UNIT-BASED COMPENSATION PLANS

12 Months Ended

Dec. 31, 2011

Deferred Compensation Arrangements [Abstract]

UNIT-BASED COMPENSATION PLANS

UNIT-BASED COMPENSATION PLANS:

We have issued equity incentive plans for employees, officers and directors, which provide for various types of awards, including options to purchase ETP Common Units, restricted units, phantom units, Common Units, distribution equivalent rights (“DERs”), Common Unit appreciation rights, and other unit-based awards. As of December 31, 2011, an aggregate total of 2,788,181 ETP Common Units remain available to be awarded under our equity incentive plans.

Unit Grants

We have granted restricted unit awards to employees that vest over a specified time period, typically a five-year period at 20% per year, with vesting based on continued employment as of each applicable vesting date. Upon vesting, ETP Common Units are issued. These unit awards entitle the recipients of the unit awards to receive, with respect to each Common Unit subject to such award that has not either vested or been forfeited, a cash payment equal to each cash distribution per Common Unit made by us on our Common Units promptly following each such distribution by us to our Unitholders. We refer to these rights as “distribution equivalent rights.”

Under our equity incentive plans, our non-employee directors each receive grants that vest ratably over three years and do not entitle the holders to receive distributions during the vesting period.

Award Activity

The following table shows the activity of the awards granted to employees and non-employee directors:

	Number of Units		Weighted Average Grant-Date Fair Value Per Unit
Unvested awards as of December 31, 2010	1,936,578		$	43.95
Awards granted	1,386,251		48.35
Awards vested	(610,557	)	44.07
Awards forfeited	(148,563	)	42.74
Unvested awards as of December 31, 2011	2,563,709		46.37

During the years ended December 31, 2011, 2010 and 2009, the weighted average grant-date fair value per unit award granted was $48.35, $49.82 and $43.56, respectively. The total fair value of awards vested was $26.9 million, $16.5 million and $14.7 million, respectively based on the market price of ETP Common Units as of the vesting date. As of December 31, 2011, a total of 2,563,709 unit awards remain unvested, for which ETP expects to recognize a total of $79.4 million in compensation expense over a weighted average period of 1.9 years.

Related Party Awards

McReynolds Energy Partners, L.P., the general partner of which is owned and controlled by the President of the entity that indirectly owns our General Partner, awarded to certain officers of ETP certain rights related to units of ETE previously issued by ETE to such ETE officer. These rights include the economic benefits of ownership of these ETE units based on a five year vesting schedule whereby the officer will vest in the ETE units at a rate of 20% per year. As these ETE units are conveyed to the recipients of these awards upon vesting from a partnership that is not owned or managed by ETE or ETP, none of the costs related to such awards are paid by ETP or ETE unless this partnership defaults under its obligations pursuant to these unit awards. As these units were outstanding prior to these awards, these awards do not represent an increase in the number of outstanding units of either ETP or ETE and are not dilutive to cash distributions per unit with respect to either ETP or ETE.

We are recognizing non-cash compensation expense over the vesting period based on the grant-date fair value of the ETE units awarded the ETP employees assuming no forfeitures. For the years ended December 31, 2011, 2010 and 2009, we recognized non-cash compensation expense, net of forfeitures, of $2.0 million, $3.7 million and $6.4 million, respectively, as a result of these awards. As of December 31, 2011, rights related to 180,000 ETE common units remain outstanding, for which we expect to recognize a total of $1.0 million in compensation expense over a weighted average period of 1.0 years.