UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 24, 2005
(Date of Earliest Event Reported: January 14, 2005)
EL PASO CORPORATION
| Delaware (State or other jurisdiction of incorporation or organization) |
1-14365 (Commission File Number) |
76-0568816 (I.R.S. Employer Identification No.) |
El Paso Building
1001 Louisiana Street
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 420-2600
(Registrant’s telephone number, including area code)
EXPLANATORY NOTE
This Current Report on Form 8-K, as amended, is being filed to eliminate our pro forma condensed consolidated balance sheet as of December 31, 2004, which is no longer required, and to correct the Unaudited Pro Forma Condensed Consolidated Statement of Income for adjustments to our historical income from continuing operations for the year ended December 31, 2004. These adjustments resulted from errors in the accounting and reporting for foreign currency translation adjustments (CTA) and related tax adjustments. These adjustments and the related restatement of our historical financial statements are further described in our 2004 Report on Form 10-K, as amended on June 16, 2005.
Item 9.01. FINANCIAL STATEMENT AND EXHIBITS
b. Unaudited Pro Forma Financial Statement
On January 14, 2005, we sold our remaining interests in Enterprise Products GP, LLC, the general partner of Enterprise Products Partners, L.P., and Enterprise Products Partners L.P. (Enterprise) to affiliates of EPCO, Inc. for approximately $425 million. The transaction included the sale of our 9.9 percent membership interest in the general partner of Enterprise and approximately 13.5 million common units in Enterprise.
Previously, on September 30, 2004, we completed the sale of a portion of our ownership interests in GulfTerra Energy Partners, L.P. (“GulfTerra”) and nine processing plants in South Texas to affiliates of Enterprise. The sales were completed in connection with the closing of the merger between GulfTerra and Enterprise. This Current Report on Form 8-K, as amended, provides updated pro forma impacts of these sales on our statement of income for the year ended December 31, 2004.
This unaudited pro forma condensed consolidated statement of income is based on our historical consolidated statement of income for the year ended December 31, 2004, adjusted for the effects of the sales of our interests in Enterprise and GulfTerra and the processing plants described above. The unaudited pro forma condensed consolidated statement of income for the twelve months ended December 31, 2004 assumes all dispositions occurred on January 1, 2004, and should be read in conjunction with the historical consolidated financial statements included in our 2004 Report on Form 10-K, as amended on June 16, 2005. These pro forma results should not be construed to be indicative of future results or results that actually would have occurred had the transactions 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 these transactions.
-2-
EL PASO CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004
(In millions)
| EL PASO | PRO FORMA | |||||||||||
| HISTORICAL | ADJUSTMENTS | PRO FORMA | ||||||||||
Operating revenues |
$ | 5,874 | $ | (722 | )(a) | $ | 5,152 | |||||
Operating
expenses Cost of products and services |
1,363 | (528 | )(a) | 835 | ||||||||
Operation and maintenance |
1,872 | (12 | )(a) | 1,860 | ||||||||
Depreciation, depletion and amortization |
1,088 | (8 | )(a) | 1,080 | ||||||||
Loss on long-lived assets |
1,108 | (491 | )(a) | 617 | ||||||||
Taxes, other than income taxes |
253 | (2 | )(a) | 251 | ||||||||
| 5,684 | (1,041 | ) | 4,643 | |||||||||
Operating income |
190 | 319 | 509 | |||||||||
Earnings from unconsolidated affiliates |
546 | (613 | )(a) | (67 | ) | |||||||
Other income, net |
94 | 94 | ||||||||||
Interest and debt expense |
(1,607 | ) | (1,607 | ) | ||||||||
Distributions on preferred interests of consolidated
subsidiaries |
(25 | ) | (25 | ) | ||||||||
Loss before income taxes |
(802 | ) | (294 | ) | (1,096 | ) | ||||||
Income taxes |
31 | (242 | )(b) | (211 | ) | |||||||
Loss from continuing operations |
$ | (833 | ) | $ | (52 | ) | $ | (885 | ) | |||
Basic and diluted loss per common share
from continuing operations |
$ | (1.30 | ) | $ | (1.38 | ) | ||||||
Basic and diluted average common
shares outstanding |
639 | 639 | ||||||||||
See accompanying notes
-3-
EL PASO CORPORATION
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF INCOME
EL PASO HISTORICAL
These amounts represent our condensed historical consolidated income statement information. Amounts for the twelve months ended December 31, 2004 were derived from our 2004 Report on Form 10K, as amended on June 16, 2005.
PRO FORMA ADJUSTMENTS
These amounts represent the historical results related to our interests in Enterprise and GulfTerra which were accounted for as equity investments and the nine processing plants sold to affiliates of EPCO, Inc. for the period presented. The pro forma adjusting entries reflect the following transactions:
| • | The sale of all of our interest in the general partner of Enterprise and GulfTerra; | |||
| • | The elimination of all effects of our common units of GulfTerra and Enterprise and Series C units of GulfTerra; and | |||
| • | The elimination of all non-affiliated effects of the nine processing plants sold. | |||
PRO FORMA ADJUSTING ENTRIES
| (a) | To reflect the pro forma effects of the sale of our Enterprise and GulfTerra interests and nine processing plants on our condensed consolidated income statement. The pro forma effects include the following: |
| (1) | Adjustment for the historical results of operations for our nine
processing plants, including impairment charges recorded during 2004 on these assets; |
|||
| (2) | Reduction of earnings from unconsolidated affiliates for (i) all of our general partner interests in Enterprise and GulfTerra, (ii) all of our Series C units in GulfTerra and (iii) all of the common units sold in both GulfTerra and Enterprise; and | |||
| (3) | Elimination of gains and losses on long-lived assets during 2004 on sales of our Enterprise and GulfTerra interests. | |||
| (b) | To reflect income taxes related to the income statement adjustments. Income taxes were computed using a statutory rate of 35 percent, except for taxes on the net gain related to the sale of our interests in GulfTerra and our nine processing plants. Taxes on the net gain were computed separately and resulted in an increase in our tax expense of $139 million due to the non-deductibility of goodwill which was written off as a result of these transactions. The statutory rate of 35 percent differs from our effective tax rate. |
-4-
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 hereunto duly authorized.
| EL PASO CORPORATION |
||||
| By: | /s/ JEFFREY I. BEASON | |||
| Jeffrey I. Beason | ||||
| Senior Vice President and Controller (Principal Accounting Officer) |
||||
Date: June 24, 2005
-5-