el paso EP3Q2008EarningsFINAL(Web)

El Paso Corporation

Third Quarter 2008Financial & Operational Update

November 6, 2008

2

Cautionary StatementRegarding Forward-looking Statements

This presentation 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 meet our 2009 debt maturities; volatility in, and access to, the capital markets; our ability to implement and achieve our objectives in our 2008 plan, 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 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; our ability to close asset sales, as well as transactions with partners on one or more of our expansion projects that are included in the plan on a timely basis; 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; our ability to obtain targeted cost savings in our businesses; inability to realize anticipated synergies and cost savings 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, 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 presentation 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.

Cautionary Note to U.S. Investors—The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosures regarding proved reserves in this presentation and the disclosures contained in our Form 10-K for the year ended December 31, 2007, File No. 001-14365, available by writing; Investor Relations, El Paso Corporation, 1001 Louisiana St., Houston, TX 77002. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

Non-GAAP Financial MeasuresThis presentation includes certain Non-GAAP financial measures as defined in the SEC’s Regulation G. More information on these Non-GAAP financial measures, including EBIT, EBITDA, adjusted EBITDA, adjusted EPS, cash costs, and the required reconciliations under Regulation G, are set forth in this presentation or in the appendix hereto. El Paso defines Resource Potential or Resource Inventory as subsurface volumes of oil and natural gas the company believes may be present and eventually recoverable. The company utilizes a net, geologic risk mean to represent this estimated ultimate recoverable amount.

3

Our Purpose

El Paso Corporation provides natural gas and related energy

products in a safe, efficient, and dependable manner

4

the place to workthe neighbor to havethe company to own

Our Vision & Values

5

Maintaining Liquidity WhilePreserving Future Growth

ANR sale, EPB IPO and drop down all designed toprovide financial flexibilityPosition El Paso to weather current situation$3 billion 2009 capital budgetKey points of focus:

Provide sufficient liquidity for May maturitiesExecute on pipeline backlogPreserve inventory of E&P opportunities

Will utilize several strengths & benefits:Strong cash flow2009 hedgesCapex flexibilityPipeline investment-grade ratings

6

Strong Quarterly Earnings

Pipeline expansions

Higher pricing

Improvement despite significant hurricane impact

Financial Results

8

Financial Results:Quarters Ending September 30

2008 2007

$1,248

$834

AdjustedEBITDA*

Diluted EPSfrom Continuing

2008 2007

$0.58

$0.20

Adjusted Diluted EPS from Continuing

2008 2007

$0.35$0.22

EBIT

2008 2007

$881

$483

Interest Expense

2008 2007

$221 $228

Realized Natural Gas Price ($Mcf)

2008 2007

$8.92$7.12

Higher earnings driven by growth in both core businesses

$ Millions, Except EPS

Note: Appendix and slides 9 and 10 include details on non-GAAP terms*Reflects El Paso’s proportionate interest in Citrus and Four Star

9

Items Impacting 3Q 2008 Results

Net income available to common stockholders

Adjustments1

Change in fair value of power contractsChange in fair value of legacy indemnification

Change in fair value ofproduction-related derivatives in Marketing

Impact of MTM E&P derivatives2

Adjusted EPS—Continuing operations3

$ (63)12

(14)(215)

Pre-tax$ 436

$ (40)8

(9)(138)

After-tax$ 0.58

$(0.05)0.01

(0.01)(0.18)

$ 0.35

Diluted EPS

1All adjustments assume a 36% tax rate and 766 MM diluted shares2Includes $214 MM of MTM gains on derivatives adjusted for $1 MM of realized losses from cash settlements3Reflects fully diluted shares of 766 MM and includes income impact from dilutive securities


10

Business Unit Contribution

Core BusinessesPipelines E&P

Core Businesses Total

Other BusinessesMarketingPowerCorporate & Other

Total

Quarter EndedSeptember 30, 2008

$ 278532

$ 810

82(6)(5)

$ 881

AdjustedEBITDA*EBIT DD&A EBITDA

*Adjusted Pipeline EBITDA for 50% interest in Citrus and adjusted E&P EBITDA for 49% interest in Four Star; Appendix includes details on non-GAAP terms

$ Millions

$ 97191

$ 288

––4

$ 292

$ 375723

$1,098

82(6)(1)

$1,173

$ 410763

$1,173

82(6)(1)

$1,248

11

Cash Flow and Capital Investment

$ 8551,4082,263(212)

2,051–

$ 2,051

$ 1,905$ 362$ 671$ 113

Income from continuing operationsNon-cash adjustments

SubtotalWorking capital changes and other*

Cash flow from continuing operationsDiscontinued operations

Cash flow from operations

Capital expendituresAcquisitionsProceeds from divestituresDividends paid

2008

Nine Months EndedSeptember 30,

$ 2761,2931,569

(76)1,493

(31)$1,462

$1,796$1,182$ 82$ 112

2007

*Includes change in margin collateral of $32 MM in 2008 and $83 MM in 2007

$ Millions

2008 YTD total cash generated > $300 MM

12

Marketing Financial Results

StrategicChange in fair value of

production-related derivatives

OtherChange in fair value of natural gas

derivative contractsChange in fair value of power contractsSettlements, demand charges, & otherOperating expenses & other income

Other total

EBIT

EBIT

$ Millions

$ 14

763

5(7)68

$ 82

Quarters EndedSeptember 30,2008 2007

$ 15

(4)(11)

(9)1

(23)

$ (8)

$ (59)

18(83)10

(17)(72)

$(131)

Nine Months EndedSeptember 30,2008 2007

$ (63)

(26)(43)(28)22

(75)

$(138)

13

($150)

($125)

($100)

($75)

($50)

($25)

$0

$25

$50

$75

2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

PJM Basis MTM Impact & Cash Settlements

MTM impactCash settlements

14

2008 Natural Gas andOil Hedge Positions

0.2 MMBbls$56.10 ceiling/

$55.00 floor

Balance atMarket Price

Ceiling

Floor

0.8 MMBblsAverage cap $80.10/Bbl

0.8 MMBblsAverage floor $79.81/Bbl

Note: See full Production-related Derivative Schedule in Appendix

42 TBtuAverage cap $10.16/MMBtu

34 TBtu$10.77 ceiling/

$8.00 floor

8 TBtu$7.66

fixed price

42 TBtuAverage floor $7.93/MMBtu

Ceiling

Floor

0.6 MMBbls$88.48

fixed price

Positions as of October 2, 2008(Contract Months October 2008 – Forward)

2008 Gas

2008 Oil

Attractive hedges for remainder of 2008

15

Balance atMarket Price

Note: See full Production-related Derivative Schedule in Appendix*Includes proportionate share of Four Star equity volumes

151 TBtuAverage cap $14.97/MMBtu

8 TBtu$7.33

fixed price

176 TBtuAverage floor $9.02/MMBtu

Ceiling

Floor

3.4 MMBbls$109.93

fixed price

2009 Gas

2009 Oil

2009 Natural Gas andOil Hedge Positions

143 TBtu$15.41ceiling

168 TBtu$9.10floor

~70% of domestic natural gas and ~60% domestic oil production hedged*2009 hedge program valued at ~$500 MM at November 3, 2008

Positions as of October 2, 2008(Contract Months October 2008 – Forward)

16

Liquidity Update

$1.9 billion liquidity at 9/30/08$1.2 billion cash$0.7 billion revolving credit facilities

$2.5 billion in revolving facilities maturing 2012$1.0 billion in LC facilities

Roll-off with collateral needs in 2009 and 2011Diverse group of 31 banksPrimary covenants*

Debt to EBITDA < 5.25x LTM 3.4xEBITDA to fixed charges > 2.0x LTM 3.1x

*As defined in El Paso Corporation’s $1.5 billion Revolving Credit Agreement

17

Debt Maturity Schedule$ Millions

$0$100$200$300$400$500$600$700$800$900

$1,000

4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2010

$4

$956*

$251

$4$115

$4

*Excludes $89 MM of euro hedge gain

18

2008–2009 Outlook

Projected 2008 EPS ± $1.25Capital spending slow down underway$3 billion 2009 capital program

$1.7 billion Pipelines; $1.3 billion E&PPlan to meet 2009 maturities primarily through capex reductions

Minor asset salesPartner(s) on growth projects

Do not anticipate need to access capital markets until 2H 2009Will be opportunistic in capital markets

And have numerous additional liquidity options

Pipeline Group

20

3Q Highlights

EBIT: $278 MM$12 MM hurricane impact

Throughput increased 5% from 2007 YTD

Three growth projects placed in-serviceCheyenne Plains Coral Expansion (Aug. 2008)SNG SESH Phase I (Sep. 2008)—Spectra operatedWIC Medicine Bow Expansion (Oct. 2008)

21

Pipeline Group Financial Results

EBIT before minority interest1Less minority interestEBIT

EBITDAAdjusted EBITDA2

Capital expendituresAcquisitions3

Quarters Ended September 30,2008 2007

$275–

$275

$369$403

$339 $ –

$ Millions

Nine Months Ended September 30,2008 2007

$2857

$278

$375$410

$375 $ 8

$ 957–

$ 957

$ 1,236$ 1,338

$ 765 $ –

$ 97824

$ 954

$ 1,249$ 1,348

$ 830 $ 303

13Q 2008 included $12 MM unfavorable impact from Hurricanes Gustav & Ike2Adjusted Pipeline EBITDA for 50% interest in Citrus3Gulf LNG and TGP Blue Water acquisitionsNote: Appendix includes details on non-GAAP terms

Full year capital ~$1.7 billion

22

Continued Throughput Increase

TGP

Elba deliveries to FloridaSNG 2%

9%

EPNG

CIG Rockies supply, expansions

5% overall increase

2% Independence Hub

Note: CIG includes Colorado Interstate Gas, Cheyenne Plains and Wyoming InterstateEPNG includes El Paso Natural Gas and Mojave

4% California

YTD % Increase 2008 vs. 2007

Impacted bycooler summer, hurricanes

TGP Hurricane Impact

Kinder

VM 245

Cocodrie

Port Sulphur

YscloskeyJohnson Bayou

SS 198

Egan

Pecan Island

Grand Chenier

Bluewater Header

Blue

wat

er W

est L

eg

500

Line

800

Line

Damaged TGP FacilitiesThird Party Platforms (Toppled or Damaged)

South Timbalier

SouthPass

Blue

wate

r Eas

t Leg

$80–$120 MM preliminary estimate to repair/abandon525 MMcf/d still shut-in

24

TGP Carthage

TGP Concord Lateral Expansion

CIG Totem Storage

WIC Piceance Lateral Expansion

$200Total capital

Projects In-service 2008–20092008 2009

WIC Kanda Lateral IN-SERVICE

Cheyenne Plains—Coral IN-SERVICE

SNG Cypress Phase II IN-SERVICE

SNG SESH Phase I* IN-SERVICE

WIC Medicine Bow IN-SERVICE

CIG High Plains Pipeline 4Q

TGP Blue Water/800 Line Exp 4Q

$575

Note: Total capital amounts represent total project costs*Operated by Spectra Energy

El Paso operated projects are within budget

($ Millions)

25

CIG High Plains Pipeline$216 MM (100%)November 2008

900 MMcf/d

TGP Carthage Expansion

$39 MMMay 2009

100 MMcf/d

SNG South System III/ SESH Phase II

$352 MM / $69 MM2011–2012

370 MMcf/d / 350 MMcf/d

Elba Expansion III & Elba Express

$1.1 Billion2010–2013

8.4 Bcf / 0.9 Bcf/d & 1.2 Bcf/d

SNG Cypress Phase III $86 MM

2011160 MMcf/d

CIG Totem Storage$154 MM (100%)

July 2009200 MMcf/d

WIC Piceance Lateral$62 MM4Q 2009

220 MMcf/d

El Paso PipelineEl Paso Pipeline Partners, LP

TGP Concord$21 MM

Nov 200930 MMcf/d

Gulf LNG$1+ Billion (100%)

20116.6 Bcf / 1.3 Bcf/d

CIG Raton 2010 Expansion$146 MM2Q 2010

130 MMcf/d

Executing on $8 Billion Backlog ofCommitted Growth

FGT Phase VIII Expansion

$2.4 Billion (100%)2011

800 MMcf/d

7x run-rate EBITDAManaging capex risk

TGP Blue Water / 800 Ln Exp$25 MM

Dec 2008340 MMcf/d

Note: As of November 6, 2008; El Paso Pipeline Partners owns 25% of SNG & 40% of CIG

Ruby Pipeline$3 Billion

20111.3–1.5 Bcf/d

WIC System Expansion $71 MM

2010–2011320 MMcf/d

TGP Line 300 Expansion $750 MM

2010–2011290 MMcf/d

26

Pipeline Summary

Solid YTD performance

Disciplined execution on growth projects

Outlook remains strong

Exploration & Production

28

3Q Highlights

EBIT significantly increased over same period last year Production below expectations

Peoples Energy productionCentralLegacy Texas Gulf CoastHurricane Impact

Progress in Haynesville and Cotton Valley programsInternational projects advancing

29

Hurricane Impact 3Q Update

TGC: -5 MMcfe/d

Central: -2 MMcfe/d

Dolly

IkeGulf of Mexico impact: -34 MMcfe/d

15 MMcfe/d currently shut-in due to damage at Eugene Island55 MMcfe/d currently shut-in behind High Island Offshore Systems25 MMcfe/d shut-in behind Stingray System

Production: -41 MMcfe/dTotal repair costs: $30 MM–$35 MM during 2008–2009

Gustav

Edouard

30

E&P Results

EBIT1

EBITDA1

Adjusted EBITDA2

Capital expendituresAcquisition capital

$ 532

723763

41218

20072008

Quarters EndedSeptember 30

$ 232

426450

349911

1Quarter ended includes MTM gains on derivatives of $214 MM in 2008 and $6 MM in 2007. Cash paid related to settlements of these derivatives were $1 MM and $6 MM, respectively. Year-to-date includes MTM gains on derivatives of $104 MM in 2008 and $4 MM in 2007. Cash paid related to settlements of these derivatives were $19 MM and $25 MM, respectively

2Adjusted E&P EBITDA for equity interest in Four StarNote: Appendix includes details on non-GAAP terms

$ Millions

$ 1,078

1,6781,784

1,11461

20072008

Nine Months EndedSeptember 30

$ 646

1,1991,278

1,0841,180

Full year capital ~$1.8 billion

31

3Q 2007 2Q 2008 3Q 20083Q 2007 2Q 2008 3Q 2008

3Q Production Update

Note: Includes proportionate share of Four Star equity volumesAppendix includes details on non-GAAP terms*Excludes volumes from domestic assets sold in 2008, adjusts volumes for the effects of the hurricanes in 2008 and assumesfull year of Peoples volumes in 2007

MMcfe/d

308

223

13611

833

155

As Reported

283

205

20614

848

140

Pro Forma*

308

222

13411

830

155

196

14914

801

143

299

Full year estimate 815–825 MMcfe/d, excluding 30 MMcfe/d of hurricane volumes

313

227

12711

834

156

311

222

9311793

156

Central Western TGC GOM/SLA Intl

32

Total Cash Costs$/Mcfe

3Q 2007 1Q 2008 2Q 2008 3Q 2008

Production TaxesTaxes Other Than Production & IncomeGeneral & AdministrativeDirect Lifting Costs

$1.77

$0.04

$0.64

$0.26

$0.83

$1.92

$0.04

$0.64

$0.42

$0.82 $0.79

$0.54

$0.63

$0.05

$2.01

$1.51 $1.50 $1.47$0.96

$0.50

$0.38$0.05

$1.89

$1.39

33

Domestic Pilot Programs Progressing

Cotton Valley HorizontalProducing

Lindy Britton #2H (IP @ 7.0 MMcfe/d)Sample H #5 (IP @ 3.2 MMcfe/d)

Remaining 2008Weyerhauser 15H #1Lindy Britton #4HMeans Family Trust 26H

Haynesville ShaleProducing

Miller Land Co 10H #1 (IP @ 4.5 MMcfe/d)Travis Lynch GU #4-H (IP @ 8.0 MMcfe/d)

Remaining 2008RF Gamble 24H #1Blake 10H #1

TX

AK

LA

Haynesville Shale OutlineEl Paso AcreageCotton Valley HorizontalHaynesville ShaleRemaining 2008 locations

Holly/LogansportBethany Longstreet

Minden/SEBrachfield

34

Brazil Update

Camarupim (Bia)Expect first gas 1Q 2009Finalizing commercial agreementsAdvancing drilling programs

PinaúnaEnvironmental milestone—Terms of ReferenceStart-up linked to the timing of remaining environmental approvalsPlan to slow pace of development

Exploration Copaiba—currently evaluating well

35

2009 Capital Program$1.3 billion capital program

~ 30% below 2008

Increase focus on programswith significant inventory and repeatability

Cotton Valley Horizontal,Altamont oilHaynesville, Niobrara (Pierre),New Albany shalesBlack Warrior Basin CBM

Reduced spending in Texas Gulf Coast and Gulf of Mexico

2009 production essentially flat with 2008

$0

$500

$1,000

$1,500

$2,000

2008 2009

Domestic International

2008 vs. 2009Capital Spending

($ Millions)

36

E&P Summary

Strong 3Q financial performance

Continued focus on low-risk programs with significant inventory

Lower 2009 capital will result in essentially flat production

Preserve drilling inventory

37

Outlook

Capital planAddresses 2009 maturitiesFulfills Pipeline growth programPreserves future E&P opportunities

Additional options available to address potential liquidity needs

No change in longer-term earnings potential

El Paso Corporation

Third Quarter 2008Financial & Operational Update

November 6, 2008

39

Appendix

40

Disclosure of Non-GAAPFinancial 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 and 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. EBITDA is defined as EBIT excluding depreciation, depletion and amortization. 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. Adjusted EBITDA is defined as EBITDA including the proportional share of EBITDA less our recorded equity earnings from our equity investments in Citrus and Four Star. The company believes that adjusted EBITDA is useful to its investors because it allows them to evaluate more effectively the performance of our businesses regardless of the type of ownership structure. Exploration and Production per-unit total cash costs or cash operating costs equal total operating expenses less DD&A, cost of products and services, transportation costs, and ceiling test charges 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 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, loss on other legacy litigation adjustments, changes in fair value of power contracts, changes in fair value of the production-related derivatives in the Marketing segment and the impact of MTM E&P derivatives. For 2007, Adjusted EPS is earnings per share from continuing operations excluding changes in fair value of production-related derivatives in Marketing, the loss related to Brazilian power impairments, the gain related to the crude oil trading liability, the loss related to an adjustment of the liability for indemnification of medical benefits for retirees of the Case Corporation, debt repurchase costs, and the effect of the change in the number of diluted shares. 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.

43

Financial Results

EBITInterest and debt expenseIncome before income taxesIncome taxes Income from continuing operationsDiscontinued operations, net of income taxes

Net incomePreferred stock dividends


Diluted EPS from continuing operationsDiluted EPS from discontinued operations

Total diluted EPS

Diluted shares (millions)

2007


2008($ Millions, Except EPS) 2007

Quarters EndedSeptember 30,

$ 881(221)660215445

–445

9$ 436

$ 0.58–

$ 0.58

766

2008

$ 483(228)255100155

–155

9$ 146

$ 0.20–

$ 0.20

759

$ 1,980(675)

1,305450855

–85528

$ 827

$ 1.12–

$ 1.12

767

$ 1,169(742)42715127667495028

$ 922

$ 0.350.96

$ 1.31

699

44

2008 Analysis ofWorking Capital and Other Changes

$ 32

177

(381)

(62)

(56)

78

$(212)

Margin collateral

Changes in price risk management activities

Settlements of derivative instruments

Net changes in trade receivable/payable

Settlement of liabilities

Other

Total working capital changes & other

Nine Months EndedSeptember 30, 2008

$ Millions

45

Items Impacting YTD 2008 Results


Adjustments1

Change in fair value of power contractsChange in fair value of legacy indemnificationCase Corporation indemnificationGain on sale of portion of telecommunications businessOther legacy litigation adjustments


Impact of MTM E&P derivatives2


$ 8346

(65)(18)(27)

59(123)

Pre-tax

$827

$ 5329

(27)(12)(29)

38(79)

After-tax

$ 1.12

$ 0.070.04

(0.04)(0.01)(0.04)

0.05(0.10)

$ 1.09

Diluted EPS

1All adjustments assume a 36% tax rate, except Case Corporation indemnification and other legacy litigation adjustments, and 767 MM diluted shares

2Includes $104 MM of MTM gains on derivatives adjusted for $19 MM of realized losses from cash settlements3Reflects fully diluted shares of 767 MM and includes income impact from dilutive securities


46

Items Impacting 3Q 2007 Results


Adjustments1

Brazilian power impairmentsCrude oil trading liabilityCase Corporation indemnification



$ 65(77)11

(15)

Pre-tax$146

$ 65(49)

7

(10)

After-tax$ 0.20

$ 0.09(0.07)0.01

(0.01)

$ 0.22

Diluted EPS

1All adjustments assume a 36% tax rate, except for Brazilian power impairments, and 759 MM diluted shares2Reflects diluted shares of 759 MM and includes income impact from dilutive securities


47

Items Impacting YTD 2007 Results


Adjustments1

Brazilian power impairmentsCrude oil trading liabilityCase Corporation indemnificationDebt repurchase costsChange in fair value of

production-related derivatives in MarketingSale of ANR and related assetsEffect of change in number of diluted shares2


$ 65(77)11

287

63(1,043)

Pre-tax$ 922

$ 65(49)

7184

40(674)

After-tax$ 1.31

$ 0.09(0.07)0.010.26

0.06(0.96)(0.01)

$ 0.69

Diluted EPS

1Adjustments assume 36% tax rate, except for Brazilian power impairments and discontinued operations, and 699 MM diluted shares

2Based upon 757 MM diluted shares and includes the income impact from dilutive securities


48





Total

Quarter EndedSeptember 30, 2007

$ 275232

$ 507

(8)(67)

51

$ 483



$ Millions

$ 94194

$ 288

–14

$ 293

$ 369426

$ 795

(8)(66)

55

$ 776

$ 403450

$ 853

(8)(66)55

$ 834

49





Total

Nine Months EndedSeptember 30, 2008

$ 9541,078

$2,032

(131)4

75

$1,980



$ Millions

$ 295600

$ 895

––8

$ 903

$1,2491,678

$2,927

(131)4

83

$2,883

$1,3481,784

$3,132

(131)4

83

$3,088

50

Reconciliation of EBIT/EBITDA

EBITDALess: DD&AEBITInterest and debt expenseIncome before income taxesIncome taxes Income from continuing operationsDiscontinued operations, net of taxes

Net IncomePreferred stock dividends

Net income available tocommon stockholders

$1,173292881

(221)660215445

–445

9

$ 436

Quarters EndedSeptember 30, 2008 2007

$ Millions

Nine Months EndedSeptember 30, 2008 2007

$2,883903

1,980(675)

1,305450855

–855

28

$ 827

$ 776293483

(228)255100155

–155

9

$ 146

$2,019850

1,169(742)

427151276674950

28

$ 922

51

Reconciliation ofAdjusted Pipeline EBITDA

$ 20131012

–$ 55

$ 3755520

$ 410

Citrus equity earnings50% Citrus DD&A50% Citrus interest50% Citrus income taxesOther*

50% Citrus EBITDA

El Paso Pipeline EBITDAAdd: 50% Citrus EBITDALess: Citrus equity earnings

Adjusted Pipeline EBITDA

Citrus debt at September 30 (50%)

Quarters EndedSeptember 30,2008 2007

*Other represents the excess purchase price amortization and differences between the estimated and actual equity earnings on our investment

$ Millions

Nine Months EndedSeptember 30,2008 2007

$ 21139

13(1)

$ 55

$ 3695521

$ 403

$ 52402832(1)

$ 151

$1,249151

52$1,348

$ 542

$ 65382839(3)

$ 167

$1,236167

65$1,338

$ 479

52

Reconciliation of Adjusted E&P EBITDA

$ 106–

2113

$ 50

$ 7235010

$ 763

Four Star equity earningsProportionate share of Four Star DD&AProportionate share of Four Star interestProportionate share of Four Star income taxesOther*

Proportionate share of Four Star EBITDA

El Paso E&P EBITDAAdd: Proportionate share of Four Star EBITDALess: Four Star equity earnings

Adjusted E&P EBITDA

Quarters EndedSeptember 30,

2008 2007

*Represents the excess purchase price amortizationNote: In the third quarter of 2007, E&P increased its interest in Four Star from 43% to 49%

$ Millions


2008 2007$ 2

5–9

10$ 26

$ 42626

2$ 450

$ 3617

–4940

$ 142

$1,678142

36$1,784

$ 416

–2637

$ 83

$ 1,19983

4$ 1,278

53

Per Unit($/Mcfe)

3Q 2007

$ 4.79

(2.69)

(0.26)

(0.07)

–

$ 1.77

72,392

$ 347

(194)

(19)

(6)

–

E&P Cash Costs

Total operating expense

Depreciation, depletion and amortization

Transportation costs

Costs of products

Other

Per unit cash costs1

Total equivalent volumes (MMcfe)1,2

1Excludes volumes and costs associated with equity investment in Four Star2Approximately 41 MMcfe/d was lost in 3Q 2008 due to hurricane impact

Total($ MM)

Total($ MM)

$ 374

(197)

(21)

(10)

(7)

$ 5.40

(2.84)

(0.31)

(0.15)

(0.09)

$ 2.01

69,366

Per Unit($/Mcfe)

2Q 2008

$ 377

(212)

(19)

(5)

–

$ 5.11

(2.87)

(0.26)

(0.06)

–

$ 1.92

73,762

Total($ MM)

Per Unit($/Mcfe)

1Q 2008

Total($ MM)

$ 353

(191)

(23)

(13)

(1)

$ 5.35

(2.89)

(0.35)

(0.20)

(0.02)

$ 1.89

66,033

Per Unit($/Mcfe)

3Q 2008

54

Production-Related Derivative Schedule

Designated—EPEPFixed price—LegacyFixed priceCeilingFloor

Economic—EPEPFixed priceCeilingFloor

Avg. ceilingAvg. floor

Designated—EPEPFixed price

Economic—EPEPFixed price

Economic—EPMCeilingFloor

Avg. ceilingAvg. floor

1.15.3

27.527.5

1.86.56.5

42.242.2

0.43

0.20

0.220.22

0.850.85

$ 3.49$ 8.37$ 10.87$ 8.00

$ 8.24$ 10.32$ 8.00

$ 10.16$ 7.93

$ 88.57

$ 88.28

$ 56.10$ 55.00

$ 80.10$ 79.81

4.6

101.0125.8

3.641.941.9

151.1175.9

1.39

2.04

3.433.43

$ 3.56

$ 14.58$ 8.93

$ 12.06$ 17.40$ 9.61

$ 14.97$ 9.02

$110.00

$109.87

$109.93$109.93

4.6

4.64.6

$3.70

$3.70$3.70

2008NotionalVolume(TBtu)

Avg. HedgePrice

($/MMBtu)

2009NotionalVolume(TBtu)

Avg. Hedge Price

($/MMBtu)

NotionalVolume(TBtu)

Avg. Hedge Price

($/MMBtu)

2010

NotionalVolume

(MMBbls)

Avg. HedgePrice

($/Bbl)

2008

Natural Gas

Crude Oil

6.8

6.86.8

$3.88

$3.88$3.88

NotionalVolume(TBtu)

Avg. Hedge Price

($/MMBtu)

2011–2012

Note: Positions are as of October 2, 2008 (Contract months: Oct 2008–Forward)

NotionalVolume

(MMBbls)

Avg. HedgePrice

($/Bbl)

2009

55

Reconciliation ofPro Forma Production Volumes

Equivalents, MMcfe/d

Central

Western

TGC

GOM/SLA

International

Total consolidated

Proportionate shareof Four Star

Total withFour Star

222

140

205

206

14

787

61

848

30

8

31

1

–

70

–

70

ReportedAdd:

Peoples

Less:Domestic

Assets Sold Pro Forma*

14

5

40

58

–

117

–

117

238

143

196

149

14

740

61

801

3Q 2007

Reported

237

155

223

136

11

762

71

833

Add:Peoples

Less:Domestic

Assets SoldPro

Forma*

2Q 2008

–

–

1

2

–

3

–

3

237

155

222

134

11

759

71

830

236

156

222

93

11

718

75

793

Add:Peoples

Less:Domestic

Assets SoldPro

Forma*

3Q 2008

238

156

227

127

11

759

75

834

Reported

*Excludes volumes from domestic assets sold in 2008 and adjusts volumes for the effects of the hurricanes in 2008 and assumes full year of Peoples volumes in 2007

–

–

–

–

–

–

–

–

Add:Hurricane

Impact

2

–

5

34

–

41

–

41

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

el paso EP3Q2008EarningsFINAL(Web)

Economy & Finance

Transcript of el paso EP3Q2008EarningsFINAL(Web)