OPERATIONS AND ORGANIZATION:

The Company was incorporated under the laws of the State of Delaware in 1932. Southern Union owns and operates assets in the regulated and unregulated natural gas industry and is primarily engaged in the gathering, treating, processing, transportation, storage and distribution of natural gas in the United States. The Company operates in three reportable segments as follows:

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Transportation and Storage — The Transportation and Storage segment is primarily engaged in the interstate transportation and storage of natural gas, and also provides LNG terminalling and regasification services. Through Panhandle, the Company owns and operates approximately 10,000 miles of interstate pipelines that transport up to 6.4 Bcf/d of natural gas from the Gulf of Mexico, South Texas and the Panhandle regions of Texas and Oklahoma to major U.S. markets in the Midwest and Great Lakes regions. Panhandle also owns and operates an LNG import terminal located on Louisiana’s Gulf Coast.

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Gathering and Processing — The Gathering and Processing segment is primarily engaged in connecting wells of natural gas producers to its gathering system, treating natural gas to remove impurities to meet pipeline quality specifications, processing natural gas for the removal of NGL, and redelivering natural gas and NGL to a variety of markets. Through SUGS, the Company owns approximately 5,700 miles of natural gas and NGL pipelines, 6 processing plants with a combined capacity of 510 MMcf/d and 7 natural gas treating plants with combined capacities of 630 MMcf/d. As discussed in Note 3, on February 27, 2013, Southern Union expects to contribute SUGS and its parent company to Regency during the second quarter of 2013.

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Distribution — The Distribution segment is primarily engaged in the local distribution of natural gas in Missouri and Massachusetts. Through Southern Union’s regulated utility operations, Missouri Gas Energy and New England Gas Company, the Company serves natural gas end-user customers in Missouri and Massachusetts, respectively. On December 17, 2012, Southern Union and The Laclede Group, Inc. entered into definitive purchase and sale agreements dated December 14, 2012 with Laclede Missouri and Laclede Massachusetts, both of which are subsidiaries of Laclede Gas Company, Inc., pursuant to which Laclede Missouri has agreed to acquire the assets of Southern Union’s Missouri Gas Energy division, and Laclede Massachusetts has agreed to acquire the assets of Southern Union’s New England Gas Company division (together, the LDC Disposal Group) for approximately $1.035 billion, subject to customary closing adjustments. On February 11, 2013, The Laclede Group, Inc. announced that it had entered into an agreement with Algonquin Power & Utilities Corp (APUC) that will allow a subsidiary of APUC to assume the rights of The Laclede Group, Inc. to purchase the assets of New England Gas Company, subject to certain approvals. It is expected that the transactions contemplated by the purchase and sale agreements will close by the end of the third quarter of 2013. For the periods from March 26, 2012 to December 31, 2012 and January 1, 2012 to March 25, 2012, and for the years ended December 31, 2011 and 2010, the results of continuing operations of the LDC Disposal Group have been reclassified to income from discontinued operations and the prior period amounts have been restated to present the LDC Disposal Group’s operations as discontinued operations in the consolidated statements of operations. The LDC Disposal Group’s assets and liabilities have been reclassified and reported as assets and liabilities held for sale as of December 31, 2012.

See Note 3 for information related to the Company’s merger with ETE and the completion of the Holdco Transaction.