Operations and Organization

3 Months Ended

Mar. 31, 2013

DESCRIPTION OF BUSINESS:

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:


•	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. Its operations expand from the Gulf Coast region throughout the Midwest and Great Lakes region.

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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. Its operations are conducted through SUGS. As discussed in Note 3, Southern Union completed its contribution of SUGS and its parent company to Regency for approximately $1.50 billion consisting of cash, Regency common units and Regency Class F units on April 30, 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. As discussed in Note 3, Southern Union and The Laclede Group, Inc. have entered into definitive purchase and sale agreements 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 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.

See Note 3 for information related to the Company’s disposal and other related transactions.