El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
6-Aug-2008
El Paso Corporation Reports 34 Percent Increase in Adjusted Second Quarter Earnings
HOUSTON, TX--(Marketwire - August 6, 2008) - El Paso Corporation (NYSE: EP) is reporting
today second quarter 2008 financial and operational results for the
company.
Highlights:
-- $0.25 earnings per diluted share from continuing operations versus
$0.22 in 2007
-- $0.39 earnings per share after adjusting for production-related
derivatives and other items impacting second quarter 2008 results versus
$0.29 in 2007
-- Pipeline earnings before interest expense and taxes (EBIT) of $295
million
-- Exploration & Production (E&P) EBIT of $304 million -- up 29 percent
versus second quarter 2007
-- Production, including unconsolidated affiliate volumes, totaled 833
million cubic feet equivalent per day (MMcfe/d)
-- Second quarter 2008 production rose 4 percent from first quarter 2008,
pro forma for divested properties
-- Hedge positions expanded for 2009
"This quarter we continued our solid financial and operational performance,
while making tangible progress that enhances our multi-year growth
outlook," said Doug Foshee, president and chief executive officer of El
Paso Corporation. "Our Pipeline Group secured two major new projects --
the Ruby pipeline and the TGP Line 300 expansion, which increase our
committed backlog to $8 billion -- a level that is more than two times
larger than any time in our 80-year history. In E&P, our Peoples
acquisition is delivering promising new drilling opportunities in the Texas
Gulf Coast and the Arklatex, including the Haynesville Shale. In Brazil,
our Bia/Camarupim project is accelerating with first production now
expected in the first quarter of 2009. And our Pinauna project remains on
schedule with first production expected in late 2009. In short, the
outlook for our businesses has never been better."
A summary of financial results for the three months ended June 30, 2008,
and 2007 is as follows:
Financial Results Three Months Ended
June 30,
($ in millions, except per share amounts) 2008 2007
------------ -----------
Income from continuing operations $ 191 $ 169
Discontinued operations, net of income taxes - (3)
------------ -----------
Net income 191 166
Preferred stock dividends(1) - 10
------------ -----------
Net income available to common stockholders $ 191 $ 156
============ ===========
Basic per common share amounts
Income from continuing operations $ 0.27 $ 0.23
Discontinued operations - -
------------ -----------
Net income per common share $ 0.27 $ 0.23
============ ===========
Diluted per common share amounts
Income from continuing operations $ 0.25 $ 0.22
Discontinued operations - -
------------ -----------
Net income per common share $ 0.25 $ 0.22
============ ===========
(1) Due to timing of declaration, second quarter 2008 preferred stock
dividends were reflected in the first quarter.
Items Impacting Quarterly Results
Second quarter 2008 and 2007 net income includes the following items:
Second Quarter 2008 Before After Diluted
($ millions, except per share amounts) Tax Tax EPS
------ ------ -------
Net income available to common stockholders $ 191 $ 0.25
Adjustments(1)
Change in fair value of power contracts $ 105 $ 67 $ 0.09
Change in fair value of legacy indemnification (9) (6) (0.01)
Other legacy litigation adjustments (27) (29) (0.04)
Change in fair value of production-related
derivatives in Marketing 52 33 0.04
Impact of mark-to-market (MTM) E&P derivatives(2) 61 39 0.06
-------
Adjusted EPS -- continuing operations(3) $ 0.39
=======
(1) Assumes a 36 percent tax rate, except other legacy litigation
adjustments, and 761 million diluted shares
(2) Includes $75 million of MTM losses on derivatives, adjusted for $14
million of realized losses from cash settlements
(3) Based upon 769 million fully diluted shares and includes income impact
from dilutive securities
Second Quarter 2007 Before After Diluted
($ millions, except per share amounts) Tax Tax EPS
------ ------ -------
Net income available to common stockholders $ 156 $ 0.22
Adjustments(1)
Debt repurchase costs $ 86 $ 55 $ 0.08
Change in fair value of production-related
derivatives in Marketing (9) (6) (0.01)
Discontinued operations 5 3 -
-------
Adjusted EPS -- continuing operations(2) $ 0.29
=======
(1) Assumes a 36 percent tax rate, except for discontinued operations, and
757 million diluted shares
(2) Based upon 757 million diluted shares and includes the income impact
from dilutive securities
Financial Results -- Six Months Ended June 30, 2008
For the six months ended June 30, 2008, El Paso reported net income
available to common stockholders of $391 million, or $0.54 per diluted
share, compared with $776 million, or $1.11 per diluted share, for the
first six months of 2007, which includes a $674 million, or $0.96 per
share, gain on the sale of ANR and related assets. Earnings for the
six-month periods of 2008 and 2007, after adjusting for the impacts of
production-related derivatives and other items, are $0.74 and $0.47 per
diluted share, respectively. A schedule of items affecting year-to-date
results is listed as an appendix to the release.
Business Unit Financial Update
Three Months Ended
Segment EBIT Results June 30,
($ in millions) 2008 2007
--------- ---------
Pipeline Group $ 295 $ 318
Exploration and Production 304 235
Marketing (153) 5
Power 12 16
Corporate and Other 41 (104)
--------- ---------
$ 499 $ 470
========= =========
Pipeline Group
The Pipeline Group's EBIT for the three months ended June 30, 2008, was
$295 million, compared with $318 million for the same period in 2007. EBIT
before minority interest associated with El Paso Pipeline Partners, L. P.
(NYSE: EPB), which completed its initial public offering in November 2007,
was $303 million, a 5 percent decrease from 2007 levels. Higher
reservation revenues, primarily from several expansion projects placed
in-service during 2007 and 2008, were offset by higher operating costs.
Higher operating costs primarily reflect increased labor costs and
additional maintenance associated with required work on both the Tennessee
Gas and SNG systems. While higher, these costs are on track with El Paso's
2008 plan, and the Pipeline Group is on track to achieve its 2008 financial
targets. In addition, second quarter 2007 results were favorably impacted
by a
$10-million contract settlement received from a bankruptcy claim.
Three Months Ended
Pipeline Group Results June 30,
($ in millions) 2008 2007
--------- ----------
EBIT before minority interest $ 303 $ 318
Minority interest (8) -
--------- ----------
EBIT $ 295 $ 318
DD&A $ 99 $ 91
Total throughput (BBtu/d)(1) 17,981 17,161
(1) Includes proportionate share of jointly owned pipelines
Exploration and Production
The Exploration and Production segment's EBIT for the three months ended
June 30, 2008, was $304 million, compared with $235 million for the same
period in 2007. The increase is primarily due to higher realized commodity
prices, partially offset by losses of $75 million in 2008 and $5 million in
2007 related to changes in fair value of derivative contracts not
designated as accounting hedges, higher production taxes, and higher
depreciation, depletion and amortization expense.
Second quarter 2008 production volumes averaged 833 MMcfe/d, including 71
MMcfe/d of unconsolidated affiliate production volumes. Second quarter
2007 production volumes averaged 857 MMcfe/d, including 71 MMcfe/d of
unconsolidated affiliate production volumes and 121 MMcfe/d related to
properties that were divested in the first quarter of 2008. On a pro forma
basis, adjusting 2007 production to include People's Energy and eliminating
properties that were divested in the first half of 2008, second quarter
2008 production grew 4 percent from the first quarter of 2008.
Total per-unit cash operating costs increased to an average of $2.01 per
thousand cubic feet equivalent (Mcfe) in second quarter 2008 from $1.92 per
Mcfe for the same 2007 period. The increase is primarily a result of higher
production taxes, which rise with commodity prices, and was partially
offset by a decrease in controllable costs -- direct lifting costs and G&A
expenses, which were down 7 percent year-over-year.
Three Months Ended
Exploration and Production Results June 30,
($ in millions, except prices and unit cost amounts) 2008 2007
--------- ---------
Natural gas, oil, condensate and NGL revenue $ 711 $ 570
Changes in fair value of derivative contracts(1) (75) (5)
Other revenues 19 10
--------- ---------
Total Operating Revenues $ 655 $ 575
Operating Expenses (374) (346)
Other income 23 6
--------- ---------
EBIT $ 304 $ 235
DD&A $ 197 $ 189
Consolidated volumes:
Natural gas sales volumes (MMcf/d) 662 657
Oil, condensate, and NGL sales volumes (MBbls/d) 17 21
Total consolidated equivalent sales volumes (MMcfe/d) 762 786
Four Star total equivalent sales volumes (MMcfe/d)(2) 71 71
Weighted average realized prices including hedges(3)
Natural gas ($/Mcf) $ 9.53 $ 7.67
Oil, condensate, and NGL ($/Bbl) $ 90.64 $ 56.87
Transportation costs(3)
Natural gas ($/Mcf) $ 0.32 $ 0.24
Oil, condensate, and NGL ($/Bbl) $ 1.07 $ 0.68
Per-unit costs ($/Mcfe)(3)
Depreciation, depletion and amortization $ 2.84 $ 2.64
Cash operating costs(4) $ 2.01 $ 1.92
(1) Represents the income effect of contracts not designated as accounting
hedges
(2) Four Star is an equity investment. Amounts disclosed represent the
company's proportionate share.
(3) Does not include proportionate share of Four Star
(4) Includes direct lifting costs, production taxes, G&A expenses, and
taxes other than production and income
Updated Hedge Positions
As of July 15, 2008, natural gas hedges for the last six months of 2008
have an average floor price of $7.94 per million British thermal unit
(MMBtu) and an average ceiling price of $10.23 per MMBtu on 98 trillion
British thermal units (TBtu). They are weighted toward July through
October production, with November and December production hedged at
approximately 50 percent of anticipated production. In addition, El Paso
has 1.7 million barrels of 2008 crude oil production with an average floor
price of $79.17 per barrel and an average ceiling price of $79.54 per
barrel. El Paso's 2009 natural gas hedge position has been expanded with
the addition of collars and swaps. The 2009 natural gas hedges have an
average floor price of $9.02 per MMBtu on 176 TBtu and an average ceiling
price of $14.97 per MMBtu on 151 TBtu. El Paso has oil hedges for 2009 on
3.4 million barrels of crude oil at an average fixed price of $109.93 per
barrel. 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 an EBIT loss of $153 million for the three
months ended June 30, 2008, compared with an EBIT gain of $5 million for
the same period in 2007. The decline was due to a $105-million MTM loss on
the company's power obligations that extend through 2016 in the
Pennsylvania-New Jersey-Maryland (PJM) power market and a $52-million loss
in the fair value of derivatives intended to manage the price risk of the
company's natural gas and oil production. The PJM loss was driven by
higher natural gas prices, which resulted in an 80-percent increase in
locational power price differences within the region. The actual cash paid
in the quarter relating to the basis positions was approximately $9
million. In the second quarter of 2007, the company realized a gain of $9
million on its production-related derivatives and a $36 million loss on its
PJM power contracts. Additionally, 2007 included gains totaling $44
million relating to the California power price disputes and the sale of the
company's NYMEX investment.
Power
The Power segment reported an EBIT of $12 million for the three months
ended June 30, 2008, compared with EBIT of $16 million for the same period
in 2007. Lower second quarter 2008 earnings were primarily due to gains
recognized on the sale of investments in Asia and Central America, while
2007 earnings resulted primarily from the Porto Velho power plant in
Brazil, which is expected to be sold later this year.
Corporate and Other
During the second quarter of 2008, Corporate and Other reported EBIT of $41
million compared with an EBIT loss of $104 million for the same period in
2007. Second quarter 2008 results were positively impacted by a MTM gain
related to changes in fair value of a legacy indemnification from the sale
of an ammonia facility and an adjustment to liabilities for legacy
litigation. Second quarter 2007 results were impacted by the $86-million
charge related to debt repurchase costs.
Detailed operating statistics for each of 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 second quarter 2008
results on August 6, 2008, beginning at 9:30 a.m. Eastern Time, 8:30 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 #
54966501) ten 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 August 13, 2008 by dialing (800) 642-1687 (conference ID
# 54966501). If you have any questions regarding the dial-in procedures,
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. 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. The company defines
EBIT as net income (loss) adjusted for (i) items that do not impact its
income (loss) from continuing operations, such as extraordinary items,
discontinued operations; (ii) income taxes; and (iii) interest and debt
expense. The company excludes interest and debt expense so that investors
may evaluate the company's operating results without regard to its
financing methods or capital structure. El Paso's business operations
consist of both consolidated businesses as well as investments in
unconsolidated affiliates. As a result, the company believes that EBIT,
which includes the results of both these consolidated and unconsolidated
operations, is useful to its investors because it allows them to evaluate
more effectively the performance of all of El Paso's businesses and
investments. Exploration and Production per-unit total cash costs or cash
operating costs equal total operating expenses less DD&A, transportation
cost, ceiling test charges, and cost of products and services divided by
total production. It is a valuable measure of operating efficiency. For
2008, Adjusted EPS is earnings per share from continuing operations
excluding the gain or loss related to the change in fair value of an
indemnification from the sale of an ammonia plant in 2005, the gain related
to an adjustment of the liability for indemnification of medical benefits
for retirees of the Case Corporation, gain related to the disposition of a
portion of the company's investment in its telecommunications business,
changes in fair value of power contracts, changes in fair value of the
production-related derivatives in Marketing, impact of mark-to-market E&P
derivatives and other legacy litigation adjustments. For 2007, Adjusted
EPS is earnings per share from continuing operations excluding changes in
fair value of production-related derivatives in Marketing, and debt
repurchase costs. Adjusted EPS is useful in analyzing the company's
on-going earnings potential.
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, 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, changes in unaudited and/or unreviewed financial information;
our ability to implement and achieve our objectives in our 2008 plan,
including achieving our earnings and cash flow targets; changes in reserve
estimates based upon internal and third-party reserve analyses; the effects
of any changes in accounting rules and guidance; our ability to meet
production volume targets in our Exploration and Production segment;
uncertainties and potential consequences associated with the outcome of
governmental investigations; outcome of litigation; our ability to comply
with the covenants in our various financing documents; our ability to
obtain necessary governmental approvals for proposed pipeline 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; our ability to close our announced asset sales on a
timely basis; changes in commodity prices and basis differentials for oil,
natural gas, and power; inability to realize anticipated synergies and cost
savings associated with restructurings and divestitures on a timely basis
or at all; 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; 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 August 6, 2008 Earnings Press Release
Items Impacting year-to-date results
Six Months Ended 2008 Before After Diluted
($ millions, except per share amounts) Tax Tax EPS
------ ------ -------
Net income available to common stockholders $ 391 $ 0.54
Adjustments(1)
Change in fair value of power contracts $ 146 $ 93 $ 0.12
Change in fair value of legacy indemnification 34 22 0.03
Case Corporation indemnification (65) (27) (0.04)
Gain on sale of portion of telecommunications
business (18) (12) (0.01)
Other legacy litigation adjustments (27) (29) (0.04)
Change in fair value of production-related
derivatives in Marketing 73 47 0.06
Impact of MTM E&P derivatives(2) 92 59 0.08
-------
Adjusted EPS -- continuing operations(3) $ 0.74
=======
(1) Assumes a 36 percent tax rate, except for Case Corporation
indemnification and other legacy litigation adjustments, and 760
million diluted shares
(2) Includes $110 million of MTM losses on derivatives, adjusted for $18
million of realized losses from cash settlements
(3) Based upon 768 million fully diluted shares and includes the income
impact from dilutive securities
Six Months Ended 2007 ($ millions, except per Before After Diluted
share amounts) Tax Tax EPS
------ ------ -------
Net income available to common stockholders $ 776 $ 1.11
Adjustments(1)
Debt repurchase costs $ 287 $ 184 $ 0.26
Change in fair value of production-related
derivatives in Marketing 78 50 0.07
Sale of ANR and related assets (1,043) (674) (0.96)
Effect of change in number of diluted shares(2) (0.01)
-------
Adjusted EPS -- continuing operations(2) $ 0.47
=======
(1) Assumes a 36 percent tax rate, except for discontinued operations, and
699 million diluted shares
(2) Based upon 757 million diluted shares and includes income impact from
dilutive securities
Reconciliation of Pro Forma Production Volumes
Production Volumes Three Months Ended
June 30, March 31, June 30,
(Equivalents, Mmcfe/d) 2007 2008 2008
---------- ---------- ----------
Total consolidated volumes 786 811 762
Proportionate share of Four Star 71 75 71
---------- ---------- ----------
Total volumes including Four Star 857 886 833
Less volumes from divested properties 121 88 3
---------- ---------- ----------
Pro forma production volumes 736 798 830
========== ========== ==========
EL PASO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per common share amounts)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ----------------
2008 2007 2008 2007
------- ------- ------- -------
Operating revenues $ 1,153 $ 1,198 $ 2,422 $ 2,220
Operating expenses
Cost of products and services 71 60 127 115
Operation and maintenance 282 329 553 630
Depreciation, depletion and
amortization 298 286 611 557
Taxes, other than income taxes 81 72 160 132
------- ------- ------- -------
732 747 1,451 1,434
------- ------- ------- -------
Operating income 421 451 971 786
Earnings from unconsolidated affiliates 52 44 89 81
Loss on debt extinguishment - (86) - (287)
Other income, net 33 60 55 106
Minority Interest (7) 1 (16) -
------- ------- ------- -------
78 19 128 (100)
------- ------- ------- -------
Earnings before interest expense,
income taxes, and other charges 499 470 1,099 686
Interest and debt expense (221) (231) (454) (514)
------- ------- ------- -------
Preferred interests of consolidated
subsidiaries - - - -
------- ------- ------- -------
Income before income taxes 278 239 645 172
Income taxes 87 70 235 51
------- ------- ------- -------
Income from continuing operations 191 169 410 121
Discontinued operations, net of income
taxes - (3) - 674
------- ------- ------- -------
Net income 191 166 410 795
Preferred stock dividends (1) - 10 19 19
------- ------- ------- -------
Net income available to common
stockholders $ 191 $ 156 $ 391 $ 776
======= ======= ======= =======
Earnings per common share
Basic
Income from continuing operations $ 0.27 $ 0.23 $ 0.56 $ 0.15
Discontinued operations, net of
income taxes - - - 0.97
------- ------- ------- -------
Net income per common share $ 0.27 $ 0.23 $ 0.56 $ 1.12
======= ======= ======= =======
Diluted
Income from continuing operations $ 0.25 $ 0.22 $ 0.54 $ 0.15
Discontinued operations, net of
income taxes - - - 0.96
------- ------- ------- -------
Net income per common share $ 0.25 $ 0.22 $ 0.54 $ 1.11
======= ======= ======= =======
Weighted average common shares outstanding
Basic 698 696 698 695
======= ======= ======= =======
Diluted 761 757 760 699
======= ======= ======= =======
Dividends declared per common share (1) $ - $ 0.04 $ 0.08 $ 0.08
======= ======= ======= =======
(1) Due to timing, first quarter 2008 includes two quarters of dividends
EL PASO CORPORATION
SEGMENT INFORMATION
(UNAUDITED)
2008 2007 Year-to-Date
------------- --------------------------- -------------
(In millions) First Second First Second Third Fourth 2008 2007
------ ------ ------ ------ ------ ------ ------ ------
Operating revenues
Pipelines $ 720 $ 646 $ 644 $ 614 $ 586 $ 650 $1,366 $1,258
Exploration and
Production 603 655 505 575 575 645 1,258 1,080
Marketing (57) (146) (135) (16) (9) (59) (203) (151)
Power - - - - - - - -
Corporate and
other, including
eliminations (1) 3 (2) 8 25 14 26 1 33
------ ------ ------ ------ ------ ------ ------ ------
Consolidated
total $1,269 $1,153 $1,022 $1,198 $1,166 $1,262 $2,422 $2,220
------ ------ ------ ------ ------ ------ ------ ------
Depreciation,
depletion and
amortization
Pipelines $ 99 $ 99 $ 94 $ 91 $ 94 $ 94 $ 198 $ 185
Exploration and
Production 212 197 170 189 194 227 409 359
Marketing - - 1 1 - 1 - 2
Power - - - - 1 - - -
Corporate and
other (1) 2 2 6 5 4 4 4 11
------ ------ ------ ------ ------ ------ ------ ------
Consolidated
total $ 313 $ 298 $ 271 $ 286 $ 293 $ 326 $ 611 $ 557
------ ------ ------ ------ ------ ------ ------ ------
Operating income (loss)
Pipelines $ 357 $ 263 $ 324 $ 276 $ 234 $ 277 $ 620 $ 600
Exploration and
Production 226 281 177 229 228 252 507 406
Marketing (60) (154) (136) (20) (13) (65) (214) (156)
Power (8) (5) (5) (9) (9) (3) (13) (14)
Corporate and
other (1) 35 36 (25) (25) (23) (19) 71 (50)
------ ------ ------ ------ ------ ------ ------ ------
Consolidated
total $ 550 $ 421 $ 335 $ 451 $ 417 $ 442 $ 971 $ 786
------ ------ ------ ------ ------ ------ ------ ------
Earnings (losses)
before interest
expense and income
taxes (EBIT)
Pipelines $ 381 $ 295 $ 364 $ 318 $ 275 $ 308 $ 676 $ 682
Exploration and
Production 242 304 179 235 232 263 546 414
Marketing (60) (153) (135) 5 (8) (64) (213) (130)
Power (2) 12 18 16 (67) (4) 10 34
Corporate and
other (1) 39 41 (210) (104) 51 (20) 80 (314)
------ ------ ------ ------ ------ ------ ------ ------
Consolidated
total $ 600 $ 499 $ 216 $ 470 $ 483 $ 483 $1,099 $ 686
------ ------ ------ ------ ------ ------ ------ ------
E&P Cash Costs Second Second
Quarter 2008 Quarter 2007
Total Per Unit Total Per Unit
($MM) ($/Mcfe) ($MM) ($/Mcfe)
------ ------ ------ ------
Total operating
expense $ 374 $ 5.40 $ 346 $ 4.84
Depreciation,
depletion and
amortization (197) (2.84) (189) (2.64)
Transportation
Costs (21) (0.31) (15) (0.22)
Cost of products
& services (10) (0.15) (4) (0.06)
Other (7) (0.09) - -
------ ------ ------ ------
Per unit cash
costs(2) $ 2.01 $ 1.92
------ ------ ------ ------
Total equivalent
volumes (Mmcfe)(2) 69,366 71,493
------------- -------------
(1) Includes our corporate businesses, telecommunications business and
residual assets and liabilities of previously sold or discontinued
businesses.
(2) Excludes volumes and costs associated with equity investment in Four
Star.
Contacts
Investor and Public Relations
Bruce L. Connery
Vice President
Office: (713) 420-5855
Media Relations
Bill Baerg
Manager
Office: (713) 420-2906
|
El Paso Corp.
