1260349--3/15/2010--SOUTHERN_STAR_CENTRAL

related topics

{gas, price, oil}

{condition, economic, financial}

{cost, regulation, environmental}

{operation, natural, condition}

{capital, credit, financial}

{customer, product, revenue}

{debt, indebtedness, cash}

{financial, litigation, operation}

{competitive, industry, competition}

{regulation, change, law}

Risks Related to Our Business Current or future distressed financial conditions of customers could have an adverse impact on us in the event these customers are unable to pay us for the products or services we provide. Current levels of market volatility are unprecedented. Changes in our regulatory environment and recent events in the energy markets that are beyond our control may significantly affect our costs and access to capital markets. We are subject to numerous environmental and safety laws and regulations that may increase our cost of operations, or expose us to liabilities, which are not recoverable through rates or insurance. Climate change regulation at the federal, state, provincial, or regional levels could result in increased operating and capital costs for us. We do not control the rates that we are allowed to charge for our services and those rates may be decreased at any time, thereby decreasing our revenues and operating results. Substantial operational risks are involved in operating a natural gas pipeline system that could result in unanticipated expense or financial liability which may not be fully covered by insurance. Reduction in firm reservation agreements and the demand for interruptible services could cause significant reductions in our revenues and operating results. Decreases in the availability of natural gas supplies could have a significant negative impact on our revenues and results of operations. Operational limitations of our pipeline system could cause a significant decrease in our revenues and operating results. Due to our lack of asset diversification, adverse developments in our pipeline business could negatively affect our business, financial position or results of operations. Department of Transportation regulations may impose significant costs and liabilities on us. Storage limitations may impact our ability to recover our costs. Decreases in demand for natural gas may reduce our revenues and operating results. Competitive pressures could reduce our revenues and operating results. We are dependent on a limited number of customers for a significant percentage of our revenues and the loss of a large customer could have a material adverse effect on our operating results. We are exposed to the credit risk of our customers in the ordinary course of our business. Reductions in our credit ratings may negatively affect our cost of, and possibly access to, capital. Recent terrorist activities and the potential for military and other actions could adversely affect our business, financial position and results of operations. Our current debt instruments contain restrictive covenants that may restrict our ability to pursue our business strategies.

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1260349--3/15/2010--SOUTHERN_STAR_CENTRAL_CORP