UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to
Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report:
May
3,
2006
(Date
of Earliest
Event Reported: April 27, 2006)
EL
PASO
CORPORATION
(Exact
name of
Registrant as specified in its charter)
|
Delaware
|
|
1-14365
|
|
76-0568816
|
|
(State
or
other jurisdiction of
incorporation
or organization)
|
|
(Commission
File Number)
|
|
(I.R.S.
Employer
Identification
No.)
|
El
Paso
Building
1001
Louisiana
Street
Houston,
Texas
77002
(Address
of
principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (713) 420-2600
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
On
April 27, 2006,
we completed the sale of our interest in the Macae power facility in Brazil
to
Petrobras for approximately $358 million in cash. Pursuant to an agreement
in
March 2006, we terminated a participation agreement between Petrobras and us
related to the Macae facility, resolving certain disputes which are described
in
our Annual Report on Form 10-K for the year ended December 31, 2005. In
addition, prior to closing we repaid the outstanding project financing debt,
including accrued interest.
Upon
approval of
this sale by our Board of Directors in March 2006, Macae became a discontinued
operation and will be reported in our financial statements as such beginning
with our Quarterly Report on Form 10-Q for the quarter ended March 31,
2006.
This
Current Report
on Form 8-K is being filed to report the completion of the sale and present
the
pro forma impacts of the sale on our historical financial
statements.
|
(b)
|
Pro
forma
financial information.
|
The
accompanying
unaudited pro forma financial statements are based on our historical
consolidated financial statements as of and for the year ended December 31,
2005, adjusted for the effects of the sale of Macae, as described above. The
unaudited pro forma balance sheet as of December 31, 2005, assumes the
disposition occurred on the balance sheet date. The unaudited pro forma
statements of income for the years ended December 31, 2005, 2004 and 2003 assume
the disposition occurred on January 1, 2003. The unaudited pro forma financial
statements should be read in conjunction with the historical consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 2005 and should not be construed to be indicative of future
results or results that actually would have occurred had the transaction
occurred at the dates presented. In addition, these pro forma financial
statements were prepared in accordance with Article 11 of Regulation S-X.
Accordingly, we have not assumed any cost savings or synergies that might occur
related to the transaction.
|
El
Paso
Corporation
|
|||||||||||||
|
Unaudited
Pro
Forma Condensed Consolidated Balance Sheet
|
|||||||||||||
|
For
the Year
Ended December 31, 2005
|
|||||||||||||
|
(In
millions)
|
|||||||||||||
|
El
Paso
|
Pro
Forma
|
As
|
|||||||||||
|
Historical
|
Adjustments
|
Adjusted
|
|||||||||||
|
Assets
|
|||||||||||||
|
Current
assets
|
|||||||||||||
|
Cash
and cash
equivalents
|
$
|
2,132
|
$
|
(5
|
)
|
(a
|
)
|
$
|
2,255
|
||||
|
358
|
(b
|
)
|
|||||||||||
|
(230
|
)
|
(c
|
)
|
||||||||||
|
Accounts
and
notes receivable, net
|
1,319
|
(5
|
)
|
(a
|
)
|
1,319
|
|||||||
|
5
|
(d
|
)
|
|||||||||||
|
Other
|
2,734
|
(189
|
)
|
(a
|
)
|
2,545
|
|||||||
|
Total
current
assets
|
6,185
|
(66
|
)
|
6,119
|
|||||||||
|
Property,
plant and equipment, net
|
19,135
|
(348
|
)
|
(a
|
)
|
18,787
|
|||||||
|
Other
assets
|
|||||||||||||
|
Investments
in unconsolidated affiliates
|
2,473
|
-
|
2,473
|
||||||||||
|
Other
|
4,045
|
(5
|
)
|
(a
|
)
|
4,040
|
|||||||
|
Total
assets
|
$
|
31,838
|
$
|
(419
|
)
|
$
|
31,419
|
||||||
See
notes.
|
El
Paso
Corporation
|
|||||||||||||
|
Unaudited
Pro Forma Condensed Consolidated Balance Sheet
|
|||||||||||||
|
For
the
Year Ended December 31, 2005
|
|||||||||||||
|
(In
millions)
|
|||||||||||||
|
|
El
Paso
|
|
Pro
Forma
|
|
|
|
As
|
|
|||||
|
|
|
Historical
|
|
Adjustments
|
|
|
|
Adjusted
|
|||||
|
Liabilities
and Stockholders’ Equity
|
|||||||||||||
|
Current
liabilities
|
|||||||||||||
|
Accounts
payable
|
$
|
1,604
|
$
|
(190
|
)
|
(a
|
)
|
$
|
1,414
|
||||
|
Short-term
financing obligations, including current maturities
|
1,211
|
(225
|
)
|
(c
|
)
|
986
|
|||||||
|
Other
|
2,897
|
8
|
(a
|
)
|
2,900
|
||||||||
|
(5
|
)
|
(c
|
)
|
||||||||||
|
Total
current
liabilities
|
5,712
|
(412
|
)
|
5,300
|
|||||||||
|
Long-term
debt
|
17,023
|
-
|
17,023
|
||||||||||
|
Other
liabilities
|
|||||||||||||
|
Deferred
income taxes
|
1,407
|
(2
|
)
|
(a
|
)
|
1,405
|
|||||||
|
Other
|
4,276
|
5
|
(e
|
)
|
4,281
|
||||||||
|
Commitments
and contingencies
|
|||||||||||||
|
Securities
of
subsidiaries
|
31
|
-
|
31
|
||||||||||
|
Stockholders'
equity
|
|||||||||||||
|
Preferred
stock
|
750
|
-
|
750
|
||||||||||
|
Common
stock
|
2,001
|
-
|
2,001
|
||||||||||
|
Additional
paid-in-capital
|
4,592
|
-
|
4,592
|
||||||||||
|
Accumulated
deficit
|
(3,415
|
)
|
(10
|
)
|
(f
|
)
|
(3,425
|
)
|
|||||
|
Other
|
(539
|
)
|
-
|
(539
|
)
|
||||||||
|
Total
stockholders' equity
|
3,389
|
(10
|
)
|
3,379
|
|||||||||
|
Total
liabilities and stockholders' equity
|
$
|
31,838
|
$
|
(419
|
)
|
$
|
31,419
|
||||||
See
notes.
|
El
Paso
Corporation
|
||||||||||||||
|
Unaudited
Pro
Forma Condensed Consolidated Statement of Income
|
||||||||||||||
|
For
the Year
Ended December 31, 2005
|
||||||||||||||
|
(In
millions,
except per common share amounts)
|
||||||||||||||
|
El
Paso
|
Pro
Forma
|
As
|
||||||||||||
|
Historical
|
Adjustments
|
Adjusted
|
||||||||||||
|
|
||||||||||||||
|
Operating
revenues
|
$
|
4,017
|
$
|
(47
|
)
|
(a
|
)
|
$
|
3,970
|
|||||
|
Operating
expenses
|
||||||||||||||
|
Cost
of
products and services
|
323
|
-
|
323
|
|||||||||||
|
Operation
and
maintenance
|
2,083
|
(51
|
)
|
(a
|
)
|
2,032
|
||||||||
|
Depreciation,
depletion and amortization
|
1,121
|
(21
|
)
|
(a
|
)
|
1,100
|
||||||||
|
Loss
on
long-lived assets
|
407
|
(333
|
)
|
(a
|
)
|
74
|
||||||||
|
Taxes,
other
than income taxes
|
270
|
(8
|
)
|
(a
|
)
|
262
|
||||||||
|
4,204
|
(413
|
)
|
3,791
|
|||||||||||
|
Operating
income (loss)
|
(187
|
)
|
366
|
179
|
||||||||||
|
Earnings
from
unconsolidated affiliates
|
342
|
-
|
342
|
|||||||||||
|
Other
income,
net
|
243
|
(4
|
)
|
(a
|
)
|
239
|
||||||||
|
Interest
and
debt expense
|
(1,380
|
)
|
26
|
(c
|
)
|
(1,354
|
)
|
|||||||
|
Distributions
on preferred interests of consolidated subsidiaries
|
(9
|
)
|
-
|
(9
|
)
|
|||||||||
|
Income
(loss)
before income taxes
|
(991
|
)
|
388
|
(603
|
)
|
|||||||||
|
Income
taxes
|
(289
|
)
|
38
|
(a)(c
|
)
|
(251
|
)
|
|||||||
|
Income
(loss)
from continuing operations
|
$
|
(702
|
)
|
$
|
350
|
$
|
(352
|
)
|
||||||
|
Basic
and
diluted loss per common share from continuing operations
|
$
|
(1.13
|
)
|
$
|
(0.59
|
)
|
||||||||
|
Basic
and
diluted average common shares outstanding
|
646
|
646
|
||||||||||||
See
notes.
|
El
Paso
Corporation
|
|||||||||||||
|
Unaudited
Pro
Forma Condensed Consolidated Statement of Income
|
|||||||||||||
|
For
the Year
Ended December 31, 2004
|
|||||||||||||
|
(In
millions,
except per common share amounts)
|
|||||||||||||
|
El
Paso
|
Pro
Forma
|
As
|
|||||||||||
|
Historical
|
Adjustments
|
Adjusted
|
|||||||||||
|
|
|||||||||||||
|
Operating
revenues
|
$
|
5,539
|
$
|
(251
|
)
|
(a
|
)
|
$
|
5,288
|
||||
|
Operating
expenses
|
|||||||||||||
|
Cost
of
products and services
|
1,218
|
-
|
1,218
|
||||||||||
|
Operation
and
maintenance
|
1,744
|
(34
|
)
|
(a
|
)
|
1,710
|
|||||||
|
Depreciation,
depletion and amortization
|
1,068
|
(25
|
)
|
(a
|
)
|
1,043
|
|||||||
|
Loss
on
long-lived assets
|
1,077
|
-
|
1,077
|
||||||||||
|
Taxes,
other
than income taxes
|
250
|
(26
|
)
|
(a
|
)
|
224
|
|||||||
|
5,357
|
(85
|
)
|
5,272
|
||||||||||
|
Operating
income
|
182
|
(166
|
)
|
16
|
|||||||||
|
Earnings
from
unconsolidated affiliates
|
546
|
-
|
546
|
||||||||||
|
Other
income,
net
|
89
|
(5
|
)
|
(a
|
)
|
84
|
|||||||
|
Interest
and
debt expense
|
(1,607
|
)
|
39
|
(c
|
)
|
(1,568
|
)
|
||||||
|
Distributions
on preferred interests of consolidated subsidiaries
|
(25
|
)
|
-
|
(25
|
)
|
||||||||
|
Income
(loss)
before income taxes
|
(815
|
)
|
(132
|
)
|
(947
|
)
|
|||||||
|
Income
taxes
|
14
|
(57
|
)
|
(a)(c
|
)
|
(43
|
)
|
||||||
|
Income
(loss)
from continuing operations
|
$
|
(829
|
)
|
$
|
(75
|
)
|
$
|
(904
|
)
|
||||
|
Basic
and
diluted loss per common share from continuing operations
|
$
|
(1.30
|
)
|
$
|
(1.41
|
)
|
|||||||
|
Basic
and
diluted average common shares outstanding
|
639
|
639
|
|||||||||||
See
notes.
|
El
Paso
Corporation
|
|||||||||||||
|
Unaudited
Pro
Forma Condensed Consolidated Statement of Income
|
|||||||||||||
|
For
the Year
Ended December 31, 2003
|
|||||||||||||
|
(In
millions,
except per common share amounts)
|
|||||||||||||
|
El
Paso
|
Pro
Forma
|
As
|
|||||||||||
|
Historical
|
Adjustments
|
Adjusted
|
|||||||||||
|
|
|||||||||||||
|
Operating
revenues
|
$
|
6,339
|
$
|
(181
|
)
|
(a
|
)
|
$
|
6,158
|
||||
|
Operating
expenses
|
|||||||||||||
|
Cost
of
products and services
|
1,637
|
-
|
1,637
|
||||||||||
|
Operation
and
maintenance
|
1,999
|
(27
|
)
|
(a
|
)
|
1,972
|
|||||||
|
Depreciation,
depletion and amortization
|
1,157
|
(20
|
)
|
(a
|
)
|
1,137
|
|||||||
|
Loss
on
long-lived assets
|
860
|
-
|
860
|
||||||||||
|
Taxes,
other
than income taxes
|
292
|
(16
|
)
|
(a
|
)
|
276
|
|||||||
|
5,945
|
(63
|
)
|
5,882
|
||||||||||
|
Operating
income
|
394
|
(118
|
)
|
276
|
|||||||||
|
Earnings
from
unconsolidated affiliates
|
363
|
-
|
363
|
||||||||||
|
Other
income,
net
|
(4
|
)
|
(7
|
)
|
(a
|
)
|
(11
|
)
|
|||||
|
Interest
and
debt expense
|
(1,790
|
)
|
22
|
(c
|
)
|
(1,768
|
)
|
||||||
|
Distributions
on preferred interests of consolidated subsidiaries
|
(52
|
)
|
-
|
(52
|
)
|
||||||||
|
Income
(loss)
before income taxes
|
(1,089
|
)
|
(103
|
)
|
(1,192
|
)
|
|||||||
|
Income
taxes
|
(484
|
)
|
(46
|
)
|
(a)(c
|
)
|
(530
|
)
|
|||||
|
Income
(loss)
from continuing operations
|
$
|
(605
|
)
|
$
|
(57
|
)
|
$
|
(662
|
)
|
||||
|
Basic
and
diluted loss per common share from continuing operations
|
$
|
(1.01
|
)
|
$
|
(1.11
|
)
|
|||||||
|
Basic
and
diluted average common shares outstanding
|
597
|
597
|
|||||||||||
See
notes.
El
Paso
Corporation
Notes
to the
Unaudited Pro Forma Condensed
Consolidated
Financial Statements
El
Paso
Historical
These
amounts
represent our condensed historical consolidated balance sheet and income
statements derived from our Annual Report on Form 10-K for the year ended
December
31,
2005.
Pro
Forma
Adjustments
The
pro forma
adjustments represent:
| o |
the
historical results and balances related to the Macae power facility
as of
and for the periods presented;
|
| o |
the
receipt
of proceeds from the sale;
|
| o |
the
recording
of a liability related to an indemnification agreement;
and,
|
| o |
the
repayment
of Macae project financing debt prior to closing.
|
Each
of these items
is described further below:
| (a) |
Amounts
represent the historical consolidated account balances and activity
related to Macae, net of the settlement of intercompany account balances
prior to closing.
|
| (b) |
Amounts
represent the receipt of net cash proceeds of approximately $358
million.
|
| (c) |
Amounts
represent the repayment of Macae non-recourse project financing debt
of
$225 million and accrued interest of $5 million repaid prior to the
sale of Macae. Amounts also represent the elimination of the historical
interest expense, net of taxes at the Brazilian statutory tax rate
of
34%.
|
| (d) |
Amount
represents the recording of an account receivable from Petrobras
related
to our negotiated $4.5 million share of an income tax overpayment,
which totaled $9 million at December 31,
2005.
|
| (e) |
Amount
represents the recording of a $5 million liability related to an
indemnification agreement on certain tax matters entered into as
part of
the sale transaction.
|
| (f) |
Amounts
represent the loss on the sale, which is not subject to income taxes
and
does not result in a U.S. or Brazil tax benefit.
|
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 CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
John
R. Sult
|
|
|
|
John
R. Sult
|
|
|
|
Senior
Vice President and Controller
|
|
|
|
(Principal Accounting
Officer)
|
Dated:
May 3, 2006