Related Party Transactions

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements [Abstract]

Related Party Transactions

4. Related Party Transactions

The following table provides a summary of related party transactions for the periods presented.

		Three Months Ended June 30,				Six Months Ended June 30,
		2011		2010		2011		2010
		(In thousands)
Transportation and storage
	of natural gas (1)	$	663	$	648	$	1,671	$	1,925
Operation and maintenance:
	Management and royalty fees		4,743		4,661		9,798		9,344
	Other expenses (2)		8,626		7,066		16,969		16,260
Other income, net:
	Interest income - Southern Union		384		310		771		568
	Interest income - CrossCountry Citrus		1,760		1,832		3,542		3,587
	Other		64		69		130		128

___________________________

• Represents transportation and storage revenues with Missouri Gas Energy, a Southern Union division.
• Primarily includes allocations of corporate charges from Southern Union, partially offset for expenses attributable to services provided by Panhandle on behalf of other affiliate companies.

Pursuant to a demand note with Southern Union Company under a cash management program, the Company loans excess cash, net of repayments, to Southern Union. The Company is credited with interest on the note at a one month LIBOR rate. Given the uncertainties regarding the timing of the Company's cash flows, including financings, capital expenditures and operating cash flows, the Company has reported the note receivable as a non-current asset. The Company has access to the funds via the demand note and expects repayment to ultimately occur to primarily fund capital expenditures or debt retirements.

The interest rate under the note receivable with CrossCountry Citrus is based on the variable interest rate under the term loan facility due in 2012 plus a credit spread over LIBOR of 112.5 basis points.

The counterparty to the notes receivable is the parent of the Company, Southern Union, whose debt is rated BBB- by Fitch Ratings, Baa3 by Moody's Investor Services, Inc. and BBB- by Standard & Poor's.

The following table provides a summary of the related party balances included in the Condensed Consolidated Balance Sheet at the dates indicated.

		June 30,		December 31,
		2011		2010
			(In thousands)
Notes receivable - related parties:
	Current:
	CrossCountry Citrus	$	368,126	$	-
	Noncurrent:
	Southern Union	$	610,530	$	455,280
	CrossCountry Citrus		-		368,126
		$	610,530	$	823,406
Accounts receivable - related parties (1)		$	4,233	$	5,922
Accounts payable - related parties:
	Southern Union - income taxes (2)	$	39,595	$	43,273
	Southern Union - other (3)		17,004		12,940
	Other (4)		769		180
		$	57,368	$	56,393

______________________________

• Primarily related to interest income associated with the Note receivable – CrossCountry Citrus and services provided for Citrus.
• Related to income taxes payable to Southern Union per the tax sharing agreement to provide for taxes to be remitted upon the filing of the tax return.
• Primarily related to payroll funding provided by Southern Union. The June 30, 2011 and December 31, 2010 amountsare net of insurance proceeds ofniland $13.9 million, respectively, owed by Southern Union to the Company.
• Primarily related to various administrative and operating costs paid by other affiliate companies on behalf of the Company.