El Paso Corporation (NYSE: EP) is today reporting third quarter
2009 financial and operational results for the company.
Highlights:
-- $0.23 adjusted diluted earnings per share (EPS) versus $0.35 in 2008.
A sharp increase in Pipeline Group earnings was more than offset by lower
natural gas and oil prices.
-- 2009 adjusted earnings per share guidance raised to $1.15 to $1.20.
-- Third quarter 2009 reported EPS of $0.08 per diluted share versus
$0.58 in 2008. A sharp decline in natural gas prices in the company's
Exploration and Production (E&P) business was the major reason for lower
reported earnings.
-- Third quarter 2009 Pipeline Group earnings before interest expense and
taxes (EBIT) rose 17 percent from the third quarter of 2008.
-- Third quarter production averaged 732 million cubic feet equivalent
per day (MMcfe/d), including 71 MMcfe/d of Four Star volumes. Strong
domestic results, particularly from Haynesville Shale activities, offset
delays in Brazil's Camarupim project.
-- The company announced that its first Eagle Ford shale well was
successful and that it had increased its acreage position to 112,000 net
acres.
"I am very pleased with our third quarter financial results and
the solid execution by our Pipeline and E&P businesses," said
Doug Foshee, chairman, president, and chief executive officer of El
Paso Corporation. "We placed the Piceance Lateral Expansion project
in service during the quarter -- on time and on budget, while at
the same time advancing other projects in our committed backlog as
well as new growth opportunities. In E&P, we continued to
generate excellent results from our Haynesville Shale program and
have ramped up our activity level to five rigs. Importantly, we are
transferring our Haynesville expertise to the Eagle Ford Shale,
where we are off to a great start. In summary, we are generating
consistent results that will provide sustained value creation for
our shareholders."
A summary of financial results for the quarters and nine-month
periods ended September 30, 2009 and 2008 is as follows:
Financial Results
Quarters Ended Nine Months Ended
($ in millions, except per September 30, September 30,
share amounts) 2009 2008 2009 2008
---------- ---------- --------- ----------
Net income (loss) attributable
to El Paso Corporation (EPC) $ 67 $ 445 $ (813) $ 855
Preferred stock dividends 9 9 28 28
---------- ---------- --------- ----------
Net income (loss) attributable
to EPC common stockholders $ 58 $ 436 $ (841) $ 827
========== ========== ========= ==========
Basic per common share amounts
Net income (loss) attributable
to EPC common stockholders $ 0.08 $ 0.63 $ (1.21) $ 1.19
========== ========== ========= ==========
Diluted per common share
amounts
Net income (loss) attributable
to EPC common stockholders $ 0.08 $ 0.58 $ (1.21) $ 1.12
========== ========== ========= ==========
Items Impacting Quarterly Results
Third quarter 2009 and 2008 net income includes the following
items:
Third Quarter 2009
($ millions, except per Before After Diluted
share amounts) Tax Tax EPS
---------- ---------- ----------
Net income attributable to EPC common
stockholders $ 58 $ 0.08
Adjustments (1)
Ceiling test charges $ 5 $ 5 $ 0.01
Change in fair value of power contracts 6 4 0.01
Change in fair value of legacy natural
gas contracts 14 9 0.01
Change in fair value of legacy
indemnification and other 16 10 0.01
Impact of E&P financial derivatives (2) 118 75 0.11
----------
Adjusted EPS (3) $ 0.23
==========
(1) Assumes a 36 percent tax rate, except for international ceiling test
charges and 700 million diluted shares
(2) Consists of $87 million of gains
on financial derivatives, adjusted for $205 million of realized gains from
cash settlements
(3) Based upon 758 million fully diluted shares and includes
income impact from dilutive securities
Adjusted EPS for the quarter do not include $50 million, or
$0.04 per share, of early cash settlements of oil derivative
contracts that hedged July through September 2009 production that
were realized in the first quarter of 2009.
Third Quarter 2008 ($ millions, except Before After Diluted
per share amounts) Tax Tax EPS
--------- --------- ---------
Net income attributable to EPC common
stockholders $ 436 $ 0.58
Adjustments (1)
Change in fair value of power contracts $ (63) $ (40) $ (0.05)
Change in fair value of legacy
indemnification 12 8 0.01
Change in fair value of
production-related derivatives in
Marketing (14) (9) (0.01)
Impact of E&P financial derivatives (2) (215) (138) (0.18)
---------
Adjusted EPS (3) $ 0.35
=========
(1) Assumes a 36 percent tax rate and 766 million diluted shares
(2) Consists of $158 million of gains on financial derivatives, adjusted
for $57 million
of realized losses from cash settlements
(3) Based upon 766 million fully
diluted shares and includes income impact from dilutive securities
Financial Results - Nine Months Ended September 30, 2009
For the nine months ended September 30, 2009, El Paso reported a
net loss attributable to EPC common stockholders of $841 million,
or $1.21 per diluted share, compared with net income of $827
million, or $1.12 per diluted share, for the first nine months of
2008. Earnings for the nine month periods of 2009 and 2008, after
adjusting for the impacts of production-related derivatives,
ceiling test charges and other items, were $0.95 and $1.09 per
diluted share, respectively. A schedule of items affecting
year-to-date results is included in the appendix of this
release.
Business Unit Financial Update
Quarters Ended Nine Months Ended
Segment EBIT Results September 30, September 30,
($ in millions) 2009 2008 2009 2008
--------- --------- --------- ---------
Pipeline Group $ 326 $ 278 $ 1,049 $ 954
Exploration and Production 88 532 (1,536) 1,078
Marketing (28) 82 34 (131)
Power (8) (6) (25) 4
Corporate and Other (20) (5) 4 75
--------- --------- --------- ---------
$ 358 $ 881 $ (474) $ 1,980
========= ========= ========= =========
Pipeline Group
The Pipeline Group's EBIT for the quarter ended September 30,
2009 was $326 million, compared with $278 million for the same
period in 2008. Third quarter results benefited from several
expansion projects that went into service throughout 2008 and 2009
including the Medicine Bow expansion, the High Plains Pipeline, the
Carthage Expansion, and the Totem Gas Storage project. Third
quarter 2009 results were also favorably impacted by lower O&M
costs and higher volumes and realized prices on operational sales
of gas not used in operations. Total throughput decreased slightly
from the third quarter of 2008 as weaker demand due to slower
economic conditions was mostly offset by incremental volumes from
the recent expansions listed above. While the pipelines experience
fluctuations in throughput, there is no material impact to
near-term financial results because a significant portion of
revenues are derived from demand charges under long-term contracts.
Third quarter 2009 financial results also improved compared to
third quarter 2008 due to the impact of lost natural gas and higher
operations and maintenance costs in 2008 as a result of facility
damage caused by Hurricanes Ike and Gustav.
During the third quarter of 2009, the Pipeline Group placed the
WIC Piceance Lateral Expansion project into service -- both on time
and on budget.
Quarters Ended
Pipeline Group Results September 30,
($ in millions) 2009 2008
--------- ---------
EBIT before adjustment for non-controlling interests $ 341 $ 285
Net income attributable to non-controlling interests (15) (7)
--------- ---------
EBIT $ 326 $ 278
DD&A $ 104 $ 97
Total throughput (BBtu/d) (1) 17,757 18,905
(1) Includes proportionate share of jointly owned pipelines
Exploration and Production
The Exploration and Production segment reported $88 million of
EBIT for the quarter ended September 30, 2009, compared with $532
million for the same period in 2008. The decrease was primarily due
to lower realized commodity prices, lower production volumes, lower
MTM gains associated with derivative hedging contracts and a $16
million impairment of casing and tubular goods inventory, partially
offset by lower cash operating costs and lower DD&A expense.
Third quarter 2009 production volumes averaged 732 MMcfe/d,
including 71 MMcfe/d of unconsolidated affiliate volumes. Third
quarter 2008 production volumes averaged 793 MMcfe/d, including 75
MMcfe/d of unconsolidated affiliate volumes. Production was lower
primarily due to a sharp drop in drilling activity in response to
lower natural gas and oil prices. Third quarter 2008 production
volumes were negatively affected by 41 MMcfe/d as a result of
hurricanes and a tropical storm. Total per-unit cash operating
costs decreased to an average of $1.78 per Mcfe in third quarter
2009, compared with $1.89 per Mcfe for the same 2008 period. The
decrease was primarily due to lower lease operating expenses and
production taxes, partially offset by lower production volumes.
Third quarter 2009 lease operating expenses were negatively
impacted by $0.19 per unit due to start up costs from the Camarupim
project in Brazil. Additionally, cash operating costs in the third
quarter of 2008 included a $20 million, or a $0.30 per-unit
reversal of an accrual of a favorable ruling on a legal matter.
Production from the first of four planned wells of the Camarupim
project in Brazil began in October. That well has gross production
in excess of 90 MMcfe/d, which is more than 20 MMcfe/d, net to El
Paso's interest.
El Paso also announced that its first Eagle Ford shale well in
La Salle County, Texas was recently drilled with a 4,000 foot
horizontal lateral and completed with a 16-stage frac. The well is
still cleaning up with volumes steadily increasing. The current
flow rate is approximately 6.1 MMcfe/d with a flowing tubing
pressure of 5,200 psi. The company has almost doubled its lease
position to 112,000 net acres. El Paso will maintain a one-rig
program as it progresses in this new play.
Exploration and Production Results Quarters Ended
September 30,
($ in millions, except price and unit cost amounts) 2009 2008
--------- ---------
Physical sales - natural gas, oil, condensate and NGL $ 245 $ 700
Realized and unrealized gains on financial
derivatives (1) 87 158
Other revenues 11 23
--------- ---------
Total operating revenues $ 343 $ 881
Operating expenses (2) (246) (353)
Other income (expenses) (9) 4
--------- ---------
EBIT $ 88 $ 532
DD&A $ 93 $ 191
Consolidated volumes:
Natural gas sales volumes (MMcf/d) 574 615
Oil, condensate, and NGL sales volumes (MBbls/d) 15 17
Total consolidated equivalent sales volumes (MMcfe/d) 661 718
Four Star total equivalent sales volumes (MMcfe/d)(3) 71 75
Weighted average realized prices including financial
derivative settlements
Natural gas ($/Mcf) $ 7.37 $ 8.67
Oil, condensate, and NGL ($/Bbl) (4) $ 82.25 $ 88.13
Transportation costs
Natural gas ($/Mcf) $ 0.24 $ 0.37
Oil, condensate, and NGL ($/Bbl) $ 0.80 $ 1.18
Per-unit costs ($/Mcfe)
DD&A $ 1.54 $ 2.89
Cash operating costs (5) $ 1.78 $ 1.89
(1) Includes a gain of $95 million in 2009 and a loss of $66 million in
2008 reclassified from accumulated other comprehensive income/loss
associated with accounting hedges
(2) 2009 includes $5 million of ceiling test charges primarily related to
buyout fees for a drilling rig contract in Egypt and a $16 million
charge related to the impairment of casing and tubular goods inventory.
(3) Four Star is an equity investment. Amounts disclosed represent the
company's proportionate share
(4) 2009 includes approximately $50 million of the $186 million received
in the first quarter of 2009 related to the early settlement of $110 per
barrel oil derivative contracts originally scheduled to settle July
through September of 2009
(5) Includes direct lifting costs, production taxes, G&A expenses, and
taxes other than production and income
Hedge Positions
As of November 4, 2009, El Paso had derivative positions that
provide price protection for approximately 70 percent of its
estimated domestic natural gas production for the last three months
of 2009. The natural gas positions have an average floor price of
$9.02 per million British thermal unit (MMBtu) on 40.3 trillion
British thermal units (TBtu) and an average ceiling price of $14.35
per MMBtu on 32.0 TBtu. The company also has fixed-price hedges on
0.7 million barrels of crude oil with an average price of $56.48
per barrel. For 2010, El Paso has natural gas positions that
provide an average floor price of $6.41 per MMBtu on 175.0 TBtu and
an average ceiling price of $7.24 per MMBtu on 112.5 TBtu. El
Paso's 2010 positions also included fixed-price hedges on 2.4
million barrels of crude oil with an average price of $74.63. For
2011, El Paso has natural gas positions that provide an average
floor price of $6.00 per MMBtu and an average ceiling price of
$8.66 per MMBtu on 136.1 TBtu. Further information on the company's
hedging activities will be available in El Paso's Form 10-Q.
Other Operations
Marketing
The Marketing segment reported a $28 million EBIT loss for the
quarter ended September 30, 2009, compared with $82 million of EBIT
for the same period in 2008. Third quarter 2009 includes a $6
million MTM loss on remaining Pennsylvania-New Jersey-Maryland
power contracts, compared with a third quarter 2008 gain of $63
million. Third quarter 2008 results also include a $17 million gain
from proceeds on various Enron bankruptcy claims and a $14 million
gain related to changes in the fair value of derivatives intended
to manage the price risk of the company's oil production.
Corporate and Other
During the third quarter of 2009, Corporate and Other reported a
$20 million EBIT loss, compared with a $5 million EBIT loss for the
same period in 2008. The EBIT loss in 2009 is greater primarily due
to higher legacy environmental remediation costs.
Detailed operating statistics for El Paso's businesses will be
posted at www.elpaso.com in the Investors section.
Webcast Information
El Paso Corporation has scheduled a live webcast of its third
quarter 2009 results on November 4, 2009, beginning at 10 a.m.
Eastern Time, 9 a.m. Central Time, which may be accessed online
through El Paso's Web site at www.elpaso.com in the Investors
section. During the webcast, management will refer to slides that
will be posted on the Web site. The slides will be available one
hour before the webcast and can be accessed in the Investors
section. A limited number of telephone lines will also be available
to participants by dialing (888) 710-3574 (conference ID #38617810)
10 minutes prior to the start of the webcast.
A replay of the webcast will be available online through the
company's Web site in the Investors section. A telephone audio
replay will be also available through November 13, 2009, by dialing
(800) 642-1687 (conference ID #38617810). If you have any questions
regarding this procedure, please contact Margie Fox at (713)
420-2903.
Disclosure of Non-GAAP Financial Measures
The SEC's Regulation G applies to any public disclosure or
release of material information that includes a non-GAAP financial
measure. In the event of such a disclosure or release, Regulation G
requires (i) the presentation of the most directly comparable
financial measure calculated and presented in accordance with GAAP
and (ii) a reconciliation of the differences between the non-GAAP
financial measure presented and the most directly comparable
financial measure calculated and presented in accordance with GAAP.
The required presentations and reconciliations are attached, or
included in the body of this release. Additional detail regarding
non-GAAP financial measures can be reviewed in El Paso's full
operating statistics, which will be posted at www.elpaso.com in the
Investors section.
El Paso uses the non-GAAP financial measure "earnings before
interest expense and income taxes" or "EBIT" to assess the
operating results and effectiveness of the company and its business
segments, which consist of both consolidated businesses and
investments in unconsolidated affiliates. The company believes that
EBIT is useful to its investors because it allows them to evaluate
more effectively the performance of all of El Paso's businesses and
investments using the same performance measure analyzed internally
by our management. The company defines EBIT as net income (loss)
adjusted for items such as (i) interest and debt expense; (ii)
income taxes; and (iii) net income attributable to non-controlling
interests so that our investors may evaluate the company's
operating results without regard to its financing methods or
capital structure. Exploration and Production per-unit total cash
operating costs is a non-GAAP measure calculated on a per Mcfe
basis equal to total operating expenses less DD&A,
transportation costs, ceiling test and other impairment charges,
and cost of products and services divided by total production. It
is a valuable measure of operating performance and efficiency for
our Exploration and Production segment. For YTD 2009, Adjusted EPS
is earnings per share attributable to El Paso Corporation common
stockholders excluding changes in fair value of power contracts,
changes in fair value of legacy natural gas contracts, changes in
fair value of legacy indemnification and other items, the loss
related to the sale of notes receivable relating to Porto Velho
sale, impact of E&P financial derivatives, ceiling test
charges, and the effect of the change in the number of diluted
shares. For YTD 2008, Adjusted EPS is earnings per share
attributable to El Paso Corporation common stockholders excluding
changes in fair value of legacy indemnification, the gain related
to an adjustment of the liability for indemnification of medical
benefits for retirees of the Case Corporation, the gain related to
the disposition of a portion of the company's investment in its
telecommunications business, changes in fair value of power
contracts, and changes in fair value of the production-related
derivatives in Marketing, impact of E&P financial derivatives,
and other legacy litigation adjustments. Adjusted EPS is useful in
analyzing the company's on-going earnings potential. Full-year 2009
projected EPS is subject to the same adjustments as shown for YTD
2009 Adjusted EPS above plus an expected charge from the
reorganization announced on November 3, 2009. The improvement from
original guidance is primarily due to lower DD&A as a result of
ceiling test charges during the year. Projected Adjusted EPS is
useful as a indicator or the earnings power of the company.
El Paso believes that the non-GAAP financial measures described
above are also useful to investors because these measurements are
used by many companies in the industry as a measurement of
operating and financial performance and are commonly employed by
financial analysts and others to evaluate the operating and
financial performance of the company and its business segments and
to compare the operating and financial performance of the company
and its business segments with the performance of other companies
within the industry.
These non-GAAP financial measures may not be comparable to
similarly titled measurements used by other companies and should
not be used as a substitute for net income (loss), income (loss)
before income taxes, operating income or operating cash flows,
earnings per share or other GAAP operating measurements.
El Paso Corporation provides natural gas and related energy
products in a safe, efficient, and dependable manner. El Paso owns
North America's largest interstate natural gas pipeline system and
one of North America's largest independent natural gas producers.
For more information, visit www.elpaso.com.
Cautionary Statement Regarding Forward-Looking Statements
This release includes certain forward-looking statements and
projections. 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, including, without
limitation, our ability to achieve the targeted costs savings from
the announced reorganization; complete planned asset sales; change
management risk associated with the reorganization; our ability to
pay the dividends declared; changes in unaudited and/or unreviewed
financial information; volatility in, and access to, the capital
markets; our ability to implement and achieve our objectives in our
2009 plan and updated guidance, including achieving our earnings
and cash flow targets; the effects of any changes in accounting
rules and guidance; our ability to meet production volume targets
in our Exploration and Production segment; our ability to
successfully identify and finance new Midstream opportunities; our
ability to comply with the covenants in our various financing
documents; our ability to obtain necessary governmental approvals
for proposed pipeline and E&P projects and our ability to
successfully construct and operate such projects; the risks
associated with recontracting of transportation commitments by our
pipelines; regulatory uncertainties associated with pipeline rate
cases; actions by the credit rating agencies; the successful close
of our financing transactions; credit and performance risk of our
lenders, trading counterparties, customers, vendors and suppliers;
changes in commodity prices and basis differentials for oil,
natural gas, and power; general economic and weather conditions in
geographic regions or markets served by the company and its
affiliates, or where operations of the company and its affiliates
are located, including the risk of a global recession and negative
impact on natural gas demand; the uncertainties associated with
governmental regulation; political and currency risks associated
with international operations of the company and its affiliates;
competition; and other factors described in the company's (and its
affiliates') Securities and Exchange Commission filings. While the
company makes these statements and projections in good faith,
neither the company nor its management can guarantee that
anticipated future results will be achieved. Reference must be made
to those filings for additional important factors that may affect
actual results. The company assumes no obligation to publicly
update or revise any forward-looking statements made herein or any
other forward-looking statements made by the company, whether as a
result of new information, future events, or otherwise.
Certain of the production information in this press release
include the production attributable to El Paso's 49 percent
interest in Four Star Oil & Gas Company ("Four Star"). El
Paso's Supplemental Oil and Gas disclosures, which are included in
its Annual Report on Form 10-K, reflect its proportionate share of
the proved reserves of Four Star separate from its consolidated
proved reserves. In addition, the proved reserves attributable to
its proportionate share of Four Star represent estimates prepared
by El Paso and not those of Four Star.
Appendix to El Paso Corporation November 3, 2009 Earnings Press
Release
Items Impacting Nine Month Results
Nine Months Ended September 30, 2009 Before After Diluted
($ millions, except per share amounts) Tax Tax EPS
--------- --------- ---------
Net income (loss) attributable to EPC
common stockholders $ (841) $ (1.21)
Adjustments (1)
Ceiling test charges $ 2,085 $ 1,349 $ 1.94
Change in fair value of power contracts (49) (31) (0.05)
Change in fair value of legacy natural
gas contracts (4) (3) -
Change in fair value of legacy
indemnification and other (9) (6) (0.01)
Loss on sale of notes receivable
relating to Porto Velho sale 22 22 0.03
Impact of E&P financial derivatives (2) 314 201 0.29
Effect of change in number of diluted
shares (0.04)
---------
Adjusted EPS (3) $ 0.95
=========
(1) Assumes a 36 percent tax rate, except for international portion of
ceiling test charges and loss on sale of notes receivable relating to
Porto Velho sale, and 695 million diluted shares
(2) Consists of $536 million of gains on financial derivatives, adjusted
for $850 million of realized gains from cash settlements
(3) Based upon 756 million fully diluted shares and includes income impact
from dilutive securities
Adjusted earnings per share include $49 million, or $0.04 per
share, of early cash settlements of oil derivative contracts that
hedged October through December 2009 production.
Nine Months Ended September 30, 2008 Before After Diluted
($ millions, except per share amounts) Tax Tax EPS
--------- --------- ---------
Net income attributable to EPC common
stockholders $ 827 $ 1.12
Adjustments (1)
Change in fair value of power contracts $ 83 $ 53 $ 0.07
Change in fair value of legacy
indemnification 46 29 0.04
Case Corporation indemnification (65) (27) (0.04)
Gain on sale of portion of
telecommunication business (18) (12) (0.01)
Other legacy litigation adjustments (27) (29) (0.04)
Change in fair value of
production-related derivatives in
Marketing 59 38 0.05
Impact of E&P financial derivatives (2) (123) (79) (0.10)
---------
Adjusted EPS (3) $ 1.09
=========
(1) Assumes a 36 percent tax rate, except for Case Corporation
indemnification and other legacy litigation adjustments, and 767 million
diluted shares
(2) Consists of $45 million of losses on derivatives, adjusted for $168
million of realized losses from cash settlements
(3) Based upon 767 million fully diluted shares and includes income impact
from dilutive securities
EL PASO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per common share amounts)
(UNAUDITED)
Quarters Ended 9 Months Ended
September 30, September 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
Operating revenues $ 981 $ 1,598 $ 3,438 $ 4,020
Operating expenses
Cost of products and services 45 68 158 195
Operation and maintenance 346 328 910 874
Ceiling test charges 5 1 2,085 8
Depreciation, depletion and
amortization 200 292 653 903
Taxes, other than income taxes 56 70 181 230
------- ------- ------- -------
652 759 3,987 2,210
------- ------- ------- -------
Operating income (loss) 329 839 (549) 1,810
Earnings from unconsolidated affiliates 11 52 42 141
Other income, net 33 (3) 71 52
Noncontrolling interests (15) (7) (38) (23)
------- ------- ------- -------
29 42 75 170
------- ------- ------- -------
Earnings (loss) before interest expense
and income taxes (EBIT) 358 881 (474) 1,980
Adjustment for noncontrolling interests 15 7 38 23
Interest and debt expense (256) (221) (764) (675)
------- ------- ------- -------
Income (loss) before income taxes 117 667 (1,200) 1,328
Income tax expense (benefit) 35 215 (425) 450
------- ------- ------- -------
Net income (loss) 82 452 (775) 878
Net income attributable to
noncontrolling interests (15) (7) (38) (23)
------- ------- ------- -------
Net income (loss) attributable to El
Paso Corporation (EPC) 67 445 (813) 855
Preferred stock dividends 9 9 28 28
------- ------- ------- -------
Net income (loss) attributable to EPC's
common stockholders $ 58 $ 436 $ (841) $ 827
======= ======= ======= =======
Basic earnings per common share
Net income (loss) attributable to
EPC's common stockholders $ 0.08 $ 0.63 $ (1.21) $ 1.19
======= ======= ======= =======
Diluted earnings per common share
Net income (loss) attributable to
EPC's common stockholders $ 0.08 $ 0.58 $ (1.21) $ 1.12
======= ======= ======= =======
Weighted average common shares
outstanding
Basic 696 696 695 697
======= ======= ======= =======
Diluted 700 766 695 767
======= ======= ======= =======
Dividends declared per EPC's common
share $ 0.05 $ 0.05 $ 0.15 $ 0.13
======= ======= ======= =======
EL PASO CORPORATION
SEGMENT INFORMATION
(UNAUDITED)
2009 2008
------------------- -------------------------------
(In millions) Q1 Q2 Q3 Q1 Q2 Q3 Q4
------- ---- ---- ------ ------ ------ -------
Operating revenues
Pipelines $ 733 $650 $667 $ 720 $ 646 $ 628 $ 690
Exploration and
Production 700 309 343 603 655 881 623
Marketing 53 15 (26) (57) (146) 89 31
Power - - - - - - -
Corporate and
other, including
eliminations (1) (2) (1) (3) 3 (2) - (1)
------- ---- ---- ------ ------ ------ -------
Consolidated
total $ 1,484 $973 $981 $1,269 $1,153 $1,598 $ 1,343
------- ---- ---- ------ ------ ------ -------
Depreciation,
depletion and
amortization
Pipelines $ 104 $102 $104 $ 99 $ 99 $ 97 $ 100
Exploration and
Production 150 91 93 212 197 191 199
Marketing - - - - - - -
Power - - - - - - 1
Corporate and
other (1) 2 4 3 2 2 4 2
------- ---- ---- ------ ------ ------ -------
Consolidated
total $ 256 $197 $200 $ 313 $ 298 $ 292 $ 302
------- ---- ---- ------ ------ ------ -------
Operating income
(loss)
Pipelines $ 367 $285 $294 $ 357 $ 263 $ 241 $ 291
Exploration and
Production (1,675) 76 97 226 281 528 (2,393)
Marketing 52 10 (28) (60) (154) 82 29
Power (3) (5) (6) (8) (5) (5) (4)
Corporate and
other (1) (10) 25 (28) 35 36 (7) 37
------- ---- ---- ------ ------ ------ -------
Consolidated
total $(1,269) $391 $329 $ 550 $ 421 $ 839 $(2,040)
------- ---- ---- ------ ------ ------ -------
Earnings before
interest expense
and income taxes
(EBIT)
Pipelines $ 396 $327 $326 $ 381 $ 295 $ 278 $ 319
Exploration and
Production (1,685) 61 88 242 304 532 (2,526)
Marketing 52 10 (28) (60) (153) 82 27
Power 4 (21) (8) (2) 12 (6) (3)
Corporate and
other (1) (7) 31 (20) 39 41 (5) 49
------- ---- ---- ------ ------ ------ -------
Consolidated
total $(1,240) $408 $358 $ 600 $ 499 $ 881 $(2,134)
------- ---- ---- ------ ------ ------ -------
Year-to-Date
--------------
(In millions) 2009 2008
------ ------
Operating revenues
Pipelines $2,050 $1,994
Exploration and
Production 1,352 2,139
Marketing 42 (114)
Power - -
Corporate and
other, including
eliminations (1) (6) 1
------ ------
Consolidated
total $3,438 $4,020
------ ------
Depreciation,
depletion and
amortization
Pipelines $ 310 $ 295
Exploration and
Production 334 600
Marketing - -
Power - -
Corporate and
other (1) 9 8
------ ------
Consolidated
total $ 653 $ 903
------ ------
Operating income
(loss)
Pipelines $ 946 $ 861
Exploration and
Production (1,502) 1,035
Marketing 34 (132)
Power (14) (18)
Corporate and
other (1) (13) 64
------ ------
Consolidated
total $ (549) $1,810
------ ------
Earnings before
interest expense
and income taxes
(EBIT)
Pipelines $1,049 $ 954
Exploration and
Production (1,536) 1,078
Marketing 34 (131)
Power (25) 4
Corporate and
other (1) 4 75
------ ------
Consolidated
total $ (474) $1,980
------ ------
(1) Includes our corporate businesses, telecommunications business and
residual assets and liabilities of previously sold or discontinued
businesses.
Contacts Investor and Public Relations Bruce Connery Vice
President Office: (713) 420-5855 Media Relations Bill Baerg Manager
Office: (713) 420-2906
El Paso (NYSE:EP)
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El Paso (NYSE:EP)
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