Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

As of June 30, 2013 and December 31, 2012, details of the Partnership’s related party receivables and related party payables were as follows:

	June 30, 2013		December 31, 2012
Related party receivables
HPC	$	1	$	1
ETE and its subsidiaries	18		5
Ranch JV	1		2
Total related party receivables	$	20	$	8
Related party payables
HPC	$	1	$	1
ETE and its subsidiaries	41		99
Ranch JV	1		—
Total related party payables	$	43	$	100

Transactions with ETE and its subsidiaries. Under the service agreement with Services Co., the Partnership pays Services Co.’s direct expenses for services performed, plus an annual fee of $10 million, and receives the benefit of any cost savings recognized for these services. The service agreement had a five year term which was to expire 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. On April 30, 2013, in conjunction with the SUGS Acquisition, the Partnership entered into the first amendment (the “Services Agreement Amendment”) to the Services Agreement, effective as of May 26, 2010, by and among the Partnership, ETE and Services Co. The Services Agreement Amendment provided for a waiver of the $10 million annual fee effective as of May 1, 2013 through and including April 30, 2015 and clarified the scope and expenses chargeable as direct expenses thereunder.

On April 30, 2013, the Partnership entered into the second amendment (the “Operation and Service Amendment”) to the Operation and Service Agreement (the “Operation and Service Agreement”), by and among the Partnership, ETC, the General Partner and RGS. Under the Operation and Service Agreement, ETC performs certain operations, maintenance and related services reasonably required to operate and maintain certain facilities owned by the Partnership, and the Partnership reimburses 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 Operation and Service Agreement Amendment provides that ETC will no longer provide services for the Partnership’s west Texas facilities or for certain south Texas facilities and also defines the services to be provided in the future.

The Partnership incurred total service fees from ETE and its subsidiaries of $2 million and $4 million for the three months endedJune 30, 2013 and 2012, respectively, and $7 million and $9 million for the six months ended June 30, 2013 and 2012, respectively.

In conjunction with distributions by the Partnership to the limited and general partner interests, ETE received cash distributions of $15 million and $16 million for each of the three months ended June 30, 2013 and 2012, respectively, and $31 million for the six months ended June 30, 2013 and 2012.

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 Services segment provides contract compression and treating services to subsidiaries of ETP and records revenue in gathering, transportation and other fees. The Partnership’s Contract Services segment purchased compression equipment from a subsidiary of ETP for $14 million and $25 million for the three and six months ended June 30, 2013.

Transactions with Southern Union. Prior to April 30, 2013, Southern Union provided certain administrative services for SUGS that were either based on SUGS's pro-rata share of combined net investment, margin and certain expenses or direct costs incurred by Southern Union on the behalf of SUGS. Southern Union also charged a management and royalty fee to SUGS for certain management support services provided by Southern Union on the behalf of SUGS and for the use of certain Southern Union trademarks, trade names and service marks by SUGS. These administrative services are no longer being provided subsequent to the SUGS Acquisition.

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. The related party general and administrative expenses reimbursed to the Partnership were $4 million and $5 million for the three months endedJune 30, 2013 and 2012, respectively, and $10 million and $9 million for the six months endedJune 30, 2013 and 2012, respectively, which are recorded in gathering, transportation and other fees.

The Partnership’s Contract Services segment provides compression services to HPC and records revenues in gathering, transportation and other fees. The Partnership also receives transportation services from HPC and records it as cost of sales.