El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Energy Corporation Reports 20% Increase In Adjusted 1999 Earnings Per Share
Houston, Texas, January 24, 2000ŚEláPaso Energy Corporation
(NYSE:EPG) announced today that full year 1999 diluted earnings per share rose
20ápercent to $1.80, up from $1.50 in 1998. These results include the impact of
EláPaso's merger with SonatáInc., which closed in Octoberá1999 and was
accounted for as a pooling-of-interests. The results for all prior periods have been
revised accordingly. The results also exclude the impact of merger-related and other
non-recurring charges in 1999, as well as ceiling test and other non-recurring charges in
the 1998 period. Consolidated earnings before interest expense and taxes (EBIT), adjusted
for merger-related and other charges, increased to $1,098 million in 1999 from an adjusted
$998ámillion in the year-ago period.
"Last year was an extraordinary year for our company," said
WilliamáA.áWise, president and chief executive officer of EláPaso Energy
Corporation. "The company continued its several-year track record of double-digit
earnings growth while completing the strategically important $6 billion merger with Sonat.
Successfully and seamlessly combining Sonat's businesses into EláPaso's
confirms EláPaso's core competency of integrating assets while maintaining solid
earnings performance. Each business segment contributed to another year of record
performance with our non-regulated businesses growing 38ápercent year to year."
Full Year Results
The company's natural gas transmission segment is comprised of the
Tennessee Gas Pipeline, EláPaso Natural Gas, and Southern Natural Gas pipeline
systems. This segment reported adjusted EBIT of $794ámillion in 1999, compared to
$811ámillion in 1998, primarily reflecting lower throughput on the Tennessee system
as a result of continued mild weather conditions in its market areas. Total throughput for
the natural gas segment averaged 12.7átrillion Btu per day (TBtu/d), up 2 percent
from the year-ago period.
Total adjusted EBIT from the company's non-regulated
businessesŚEláPaso Merchant Energy Company, EláPaso Energy International
Company, EláPaso Field Services Company, and El Paso Production CompanyŚtotaled
$300 million. This represented a 38-percent growth from the 1998 level of $218 million,
with every business unit contributing to the increase. The company's merchant energy
and international segments had the largest percentage increases in adjusted EBIT in 1999,
with Merchant Energy rising from $3 million in 1998 to $46ámillion in 1999 and
International increasing from $25 million in 1998 to $45 million in 1999. Full year EBIT
for the field services segment totaled $81ámillion, compared to $76 million in 1998,
while the production segment reported $128ámillion versus $114 million in the
year-ago period. Combined, EláPaso's non-regulated operations contributed 27
percent of the total consolidated EBIT in 1999.
Fourth Quarter Results
Fourth quarter 1999 diluted earnings per share, adjusted for merger-related and other
non-recurring charges, increased 45 percent to $0.48 per share in 1999, compared to $0.33
per share in 1998. Consolidated EBIT, adjusted for these charges, rose to
$295ámillion in 1999, up from $229 million in 1998.
The natural gas transmission segment reported fourth quarter adjusted EBIT of
$184ámillion, compared to $206 million in 1998, primarily due to higher operating
expenses versus the year-ago period. Total pipeline throughput for the quarter averaged
12.9áTBtu/d, up 3 percent from the fourth quarter 1998.
Adjusted EBIT for the merchant energy segment totaled $26 million compared to an EBIT
loss of $4 million in the fourth quarter of 1998 due to significantly higher contributions
from power and natural gas transactions completed in the quarter. Physical natural gas
marketed volumes averaged 6,323 BBtu/d, while marketed power volumes rose over
75ápercent to 18.1 million megawatt hours.
Fourth quarter 1999 adjusted EBIT for the international segment totaled $14 million
versus $2 million during the same period in 1998, primarily due to increased earnings from
Latin American projects.
Adjusted EBIT for the field services segment totaled $25 million, up from $21 million
in 1998, primarily due to increased equity earnings from EláPaso Energy Partners,
L.P. Gathering and treating volumes averaged 3,873 BBtu/d for the quarter, while
processing volumes averaged 1,022 BBtu/d.
The production segment reported a significant increase in EBIT due to higher realized
gas and oil prices during the period. Fourth quarter 1999 EBIT totaled $46 million versus
$18 million in the year-ago period. In terms of production volumes, natural gas sales
totaled 45.3 billion cubic feet; while oil, condensate, and liquids sales totaled
With over $16 billion in assets, EláPaso Energy Corporation provides comprehensive
energy solutions through its strategic business units: Tennessee Gas Pipeline Company,
EláPaso Natural Gas Company, Southern Natural Gas Company, EláPaso Merchant
Energy Company, EláPaso Energy International Company, EláPaso Field Services
Company, and EláPaso Production Company. The company owns North America's
largest natural gas pipeline system, both in terms of throughput and miles of pipeline,
and has operations in natural gas transmission, merchant energy services, power
generation, international project development, gas gathering and processing, and gas and
oil production. On Januaryá18,á2000, EláPaso Energy announced that it has
agreed to merge with The Coastal Corporation in a deal valued at $16 billion, including
approximately $6 billion of assumed debt and preferred equity. Visit EláPaso
Energy's web site at www.epenergy.com.
View the attached table of additional financial information by clicking here.
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 company has 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 company makes these statements and projections in good faith,
neither the company nor its management can guarantee that the anticipated future results
will be achieved. Reference should be made to the company's (and its
affiliates') Securities and Exchange Commission filings for additional important
factors that may affect actual results.