Reportable Segments

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Reportable Segments

REPORTABLE SEGMENTS:

The Company’s primary operating segments, which are individually disclosed as its reportable business segments, are:  Transportation and Storage, Gathering and Processing, and Distribution.  These operating segments are organized for segment reporting purposes based on the way internal managerial reporting presents the results of the Company’s various businesses to its chief operating decision maker for use in determining the performance of the businesses.

The Transportation and Storage segment operations are conducted through Panhandle and the Company’s investment in Citrus (through March 26, 2012, the date of the Citrus Merger).  The Gathering and Processing segment operations are conducted through SUGS.  The Distribution segment is primarily engaged in the local distribution of natural gas in Missouri and Massachusetts, through its Missouri Gas Energy and New England Gas Company operating divisions, respectively. See Note 1 for additional information associated with the Company’s reportable segments.

Sales of products or services between segments are billed at regulated rates or at market rates, as applicable.  There were no material intersegment revenues during the nine months ended September 30, 2012 and 2011.

The remainder of the Company’s business operations, which do not meet the quantitative threshold for segment reporting, are presented as Corporate and other activities.  Corporate and other activities consist of unallocated corporate costs, a wholly-owned subsidiary with ownership interests in electric power plants, and other miscellaneous activities.

The Company previously reported segment EBIT as a measure of segment performance.  Subsequent to the ETE Merger, the chief operating decision maker assesses performance of the Company’s business based on Segment Adjusted EBITDA.  The Company defines Segment Adjusted EBITDA as earnings before interest, taxes, depreciation, amortization and other non-cash items, such as non-cash compensation expense, unrealized gains and losses on unhedged derivative activities, accretion expense and amortization of regulatory assets and other non-operating income or expense items.  Segment Adjusted EBITDA reflects amounts for less than wholly owned subsidiaries and unconsolidated affiliates based on the Company’s proportionate ownership.  Based on the change in its segment performance measure, the Company has recast the presentation of its segment results for the prior periods to be consistent with the current period presentation. Segment Adjusted EBITDA may not be comparable to measures used by other companies and should be considered in conjunction with net earnings and other performance measures such as operating income or net cash flows provided by operating activities.

The following tables set forth certain selected financial information for the Company’s segments for the periods presented or at the dates indicated:

	Successor		Predecessor
	Three months ended September 30, 2012		Three months ended September 30, 2011
Operating revenues from external customers:
Transportation and Storage	$	188,481	$	192,699
Gathering and Processing	213,382		339,658
Distribution	73,237		80,763
Total segment operating revenues	475,100		613,120
Corporate and other activities	2,796		4,091
	$	477,896	$	617,211

	Successor		Predecessor
	Period from Acquisition (March 26, 2012) to September 30, 2012		Period from January 1, 2012 to March 25, 2012		Nine months ended September 30, 2011
Operating revenues from external customers:
Transportation and Storage	$	387,173	$	193,921	$	584,753
Gathering and Processing	430,215		246,463		891,825
Distribution	167,742		190,499		506,412
Total segment operating revenues	985,130		630,883		1,982,990
Corporate and other activities	4,948		2,766		12,650
	$	990,078	$	633,649	$	1,995,640

	Successor			Predecessor
	Three months ended September 30, 2012			Three months ended September 30, 2011
Segment Adjusted EBITDA:
Transportation and Storage	$	122,486		$	199,952
Gathering and Processing	25,296			34,234
Distribution	22,461			14,369
Corporate and other activities	(1,065		)	(1,255		)
Total Segment Adjusted EBITDA	169,178			247,300
Depreciation and amortization	(75,710		)	(59,327		)
Unrealized gains on unhedged derivative activities	—			5,130
Non-cash equity-based compensation, accretion expense and amortization of regulatory assets	(7,256		)	(2,926		)
Other, net	(755		)	191
Earnings (losses) from unconsolidated investments	(1,065		)	26,686
Adjusted EBITDA attributable to unconsolidated investments	(3,808		)	(79,651		)
Interest expense	(34,639		)	(54,925		)
Income before income tax expense	45,945			82,478
Income tax expense	(28,959		)	(24,446		)
Net income	$	16,986		$	58,032

	Successor			Predecessor
	Period from Acquisition (March 26, 2012) to September 30, 2012			Period from January 1, 2012 to March 25, 2012			Nine months ended September 30, 2011
Segment Adjusted EBITDA:
Transportation and Storage	$	205,130		$	185,706		$	570,072
Gathering and Processing	36,155			25,338			94,440
Distribution	35,907			33,554			58,673
Corporate and other activities	(2,471		)	(18,845		)	(70		)
Total Segment Adjusted EBITDA	274,721			225,753			723,115
Depreciation and amortization	(154,909		)	(56,544		)	(177,949		)
Unrealized losses on unhedged derivative activities	—			—			(9,283		)
Net gain on curtailment of OPEB plans	15,332			—			—
Non-cash equity-based compensation, accretion expense and amortization of regulatory assets	(12,116		)	(1,350		)	(7,580		)
Other, net	(564		)	284			557
Earnings (losses) from unconsolidated investments	(381		)	16,160			78,435
Adjusted EBITDA attributable to unconsolidated investments	(7,673		)	(61,108		)	(194,723		)
Interest expense	(96,323		)	(50,407		)	(165,429		)
Income before income tax expense	18,087			72,788			247,143
Income tax expense	(27,883		)	(22,871		)	(68,676		)
Net income (loss)	$	(9,796	)	$	49,917		$	178,467

	Successor		Predecessor
	September 30, 2012		December 31, 2011
Total assets:
Transportation and Storage	$	5,695,305	$	5,288,967
Gathering and Processing	2,820,127		1,742,516
Distribution	1,249,047		1,075,253
Total segment assets	9,764,479		8,106,736
Corporate and other activities	115,333		164,123
Total assets	$	9,879,812	$	8,270,859