Print Page | Close Window
SEC Filings
10-Q
SOUTHERN UNION CO filed this Form 10-Q on 11/07/2013
Entire Document
 << Previous Page | Next Page >>

within the Transportation and Storage segment are related to firm capacity reservation charges, which customers pay whether they utilize their contracted capacity or not, volumes transported do not have as significant an impact on revenues over the short-term.  However, longer-term demand for capacity may be affected by changes in the customers’ actual and anticipated utilization of their contracted capacity and other factors.
The Company’s regulated transportation and storage businesses can file (or be required to file) for changes in their rates, which are subject to approval by the FERC.  Although a significant portion of the Company’s contracts are discounted or negotiated rate contracts, changes in rates and other tariff provisions resulting from regulatory proceedings have the potential to impact negatively the Company’s results of operations and financial condition.

The following table illustrates the results of operations applicable to the Company’s Transportation and Storage segment:
 
 
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
Operating revenues (1)
 
$
611

 
$
387

 
 
$
194

Operating, maintenance and general, net of non-cash compensation expense, accretion and gain on curtailment
 
(182
)
 
(170
)
 
 
(60
)
Taxes other than on income and revenues
 
(22
)
 
(19
)
 
 
(9
)
Adjusted EBITDA related to unconsolidated investments
 

 

 
 
61

Segment Adjusted EBITDA
 
$
407

 
$
198

 
 
$
186

 
 
 
 
 
 
 
 
Panhandle natural gas volumes transported (TBtu): (2)
 
 
 
 
 
 
 
PEPL
 
445

 
277

 
 
152

Trunkline
 
537

 
354

 
 
177

Sea Robin
 
107

 
47

 
 
20

(1) 
Reservation revenues comprised 89% of total operating revenues for the nine months ended September 30, 2013. Reservation revenues comprised 88% and 88% of total operating revenues in the successor and predecessor periods in 2012, respectively.
(2) 
Includes transportation deliveries made throughout the Company’s pipeline network.
Following is a discussion of the significant items and variance impacting Segment Adjusted EBITDA for the Company’s Transportation and Storage segment.
Operating Revenues.  Operating revenues for the nine months ended September 30, 2013 increased compared to the successor and predecessor periods in 2012 primarily due to the recognition of $52 million received in connection with the buyout of a customer’s contract, partially offset by lower capacity sold at overall average lower rates and lower parking revenues.
Operating, Maintenance and General Expenses.  The period from March 26, 2012 to September 30, 2012 included $44 million of merger-related employee severance expenses. The remaining decrease in operating expenses for the nine months ended September 30, 2013 compared to the prior periods is primarily attributable to a decrease in employee-related costs related to integration efforts subsequent to ETE’s acquisition of Southern Union.
Unconsolidated Investments.  The primary driver for the reduction in Segment Adjusted EBITDA for the Company’s Transportation and Storage segment was the contribution of Citrus to ETP on March 26, 2012.  Citrus was reflected in Adjusted EBITDA attributable to unconsolidated investments for the predecessor period shown above but was not reflected in the successor periods.  The period from January 1, 2012 to March 25, 2012 reflected Adjusted EBITDA attributable to Citrus of $61 million.

25

 << Previous Page | Next Page >>