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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the fiscal year ended December 31, 2001
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT F 1934
For the transition period from to
Commission file number 33-42696
Coastal Aruba Refining Company N.V.
Thrift Plan
(Full title of the plan)
El Paso Corporation
El Paso Building
1001 Louisiana Street
Houston, Texas 77002
(Name of issuer of the securities held pursuant to the plan
and address of its prinipal executive office)
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COASTAL ARUBA REFINING COMPANY N.V.
THRIFT PLAN
____________
FINANCIAL STATEMENTS AND FINANCIAL SCHEDULES
WITH REPORT OF INDEPENDENT ACCOUNTANTS
INDEX
Page
----
Report of Independent Accountants -
PricewaterhouseCoopers LLP.............................. 2
Independent Auditors' Report-Deloitte & Touche LLP........ 3
Financial Statements:
Statements of Net Assets Available for Plan Benefits
as of December 31, 2001 and 2000..................... 4
Statements of Changes in Net Assets Available for Plan
Benefits for the years ended December 31, 2001,
2000 and 1999........................................ 5
Notes to Financial Statements........................... 6
Financial Schedules:
Schedule I - Schedule of Assets Held for Investment
Purposes as of December 31, 2001...................... 12
Schedule II - Allocation of Plan Assets and
Liabilities to Investment Programs as of
December 31, 2001 and 2000............................ 13
Schedule III - Allocation of Plan Income and Changes
in Plan Equity to Investment Programs for the years
ended December 31, 2001, 2000 and 1999................ 14
Exhibits:
Consent Of Independent Accountants -
PricewaterhouseCoopers LLP........................... 16
Independent Auditors' Consent-Deloitte & Touche LLP..... 17
Report of Independent Accountants
To the Administrator of
Coastal Aruba Refining Company N.V. Thrift 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
Coastal Aruba Refining Company N.V. Thrift Plan (the "Plan") at
December 31, 2001, and the changes in net assets available for
benefits for the year ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement
schedules present fairly, in all material respects, the
information set forth therein when read in conjunction with the
related financial statements. These financial statements and
schedules are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial
statements and schedules based on our audit. We conducted our
audit of these statements and schedules in accordance with
auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements and schedules are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and
schedules, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement and schedule presentation. We
believe that our audit provides a reasonable basis for our
opinion.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
March 22, 2002
INDEPENDENT AUDITORS' REPORT
We have audited the statement of net assets available for Plan
benefits of Coastal Aruba Refining Company N.V. Thrift Plan
(the "Plan") as of December 31, 2000, and the related
statements of changes in net assets available for Plan benefits
for the two years in the period ended December 31, 2000.
Our audits also included the financial statement schedules on
pages 12 through 15. These financial statements and financial
statement schedules are the responsibility of the Plan's
management. Our responsibility is to express an opinion on
these financial statements and financial statement schedules
based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance that 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. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in
all material respects, the net assets available for Plan
benefits as of December 31, 2000 and the changes in net assets
available for Plan benefits for the two years in the period
ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America. Also, in
our opinion, such financial statement schedules, when considered
in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set
forth therein.
/S/ Deloitte & Touche LLP
Houston, Texas
March 28, 2001
COASTAL ARUBA REFINING COMPANY N.V. THRIFT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31,
----------------------
2001 2000
ASSETS --------- ----------
Investments, at market
Securities of El Paso Corporation Common Stock
(cost: 2001- $3,524,316; 2000-$3,441,396) $7,732,923 $12,330,458
Other 207,851 205,591
---------- -----------
Total Investments 7,940,774 12,536,049
Receivables
Dividends 25,785 6,051
Contributions 210,397 8,725
---------- -----------
Total Receivables 236,182 14,776
---------- -----------
TOTAL ASSETS 8,176,956 12,550,825
LIABILITIES
Payable to employer - 95,687
Other - 1,240
---------- -----------
TOTAL LIABILITIES - 96,927
---------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $8,176,956 $12,453,898
========== ===========
The accompanying notes are an integral part of these financial statements.
COASTAL ARUBA REFINING COMPANY N.V. THRIFT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
for the years ended December 31,
--------------------------------
2001 2000 1999
---------- ---------- ----------
Net (depreciation)/appreciation in
fair value of investments $(4,680,455) $7,101,280 $ 333
Investment income
Dividends, net of withholding tax 102,654 23,525 21,169
Interest 9,446 9,573 8,169
---------- ---------- ----------
Net investment (loss)/income (4,568,355) 7,134,378 29,671
Contributions
Employer 595,848 514,301 434,406
Participants 724,938 601,717 533,265
---------- ---------- ----------
Total contributions 1,320,786 1,116,018 967,671
---------- ---------- ----------
Net (reduction)/addition (3,247,569) 8,250,396 997,342
Less: Benefits paid to participants 1,029,373 480,921 438,009
---------- ---------- ----------
Net (decrease)/increase in net assets
available for Plan benefits (4,276,942) 7,769,475 559,333
Beginning of period 12,453,898 4,684,423 4,125,090
---------- ---------- ----------
End of period $ 8,176,956 $12,453,898 $4,684,423
========== ========== ==========
COASTAL ARUBA REFINING COMPANY N.V.
THRIFT PLAN
____________
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN
-------------------
The following description of the Coastal Aruba Refining
Company N.V. Thrift Plan (the "Plan") provides general
information about the Plan's provisions in effect for the
year ended December 31, 2001. Participants should refer to
the Plan documents and summary plan description for a more
complete description of the Plan's provisions.
General
-------
On January 29, 2001, Coastal Aruba Refining Company N.V.
(the "Company") became an indirect, wholly owned
subsidiary of El Paso Corporation ("El Paso") through the
merger of a wholly owned El Paso subsidiary with The
Coastal Corporation ("Coastal"). In the merger, each share
of Coastal common stock and Class A common stock was
converted on a tax-free basis into 1.23 shares of El Paso
common stock. The shares of Coastal stock previously held
in this Plan were exchanged for El Paso stock on the
merger date.
The Plan is an employee retirement savings plan,
registered under the Securities Act of 1933, as amended,
covering eligible employees of the Company. The Management
Board of the Coastal Aruba Thrift Foundation (the
"Foundation") administers the Plan.
Contributions
-------------
Upon enrollment, a participant may elect to contribute to
the Plan, by means of regular payroll deductions, from two
percent to eight percent, in increments of one percent, of
the participant's basic compensation. Basic compensation
means fixed salaries or wages per hour, excluding
compensation for bonuses, overtime, commissions and
incentive compensation.
The Company makes matching contributions at an amount
equal to the employee's contributions up to a maximum of
two percent of the employee's basic compensation during
the first and second year of active participation in the
Plan. Thereafter, the matching contributions are increased
to not more than four percent during the third and fourth
years of active participation, six percent during the
fifth and sixth years of active participation and eight
percent after six years of active participation in the
Plan.
Participant Accounts
--------------------
Each participant's account is credited with the
participant's contributions, the Company's matching
contribution, and the participant's share of net earnings
or losses of his or her respective investment funds
elected under the Plan. Net investment gains and losses
in a particular investment fund are allocated in
proportion to the respective participant's account
balances in that fund.
COASTAL ARUBA REFINING COMPANY N.V.
THRIFT 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.
Investment Options
------------------
The Plan maintains three investment funds in which current
employee contributions are invested:
1) Stock Fund - invested in common stock of El Paso
Corporation (NYSE:EP). Prior to the merger date, these
funds were invested in The Coastal Corporation (NYSE: CGP).
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 Stock Fund may instruct the trustee regarding the
voting of the common stock allocated to the participant's
account. Cash dividends thereon are reinvested in El Paso
common stock. Prior to November 1, 2001, employer-matched
contributions were invested in the Stock Fund only.
Effective November 1, 2001, the Plan was amended to allow
participants to direct their employer-matched
contributions among all investment options. JP Morgan
Chase is the custodian of the Stock Fund. Contributions
attributable to the Stock Fund are temporarily held
in an interest-bearing account at JP Morgan Chase pending
investment in the Stock Fund.
2) Interest Income Fund - an unsegregated fund
invested in interest-bearing investments such as bonds,
notes, debentures, savings accounts, savings certificates,
commercial paper, deposit accounts maintained by one or
more legal reserve life insurance companies that provide
for the payment of fixed or variable rates of interest for
specified periods of time, and other similar types of
investments. A portion of the Interest Income Fund may be
retained in cash.
3) Diversified Fund - an unsegregated fund invested
in capital stocks of issuers (other than El Paso common
stock), notes, bonds, debentures, and other similar types
of investments. A portion of the Diversified Fund may be
retained in cash or invested temporarily in commercial
paper, certificates of deposit or savings accounts.
The contributions attributable to the Interest Income Fund
and the Diversified Fund are temporarily held in a foreign
currency, Aruban Florin, in interest-bearing accounts at
the Caribbean Mercantile Bank N.V., which are translated
into U.S. dollars using the conversion rate at December
31, 2001 and 2000. See Schedule I - Schedule of Assets
Held for Investment Purposes. Contributions will remain in
the interest-bearing accounts pending a determination by
the investment manager that sufficient funds have
accumulated to warrant one of the investments described
above for each fund.
1. DESCRIPTION OF PLAN (Continued)
-------------------
The following numbers of participants were invested in the
various funds at December 31, 2001:
Number of
Fund Participants
---- ------------
2001 2000
---- ----
Stock Fund 430 400
Interest Income Fund 34 44
Diversified Fund 29 38
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 benefits at the date of the
financial statements, and the reported changes in net
assets available for benefits during the reporting period.
Actual results could differ from those estimates.
Marketable Securities
---------------------
Securities valuations are based on the last recorded sales
price at December 31, 2001 and 2000, as reported by the
principal securities exchange on which the security is
traded, or the average of the bid and the ask price if
sold over the counter. Realized gains and losses reported
herein on the sale or withdrawal of securities are based
on the difference between market values of the securities
sold and/or issued at the effective dates and the market
value at the beginning of the year and cost of securities
purchased during the year.
Taxes
-----
The Plan is not a qualified plan for purposes of the laws
of the United States pursuant to Section 401(a) of the
Internal Revenue Code of 1986, as amended, nor is it
subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
The Plan was reviewed in 1991 by the Centrale Bank van
Aruba, which concluded that the Plan was not subject to
the prudential supervision of the Centrale Bank because it
is designed in accordance with United States customs and
does not conform to the requirements for a savings plan in
Aruba. No subsequent reviews have been conducted to assert
otherwise.
COASTAL ARUBA REFINING COMPANY N.V.
THRIFT PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
------------------------------------------
Under present United States tax laws, the purchase and
sale of El Paso common stock by the Foundation is not
subject to income or withholding tax. However, dividends
paid on the common stock are subject to a 30 percent
withholding tax.
Expenses
--------
Generally, reasonable expenses of administering the Plan
are paid by the Company, although it is not obligated to
do so. All taxes that may be levied or assessed under
future laws upon the assets or the income of the Plan will
be paid by the Plan.
Change In Recordkeeper
----------------------
Prior to the merger with El Paso, administrative
recordkeeping of the Plan was performed in-house by
Coastal. Effective July 1, 2001, El Paso out-sourced the
administrative recordkeeping function of the Plan to
Hewitt Associates.
3. NET (DEPRECIATION) / APPRECIATION IN THE STOCK FUND
---------------------------------------------------
During 2001, 2000 and 1999, the fair value of investments
(including investments bought and sold, as well as held
during the year) (depreciated)/appreciated as follows:
Stock Fund
----------
Balance at December 31, 1998 $ 1,787,449
Appreciation during 1999 333
-----------
Balance at December 31, 1999 1,787,782
Appreciation during 2000 7,101,280
-----------
Balance at December 31, 2000 8,889,062
Depreciation during 2001 (4,679,003)
-----------
Balance at December 31, 2001 $ 4,210,059
===========
4. PLAN TERMINATION
----------------
Although the Company has not expressed any intent to do
so, it reserves the right to discontinue contributions at
any time and to terminate the Plan. Upon termination, Plan
assets would be distributed to the participants, as
directed by the Management Board of the Foundation upon
the Company's recommendation, on the basis of their
account balances existing at the date of termination, as
adjusted for investment gains and losses.
COASTAL ARUBA REFINING COMPANY N.V.
THRIFT PLAN
____________
NOTES TO FINANCIAL STATEMENTS
(Continued)
5. FINAL DISTRIBUTIONS AND BENEFITS PAID
-------------------------------------
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. Final distributions and
participant withdrawals that were processed and approved,
but not paid, amounted to $32,889 and $222,387 as of
December 31, 2001 and 2000.
6. AMENDMENTS
----------
The Management Board of the Foundation, upon the Company's
recommendation, may amend the Plan at any time.
Each participant who is an active employee on or after
July 1, 2001, is fully vested in his or her entire account
balance in the Plan.
Effective November 1, 2001, all employer matched
contributions and employee unmatched contributions may be
allocated among all investment options as directed by the
participant's written election. Also, effective November
1, 2001, participants shall have the right once each
calendar quarter to file a written notice directing the
transfer of funds among all investment options in which
the participants' account is invested.
FINANCIAL SCHEDULES
COASTAL ARUBA REFINING COMPANY N.V. THRIFT PLAN
SCHEDULE I - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 2001
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
--------------------------------------- ----------- ---------- ----------
STOCK FUND
El Paso Corporation common stock 173,345 $3,524,316 $7,732,923
Short-term securities
JP Morgan Chase Securities of Texas
Money Market Fund 152 152 152
---------- ----------
Total investments - Stock Fund 3,524,468 7,733,075
---------- ----------
INTEREST INCOME FUND
Short-term securities
Caribbean Mercantile Bank N.V. 116,375 116,375 116,375
----------- ----------
Total deposits - Interest Income Fund 116,375 116,375
----------- ----------
DIVERSIFIED FUND
Short-term securities
Caribbean Mercantile Bank N.V. 91,324 91,324 91,324
----------- ----------
Total deposits - Diversified Fund 91,324 91,324
----------- ----------
Total Assets Held For Investment Purposes $3,732,167 $7,940,774
=========== ==========
COASTAL ARUBA REFINING COMPANY N.V. THRIFT PLAN
SCHEDULE II - ALLOCATION OF PLAN ASSETS
AND LIABILITIES TO INVESTMENT PROGRAMS
as of December 31, 2001
----------------------------------------------
El Paso Interest
Common Income Diversified
Total Plan Stock Fund Fund Fund
---------- ---------- -------- ------------
Investments, at market
Securities of El Paso Common Stock
(Cost $3,524,316) $7,732,923 $7,732,923 $ - $ -
Other 207,851 152 116,375 91,324
---------- ---------- --------- -----------
7,940,774 7,733,075 116,375 91,324
Receivables
Dividends 25,785 25,785 - -
Contributions 210,397 187,391 13,513 9,493
--------- --------- -------- ----------
236,182 213,176 13,513 9,493
--------- --------- -------- ----------
Net assets availiable for plan
benefits $8,176,956 $7,946,251 $ 129,888 $ 100,817
========= ========= ========= ==========
as of December 31, 2000
-----------------------------------------------
Coastal Interest
Common Income Diversified
Total Plan Stock Fund Fund Fund
---------- ---------- -------- ------------
Investments, at market
Securities of Coastal Common Stock
(Cost $3,441,396) $12,330,458 $12,330,458 $ - $ -
Other 205,591 86 113,203 92,302
----------- ----------- ---------- ------------
12,536,049 12,330,544 113,203 92,302
Receivables
Dividends 6,051 6,051 - -
Contributions 8,725 - 4,072 4,653
---------- ----------- ----------- -----------
14,776 6,051 4,072 4,653
Liabilities
Payables to employer 95,687 95,687 - -
Other 1,240 1,240 - -
---------- ----------- ----------- ----------
96,927 96,927 - -
---------- ----------- ----------- ----------
Net assets availiable for plan
benefits $12,453,898 $12,239,668 $ 117,275 $ 96,955
COASTAL ARUBA REFINING COMPANY N.V. THRIFT PLAN
SCHEDULE III - ALLOCATION OF PLAN INCOME AND
CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS
for the year ended December 31, 2001
----------------------------------------------
El Paso Interest
Common Income Diversified
Total Plan Stock Fund Fund Fund
---------- ---------- -------- ------------
Investments income
Dividends $ 102,654 $ 102,654 $ - $ -
Interest 9,446 66 5,240 4,140
--------- --------- --------- -----------
Total investment income 112,100 102,720 5,240 4,140
(Depreciation)/appreciation of
investments (4,680,455) (4,679,003) 2,036 (3,488)
Contributions
Employer 595,848 595,848 - -
Employee 724,938 683,558 23,509 17,871
--------- ---------- --------- -----------
Total contributions 1,320,786 1,279,406 23,509 17,871
Less: Benefits paid to
participants 1,029,373 996,540 18,172 14,661
Net (decrease)/increase in net assets
available for plan benefits (4,276,942) (4,293,417) 12,613 3,862
--------- --------- -------- -----------
Beginning of period 12,453,898 12,239,668 117,275 96,955
---------- ---------- -------- -----------
End of period $8,176,956 $7,946,251 $ 129,888 $ 100,817
========== ========== ========= ===========
for the year ended December 31, 2000
----------------------------------------------
Coastal Interest
Common Income Diversified
Total Plan Stock Fund Fund Fund
---------- ---------- -------- ------------
Investments income
Dividends $ 23,525 $ 23,525 $ - $ -
Interest 9,573 427 5,007 4,139
---------- ---------- --------- ------------
Total Investment Income 33,098 23,952 5,007 4,139
Appreciation of investments
Coastal common stock 7,101,280 7,101,280 - -
Contributions
Employer 514,301 514,301 - -
Employee 601,717 565,114 21,581 15,022
--------- --------- ---------- -----------
Total contributions 1,116,018 1,079,415 21,581 15,022
Less: Benefits paid to
participants 480,921 472,292 7,556 1,073
Net increase in net assets
available for plan benefits 7,769,475 7,732,355 19,032 18,088
---------- --------- ---------- -----------
Beginning of period 4,684,423 4,507,313 98,243 78,867
---------- ---------- ---------- -----------
End of period $12,453,898 $12,239,668 $ 117,275 $ 96,955
=========== ========== ========== ===========
COASTAL ARUBA REFINING COMPANY N.V. THRIFT PLAN
SCHEDULE III - ALLOCATION OF PLAN INCOME AND
CHANGES IN PLAN EQUITY TO INVESTMENT PROGRAMS
(continued)
for the year ended December 31, 1999
----------------------------------------------
Coastal Interest
Common Income Diversified
Total Plan Stock Fund Fund Fund
---------- ---------- -------- ------------
Investments income
Dividends $ 21,169 $ 21,169 $ - $ -
Interest 8,169 160 4,398 3,611
---------- --------- --------- ---------
Total Investment Income 29,338 21,329 4,398 3,611
Appreciation of investments
Coastal common stock 333 333 - -
Contributions
Employer 434,406 434,406 - -
Employee 533,265 497,117 20,536 15,612
---------- ---------- --------- ---------
Total contributions 967,671 931,523 20,536 15,612
Less: Benefits paid to participants 438,009 412,130 12,098 13,781
Net increase in assets
available for plan benefits 559,333 541,055 12,836 5,442
--------- ---------- --------- ---------
Beginning of period 4,125,090 3,966,258 85,407 73,425
---------- ---------- --------- ---------
End of period $4,684,423 $4,507,313 $ 98,243 $ 78,867
========== ========== ========= ========
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Management Board of the Coastal Aruba Thrift Foundation, as Administator, has
duly caused this Annual Report to be signed on its behalf by the undersigned
hereunto duly authorized.
MANAGEMENT BOARD OF THE COASTAL ARUBA
THRIFT FOUNDATION, AS ADMINISTRATOR
OF COASTAL ARUBA REFINING COMPANY N.V.
THRIFT PLAN
By: /s/ Joel Richards III
________________________________
Joel Richards III
Member of Management Board
Dated: March 28, 2002
Exhibit Index
-------------
Exhibit No. Description
----------- -----------
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Deloitte & Touche LLP