-------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-12
EL PASO CORPORATION
-------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
-------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------
(3) Filing Party:
---------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------------
EL PASO CORPORATION
OPERATING STATISTICS
FOURTH QUARTER 2002
TABLE OF CONTENTS
PAGE
CONSOLIDATED STATEMENTS OF INCOME 2
CONSOLIDATED ANALYSIS OF NON-RECURRING ITEMS 3
SEGMENT INFORMATION 4
CONSOLIDATED OPERATING RESULTS
CONSOLIDATED NET INCOME 5
CONSOLIDATED EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES 6
BUSINESS SEGMENT RESULTS
PIPELINE GROUP
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES 7
THROUGHPUT 8
PRODUCTION
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES 9
SALES VOLUMES AND REALIZED PRICES 10
MERCHANT ENERGY GROUP
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES 11
ANALYSIS OF PRO FORMA EARNINGS BEFORE INTEREST AND
INCOME TAX BY DIVISION 12
OPERATING DATA 13
FIELD SERVICES
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES 14
VOLUMES AND RATES 15
SCHEDULE OF NON-RECURRING ITEMS 16
EL PASO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, Except per Share Amounts)
(UNAUDITED)
Fourth Quarter Ended Twelve Months Ended
December 31, December 31,
---------------------- ---------------------
2002 2001 2002 2001
---------------------- ---------------------
Operating revenues $ 2,796 $ 2,759 $ 12,194 $ 13,649
Operating expenses
Cost of products and services 1,944 1,084 6,447 6,353
Operation and maintenance 728 679 2,606 2,876
Restructuring and merger-related costs 18 (7) 81 1,520
(Gain) loss on long-lived assets 311 19 282 183
Western Energy Settlement 899 - 899 -
Ceiling test charges 2 - 269 135
Depreciation, depletion and amortization 348 345 1,405 1,327
Taxes, other than income taxes 65 43 277 334
-------- -------- -------- --------
4,315 2,163 12,266 12,728
-------- -------- -------- --------
Operating income (loss) (1,519) 596 (72) 921
Equity earnings and other income (expense) (163) 301 (153) 708
-------- -------- -------- --------
Earnings before interest expense, income
taxes and other charges (1,682) 897 (225) 1,629
Interest and debt expense 392 290 1,400 1,156
Returns on preferred interests of
consolidated subsidiaries 38 48 159 217
-------- -------- -------- --------
Income (loss) before income taxes (2,112) 559 (1,784) 256
Income taxes (600) 180 (495) 184
-------- -------- -------- --------
Income (loss) from continuing operations
before extraordinary items and cumulative
effect of accounting changes (1,512) 379 (1,289) 72
Discontinued operations, net of income taxes (2) (4) (124) (5)
Extraordinary items, net of income taxes - - - 26
Cumulative effect of accounting changes,
net of income taxes (222) - (54) -
-------- -------- -------- --------
Net income (loss) $ (1,736) $ 375 $ (1,467) $ 93
======== ======== ======== ========
Diluted earnings (loss) per common share $ (2.92) $ 0.72 $ (2.62) $ 0.18
======== ======== ======== ========
Diluted average common shares outstanding
(000's) 593,894 529,154 559,521 515,591
======== ======== ======== ========
EL PASO CORPORATION
CONSOLIDATED ANALYSIS OF NON-RECURRING ITEMS
(In Millions, Except per Share Amounts)
(UNAUDITED)
Fourth Quarter Ended Twelve Months Ended
December 31, December 31,
---------------------- ---------------------
2002 2001 2002 2001
---------------------- ---------------------
Reported net income (loss) $ (1,736) $ 375 $ (1,467) $ 93
--------- -------- -------- --------
Non-recurring items affecting EBIT
Restructuring and merger-related costs 18 (7) 81 1,520
Impairment of long-lived assets 549 16 549 178
Impairment of equity investments 291 34 578 77
Impairments of cost basis investments - 6 56 66
Net gain on sale of long-lived assets (237) - (246) -
Net loss on sale of equity investments 20 - 51 -
Changes in accounting estimates (a) - - - 316
Western Energy Settlement 899 - 899 -
Ceiling test charges 2 - 269 135
--------- -------- -------- --------
Total non-recurring items affecting
EBIT 1,542 49 2,237 2,292
--------- -------- -------- --------
Currency loss on Euro bond offering-
reported as interest and debt expense - - 45 -
Income taxes- tax effect of above
non-recurring items (437) (16) (632) (635)
Discontinued coal operations, net of income
taxes 2 4 124 5
Extraordinary items, net of income
taxes-FTC ordered asset sales - - - (26)
Cumulative effect of accounting changes,
net of income taxes
Adoption of EITF No. 02-3 222 - 222 -
Adoption of Derivatives Issue C-16 - - (14) -
Adoption of SFAS No. 141- elimination
of negative goodwill - - (154) -
--------- -------- -------- --------
Pro forma net income (loss) $ (407) $ 412 $ 361 $ 1,729
========= ======== ======== ========
Diluted earnings (loss) per common share:
Pro forma diluted earnings per common
share $ (0.69) $ 0.79 $ 0.64 $ 3.31
Restructuring and merger-related costs (0.02) 0.01 (0.10) (2.14)
Impairment of long-lived assets (0.66) (0.02) (0.71) (0.23)
Impairment of equity investments (0.35) (0.04) (0.74) (0.10)
Impairments of cost basis investments - (0.01) (0.07) (0.08)
Net gain on sale of long-lived assets 0.28 - 0.32 -
Net loss on sale of equity investments (0.03) - (0.07) -
Changes in accounting estimates (a) - - - (0.40)
Western Energy Settlement (1.08) - (1.16) -
Ceiling test charges - - (0.35) (0.17)
Currency loss on Euro bond offering - - (0.06) -
Discontinued coal operations - (0.01) (0.22) (0.01)
Extraordinary items-FTC ordered asset
sales - - - 0.05
Cumulative effect of accounting changes
Adoption of EITF No. 02-3 (0.37) - (0.40) -
Adoption of Derivatives Issue C-16 - - 0.03 -
Adoption of SFAS No. 141- elimination
of negative goodwill - - 0.27 -
Adjustment for antidilution (b) - - - (0.05)
--------- -------- -------- --------
Reported diluted earnings (loss) per common
share $ (2.92) $ 0.72 $ (2.62) $ 0.18
========= ======== ======== ========
Reported diluted average common shares
outstanding (000's) 593,894 529,154 559,521 515,591
========= ======== ======== ========
Adjusted pro forma diluted average common
shares outstanding (000's) (b) 593,894 529,154 560,466 530,494
========= ======== ======== ========
(a) Changes in estimates related to environmental liabilities and spare
parts inventories, as discussed in our Form 10-K for the period ended
December 31, 2001.
(b) Adjusted pro forma diluted earnings (loss) per common share and
adjusted pro forma diluted average common shares outstanding for the
year ended December 31, 2002 and 2001, include the impact of
securities that are antidilutive for purposes of reporting under U.S.
generally accepted accounting principles. As a result, these amounts
differ from our reported amounts.
EL PASO CORPORATION
SEGMENT INFORMATION
(UNAUDITED)
2002 2001 Year-to-Date
--------------------------------- ------------------------------- -------------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2000
--------------------------------- ------------------------------- -------------------------
Operating revenues
Pipelines $ 703 $ 629 $ 609 $ 664 $ 792 $ 652 $ 609 $ 695 $ 2,605 $ 2,748 $ 2,741
Production 550 560 499 517 571 588 609 579 2,126 2,347 1,686
Merchant Energy 2,011 1,346 1,071 1,162 1,905 1,689 1,416 1,065 5,590 6,075 13,000
Field Services 540 501 551 437 757 737 559 500 2,029 2,553 1,439
All other and eliminations (49) (49) (74) 16 (58) 91 (27) (80) (156) (74) 405
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Consolidated total 3,755 2,987 2,656 2,796 3,967 3,757 3,166 2,759 $12,194 $13,649 19,271
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Depreciation, depletion and
amortization
Pipelines $ 91 $ 95 94 $ 94 96 $ 95 95 $ 97 $ 374 $ 383 $ 376
Production 207 193 181 192 160 165 177 176 773 678 611
Merchant Energy 34 31 34 30 24 28 26 30 129 108 100
Field Services 19 15 11 11 28 26 29 28 56 111 76
All other and eliminations 14 18 20 21 11 11 11 14 73 47 68
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Consolidated total 365 352 340 348 319 325 338 345 $ 1,405 $ 1,327 1,231
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Operating income (loss)
Pipelines $ 357 $ 277 $ 259 $ (103) $ 294 $ 31 $ 240 $ 321 $ 790 $ 886 $ 1,150
Production 175 5 179 170 188 286 168 277 529 919 613
Merchant Energy 455 (25) (241) (1,525) 168 59 147 24 (1,336) 398 572
Field Services 38 36 20 177 20 39 31 34 271 124 166
All other and eliminations (13) (59) (16) (238) (887) (350) (109) (60) (326) (1,406) (86)
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Operating income (loss) as reported 1,012 234 201 (1,519) (217) 65 477 596 $ (72) $ 921 2,415
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Earnings (loss) before interest
expense and income taxes as reported
Pipelines $ 399 $ 323 $ 302 $ (206) $ 333 $ 69 $ 274 $ 362 $ 818 $ 1,038 $ 1,323
Production 176 7 179 172 185 289 169 277 534 920 609
Merchant Energy 93 60 (171) (1,620) 257 137 253 257 (1,638) 904 930
Field Services 51 54 (11) 193 36 55 43 61 287 195 214
All other and eliminations (6) (33) 34 (221) (880) (397) (91) (60) (226) (1,428) (56)
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Consolidated total 713 411 333 (1,682) (69) 153 648 897 (225) 1,629 3,020
Non-recurring charges 375 287 33 1,542 1,159 804 280 49 2,237 2,292 117
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
Pro forma earnings
(loss) before interest and taxes $1,088 $ 698 $ 366 $ (140) $1,090 $ 957 $ 928 $ 946 $ 2,012 $ 3,921 $ 3,137
------ ------ ------- ------- ------ ------ ------ ------ ------- ------- -------
EL PASO CORPORATION
CONSOLIDATED NET INCOME
(UNAUDITED)
2002 2001 Year-to-Date
--------------------------------- ------------------------------- -------------------------
(In Millions, First Second Third Fourth First Second Third Fourth 2002 2001 2000
Except per Share Amounts) --------------------------------- ------------------------------- -------------------------
Operating revenues $3,755 $2,987 $2,656 $2,796 $3,967 $3,757 $3,166 $2,759 $12,194 $13,649 $19,271
Operating expenses 2,743 2,753 2,455 4,315 4,184 3,692 2,689 2,163 12,266 12,728 16,856
------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Operating income (loss) 1,012 234 201 (1,519) (217) 65 477 596 (72) 921 2,415
Equity earnings and other income (299) 177 132 (163) 148 88 171 301 (153) 708 605
------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Earnings (loss) before interest
expense, income taxes and
other charges 713 411 333 (1,682) (69) 153 648 897 (225) 1,629 3,020
Interest and debt expense 307 359 342 392 295 291 280 290 1,400 1,156 1,040
Returns on preferred interests of
consolidated subsidiaries 40 43 38 38 62 56 51 48 159 217 204
------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Income (loss) before income taxes and
other charges 366 9 (47) (2,112) (426) (194) 317 559 (1,784) 256 1,776
Income taxes 118 1 (14) (600) (35) (63) 102 180 (495) 184 539
------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Income (loss) from continuing
operations 248 8 (33) (1,512) (391) (131) 215 379 (1,289) 72 1,237
Discontinued operations, net of income
taxes (19) (67) (36) (2) 1 (3) 1 (4) (124) (5) (1)
Extraordinary items, net of income
taxes - - - - (10) 41 (5) - - 26 70
Cumulative effect of accounting
changes, net of income taxes 154 14 - (222) - - - - (54) - -
------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Consolidated net income (loss) $ 383 $ (45) $ (69) $(1,736) $ (400) $ (93) $ 211 $ 375 $(1,467) $ 93 $ 1,306
------ ------ ------ ------ ------ ------ ------ ------ ------- ------- -------
Pro forma diluted earnings per
common share (a) $ 0.93 $ 0.44 $(0.02) $ (0.69) $ 0.96 $ 0.79 $ 0.78 $ 0.79 $ 0.64 $ 3.31 $ 2.59
Reported diluted earnings (loss)
per common share $ 0.72 $(0.08) $(0.12) $ (2.92) $(0.80) $(0.18) $ 0.41 $ 0.72 $ (2.62) $ 0.18 $ 2.57
Adjusted pro forma diluted average
common shares outstanding (000's) 546,472 539,975 586,079 593,894 524,963 531,556 528,099 529,154 560,466 530,494 513,578
Reported diluted average common
shares outstanding (000's) 538,015 532,163 586,079 593,894 502,401 505,083 519,642 529,154 559,521 515,591 513,578
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(a) First quarter 2002 pro forma net income and pro forma diluted earnings
per share exclude after-tax impairments of investments in Argentina of
$(232) million, an after-tax ceiling test charge of $(23) million,
discontinued operations net of taxes of $(19) million and an after-tax
cumulative effect of an accounting change of $154 million from the adoption
of SFAS No. 141. First quarter 2001 pro forma net income and pro forma
diluted earnings per share exclude after-tax merger related costs of $(889)
million, discontinued operations net of taxes of $1 million and an
after-tax net extraordinary loss related to FTC-ordered asset sales of
$(10) million.
Second quarter 2002 pro forma net income and pro forma diluted earnings per
share exclude an after-tax ceiling test charge of $(159) million, after-tax
restructuring costs of $(43) million, an after-tax gain on sale of Field
Services' Dragon Trail plant of $7 million, discontinued operations net of
tax of $(67) million, an after-tax cumulative effect of an accounting
change of $14 million from the adoption of Derivatives Issue C-16 and
after-tax currency loss on Euro bond offering reported as interest expense
of $(31) million. Second quarter 2001 pro forma net income and pro forma
diluted earnings per share exclude after-tax merger-related costs of $(545)
million, discontinued operations net of taxes of $(3) million and the
after-tax impact of extraordinary items related to FTC-ordered asset sales
of $41 million.
Third quarter 2002 pro forma net income and pro forma diluted earnings per
share exclude discontinued operation net of tax of $(36) million and
after-tax loss on sale of asset disposals of $(22) million. Third quarter
2001 pro forma net income and pro forma diluted earnings per share exclude
after-tax merger-related costs of $(98) million, an after-tax ceiling test
charge of $(91) million, discontinued operations net of taxes of $1 million
and the after-tax impact of extraordinary items related to FTC-ordered
asset sales of $(5) million.
For an explanation of the fourth quarter 2002 and 2001 excluded charges
refer to the Consolidated Analysis of Non-recurring Items on page 3.
EL PASO CORPORATION
CONSOLIDATED EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES
(UNAUDITED)
2002 2001 Year-to-Date
--------------------------------- ------------------------------- -------------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2000
--------------------------------- ------------------------------- -------------------------
Operating revenues
Pipelines $ 703 $ 629 $ 609 $ 664 $ 792 $ 652 $ 609 $ 695 $ 2,605 $ 2,748 $ 2,741
Production 550 560 499 517 571 588 609 579 2,126 2,347 1,686
Merchant Energy 2,011 1,346 1,071 1,162 1,905 1,689 1,416 1,065 5,590 6,075 13,000
Field Services 540 501 551 437 757 737 559 500 2,029 2,553 1,439
All other and eliminations (49) (49) (74) 16 (58) 91 (27) (80) (156) (74) 405
------ ----- ------ ------- ------ ------ ------ ------ ------- ------- -------
Total 3,755 2,987 2,656 2,796 3,967 3,757 3,166 2,759 12,194 13,649 19,271
------ ----- ------ ------- ------ ------ ------ ------ ------- ------- -------
Operating expenses
Cost of products and services 1,613 1,472 1,418 1,944 1,923 1,965 1,381 1,084 6,447 6,353 12,863
Operation and maintenance 662 584 632 728 658 815 724 679 2,606 2,876 2,408
Restructuring and merger-related
costs - 63 - 18 1,011 489 27 (7) 81 1,520 93
(Gain) loss on long-lived assets (15) (15) 1 311 153 4 7 19 282 183 (5)
Western energy settlement - - - 899 - - - - 899 - -
Ceiling test charges 33 234 - 2 - - 135 - 269 135 -
Depreciation, depletion and
amortization 365 352 340 348 319 325 338 345 1,405 1,327 1,231
Taxes, other than income taxes 85 63 64 65 120 94 77 43 277 334 266
------ ----- ------ ------- ------ ------ ------ ------ ------- ------- -------
Total 2,743 2,753 2,455 4,315 4,184 3,692 2,689 2,163 12,266 12,728 16,856
------ ----- ------ ------- ------ ------ ------ ------ ------- ------- -------
Consolidated operating income (loss) 1,012 234 201 (1,519) (217) 65 477 596 (72) 921 2,415
Equity earnings and other income (299) 177 132 (163) 148 88 171 301 (153) 708 605
------ ----- ------ ------- ------ ------ ------ ------ ------- ------- -------
Earnings (loss) before interest
expense, income taxes and other
charges $ 713 $ 411 $ 333 $(1,682) $ (69) $ 153 $ 648 $ 897 $ (225) $ 1,629 $ 3,020
------ ----- ------ ------- ------ ------ ------ ------ ------- ------- -------
PIPELINE GROUP
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES
(EXCLUDES INTRASEGMENT TRANSACTIONS)
2002 2001 Year-to-Date
--------------------------------- ------------------------------- -------------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2000
--------------------------------- ------------------------------- -------------------------
Revenues $ 703 $ 629 $ 609 $ 664 $ 792 $ 652 $ 609 $ 695 $2,605 $2,748 $2,741
Operating expenses
Operation and maintenance 227 223 226 240 273 265 243 247 916 1,028 1,083
Restructuring and merger-related costs - 1 - - 88 207 (4) - 1 291 -
(Gain) loss on long-lived assets (12) (2) 2 (1) 1 19 2 (1) (13) 21 (7)
Western Energy Settlement - - - 412 - - - - 412 - -
Depreciation, depletion and
amortization 91 95 94 94 96 95 95 97 374 383 376
Taxes, other than income taxes 40 35 28 22 40 35 33 31 125 139 139
----- ----- ----- ----- ----- ----- ----- ----- ------- ------ ------
Total 346 352 350 767 498 621 369 374 1,815 1,862 1,591
----- ----- ----- ----- ----- ----- ----- ----- ------- ------ ------
Operating income (loss) as reported 357 277 259 (103) 294 31 240 321 790 886 1,150
Equity earnings and other income
(expense) 42 46 43 (103) 39 38 34 41 28 152 173
Earnings before interest expense and
income taxes as reported $ 399 $ 323 $ 302 $(206) $ 333 $ 69 $ 274 $ 362 $ 818 $1,038 $1,323
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Earnings before interest expense and
income taxes as reported $ 399 $ 323 $ 302 $(206) $ 333 $ 69 $ 274 $ 362 $ 818 $1,038 $1,323
Non-recurring charges:
Operations and Maintenance - 1 - - 89 246 (4) - 1 331 -
Western Energy Settlement - - - 412 - - - - 412 - -
Equity earnings and other income - - - 149 - - 3 - 149 3 -
----- ----- ----- ----- ----- ----- ----- ----- ------- ------ ------
Pro forma earnings before interest
expense and income taxes $ 399 $ 324 $ 302 $ 355 $ 422 $ 315 $ 273 $ 362 $ 1,380 $1,372 $1,323
----- ----- ----- ----- ----- ----- ----- ----- ------- ------ ------
PIPELINE GROUP
THROUGHPUT
(EXCLUDES INTRASEGMENT VOLUMES)
(BBtu/d)
2002 2001 Year-to-Date
-------------------------------- ------------------------------- ---------------------
First Second Third Fourth First Second Third Fourth 2002 2001 2000
Tennessee Gas Pipeline 4,789 4,235 4,472 4,889 5,045 4,092 4,162 4,331 4,596 4,405 4,354
American Natural Resources 3,779 3,604 3,746 3,634 3,938 3,776 3,655 3,738 3,691 3,776 3,807
Southern Natural Gas 2,283 1,780 1,823 2,195 2,231 1,657 1,692 1,935 2,020 1,877 2,132
El Paso Natural Gas 4,203 4,046 4,069 3,943 4,826 4,552 4,550 4,214 4,065 4,535 4,310
Colorado Interstate Gas 2,789 2,429 2,460 2,896 2,431 2,284 2,136 2,517 2,644 2,341 2,106
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total 17,843 16,094 16,570 17,557 18,471 16,361 16,195 16,735 17,016 16,934 16,709
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Equity Investments (Ownership
Percentage)
Citrus (50%) 887 1,048 1,151 919 619 782 954 873 1,002 808 766
Portland (30%) 51 31 43 46 26 19 34 42 43 30 21
Australia (33%) 286 309 320 304 293 296 347 289 305 306 274
Great Lakes (50%) 1,245 1,099 1,221 1,192 1,146 1,095 1,143 1,066 1,189 1,112 1,239
Alliance (2%) 224 208 199 136 202 222 210 220 192 214 15
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total 2,693 2,695 2,934 2,597 2,286 2,414 2,688 2,490 2,731 2,470 2,315
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total throughput 20,536 18,789 19,504 20,154 20,757 18,775 18,883 19,225 19,747 19,404 19,024
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Alliance percentage decreased from 14% to 2% effective 11/21/02.
PRODUCTION
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES
(EXCLUDES INTRASEGMENT TRANSACTIONS)
2002 2001 Year-to-Date
------------------------------- ------------------------------- ----------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2000
------------------------------- ------------------------------- ----------------------
Operating revenues
Natural gas $ 480 $ 441 $ 403 $ 434 $ 480 $ 501 $ 523 $ 501 $1,758 $2,005 $1,412
Oil, condensate and liquids 82 115 92 84 86 80 80 74 373 320 255
Other (12) 4 4 (1) 5 7 6 4 (5) 22 19
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Total operating revenues 550 560 499 517 571 588 609 579 2,126 2,347 1,686
Transportation and net product
costs (22) (33) (29) (29) (37) (19) (19) (22) (113) (97) (78)
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Total operating margin 528 527 470 488 534 569 590 557 2,013 2,250 1,608
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Operating expenses
Operation and maintenance 97 92 97 100 75 83 86 110 386 354 314
Restructuring and merger-related
costs - - - - 47 - - - - 47 -
(Gain) loss on long-lived assets (2) - - 5 16 - - - 3 16 -
Ceiling test charges 33 234 - 2 - - 135 - 269 135 -
Depreciation, depletion and
amortization 207 193 181 192 160 165 177 176 773 678 611
Taxes, other than income taxes 18 3 13 19 48 35 24 (6) 53 101 70
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Total 353 522 291 318 346 283 422 280 1,484 1,331 995
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Operating income 175 5 179 170 188 286 168 277 529 919 613
Equity Earnings and Other income
(expense) 1 2 - 2 (3) 3 1 - 5 1 (4)
----- ----- ----- ----- ----- ----- ----- ----- ------ ------ ------
Earnings before interest expense and
income taxes as reported $ 176 $ 7 $ 179 $ 172 $ 185 $ 289 $169 $ 277 $ 534 $ 920 $ 609
----- ----- ----- ------ ----- ----- ---- ----- ----- ----- ------
Earnings before interest expense and
income taxes as reported $ 176 $ 7 $ 179 $ 172 $ 185 $ 289 $ 169 $ 277 $ 534 $ 920 $ 609
Non-recurring charges:
Operations and Maintenance - - - 4 63 7 3 - 4 73 -
Ceiling test charges 33 234 - 2 - - 135 - 269 135 -
-----------------------------------------------------------------------------------------
Pro forma earnings before interest
expense and income taxes $ 209 $ 241 $ 179 $ 178 $ 248 $ 296 $ 307 $ 277 $ 807 $1,128 $ 609
-----------------------------------------------------------------------------------------
PRODUCTION
SALES VOLUMES AND REALIZED PRICES
2002 2001 Year-to-Date
-------------------------------- -------------------------------- -------------------------
First Second Third Fourth First Second Third Fourth 2002 2001 Third
-------------------------------- -------------------------------- -------------------------
Natural Gas Sales Volumes (MMcf)
Onshore 82,122 69,866 68,612 62,619 72,764 77,493 84,098 88,665 283,219 323,020 291,719
Offshore 40,024 38,239 36,991 35,818 54,033 52,231 51,362 43,861 151,072 201,487 200,039
Coal Seam 7,261 8,223 9,957 10,350 5,530 6,878 7,785 6,853 35,791 27,046 24,095
International 3,859 3,692 4,532 4,759 1,617 2,675 3,121 5,774 16,841 13,187 1,064
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Natural Gas Sales Volumes 133,266 120,020 120,092 113,546 133,944 139,277 146,366 145,153 486,923 564,740 516,917
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Oil, Condensate and Liquids Sales
Volumes (MBbls)
Onshore 2,132 1,778 1,416 1,261 1,575 1,901 1,507 1,756 6,587 6,739 5,548
Offshore 2,586 2,913 2,323 2,053 1,545 1,429 1,858 2,251 9,875 7,083 6,066
International 270 275 247 260 14 23 197 326 1,052 560 12
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Oil, Condensate and
Liquids Sales Volumes 4,988 4,966 3,986 3,574 3,134 3,353 3,562 4,333 17,514 14,382 11,626
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Equivalent Sales Volumes (MMcf)
Onshore 94,913 80,534 77,109 70,184 82,213 88,900 93,140 99,204 322,739 363,457 325,007
Offshore 55,538 55,719 50,931 48,134 63,300 60,805 62,510 57,363 210,322 243,978 236,439
Coal Seam 7,261 8,223 9,957 10,350 5,530 6,878 7,785 6,853 35,791 27,046 24,095
International 5,481 5,340 6,011 6,324 1,699 2,812 4,307 7,732 23,156 16,550 1,140
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Equivalent Sales Volumes 163,193 149,816 144,008 134,992 152,742 159,395 167,742 171,152 592,008 651,031 586,681
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Weighted Average Realized Prices
Natural Gas ($/Mcf) $ 3.46 $ 3.45 $ 3.21 $ 3.61 $ 3.48 $ 3.49 $ 3.46 $ 3.33 $ 3.43 $ 3.44 $ 2.62
Natural Gas ($/Mcf) before Hedging $ 2.18 $ 2.40 $ 2.93 3.79 $ 7.14 $ 4.37 $ 2.85 $ 2.34 $ 2.98 $ 4.11 $ 3.86
Oil, Condensate and Liquids ($/bbl) $ 15.68 $ 22.14 $ 22.19 $ 22.39 $ 27.42 $ 22.98 $21.62 $ 16.58 $ 20.37 $21.68 $21.82
Oil, Condensate and Liquids ($/bbl)
before Hedging $ 15.02 $ 21.99 $ 22.93 $ 23.14 $ 28.64 $ 24.02 $22.46 $ 16.26 $ 20.46 $22.31 $28.24
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
MERCHANT ENERGY GROUP
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES
(EXCLUDES INTRASEGMENT TRANSACTIONS)
2002 2001 Year-to-Date
------------------------------- ------------------------------- ---------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2002
------------------------------- ------------------------------- ---------------------
Gross margin and other revenue $819 $307 $101 $(312) $638 $460 $478 $343 $ 915 $1,919 $1,703
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
Operating expenses
Operation and maintenance 319 277 295 359 301 347 298 263 1,250 1,209 1,014
Restructuring and merger-related
costs - 11 1 17 4 25 (1) 16 29 44 -
(Gain) loss on long-lived assets - (3) (2) 306 132 (9) - 4 301 127 (6)
Western Energy Settlement - - - 487 - - - - 487 - -
Depreciation, depletion and
amortization 34 31 34 30 24 28 26 30 129 108 100
Taxes other than income taxes 11 16 14 14 9 10 8 6 55 33 23
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
Total 364 332 342 1,213 470 401 331 319 2,251 1,521 1,131
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
Operating income (loss) as reported 455 (25) (241) (1,525) 168 59 147 24 (1,336) 398 572
Equity earnings and other income
(expense) (362) 85 70 (95) 89 78 106 233 (302) 506 358
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
Earnings before interest expense and
income taxes as reported $ 93 $60 $(171) $(1,620) $257 $137 $253 $257 $(1,638) $904 $930
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
Earnings before interest expense and
income tax as reported $ 93 $60 $(171) $(1,620) $257 $137 $253 $257 $(1,638) $904 $930
Non-recurring charges:
Operation and maintenance - 11 1 326 134 91 61 15 338 301 13
Western Energy Settlement - - - 487 - - - - 487 - -
Equity earnings and other income
(expense) 342 - (16) 159 - 39 - 35 485 74 -
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
Pro forma earnings before interest
expense and income taxes $435 $71 $(186) $ (648) $391 $267 $314 $307 $ (328) $1,279 $943
---- --- ----- ------- ---- ---- ---- ---- ------- ---- ----
MERCHANT ENERGY GROUP
ANALYSIS OF PRO FORMA EARNINGS BEFORE INTEREST EXPENSE AND
INCOME TAXES BY DIVISION
2002 2001 Year-to-Date
------------------------------- ------------------------------- ---------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2000
------------------------------- ------------------------------- ---------------------
Power
Electron management fee $ 46 $ 46 $ 47 $ 46 $ 37 $ 37 $ 37 $ 36 $ 185 $ 147 $ 80
Other Domestic 354 69 19 4 55 47 32 117 446 251 187
International 14 114 49 47 36 52 65 43 224 196 188
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Total 414 229 115 97 128 136 134 196 855 594 455
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Petroleum
Refineries 15 (16) (84) 10 45 - 32 (29) (75) 48 48
Chemicals, Terminals, Marine, &
Other 1 - (1) (11) 12 18 9 - (11) 39 74
Petroleum & LNG Trading 4 19 17 42 48 48 26 98 82 220 99
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Total 20 3 (68) 41 105 66 67 69 (4) 307 221
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Trading
Gas and Power 68 (108) (170) (713) 194 112 160 89 (923) 555 421
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Total 68 (108) (170) (713) 194 112 160 89 (923) 555 421
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Admin. G&A (67) (53) (63) (73) (36) (47) (47) (47) (256) (177) (154)
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
Total $435 $ 71 $(186) $(648) $391 $267 $314 $307 $(328) $1,279 $943
---- ---- ---- ---- ---- ---- ---- ---- ----- ------ -----
MERCHANT ENERGY GROUP
OPERATING DATA
(EXCLUDES INTRASEGMENT TRANSACTIONS)
2002 2001 Year-to-Date
------------------------------- ------------------------------- -------------------------
First Second Third Fourth First Second Third Fourth 2002 2001 2000
------------------------------- ------------------------------- -------------------------
PRICE RISK MANAGEMENT STATISTICS
Forward Trading Book (In Millions) $ 995 $ 1,078 $ 968 $ (59) $ 1,151 $ 1,158 1,026 $ 1,295 $ (59) $ 1,295 $ 2,201
Forward Non-trading Book (In
Millions) 984 979 963 968 - - - - 968 - -
------- ------- ------- ------- ------- ------- ----- ------- ------- ------- -------
Total Forward Book (In
Millions) $ 1,979 $ 2,057 $ 1,931 $ 909 $ 1,151 $ 1,158 $ 1,026 $ 1,295 $ 909 $ 1,295 $ 2,201
Average VAR (In Millions) * $ 18 $ 13 $ 16 $ 16 $ 35 $ 25 $ 24 $ 18 $ 16 $ 25 $ 9
Physical Gas Delivery (BBtu/d) 13,221 13,639 12,425 8,232 13,847 9,187 7,318 9,468 11,879 9,230 7,768
Physical Power Sales (MMwh) 104,659 107,698 141,022 116,098 35,488 44,537 60,551 76,811 469,477 217,387 115,303
Financial Settlements (BBtue/d)** 222,745 201,637 207,683 195,215 247,596 186,860 231,942 262,571 190,670 232,282 151,115
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
ASSET STATISTICS
Power Assets Capacity (Net Megawatts)
Domestic 2,228 2,228 2,183 2,192 3,517 3,117 3,117 2,301 2,192 2,301 2,096
Electron 3,931 3,931 3,465 3,457 4,202 4,722 3,714 3,775 3,457 3,775 3,532
------- ------- ------- ------- ------- ------- ----- ------- ------- ------- -------
Total Domestic 6,159 6,159 5,648 5,649 7,719 7,839 6,831 6,076 5,649 6,076 5,628
International 4,389 4,535 5,302 4,836 3,806 3,685 3,685 4,006 4,836 4,006 3,586
------- ------- ------- ------- ------- ------- ----- ------- ------- ------- -------
Total 10,548 10,694 10,950 10,485 11,525 11,524 10,516 10,082 10,485 10,082 9,214
Power Generation Volumes (MMwh) 1,663 1,409 1,631 1,206 819 897 1,020 953 5,909 3,689 3,369
Petroleum Assets
Aruba refinery-MBbl/d 220 124 118 124 247 142 171 152 146 178 229
Aruba refinery-Margin/Bbl $3.324 $ 1.619 $ 1.659 $ 3.103 $ 4.345 $ 5.482 $ 3.657 $ 0.182 $ 2.579 $ 3.507 $ 3.338
Eagle Point refinery-MBbl/d 92 124 143 146 122 128 114 109 127 118 144
Eagle Point refinery-Margin/Bbl $4.351 $ 2.942 $ 3.261 $ 4.174 $ 4.027 $ 3.624 $ 2.480 $ 0.273 $ 3.644 $ 2.670 $ 4.162
------ ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
ANALYSIS OF PRICE RISK MANAGEMENT ACTIVITIES AND FORWARD BOOK
Total Portfolio Value at Risk:
(In Millions)
-------------
One Day VAR-95% Confidence Level at December 31, 2002 $ 11
One Day VAR-99% Confidence Level at December 31, 2002 $ 16
Average VAR-95% Confidence Level during 2002 $ 16
High VAR-95% Confidence Level during 2002 $ 22
Low VAR-95% Confidence Level during 2002 $ 9
December 02 (In Millions)
-------------------------
Trade Book Book
Risk Management Assets and Liabilities -------------------------
Mark to Market Value and Cash Liquidation
2003 $ 26 $ 93
2004 $ (21) $ 91
2005 $ 18 $ 89
2006 $ 3 $ 86
2007 $ (12) $ 84
Remainder $ (73) $ 525
--------- ---------
* 2001 average VAR was calculated using the variance-covariance
methodology, and 2002 was calculated using the historical simulation
methodology.
** Financial settlements for the second through fourth quarters of 2002
and year-to-date 2002 exclude financial settlements associated with
futures.
FIELD SERVICES
EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES
(EXCLUDES INTERSEGMENT TRANSACTIONS)
2002 2001 Year-to-Date
------------------------------- ------------------------------- ---------------------
(In Millions) First Second Third Fourth First Second Third Fourth 2002 2001 2000
------------------------------- ------------------------------- ---------------------
Gross margin
Gathering and transportation $ 82 $ 41 $ 39 $ 29 $ 76 $ 74 $ 82 $ 69 $ 191 $ 301 $ 225
Processing 39 39 39 30 61 65 61 48 147 235 190
NGL business 4 4 2 1 13 6 2 4 11 25 22
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Total 125 84 80 60 150 145 145 121 349 561 437
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Operating expenses
Operation and maintenance 61 37 44 38 66 64 71 51 180 252 175
Restructuring and merger-related
costs - 1 - - 29 9 8 - 1 46 -
(Gain) loss on long-lived assets - (10) 1 (170) - - - - (179) - 7
Depreciation, depletion and
amortization 19 15 11 11 28 26 29 28 56 111 76
Taxes;other than income taxes 7 5 4 4 7 7 6 8 20 28 13
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Total 87 48 60 (117) 130 106 114 87 78 437 271
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Operating income (loss) as reported 38 36 20 177 20 39 31 34 271 124 166
Equity earnings and other income
(expense) 13 18 (31) 16 16 16 12 27 16 71 48
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Earnings before interest expense and
income taxes as reported $ 51 $ 54 $(11) $ 193 $ 36 $ 55 $ 43 $ 61 $ 287 $ 195 $ 214
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Earnings before interest expense and
income taxes as reported $ 51 $ 54 $(11) $ 193 $ 36 $ 55 $ 43 $ 61 $ 287 $ 195 $ 214
Non-recurring charges:
Operation and maintenance - (9) 1 (169) 29 10 17 - (177) 56 11
Equity earnings and other income - - 47 3 - - - - 50 - -
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Pro forma earnings before interest
expense and income taxes $ 51 $ 45 $ 37 $ 27 $ 65 $ 65 $ 60 $ 61 $ 160 $ 251 $ 225
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Equity earnings from El Paso Energy
Partners, L.P.(a) $ 15 $ 18 $ 17 $ 19 $ 16 $ 10 $ 10 $ 11 $ 69 $ 47 $ 20
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Cash Distributions from El Paso Energy
Partners, L.P.
Common unit ownership 6 8 8 8 5 5 5 5 30 20 20
General partner ownership 9 11 11 12 5 6 6 8 43 25 17
----- ----- ---- ------ ----- ------ ----- ----- ----- ----- -----
Total $ 15 $ 19 $ 19 $ 20 10 $ 11 $ 11 $ 13 $ 73 $ 45 $ 37
(a) El Paso is a general partner and owns 26.5 percent of the common units,
all of the partership's Series C units and Series B preference units. The
Series C units are reflected in the partnership's capital account at $351
million and the Series B preference units are reflected at $158 million.
FIELD SERVICES SEGMENT
VOLUMES AND RATES
2002 2001 Year-to-Date
------------------------------- -------------------------------- ----------------------
First Second Third Fourth First Second Third Fourth 2002 2001 2000
------------------------------- -------------------------------- ----------------------
Gathering and transportation volumes
(BBtu/d) 2,153 2,265 2,209 1,839 2,442 2,363 2,229 2,121 2,116 2,288 -
Gathering and transportation volumes
from sold assets(1) 3,679 - - - 3,666 3,631 3,948 4,036 907 3,821 -
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
Total gathering and transportation
volumes (Btu/d) 5,832 2,265 2,209 1,839 6,108 5,994 6,177 6,157 3,023 6,109 3,868
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
Weighted average gathering and
transporation rates ($/MMBtu) $ 0.16 $ 0.20 $ 0.19 $ 0.17 $ 0.14 $ 0.14 $ 0.14 $ 0.12 $0.17 $ 0.14 $0.16
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
Processing volumes (Inlet BBtu/d) (2) 3,937 3,928 3,883 3,729 3,710 4,160 4,367 4,461 3,869 4,177 -
Processing volumes from sold assets (1) 180 28 - - 182 180 184 186 51 183 -
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
Total processing volumes (Inlet
BBtu/d) 4,117 3,956 3,883 3,729 3,892 4,340 4,551 4,647 3,920 4,360 2,930
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
Weighted average processing margins
($/MMBtu) $ 0.10 $ 0.11 $ 0.11 $ 0.09 $ 0.17 $ 0.16 $ 0.15 $ 0.11 $ 0.10 $ 0.15 $ 0.18
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
Total NGL production (Bbl/d) 162,052 181,718 153,630 134,851 143,784 172,212 184,063 177,672 157,976 169,566 111,054
------- ------- ------- ------- ------- ------- ------- ------ ----- ------ -----
2002 2001 Year-to-Date
------------------------------- -------------------------------- ----------------------
First Second Third Fourth First Second Third Fourth 2002 2001 2000
------------------------------- -------------------------------- ----------------------
El Paso Energy Partners, L.P
Natural gas pipelines and plants
(BBtu/d) (2) 2,430 6,254 5,971 6,501 1,950 2,235 1,896 2,314 5,302 2,099 1,714
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Oil and NGL logistics (Bbls/d) 231,740 240,184 219,449 209,613 201,288 248,825 234,606 241,408 225,170 231,650 175,005
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(1) Represents volumes for assets sold during 2002. YTD reflects total
activities since transfer date over 365 days (four quarters) for the
volumes of the assets transferred.
(2) Includes Chaco volumes of 432 Bbtu/d for the fourth quarter, 616 Bbtu/d
for the third quarter, 646 Bbtu/d for the second quarter, 619 Bbtu/d
for the first quarter 2002, and 529 Bbtu/d for the fourth quarter
2001 related to the Chaco transaction of October 2001.
EL PASO CORPORATION
SCHEDULE OF NON-RECURRING ITEMS
(UNAUDITED)
Fourth Quarter Ended December 31, Twelve Months Ended December 31,
--------------------------------- --------------------------------
2002 2001 2002 2001
---- ---- ---- ----
(In Millions) Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax Pre-tax After-tax
------- --------- ------- --------- ------- --------- ------- ---------
Restructuring and mereger-related costs
Employee severance, retention and
transition costs $ 18 $ 13 $ 9 $ 6 $ 41 $ 30 $ 838 $ 569
Transactions costs and fees - - - - 40 29 70 48
Business and operational integration (32) (22) - - 383 260
Other - - 16 11 - - 229 257
Total Restructuring and merger-related ------ ------ ----- ----- ------ ------ ------- ------
costs 18 13 (7) (5) 81 59 1,520 1,134
------ ------ ----- ----- ------ ------ ------- ------
Asset impairments and net (gain)/loss
on sales
Long-lived assets impairment 549 393 16 11 549 397 178 121
Equity investments impairment 291 209 34 23 578 418 77 52
Cost basis investments impairment - - 6 4 56 40 66 45
Long-lived assets net gain on sales (237) (169) - - (246) (177) - -
Equity investments net loss on sales 20 14 - - 51 37 - -
------ ------ ----- ----- ------ ------ ------- ------
Total (gain)/loss on assets 623 447 56 38 988 715 321 218
------ ------ ----- ----- ------ ------ ------- ------
Changes in accounting estimates - - - - - - 316 214
Western Energy Settlement 899 644 - - 899 649 - -
Ceiling test charges 2 1 - - 269 194 135 91
------ ------ ----- ----- ------ ------ ------- ------
Total charges impacting EBIT 1,542 1,105 49 33 2,237 1,617 2,292 1,657
------ ------ ----- ----- ------ ------ ------- ------
Currency Loss - - - - 45 33 - -
Discontinued operations, net of income
taxes - 2 - 4 - 124 - 5
------ ------ ----- ----- ------ ------ ------- ------
Extraordinary items, net of income taxes - - - - - - - (26)
------ ------ ----- ----- ------ ------ ------- ------
Cumulative effect of accounting
changes, net of income taxes - 222 - - - 54 - -
------ ------ ----- ----- ------ ------ ------- ------
Total non-recurring items $1,542 $1,329 $ 49 $ 37 $2,282 $1,828 $ 2,292 $1,636
------ ------ ----- ----- ------ ------ ------- ------
Fourth Quarter 2002 Twelve Months Ended 2002
-------------------------------- ------------------------------
Pro forma Non-Rec Reported Pro forma Non-Rec Reported
EBIT Charges EBIT EBIT Charges EBIT
Total EBIT by segment ---------- --------- --------- --------- -------- ---------
Pipelines $ 355 $ 561 $ (206) $1,380 $ 562 $ 818
Production 178 6 172 807 273 534
Merchant Energy (648) 972 (1,620) (328) 1,2310 (1,638)
Field Services 27 (166) 193 160 (127) 287
Corporate and Other (52) 169 (221) (7) 219 (226)
------ ------ ------- ------ ------ ------
Total $ (140) $1,542 $(1,682) $2,012 $2,237 $ (225)
------ ------ ------- ------ ------ ------
Fourth Quarter 2001 Twelve Months Ended 2001
-------------------------------- ------------------------------
Pro forma Non-Rec Reported Pro forma Non-Rec Reported
EBIT Charges EBIT EBIT Charges EBIT
Total EBIT by segment ---------- --------- --------- --------- -------- ---------
Pipelines $ 362 $ - $ 362 1,372 $ 334 $1,038
Production 277 - 277 1,128 208 920
Merchant Energy 307 50 257 1,279 375 904
Field Services 61 - 61 251 56 195
Corporate and Other (61) (1) (60) (109) 1,319 (1,428)
------ ------ ------- ----- ------ ------
Total $ 946 49 $ 897 $3,921 2.292 $1,629)
------ ------ ------- ----- ------ ------