SEC Filings
10-Q
SOUTHERN UNION CO filed this Form 10-Q on 11/10/1997
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             SOUTHERN UNION COMPANY AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



FINANCIAL STATEMENTS

The interim financial statements are unaudited but, in the
opinion of management, reflect all adjustments (including both
normal recurring as well as any non-recurring) necessary for a
fair presentation of the results of operations for such periods.
Because of the seasonal nature of the Company's operations, the
results of operations and cash flows for any interim period are
not necessarily indicative of results for the full year.

These financial statements should be read in conjunction with the
financial statements and notes thereto contained in Southern
Union Company's (Southern Union and, together with its wholly-
owned subsidiaries, the Company) Annual Report on Form 10-K for
the fiscal year ended June 30, 1997.

INVESTMENT SECURITIES

During the three months ended September 30, 1997, the Company
disposed of its remaining investment securities portfolio.  As a
result of this transaction, the Company recorded proceeds and
realized gains of $6,599,000 and $1,088,000, respectively.
Realized gains and losses on sales of investments, as determined
on a specific identification basis, are included in the Con-
solidated Statement of Operations when incurred.

ACQUISITIONS

On July 23, 1997 two subsidiaries of Southern Union Company
acquired a 42% equity ownership in a natural gas distribution
company serving 16,000 customers in Piedras Negras, Mexico for
$2,700,000.  This system is across the border from the Company's
Eagle Pass, Texas service area.  On September 8, 1997, the Com-
pany purchased a 45-mile intrastate pipeline for $305,000 which
will augment the Company's gas supply to the city of Eagle Pass
and, subject to necessary regulatory approvals, ultimately
Piedras Negras.

On October 8, 1997, the Company announced the signing of a letter
of intent for the acquisition of Atlantic Utilities Corporation
and Subsidiaries for $22,000,000 in common stock and cash.  These
properties provide service to several communities in Florida.

PREFERRED SECURITIES OF SUBSIDIARY TRUST

On May 17, 1995, Southern Union Financing I (Subsidiary Trust), a
consolidated wholly-owned subsidiary of Southern Union, issued
$100,000,000 of 9.48% Trust Originated Preferred Securities (Pre-
ferred Securities).  In connection with the Subsidiary Trust's
issuance of the Preferred Securities and the related purchase by
Southern Union of all of the Subsidiary Trust's common securities
(Common Securities), Southern Union issued to the Subsidiary
Trust $103,092,800 principal amount of its 9.48% Subordinated
Deferrable Interest Notes, due 2025 (Subordinated Notes).  The
sole assets of the Subsidiary Trust are the Subordinated Notes.
The interest and other payment dates on the Subordinated Notes
correspond to the distribution and other payment dates on the
Preferred Securities and the Common Securities.  Under certain
circumstances, the Subordinated Notes may be distributed to
holders of the Preferred Securities and holders of the Common
Securities in liquidation of the Subsidiary Trust.  The Subordi-
nated Notes are redeemable at the option of the Company on or
after May 17, 2000, at a redemption price of $25 per Subordinated
Note plus accrued and unpaid interest.  The Preferred Securities
and the Common Securities will be redeemed on a pro rata basis to
the same extent as the Subordinated Notes are repaid, at $25 per
Preferred Security and Common Security plus accumulated and
unpaid distributions.  Southern Union's obligations under the
Subordinated Notes and related agreements, taken together, con-
stitute a full and unconditional guarantee by Southern Union of
payments due on the Preferred Securities.  As of September 30,
1997 and 1996, 4,000,000 shares of Preferred Securities were
outstanding.


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