treatment of certain
project development costs that newly adopted accounting standards now require to be
expensed rather than capitalized. The accounting change resulted in a one-time $13 million
aftertax charge, or $0.10 per diluted share. Diluted average common shares outstanding for
the quarter totaled 128 million.
"El Paso Energy once again reported record earnings per share during the
first quarter. This represents the ninth consecutive quarter of record earnings on a year
over year basis since the company's Tenneco Energy acquisition in December
1996," said William A. Wise, chairman, president and chief executive officer of
El Paso Energy. "We continue to reap the benefits of our strategically located
natural gas transmission assets, Tennessee Gas Pipeline Company and El Paso Natural
Gas Company. These pipelines produced exceptional results in the first quarter,
notwithstanding the generally mild temperatures this past winter.
"Despite significantly lower natural gas and natural gas liquids prices versus the
year ago quarter, El Paso Field Services reported higher gathering and treating
volumes as a result of last year's acquisition of the interests in Leviathan Gas
Pipeline Partners and the improved uplift in the San Juan Basin following completion of
our global compression project," Wise continued. "With its increased size and
scale both onshore and offshore, El Paso Field Services is positioned to be a growing
income contributor as gas and liquids prices rebound.
"El Paso Energy Marketing's results for the quarter reflect the
unit's continued success in structuring gas and power transactions around our
coast-to-coast, border-to-border assets," said Mr. Wise. "During the quarter,
the company added 900 megawatts of generation capacity through its acquisition of a
50-percent interest in CE Generation LLC from CalEnergy Company, Inc., bringing the total
power assets either in operation or under development to over 3,000 megawatts.
"The earnings contribution from El Paso Energy International continues to
grow," said Mr. Wise. "In February, the company acquired a 63-percent interest
in East Asia Power Resources Company in the Philippines, and in March we acquired an
additional 10- percent in the Samalayuca II power project in Mexico, bringing El
Paso's overall interest in the project to 40 percent."
Mr. Wise concluded, "El Paso Energy's first quarter results are a
continuation of the forward momentum established during the past several years, and we
expect to build on this momentum as we prepare for the announced merger with Sonat Inc.
later this year."
First Quarter Consolidated and Business Segment Results
Consolidated earnings before interest expense and income taxes (EBIT) for the first
quarter rose 17 percent to $190 million from the $163 million level reported in the year
Tennessee Gas Pipeline Company reported first quarter EBIT of $113 million compared to
$98 million a year ago. The $15 million increase was primarily due to lower operating
expenses in the current period. Tennessee system throughput averaged 5,564 billion British
thermal units per day (BBtu/d) for the quarter.
El Paso Natural Gas Company reported first quarter EBIT of $56 million compared to
$52 million in 1998, with the increase resulting from higher transportation revenues. El
Paso's first quarter 1999 throughput averaged 3,936 BBtu/d, up 4 percent from the
El Paso Field Services Company reported first quarter EBIT of $16 million compared
to $24 million in 1998. The decrease was due to lower natural gas and liquids prices,
partially offset by a 10 percent increase in gathering and treating volumes and the
contribution from the company's interest in Leviathan. Gathering and treating volumes
averaged 4,378 BBtu/d, while processing volumes averaged 981 BBtu/d.
El Paso Energy Marketing Company reported EBIT of $8 million for the first quarter
of 1999 compared to $0.2 million in 1998. Average marketed gas volumes in the quarter were
4,443 BBtu/d and power marketed volumes were 13,213 thousand megawatt hours.
El Paso Energy International Company reported first quarter EBIT of $3 million
compared to $2 million in 1998.
With over $10 billion in assets, El Paso Energy Corporation provides energy
solutions through five business units: Tennessee Gas Pipeline Company, El Paso
Natural Gas Company, El Paso Field Services Company, El Paso Energy Marketing
Company, and El Paso Energy International Company. The company owns the nation's
only integrated coast-to-coast natural gas pipeline system and has operations in
interstate natural gas transmission, gas gathering and processing, energy marketing, and
international infrastructure development. Visit El Paso Energy's web site at
This release includes forward-looking statements and projections, made in
reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The companies have made every reasonable effort to ensure that the information and
assumptions on which these statements and projections are based are current, reasonable,
and complete. However, a variety of factors could cause actual results to differ
materially from the projections, anticipated results or other expectations expressed in
this release. While the companies make these statements and projections in good faith,
neither the companies nor their managements can guarantee that the anticipated future
results will be achieved. Reference should be made to the companies' (and their
affiliates') Securities and Exchange Commission filings for additional important
factors that may affect actual results.