PRICING SUPPLEMENT NO. 02 Registration No. 333-86049
Dated December 6, 2000
to Supplemental Prospectus
Dated December 14, 1999
and Base Prospectus
Dated December 3, 1999
EL PASO ENERGY CORPORATION
Global Medium Term Notes
(Senior Fixed Rate Notes)
Trade Date: December 6, 2000
Settlement Date (Original Issue Date): December 11, 2000
Maturity Date: December 15, 2012
Principal Amount (in specified currency): US$ 300,000,000
Price to Public (Issue Price): 99.983% of Principal Amount
Agent's Discount or Commission: 0.625%
Net Proceeds to El Paso Energy: US$ 298,074,000
Interest Rate: 7.375% per annum
Record Dates: Each June 1 and December 1
Interest Payment Dates: Each June 15 and December 15
First Interest Payment Date: June 15, 2001
Form of Note (Book-Entry or Certified): Book-Entry
CUSIP No: 28368E AB 2
Trustee and Paying Agent: The Chase Manhattan Bank
Call Provision: Redeemable at any time by the
Issurer at Treasury Rate plus
25 basis points
(Please read "Redemption of Notes")
Other Terms: None
Capitalized terms used in this pricing supplement which are
defined in the prospectus supplement have the meanings assigned
to them in the prospectus supplement. Medium Term Notes may be
issued by El Paso Energy in an aggregate principal amount of up
to $600,000,000 and, to date, including this offering, an
aggregate of $600,000,000 Medium Term Notes have been issued.
<PAGE>
PRICING SUPPLEMENT NO. 02
December 6, 2000
Additional Information:
Ratio of Earnings to Fixed Charges and Ratio of Earnings to
Combined Fixed Charges and Preferred and Preference Stock
Dividend Requirements
The information contained in the base prospectus under the
caption "Ratio of Earnings to Fixed Charges and Ratio of Earnings
to Combined Fixed Charges and Preferred and Preference Stock
Dividend Requirements" is hereby amended in its entirety as
follows:
Nine Months
Ended
Year Ended December 31, September 30,
-------------------------- ----------------
1995 1996 1997 1998 1999 1999 2000
----- ---- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges and Ratio
of Earnings to Combined
Fixed Charges and
Preferred and
Preference Stock
Dividend Requirements(1) 2.99x 2.62x 2.53x -(2) -(2) -(2) 2.06x
_______________________
(1)The ratio of earnings to combined fixed charges and preferred
and preference stock dividend requirements for the period
presented is the same as the ratio of earnings to fixed
charges since we have no outstanding preferred stock or
preference stock and, therefore, no dividend requirements.
(2)Earnings were inadequate to cover fixed charges by $560
million in 1998, $407 million in 1999, and $169 million for
the nine months ended September 30, 1999.
For the purpose of computing these ratios, earnings means
income (loss) from continuing operations before:
* income taxes;
* minority interest in majority-owned subsidiaries;
* interest expense, not including interest on rate
refunds;
* amortization of debt costs;
* that portion of rental expense which we believe to
represent an interest factor; and
* adjustment to equity earnings to reflect actual
distributions from equity investments.
Fixed charges means the sum of the following:
* interest cost, not including interest on rate
refunds;
* amortization of debt costs;
* that portion of rental expense which we believe to
represent an interest factor;
* the pre-tax preferred stock dividend requirements
of majority-owned subsidiaries; and
* minority interest in majority-owned subsidiaries.
Redemption of Notes
The Notes will be subject to redemption at the option of the
Company at any time, in whole or from time to time in part, at
the Make-Whole Price (as defined below), on notice given no more
than 60 nor less than 30 calendar days prior to the date of
redemption (the "Redemption Date") and in accordance with the
provisions of the Indenture. "Make-Whole Price" means an amount
equal to the greater of (i) 100% of the principal amount of the
Notes to be redeemed and (ii) as determined by an Independent
Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of
the Redemption Date) discounted back to the Redemption Date on a
semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below) plus 25
basis points, plus, in the case of both (i) and (ii), accrued and
unpaid interest to the Redemption Date. Unless the Company
defaults in payment of the Make-Whole Price, on and after the
Redemption Date, interest will cease to accrue on the Notes to be
redeemed. In the event of redemption of a Note in part only, a
new Note of like tenor for the unredeemed portion thereof and
otherwise having the same terms as the Note partially redeemed
shall be issued in the name of the holder of the Note upon the
presentation and surrender thereof.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Notes to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (i) the average of five Reference Treasury
Dealer Quotations for such Redemption Date, after excluding the
highest and lowest of such Reference Treasury Dealer Quotations,
or (ii) if the Trustee obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with
the Company.
"Reference Treasury Dealer" means (i) Banc of America
Securities LLC; ABN AMRO Incorporated; and Chase Securities Inc.
and their respective successors; provided, however, that if any
of the foregoing shall not be a primary U.S. government
securities dealer in New York City (a "Primary Treasury Dealer"),
the Company shall substitute therefor another Primary Treasury
Dealer; and (ii) any two other Primary Treasury Dealers the
Company selects.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case
as a percentage of its principal amount) quoted in writing to the
Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date,
(i) the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently
published statistical release designated "H.15(519)" or any
successor publication that is published weekly by the Board of
Governors of the Federal Reserve System and that establishes
yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the
Comparable Treasury Issue (if no maturity is within three months
before or after the Stated maturity, yields for the two published
maturities most closely corresponding to the Comparable Treasury
Issue shall be determined, and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line
basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to maturity
of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such
Redemption Date. The Treasury Rate shall be calculated on the
third Business Day preceding the Redemption Date.
Notwithstanding Section 1104 of the Indenture, the notice of
redemption with respect to the foregoing redemption need not set
forth the Make-Whole Price but only the manner of calculation
thereof. The Company shall notify the Trustee of the Make-Whole
Price with respect to any redemption promptly after the
calculation thereof, and the Trustee shall not be responsible for
such calculation.
Plan of Distribution
The Notes are being purchased in the amounts indicated by
the underwriters listed below, individually as principal.
Banc of America Securities LLC US$ 180,000,000
ABN AMRO Incorporated US$ 60,000,000
Chase Securities Inc. US$ 60,000,000
The Company has agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended.
