<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-4101
---------------------
TENNESSEE GAS PIPELINE COMPANY
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
DELAWARE 74-1056569
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
EL PASO ENERGY BUILDING
1001 LOUISIANA STREET
HOUSTON, TEXAS 77002
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's Telephone Number, Including Area Code: (713) 420-2131
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, par value $5 per share. Shares outstanding on November 6,
2000: 208
TENNESSEE GAS PIPELINE COMPANY MEETS THE CONDITIONS OF GENERAL INSTRUCTION
H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A REDUCED
DISCLOSURE FORMAT AS PERMITTED BY SUCH INSTRUCTION.
--------------------------------------------------------------------------------
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<PAGE> 2
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TENNESSEE GAS PIPELINE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------- --------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues...................................... $158 $164 $518 $526
---- ---- ---- ----
Operating expenses
Operation and maintenance............................. 32 53 135 127
Depreciation, depletion, and amortization............. 33 34 102 102
Taxes, other than income taxes........................ 11 9 34 33
---- ---- ---- ----
76 96 271 262
---- ---- ---- ----
Operating income........................................ 82 68 247 264
---- ---- ---- ----
Other income
Equity investment earnings............................ 2 1 8 6
Other, net............................................ 2 2 7 9
---- ---- ---- ----
4 3 15 15
---- ---- ---- ----
Income before interest and income taxes................. 86 71 262 279
---- ---- ---- ----
Non-affiliated interest and debt expense................ 28 26 89 90
Affiliated interest income, net......................... (1) (3) (15) (19)
Income tax expense...................................... 19 15 62 67
---- ---- ---- ----
46 38 136 138
---- ---- ---- ----
Net income.............................................. $ 40 $ 33 $126 $141
==== ==== ==== ====
</TABLE>
See accompanying notes.
1
<PAGE> 3
TENNESSEE GAS PIPELINE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 4 $ 4
Accounts and notes receivable, net........................ 359 624
Materials and supplies.................................... 19 17
Deferred income tax benefit............................... 36 44
Other..................................................... 15 18
------ ------
Total current assets.............................. 433 707
Property, plant, and equipment, net......................... 4,496 4,488
Other....................................................... 223 226
------ ------
Total assets...................................... $5,152 $5,421
====== ======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts and notes payable................................ $ 281 $ 216
Short-term borrowings (including current maturities of
long-term debt)........................................ 165 650
Taxes payable............................................. 113 105
Other..................................................... 91 85
------ ------
Total current liabilities......................... 650 1,056
Long-term debt, less current maturities..................... 1,354 1,353
Deferred income taxes....................................... 1,171 1,175
Other....................................................... 288 275
Commitments and contingencies
Stockholder's equity
Common stock, par value $5 per share; authorized 300
shares; issued 208 shares.............................. -- --
Additional paid-in capital................................ 1,389 1,388
Retained earnings......................................... 300 174
------ ------
Total stockholder's equity........................ 1,689 1,562
------ ------
Total liabilities and stockholder's equity........ $5,152 $5,421
====== ======
</TABLE>
See accompanying notes.
2
<PAGE> 4
TENNESSEE GAS PIPELINE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30,
---------------
2000 1999
----- ----
<S> <C> <C>
Cash flows from operating activities
Net income................................................ $ 126 $141
Adjustments to reconcile net income to net cash from
operating activities
Depreciation, depletion, and amortization.............. 102 102
Deferred income tax expense............................ 6 20
Other.................................................. (8) 1
Working capital changes, net of non-cash transactions..... (132) (43)
Other..................................................... 32 1
----- ----
Net cash provided by operating activities......... 126 222
----- ----
Cash flows from investing activities
Purchases of property, plant, and equipment............... (122) (90)
Additions to investments.................................. -- (12)
Net change in other affiliated advances receivable........ 447 --
Other..................................................... (9) (8)
----- ----
Net cash provided by (used in) investing
activities....................................... 316 (110)
----- ----
Cash flows from financing activities
Net repayments of commercial paper........................ (484) (170)
Net change in other affiliated advances payable........... 42 57
Payments to retire long-term debt......................... -- (1)
----- ----
Net cash used in financing activities............. (442) (114)
----- ----
Decrease in cash and cash equivalents....................... -- (2)
Cash and cash equivalents
Beginning of period............................... 4 5
----- ----
End of period..................................... $ 4 $ 3
===== ====
</TABLE>
See accompanying notes.
3
<PAGE> 5
TENNESSEE GAS PIPELINE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
Our 1999 Annual Report on Form 10-K includes a summary of our significant
accounting policies and other disclosures. You should read it in conjunction
with this Quarterly Report on Form 10-Q. The condensed consolidated financial
statements at September 30, 2000, and for the quarters and nine months ended
September 30, 2000 and 1999, are unaudited. The condensed consolidated balance
sheet at December 31, 1999, is derived from the audited financial statements.
These financial statements have been prepared pursuant to the rules and
regulations of the U.S. Securities and Exchange Commission and do not include
all disclosures required by accounting principles generally accepted in the
United States. In our opinion, we have made all adjustments, all of which are of
a normal, recurring nature, to fairly present our interim period results.
Information for interim periods may not necessarily indicate the results of
operations for the entire year due to the seasonal nature of our businesses. The
prior period information includes reclassifications which were made to conform
to the current presentation. These reclassifications have no effect on our
reported net income or stockholder's equity.
2. PROPERTY, PLANT, AND EQUIPMENT
Our property, plant, and equipment consisted of the following at September
30, 2000 and December 31, 1999:
<TABLE>
<CAPTION>
2000 1999
------ ------
(IN MILLIONS)
<S> <C> <C>
Property, plant, and equipment, at cost..................... $2,535 $2,479
Less accumulated depreciation............................... 336 304
------ ------
2,199 2,175
Additional acquisition cost assigned to utility plant, net
of accumulated amortization............................... 2,297 2,313
------ ------
Total property, plant, and equipment, net................... $4,496 $4,488
====== ======
</TABLE>
3. DEBT AND OTHER CREDIT FACILITIES
In August 2000, El Paso Energy replaced its $1,250 million 364-day
renewable revolving credit and competitive advance facility with a $2 billion
facility and its $750 million 3-year revolving credit and competitive advance
facility with a $1 billion facility. We are a designated borrower under these
new facilities. Our interest rate for these facilities varies and would have
been LIBOR plus 41 basis points on September 30, 2000. The available credit
under these facilities is expected to be used for El Paso Energy's general
corporate purposes including, but not limited to, supporting our commercial
paper programs.
At September 30, 2000, our weighted average interest rate on short-term
borrowings was 6.8%, and at December 31, 1999, it was 6.6%. We had the following
short-term borrowings, including current maturities of long-term debt, at
September 30, 2000 and December 31, 1999:
<TABLE>
<CAPTION>
2000 1999
----- -----
(IN MILLIONS)
<S> <C> <C>
Commercial paper............................................ $165 $649
Current maturities of long-term debt........................ -- 1
---- ----
$165 $650
==== ====
</TABLE>
4
<PAGE> 6
In October 2000, El Paso Energy issued $300 million aggregate principal
amount 8.05% medium-term notes due 2030. From the proceeds of this transaction,
$165 million was transferred to us and we repaid our commercial paper
borrowings.
4. COMMITMENTS AND CONTINGENCIES
Rates and Regulatory Matters
In April 1997, the Federal Energy Regulatory Commission (FERC) approved the
settlement of all issues related to the recovery of our Gas Supply Realignment
(GSR) and other transition costs and related proceedings. Under the agreement,
we are entitled to collect up to $770 million from our customers, $693 million
through a demand surcharge and $77 million through an interruptible
transportation surcharge. The demand portion has been fully collected. As of
September 30, 2000, $51 million of the interruptible transportation surcharge
had been collected. There is no time limit for collection of the interruptible
transportation surcharge. This agreement also provides for a rate case
moratorium through November 2000 (subject to certain limited exceptions) and an
escalating rate cap, indexed to inflation, through October 2005, for some of our
customers. In March 2000, we provided a report to our firm and interruptible
customers detailing our GSR costs and collections through December 31, 1999. At
December 31, 1999, we were over-collected from our firm customers by
approximately $30 million. We will be required to refund amounts collected in
excess of each firm customer's share of the final transition costs based on the
final GSR reconciliation report, which will be filed in March 2001. We do not
expect future refunds to have a material adverse effect on our financial
position, results of operations, or cash flows.
In December 1996, we filed for a general rate increase with FERC. In
October 1998, FERC approved our settlement resolving that proceeding. The
settlement included a rate design change that resulted in a larger portion of
our transportation revenues being dependent on throughput. One of our
competitors filed a petition for review of the settlement with the Court of
Appeals, which remanded the case to FERC to respond to the competitor's argument
that our cost allocation methodology deters the development of market centers.
Comments were filed with FERC in January 1999. In June 2000, the FERC issued an
order setting the competitor's issues for hearing before an Administrative Law
Judge (ALJ). The FERC directed the ALJ to develop a record on:
- existing and potential market centers and whether our existing rate
structure affected their development;
- whether the location of our existing rate zone boundaries affected the
development of market centers;
- whether our systemwide allocation of cost of service inhibited market
centers; and
- if our rate design is changed, the opportunity to recover stranded costs.
On August 11, 2000, we and the competitor jointly filed a proposed
settlement to resolve the competitor's issues. The settlement provided for a
discount on the transportation rates for receipts at the interconnect shared by
us and the competitor. On October 10, 2000, the ALJ convened a hearing on the
issues raised by various comments filed on the proposed settlement. On October
17, 2000, the ALJ certified the settlement to the FERC for approval. We are
currently awaiting an order from the FERC.
We have contracts covering a portion of our firm transportation capacity
which have various terms of maturity. Currently, approximately 70 percent of our
capacity is subject to firm contracts, with an average term in excess of five
years, that will expire after 2001. We are aggressively pursuing the
renegotiation and renewal of expiring contracts and the sale of excess capacity
under firm transportation arrangements. However, we are uncertain if future
contracts will be on terms as favorable to us as those that currently exist.
Also, new and renewed contracts can be disputed by customers and other groups,
and there is no certainty that regulators or other jurisdictional bodies will
not intercede in the re-contracting process and alter the ultimate outcome of
our efforts.
5
<PAGE> 7
As an interstate pipeline, we are subject to FERC audits of our books and
records. Also, from time to time, the FERC audit staff requests supporting
documentation from us as evidence of our compliance.
As changes in the regulatory and economic environment evolve and our
pipeline continues to experience discounting of rates and unsubscribed capacity,
we will continue to evaluate the application of regulatory accounting
principles. Factors which could impact this assessment include an inability to
recover cost increases under rate caps and rate case moratoriums, an inability
to recover capitalized costs, including an adequate return on those costs
through the ratemaking process, excess capacity or significant discounting of
rates in the markets we serve, and the impacts of ongoing initiatives in, and
deregulation of, the natural gas industry.
As our rate and regulatory matters are fully and unconditionally resolved,
we may either recognize additional refund obligations, non-cash write-downs of
previously established assets, or non-cash benefits to finalize previously
estimated liabilities. While we cannot predict with certainty the final outcome
or timing of the final resolution of our rates and regulatory matters, the
outcome of our current re-contracting efforts, or the outcome of ongoing
industry trends and initiatives, we believe that the ultimate resolution of
these pending rate and regulatory matters will not have a material adverse
effect on our financial position, results of operations, or cash flows.
Legal Proceedings
In February 1998, the United States and the State of Texas filed in a U.S.
District Court a Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA) cost recovery action against fourteen companies,
including some of our current and former affiliates, relating to the Sikes
Disposal Pits Superfund Site located in Harris County, Texas. The suit claims
that the United States and the State of Texas have spent over $125 million in
remediating Sikes, and seeks to recover that amount plus interest from the
defendants to the suit. The Environmental Protection Agency (EPA) has recently
indicated that it may seek an additional amount up to $30 million plus interest
in indirect costs from the defendants under a new cost allocation methodology.
Defendants are challenging this allocation policy. Although an investigation
relating to Sikes is ongoing, we believe that the amount of material, if any,
disposed at Sikes by our former affiliates was small, possibly de minimis.
However, the plaintiffs have alleged that the defendants are each jointly and
severally liable for the entire remediation costs and have also sought a
declaration of liability for future response costs such as groundwater
monitoring.
We are a party in proceedings involving federal and state authorities
regarding the past use of a lubricant containing polychlorinated biphenyls
(PCBs) in its starting air systems. We have executed a consent order with the
EPA governing the remediation of some compressor stations and is working with
the EPA and the relevant states regarding those remediation activities. We are
also working with the Pennsylvania and New York environmental agencies regarding
remediation and post-remediation activities at the Pennsylvania and New York
stations.
In November 1988, the Kentucky environmental agency filed a complaint in a
Kentucky state court alleging that we discharged pollutants into the waters of
the state and disposed of PCBs without a permit. The agency sought an injunction
against future discharges, an order to remediate or remove PCBs, and a civil
penalty. We entered into agreed orders with the agency to resolve many of the
issues raised in the original allegations, have received water discharge permits
from the agency for its Kentucky compressor stations, and continue to work to
resolve the remaining issues. The relevant Kentucky compressor stations are
being characterized and remediated under the consent order with the EPA.
We are a named defendant in actions brought by Jack Grynberg on behalf of
the U.S. Government under the False Claims Act. Generally, these complaints
allege an industry-wide conspiracy to under report the heating value as well as
the volumes of the natural gas produced from federal and Native American lands,
which deprived the U.S. Government of royalties. We have also been named
defendants in a similar class action suit, Quinque Operating Company v. Gas
Pipelines. This complaint alleges that the defendants mismeasured natural gas
volumes and heating content of natural gas on non-federal and non-Native
American
6
<PAGE> 8
lands. The Quinque complaint was transferred to the same court handling the
Grynberg complaint. We believe both complaints are without merit.
We are also a named defendant in numerous lawsuits and a named party in
numerous governmental proceedings arising in the ordinary course of our
business.
While the outcome of the matters discussed above cannot be predicted with
certainty, we do not expect the ultimate resolution of these matters to have a
material adverse effect on our financial position, results of operations, or
cash flows.
Environmental
We are subject to extensive federal, state, and local laws and regulations
governing environmental quality and pollution control. These laws and
regulations require us to remove or remedy the effect on the environment of the
disposal or release of specified substances at current and former operating
sites. As of September 30, 2000, we had reserved $101 million for expected
environmental costs.
In addition, we expect to make capital expenditures of approximately $3
million in 2000 and a total of $80 million for the years 2001 through 2007 for
environmental matters primarily relating to compliance with air regulations and
control of water discharges. Some of our subsidiaries have been designated, have
received notice that they could be designated, or have been asked for
information to determine whether they could be designated as a potentially
responsible party with respect to 4 active sites under CERCLA.
It is possible that new information or future developments could require us
to reassess our potential exposure related to environmental matters. We may
incur significant costs and liabilities in order to comply with existing
environmental laws and regulations. It is also possible that other developments,
such as increasingly strict environmental laws and regulations, and claims for
damages to property, employees, other persons and the environment resulting from
our current or past operations, could result in substantial costs and
liabilities in the future. As this information becomes available, or other
relevant developments occur, we will adjust our accrual amounts accordingly.
While there are still uncertainties relating to the ultimate costs we may incur,
based upon our evaluation and experience to date, we believe the recorded
reserves are adequate.
5. NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED
Accounting for Derivative Instruments and Hedging Activities
In June of 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities. In June of 1999, the FASB
extended the adoption date of SFAS No. 133 through the issuance of SFAS No. 137,
Deferral of the Effective Date of SFAS 133. In June 2000, the FASB issued SFAS
No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities, which also amended SFAS No. 133. SFAS No. 133, and its amendments
and interpretations, establishes accounting and reporting standards for
derivative instruments, including derivative instruments embedded in other
contracts, and derivative instruments used for hedging activities. It will
require that we measure all derivative instruments at their fair value, and
classify them as either assets or liabilities on our balance sheet, with a
corresponding offset to income or other comprehensive income depending on their
designation, their intended use, or their ability to qualify as hedges under the
standard.
We will adopt SFAS No. 133 beginning January 1, 2001, and do not believe it
will have a material impact on our financial position, results of operations, or
cash flows.
Revenue Recognition in Financial Statements
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements,
to provide guidance for revenue recognition issues and disclosure requirements.
SAB No. 101 offers guidelines, examples, and explanations for certain matters
relating to the recognition of revenue and will be effective for us in the
fourth quarter of 2000. We do not
7
<PAGE> 9
believe the adoption of SAB No. 101 will have a material impact on our financial
position, results of operations, or cash flows.
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities
In September 2000, the FASB issued SFAS No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities, which
replaces SFAS No. 125. This statement revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but carries over most of SFAS No. 125's provisions
without reconsideration. This standard has various effective dates, the earliest
of which is for fiscal years ending after December 15, 2000. We are currently
evaluating the effects of this pronouncement.
8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information contained in this section updates, and should be read in
conjunction with, information disclosed in Part II, Items 7, 7A, and 8, in our
Annual Report on Form 10-K for the year ended December 31, 1999, in addition to
the financial statements and notes presented in Item 1 of this Quarterly Report
on Form 10-Q.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
QUARTER NINE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------- ---------------
2000 1999 2000 1999
------ ------ ------ ------
(IN MILLIONS, EXCEPT VOLUME
AMOUNTS)
<S> <C> <C> <C> <C>
Operating revenues................................. $ 158 $ 164 $ 518 $ 526
Operating expenses................................. (76) (96) (271) (262)
Other income....................................... 4 3 15 15
------ ------ ------ ------
EBIT............................................. $ 86 $ 71 $ 262 $ 279
====== ====== ====== ======
Throughput volumes (BBtu/d)(1)..................... 4,038 3,791 4,309 4,318
====== ====== ====== ======
</TABLE>
---------------
(1) BBtu/d means billion British thermal units per day.
Third Quarter 2000 Compared to Third Quarter 1999
Operating revenues for the quarter ended September 30, 2000, were $6
million lower than the same period of 1999 as a result of the impact of a
customer settlement during the third quarter of 2000.
Operating expenses for the quarter ended September 30, 2000, were $20
million lower than the same period of 1999. The decrease was due to cost
efficiencies following El Paso Energy's merger with Sonat.
Nine Months Ended 2000 Compared to Nine Months Ended 1999
Operating revenues for the nine months ended September 30, 2000, were $8
million lower than the same period of 1999. A favorable resolution of regulatory
issues in 1999 and the impact of a customer settlement in 2000 were partially
offset by higher revenues from contract settlements associated with El Paso
Energy's sale of the East Tennessee Pipeline system and an increase in revenues
from transportation and other services in 2000.
Operating expenses for the nine months ended September 30, 2000, were $9
million higher than the same period of 1999. A favorable resolution of our
customer imbalance issues in 1999 was partially offset by cost efficiencies
following El Paso Energy's merger with Sonat.
NON-AFFILIATED INTEREST AND DEBT EXPENSE
Non-affiliated interest and debt expense for the quarter ended September
30, 2000, was $2 million higher than the same period in 1999 due to higher
average commercial paper borrowings during the third quarter of 2000.
Non-affiliated interest and debt expense for the nine months ended
September 30, 2000 was $1 million lower than the same period in 1999 due to
higher capitalized interest partially offset by higher commercial paper
borrowings.
9
<PAGE> 11
AFFILIATED INTEREST INCOME, NET
Affiliated interest income, net for the quarter and nine months ended
September 30, 2000 was $2 million and $4 million lower than for the same periods
of 1999 due to decreased average advances to El Paso Energy in 2000.
INCOME TAX EXPENSE
The effective income tax rates for the quarters ended September 30, 2000
and 1999, were 32% and 31%. The effective income tax rates for the nine months
ended September 30, 2000 and 1999, were 33% and 32%. The effective tax rates
were lower than the statutory rate of 35% due to state income tax benefits.
OTHER
In May 2000, El Paso Energy formed Clydesdale Associates, L.P., a limited
partnership, and several other separate legal entities, for the purpose of
generating funds for El Paso Energy to invest in capital projects and other
assets. Certain assets of El Paso Energy, including proceeds we receive from
renting our office building in Houston, Texas, collateralize the funds generated
by the structure.
10
<PAGE> 12
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
We have made statements in this document that constitute forward-looking
statements, as that term is defined in the Private Securities Litigation Reform
Act of 1995. These statements are subject to risks and uncertainties.
Forward-looking statements include information concerning possible or assumed
future results of operations. These statements may relate to information or
assumptions about:
- capital and other expenditures;
- dividends;
- financing plans;
- capital structure;
- cash flow;
- pending legal proceedings and claims, including environmental matters;
- future economic performance;
- operating income;
- cost savings;
- management's plans; and
- goals and objectives for future operations.
Important factors that could cause actual results to differ materially from
estimates or projections contained in forward-looking statements include, among
others, the following:
- the increasing competition within our industry;
- the timing and extent of changes in commodity prices for natural gas and
power;
- the uncertainties associated with customer contract expirations on our
pipeline systems;
- the potential contingent liabilities and tax liabilities related to our
acquisitions; and
- the conditions of equity and other capital markets.
These risk factors are more fully described in our other filings with the
Securities and Exchange Commission, including our Annual Report on Form 10-K for
the year ended December 31, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
This information updates, and should be read in conjunction with,
information disclosed in Part II, Item 7A in our Annual Report on Form 10-K for
the year ended December 31, 1999, in addition to the information presented in
Items 1 and 2 of this Quarterly Report on Form 10-Q.
There are no material changes in market risk from those reported in our
Annual Report on Form 10-K for the year ended December 31, 1999.
11
<PAGE> 13
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Part I, Financial Information, Note 4, which is incorporated herein by
reference.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
Each exhibit identified below is filed as a part of this report.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------- DESCRIPTION
<C> <S>
10.A -- $2,000,000,000 364-Day Revolving Credit and Competitive
Advance Facility Agreement dated August 4, 2000, by and
among El Paso Energy Corporation, El Paso Natural Gas
Company, Tennessee Gas Pipeline Company, the several
banks and other financial institutions from time to time
parties to the Agreement, The Chase Manhattan Bank,
Citibank N.A. and ABN Amro Bank, N.V. as co-
documentation agents for the Lenders and Bank of America,
N.A. as syndication agent for the Lenders.
10.B -- $1,000,000,000 3-Year Revolving Credit and Competitive
Advance Facility Agreement dated August 4, 2000, by and
among El Paso Energy Corporation, El Paso Natural Gas
Company, Tennessee Gas Pipeline Company, the several
banks and other financial institutions from time to time
parties to the Agreement, The Chase Manhattan Bank,
Citibank N.A. and ABN Amro Bank, N.V. as co-
documentation agents for the Lenders and Bank of America,
N.A. as syndication agent for the Lenders.
27 -- Financial Data Schedule
</TABLE>
Undertaking
The undersigned hereby undertakes, pursuant to Regulation S-K, Item
601(b), paragraph (4)(iii), to furnish to the U.S. Securities and Exchange
Commission, upon request, all constituent instruments defining the rights
of holders of long-term debt of Tennessee Gas Pipeline Company and its
consolidated subsidiaries not filed herewith for the reason that the total
amount of securities authorized under any of such instruments does not
exceed 10 percent of the total consolidated assets of Tennessee Gas
Pipeline Company and its consolidated subsidiaries.
b. Reports on Form 8-K
None.
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TENNESSEE GAS PIPELINE COMPANY
Date: November 9, 2000 /s/ H. BRENT AUSTIN
------------------------------------
H. Brent Austin
Executive Vice President and
Chief Financial Officer
Date: November 9, 2000 /s/ JEFFREY I. BEASON
------------------------------------
Jeffrey I. Beason
Senior Vice President and Controller
(Chief Accounting Officer)
13
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
------- DESCRIPTION
<C> <S>
10.A -- $2,000,000,000 364-Day Revolving Credit and Competitive
Advance Facility Agreement dated August 4, 2000 among El
Paso Energy Corporation, El Paso Natural Gas Company,
Tennessee Gas Pipeline Company, the several banks and
other financial institutions from time to time parties to
the Agreement, The Chase Manhattan Bank, Citibank N.A.
and ABN Amro Bank, N.V. as co-documentation agents for
the Lenders and Bank of America, N.A. as syndication
agent for the Lenders.
10.B -- $1,000,000,000 3-Year Revolving Credit and Competitive
Advance Facility Agreement dated August 4, 2000 among El
Paso Energy Corporation, El Paso Natural Gas Company,
Tennessee Gas Pipeline Company, the several banks and
other financial institutions from time to time parties to
the Agreement, The Chase Manhattan Bank, Citibank N.A.
and ABN Amro Bank, N.V. as co-documentation agents for
the Lenders and Bank of America, N.A. as syndication
agent for the Lenders.
27 -- Financial Data Schedule
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