Organization and Basis of Presentation (Notes)

12 Months Ended

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure

Organization and Basis of Presentation

Organization. The consolidated financial statements presented herein contain the results of Regency Energy Partners LP and its subsidiaries (the “Partnership”), a Delaware limited partnership. The Partnership was formed on September 8, 2005, and completed its IPO on February 3, 2006. The Partnership and its subsidiaries are engaged in the business of gathering and processing, compression, treating and transportation of natural gas and the transportation, fractionation and storage of NGLs. Regency GP LP is the Partnership’s general partner and Regency GP LLC is the managing general partner of the Partnership and the general partner of Regency GP LP.

SUGS Acquisition. In April 2013, the Partnership acquired SUGS from Southern Union, a wholly-owned subsidiary of Holdco, for $1.5 billion (the “SUGS Acquisition”). The Partnership financed the acquisition by issuing to Southern Union 31,372,419 of common units and 6,274,483 Class F common units. The Class F common units are not entitled to participate in the Partnership’s distributions for twenty-four months post-transaction closing. The remaining $600 million, less $107 million of closing adjustments, was paid in cash. In addition, ETE agreed to forgo IDR payments on the Partnership common units issued with this transaction for the twenty-four months post-transaction closing and to suspend the $10 million annual management fee paid by the Partnership for two years post-transaction close.

The common units and Class F common units related to the SUGS Acquisition were issued in a private placement conducted in accordance with the exemption from registration requirements of the Securities Act of 1933, as amended under Section 4(2) thereof. The Class F common units will convert into common units on a one-for-one basis in May 2015.

The cash portion of the SUGS Acquisition was funded from the net proceeds of $600 million of senior notes issued by the Partnership on April 30, 2013 in a private placement. In December 2013, these senior notes were exchanged for senior notes that are substantially identical, except that the exchange senior notes are registered under federal securities law and do not have any transfer restrictions. In January 2014, Panhandle Eastern Pipe Line Company, LP (“PEPL”) entered into an agreement and plan of merger with Southern Union and PEPL Holdings, pursuant to which each of Southern Union and PEPL Holdings were merged with and into PEPL, with PEPL as the surviving entity.  In connection with this merger, PEPL assumed the guarantee of collection with respect to the payment of the principal amounts of the senior notes issued.

The Partnership accounted for the SUGS Acquisition in a manner similar to the pooling of interest method of accounting, as it was a transaction between commonly controlled entities. Under this method of accounting, the Partnership reflected historical balance sheet data for the Partnership and SUGS instead of reflecting the fair market value of SUGS assets and liabilities from the date of acquisition forward. The Partnership retrospectively adjusted its financial statements to include the balances and operations of SUGS from March 26, 2012 (the date upon which common control began). The SUGS Acquisition does not impact historical earnings per unit as pre-acquisition earnings were allocated to predecessor equity.

The assets acquired and liabilities assumed in the SUGS Acquisition were as follows:

	April 30, 2013
Current assets	$	113
Property, plant and equipment, net	1,608
Goodwill	337
Other non-current assets	1
Total assets acquired	$	2,059
Less:
Current liabilities	(93		)
Non-current liabilities	(36		)
Net assets acquired	$	1,930

The following table presents the revenues and net income for the previously separate entities and combined amounts presented herein:

	Years Ended December 31,
	2013			2012
Revenues:
Partnership	$	2,253		$	1,339
SUGS (1)	268			661
Combined	$	2,521		$	2,000
Net income (loss):
Partnership	$	63		$	48
SUGS (1)	(36		)	(14		)
Combined	$	27		$	34

(1) Combined amounts attributable to SUGS include the period from March 26, 2012 to December 31, 2012 for the year ended December 31, 2012, and the period from January 1, 2013 to April 30, 2013 for the year ended December 31, 2013. Subsequent to the closing of the SUGS Acquisition on April 30, 2013, the results of SUGS were attributable to the Partnership.

Basis of presentation. The consolidated financial statements of the Partnership have been prepared in accordance with GAAP and include the accounts of all controlled subsidiaries after the elimination of all intercompany accounts and transactions. Certain prior year numbers have been conformed to the current year presentation