Energy Transfer 2012 Annual Report Download - page 172

F - 27
as discontinued operations. A write down of the carrying amounts of the Canyon assets to their fair values was recorded for
approximately $132 million during the year ended December 31, 2012. Canyon was previously included in our midstream
segment.
In December 2012, Southern Union entered into a purchase and sale agreement with the Laclede Entities, pursuant to which
Laclede Missouri has agreed to acquire the assets of Missouri Gas Energy division and Laclede Massachusetts has agreed to
acquire the assets of the New England Gas Company division. Total consideration is expected to be $1.04 billion, subject to
customary closing adjustments, less the assumption of approximately $19 million of debt. For the period from March 26,
2012 to December 31, 2012 the results of continuing operations of distribution operations have been reclassified to income
from discontinued operations. The assets and liabilities of the disposal group have been reclassified and reported as assets
and liabilities held for sale as of December 31, 2012.
Below is selected financial information related to Southern Union's distribution operations for the period from March 26,
2012 to December 31, 2012:
Revenue from discontinued operations $ 324
Net income of discontinued operations, excluding effect of taxes
and overhead allocations 43
The goodwill allocated to the disposal group was $133 million at December 31, 2012.
SUGS Contribution
On February 27, 2013, Southern Union entered into a definitive contribution agreement to contribute to Regency all of the
issued and outstanding membership interest in Southern Union Gathering Company, LLC, and its subsidiaries, including
SUGS. The consideration to be paid by Regency in connection with this transaction will consist of (i) the issuance of 31,372,419
Regency common units to Southern Union, (ii) the issuance of 6,274,483 Regency Class F units to Southern Union, (iii) the
distribution of $570 million in cash to Southern Union, and (iv) the payment of $30 million in cash to a subsidiary of ETP.
The Regency Class F units will have the same rights, terms and conditions as the Regency common units, except that Southern
Union will not receive distributions on the Regency Class F units for the first eight consecutive quarters following the closing,
and the Regency Class F units will thereafter automatically convert into Regency common units on a one-for-one basis. Upon
the closing of the transaction, ETE will agree to forego all distributions with respect to its IDRs on the Regency common
units issued in the transaction for the first eight consecutive quarters following the closing. The transaction is expected to
close in the second quarter of 2013.
2011 Transactions
LDH Acquisition
On May 2, 2011, ETP-Regency Midstream Holdings, LLC (“ETP-Regency LLC”), a joint venture owned 70% by the
Partnership and 30% by Regency Energy Partners LP (“Regency”), acquired all of the membership interest in LDH Energy
Asset Holdings LLC (“LDH”), from Louis Dreyfus Highbridge Energy LLC (“Louis Dreyfus”) for approximately $1.98
billion in cash (the “LDH Acquisition”), including working capital adjustments. The Partnership contributed approximately
$1.38 billion to ETP-Regency LLC to fund its 70% share of the purchase price. Subsequent to closing, ETP-Regency LLC
was renamed Lone Star.
Lone Star owns and operates a natural gas liquids storage, fractionation and transportation business. Lone Star’s storage assets
are primarily located in Mont Belvieu, Texas, and its West Texas Pipeline transports NGLs through an intrastate pipeline
system that originates in the Permian Basin in west Texas, passes through the Barnett Shale production area in north Texas
and terminates at the Mont Belvieu storage and fractionation complex. Lone Star also owns and operates fractionation and
processing assets located in Louisiana. The acquisition of LDH by Lone Star expands the Partnership’s asset portfolio by
adding an NGL platform with storage, transportation and fractionation capabilities.
We accounted for the LDH Acquisition using the acquisition method of accounting. Lone Star’s results of operations are
included in our NGL transportation and services segment. Regency’s 30% interest in Lone Star is reflected as noncontrolling
interest.
2010 Transactions
In March 2010, we purchased a natural gas gathering company, which provides dehydration, treating, redelivery and
compression services on a 120-mile pipeline system in the Haynesville Shale for approximately $150 million in cash, excluding
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