El Paso has reported its fourth quarter and full-year 2004 financial results for the company.
El Paso will file for an extension of 15 days in order to allow it and its auditor to complete documentation of its activities under the Sarbanes-Oxley Act of 2002 and to finalize the audit of the company’s financial statements.
In the course of El Paso’s 2004 audit process, the company and its auditor identified an issue related to the company’s adoption in the first quarter of 2002 of SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, related to the carrying value of certain of its equity investments. Although the company and its auditor are still reviewing this issue, the company’s auditor has informed the company that it currently believes that the original treatment was in error. The company is currently evaluating the impact this could have on the current and prior period financial statements.
The company expects that this issue will be fully resolved within the 15-day extension period ending March 31, 2005. The impact on the company’s financial statements is anticipated to be no more than an additional $154-million loss in 2002 and up to an additional $70 million of net income in 2004. The impact of the original implementation of SFAS No. 141 and 142 was reported as a cumulative effect of an accounting change in the company’s income statement and not in the company’s income from continuing operations. This impact was non-cash, and any change would have no effect on the company’s reported cash flow from operations for any period.
“In 2004, we laid the foundation for substantial progress in 2005 and beyond,” said Doug Foshee, president and chief executive officer of El Paso. “We made solid progress in reducing costs, stabilizing our production business, and continuing to build our pipeline franchise. Additionally, we exceeded expectations on the timing and amount of non-core asset sales and reduced our debt, net of cash, by $3.4 billion.”
Murdok | Breaking eBusiness News
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