SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996)
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______ to _______
Commission File No. 1-14365
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
El Paso Energy Corporation Retirement Savings Plan
(herein referred to as the "Plan")
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
El Paso Energy Corporation
(herein referred to as the "Company")
1001 Louisiana Street
Houston, Texas 77002
<PAGE>
REQUIRED INFORMATION
Item 4.
Financial Statements and Exhibits
(a) Financial Statements and Supplemental Schedules for the Years
Ended December 31, 1999, and 1998:
Report of Independent Accountants
Financial Statements:
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1999
Statement of Net Assets Available for Plan Benefits with Fund
Information as of December 31, 1998
Statement of Changes in Net Assets Available for Plan Benefits with
Fund Information for the Year Ended December 31, 1999
Notes to Financial Statements
Supplemental Schedules:
Schedule H
Line 4i - Schedule of Assets Held for Investment Purposes as
of December 31, 1999
Schedule H
Line 4j - Schedule of Reportable Transactions for the Year
Ended December 31, 1999
(b) Exhibits:
Exhibit
No. Description
------- -----------
23 Consent of Independent Accountants
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the trustees (or other persons
who administer the plan) have duly caused this
annual report to be signed by the undersigned
hereunto duly authorized.
El Paso Energy Corporation
Retirement Savings Plan
By /s/ Jeffrey I. Beason
_________________________
Jeffrey I. Beason
Vice President and
Controller
Date: June 28, 2000
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
-------------
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
WITH REPORT OF INDEPENDENT ACCOUNTANTS
December 31, 1999 and 1998
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
WITH REPORT OF INDEPENDENT ACCOUNTANTS
INDEX
Page
----
Report of Independent Accountants............................... 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits with
Fund Information as of December 31, 1999..................... 3
Statement of Net Assets Available for Plan Benefits with
Fund Information as of December 31, 1998..................... 4
Statement of Changes in Net Assets Available for Plan
Benefits with Fund Information for the year ended
December 31, 1999............................................. 5
Notes to Financial Statements.................................. 6
Supplemental Schedules:
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes as of December 31, 1999................... 17
Schedule H, Line 4j- Schedule of Reportable Transactions for
the year ended December 31, 1999................... 19
Consent of Independent Accountants............................... 20
<PAGE>
[Letterhead of PricewaterhouseCoopers LLP]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
El Paso Energy Corporation:
In our opinion, the accompanying statements of net assets available for
benefits with fund information and the related statement of changes in
net assets available for benefits with fund information present
fairly, in all material respects, the net assets available for benefits of
the El Paso Energy Corporation Retirement Savings Plan (the "Plan") at
December 31, 1999 and December 31, 1998, and the changes in net assets
available for benefits with fund information for the year ended
December 31, 1999 in conformity with accounting principles generally
accepted in the United States. These financial statements are the
responsibility of the Plan's management; our responsibility is to express
an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
listed in the index on page 1 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but
are supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The fund information in the statements of net
assets available for plan benefits with fund information and the statement
of changes in net assets available for plan benefits with fund information
is presented for purposes of additional analysis rather than to present the
net assets available for plan benefits and changes in net assets available
for plan benefits of each fund. These supplemental schedules and fund
information are the responsibility of the Plan's management. The
supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
June 23, 2000
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
December 31, 1999
<TABLE>
<CAPTION>
Fund Information
--------------------------------------------------------------------------------------
Large
Company Equity International Capitalization
Income Stock Index Equity Equity
Fund Fund Fund Fund Fund(1)
---------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Assets
Investments at
fair value:
Company common
stock $ - $155,462,460 $ - $ - $ -
Equity interest - - 85,209,217 13,702,589 38,382,510
Participant loan - - - - -
Short-term cash
investments 10,005,585 1,068,225 173 - -
Investments at
contract value:
Deposits with
financial
institutions 78,667,449 - - - -
Deposits with
insurance
companies 73,659,911 - - - -
------------ ----------- ------------- ----------- ------------
Total investment 162,332,945 156,530,685 85,209,390 13,702,589 38,382,510
------------ ----------- ------------- ----------- ------------
Receivables:
Dividends and
interest 13,910 826,809 - - -
Amounts due from
(due to) others - 3,825,876 (396,795) (105,411) (152,618)
------------ ----------- ------------- ----------- ------------
Total net
receivables 13,910 4,652,685 (396,795) (105,411) (152,618)
------------ ----------- ------------- ----------- ------------
Total assets 162,346,855 161,183,370 84,812,595 13,597,178 38,229,892
------------ ----------- ------------- ----------- ------------
Net assets available
for Plan benefits $162,346,855 $161,183,370 $84,812,595 $13,597,178 $38,229,892
=========== ============ =========== =========== ===========
Small
Putnam New Capitalization Asset
Opportunities Equity Allocation Loan
Fund Fund Fund Fund Total
-------------- -------------- ---------- ---------- -------------
Assets
Investments at
fair value:
Company common
stock $ - $ - $ - $ - $155,462,460
Equity interest 66,332,522 2,477,536 18,691,362 - 224,795,736
Participant loan - - - 15,239,997 15,239,997
Short-term cash
investments - - - - 11,073,983
Investments at
contract value:
Deposits with
financial
institutions - - - - 78,667,449
Deposits with
insurance
companies - - - - 73,659,911
------------ ----------- ------------- ----------- ------------
Total investment 66,332,522 2,477,536 18,691,362 15,239,997 558,899,536
------------ ----------- ------------- ----------- ------------
Receivables:
Dividends and
interest - - - - 840,719
Amounts due from
(due to) others 245,255 - 76,333 - 3,492,640
------------ ----------- ------------- ----------- ------------
Total net
receivables 245,255 - 76,333 - 4,333,359
------------ ----------- ------------- ----------- ------------
Total assets 66,577,777 2,477,536 18,767,695 15,239,997 563,232,895
------------ ----------- ------------- ----------- ------------
Net assets available
for Plan benefits $66,577,777 $2,477,536 $18,767,695 $15,239,997 $563,232,895
=========== ========= ========== ========== ===========
(1) The Large Capitalization Equity Fund replaced the Growth Fund. See Investment Options under footnote 1.
The accompanying notes are an integral part of these financial statements
</TABLE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
December 31, 1998
<TABLE>
<CAPTION>
Fund Information
--------------------------------------------------------------------------------------
Company Equity International
Income Stock Index Equity Growth
Fund Fund Fund Fund Fund
---------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Assets
Investments at
fair value:
Company common
stock $ - $107,917,167 $ - $ - $ -
Equity interest - - 78,825,896 10,085,840 28,807,691
Deposits with
insurance companies 8,710,660 - - - -
Participant loan - - - - -
Short-term cash
investments 10,774,913 9,298,189 - - -
Investments at
contract value:
Deposits with
financial
institutions 37,105,508 - - - -
Deposits with
insurance
companies 100,844,788 - - - -
------------ ----------- ------------- ----------- ------------
Total investment 157,435,869 117,215,356 78,825,896 10,085,840 28,807,691
------------ ----------- ------------- ----------- ------------
Receivables:
Dividends and
interest 20,070 580,470 - - -
Amounts due from
(due to) others (2,750,255) 7,738,104 (155,395) (71,386) 1,168
------------ ----------- ------------- ----------- ------------
Total net
receivables (2,730,185) 8,318,574 (155,395) (71,386) 1,168
------------ ----------- ------------- ----------- ------------
Total assets 154,705,684 125,533,930 78,670,501 10,014,454 28,808,859
------------ ----------- ------------- ----------- ------------
Net assets available
for Plan benefits $154,705,684 $125,533,930 $78,670,501 $10,014,454 $28,808,859
=========== ============ =========== =========== ===========
Small
Putnam New Capitalization Asset
Opportunities Equity Allocation Loan
Fund Fund Fund Fund Total
-------------- -------------- ---------- ---------- -------------
Assets
Investments at
fair value:
Company common
stock $ - $ - $ - $ - $107,917,167
Equity interest 39,987,627 2,023,607 25,185,591 - 184,916,252
Deposits with
insurance companies - - - - 8,710,660
Participant loan - - - 16,093,331 16,093,331
Short-term cash
investments - - - - 20,073,102
Investments at
contract value:
Deposits with
financial
institutions - - - - 37,105,508
Deposits with
insurance
companies - - - - 100,844,788
------------ ----------- ------------- ----------- ------------
Total investment 39,987,627 2,023,607 25,185,591 16,093,331 475,660,808
------------ ----------- ------------- ----------- ------------
Receivables:
Dividends and
interest - - - 131,952 732,492
Amounts due from
(due to) others (10,608) (6,164) (221,739) 1,347,375 5,871,100
------------ ----------- ------------- ----------- ------------
Total net
receivables (10,608) (6,164) (221,739) 1,479,327 6,603,592
------------ ----------- ------------- ----------- ------------
Total assets $39,977,019 $2,017,443 $24,963,852 $17,572,658 482,264,400
------------ ----------- ------------- ----------- ------------
Net assets available
for Plan benefits $39,977,019 $2,017,443 $24,963,852 $17,572,658 $482,264,400
=========== ========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
PLAN BENEFITS WITH FUND INFORMATION
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
Large
Company Equity International Capitlization
Income Stock Index Equity Equity
Fund Fund Fund Fund Fund(1)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividends $ - $ 2,786,192 $ - $ - $ 1,277,434
Interest 10,678,875 253,667 11 490,600 -
Net appreciation
(depreciation)
in fair value of
investments - 16,906,164 15,773,273 3,262,377 7,438,918
----------- ----------- ---------- ------------ ----------
Net investment
income 10,678,875 19,946,023 15,773,284 3,752,977 8,716,352
Contributions:
Employer 84,221 9,295,566 41,338 6,108 23,357
Participants 5,695,654 3,757,438 3,353,927 746,695 2,141,041
Net loan activity 887,810 114,595 244,089 110,099 138,552
Trustee transfers 856,333 (70,919) (97,315) (22,407) (4,135)
Interfund tranfers 4,988,668 8,098,674 (8,631,108) (330,658) 1,358,620
Benefits paid to
participants (15,081,361) (5,351,699) (4,445,849) (680,090) (2,952,754)
Administrative fees (469,029) (140,238) (96,272) - -
----------- ----------- ---------- ------------ ----------
Net increase/(decrease) 7,641,171 35,649,440 6,142,094 3,582,724 9,421,033
----------- ----------- ---------- ------------ ----------
Net assets available
for Plan benefits:
Beginning of period 154,705,684 125,533,930 78,670,501 10,014,454 28,808,859
=========== =========== ========== =========== ==========
End of period $162,346,855 $161,183,370 $84,812,595 $13,597,178 $38,229,892
--------------------------------------------------------------------------------------
Small
Putnam New Capitalization Asset
Opportunties Equity Allocation Loan
Fund Fund Fund Fund Total
--------------------------------------------------------------------------------------
Dividends $ 4,891,401 $ 1,676 $ - $ - $ 8,956,703
Interest - - 1,373,802 1,366,045 14,163,000
Net appreciation
(depreciation)
in fair value of
investments 21,818,286 114,356 (1,609,924) - 63,703,450
---------- --------- ---------- ---------- -----------
Net investment
income 26,709,687 116,032 (236,122) 1,366,045 86,823,153
Contributions:
Employer 25,920 2,086 14,634 - 9,493,230
Participan 2,355,030 288,798 1,248,467 - 19,587,050
Net loan activity 197,836 16,226 102,193 (1,811,400) -
Trustee transfers (33,259) - (54,596) (66,496) 507,206
Interfund tranfers 594,954 98,157 (6,177,307) - -
Benefits paid to
participants (3,249,410) (61,206) (1,093,426) (1,820,810) (34,736,605)
Administrative fees - - - - (705,539)
---------- --------- ---------- ---------- -----------
Net increase/(decrease) 26,600,758 460,093 (6,196,157) (2,332,661) 80,968,495
Net assets available
for Plan benefits:
Beginning of period 39,977,019 2,017,443 24,963,852 17,572,658 482,264,400
---------- --------- ---------- ---------- -----------
End of period $66,577,777 $2,477,536 $18,767,695 $15,239,997 $563,232,895
========== ========= ========== ========== ===========
(1) The Large Capitalization Equity Fund replaced the Growth Fund. See Investment Options under footnote 1.
The accompanying notes are an integral part of these financial statements
</TABLE>
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
1.DESCRIPTION OF PLAN
-------------------
The following description of the El Paso Energy
Corporation Retirement Savings Plan (the "Plan") provides
general information about the Plan's provisions in effect
for the plan year ending December 31, 1999. Participants
should refer to the Plan documents and summary plan
description for a more complete description of the Plan's
provisions.
General
-------
The Plan is a defined contribution plan covering eligible
employees of El Paso Energy Corporation (the "Company")
and its participating employers, except leased employees,
certain nonresident aliens, and members of any unit
covered by a collective bargaining agreement. The Plan is
subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
The preparation of the financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
the reported amounts of net assets available for benefits
at the date of the financial statements and the reported
changes in net assets available for benefits during the
reporting period. Actual results could differ from those
estimates.
Contributions
-------------
A participant may elect to make basic contributions from 2
percent to 10 percent of his or her eligible compensation
on a before-tax or after-tax basis. The Company will make
matching contributions of Company common stock, or cash
which is initially invested in Company common stock, equal
to 75 percent of a participant's basic contribution up to
a maximum level of 6 percent of eligible compensation. In
addition, if a participant has elected the maximum basic
contribution eligible for a matching Company contribution,
he or she may make after-tax supplemental contributions to
the Plan from 1 percent to 5 percent of his or her
eligible compensation. A participant may also elect to
have the amount of available cash under the Company's
FlexPlan transferred to the Plan as a flex contribution
and may make an approved rollover contribution of a
distribution received or direct transfer from another
qualified retirement plan. There are certain legal
limitations applicable to contributions to the Plan.
Federal income taxes on before-tax contributions, company
matching contributions, and the earnings from the
investments in the Plan are deferred until amounts are
withdrawn from the Plan.
Participant Accounts
--------------------
Each participant's account is credited with the
participant's contributions, the Company's matching
contribution, and the participant's share of net earnings
or losses of his or her respective investment funds
elected under the Plan. Net investment gains and losses
in a particular investment fund are allocated in
proportion to the respective participant's account
balances in that fund.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
-------------------
Vesting
-------
A participant's interest in the balance credited to his or
her account is fully vested at all times.
Payment of Benefits
-------------------
Upon separation from service with the Company, a
participant whose account balance has exceeded $5,000 may
elect to receive either a lump-sum amount equal to the
value of his or her account or to defer the distribution.
A deferred distribution may take the form of either a lump-
sum distribution payable within, or installments payable
over, a period which ends on or before April 1 of the year
following the calendar year in which the participant
attains age 70-1/2. A participant whose account balance
has never been more than $5,000 will receive an immediate
lump-sum distribution of the amount equal to his or her
account balance. Certain in-service withdrawals may also
be available, as provided by the Plan.
Participant Loans
------------------
To obtain a loan, the participant must have a total
account balance of at least $2,000 excluding any amounts
held in an "IRA Account" under the Plan. Loan amounts may
be from $1,000 to $50,000 but may not be more than 50
percent of the total balance in the participant's account,
excluding any IRA Account balance. The 50 percent limit
is reduced by the participant's highest outstanding loan
balance(s) during the prior 12-month period. Each loan is
made from, and repaid to, the borrowing participant's
account so as not to affect the accounts of other
participants. A participant may not obtain more than one
loan during any 12-month period and may not have more than
two loans outstanding. The interest rate on a loan is 1
percent above the prime rate, which is determined on the
last business day of the month proceeding the quarter in
which the loan is taken. The interest rate is fixed for
the term of the loan. The repayment period may be from 1
to 5 years. When a participant terminates employment with
the Company, the unpaid balance of the participant's
loan(s) will be deducted from any distributions to the
participant. If the participant elects to defer the
distributions, the loan must be repaid within 60 days
after the separation from service. If the loan is not
repaid, it will be automatically treated as a distribution
to the participant.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
-------------------
Investment Options
------------------
With certain exceptions as described below, a participant
could direct the investment of his or her contributions to
the Plan or reallocate the existing balance in his or her
account among any one or more of the following investment
funds during 1999. For a more complete description of the
investment objectives, general information and performance
history of the funds, participants should refer to the
individual mutual fund prospectus and the summary plan
description.
1) Income Fund - invested primarily in a diversified
portfolio of investment contracts offered by major
insurance companies, banks and other financial
institutions. The objective of the fund is to provide
liquidity and safety of principal while providing a higher
return over time than offered by money market funds. An
investment contract is an agreement whereby the issuing
entity promises a specific rate of return for a period of
time. The contracts provide that there will not be a
reduction in principal due to a change in interest rates.
These contracts usually have maturity dates and interest
rates that fluctuate to reflect the investment performance
and activity of the underlying bonds. However, like all of
the Plan's investment funds, there is an element of risk.
Some of the contracts are direct obligations of the
issuing entity. To enhance the safety of the fund, most of
the investment contracts are backed by fixed-income
securities held in a separate account of an insurance
company, or in a trust fund, to protect them from the
general creditors of the contract issuer. The fund may
also hold cash or other short-term fixed income
securities, although these are expected to be a small
percentage of the Income Fund. PRIMCO Capital Management,
Inc. ("PRIMCO") manages the Income Fund.
2) Company Stock Fund - invested primarily in common
stock of the Company (NYSE:EPG). As with investments in
any single stock, this fund may be more volatile (that is,
subject to larger swings in value, both up and down) than
a fund that is diversified among the stocks of many
companies. Participants who invest in the Company Stock
Fund may instruct the trustee regarding the voting of the
Company's common stock allocated to the participant's
account.
Also included in the Company Stock Fund were shares of
"new" Tenneco Inc. and Newport News Shipbuilding Inc.
These shares were transferred to the Plan upon its merger
with the Tenneco Energy Plan in 1997. At December 31,
1998, all such shares had been liquidated, in accordance
with the Plan's provisions, and the proceeds not directed
by the participants to other investments were reinvested
in shares of Company stock in early January 1999.
3) Equity Index Fund - invested primarily in an
index fund designed to match the performance of the
Standard and Poors (S&P) Index by investing in stock of
most of the 500 largest U.S. companies comprising that
Index. This fund currently invests in a commingled fund
for institutional investors known as the Daily Equity
Index Fund (T) managed by Barclays Global Investors (BGI).
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
-------------------
Investment Options
------------------
4) International Equity Fund - invested primarily in
the publicly traded mutual fund known as the Templeton
Foreign Fund managed by Templeton Global Advisors Limited.
The purpose of this fund is to invest in companies in
locations and businesses around the world where economic
conditions are favorable for growth. Because of global
monetary exchange, economic and political conditions, the
risks and returns for this fund can vary significantly
from investments in domestic stocks.
5) Growth Fund - From June 1, 1998 to December 1,
1999, the Growth Fund was invested primarily in the
publicly traded mutual fund known as the Founders Growth
Fund managed by Founders Asset Management, Inc. Prior to
June 1, 1998, the growth funds were invested primarily in
the publicly traded mutual fund Fidelity Growth Company
Fund managed by Fidelity Management & Research Company.
This investment option was terminated on December 1, 1999
and participants' remaining account balances in this fund
were transferred to the Large Capitalization Equity Fund
(see below).
6) Large Capitalization Equity Fund - invested
primarily in the publicly traded mutual fund known as the
Fidelity Magellan Fund managed by Fidelity Management &
Research Company. This investment option became available
to participants effective December 1, 1999.
7) Putnam New Opportunities Fund - invested
primarily in the publicly traded mutual fund known as the
Putnam New Opportunities Fund (Class A) managed by Putnam
Investments, Inc.
8) Small Capitalization Equity Fund - invested
primarily in the publicly traded mutual fund known as the
SSgA Small Cap Fund managed by State Street Global
Advisors. This investment option became available to
participants effective June 1, 1998.
9) Asset Allocation Fund - invested primarily in the
publicly traded mutual fund known as the INVESCO Total
Return Fund managed by INVESCO Funds Group Inc.
10) Loan Fund - invested individually for each
borrowing participant in any loans to the participant.
1.DESCRIPTION OF PLAN (Continued)
The following number of participants were invested in the
various funds at December 31, 1999 and 1998:
Number of
Fund Participants
--------- ---------------
1999 1998
----- ----
Income Fund 2,555 2,708
Company Stock Fund 4,148 3,778
Equity Index Fund 2,027 2,062
International Equity Fund 900 860
Growth Fund - 1,441
Large Capitalization Equity
Fund 1,585 -
Putnam New Opportunities Fund 1,775 1,631
Small Capitalization Equity
Fund 315 237
Asset Allocation Fund 1,027 1,159
Loan Fund 1,055 1,304
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Valuation of Investments
------------------------
For the Plan years ending December 31, 1999 and 1998, the
Plan's investment contracts with financial institutions
and insurance companies are reported at contract value
which approximates estimated fair value. The average yield
for these investment contracts reported at contract value
for 1999 equaled 6.62 percent with an averaging crediting
interest rate of 6.46 percent. Crediting interest rates
are normally reset quarterly for contracts with underlying
investments to reflect the investment experience of that
asset. Estimated fair value for investment contracts is
based on discounted cash flows using current market rates
for similar investments with similar terms. Short-term
securities and participant loans are carried at cost which
approximates fair value. All other investments are carried
at fair value as determined by quoted market prices.
Purchases and sales of securities are reflected on a trade-
date basis. The basis of securities sold is determined by
average cost.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
------------------------------------------
Investment Income
-----------------
Dividend and interest income from investments is recorded
as earned on an accrual basis and is allocated to
participants' accounts based upon each participant's
proportionate share of assets in each investment fund.
Dividend and interest income is reported in accordance
with the Internal Revenue Service ("IRS") Form 5500
instructions. Dividend income represents income for those
funds holding individual equity securities. Interest
income represents income received from deposits with
insurance companies, short-term securities, and dividends
received from funds invested in commingled equity or
mutual funds.
Expenses
--------
Administrative expenses include participant recordkeeping
and custodial fees, and certain professional fees incurred
and paid by the Plan. In addition, any expenses directly
relating to the purchase, sale, or transfer of the Plan's
investments are charged to the particular investment fund
to which the expense relates.
Net Appreciation (Depreciation) in Fair Value of Investments
------------------------------------------------------------
The Plan presents in the statement of changes in net
assets available for plan benefits the net appreciation
(depreciation) in the fair value of its investments which
consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those
investments.
Risks and Uncertainties
-----------------------
The Plan provides for various investment options in any
combination of stocks, bonds, fixed income securities,
mutual funds, and other investment securities. Investment
securities are exposed to various risks, such as interest
rate risk, market risk and credit risk. Due to the level
of risk associated with certain investment securities, it
is at least reasonably possible that changes in the values
of investment securities will occur in the near term and
that such changes could materially affect the amounts
reported in the statement of net assets available for plan
benefits.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. INVESTMENTS
-----------
Investments representing 5 percent or more of the Plan's
net assets are separately identified.
December 31,
--------------
1999 1998
---- ----
El Paso Energy Corporation common stock,
4,005,474 and 3,099,910 shares,
respectively $155,462,460 $ 107,917,167
Barclays Equity Index Fund, 2,095,550 and
2,342,774 shares, respectively 85,209,217 78,825,896
Fidelity Magellan Fund, 280,923 shares 38,382,510* -
Founders Growth Fund, 1,408,603 shares - 28,807,691*
Putnam New Opportunities Fund, 729,249 and
683,206 shares, respectively 66,332,522 39,987,627
* Effective December 1,1999, the Fidelity Magellan Fund
was added while the Founders Growth Fund was removed from
the investment mix.
4. CONCENTRATION OF CREDIT RISK
----------------------------
The Plan invests in various investment funds, as described
in Note 1, based upon participant instructions. The
Income Fund held approximately 29 percent and 33 percent
of the invested assets of the Plan at December 31, 1999,
and 1998, respectively. The Company Stock Fund held
approximately 29 percent and 25 percent of the invested
assets of the Plan at December 31, 1999, and 1998,
respectively. The Company believes that it offers
sufficient investment options to offset any significant
concentration of credit risk.
5. RELATED PARTY TRANSACTIONS
--------------------------
Bankers Trust Company is the trustee for the Plan.
Certain assets of the Plan were invested in the following
funds and contracts issued by Bankers Trust Company: (i)
BT Pyramid Directed Account Cash Fund and (ii) various
investment contracts. During 1999, approximately 42
percent and 47 percent of the Plan's purchase and sale
transactions, respectively, were related to these assets.
6. INVESTMENT CONTRACTS UNDER REHABILITATION
-----------------------------------------
Confederation Life Insurance Company
------------------------------------
The Income Fund had investment contracts issued by
Confederation Life Insurance Company ("Confederation
Life"), a Canadian insurance corporation. On August 12,
1994, an Order of Rehabilitation was entered which placed
the U.S. assets of Confederation Life under the regulatory
supervision of the Michigan Commissioner of Insurance (the
"Commissioner"). The investment contracts issued by
Confederation Life were valued at $5,986,270 on August 11,
1994. As of December 31, 1994, a Bankers Trust Company
(Del) BASIC investment contract was amended to ensure the
benefit responsiveness of the Confederation Life contracts
and therefore these contracts are reported at contract
value. A plan of rehabilitation was finalized and approved
by the courts on March 31, 1997. Under the plan, the
estate of Confederation Life was to be liquidated and paid
to the contract holders over a three-year period. On
September 29, 1999, final payment from the estate of
Confederation Life was received. Payments totaling
$7,176,968, or 119.9% of the August 11, 1994 balance, have
been received from the rehabilitated contracts with all
interest reflected as income on the statement of changes
in net assets available for plan benefits with fund
information.
Mutual Benefit Life Insurance Company
-------------------------------------
On July 16, 1991, Mutual Benefit Life Insurance Company
was placed in rehabilitation under the control of the
Commissioner of Insurance of the State of New Jersey. On
November 10, 1993, the Superior Court of New Jersey
confirmed a Rehabilitation Plan for Mutual Benefit, and on
March 28, 1994, PRIMCO opted to retain the investment
contracts as restructured under the terms of the
Rehabilitation Plan. Effective with the April 29, 1994,
closing date of the Rehabilitation Plan, MBL Life
Assurance Corporation assumed and reinsured the
restructured contracts. At December 31, 1998, the value of
the restructured contracts was $8,710,660. By June 1,
1999, principle and accrued interest totaling $8,645,692
were received by the Plan, and on July 1, 1999, $995,632
of contract value was assumed by SunAmerica Life Insurance
Company at 8.08% maturing on January 2, 2004.
7. TAX STATUS
-----------
The Plan is intended to be a qualified plan pursuant to
Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code") and, accordingly, the trust
established under the Plan to hold the Plan's assets is
intended to be exempt from federal income taxes pursuant
to Section 501(a) of the Code. The Company received a
favorable tax determination letter from the IRS on July 2,
1998, stating that the Plan, as designed, was in
compliance with the applicable requirements of the
Internal Revenue Code. The Plan has been amended since
receiving the determination letter. However, the Company
believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, no provision for
income taxes has been included in the Plan's financial
statements.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
8. AMENDMENTS
-----------
On August 14, 1998, the Company, through its subsidiary,
completed the acquisition of DeepTech International Inc
After spin off of the assets attributable to employees of
Tatham Offshore Inc., the account balances, approximating
$1.4 million, of the remaining employees in the DeepTech
International Inc. Section 401(k) Plan were transferred to
the Plan effective April 30,1999, and are reflected in the
statement of changes in net assets available for plan
benefits at fair value as trustee transfers.
Effective September 9, 1998, certain assets of the Company
were acquired by Midcoast Energy Resources, Inc.
("Midcoast") and certain former employees of the Company
became employees of Midcoast. The account balances,
approximating $835,000, of the employees who became
Midcoast employees were transferred from the Plan to the
Midcoast Energy, Inc. 401(k) Plan effective February 1,
1999, and are reflected in the statement of changes in net
assets available for plan benefits at fair value as
trustee transfers.
Effective December 1, 1999, the Plan's investment fund mix
was amended to remove the Founders Growth Fund and add the
Fidelity Magellan Fund as an investment alternative.
On October 25, 1999, the Company and Sonat Inc. ("Sonat")
completed a merger and the Sonat Savings Plan (the "Sonat
Plan") was merged into and became part of the Plan.
Account balances of participants in the Sonat Plan were
frozen from participant activity until year end. Effective
January 1, 2000, account balances, approximating $137
million, of Sonat Plan participants were transferred to
the Plan.
Effective January 1, 2000, an eligible employee becomes a
participant in the Plan immediately upon employment by a
participating company.
9. SUBSEQUENT EVENTS
-----------------
On January 5, 2000, the Company, through its subsidiary,
completed the acquisition of Crystal Gas Storage Inc.
("Crystal"). Crystal maintained the Crystal Oil Company
401(k) and Trust (the "Crystal Plan"). Effective March 1,
2000, account balances, approximating $1.6 million, of
participants in the Crystal Plan were transferred to the
Plan.
On January 18, 2000, Bonneville Pacific Corporation
("Bonneville") merged with and into a subsidiary of the
Company, with the Bonneville Pacific Corporation
continuing as the surviving corporation. On March 1, 2000,
all employees transferred out of the Bonneville Pacific
Corporation and became employees of other Company
subsidiaries. Effective May 1, 2000, account balances,
approximating $2.6 million, of participants in the
Bonneville Pacific Corporation 401(k) Plan (the
"Bonneville Plan") were transferred to the Plan.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
10. SUBSEQUENT EVENTS (Continued)
------------------
On January 17, 2000, the Company entered into a definitive
agreement to merge with The Coastal Corporation
("Coastal"). In the merger, each share of Coastal common
stock and Class A common stock will be converted on a tax-
free basis into shares of Company common stock. In
addition, holders of Coastal stock options and holders of
Coastal preferred stock shall receive shares of Company
common stock. On May 5, 2000, the shareholders of Coastal
approved the merger and shareholders of the Company
approved the issuance of shares to complete the merger.
The merger is expected to close in the fourth quarter of
2000 and is subject to certain customary conditions,
including, among others, receipt of certain required
regulatory approvals. Upon completion of the merger, it is
anticipanted that the Coastal Thrift Plan will be merged
into the Plan.
10. PLAN TERMINATION
----------------
Although the Company has not expressed any intent to do
so, the Company reserves the right under the Plan to
discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. Upon
termination, the Plan's assets would be distributed to the
participants, as directed by the Retirement Savings Plan
committee in accordance with the Plan and applicable law,
on the basis of their account balances existing at the
date of termination as adjusted for investment gains and
losses.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
11. RECONCILIATION WITH FORM 5500
-----------------------------
The following is a reconciliation of net assets available
for Plan benefits per the financial statements to Form
5500:
December 31,
---------------------
1999 1998
---- ----
Net assets available for Plan benefits
per the financial statements $ 563,232,895 $ 482,264,400
Less: final distributions and
participant withdrawals that
have been processed and approved
but not paid by the Plan 484,690 826,872
------------- -------------
Net assets available for Plan benefits
per the Form 5500 $ 562,748,205 $ 481,437,528
============= =============
The following is a reconciliation of the change in net
assets available for Plan benefits per the financial
statements to Form 5500:
For the year ended
December 31, 1999
------------------
Net increase in net assets
available for Plan benefits per the
financial statements $ 80,968,495
plus: change in distributions and
participant withdrawals that
had been processed and
approved but not paid by the Plan 342,182
---------------
Net increase in net assets
available for Plan benefits per the
the Form 5500 $ 81,310,677
================
Final distributions and participant withdrawals that have
been processed and approved but not paid by the Plan are
not considered Plan obligations until paid under generally
accepted accounting principles and, therefore, are not
presented as liabilities or benefits paid in the
accompanying financial statements.
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 76-0568816 Plan: 002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1999
<TABLE>
<CAPTION>
Number of
shares
(units) or
principal
Identity of issue, borrower, or amount of
similar party, and bonds and Current
description of investment notes Cost value
------------------------------ --------- ------------ -----------
<S> <C> <C> <C>
COMPANY STOCK FUND
El Paso Energy Corporation common stock 4,005,474 $131,095,888 $155,462,460
Short-term securities
Bankers Trust Company
BT Pyramid Directed Account Cash Fund 1,068,225 1,068,225 1,068,225
------------ -----------
Total investments - Company Stock Fund 132,164,113 156,530,685
------------ -----------
INCOME FUND
Deposits with financial institutions
Bankers Trust Company (Del)
BASIC # 1- 888THT, 5.4098%, matures 09/30/00 23,991,676 23,991,676 23,991,676
BASIC # 92-407ALP, 5.110%, matures 02/28/03 3,886,086 3,886,086 3,886,086
Bank America NT & SA
# 99-056, 6.220%, matures 09/15/04 15,979,613 15,979,613 15,979,613
Chase Manhattan Bank
# 401728, 6.580%, matures 12/30/03 9,710,170 9,710,170 9,710,170
CDC Investment Management Corporation
# 163-02, 7.77% 352 352 352
State Street Bank & Trust
# 98263, 5.68%, matures 05/16/05 25,099,552 25,099,552 25,099,552
---------- ----------
Total deposits with financial institutions 78,667,449 78,667,449
Deposits with insurance companies
Allstate Life Insurance Company
# 31071, 6.27%, matures 10/01/02 3,267,298 3,267,298 3,267,298
Business Men's Assurance
# 1336, 5.75%, matures 11/17/03 3,193,464 3,193,464 3,193,464
Continental Assurance Company
# 630-05647, 6.37%, matures 02/01/06 11,775,522 11,775,522 11,775,522
John Hancock Mutual Life Insurance Compan
# 7733, 5.76% matures 02/01/02 38,211 38,211 38,211
# 7436, 6.01%, matures 5/1/07 13,388,123 13,388,123 13,388,123
# 8836, 5.95%, matures 2/01/02 3,868 3,868 3,868
Mass Mutual Life Insurance Company
# 10514, 6.10%, matures 7/5/02 3,054,558 3,054,558 3,054,558
# 10733, 5.98%, matures 11/30/03 2,480,330 2,480,330 2,480,330
Monumental Life Insurance Company
# 0074TR, 7.16%, matures 04/10/07 26,215,140 26,215,140 26,215,140
New York Life Insurance Company
# 06749, 5.70%, matures 11/17/00 915,199 915,199 915,199
# 06749-002, 5.62%, matures 09/20/01 776,373 776,373 776,373
# 06749-003, 5.750%, matures 06/20/01 1,089,295 1,089,295 1,089,295
# 30889, 6.67%, matures 1/06/03 3,964,948 3,964,948 3,964,948
Peoples Security Life Insurance Corporation
# 00204TR-1, 6.38%, matures 11/30/00 2,015,982 2,015,982 2,015,982
Prudential Insurance Company of America
# 6697, 8.13%, matures 11/20/00 446,196 446,196 446,196
SunAmerica Life Insurance Company
# 4891, 8.08%, matures 01/02/04 1,035,404 1,035,404 1,035,404
---------- ----------
Total deposits with insurance companies 73,659,911 73,659,911
Short-term securities
Bankers Trust Company
BT Pyramid Directed Account Cash Fund 10,005,585 10,005,585 10,005,585
--------- -----------
Total investments - Income Fund 162,332,945 162,332,945
--------- -----------
LOAN FUND
Participant Loans, 7% to 12.5% 15,239,997 - 15,239,997
--------- -----------
Total investments - Loan Fund - 15,239,997
--------- -----------
EQUITY INDEX FUND
Barclays Equity Index
Equity Index Fund 2,095,550 52,192,350 85,209,217
Short-term securities
Bankers Trust Company
BT Pyramid Directed Account Cash Fund 173 173 173
--------- -----------
Total investments - Equity Index Fund 52,192,523 85,209,390
--------- -----------
INTERNATIONAL EQUITY FUND
Templeton Foreign Fund
Templeton Foreign Fund-Internat'l
Growth Mutual Fund 1,221,265 12,413,214 13,702,589
--------- -----------
Total investments - International Equity
Fund 12,413,214 13,702,589
--------- -----------
LARGE CAPITALIZATION EQUITY FUND
Fidelity Magellan Fund
Fidelity Magellan Portfolio Mutual Fund 280,923 37,088,885 38,382,510
--------- -----------
Total investments - Large Capitalization
Equity Fund 37,088,885 38,382,510
--------- -----------
PUTNAM NEW OPPORTUNITIES FUND
Putnam New Opportunities Funds
Putnam New Opportunities - Portfolio Mutual
Fund 729,249 40,141,146 66,332,522
--------- -----------
Total investments - Putnam New
Opportunities 40,141,146 66,332,522
--------- -----------
SMALL CAPITALIZATION EQUITY FUND
SSgA Small Cap Fund
SSgA Small Cap - Portfolio Mutual fund 123,322 2,241,003 2,477,536
--------- -----------
Total investments - Small Cap
Equity Fund 2,241,003 2,477,536
--------- -----------
ASSET ALLOCATION FUND
INVESCO Total Return
INVESCO Total Return Manager Mutual Fund 645,420 18,105,863 18,691,362
Total investments - Asset Allocation ----------- -----------
Fund 18,105,863 18,691,362
Total Assets Held For Investment ----------- -----------
Purposes 456,679,692 558,899,536
=========== ===========
</TABLE>
<PAGE>
EL PASO ENERGY CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 76-0568816 Plan: 002
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1999
<TABLE>
Number of Cost of
transactions Purchase Selling securities Net
Security Description Purchases Sales price Proceeds sold gain
--------------------- -------- ---- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
BT Pyramid Directed Acc't Cash 272 252 $295,800,360 $301,406,905 $301,406,905 $ -
El Paso Energy Corp Com Stk 48 54 112,872,849 81,725,149 64,835,383 16,889,766
Fidelity Magellan Fund 13 11 38,113,404 1,030,952 1,024,519 6,433
Founders FDS Inc. Growth Fund 111 113 9,942,931 44,831,375 37,513,294 7,318,081
Putnam New Opportunities Fund 134 113 20,898,077 16,303,562 11,662,886 4,640,676
Partn in Group Annuity with Hancock
for El Paso, #7733, 5.76%,
02/01/02 17 10 11,689,391 15,201,779 15,201,779 -
J. Hancock Mtl Life #8836 GAC for
El Paso Energy Corp
5.95%, 02/01/02 20 13 20,065,854 20,073,104 20,073,104 -
Partn in Group Annuity Contract
#00081TR with People for El Paso,
9.67%, 07/15/02 9 29 2,842,632 28,988,165 28,988,165 -
Monumental Life Ins Co. Contract
#0074TR, 7.16%, 04/10/07 6 5 28,102,866 1,887,726 1,887,726 -
State Street Bank & Trust Contract
#98263, 5.68%, 05/16/05 23 30 36,807,199 12,809,062 12,809,062 -
Bank of America NT & SA Contract
#99-056, 6.22%, 09/15/04 15 10 26,515,705 10,536,092 10,536,092 -
</TABLE>
