Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

As of December 31, 2011 and 2010, details of the Partnership’s related party receivables and related party payables were as follows:

	December 31, 2011		December 31, 2010
Related party receivables
EPD	$	41,781	$	25,539
HPC	1,360		5,823
ETE	554		970
Other	1,509		10
Total related party receivables	$	45,204	$	32,342
Related party payables
EPD	$	1,469	$	1,323
HPC	475		760
ETE	10,605		1,245
Other	76		10
Total related party payables	$	12,625	$	3,338

Transactions with ETE and its subsidiaries.Under a May 26, 2010 service agreement with Services Co., Services Co. performs certain services for the Partnership. The Partnership pays Services Co.’s direct expenses for these services, plus an annual fee of $10 million, and receives the benefit of any cost savings recognized for these services. The services agreement has a five year term from May 26, 2010 to May 26, 2015, subject to earlier termination rights in the event of a change in control, the failure to achieve certain cost savings for the Partnership or upon an event of default. Also, the Partnership, together with the General Partner and RGS entered into an operation and service agreement (the “Operations Agreement”) with ETC. Under the Operations Agreement, ETC will perform certain operations, maintenance and related services reasonably required to operate and maintain certain facilities owned by the Partnership. Pursuant to the Operations Agreement, the Partnership will reimburse ETC for actual costs and expenses incurred in connection with the provision of these services based on an annual budget agreed-upon by both parties. The Operations Agreement has an initial term of one year and automatically renews on a year-to-year basis upon expiration of the initial term. The Partnership incurred total service fees of $16.6 million and $5.8 million for the year ended December 31, 2011 and during the period from May 26, 2010 to December 31, 2010, respectively.

In conjunction with distributions made by the Partnership to the limited and general partner interests, ETE received cash distributions of $57.4 million and $27.7 million for the year ended December 31, 2011 and for the period from May 26, 2010 to December 31, 2010. During the period from May 26, 2010 to December 31, 2010, the Partnership received cash of $7.2 million from ETE, which represents the portion of the amount of the Partnership’s common unit distribution to be paid to ETE for the period of time that those units were not outstanding (April 1, 2010 to May 25, 2010).

ETE made capital contributions aggregating to $20.8 million, to maintain the General Partner’s 2% interest in the Partnership for the period from May 26, 2010 to December 31, 2010. The General Partner has the right, but not the obligation, to contribute a proportionate amount of capital to the Partnership to maintain its general partner interest.

Prior to December 31, 2010, the employees operating the assets of the Partnership and its subsidiaries and all those providing staff or support services were employees of the General Partner. Pursuant to the Partnership agreement, the General Partner receives a monthly reimbursement for all direct and indirect expenses incurred on behalf of the Partnership. Reimbursements of $58 million, $44.2 million, $31.1 million and $33.8 million were recorded in the Partnership’s financial statements for the year ended December 31, 2011, for the period from May 26, 2010 to December 31, 2010, for the period from January 1, 2010 to May 25, 2010, and the year ended December 31, 2009, respectively, as operation and maintenance expenses or general and administrative expenses, as appropriate. Effective January 1, 2011, certain employees of the General Partner became employees of ETP, and the Partnership reimburses ETP for all direct and indirect expenses incurred on behalf of the Partnership related to those employees. For the year ended December 31, 2011, a reimbursement of $21.6 million was recorded to ETP in the Partnership’s financial statements as operating expenses or general and administrative expenses.

In September 2011, the Partnership purchased a 0.1% interest in MEP from ETP for $1.2 million in cash.

The Partnership's Gathering and Processing segment, in the ordinary course of business, sells natural gas and NGLs to subsidiaries of ETE and records the revenue in gas sales and NGL sales. The Partnership’s Contract Compression segment provides contract compression services to ETP and records revenue in gathering, transportation and other fees on the statement of operations. The Partnership’s Contract Compression segment sold compression equipment to a subsidiary of ETP for $7.9 million for the year ended December 31, 2011. As these transactions are between entities under common control, partners’ capital was increased, which represented a deemed contribution of the excess sales price over the carrying amounts. The Partnership’s Contract Compression segment purchased compression equipment from a subsidiary of ETP for $33.1 million during the year ended December 31, 2011.

Transactions with HPC. Under a Master Services Agreement with HPC, the Partnership operates and provides all employees and services for the operation and management of HPC. For the year ended December 31, 2011, during the periods from May 26, 2010 to December 31, 2010, from January 1, 2010 to May 25, 2010, and the year ended December 31, 2009, the related party general and administrative expenses reimbursed to the Partnership were $16.8 million, $9.8 million, $6.9 million and $4.7 million respectively, which is recorded in gathering, transportation and other fees on the statements of operations.

Upon the formation of HPC in March 2009, the Partnership was reimbursed by HPC for construction-in-progress incurred prior to formation of HPC at the cost of $80.6 million.

The Partnership’s Contract Compression segment provides contract compression services to HPC and records revenue in gathering, transportation and other fees on the statement of operations. The Partnership also receives transportation services from HPC and records the cost as cost of sales.

Transactions with EPD and its subsidiaries. EPD owns a portion of ETE’s outstanding common units and therefore is considered a related party along with any of its subsidiaries. The Partnership, in the ordinary course of business, sells natural gas and NGLs to subsidiaries of EPD and records the revenue in gas sales and NGL sales. The Partnership also incurs NGL processing fees and transportation fees with subsidiaries of EPD and records these fees as cost of sales. On January 18, 2012, EPD sold a significant portion of its ownership in ETE's common units. Subsequent to that transaction, EPD owns less than 5% of ETE's outstanding common units.

The Partnership’s Contract Compression segment provided contract compression services to CDM MAX LLC (“CDM MAX”), which was partially owned by an officer of CDM. In 2009, CDM MAX was purchased by a third party and, as a result, CDM MAX is no longer a related party. The Partnership’s related party revenue associated with CDM MAX was $1.1 million during the year ended December 31, 2009.