exhibit99

exhibit99_1.htm

10-XX

For further information:

John F. Walsh

Vice President - Investor Relations

Southern Union Company

212-659-3208

SOUTHERN UNION ANNOUNCES 2Q RESULTS INCREASE 20%;

REAFFIRMS 2010 GUIDANCE

· Second Quarter 2010 Reported EPS of $.55; Adjusted EPS of $.42

· Adjusted EPS increases 20% over prior year

· 2010 Guidance: GAAP EPS of $1.92 to $2.12; Adjusted EPS of $1.75 to $1.95

HOUSTON, August 5, 2010 – Southern Union Company (NYSE: SUG) today reported second quarter net earnings available for common stockholders of $69.4 million ($.55 per share), compared with $31.1 million ($.25 per share) in the prior year. Adjusted net earnings for the same period were $53.0 million ($.42 per share), compared with $43.8 million ($.35 per share) in the prior year. The following table provides a reconciliation of net earnings to adjusted net earnings:

Select Non-GAAP Financial Information	Three months ended June 30,
($000s, except per share amounts)	2010			2009
Net earnings available for common stockholders	$	69,424		$	31,110
After-tax adjustments:
MTM (gain) loss on open economic hedges	$	(14,009	)	$	3,512
MTM (loss) gain recorded in prior accounting period	$	(5,697	)	$	9,147
Loss on extinguishment of preferred stock	$	3,295		$	-
Adjusted net earnings available for common stockholders	$	53,013		$	43,769
Reported net earnings per share available for common stockholders	$	0.55		$	0.25
Adjusted net earnings per share available for common stockholders	$	0.42		$	0.35

George L. Lindemann, chairman and CEO, said, “I am very pleased with our results for the second quarter. Our strong, year-over-year growth was largely a result of the Trunkline LNG Company, LLC (“Trunkline LNG”) Infrastructure Enhancement Project being placed in service and the impact of new rates at our Missouri Gas Energy distribution company. Our regulated business units continue to drive solid performance for our shareholders.”

Eric D. Herschmann, president and COO, added, “We are also pleased to announce that with the recently completed senior note offerings, Florida Gas Transmission Company, LLC (“FGT”) has successfully completed its external financing plans for the Phase VIII expansion project. Construction of the project is well underway as we work towards a spring 2011 in-service date.” FGT is a wholly owned subsidiary of Citrus Corp. (“Citrus”), a joint-venture between affiliates of Southern Union Company and El Paso Corporation.

For the six-month period ended June 30, 2010, the company reported net earnings available for common stockholders of $123.7 million ($.99 per share), compared with $75.2 million ($.61 per share) in the prior year. Adjusted net earnings for the same period were $108.2 million ($.86 per share), compared with $113.4 million ($.91 per share) in the prior year. The following table provides a reconciliation of net earnings to adjusted net earnings:

Select Non-GAAP Financial Information	Six months ended June 30,
($000s, except per share amounts)	2010			2009
Net earnings available for common stockholders	$	123,713		$	75,196
After-tax adjustments:
MTM (gain) loss on open economic hedges	$	(10,447	)	$	13,236
MTM (loss) gain recorded in prior accounting period	$	(12,581	)	$	18,319
Loss on extinguishment of preferred stock	$	3,295		$	-
Provision for hurricane related repair and abandonment costs	$	-		$	10,091
Environmental insurance settlements	$	-		$	(3,485	)
Change in tax treatment for Medicare Part D subsidies	$	4,216		$	-
Adjusted net earnings available for common stockholders	$	108,196		$	113,357
Reported net earnings per share available for common stockholders	$	0.99		$	0.61
Adjusted net earnings per share available for common stockholders	$	0.86		$	0.91

2Q 2010 Segment Results

Southern Union’s transportation and storage segment posted EBIT of $111.2 million, compared with EBIT of $97.9 million in the prior year. The increase was primarily attributable to higher operating revenues at Trunkline LNG, a subsidiary of Panhandle Eastern Pipe Line Company, LP, and higher contributions from the company’s unconsolidated investment in Citrus, largely due to higher equity AFUDC resulting from the FGT Phase VIII expansion project.

The gathering and processing segment reported adjusted EBIT of $9.1 million, compared with adjusted EBIT of $18.7 million in the prior year primarily due to lower realized natural gas and natural gas liquids prices. Total processed volumes were 436,178 MMBtu/d in the 2010 period compared with 407,777 MMBtu/d in 2009. Equity volumes, which the company primarily receives through its percentage of proceeds contracts with producers, averaged 37,000 MMBtu/d of natural gas liquids equivalents and 17,000 MMBtu/d of natural gas.

·	The company’s distribution segment posted EBIT of $6.9 million compared to a loss before interest and taxes of $291,000 in the prior year. The increase was largely due to higher net operating revenue, primarily a result of new rates that went into effect on February 28, 2010.

·	Interest expense was $55.4 million in the quarter compared with $48.4 million in the prior year. Interest expense increased primarily due to the impact of lower capitalized interest costs due to lower outstanding capital project balances.

·	Income taxes were $28.6 million in the current quarter compared with $13.8 million in the prior year. The increase was primarily due to higher pre-tax earnings. The effective income tax rate is expected to average approximately 31% for the 2010 fiscal year.

2010 Earnings Guidance

Southern Union reaffirms its expected 2010 net earnings guidance of $1.92 to $2.12 per share (GAAP basis) and adjusted net earnings of $1.75 to $1.95 per share.

Quarterly Report on Form 10-Q

Southern Union will provide additional information about its first quarter 2010 results in its quarterly report on Form 10-Q expected to be filed today with the Securities and Exchange Commission. Once made, this filing may be accessed through the Investors section of the company’s web site at www.sug.com.

Investor Call & Webcast

Southern Union will host a live investor call and webcast today at 9:00 a.m. Eastern time to discuss results, recent events and outlook. To access the call, dial 866-543-6407 (international callers dial 617-213-8898) and enter the passcode 90018846. A replay of the call will be available for one week after the event by dialing 888-286-8010 (international callers dial 617-801-6888) and entering passcode 71830228. The webcast may be accessed online through the Investor’s section of the company’s web site at www.sug.com.

Non-GAAP Financial Measures

The company uses adjusted net earnings (per share), adjusted net operating revenues, and earnings before interest and taxes (“EBIT”), or adjusted EBIT, as appropriate, as its primary measures of evaluating financial performance. The company also believes these measures present its financial performance in a manner that is more consistent with the presentation used by the investment community in its evaluation of the company’s financial performance. Adjusted net earnings (per share), adjusted net operating revenues, EBIT and adjusted EBIT are non-GAAP measures and should be used in conjunction with net earnings and other financial measures such as operating income or net cash flows provided by operating activities.

About Southern Union Company

Southern Union Company, headquartered in Houston, is one of the nation’s leading diversified natural gas companies, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the nation’s largest natural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one of North America’s largest liquefied natural gas import terminals, along with serving more than half a million natural gas end-user customers in Missouri and Massachusetts. For further information, visit www.sug.com.

Cautionary Statements

This news release includes forward-looking statements and projections. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. Important factors that could cause actual results to differ materially from the projections, anticipated results or other expectations herein are enumerated in Southern Union’s Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.

Select Financial Information

The following table sets forth financial information for the company for the three and six months ended June 30, 2010 and 2009.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
	(In thousands, except per share amounts)

Operating revenues	$	573,096		$	453,025		$	1,332,090		$	1,136,888

Operating expenses:
Cost of gas and other energy		246,626			191,917			685,635			571,979
Operating, maintenance and general		118,723			116,539			232,608			245,216
Depreciation and amortization		57,559			53,360			112,753			105,830
Revenue-related taxes		4,806			4,816			21,848			22,022
Taxes, other than on income and revenues		13,638			13,739			28,224			27,480
Total operating expenses		441,352			380,371			1,081,068			972,527

Operating income		131,744			72,654			251,022			164,361

Other income (expenses):
Interest expense		(55,436	)		(48,365	)		(106,312	)		(96,735	)
Earnings from unconsolidated investments		27,542			22,694			46,120			39,267
Other, net		(352	)		132			(63	)		6,094
Total other income (expenses), net		(28,246	)		(25,539	)		(60,255	)		(51,374	)

Earnings before income taxes		103,498			47,115			190,767			112,987

Federal and state income tax expense		28,609			13,835			59,418			33,450


Net earnings		74,889			33,280			131,349			79,537

Preferred stock dividends		(2,170	)		(2,170	)		(4,341	)		(4,341	)
Loss on extinguishment of preferred stock		(3,295	)		-			(3,295	)		-

Net earnings available for common stockholders	$	69,424		$	31,110		$	123,713		$	75,196

Net earnings available for common stockholders per share:
Basic	$	0.56		$	0.25		$	0.99		$	0.61
Diluted		0.55			0.25			0.99			0.61

Dividends declared on common stock per share	$	0.15		$	0.15		$	0.30		$	0.30

Weighted average shares outstanding
Basic		124,474			124,047			124,445			124,046
Diluted		125,244			124,274			125,202			124,123

Select Financial Information Continued

The following table sets forth certain selected financial information for the company for the periods presented.

		June 30,		December 31,
		2010		2009
		(In thousands of dollars)
Total assets	$	7,989,115	$	8,075,074

Long term debt	$	3,421,079	$	3,421,236
Short term debt and notes payable		271,975		220,500
Preferred stock		-		115,000
Common equity		2,466,908		2,354,946
Total capitalization	$	6,159,962	$	6,111,682


		Six Months Ended June 30,
		2010		2009
Cash flow information:		(In thousands of dollars)
Cash flow provided by operating activities	$	242,492	$	381,825
Changes in working capital		(16,663)		171,767
Net cash flow provided by operating activities
before changes in working capital		259,155		210,058
Net cash flow used in investing activities		(129,020)		(230,371)
Net cash flow provided by financing activities		(121,429)		(140,540)
Change in cash and cash equivalents	$	(7,957)	$	10,914

Select Non-GAAP Financial Information

The following table sets forth certain selected financial information for the company’s segments for the periods presented.

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2010		2009			2010		2009
	(In thousands)
Revenues from external customers:
Transportation and Storage	$	187,090	$	172,615		$	373,765	$	364,910
Gathering and Processing		282,707		175,084			543,567		343,389
Distribution		99,711		104,532			407,972		426,556
Total segment operating revenues		569,508		452,231			1,325,304		1,134,855
Corporate and other activities		3,588		794			6,786		2,033
Total consolidated revenues from external
customers	$	573,096	$	453,025		$	1,332,090	$	1,136,888

Depreciation and amortization:
Transportation and Storage	$	30,896	$	28,483		$	60,073	$	56,346
Gathering and Processing		17,971		16,543			35,291		32,956
Distribution		7,967		7,808			15,923		15,479
Total segment depreciation and amortization		56,834		52,834			111,287		104,781
Corporate and other activities		725		526			1,466		1,049
Total depreciation and amortization expense	$	57,559	$	53,360		$	112,753	$	105,830

Segment performance:
Transportation and Storage EBIT	$	111,246	$	97,922		$	213,671	$	191,144
Gathering and Processing EBIT		40,526		(1,523	)		47,081		(12,956	)
Distribution EBIT		6,865		(291	)		35,710		31,347
Total segment EBIT		158,637		96,108			296,462		209,535
Corporate and other activities		297		(628	)		617		187
Interest expense		55,436		48,365			106,312		96,735
Federal and state income tax expense		28,609		13,835			59,418		33,450
Net earnings		74,889		33,280			131,349		79,537
Preferred stock dividends		2,170		2,170			4,341		4,341
Loss on extinguishment of preferred stock		3,295		-			3,295		-
Net earnings available for common stockholders	$	69,424	$	31,110		$	123,713	$	75,196

The company evaluates segment performance based on several factors, of which the primary financial measure is earnings before interest and taxes (EBIT). EBIT allows management and investors to more effectively evaluate the performance of all of the company’s consolidated subsidiaries and unconsolidated investments. The company defines EBIT as net earnings available for common shareholders, adjusted for: (i) items that do not impact earnings, such as extraordinary items, discontinued operations and the impact of changes in accounting principles; (ii) income taxes; (iii) interest; (iv) dividends on preferred stock; and (v) loss on extinguishment of preferred stock.

Select Non-GAAP Financial Information

The following tables set forth a reconciliation of EBIT to adjusted EBIT (a non-GAAP measure) for the company and select business segments for the three months ended June 30, 2010 and 2009.

	Three Months Ended June 30,
	2010			2009
	(In thousands of dollars)
Southern Union Company:
Reported EBIT	$	158,934		$	95,480
Adjustments:
Mark-to-market (gain) loss on open economic hedges		(22,319	)		5,605
Mark-to-market (loss) gain recognized in prior periods		(9,076	)		14,598
Adjusted EBIT	$	127,539		$	115,683

Gathering & processing segment:
Reported EBIT	$	40,526		$	(1,523	)
Adjustments:
Mark-to-market (gain) loss on open economic hedges		(22,319	)		5,605
Mark-to-market (loss) gain recognized in prior periods		(9,076	)		14,598
Adjusted EBIT	$	9,131		$	18,680