New Accounting Principles and Other Matters

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements [Abstract]

Summary of Significant Accounting Policies and Other Matters

2. Summary of Significant Accounting Policies

There have been no changes in the Company's accounting policies as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2011, except as noted below.

Business Combination Accounting.Southern Union's March 26, 2012 merger transaction with ETE was accounted for by ETE using business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on their fair value. By the application of “push-down” accounting, PEPL's assets, liabilities and partners' capital were accordingly adjusted to fair value on March 26, 2012. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions. Southern Union has used outside appraisers to assist in the initial determination of fair value. The appraisal related to Southern Union's merger with ETE is expected to be finalized in the third quarter of 2012. See Note 3 – ETE Merger.