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SEC Filings
10-Q
SOUTHERN UNION CO filed this Form 10-Q on 11/07/2013
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Corporate and Other Activities
The period from January 1, 2012 to March 25, 2012 included $19 million in merger-related expenses. Subsequent to April 30, 2013, Corporate and other activities consists of the Company’s investment in Regency. Subsequent to September 1, 2013, Corporate and other activities includes the operations of NEG. MGE and NEG were previously reported in the Distribution segment. These operations are reported as discontinued operations for all periods presented and the reportable segment information has been recast to reflect the removal of the Distribution segment.
Supplemental Pro Forma Financial Information
The following unaudited pro forma condensed consolidated financial information of the Company has been prepared in accordance with Article 11 of Regulation S-X and reflects the pro forma impacts of the ETE Merger for the nine months ended September 30, 2012, giving effect to the ETE Merger as if it had occurred on January 1, 2012.  This unaudited pro forma financial information is provided to supplement the discussion and analysis of the historical financial information and should be read in conjunction with such historical financial information.  This unaudited pro forma information is for illustrative purposes only and is not necessarily indicative of the financial results that would have occurred if these transactions had been consummated on January 1, 2012.
 
 
Successor
 
 
Predecessor
 
 
 
 
 
 
Period from Acquisition
(March 26, 2012) to September 30,
2012
 
 
Period from January 1, 2012 to March 25, 2012
 
Pro Forma Adjustments
 
Pro Forma Nine Months Ended September 30, 2012
OPERATING REVENUES
 
$
822

 
 
$
443

 
$

 
$
1,265

OPERATING EXPENSES:
 
 
 
 
 

 
 
 
 

Cost of natural gas and other energy
 
329

 
 
197

 
 
 
526

Operating, maintenance and general
 
264

 
 
116

 
(72
)
(a)
308

Depreciation and amortization
 
137

 
 
49

 
6

(b)
192

Total operating expenses
 
730

 
 
362

 
(66
)
 
1,026

OPERATING INCOME
 
92

 
 
81

 
66

 
239

OTHER INCOME (EXPENSE):
 
 

 
 
 

 
 
 
 

Interest expense
 
(95
)
 
 
(50
)
 
9

(c)
(136
)
Earnings from unconsolidated investments
 

 
 
16

 
(9
)
(d)
7

Other, net
 

 
 
(2
)
 

 
(2
)
Total other expenses, net
 
(95
)
 
 
(36
)
 

 
(131
)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE
 
(3
)
 
 
45

 
66

 
108

Income tax expense (benefit)
 
21

 
 
12

 
23

(e)
56

INCOME (LOSS) FROM CONTINUING OPERATIONS
 
(24
)
 
 
33

 
43

 
52

Income from discontinued operations
 
14

 
 
17

 

 
31

NET INCOME (LOSS)
 
$
(10
)
 
 
$
50

 
$
43

 
$
83


(a)
To eliminate merger-related costs incurred by the Company in connection with the ETE Merger, including change in control and severance costs.  These costs are eliminated from the Company’s pro forma income statement because such costs would not have a continuing impact on the Company’s results of operations.
(b)
To record incremental depreciation on the excess purchase price allocated to property, plant and equipment based on a weighted average useful life of 24 years.
(c)
To adjust amortization included in interest expense to (i) reverse historical amortization of financing costs and fair value adjustments related to debt and (ii) record pro forma amortization related to the pro forma adjustment of the Company’s debt to fair value.
(d)
To adjust earnings from unconsolidated investments to (i) eliminate historical earnings related to Citrus to give effect to the transfer of the Company’s interest in Citrus in connection with the ETE Merger and (ii) record incremental earnings from the Company’s investment in ETP common units received in connection with the transfer of Citrus.

27

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