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SEC Filings
10-Q
SOUTHERN UNION CO filed this Form 10-Q on 11/07/2013
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RECENT DEVELOPMENTS
Note Exchange
On June 24, 2013, ETP completed the exchange of approximately $1.09 billion aggregate principal amount of the Company’s outstanding senior notes, comprising 77% of the principal amount of the 7.6% Senior Notes due 2024, 89% of the principal amount of the 8.25% Senior Notes due 2029 and 91% of the principal amount of the Junior Subordinated Notes due 2066.  These notes were exchanged for new notes issued by ETP with the same coupon rates and maturity dates. In conjunction with this transaction, the Company entered into intercompany notes payable to ETP, which provide for the reimbursement by the Company of ETP’s payments under the newly issued notes. The fair value on the settlement date of the 7.6% Senior Notes due 2024, 8.25% Senior Notes due 2029 and the Junior Subordinated Notes due 2066 was $328 million, $328 million and $464 million, respectively, which represented 118.16%, 122.84% and 85%, respectively, of the outstanding principal amount of the notes.
LDC Dispositions
Effective September 1, 2013, the Company completed its sale of the assets of the Missouri Gas Energy division to Laclede Gas for an aggregate purchase price of $975 million, subject to customary post-closing adjustment. Proceeds from the sale were used to repay borrowings under ETP’s revolving credit facility. The sale of New England Gas Company is expected to close in the fourth quarter of 2013.
RESULTS OF OPERATIONS

The following table provides a reconciliation of Segment Adjusted EBITDA (by segment) to net income (loss):
 
 
Successor
 
 
Predecessor
 
 
Nine Months Ended
September 30, 2013
 
Period from Acquisition (March 26, 2012) to September 30, 2012
 
 
Period from January 1, 2012 to March 25, 2012
Segment Adjusted EBITDA:
 
 
 
 
 
 
 
Transportation and storage segment
 
$
407

 
$
198

 
 
$
186

Gathering and processing segment
 
(7
)
 
36

 
 
25

Corporate and other activities
 
122

 
41

 
 
15

Total Segment Adjusted EBITDA
 
522

 
275

 
 
226

Depreciation and amortization
 
(147
)
 
(137
)
 
 
(49
)
Interest expense, net of interest capitalized
 
(84
)
 
(95
)
 
 
(50
)
Non-cash compensation expense, accretion expense and amortization of regulatory assets
 
(7
)
 
(1
)
 
 
(1
)
Net gain on curtailment of OPEB plans
 

 
15

 
 

Other, net
 
2

 

 
 
(2
)
Earnings from unconsolidated investments
 
15

 

 
 
16

Adjusted EBITDA attributable to unconsolidated investments
 
(56
)
 
(8
)
 
 
(61
)
Adjusted EBITDA attributable to discontinued operations
 
(75
)
 
(52
)
 
 
(34
)
Income (loss) from continuing operations before income tax expense
 
170

 
(3
)
 
 
45

Income tax expense
 
80

 
21

 
 
12

Income (loss) from continuing operations
 
90

 
(24
)

 
33

Income from discontinued operations
 
44

 
14

 
 
17

Net income (loss)
 
$
134

 
$
(10
)
 
 
$
50


The segment analysis in the following section describes the significant items impacting the Segment Adjusted EBITDA amounts reflected above.  In addition, as discussed in the “Overview” section above, the comparability of net income between predecessor and successor periods was impacted by the application of “push-down” accounting.  The most significant impacts of this new basis of accounting were:


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