Disposal and Related Transactions

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Disposal and Related Transactions

DISPOSAL AND RELATED TRANSACTIONS:

SUGS Contribution

On April 30, 2013, the Company completed its contribution to Regency of all of the issued and outstanding membership interest in Southern Union Gathering Company, LLC, and its subsidiaries, including SUGS. The consideration paid by Regency in connection with this transaction consisted of (i) the issuance of approximately 31.4 million Regency common units to the Company, (ii) the issuance of approximately 6.3 million Regency Class F units to the Company, (iii) the distribution of $570 million in cash to the Company, and (iv) the payment of $30 million in cash to a subsidiary of ETP. The total cash consideration to the Company was reduced by $107 million in estimated closing adjustments. In addition, PEPL Holdings provided a guarantee of collection with respect to the payment of the principal amounts of Regency’s debt related to the Contribution Agreement. The Regency Class F units have the same rights, terms and conditions as the Regency common units, except that Southern Union will not receive distributions on the Regency Class F units for the first eight consecutive quarters following the closing, and the Regency Class F units will thereafter automatically convert into Regency common units on a one-for-one basis. The Company has not presented SUGS as discontinued operations due to the expected continuing involvement with SUGS through affiliate relationships, as well as the direct investment in Regency received as consideration.

Holdco Transaction

On April 30, 2013, ETP acquired from ETE its interest in Holdco for approximately 49.5 million of newly issued ETP common units and $1.40 billion in cash, less $68 million in estimated closing adjustments. Holdco is the entity formed by ETP and ETE in 2012 to own the equity interests in Southern Union and Sunoco. As a result of this transaction, ETP now owns 100% of Holdco.

Discontinued Operations

In December 2012, the Company entered into a purchase and sale agreement with The Laclede Group, Inc. pursuant to which Laclede Missouri has agreed to acquire the assets of the Missouri Gas Energy division and Laclede Massachusetts has agreed to acquire the assets of the New England Gas Company division (together, the “LDC Disposal Group”) for approximately $1.04 billion, subject to customary closing adjustments.  On February 11, 2013, The Laclede Group, Inc. announced that it had entered into an agreement with 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 in the third quarter of 2013.  All periods reflected herein 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 reported as assets and liabilities held for sale as of March 31, 2013 and December 31, 2012.

Summarized financial information for Southern Union’s LDC Disposal Group is as follows:

	Successor				Predecessor
	Three Months Ended March 31, 2013		Period from Acquisition (March 26, 2012) to March 31, 2012		Period from January 1, 2012 to March 25, 2012
Revenue from discontinued operations	$	246	$	8	$	190
Net income of discontinued operations, excluding effect of taxes and overhead allocations	56		1		27

The goodwill allocated to the LDC Disposal Group was $133 million at March 31, 2013.