SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996)
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _______ to _______
Commission File No. 1-14365
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
El Paso Corporation Retirement Savings Plan (herein referred to as the
"Plan")
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
El Paso Corporation (herein referred to as the "Company")
1001 Louisiana Street
Houston, Texas 77002
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INDEX
Page
----
Report of Independent Registered Public Accounting Firm ............................... 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits
as of December 31, 2003 and 2002............................................... 3
Statement of Changes in Net Assets Available for Plan Benefits
for the year ended December 31, 2003........................................... 4
Notes to Financial Statements...................................................... 5
Supplemental Schedules:
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2003........................................................ 16
Schedule H, Line 4j - Schedule of Reportable Transactions for the year ended
December 31, 2003.............................................................. 18
Consent of Independent Registered Public Accounting Firm .............................. 19
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of
The El Paso Corporation Retirement Savings Plan:
In our opinion, the accompanying statement of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
benefits of the El Paso Corporation Retirement Savings Plan (the "Plan") at
December 31, 2003 and 2002, and the changes in net assets available for benefits
for the year ended December 31, 2003 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
index on page 1 are presented for the purpose of additional analysis and are not
a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Houston, Texas
June 28, 2004
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
( IN THOUSANDS )
December 31,
----------------------------
2003 2002
-------- --------
ASSETS
Investments $671,622 $579,074
Receivables
Interest 61 84
Dividends 776 3,633
Participant contributions 1,611 2,049
Employer contributions 583 1,166
-------- --------
Total receivables 3,031 6,932
-------- --------
Total assets 674,653 586,006
LIABILITIES
Accrued expenses 581 210
Amounts due to others 912 1,392
-------- --------
Total liabilities 1,493 1,602
-------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $673,160 $584,404
======== ========
The accompanying notes are an integral part of these financial statements.
3
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
( IN THOUSANDS )
FOR THE
YEAR ENDED
DECEMBER 31, 2003
-----------------
ADDITIONS
Dividends $ 5,493
Interest 12,905
Net appreciation in fair value of
investments 73,465
--------
Net investment gain 91,863
Contributions
Employer 13,245
Participants 50,790
--------
Total contributions 64,035
--------
Total additions 155,898
DEDUCTIONS
Benefits paid to participants 65,088
Administrative fees 2,054
--------
Total deductions 67,142
--------
Net increase 88,756
Net assets available for Plan benefits
Beginning of period 584,404
--------
End of period $673,160
========
The accompanying notes are an integral part of these financial statements.
4
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
The following description of the El Paso Corporation Retirement Savings
Plan (the "Plan") provides general information about the Plan's provisions
in effect for the plan year ended December 31, 2003. Participants should
refer to the Plan documents and summary plan description for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering eligible employees of El
Paso Corporation (the "Company") and its participating employers, except
leased employees, certain nonresident aliens, certain foreign nationals,
and members of any unit covered by a collective bargaining agreement. The
Committee for the Pension Plan, Retirement Savings Plan and Employees'
Benefit Trust (the "Committee") is responsible for the general
administration of the Plan as described in the Plan document. Until
September 1, 2003, Deutsche Bank Trust Company Americas ("Deutsche Bank")
was the trustee for the Plan. Effective September 1, 2003, State Street
Bank and Trust Company ("State Street") became the trustee of the Plan.
Hewitt Associates is the recordkeeper for the Plan. The Plan is subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
Contributions
Prior to May 1, 2003, a participant could elect to make basic contributions
from 2 percent to 15 percent on a before or after tax basis. Effective May
1, 2003, a participant may elect to make basic contributions from 2 percent
to 25 percent on a before tax basis and 2 percent to 15 percent on an after
tax basis of his or her eligible compensation. The Company will make
matching contributions in the same manner as that of participant
contributions, equal to 50 percent of a participant's basic contribution up
to a maximum level of 6 percent of eligible compensation.
In addition, if a participant has elected the maximum basic contribution
eligible for a matching contribution, he or she may make after-tax
supplemental contributions to the Plan from 1 percent to 5 percent of his
or her eligible compensation. A participant may also elect to have the
amount of available cash under the Company's FlexPlan transferred to the
Plan as a flex contribution or may make an approved rollover contribution
of a distribution received or direct transfer from another qualified
retirement plan. There are certain legal limitations, as provided by the
Plan, applicable to contributions to the Plan. Federal income taxes on
before-tax contributions, company matching contributions, and the earnings
from the investments in the Plan are deferred until amounts are withdrawn
from the Plan by participants.
Participant Accounts
Each participant's account is credited with the participant's
contributions, the Company's matching contributions, the participant's
share of net earnings or losses of his or her respective elected investment
funds under the Plan and charged with an allocation of administrative
expenses. Net investment gains and losses in a particular investment fund
and administrative expenses are allocated in proportion to the respective
participant account balances in that fund.
5
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
Vesting
A participant's interest in the balance credited to his or her account is
fully vested at all times.
Payment of Benefits
Upon separation from service with the Company, a participant whose account
balance exceeds $5,000 may elect to receive either a lump-sum or
installment distribution equal to the value of his or her account or to
defer the distribution. A deferred distribution may take the form of either
a lump-sum distribution payable within, or installments payable over, a
period which ends on or before April 1 of the year following the calendar
year in which the participant attains age 70-1/2. A participant whose
account balance does not exceed $5,000 will receive an immediate lump-sum
distribution of the amount equal to his or her account balance. Certain
in-service withdrawals may also be available, as provided by the Plan.
Participant Loans
To obtain a loan, the participant must have a total account balance of at
least $2,000 excluding any amounts held in an "IRA Rollover Account" under
the Plan. Loan amounts may be from $1,000 to $50,000 but may not be more
than 50 percent of the total balance in the participant's account,
excluding any IRA Rollover Account balance. The 50 percent limit is reduced
by the participant's highest outstanding loan balance(s) during the prior
12-month period. Each loan is made from, and repaid to, the borrowing
participant's account so as not to affect the accounts of other
participants. A participant may not obtain more than one loan during any
12-month period and may not have more than two loans outstanding. The
interest rate on a loan is 1 percent above the prime rate, which is
determined on the last business day of the month preceding the quarter in
which the loan is taken. The interest rate is fixed for the term of the
loan. Interest rates on participants loans from 5% to 10.5% in 2003 and
5.75% to 10.5% in 2002. The repayment period may be from 1 to 5 years. When
a participant terminates employment with the Company, the unpaid balance of
the participant's loan(s) will be deducted from any distributions to the
participant. If the participant elects to defer the distributions, the loan
must be repaid within 60 days after separation from service. If the loan is
not repaid, it will be automatically treated as a distribution to the
participant.
6
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
Investment Options
With exceptions as described below, a participant could direct the
investment of his or her contributions to the Plan or reallocate the
existing balance in his or her account among any one or more of the
following investment funds during 2003. The diversification of securities
within each investment fund is at the discretion of the fund manager. For a
more complete description of the investment objectives, general information
and performance history of the funds, participants should refer to the
individual mutual fund prospectus and the summary plan description.
1) Income Fund - invests primarily in a diversified portfolio of
investment contracts offered by major insurance companies, banks and other
financial institutions. The objective of the fund is to provide liquidity
and safety of principal while providing a higher return over time than
offered by money market funds. An investment contract is an agreement
whereby the issuing entity promises a specific rate of return for a period
of time. The contracts provide that a reduction in principal will not occur
due to a change in interest rates. These contracts usually have maturity
dates and interest rates that fluctuate to reflect the investment
performance and activity of bonds that underlie the contract. However, like
all of the Plan's investment funds, there is an element of risk. Some of
the contracts are direct obligations of the issuing entity. To reduce the
risk of the fund, most of the investment contracts are collateralized by
fixed-income securities held in a separate account of an insurance company,
or in a trust fund, to protect them from the general creditors of the
contract issuer. The fund may also hold cash or other short-term fixed
income securities, although these are expected to be a small percentage of
the Income Fund. PRIMCO Capital Management, Inc. manages the Income Fund.
2) Company Stock Fund - invests primarily in common stock of the
Company (NYSE:EP). As with investments in any single stock, this fund may
be more volatile (that is, subject to larger swings in value, both up and
down) than a fund that is diversified among the stocks of many companies.
Participants who invest in the Company Stock Fund may instruct the trustee
regarding the voting of the Company's common stock allocated to the
participant's account. The fund may also hold cash or other short-term
fixed income securities, although these are expected to be a small
percentage of the Stock Fund.
3) Equity Index Fund - invests in an index fund designed to match the
performance of the Standard and Poor's (S&P) Index by investing in stock of
most of the 500 largest U.S. companies comprising that Index. This fund
currently invests in a commingled fund for institutional investors known as
the Daily Equity Index Fund T managed by Barclays Global Investors.
7
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
1. DESCRIPTION OF PLAN (Continued)
Investment Options (Continued)
4) International Equity Fund - invests in the publicly traded mutual
fund known as the Templeton Foreign Fund managed by Templeton Global
Advisors Limited. The purpose of this fund is to invest in companies in
locations and businesses around the world where economic conditions are
favorable for growth. Because of global monetary exchange, economic and
political conditions, the risks and returns for this fund can vary
significantly from investments in domestic stocks.
5) Large Capitalization Equity Fund - invests in the publicly traded
mutual fund known as the Fidelity Magellan Fund managed by Fidelity
Management & Research Company.
6) Mid Capitalization Equity Fund - invests in the publicly traded
mutual fund known as the American Funds Growth Fund of America (Class A)
managed by Capital Research and Management Company.
7) Small Capitalization Equity Fund - invests in the publicly traded
mutual fund known as the AIM Small Cap Growth Fund "A" managed by AIM
Capital Management.
8) Asset Allocation Fund - invests in the publicly traded mutual fund
known as the Dodge & Cox Balanced Fund managed by Dodge & Cox.
9) Large Capitalization Value Fund - invests in the publicly traded
mutual fund known as the Dodge & Cox Large Cap Value Fund managed by Dodge
& Cox.
10) Loan Fund - invested individually for each borrowing participant
in any loans to the participant.
8
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Basis
The financial statements of the Plan are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for plan benefits at the date of the
financial statements, the reported changes in net assets available for plan
benefits during the reporting period and disclosures related to the Plan.
Actual results could differ from those estimates.
Valuation of Investments
For the Plan years ending December 31, 2003 and 2002, the Plan's investment
contracts with financial institutions and insurance companies are reported
at contract value, as they are benefit responsive investment contracts.
Estimated fair value for investment contracts is based on discounted cash
flows using current market rates for similar investments with similar
terms. Short-term securities and participant loans are carried at cost
which approximates fair value. All other investments are carried at fair
value as determined by quoted market prices. Purchases and sales of
securities are reflected on a trade-date basis. The basis of securities
sold is determined by average cost.
Amounts Due To Others
Amounts due to others reflect the net unsettled securities bought and sold
at year end.
9
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investment Income
Dividend income is recorded on the ex-dividend date. Interest income is
recorded as earned on an accrual basis. Dividend and interest income is
allocated to participants' accounts based upon each participant's
proportionate share of assets in each investment fund. Dividend income
represents income for those funds holding individual equity securities.
Interest income represents income received from deposits with insurance
companies, short-term securities and funds invested in commingled equity or
mutual funds.
Payment of Benefits
Benefits are recorded when paid.
Expenses
Administrative expenses include participant recordkeeping and custodial
fees, and certain professional fees incurred and paid by the Plan. In
addition, any expenses directly relating to the purchase, sale, or transfer
of the Plan's investments are charged to the particular investment fund to
which the expense relates.
Net Appreciation in Fair Value of Investments
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other investment
securities. Investment securities are exposed to various risks, such as
interest rate risk, market risk and credit risk. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in
the near term and those changes could materially affect the amounts
reported in the statement of net assets available for plan benefits.
Since November 2002, El Paso has undergone a series of downgrades of its
credit ratings. The Company's senior unsecured debt is rated a "CCC+" by
Standard and Poor's Rating Services as of February 18, 2004 and has
remained unchanged by Moody's Investor Service at "Caa1" as of February 11,
2003. The Committee does not believe these downgrades will impact the
Company's ability to perform its obligations as Plan Sponsor.
10
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
3. INVESTMENTS
Investments representing 5 percent or more of the Plan's net assets are
separately identified as follows:
December 31,
---------------------
(In thousands)
2003 2002
-------- --------
El Paso Corporation common stock,
19,097,744 and 17,235,920 shares, respectively $156,411 $119,962
Barclays Daily Equity Index Fund T, 1,661,945 and
1,719,043 shares, respectively 54,263 43,647
Fidelity Magellan Fund, 498,700 and 501,229
shares, respectively 48,743 39,577
American Funds Growth Fund of America "A",
1,628,933 and 1,573,867 shares, respectively 39,974 29,069*
Dodge & Cox Balanced Fund, 541,859 and 521,156
shares, respectively 39,577 31,660
Bank of America NT & SA #99-056
40,304,116 and 13,812,195 shares, respectively 40,304 13,812*
JPMorgan Chase Bank - #401728-TH,
41,340,571 and 29,609,798 shares, respectively 41,341 29,610
Monumental Life Insurance Company - #436TR,
29,736,561 and 29,585,912 shares, respectively 29,737** 29,586
Rabobank Nederland #100201
44,872,564 and 12,542,247 shares, respectively 44,873 12,542*
* Not 5% in 2002
** Not 5% in 2003
11
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
During 2003, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year)
appreciated/(depreciated) in value by approximately $73 million as
follows:
(In thousands)
Company Stock Fund $ 23,892
Mid Capitalization Equity Fund 9,237
Equity Index Fund 11,880
Large Capitalization Equity Fund 9,316
Asset Allocation Fund 6,141
International Equity Fund 4,315
Income Fund (245)
Large Capitalization Value Fund 3,841
Small Capitalization Equity Fund 5,088
--------
Net appreciation in fair value of investments $ 73,465
========
4. INVESTMENT CONTRACTS
The Plan invests in a diversified portfolio of investment contracts as
described in Note 1. The contracts are included in the financial statements
at contract value as reported to the Plan by State Street. On December 31,
2003 and 2002, the average yield for these investment contracts was 4.66
percent and 5.46 percent, respectively, while the average crediting
interest rate was 4.65 percent and 5.19 percent, respectively. Crediting
interest rates are normally reset quarterly for contracts with underlying
investments to reflect the investment experience of that asset. On December
31, 2003 and 2002, the fair market value of the investment contracts were
$246,005,686 and $263,466,869, respectively. There are no reserves against
contract value for credit risk of the contract issuer or otherwise.
5. CONCENTRATION OF CREDIT RISK
The Plan invests in various investment funds, as described in Note 1, based
upon participant instructions. The Income Fund held approximately 35
percent and 43 percent of the invested assets of the Plan at December 31,
2003, and 2002, respectively. The Company Stock Fund held approximately 24
percent and 22 percent of the invested assets of the Plan at December 31,
2003, and 2002, respectively. The Company believes that it offers
sufficient investment options to allow participants to avoid any
significant concentration of credit risk, although the ultimate control of
investment diversification across the funds is up to the individual
participant.
6. RELATED PARTY TRANSACTIONS
From January 1, 2003 to August 31, 2003, approximately $135 million and
$134 million were purchased and sold, respectively, with Deutsche Bank in
the BT Pyramid Directed Account Cash Fund. During this period,
approximately 42 percent and 29 percent of the Plan's purchase and sale
transactions, respectively, were related to these assets. During the period
September 1, 2003 through December 31, 2003, approximately $50 million and
$43 million were purchased and sold, respectively, with State Street Bank
and Trust Company in the State Street Directed Account Cash Fund. During
this period, approximately 40 percent and 33 percent of the Plan's purchase
and sale transactions, respectively, were related to these assets.
12
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
7. TAX STATUS
The Plan is intended to be a qualified plan pursuant to Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and,
accordingly, the trust established under the Plan to hold the Plan's assets
is intended to be exempt from federal income taxes pursuant to Section
501(a) of the Code. The Company received a favorable tax determination
letter from the IRS on June 20, 2003 stating that the Plan, as designed,
was in compliance with the applicable requirements of the Code. The Plan
has been amended since receiving the determination letter. However, the
Company believes that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements.
8. AMENDMENTS AND FILINGS
Effective March 1, 2003, the Plan was amended to suspend Company matching
contributions. On May 14, 2003, the Company announced its intention to
reinstate effective July 1, 2003 the Company's matching contribution in an
amount equal to 50 percent of a participant's basic contribution up to a
maximum level of 6 percent of eligible compensation.
Effective May 1, 2003, the Plan was amended to allow for before-tax basic
contributions in whole percentages from 2 percent to 25 percent of eligible
compensation. The after-tax basic contribution limit remained unchanged at
15 percent, and the supplemental after-tax contribution limit remained
unchanged at 5 percent.
Effective July 1, 2004, the matching contribution will increase to 75
percent of a participant's basic contribution up to a maximum level of 6
percent of eligible compensation.
9. PLAN TERMINATION
The Company reserves the right under the Plan to discontinue contributions
at any time and to terminate the Plan subject to the provisions of ERISA
and the Code. Upon termination, the Plan's assets would be distributed to
the participants, as directed by the Committee in accordance with the Plan
and applicable law, on the basis of their account balances existing at the
date of termination, as adjusted for investment gains and losses.
10. SUBSEQUENT EVENT
Effective June 25, 2004, the El Paso Corporation Retirement Savings Plan
Committee temporarily suspended future investments in the company stock
fund under the Retirement Savings Plan until the company becomes current on
its SEC filings. A notice to participants was distributed on June 25, 2004.
13
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
------------
NOTES TO FINANCIAL STATEMENTS
(Continued)
11. RECONCILIATION WITH FORM 5500
The following is a reconciliation of net assets available for Plan benefits
per the financial statements to Form 5500:
December 31,
-------------------------------
(In thousands)
2003 2002
-------- --------
Net assets available for Plan benefits
per the financial statements $673,160 $584,404
less: final distributions and participant
withdrawals that have been
processed and approved but
not paid by the Plan 205 454
-------- --------
Net assets available for Plan benefits
per the Form 5500 $672,955 $583,950
======== ========
The following is a reconciliation of the change in net assets available for
Plan benefits per the financial statements to Form 5500:
For the year ended
December 31, 2003
------------------
(In thousands)
Net increase in net assets
available for Plan benefits per the
financial statements $88,756
add: change in distributions and
participant withdrawals that
have been processed and approved
but not paid by the Plan 249
-------
Net increase in net assets
available for Plan benefits per the
the Form 5500 $89,005
=======
Final distributions and participant withdrawals that have been processed
and approved but not paid by the Plan are not considered Plan obligations
until paid under generally accepted accounting principles, and therefore,
are not presented as liabilities or benefits paid in the accompanying
financial statements.
14
SUPPLEMENTAL SCHEDULES
15
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 76-0568816 PLAN: 002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
NUMBER OF
SHARES
(UNITS) OR
PRINCIPAL
IDENTITY OF ISSUER, BORROWER, OR AMOUNT OF
SIMILAR PARTY, AND BONDS AND CURRENT
DESCRIPTION OF INVESTMENT NOTES COST VALUE
--------------------------------------------------------------------- ----------- ------------- -------------
COMPANY STOCK FUND
El Paso Corporation common stock * 19,097,744 $ 620,009,487 $ 156,410,523
Short-term securities
State Street Direct Account Cash Fund *
Short Term Investment Fund 5,087,659 5,087,659 5,087,659
------------- -------------
Total investments - Company Stock Fund 625,097,146 161,498,182
------------- -------------
INCOME FUND
Deposits with financial institutions
Bank of America NT & SA
# 99-056, 4.04%, matures 09/01/2020 40,304,116 40,304,116 40,304,116
CDC Financial
# 163-03, 3.75%, matures 03/21/2005 5,004,541 5,004,541 5,004,541
CDC Investment Management Corporation
# 1163-01, 3.66%, matures 09/01/2020 22,960,142 22,960,142 22,960,142
JPMorgan Chase Bank
# 401728-TH, 6.53%, matures 09/01/2020 41,340,571 41,340,571 41,340,571
Rabobank Nederland
# 100201, 2.89%, matures 09/01/2020 44,872,564 44,872,564 44,872,564
State Street Bank & Trust Co*
# 103105, 3.21%, matures 11/01/2023 16,614,891 16,614,891 16,614,891
------------- -------------
Total deposits with financial institutions 171,096,825 171,096,825
------------- -------------
Deposits with insurance companies
John Hancock Mutual Life Insurance Company
# 14937, 7.73%, matures 09/01/2020 1,956,720 1,956,720 1,956,720
# 7436, 5.99%, matures 09/01/2020 10,561,147 10,561,147 10,561,147
Metropolitan Life
# 28191, 4.99%, matures 07/26/04 2,274,176 2,274,176 2,274,176
# 28594, 4.85%, matures 04/26/05 2,706,269 2,706,269 2,706,269
Monumental Life Insurance Company
# 436TR, 3.39%, matures 09/01/2020 29,736,561 29,736,561 29,736,561
New York Life Insurance Company
# 30899002, 5.75%, matures 09/01/2020 429,754 429,754 429,754
# 303889, 6.67%, matures 01/04/2005 2,680,221 2,680,221 2,680,221
SunAmerica Life Insurance Company
# 4891, 1.00%, matures 12/31/2049 1,402,943 1,402,943 1,402,943
UBS AG
Cash 356,700 356,700 356,700
CITEC 01-A-A4, 4.84% matures 09/20/2012 1,620,766 1,620,766 1,620,766
HOFC 97-1A, 13.33% matures 03/30/2007 2,006,419 2,006,419 2,006,419
HOFC II 97-1A, 13.34% matures 12/30/2006 2,509,040 2,509,040 2,509,040
USTN 5.625 5-08, 5.63% matures 05/15/2008 3,345,225 3,345,225 3,345,225
USTN 4.375 05-07, 4.38% matures 05/15/2007 2,129,422 2,129,422 2,129,422
UBS AG Wrapper (419,133) (419,133) (419,133)
------------- -------------
Total deposits with insurance companies 63,296,230 63,296,230
------------- -------------
* Parties in interest
16
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 76-0568816 PLAN: 002
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
NUMBER OF
SHARES
(UNITS) OR
PRINCIPAL
IDENTITY OF ISSUER, BORROWER, OR AMOUNT OF
SIMILAR PARTY, AND BONDS AND CURRENT
DESCRIPTION OF INVESTMENT NOTES COST VALUE
--------------------------------------------------------------- ----------- -------------- --------------
Short-term securities
State Street Direct Account Cash Fund *
Short Term Investment Fund 1,977,851 1,977,851 1,977,851
-------------- --------------
Total investments - Income Fund 236,370,906 236,370,906
-------------- --------------
LOAN FUND
Participant Loans, 5% to 10.5%
21,679,672 21,679,672 21,679,672
-------------- --------------
Total investments - Loan Fund 21,679,672 21,679,672
-------------- --------------
EQUITY INDEX FUND
Barclays Daily Equity Index Fund T 1,661,945 47,691,221 54,262,509
-------------- --------------
Total investments - Equity Index Fund 47,691,221 54,262,509
-------------- --------------
LARGE CAPITALIZATION VALUE FUND
Dodge & Cox Stock Fund 216,285 21,269,039 24,608,928
-------------- --------------
Total investments - Large Cap Value Fund 21,269,039 24,608,928
-------------- --------------
INTERNATIONAL EQUITY FUND
Templeton Foreign Fund 2,060,399 19,551,939 21,922,643
-------------- --------------
Total investments - International Equity Fund 19,551,939 21,922,643
-------------- --------------
LARGE CAPITALIZATION EQUITY FUND
Fidelity Magellan Fund 498,700 53,654,127 48,742,983
-------------- --------------
Total investments - Large Cap Equity Fund 53,654,127 48,742,983
-------------- --------------
MID CAPITALIZATION EQUITY FUND
American Funds Growth Fund of America 'A' 1,628,933 35,164,203 39,974,007
-------------- --------------
Total investments - Mid Cap Equity Fund 35,164,203 39,974,007
-------------- --------------
SMALL CAPITALIZATION EQUITY FUND
AIM Small Cap Growth Fund "A" 893,992 18,531,041 22,984,530
-------------- --------------
Total investments - Small Cap Equity Fund 18,531,041 22,984,530
-------------- --------------
ASSET ALLOCATION FUND
Dodge & Cox Balanced Fund 541,859 35,492,604 39,577,383
-------------- --------------
Total investments - Asset Allocation Fund 35,492,604 39,577,383
-------------- --------------
Total Assets Held at End of Year $1,114,501,898 $ 671,621,743
============== ==============
* Parties in interest
17
EL PASO CORPORATION
RETIREMENT SAVINGS PLAN
EIN: 76-0568816 PLAN: 002
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
Number of
transactions Cost of
---------------------- Purchase Selling securities Net
Security description Purchases Sales price proceeds sold loss
--------------------------------------- ----------- -------- ------------- ------------ ------------- -------------
BT Pyramid Directed Account Cash Fund 145 189 $134,640,098 $133,921,204 $133,921,204 $ --
State Street Direct Account Cash Fund 71 95 50,256,484 43,190,974 43,190,974 --
El Paso Corporation Common Stock 113 132 58,035,296 42,996,600 185,747,739 ($142,751,139)
Rabobank Nederland 2.89% 09/01/2020 13 0 30,508,534 -- -- --
UBS AG 4.82% 03/05/2010 7 6 24,230,182 20,994,642 20,994,642 --
18
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File Numbers 033-49956, 033-49956-99, 333-26831 and
333-26831-99) of El Paso Corporation of our report dated June 28, 2004 relating
to the financial statements of the El Paso Corporation Retirement Savings Plan,
which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Houston, Texas
June 28, 2004
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Trustees (or other persons who administer the plan) have duly caused this
annual report to be signed by the undersigned hereunto duly authorized.
El Paso Corporation
Retirement Savings Plan
By /s/ D. Dwight Scott
------------------------------------------
D. Dwight Scott
Executive Vice President and Chief
Financial Officer of El Paso Corporation,
and Committee under the El Paso Corporation
Member of the Retirement Savings Plan
Date: June 28, 2004