<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 MARCH 31, 2001

                                       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 1-7176

                             ---------------------

                              EL PASO CGP COMPANY
             (Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S>                                            <C>
                   DELAWARE                                      74-1734212
       (State or Other Jurisdiction of                        (I.R.S. Employer
        Incorporation or Organization)                      Identification No.)

               EL PASO BUILDING
            1001 LOUISIANA STREET
                HOUSTON, TEXAS                                     77002
   (Address of Principal Executive Offices)                      (Zip Code)
</TABLE>

       Registrant's Telephone Number, Including Area Code: (713) 420-2600

     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 $1.00 per share. Shares outstanding on May 4, 2001:
1,000

     EL PASO CGP 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.

                              EL PASO CGP COMPANY

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                 (IN MILLIONS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                               QUARTER ENDED
                                                                 MARCH 31,
                                                              ----------------
                                                               2001      2000
                                                              -------   ------
<S>                                                           <C>       <C>
Operating revenues..........................................  $7,862    $5,940
                                                              ------    ------
Operating expenses
  Cost of natural gas and other products....................   6,781     5,126
  Operation and maintenance.................................     382       352
  Merger-related costs and asset impairment charges.........     767         4
  Depreciation, depletion, and amortization.................     164       148
  Taxes, other than income taxes............................      68        35
                                                              ------    ------
                                                               8,162     5,665
                                                              ------    ------
Operating income (loss).....................................    (300)      275
                                                              ------    ------
Other income
  Earnings from unconsolidated affiliates...................      61        64
  Other, net................................................      12        36
                                                              ------    ------
                                                                  73       100
                                                              ------    ------
Income (loss) before interest, income taxes, and other
  charges...................................................    (227)      375
                                                              ------    ------
Interest and debt expense...................................     128       112
Minority interest...........................................      14        14
Income tax expense (benefit)................................     (32)       75
                                                              ------    ------
                                                                 110       201
                                                              ------    ------
Income (loss) before extraordinary items....................    (337)      174
Extraordinary items, net of income taxes....................     (10)       --
                                                              ------    ------
Net income (loss)...........................................  $ (347)   $  174
                                                              ======    ======
</TABLE>

                            See accompanying notes.

                                        1
<PAGE>   3

                              EL PASO CGP COMPANY

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                      (IN MILLIONS, EXCEPT SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              MARCH 31,   DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
<S>                                                           <C>         <C>
                                        ASSETS
Current assets
  Cash and cash equivalents.................................   $   243      $    53
  Accounts and notes receivable, net........................     3,202        3,056
  Inventory.................................................     1,045        1,203
  Assets from price risk management activities..............         2          544
  Other.....................................................       527          223
                                                               -------      -------
          Total current assets..............................     5,019        5,079
                                                               -------      -------
Property, plant, and equipment, net.........................    10,742       10,603
                                                               -------      -------
Other assets
  Intangible assets.........................................       455          464
  Investments in unconsolidated affiliates..................     1,620        1,596
  Assets from price risk management activities..............       153          138
  Other.....................................................     1,046          989
                                                               -------      -------
                                                                 3,274        3,187
                                                               -------      -------
          Total assets......................................   $19,035      $18,869
                                                               =======      =======

                         LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
  Accounts and notes payable................................   $ 4,711      $ 3,369
  Short-term borrowings (including current maturities of
     long-term debt)........................................        22          945
  Liabilities from price risk management activities.........       255          546
  Other.....................................................       331          348
                                                               -------      -------
          Total current liabilities.........................     5,319        5,208
                                                               -------      -------
Long-term debt, less current maturities.....................     5,241        5,296
                                                               -------      -------
Deferred credits and other
  Deferred income taxes.....................................     1,896        1,957
  Liabilities from price risk management activities.........        --          113
  Other.....................................................     1,515          994
                                                               -------      -------
                                                                 3,411        3,064
                                                               -------      -------
Commitments and contingencies
Securities of subsidiaries
  Company-obligated preferred securities of consolidated
     trusts.................................................       300          300
  Minority interests........................................       456          451
                                                               -------      -------
                                                                   756          751
                                                               -------      -------
Stockholder's equity
  Cumulative preferred stock, no shares outstanding in 2001;
     with aggregate liquidation preference of $7.3 million
     at December 31, 2000...................................        --           --
  Class A common stock, no shares outstanding in 2001; par
     value 33 1/3c, 311,377 shares issued in 2000...........        --           --
  Common stock, par value $1 per share, 1,000 shares
     authorized and issued in 2001; par value 33 1/3c per
     share, 219,604,836 shares issued in 2000...............        --           73
  Additional paid-in capital................................     1,264        1,044
  Retained earnings.........................................     3,227        3,573
  Accumulated other comprehensive income....................      (183)          (8)
  Treasury stock (at cost) no shares in 2001 and 4,394,651
     shares in 2000.........................................        --         (132)
                                                               -------      -------
          Total stockholder's equity........................     4,308        4,550
                                                               -------      -------
          Total liabilities and stockholder's equity........   $19,035      $18,869
                                                               =======      =======
</TABLE>

                            See accompanying notes.
                                        2
<PAGE>   4

                              EL PASO CGP COMPANY

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN MILLIONS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              QUARTER ENDED
                                                                MARCH 31,
                                                              --------------
                                                              2001     2000
                                                              -----    -----
<S>                                                           <C>      <C>
Cash flows from operating activities
  Net income (loss).........................................  $(347)   $ 174
  Adjustments to reconcile net income (loss) to net cash
     from operating activities
     Depreciation, depletion, and amortization..............    164      148
     Deferred income tax expense (benefit)..................    (17)      42
     Extraordinary items....................................     11       --
     Undistributed earnings of unconsolidated affiliates....    (45)     (17)
     Non-cash portion of merger-related costs and asset
      impairment charges....................................    666       --
     Other..................................................      2       --
  Working capital changes, net of non-cash transactions.....   (116)     (68)
  Other.....................................................    223       (5)
                                                              -----    -----
          Net cash provided by operating activities.........    541      274
                                                              -----    -----
Cash flow from investing activities
  Purchases of property, plant, and equipment...............   (410)    (545)
  Net proceeds from the sale of assets......................    147        1
  Additions to investments..................................    (76)    (103)
  Proceeds from the sale of investments.....................      2      100
  Repayment of notes receivable from unconsolidated
     affiliates.............................................     77       --
  Other.....................................................     --        1
                                                              -----    -----
          Net cash used in investing activities.............   (260)    (546)
                                                              -----    -----
Cash flow from financing activities
  Net borrowings (repayments) of commercial paper and
     short-term notes.......................................   (798)     212
  Issuances of common stock.................................      2        1
  Net proceeds from the issuance of long-term debt..........      2      434
  Payments to retire long-term debt.........................   (238)    (348)
  Dividends paid............................................    (13)     (13)
  Decrease in notes payable to unconsolidated affiliates....   (150)      --
  Net change in affiliated advances payable.................  1,104       --
                                                              -----    -----
          Net cash provided by (used in) financing
           activities.......................................    (91)     286
                                                              -----    -----
Increase in cash and cash equivalents.......................    190       14
Cash and cash equivalents
  Beginning of period.......................................     53       44
                                                              -----    -----
  End of period.............................................  $ 243    $  58
                                                              =====    =====
</TABLE>

                            See accompanying notes.

                                        3
<PAGE>   5

                              EL PASO CGP COMPANY

        CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
             AND CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME
                                 (IN MILLIONS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                ACCUMULATED
                                                                                   OTHER
                                                              COMPREHENSIVE    COMPREHENSIVE
                                                              INCOME (LOSS)    INCOME (LOSS)
                                                              -------------    -------------
                                                              2001     2000    2001     2000
                                                              -----    ----    -----    ----
<S>                                                           <C>      <C>     <C>      <C>
Net income (loss) for the quarters ended March 31...........  $(347)   $174
Other comprehensive income (loss)
  Beginning balances as of December 31, 2000 and 1999.......                   $  (8)   $--
     Foreign currency translation adjustments...............     (6)     (6)      (6)    (6)
     Unrealized net gains (losses) from cash flow hedging
      activity
       Cumulative-effect transition adjustment (net of tax
        of $248 million)....................................   (459)     --     (459)    --
       Reclassification of initial cumulative-effect
        transition adjustment at original value (net of tax
        of $149 million)....................................    276      --      276     --
       Additional reclassification adjustments for changes
        in initial value to settlement date (net of tax of
        $52 million)........................................    (96)     --      (96)    --
       Unrealized mark-to-market gains (losses) arising
        during period (net of tax of $62 million)...........    110      --      110     --
                                                              -----    ----    -----    ---
Balance as of and for periods ended March 31................  $(522)   $168    $(183)   $(6)
                                                              =====    ====    =====    ===
</TABLE>

                            See accompanying notes.

                                        4
<PAGE>   6

                              EL PASO CGP COMPANY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1. BASIS OF PRESENTATION

     Our 2000 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 financial statements at March 31,
2001, and for the quarters ended March 31, 2001 and 2000, are unaudited. The
balance sheet at December 31, 2000, 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 (except for merger-related charges described
below), 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
also 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.

  Accounting for Price Risk Management Activities

     Our business activities expose us to a variety of risks, including
commodity price risk, interest rate risk, and foreign currency risk. Our
corporate risk management group identifies risks associated with our businesses
and determines which risks we want to manage and which types of instruments we
should use to manage those risks.

     With the adoption of Statement of Financial Accounting Standards (SFAS) No.
133, Accounting for Derivatives and Hedging Activities, we now record all
derivative instruments on the balance sheet at their fair value. These
instruments consist of two types, those derivatives entered into and held to
mitigate, or hedge a particular risk, and those that are entered into and held
for purposes other than risk mitigation, such as those in our trading
activities. Those instruments that do not qualify as hedges are recorded at
their fair value with changes in fair value reported in current period earnings.
For those instruments entered into to hedge risk, and which qualify as hedges
under the provisions of SFAS No. 133, the appropriate accounting treatment
depends on each instrument's intended use and how it is designated. Derivative
instruments that qualify as hedges may be designated as:

     - hedges of the fair value of a recognized asset or liability or of an
     unrecognized firm commitment
      (fair value hedges);

     - hedges of a forecasted transaction or of the variability of cash flows to
       be received or paid related to a recognized asset or liability (cash flow
       hedges);

     - foreign currency fair value or cash flow hedges (foreign currency
       hedges); or

     - hedges of a net investment in a foreign operation (net investment
       hedges).

     In addition to its designation, a hedge must be effective. To be effective,
the value of the derivative or its resulting cash flows must substantially
offset changes in the value or cash flows of the item being hedged. If it is
determined that the hedge is no longer effective, hedge accounting is
discontinued prospectively. Hedge accounting is also discontinued when:

     - the derivative instrument expires or is sold, terminated, or exercised;

     - it is no longer possible that the forecasted transaction will occur;

                                        5
<PAGE>   7

     - the hedged firm commitment no longer meets the definition of a firm
       commitment; or

     - management determines that the designation of the derivative instrument
       as a hedge is no longer appropriate.

     At the time we enter into a hedge, we formally document relationships
between the hedging instrument and the hedged item. This documentation includes:

     - the nature of the risk being hedged;

     - our risk management objectives and strategies for undertaking the hedging
       activity;

     - a description of the hedged item and the derivative instrument used to
       hedge the item;

     - a description of how effectiveness is tested at the inception of the
       hedge; and

     - how effectiveness will be tested on an ongoing basis.

     When hedge accounting is discontinued, the derivative instrument continues
to be carried on the balance sheet at its fair value. However, any further
changes in its fair value are recognized in current period earnings. Accounting
for the item that was being hedged differs depending on how the hedge was
originally designated. Our accounting for derivative instruments that qualify as
hedges is discussed below:

<TABLE>
<CAPTION>
                                                             IMPACT OF THE DISCONTINUATION OF HEDGE
TYPE OF HEDGE                 ACCOUNTING TREATMENT              ACCOUNTING ON ITEM BEING HEDGED
-------------                 --------------------           --------------------------------------
<S>                    <C>                                   <C>
Fair value             Changes in the fair value of a        When hedge accounting is discontinued,
                       derivative that is designated as a    the hedged asset or liability is no
                       fair value hedge and changes in the   longer adjusted for changes in fair
                       fair value of the related asset or    value. When hedge accounting is
                       liability attributable to the         discontinued because the hedged item
                       hedged risk are recorded in current   no longer meets the definition of a
                       period earnings, generally as a       firm commitment, any asset or
                       component of revenue in the case of   liability that was recorded related to
                       a sale or as a component of the       the firm commitment is removed from
                       cost of products in the case of a     the balance sheet and recognized in
                       purchase.                             current period earnings.
Cash flow              Changes in the fair value of a        When hedge accounting is discontinued
                       derivative designated as a cash       because it is unlikely that the
                       flow hedge are recorded in other      forecasted transaction will occur,
                       comprehensive income for the          gains or losses that were accumulated
                       portion of the change in value of     in other comprehensive income related
                       the derivative that is effective.     to the forecasted transaction will be
                       The ineffective portion of the        recognized immediately in earnings.
                       derivative is recorded in earnings    When a cash flow hedge is
                       in the current period.                de-designated, but the forecasted
                       Classification in the income          transaction is still probable, the
                       statement of the ineffective          accumulated amounts remain in other
                       portion is based on the income        comprehensive income until the
                       classification of the item being      forecasted transaction occurs. At that
                       hedged.                               time, the accumulated amounts are
                                                             recognized in earnings.
Foreign currency       Changes in the fair value of a        If hedge accounting is discontinued,
                       derivative designated as a foreign    accounting for the hedged item depends
                       currency hedge are recorded in        on whether the hedge is a fair value
                       current period earnings if it         hedge or a cash flow hedge, and
                       qualifies as a fair value hedge or    follows the accounting discussed
                       in other comprehensive income if it   above.
                       qualifies as a cash flow hedge.
</TABLE>

                                        6
<PAGE>   8

     Because our business activities encompass all aspects of the wholesale
energy marketplace, including the production, gathering, processing, treating,
transmission, refining, and the purchase and sale of highly liquid energy
commodities, our normal business contracts may qualify as derivative instruments
under the provisions of SFAS No. 133. As a result, we evaluate each of our
commercial contracts to see if derivative accounting is appropriate. Contracts
that meet the criteria of a derivative are then evaluated to determine whether
they qualify as a "normal purchase" or a "normal sale" as those terms are
defined in SFAS No. 133. If they qualify, we may document those contracts as
normal purchases and normal sales and exclude them from SFAS No. 133 treatment.
We also evaluate our contracts for "embedded" derivatives. Embedded derivatives
have terms that are not clearly and closely related to the terms of the host
contract in which they are included. If embedded derivatives exist, they are
accounted for separately from the host contract as derivatives, with changes in
their fair value recorded in current period earnings.

2. MERGERS

     In January 2001, we became a wholly owned subsidiary of El Paso Corporation
through our merger with a wholly owned El Paso subsidiary. In the merger,
holders of our common stock and Class A common stock received 1.23 shares of El
Paso common stock on a tax-free basis for each outstanding common share; holders
of our Series A and Series B convertible preferred stock received 9.133 shares
of El Paso common stock on a tax-free basis for each outstanding convertible
share; and holders of our Series C convertible preferred stock received 17.98
shares of El Paso common stock on a tax-free basis for each outstanding
convertible preferred share. In addition, holders of our outstanding stock
options received shares of El Paso common stock based on the fair value of these
options on the date of the merger. As a result of the merger, El Paso owns 100
percent of our common equity.

     Under a Federal Trade Commission (FTC) order, as a result of our merger
with El Paso, we sold our Gulfstream pipeline project, our 50 percent interest
in the Stingray pipeline system, and our investment in the Empire pipeline
system during the first quarter of 2001. Net proceeds from these sales were
approximately $144 million and we recognized an extraordinary net loss of
approximately $10 million, net of tax benefits of approximately $1 million. In
April 2001, we sold our 50 percent interest in the U-T Offshore pipeline system,
and in May 2001, we sold our interest in the Iroquois pipeline system. Net
proceeds from these sales were approximately $42 million and we will recognize
an extraordinary gain of approximately $2 million, net of income taxes of
approximately $3 million, in the second quarter of 2001.

     We do not anticipate the impact from these sales to be material to our
ongoing financial position, operating results, or cash flows.

3. MERGER-RELATED COSTS AND ASSET IMPAIRMENT CHARGES

     During the quarters ended March 31, 2001 and 2000, we incurred
merger-related costs associated with our merger with El Paso. These costs
included the following for the quarters ended March 31:

<TABLE>
<CAPTION>
                                                              2001    2000
                                                              -----   -----
                                                              (IN MILLIONS)
<S>                                                           <C>     <C>
Employee severance, retention, and transition costs.........  $578     $--
Merger-related asset impairments............................   177      --
Transaction and other costs.................................    12       4
                                                              ----     ---
                                                              $767     $ 4
                                                              ====     ===
</TABLE>

     On January 30, 2001, we completed an employee restructuring across all of
our operating segments, which resulted in the reduction of approximately 3,200
full time positions through a combination of early retirements and terminations.
In connection with the restructuring, we incurred employee severance, retention,
and transition costs. Severance costs include direct payments to severed
employees as well as pension and post-retirement benefits settled and curtailed
under existing benefit plans. Retention charges include payments to employees
who were retained following the merger and payments to employees to satisfy
contractual obligations. Transition costs relate to costs to relocate employees
and costs for severed and retired employees
                                        7
<PAGE>   9

arising after their severance date to transition their jobs into the ongoing
workforce. The amount of employee severance, retention, and transition costs
paid and charged against the accrued amount in the quarter ended March 31, 2001,
was approximately $551 million. The remainder of these charges are expected to
be paid by the end of 2001.

     Also included in employee severance, retention, and transition costs was a
charge of $278 million resulting from the issuance of approximately 4 million
shares of El Paso common stock in exchange for the fair value of our employees'
stock options.

     Merger-related asset impairments relate to write-offs or write-downs of
capitalized costs for duplicate systems, redundant facilities and assets whose
value was impaired as a result of decisions on the strategic direction of our
combined operations following our merger. These charges occurred primarily in
our Merchant Energy segment and most of these assets continue to be held for
use.

     Transaction costs include investment banking, legal, accounting,
consulting, and other advisory fees incurred to obtain federal and state
regulatory approvals and take other actions necessary to complete our merger.

4. ACCOUNTING FOR HEDGING ACTIVITIES

     On January 1, 2001, we adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 133, Accounting for Derivatives and Hedging
Activities. In accordance with the transition provisions of the statement, we
recorded a cumulative-effect adjustment of $459 million, net of income taxes, in
accumulated other comprehensive income in stockholder's equity to recognize the
fair value of all derivatives that we have designated as cash flow hedging
instruments. The majority of the initial charge related to hedging forecasted
sales of natural gas for 2001 and 2002. During the quarter ended March 31, 2001,
$276 million, net of income taxes, of this initial transition adjustment was
reclassified to earnings as a result of hedged sales and purchases during the
period and an additional $179 million of this adjustment will be reclassified by
the end of 2001. A discussion of our hedging activities is as follows:

     Fair Value Hedges.  We have crude oil and refined products inventories that
change in value daily due to changes in the commodity markets. We use futures
and swaps to protect the value of these inventories. For the quarter ended March
31, 2001, the financial statement impact of our hedges of the fair value of
these inventories was immaterial.

     Cash Flow Hedges.  A majority of our commodity sales and purchases are at
spot market or forward market prices. In order to reduce volatility of earnings
and cash flows, we use futures, forward contracts, and swaps to limit our
exposure to fluctuations in the commodity markets and allow for a fixed cash
flow stream from these activities. As of March 31, 2001, the value of cash flow
hedges included in accumulated other comprehensive income was an unrealized loss
of $169 million, net of income taxes. Of this amount, we estimate that $163
million will be reclassified from accumulated other comprehensive income over
the next 12 months. Reclassifications occur upon physical delivery of the hedged
commodity and the corresponding expiration of the hedge. The maximum term of our
cash flow hedges is 2 years; however, most of our cash flow hedges expire within
the next 12 months. For the quarter ended March 31, 2001, all cash flow hedges
were 100 percent effective.

     Our other comprehensive income also includes our proportionate share of
amounts recorded in other comprehensive income by our unconsolidated affiliates
that use derivatives as cash flow hedges.

                                        8
<PAGE>   10

5. INVENTORY

     Our inventory consisted of the following:

<TABLE>
<CAPTION>
                                                              MARCH 31,   DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
                                                                   (IN MILLIONS)
<S>                                                           <C>         <C>
Refined products, crude oil, and chemicals..................   $  836        $1,011
Coal, materials and supplies, and other.....................      173           156
Natural gas in storage......................................       36            36
                                                               ------        ------
          Total.............................................   $1,045        $1,203
                                                               ======        ======
</TABLE>

6. PROPERTY, PLANT, AND EQUIPMENT

     Our property, plant, and equipment consisted of the following:

<TABLE>
<CAPTION>
                                                              MARCH 31,   DECEMBER 31,
                                                                2001          2000
                                                              ---------   ------------
                                                                   (IN MILLIONS)
<S>                                                           <C>         <C>
Property, plant, and equipment, at cost
  Pipelines.................................................   $ 6,179      $ 6,092
  Natural gas and oil properties -- at full cost............     5,648        5,100
  Refining, crude oil, and chemical facilities..............     2,384        2,338
  Power facilities..........................................       224          237
  Gathering and processing systems..........................       345          340
  Other.....................................................       643          744
                                                               -------      -------
                                                                15,423       14,851
Less accumulated depreciation, depletion, and
  amortization..............................................     4,681        4,248
                                                               -------      -------
Total property, plant, and equipment, net...................   $10,742      $10,603
                                                               =======      =======
</TABLE>

7. DEBT AND OTHER CREDIT FACILITIES

     At December 31, 2000, our weighted average interest rate on short-term
borrowings was 7.15%. We had the following short-term borrowings, including
current maturities of long-term debt:

<TABLE>
<CAPTION>
                                                              MARCH 31,    DECEMBER 31,
                                                                2001           2000
                                                              ---------    ------------
                                                                    (IN MILLIONS)
<S>                                                           <C>          <C>
Commercial paper............................................     $--           $455
Notes payable...............................................      --            343
Current maturities of long-term debt........................      22            147
                                                                 ---           ----
                                                                 $22           $945
                                                                 ===           ====
</TABLE>

  Other Financing Arrangements

     In January 2001, we completed the merger with El Paso. We terminated
approximately $1.5 billion in revolving credit facilities and became a
designated borrower under El Paso's 364-day revolving credit and competitive
advance facility and El Paso's 3-year revolving credit and competitive advance
facility. The interest rate for these facilities varies and was LIBOR plus 50
basis points on March 31, 2001. No amounts were outstanding under these
facilities as of March 31, 2001.

     In February 2001, we retired approximately $84 million aggregate principal
amount 10.0% notes.

                                        9
<PAGE>   11

8. COMMITMENTS AND CONTINGENCIES

  Legal Proceedings

     In May 1999, we were named as defendants in a suit filed in the 319th
Judicial District Court, Nueces County, Texas by an individual employed by one
of our contractors (Rolando Lopez and Rosanna Barton v. Coastal Refining &
Marketing, Inc. and The Coastal Corporation). The suit sought damages for
injuries sustained at the time of an explosion at one of our refining plants,
and was settled in August 2000 for a total payment of $7 million, of which $5
million was covered by insurance. Three of our refinery employees intervened in
the suit and sought damages for injuries sustained in the explosion. Those
claims were tried in August 2000, resulting in a $122 million verdict, which is
also covered by insurance and which is being appealed by the insurance carrier.

     In 1997, a number of our subsidiaries were named defendants 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. These matters have been consolidated for pretrial purposes (In re:
Natural Gas Royalties Qui Tam Litigation, U.S. District Court for the District
of Wyoming).

     A number of our subsidiaries were named defendants in Quinque Operating
Company, et al v. Gas Pipelines and Their Predecessors, et al, filed in 1999 in
the District Court of Stevens County, Kansas. This class action complaint
alleges that the defendants mismeasured natural gas volumes and heating content
of natural gas on non-federal and non-Native American lands. The Quinque
complaint was transferred to the same court handling the Grynberg complaint and
has now been sent back to the Kansas State Court for further proceedings.

     In October 1992, several property owners in McAllen, Texas filed suit in
the 93rd Judicial District Court, Hidalgo County, Texas, against, among others,
one of our subsidiaries (Timely Adventures, Inc. et al, v. Phillips Properties,
Inc., et al and Garza v. Coastal Mart, Inc.). The suit sought damages for the
alleged diminution of property value and damages related to the exposure to
hazardous chemicals arising from the operation of service stations and storage
facilities. In July 2000, the trial court entered a judgment for approximately
$1.2 million in actual damages for property diminution and approximately $100
million in punitive damages. The judgment is being appealed.

     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 will have a
material adverse effect on our financial position, operating results, 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 March 31, 2001, we had a reserve of approximately $26 million for
expected remediation costs. In addition, we expect to make capital expenditures
for environmental matters of approximately $141 million in the aggregate for the
years 2002 through 2006. These expenditures primarily relate to compliance with
air regulations and control of water discharges.

     From March to October 2000, our Eagle Point Oil Company received several
Administrative Order Notices of Civil Administrative Penalty Assessment from the
New Jersey Department of Environmental Protection. All of the assessments are
related to similar alleged noncompliances with the New Jersey Air Pollution
Control Act pertaining to occurrences of air pollution from the second quarter
1998 through the third quarter 2000 by Eagle Point's refinery in Westville, New
Jersey. The New Jersey Department of

                                        10
<PAGE>   12

Environmental Protection has assessed penalties totaling approximately $1
million for these alleged violations. Eagle Point has requested an
administrative hearing on all issues raised by the assessments and,
concurrently, is in negotiations to settle these assessments.

     We have been designated and have received notice that we could be
designated, or have been asked for information to determine whether we could be
designated, as a Potentially Responsible Party (PRP) with respect to 25 active
sites under CERCLA or state equivalents. We have sought to resolve our liability
as a PRP at these CERCLA sites, as appropriate, through indemnification by third
parties and/or settlements which provide for payment of our allocable share of
remediation costs. As of March 31, 2001, we have estimated our share of the
remediation costs at these sites to be approximately $5 million and have
provided reserves that we believe are adequate for such costs. Since the cleanup
costs are estimates and are subject to revision as more information becomes
available about the extent of remediation required, and because in some cases we
have asserted a defense to any liability, our estimates could change. Moreover,
liability under the federal CERCLA statute is joint and several, meaning that we
could be required to pay in excess of our pro rata share of remediation costs.
Our understanding of the financial strength of other PRPs has been considered,
where appropriate, in the determination of our estimated liabilities. We
presently believe that the costs associated with these CERCLA sites will not
have a material adverse effect on our financial position, operating results, or
cash flows.

     Additionally, several of our subsidiaries have been named as PRPs in four
state sites. In Florida, the Florida Department of Environmental Protection has
demanded reimbursement of its costs, which total approximately $0.3 million, and
suitable remediation, with approximately $0.1 million potentially attributable
to our subsidiary's activities. In North Carolina, the North Carolina Department
of Health, Environmental and Natural Resources has estimated the total cleanup
costs to be approximately $50 million. In Texas, the Texas Natural Resource
Conservation Commission has estimated the total cleanup costs to be
approximately $2 million. In Utah, a remediation plan has been submitted to the
Utah Department of Environmental Quality for approval, with current estimated
cleanup costs of approximately $1.2 million attributable to our subsidiary's
activities. At all of the four state sites, we believe our subsidiaries'
activities were de minimis. With respect to the Texas site, we have entered into
a joint defense agreement with the other PRPs for the payment of $20,000 as a de
minimis settlement.

     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.

  Regulatory Matters

     Several regulatory issues remain unresolved among Colorado Interstate Gas
Company, ANR Pipeline Company, ANR Storage and Wyoming Interstate, their
customers, their suppliers and the Federal Energy Regulatory Commission (FERC).
We have made provisions which represent management's assessment of the ultimate
resolution of these issues. While we cannot predict with certainty the final
outcome or the timing of the resolution of all of our regulatory matters, we
believe the ultimate resolution of these issues will not have a material adverse
effect on our financial position, operating results, or cash flows.

9. SEGMENT INFORMATION

     We segregate our business activities into four distinct operating segments:
Pipelines, Merchant Energy, Production, and Field Services.

                                        11
<PAGE>   13

     These segments are strategic business units that provide a variety of
energy products and services. They are managed separately as each business unit
requires different technology and marketing strategies. We measure segment
performance using earnings before interest expense and income taxes (EBIT). At
the beginning of 2001, we aligned our segments to conform with El Paso's
segments. All periods presented have been restated for these changes. Following
are our results as of and for the periods ended March 31:

<TABLE>
<CAPTION>
                                                                  2001
                                    -----------------------------------------------------------------
                                                MERCHANT                 FIELD
                                    PIPELINES    ENERGY    PRODUCTION   SERVICES   OTHER(1)    TOTAL
                                    ---------   --------   ----------   --------   --------   -------
                                                              (IN MILLIONS)
<S>                                 <C>         <C>        <C>          <C>        <C>        <C>
Revenues from external
  customers.......................   $  311      $6,616      $  436       $322      $ 177     $ 7,862
Intersegment revenues.............       13         187         (12)        31       (219)         --
Merger-related costs and asset
  impairment charges..............       79         136          61          1        490         767
Operating income (loss)...........       61         (21)        149         24       (513)       (300)
EBIT..............................       90          27         147         24       (515)       (227)
Segment assets....................    5,138       6,151       5,585        511      1,650      19,035
</TABLE>

<TABLE>
<CAPTION>
                                                                  2000
                                    -----------------------------------------------------------------
                                                MERCHANT                 FIELD
                                    PIPELINES    ENERGY    PRODUCTION   SERVICES   OTHER(1)    TOTAL
                                    ---------   --------   ----------   --------   --------   -------
                                                              (IN MILLIONS)
<S>                                 <C>         <C>        <C>          <C>        <C>        <C>
Revenues from external
  customers.......................   $  270      $5,057      $  229       $109      $  275    $ 5,940
Intersegment revenue..............       22         163          12          7        (204)        --
Merger-related costs and asset
  impairment charges..............       --          --          --         --           4          4
Operating income (loss)...........      137          22         102         23          (9)       275
EBIT..............................      166          68          99         31          11        375
Segment assets....................    5,165       5,470       3,332        445       1,228     15,640
</TABLE>

---------------
(1) Includes Corporate and eliminations as well as retail operations.

10. INVESTMENTS IN UNCONSOLIDATED AFFILIATES

     We hold investments in various affiliates which we account for using the
equity method of accounting. Summarized financial information for our
proportionate share of these investments is as follows:

<TABLE>
<CAPTION>
                                                              QUARTER ENDED
                                                                MARCH 31,
                                                              -------------
                                                              2001    2000
                                                              -----   -----
                                                              (IN MILLIONS)
<S>                                                           <C>     <C>
Operating results data
  Revenues and other income.................................  $243    $979
  Costs and expenses........................................   169     903
  Income from continuing operations.........................    74      76
  Net income................................................    61      64
</TABLE>

11. TRANSACTIONS WITH RELATED PARTIES

     After our merger, we participate in El Paso's cash management program which
matches short-term cash excesses and requirements of participating affiliates,
thus minimizing total borrowing from outside sources. El Paso had advanced us
$736 million as of March 31, 2001, at a market rate of interest which was 5.58%
at March 31, 2001.

                                        12
<PAGE>   14

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.(1)

     The information contained in Item 2 updates, and you should read it 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, 2000, in addition to
the financial statements and notes presented in Item 1 of this Quarterly Report
on Form 10-Q.

                              RECENT DEVELOPMENTS

  Merger with El Paso

     In January 2001, we merged with El Paso. El Paso accounted for the merger
as a pooling of interests and converted each share of our common stock and Class
A common stock on a tax-free basis into 1.23 shares of El Paso common stock. El
Paso also exchanged our outstanding convertible preferred stock with its common
stock on the same basis as if the preferred stock had been converted into our
common stock immediately prior to the merger. El Paso issued a total of
approximately 271 million shares, including 4 million shares issued to holders
of our stock options.

  Merger-Related Costs and Asset Impairment Charges

     During the quarters ended March 31, 2001 and 2000, we incurred, and will
continue to incur throughout the remainder of 2001, charges that had and will
have a significant impact on our results of operations, financial position, and
cash flows. These costs included employee severance, retention, and transition
charges; write-offs and write-downs of assets; charges to relocate assets and
employees; contract termination charges; and other charges. The table below
provides a summary of our merger-related costs and asset impairment charges by
each of our business segments, and in total, for each of the quarters ended
March 31:

<TABLE>
<CAPTION>
                                                              2001      2000
                                                              ----      ----
                                                              (IN MILLIONS)
<S>                                                           <C>       <C>
Merger-related costs and asset impairment charges
  Pipelines.................................................  $ 79      $--
  Merchant Energy...........................................   136       --
  Production................................................    61       --
  Field Services............................................     1       --
                                                              ----      ---
     Segment total..........................................   277       --
  Corporate and other.......................................   490        4
                                                              ----      ---
     Consolidated total.....................................  $767      $ 4
                                                              ====      ===
</TABLE>

---------------

(1) Below is a list of terms that are common to our industry and used throughout
    our Management's Discussion and Analysis:

<TABLE>
<S>    <C>  <C>                                              <C>    <C>  <C>
/d     =    per day                                          MBbls  =    thousand barrels
Bbl    =    barrel                                           MMBtu  =    million British thermal units
BBtu   =    billion British thermal units                    Mcf    =    thousand cubic feet
BBtue  =    billion British thermal unit equivalents         MTons  =    million tons
Bcf    =    billion cubic feet                               MMWh   =    thousand megawatt hours
Btu    =    British thermal unit
</TABLE>

    When we refer to natural gas and oil in "equivalents," we are doing so to
compare quantities of oil with quantities of natural gas or to express these
different commodities in a common unit. In calculating equivalents, we use a
generally recognized standard in which one Bbl is equal to six Mcf of natural
gas. Also, when we refer to cubic feet measurements, all measurements are at
14.73 pounds per square inch.

                                        13
<PAGE>   15

                             RESULTS OF OPERATIONS

     For the quarter ended March 31, 2001, we had a net loss of $347 million
versus net income of $174 million for the quarter ended March 31, 2000. The 2001
loss was a result of merger-related costs and asset impairment charges totaling
$767 million, or $491 million after taxes, related to our merger with El Paso.
In addition, we recorded net extraordinary losses totaling $10 million, net of
income taxes, as a result of FTC ordered sales of our Gulfstream pipeline
project and our investments in the Stingray and Empire pipeline systems. During
the first quarter of 2000, merger-related charges were $4 million, or $3
million, net of income taxes. Net income, excluding the effects of
merger-related charges and extraordinary items, was $154 million in 2001 versus
$177 million in 2000.

                                SEGMENT RESULTS

     Our business activities are segregated into four segments: Pipelines,
Merchant Energy, Production, and Field Services. These segments are strategic
business units that offer a variety of different energy products and services
and each requires different technology and marketing strategies. These segments
have been restated to reflect the manner in which we are currently operating
them, and all prior period information has been restated to reflect this segment
presentation. The results presented in this analysis are not necessarily
indicative of the results that would have been achieved had the revised business
segment structure been in place during those periods. Operating revenues and
expenses by segment include intersegment revenues and expenses which are
eliminated in consolidation. Because changes in energy commodity prices have a
similar impact on both our operating revenues and cost of products sold from
period to period, we believe that gross margin (revenue less cost of sales)
provides a more accurate and meaningful basis for analyzing operating results
for our Field Services segment. For a further discussion of our individual
segments, see Item 1, Financial Statements, Note 9.

<TABLE>
<CAPTION>
                                                               QUARTER ENDED
                                                                 MARCH 31,
                                                              ---------------
                                                              2001       2000
                                                              -----      ----
                                                               (IN MILLIONS)
<S>                                                           <C>        <C>
          EARNINGS BEFORE INTEREST EXPENSE AND INCOME TAXES
Pipelines...................................................  $  90      $166
Merchant Energy.............................................     27        68
Production..................................................    147        99
Field Services..............................................     24        31
                                                              -----      ----
  Segment total.............................................    288       364
                                                              -----      ----
Corporate and other, net....................................   (515)       11
                                                              -----      ----
  Consolidated EBIT.........................................  $(227)     $375
                                                              =====      ====
</TABLE>

PIPELINES

     Our Pipelines segment operates our interstate pipeline businesses. Each
pipeline system operates under a separate tariff that governs its operations and
rates. Operating results for our pipeline systems have generally been stable
because the majority of the revenues are based on fixed demand charges. As a
result, we expect changes in this aspect of our business to be primarily driven
by regulatory actions and contractual events. Commodity or throughput-based
revenues account for a smaller portion of our operating results. These revenues
vary from period to period, and system to system, and are impacted by factors
such as weather, operating efficiencies, competition from other pipelines, and
fluctuations in natural gas prices. Results of operations of the Pipelines
segment were as follows for the quarters ended March 31:

<TABLE>
<CAPTION>
                                                              2001       2000
                                                              -----      -----
                                                               (IN MILLIONS)
<S>                                                           <C>        <C>
Operating revenues..........................................  $ 324      $ 292
Operating expenses..........................................   (263)      (155)
Other income................................................     29         29
                                                              -----      -----
  EBIT......................................................  $  90      $ 166
                                                              =====      =====
</TABLE>

                                        14
<PAGE>   16

     Operating revenues for the quarter ended March 31, 2001, were $32 million
higher than the same period in 2000. The increase was due to higher gas prices
on excess fuel recoveries and at our Dakota gasification facility in the first
quarter of 2001. Also contributing to the increase were higher revenues on our
production operations resulting from higher gas prices in the first quarter of
2001. Partially offsetting the increase was the sale of base gas in the first
quarter of 2000, the expiration of revenue sharing agreements prior to 2001, and
revised estimates of gas revenues in the first quarter of 2000.

     Operating expenses for the quarter ended March 31, 2001, were $108 million
higher than the same period in 2000. The increase was due to higher fuel costs
resulting from higher gas prices and merger costs incurred for employee benefits
and severance charges, both occurring in the first quarter of 2001.

MERCHANT ENERGY

     Merchant Energy is involved in a wide range of activities in the wholesale
energy market place, including petroleum trading and risk management and asset
ownership of power plants, refineries and chemical facilities. Each market
served by Merchant Energy is highly competitive and is influenced directly or
indirectly by energy market economics. Prior to October 2000, we conducted our
marketing and trading activities through Engage Energy U.S., L.P. and Engage
Canada, L.P., a joint venture between us and Westcoast Energy Inc., a Canadian
natural gas company. During the fourth quarter of 2000, we terminated the Engage
joint venture and commenced our own marketing and trading activities.

     Merchant Energy's trading and risk management activities provide energy
trading and energy management solutions for its customers and affiliates
involving such energy commodities as crude oil, refined products, chemicals, and
coal. The segment maintains a substantial trading portfolio that manages its
risk across multiple commodities and over seasonally fluctuating energy demands.

     Below are Merchant Energy's operating results and an analysis of those
results for each of the quarters ended March 31:

<TABLE>
<CAPTION>
                                                                2001        2000
                                                              ---------   ---------
                                                              (IN MILLIONS, EXCEPT
                                                                 VOLUME AMOUNTS)
<S>                                                           <C>         <C>
Operating and other revenues................................   $ 6,803     $ 5,220
Operating expenses..........................................    (6,824)     (5,198)
Other income................................................        48          46
                                                               -------     -------
  EBIT......................................................   $    27     $    68
                                                               =======     =======
Volumes
  Physical
     Natural Gas (BBtue/d)..................................     3,457          --
     Power (MMWh)...........................................       123          84
     Crude oil and refined products (MBbls).................   169,237     163,688
     Coal (MTons)...........................................     2,663       2,474
</TABLE>

     For the quarter ended March 31, 2001, operating revenues were $1,583
million higher than the same period in 2000. The increase was the result of
higher realized prices and volumes on refined products, particularly at our
Aruba and Corpus Christi refineries, higher revenues on Engage's operations
during January, prior to the transfer of these contracts to El Paso Merchant
Energy in February 2001, and revenues from the ManChief power project that
commenced operations in July 2000.

     In September 2000, we terminated our Engage joint venture with WestCoast
Energy. In the transaction, we assumed the U.S. portion of Engage and WestCoast
assumed the Canadian operations. As a result, we began consolidating these U.S.
operations and conducting trading activities. In February 2001, we transferred
these contracts, which included Engage's marketing contracts and other assets to
El Paso Merchant Energy, an affiliate and subsidiary of El Paso in exchange for
22 percent of the shares of El Paso Merchant Energy, which had an estimated fair
value of approximately $135 million.

                                        15
<PAGE>   17

     Operating expenses for the quarter ended March 31, 2001, were $1,626
million higher than the same period in 2000. The increase was primarily a result
of increased merger-related costs and asset impairment charges associated with
combining operations and implementing our combined strategy. We also incurred
higher operating and feedstock costs as a result of higher production volumes
and feedstock prices at our refineries, higher cost of gas purchased in our
Engage operations, and higher operating expenses and depreciation associated
with the ManChief power facility.

     In April of 2001, we had a fire at our Aruba refinery, which resulted in
the temporary shut down of these facilities. While we have not determined the
full financial impact of the shutdown, we believe that the ultimate impact,
after considering insurance recoveries, will not be material to our operations.

PRODUCTION

     Production's operating results are driven by a variety of factors including
its ability to locate and develop economic reserves, extract those reserves with
minimal production costs, sell the products at attractive commodity prices, and
operate at the lowest cost level possible.

     Production engages in hedging activities on its natural gas and oil
production in order to stabilize cash flows and reduce the risk of downward
commodity price movements on sales of its production. This is achieved through
natural gas and oil swaps. We attempt to hedge approximately 75 percent of our
anticipated current year production and approximately 50 percent of our
anticipated succeeding year production. Production's hedged positions are
closely monitored and evaluated in an effort to achieve its earnings objective
and reduce the risks associated with spot-market price volatility. Below are the
operating results and analysis of these results for the quarters ended March 31:

<TABLE>
<CAPTION>
                                                                2001        2000
                                                              ---------   ---------
                                                              (IN MILLIONS, EXCEPT
                                                               VOLUMES AND PRICES)
<S>                                                           <C>         <C>
Natural gas.................................................   $  365      $  201
Oil, condensate, and liquids................................       56          37
Other.......................................................        3           3
                                                               ------      ------
          Total operating revenues..........................      424         241
Operating expenses..........................................     (275)       (139)
Other loss..................................................       (2)         (3)
                                                               ------      ------
  EBIT......................................................   $  147      $   99
                                                               ======      ======
Volumes and prices
  Natural gas
     Volumes (Bcf)..........................................       91          79
                                                               ======      ======
     Average realized prices ($/Mcf)........................   $ 4.03      $ 2.51
                                                               ======      ======
  Oil, condensate, and liquids
     Volumes (MMBbls).......................................    1,914       1,519
                                                               ======      ======
     Average realized prices ($/Bbl)........................   $29.21      $24.02
                                                               ======      ======
</TABLE>

     For the quarter ended March 31, 2001, operating revenues were $183 million
higher than the same period in 2000. The increase was the combined result of
higher production coupled with higher realized natural gas and oil prices.
Natural gas production volumes rose during the first quarter of 2001 by 15
percent over 2000, and realized sales prices were 61 percent higher than the
first quarter 2000. Oil, condensate, and liquids production volumes were 26
percent higher than the same period in 2000, with realized average prices
increasing 22 percent.

     Operating expenses for the quarter ended March 31, 2001, were $136 million
higher than the same period in 2000 as a result of merger-related charges during
the first quarter of 2001 related to integrating our

                                        16
<PAGE>   18

combined production operations, higher production costs due to increased
oilfield services costs, higher costs under a production commitment with
Alliance Pipeline which commenced operations in the fourth quarter of 2000, and
higher production taxes in 2001 which are generally tied to natural gas and oil
prices. Also contributing to the increase was higher depreciation, depletion,
and amortization expense in 2001 as a result of the increased production volumes
and capitalized costs in the full cost pool.

FIELD SERVICES

     Field Services provides a variety of services for the midstream component
of our operations, including gathering and treating of natural gas, processing
and fractionation of natural gas, natural gas liquids and natural gas derivative
products, such as ethane, propane, and butane.

     Our gathering and treating operations earn margins substantially from fixed
fee based services; however, some of these operations earn margins from
commodity-based rates. Revenues for these commodity rate services are the
product of the market price, usually related to the monthly natural gas price
index, and the volume gathered.

     Processing and fractionation operations earn a margin based on fixed-fee
contracts, percentage-of-proceeds contracts, and make-whole contracts.
Percentage-of-proceeds contracts allow us to retain a percentage of the product
as a fee for processing or fractionation service. Make-whole contracts allow us
to retain the extracted liquid products and to return to the producer a Btu
equivalent amount of natural gas. Under its percentage-of-proceeds contracts and
make-whole contracts, Field Services may have more sensitivity to price changes
during periods when natural gas and liquid prices are volatile.

     Field Services' operating results and an analysis of those results are as
follows for the quarters ended March 31:

<TABLE>
<CAPTION>
                                                               2001         2000
                                                              -------      -------
                                                              (IN MILLIONS, EXCEPT
                                                              VOLUMES AND PRICES)
<S>                                                           <C>          <C>
Gathering, treating, and processing margin..................  $   40       $   54
Operating expenses..........................................     (16)         (31)
Other income................................................      --            8
                                                              ------       ------
  EBIT......................................................  $   24       $   31
                                                              ======       ======
Volume and prices
  Gathering and treating
     Volumes (BBtu/d).......................................     953        3,039
                                                              ======       ======
     Prices ($/MMBtu).......................................  $ 0.13       $ 0.17
                                                              ======       ======
  Processing
     Volumes (inlet BBtu/d).................................   1,955          992
                                                              ======       ======
     Prices ($/MMBtu).......................................  $ 0.14       $ 0.16
                                                              ======       ======
</TABLE>

     Total gathering, treating, and processing margin for the quarter ended
March 31, 2001, was $14 million lower than the same period in 2000. The decrease
was a result of the rapid increase in natural gas prices during the quarter,
relative to increases in natural gas liquids (NGL) prices. During periods of
high natural gas prices, NGL prices can, and often do, exhibit a delayed pricing
response. Furthermore, when natural gas prices reach extreme levels, pricing in
the NGL market may, but often does not, exhibit a proportional pricing response.
Both of these factors contributed to the reduced results in the quarter.

     Operating expenses for the quarter ended March 31, 2001, were $15 million
lower than the same period in 2000. The decrease was a result of cost savings
following the merger with El Paso during 2001, including lower payroll and
employee costs.

                                        17
<PAGE>   19

     Other income for the quarter ended March 31, 2001, was $8 million lower
than the same period in 2000. Lower equity earnings from our investments in the
Aux Sable and Mobile Bay processing plants, as well as 2000 gains from the sale
of assets all contributed to the decrease.

CORPORATE AND OTHER, NET

     Corporate and other, net for the first quarter ended March 31, 2001, were
$526 million higher than in the same period in 2000. The increase was primarily
a result of merger-related charges in connection with our January 2001 merger
with El Paso. We will incur additional merger-related costs in 2001 as a result
of this merger.

INTEREST AND DEBT EXPENSE

     Interest and debt expense for the first quarter ended March 31, 2001, was
$16 million higher than the same period in 2000 primarily due to increased
long-term borrowings for ongoing capital projects and operating requirements.

INCOME TAX EXPENSE

     Income tax benefit was $32 million for the quarter ended March 31, 2001,
resulting in an effective tax rate of 9 percent. Our effective tax rate was
different than the statutory rate of 35 percent primarily due to the following:

     - the non-deductible portion of merger-related costs and other tax
       adjustments to provide for revised estimated liabilities;

     - state income taxes; and

     - foreign income, not taxed in the U.S., but taxed at foreign rates.

     Income tax expense was $75 million for the quarter ended March 31, 2000,
resulting in an effective tax rate of 30 percent. Our effective tax rate was
different than the statutory tax rate of 35 percent primarily due to the
following:

     - state income taxes and

     - foreign income, not taxed in the U.S., but taxed at foreign rates.

                         COMMITMENTS AND CONTINGENCIES

     See Part I, Financial Information, Note 8, which is incorporated by
reference herein.

                                        18
<PAGE>   20

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
                    SECURITIES LITIGATION REFORM ACT OF 1995

     This report contains or incorporates by reference forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Where any forward-looking statement includes a statement of the
assumptions or bases underlying the forward-looking statement, we caution that,
while we believe these assumptions or bases to be reasonable and to be made in
good faith, assumed facts or bases almost always vary from the actual results,
and the differences between assumed facts or bases and actual results can be
material, depending upon the circumstances. Where, in any forward-looking
statement, we or our management express an expectation or belief as to future
results, that expectation or belief is expressed in good faith and is believed
to have a reasonable basis. We cannot assure you, however, that the statement of
expectation or belief will result or be achieved or accomplished. The words
"believe," "expect," "estimate," "anticipate" and similar expressions will
generally identify forward-looking statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     This information updates, and you should read it in conjunction with,
information disclosed in Part II, Item 7A in our Annual Report on Form 10-K for
the year ended December 31, 2000, in addition to the information presented in
Items 1 and 2 of this Quarterly Report on Form 10-Q.

     As a result of transferring Engage's contracts to El Paso Merchant Energy,
we no longer conduct unregulated natural gas and power marketing and trading
activities and are no longer exposed to the market risk associated with these
activities.

     Except as discussed above, 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, 2000.

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<PAGE>   21

                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     See Part I, Financial Information, Note 8, which is incorporated by
reference herein.

ITEM 2. CHANGES IN SECURITIES.

     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.

     None.

     Undertaking

          We hereby undertake, pursuant to Regulation S-K, Item 601(b),
     paragraph (4)(iii), to furnish to the Securities and Exchange Commission
     upon request all constituent instruments defining the rights of holders of
     our long-term debt and of our 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 our total consolidated
     assets.

  b. Reports on Form 8-K

          We filed a Current Report on Form 8-K dated February 2, 2001,
     announcing that we became a direct subsidiary of El Paso Corporation as a
     result of our merger with a wholly owned subsidiary of El Paso Corporation
     on January 29, 2001 and changed our name.

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<PAGE>   22

                                   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.

                                            EL PASO CGP COMPANY

Date: May 14, 2001                                 /s/ H. BRENT AUSTIN
                                            ------------------------------------
                                                      H. Brent Austin
                                                Executive Vice President and
                                                  Chief Financial Officer

Date: May 14, 2001                                /s/ JEFFREY I. BEASON
                                            ------------------------------------
                                                     Jeffrey I. Beason
                                            Senior Vice President and Controller
                                                 (Chief Accounting Officer)

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