El Paso Energy earnings hit a new record for 1998, and each ofthe company’s operating segments was credited for the success. ElPaso diluted earnings per share rose 16% to a record $1.85 in 1998from $1.59 in 1997. Consolidated earnings before interest expenseand income taxes (EBIT) for 1998 increased to a record $644 millioncompared to $578 million in the year ago period.

“Each of El Paso Energy’s operating segments had an outstandingyear in 1998, enabling the company to deliver substantial, highquality earnings growth,” said CEO William A. Wise. “We had a solidperformance from our interstate pipelines, and evolving marketconditions will make these systems even more valuable in the comingyear. We also have a real success story in our non-regulatedbusinesses, where earnings more than doubled from 1997 levels. Thisis exceptional performance in a year marked by considerablefluctuations in global financial markets and depressed energycommodity prices. 1998 continues our trend of developing anincreasing share of earnings from our non-regulated businesseswhile also growing our regulated pipeline earnings.”

El Paso’s Tennessee Gas Pipeline, and El Paso Natural Gas Co.,reported 1998 EBIT of $358 million and $217 million, respectively.Tennessee’s earnings increased 13% from 1997, while El Pasoreported record throughput on its system. Earnings from thecompany’s non-regulated businesses – El Paso Field Services Co., ElPaso Energy Marketing Co., and El Paso Energy International Co. -totaled $110 million compared to $48 million in 1998. Strong gainsin both the energy marketing and international segments contributedto the significant increase. Full-year EBIT for El Paso FieldServices was $75 million. El Paso Energy Marketing’s EBIT was $9million for ’98, compared to a $28 million EBIT loss in 1997, whileEBIT for El Paso Energy International rose to $25 million comparedto $2 million in 1997.

El Paso fourth quarter 1998 diluted earnings increased 11% to arecord $0.49/diluted share, compared with $0.44/share in 1997.Consolidated EBIT for the quarter increased to $173 millioncompared to $151 million in the year-ago period.

Tennessee Gas Pipeline reported fourth quarter EBIT of $106million compared to $89 million a year ago. The $17 millionincrease was the result of lower operating expenses partiallyoffset by a decrease in system throughput due to generally mildweather in the company’s market areas. Tennessee system throughputaveraged 4,959 billion British thermal units a day (BBTU/d). ElPaso Natural Gas reported fourth quarter EBIT of $50 millioncompared to $61 million in 1997. The decrease resulted from lowerrevenues due to contract step-downs, partially offset by additionalrevenues from re-marketed pipeline capacity. Throughput on the ElPaso system averaged 4,156 BBTU/d for the fourth quarter of 1998.

El Paso Field Services reported fourth quarter EBIT of $22million compared to $18 million in 1997. The increase was due tohigher gathering and treating volumes. The increase in volumespartially offset the impact of continued weak gas liquids prices.Gathering and treating volumes averaged 4,321 BBTU/d, whileprocessing volumes averaged 1,050 BBTU/d. El Paso Energy Marketingreported fourth quarter EBIT of $9 million compared to $0.5 millionin 1997. Average marketed gas volumes in the quarter were 15,263BBTU/d and power marketed volumes were 8,738 thousand MWh. El PasoEnergy International reported fourth quarter EBIT of $3 millioncompared to an EBIT loss of $3 million in 1997.

El Paso’s board increased the quarterly dividend of 4.6% to 20cents/share payable April 1. With this increase, El Paso Energy’sdividend has grown at an average annual rate of 7% since thecompany’s initial public offering in March 1992.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.