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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
EL PASO CORPORATION
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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[ ] Fee paid previously with preliminary materials:
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offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
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On February 24, 2003, ANR Pipeline Company and Southern Natural Gas
Company, wholly owned subsidiaries of El Paso Corporation ("El Paso"),
commenced private offerings of $300 million and $400 million principal
amount of senior notes, respectively. Information about El Paso's business
was presented in the slide presentation related to the offerings used at
various meetings with prospective investors. The portion of the slide
presentation related to El Paso's business (the "El Paso Slides") was filed
with the Securities and Exchange Commission by El Paso on March 3, 2003 as
Exhibit 99.1 to a Current Report on Form 8-K filed on that date ("Form
8-K"). Because the public filing of the El Paso Slides may constitute a
solicitation by El Paso of its stockholders by means of a written
communication, El Paso is including the El Paso Slides below.
As noted in the Form 8-K, the El Paso Slides include statements that
constitute forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act. These statements
are subject to risks and uncertainties. Forward-looking statements include
information concerning possible or assumed future results of operations of
us and our affiliates. These statements may relate to, but are not limited
to, information or assumptions about capital and other expenditures,
dividends, financing plans, capital structure, cash flow, pending legal and
regulatory proceedings and claims, including environmental matters, future
economic performance, cost savings, management's plans, goals and
objectives for future operations and growth. These forward-looking
statements generally are accompanied by words such as "intend,"
"anticipate," "believe," "estimate," "expect," "should" or similar
expressions. It should be understood that these forward-looking statements
are necessarily estimates reflecting the best judgment of our senior
management, not guarantees of future performance. They are subject to a
number of assumptions, risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in the
forward-looking statements. Undue reliance should not be placed on
forward-looking statements in the El Paso Slides, which speak only as of
the date of the Form 8-K. El Paso does not undertake any obligation to
release publicly any revisions to the forward-looking statements contained
in the El Paso Slides to reflect events or circumstances thereafter or to
reflect the occurrence of unanticipated events, unless the securities laws
require us to do so.
The following was also included in the Form 8-K:
ADDITIONAL IMPORTANT INFORMATION
Prior to its 2003 annual meeting, El Paso will furnish to its
shareholders El Paso's definitive proxy statement relating to this meeting,
together with a WHITE proxy card. Shareholders are strongly advised to read
this proxy statement when it becomes available, as it will contain
important information.
Shareholders will be able to obtain El Paso's proxy statement, any
amendments or supplements to the proxy statement and any other documents
filed by El Paso with the Securities and Exchange Commission for free at
the Internet website maintained by the Securities and Exchange Commission
at www.sec.gov. Copies of the proxy statement and any amendments and
supplements to the proxy statement will also be available for free at El
Paso's Internet Web site at www.elpaso.com or by writing to El Paso
Corporation, Investor Relations, PO Box 2511, Houston, TX 77252. In
addition, copies of the proxy materials may be requested by contacting our
proxy solicitor, MacKenzie Partners, Inc. at (800)322-2885 Toll-Free or by
email at proxy@mackenziepartners.com.
To the extent that individual customers, independent industry
researchers, financial analysts, or El Paso commissioned research, are
quoted herein, it is El Paso's policy to use reasonable efforts to verify
the source and accuracy of the quote. El Paso has not, however, sought or
obtained the consent of the quoted source to the use of such quote as proxy
soliciting material. This document may contain expressions of opinion and
belief. Except as otherwise expressly attributed to another individual or
entity, these opinions and beliefs are the opinions and beliefs of El Paso.
Information regarding the names, affiliation and interests of
individuals who may be deemed participants in the solicitation of proxies
of El Paso's shareholder is contained in a Schedule 14A filed by El Paso
with the Securities and Exchange Commission on February 18, 2003.
EL PASO SLIDES
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EL PASO UPDATE
EL PASO FIVE POINT PLAN
o Preserve and enhance value of core pipeline,
production, midstream and non-merchant power
business
o Divest non-core businesses quickly, but prudently
o Strengthen and simplify balance sheet while
maximizing liquidity
o Aggressively pursue additional cost reductions
o Continue to work diligently to resolve regulatory
and litigation matters
CORE BUSINESS STRATEGIES
o PIPELINES: Protect and enhance value through
continuous efficiency gains and prudent capital
spending
o PRODUCTION: Continue to be the industry leader in
deep drilling with superior near-term volumes and
profit
o MIDSTREAM: Participate in sector growth through El
Paso Energy Partners
o POWER: Maximize earnings and cash flow from
stable, contracted projects while selling certain
other assets
2001-2003 CAPITAL PROGRAM
$ Billions
Total Capital Expenditures
* 2001 $ 5.7
+ 2002 E $ 4.0
o 2003 Plan $ 2.6
$1.1 $1.1 $0.9 $2.3 $2.5 $1.3 $0.2 $0.2 $0.1 $1.4 ($0.1) $0.1 $0.7 $0.3 $0.2
* + o * + o * + o * + o * + o
Pipelines Production Midstream Power All Other
2003 ESTIMATED CASH FLOW $BILLIONS
Year Ending
December 31, 2003
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Estimated operating cash flow $2.5 - $2.8
Capital expenditures (2.6)
Common stock dividends (0.2)
Expected asset sales (excl. working capital) 2.6
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Cash flow generation $2.3 - $2.6
Mid-Continent asset sale $0.5
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ADJUSTED CASH FLOW GENERATION $2.8 - $3.1
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PLAN UPDATE:
RECENTLY ANNOUNCED TRANSACTIONS
o El Paso expects a significant increase in liquidity based on
its announced transactions
- Incremental cash of $1.3 billion
- Elimination of preferred security redemption (Trinity River)
of $.8 billion in 2003-2004
RECENTLY ANNOUNCED TRANSACTIONS
o $700 MM pipeline bond offerings due 2010
o $500 MM sale of Mid-Continent production assets
o Refinancing of Trinity River preferred security
- $1.0 billion new 2-year term loan backed by remaining
reserves currently in Trinity River
- (.8) billion Trinity River redemption
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$0.2 billion incremental cash
ASSET SALE PROGRAM UPDATE
$ BILLIONS
2003 announced asset sales(1) $2.6
Mid-Continent asset sale .5
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UPDATE 2003 PLAN $3.1
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Closed 2003 to date $ .3
Announced 1Q 2003 .2
Mid-Continent asset sale .5
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TOTAL PROGRAM PROGRESS $1.0
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(1) Excludes expected working capital recovery of approximately $300 million
2003 LIQUIDITY $ BILLIONS
LIQUIDITY AS OF 1/31/03 $2.6
2003 Plan
Cash flow generation $2.3-$2.6
Debt maturities (.5)
Multi-year revolver maturity (1.0)
Preferred redemptions (.6)
Electron and Gemstone equity payments (.2)
Update for announced transactions
Pipeline bonds .7
Mid-Continent asset sale .5
2-year term loan 1.0
Redemption of preferred security (0.8)
Repayment of Electron (1.0)
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PROJECTED LIQUIDITY AS OF DECEMBER 31, 2003 $3.0-$3.3
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MATURITY SCHEDULE: PLAN UPDATE $ MILLIONS
2003
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2Q 3Q 4Q 2004(1)
2003 PLAN
Debt $ -- $ 300 $ 200 $ 350
Multi-year revolver -- 1,000 -- --
Preferred securities 390 330 410 620
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Plan total $ 390 $ 1,630 $ 610 $ 970
RECENTLY ANNOUNCED TRANSACTIONS
Elimination of Trinity River (235) (200) (195) (195)
New term loan -- -- -- 500
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UPDATED TOTAL $ 155 $ 1,430 $ 415 $ 1,275
GEMSTONE -- -- -- 950
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ADJUSTED TOTAL $ 155 $ 1,430 $ 415 $ 2,225
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(1) El Paso is actively engaged in renegotiating its 364-day $3 billion
revolver. These numbers assume successful renegotiation and extension
of maturity.