El Paso Reports 41-Percent Increase in First Quarter 2001 Adjusted Earnings Per Share

Apr 25, 2001, 01:00 ET from El Paso Corporation

    HOUSTON, April 25 /PRNewswire/ -- El Paso Corporation (NYSE:   EPG) today
 reported its first quarter of combined results since the completion of its
 merger with The Coastal Corporation in January 2001.  Adjusted diluted
 earnings per share increased by 41 percent to $0.96 per diluted share compared
 with $0.68 per diluted share in 2000.  First quarter adjusted net income rose
 to $500 million in 2001 from an adjusted $342 million in 2000.  The adjusted
 results exclude merger-related costs and extraordinary items totaling
 $900 million in net after-tax charges in 2001 and $86 million in net after-tax
 gains in 2000.  Diluted average common shares outstanding totaled 525 million
 for 2001 compared with 505 million in 2000.
     Consolidated earnings before interest expense and taxes (EBIT), adjusted
 for non-recurring items, increased 42 percent to $1,093 million from an
 adjusted $769 million in 2000.  "These outstanding first quarter results are
 directly attributable to the successful integration of the El Paso and Coastal
 organizations, as well as the combined company's broad presence across all
 segments of the natural gas-to-power value chain," said William A. Wise,
 chairman, president, and chief executive officer of El Paso.  "Each of our
 business segments achieved record financial results this quarter.  We are
 especially pleased by the tremendous growth of our non-regulated businesses,
 which delivered 63 percent of total first quarter EBIT.  We are well on our
 way to achieving better than 20-percent earnings per share growth in 2001."
 
                                SEGMENT RESULTS
     The Natural Gas Transmission segment reported an 8-percent increase in
 adjusted EBIT to $422 million, compared with $390 million in the first quarter
 of 2000.  The increase primarily was due to higher throughput and increased
 operating efficiencies.  Total pipeline system throughput for the first
 quarter of 2001 averaged 21,073 billion British thermal units per day
 (BBtu/d), up 7 percent from 2000 levels.
     The Merchant Energy Group reported adjusted EBIT of $394 million, up from
 $152 million in the first quarter of 2000.  The improvement was broad-based,
 reflecting substantially higher transaction volumes, an increase in risk
 management and long-term customer solutions, higher petroleum margins, and
 growing fee-based income from power assets and financial services businesses.
 EBIT growth from North American activities was especially strong, rising to
 $271 million from $62 million last year.  Total worldwide energy equivalent
 volumes totaled 274,500 BBtu/d equivalent, up approximately 75 percent over
 last year.  Physical natural gas and power volumes rose 149 percent and
 50 percent, respectively, while financial volumes increased 78 percent from
 2000 levels.  The company made excellent progress in advancing its liquefied
 natural gas (LNG) business in the quarter and in increasing the value of
 assets in Electron, the U.S. power entity that El Paso manages for a fee.
     Higher natural gas and oil prices, together with increased production,
 caused El Paso Production Company's adjusted EBIT to grow to $248 million from
 $154 million last year.  Production volumes for the quarter averaged
 1,697 million cubic feet per day (MMcf/d) equivalent, up 7 percent from the
 year earlier quarter.  The company's realized natural gas price rose to
 $3.48 per thousand cubic feet (Mcf) from $2.47 per Mcf a year ago, while
 realized oil, condensate, and liquids prices increased to $27.42 per barrel
 from $20.99 in 2000.  El Paso Production also experienced strong drilling
 results in all of its core areas in the first quarter.
     El Paso Field Services reported adjusted first quarter 2001 EBIT of
 $65 million, compared with first quarter 2000 EBIT of $55 million.  The
 improvement reflects higher gathering and processing volumes and an increased
 contribution from its general and limited partner interests in El Paso Energy
 Partners, which will report earnings on May 1, 2001.  During the first quarter
 of 2001, gathering and treating volumes increased 63 percent to 6,477 BBtu/d,
 up from 3,985 BBtu/d in the year-ago period, while processing volumes rose
 33 percent to 3,892 BBtu/d from 2,925 BBtu/d last year.  Gathering and
 processing volumes were strengthened by the acquisition of PG&E's Texas
 Midstream operations in December 2000.
 
                               EARNINGS GUIDANCE
     Based on the company's excellent first quarter results and the continued
 strong outlook for the rest of the year, the company expects to earn
 approximately $3.30 per share in 2001, versus earlier guidance of $3.25 per
 share.  The company expects second quarter diluted earnings per share,
 excluding additional merger charges, to be in line with the current
 $0.75 First Call consensus estimate.
 
                                CONFERENCE CALL
     El Paso Corporation has scheduled a conference call on Wednesday,
 April 25, 2001, at 10:00 a.m. Eastern Time.  The company will discuss first
 quarter earnings results as well as recent business developments.  The public
 may listen to this call live by calling (973) 321-1020 or listen to a replay
 through May 2, 2001 by dialing (402) 220-0803.
     A live Web cast of the call will be available online through our Web site
 at www.elpaso.com/investor.  El Paso will maintain an audio replay of this
 call on the Web site through May 2, 2001.  In the event that the company is
 unable to respond to questions during the call, El Paso may choose to post
 selected questions and answers at www.elpaso.com/investor.
     Detailed operating statistics for each of El Paso's businesses are also
 available on our website listed above.
     El Paso Corporation, the largest and most broadly based natural gas
 company in the world, spans the energy value chain from wellhead to electron.
 With an enterprise value in excess of $50 billion, El Paso is a leader in
 every phase of the natural gas industry.  The company owns and operates a
 significant portion of the North American natural gas delivery grid, operates
 the fastest growing, most sophisticated energy merchant group, and is the
 nation's third largest natural gas producer.  El Paso, a leader in risk
 management techniques, is focused on maximizing shareholder value,
 transforming existing markets, and speeding the development of new markets.
 Visit El Paso at www.elpaso.com.
 
           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
     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.
 
 
                              EL PASO CORPORATION
 
                        CONSOLIDATED STATEMENT OF INCOME
                    (In Millions, Except per Share Amounts)
                                  (UNAUDITED)
 
                                                       First Quarter Ended
                                                             March 31,
                                                     2001                2000
 
     Operating revenues                             $17,754             $9,072
 
     Operating expenses
         Cost of gas and other products              15,689              7,530
         Operation and maintenance                      663                562
         Merger related costs and asset
          impairment charges                          1,161                  4
         Depreciation, depletion, and
          amortization                                  326                293
         Taxes, other than income taxes                 127                 76
                                                     17,966              8,465
 
     Operating income (loss)                           (212)               607
 
     Equity earnings and other income                   144                158
 
     Earnings (loss) before interest
      expense, income taxes, and other charges          (68)               765
 
     Interest and debt expense                          295                235
     Minority interest                                   62                 42
 
     Income (loss) before income taxes and
      other charges                                    (425)               488
 
     Income tax expense (benefit)                       (35)               149
 
     Income (loss) before extraordinary items          (390)               339
 
     Extraordinary items, net of income taxes           (10)                89
 
     Net income (loss)                                $(400)              $428
 
     Adjusted net income (A)                           $500               $342
 
     Diluted earnings (loss) per common share:
 
             Adjusted diluted earnings per
              common share (A)                        $0.96              $0.68
 
             Extraordinary items                      (0.02)              0.18
 
             Merger related costs and
              asset impairment charges                (1.70)             (0.01)
 
             Proforma diluted earnings
              (loss) per common share (B)            $(0.76)             $0.85
 
             Reported diluted earnings
              (loss) per common share (B)            $(0.80)             $0.85
 
 
     Basic average common shares
      outstanding (000's)                           502,401            491,422
 
     Diluted average common shares
      outstanding (000's)                           524,963            505,314
 
      (A)  First quarter 2001 adjusted net income and diluted earnings per
          share have been adjusted to exclude the extraordinary gain on the
          sale of the Empire State Pipeline Co. system of $11 million
          aftertax, or $0.02 per share, the extraordinary loss on the sale of
          the Gulfstream Natural Gas System investment of $(18) million
          aftertax, or $(0.03) per share, the extraordinary loss on the sale
          of our interest in the Stingray system and other assets of
          $(3) million aftertax, or $(0.01) per share, and merger related
          charges of $(890) million aftertax, or $(1.70) per share.  First
          quarter 2000 adjusted net income and diluted earnings per share have
          been adjusted to exclude the extraordinary gain on the sale of the
          East Tennessee and Sea Robin systems of $89 million aftertax, or
          $0.18 per share, and merger related costs and asset impairment
          charges of $(3) million aftertax, or $(0.01) per share.
 
      (B)  Proforma diluted loss per common share reflects reported diluted
          earnings per share but assumes dilution.  The reported diluted loss
          per common share does not assume dilution because dilution would
          reduce the amount of loss per share.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X63461181
 
 

SOURCE El Paso Corporation
    HOUSTON, April 25 /PRNewswire/ -- El Paso Corporation (NYSE:   EPG) today
 reported its first quarter of combined results since the completion of its
 merger with The Coastal Corporation in January 2001.  Adjusted diluted
 earnings per share increased by 41 percent to $0.96 per diluted share compared
 with $0.68 per diluted share in 2000.  First quarter adjusted net income rose
 to $500 million in 2001 from an adjusted $342 million in 2000.  The adjusted
 results exclude merger-related costs and extraordinary items totaling
 $900 million in net after-tax charges in 2001 and $86 million in net after-tax
 gains in 2000.  Diluted average common shares outstanding totaled 525 million
 for 2001 compared with 505 million in 2000.
     Consolidated earnings before interest expense and taxes (EBIT), adjusted
 for non-recurring items, increased 42 percent to $1,093 million from an
 adjusted $769 million in 2000.  "These outstanding first quarter results are
 directly attributable to the successful integration of the El Paso and Coastal
 organizations, as well as the combined company's broad presence across all
 segments of the natural gas-to-power value chain," said William A. Wise,
 chairman, president, and chief executive officer of El Paso.  "Each of our
 business segments achieved record financial results this quarter.  We are
 especially pleased by the tremendous growth of our non-regulated businesses,
 which delivered 63 percent of total first quarter EBIT.  We are well on our
 way to achieving better than 20-percent earnings per share growth in 2001."
 
                                SEGMENT RESULTS
     The Natural Gas Transmission segment reported an 8-percent increase in
 adjusted EBIT to $422 million, compared with $390 million in the first quarter
 of 2000.  The increase primarily was due to higher throughput and increased
 operating efficiencies.  Total pipeline system throughput for the first
 quarter of 2001 averaged 21,073 billion British thermal units per day
 (BBtu/d), up 7 percent from 2000 levels.
     The Merchant Energy Group reported adjusted EBIT of $394 million, up from
 $152 million in the first quarter of 2000.  The improvement was broad-based,
 reflecting substantially higher transaction volumes, an increase in risk
 management and long-term customer solutions, higher petroleum margins, and
 growing fee-based income from power assets and financial services businesses.
 EBIT growth from North American activities was especially strong, rising to
 $271 million from $62 million last year.  Total worldwide energy equivalent
 volumes totaled 274,500 BBtu/d equivalent, up approximately 75 percent over
 last year.  Physical natural gas and power volumes rose 149 percent and
 50 percent, respectively, while financial volumes increased 78 percent from
 2000 levels.  The company made excellent progress in advancing its liquefied
 natural gas (LNG) business in the quarter and in increasing the value of
 assets in Electron, the U.S. power entity that El Paso manages for a fee.
     Higher natural gas and oil prices, together with increased production,
 caused El Paso Production Company's adjusted EBIT to grow to $248 million from
 $154 million last year.  Production volumes for the quarter averaged
 1,697 million cubic feet per day (MMcf/d) equivalent, up 7 percent from the
 year earlier quarter.  The company's realized natural gas price rose to
 $3.48 per thousand cubic feet (Mcf) from $2.47 per Mcf a year ago, while
 realized oil, condensate, and liquids prices increased to $27.42 per barrel
 from $20.99 in 2000.  El Paso Production also experienced strong drilling
 results in all of its core areas in the first quarter.
     El Paso Field Services reported adjusted first quarter 2001 EBIT of
 $65 million, compared with first quarter 2000 EBIT of $55 million.  The
 improvement reflects higher gathering and processing volumes and an increased
 contribution from its general and limited partner interests in El Paso Energy
 Partners, which will report earnings on May 1, 2001.  During the first quarter
 of 2001, gathering and treating volumes increased 63 percent to 6,477 BBtu/d,
 up from 3,985 BBtu/d in the year-ago period, while processing volumes rose
 33 percent to 3,892 BBtu/d from 2,925 BBtu/d last year.  Gathering and
 processing volumes were strengthened by the acquisition of PG&E's Texas
 Midstream operations in December 2000.
 
                               EARNINGS GUIDANCE
     Based on the company's excellent first quarter results and the continued
 strong outlook for the rest of the year, the company expects to earn
 approximately $3.30 per share in 2001, versus earlier guidance of $3.25 per
 share.  The company expects second quarter diluted earnings per share,
 excluding additional merger charges, to be in line with the current
 $0.75 First Call consensus estimate.
 
                                CONFERENCE CALL
     El Paso Corporation has scheduled a conference call on Wednesday,
 April 25, 2001, at 10:00 a.m. Eastern Time.  The company will discuss first
 quarter earnings results as well as recent business developments.  The public
 may listen to this call live by calling (973) 321-1020 or listen to a replay
 through May 2, 2001 by dialing (402) 220-0803.
     A live Web cast of the call will be available online through our Web site
 at www.elpaso.com/investor.  El Paso will maintain an audio replay of this
 call on the Web site through May 2, 2001.  In the event that the company is
 unable to respond to questions during the call, El Paso may choose to post
 selected questions and answers at www.elpaso.com/investor.
     Detailed operating statistics for each of El Paso's businesses are also
 available on our website listed above.
     El Paso Corporation, the largest and most broadly based natural gas
 company in the world, spans the energy value chain from wellhead to electron.
 With an enterprise value in excess of $50 billion, El Paso is a leader in
 every phase of the natural gas industry.  The company owns and operates a
 significant portion of the North American natural gas delivery grid, operates
 the fastest growing, most sophisticated energy merchant group, and is the
 nation's third largest natural gas producer.  El Paso, a leader in risk
 management techniques, is focused on maximizing shareholder value,
 transforming existing markets, and speeding the development of new markets.
 Visit El Paso at www.elpaso.com.
 
           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
     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.
 
 
                              EL PASO CORPORATION
 
                        CONSOLIDATED STATEMENT OF INCOME
                    (In Millions, Except per Share Amounts)
                                  (UNAUDITED)
 
                                                       First Quarter Ended
                                                             March 31,
                                                     2001                2000
 
     Operating revenues                             $17,754             $9,072
 
     Operating expenses
         Cost of gas and other products              15,689              7,530
         Operation and maintenance                      663                562
         Merger related costs and asset
          impairment charges                          1,161                  4
         Depreciation, depletion, and
          amortization                                  326                293
         Taxes, other than income taxes                 127                 76
                                                     17,966              8,465
 
     Operating income (loss)                           (212)               607
 
     Equity earnings and other income                   144                158
 
     Earnings (loss) before interest
      expense, income taxes, and other charges          (68)               765
 
     Interest and debt expense                          295                235
     Minority interest                                   62                 42
 
     Income (loss) before income taxes and
      other charges                                    (425)               488
 
     Income tax expense (benefit)                       (35)               149
 
     Income (loss) before extraordinary items          (390)               339
 
     Extraordinary items, net of income taxes           (10)                89
 
     Net income (loss)                                $(400)              $428
 
     Adjusted net income (A)                           $500               $342
 
     Diluted earnings (loss) per common share:
 
             Adjusted diluted earnings per
              common share (A)                        $0.96              $0.68
 
             Extraordinary items                      (0.02)              0.18
 
             Merger related costs and
              asset impairment charges                (1.70)             (0.01)
 
             Proforma diluted earnings
              (loss) per common share (B)            $(0.76)             $0.85
 
             Reported diluted earnings
              (loss) per common share (B)            $(0.80)             $0.85
 
 
     Basic average common shares
      outstanding (000's)                           502,401            491,422
 
     Diluted average common shares
      outstanding (000's)                           524,963            505,314
 
      (A)  First quarter 2001 adjusted net income and diluted earnings per
          share have been adjusted to exclude the extraordinary gain on the
          sale of the Empire State Pipeline Co. system of $11 million
          aftertax, or $0.02 per share, the extraordinary loss on the sale of
          the Gulfstream Natural Gas System investment of $(18) million
          aftertax, or $(0.03) per share, the extraordinary loss on the sale
          of our interest in the Stingray system and other assets of
          $(3) million aftertax, or $(0.01) per share, and merger related
          charges of $(890) million aftertax, or $(1.70) per share.  First
          quarter 2000 adjusted net income and diluted earnings per share have
          been adjusted to exclude the extraordinary gain on the sale of the
          East Tennessee and Sea Robin systems of $89 million aftertax, or
          $0.18 per share, and merger related costs and asset impairment
          charges of $(3) million aftertax, or $(0.01) per share.
 
      (B)  Proforma diluted loss per common share reflects reported diluted
          earnings per share but assumes dilution.  The reported diluted loss
          per common share does not assume dilution because dilution would
          reduce the amount of loss per share.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X63461181
 
 SOURCE  El Paso Corporation