Note 9. Investments in Unconsolidated Affiliates

We own interests in a number of related businesses that are accounted for using the equity method of accounting. We group our investments in unconsolidated affiliates according to the business segment to which they relate (see Note 14 for a general discussion of our business segments). The following table shows our investments in unconsolidated affiliates by business segment at the dates indicated:

	Ownership Interest at December 31, 2011	December 31,
	Ownership Interest at December 31, 2011	2011		2010
NGL Pipelines & Services:
Venice Energy Service Company, L.L.C. (“VESCO”)	13.1%	$	35.5	$	31.9
K/D/S Promix, L.L.C. (“Promix”)	50%		40.7		43.5
Baton Rouge Fractionators LLC (“BRF”)	32.2%		21.0		21.9
Skelly-Belvieu Pipeline Company, L.L.C. (“Skelly-Belvieu”)	50%		35.0		34.2
Texas Express Pipeline LLC (“TEP”)	45%		13.9		--
Onshore Natural Gas Pipelines & Services:
Evangeline (1)	49.5%		4.4		6.4
White River Hub, LLC (“White River Hub”)	50%		25.7		26.2
Onshore Crude Oil Pipelines & Services:
Seaway Crude Pipeline Company (“Seaway”)	50%		170.7		172.2
Offshore Pipelines & Services:
Poseidon Oil Pipeline Company, L.L.C. (“Poseidon”)	36%		55.4		57.2
Cameron Highway Oil Pipeline Company (“Cameron Highway”)	50%		222.8		233.7
Deepwater Gateway, L.L.C. (“Deepwater Gateway”)	50%		94.6		98.4
Neptune Pipeline Company, L.L.C. (“Neptune”)	25.7%		51.1		53.9
Southeast Keathley Canyon Pipeline Company L.L.C. (“SEKCO”)	50%		1.0		--
Petrochemical & Refined Products Services:
Baton Rouge Propylene Concentrator, LLC (“BRPC”)	30%		9.5		10.1
Centennial Pipeline LLC (“Centennial”)	50%		51.8		63.1
Other (2)	Various		3.4		3.6
Other Investments:
Energy Transfer Equity	13.1%		1,023.1		1,436.8
Total		$	1,859.6	$	2,293.1

(1) Evangeline refers to our ownership interests in Evangeline Gas Pipeline Company, L.P. and Evangeline Gas Corp., collectively. (2) Other unconsolidated affiliates include a 50% interest in a propylene pipeline extending from Mont Belvieu, Texas to La Porte, Texas and a 25% interest in a company that provides logistics communications solutions between petroleum pipelines and their customers.

With the exception of Energy Transfer Equity, all of these investments are in non-traded privately held companies, the fair values of which are not practicable to estimate. At December 31, 2011, the fair value of our investment in Energy Transfer Equity was $1.19 billion based on the closing market price of Energy Transfer Equity's common units on that date.

NGL Pipelines & Services

The business of each investee included in our NGL Pipelines & Services segment is briefly described as follows:

§	VESCO owns a natural gas processing facility and related assets located in south Louisiana.

§	Promix owns an NGL fractionation facility and related storage and pipeline assets located in south Louisiana.

§	BRF owns an NGL fractionation facility located in south Louisiana.

§	Skelly-Belvieu owns a pipeline that transports mixed NGLs to markets in southeast Texas.

TEP was formed in September 2011 to design and construct a new NGL pipeline (the “Texas Express Pipeline”) that will originate in Skellytown, Texas and extend approximately 580 miles to our NGL fractionation and storage facilities in Mont Belvieu, Texas. The Texas Express Pipeline is expected to begin service in the second quarter of 2013.

Onshore Natural Gas Pipelines & Services

The business of each investee included in our Onshore Natural Gas Pipelines & Services segment is briefly described as follows:

§	Evangeline owns a natural gas pipeline located in south Louisiana.

§	White River Hub owns a natural gas hub located in northwest Colorado.

Onshore Crude Oil Pipelines & Services

Seaway owns a pipeline that transports crude oil from a marine terminal located in Freeport, Texas, to Cushing, Oklahoma, and from a marine terminal located in Texas City, Texas, to refineries in the Texas City and Houston, Texas areas. In November 2011, Enterprise and Enbridge Inc. agreed to reverse the Seaway crude oil pipeline from Cushing, Oklahoma to the U.S. Gulf Coast. Pending regulatory approval, the line could operate in reversed service with an initial capacity of 150 MBPD by the second quarter of 2012. Following pump station additions and other modifications, which are anticipated to be completed in the first quarter of 2013, we anticipate the capacity of the reversed Seaway pipeline will be up to 400 MBPD (assuming a mix of light and heavy grades of crude oil).

Offshore Pipelines & Services

The business of each investee included in our Offshore Pipelines & Services segment is briefly described as follows:

§	Poseidon owns a crude oil pipeline that gathers production from the outer continental shelf and deepwater areas of the Gulf of Mexico for delivery to onshore locations in south Louisiana.

§	Cameron Highway owns a crude oil pipeline that gathers production from deepwater areas of the Gulf of Mexico, primarily the South Green Canyon area, for delivery to refineries and terminals in southeast Texas.

§	Deepwater Gateway owns a crude oil and natural gas platform that processes production from the Marco Polo, K2, K2 North and Genghis Khan fields located in the South Green Canyon area of the Gulf of Mexico.

§	Neptune owns natural gas pipeline systems located in the Gulf of Mexico.

SEKCO was formed in December 2011 to construct a new crude oil gathering pipeline (“SEKCO Oil Pipeline”) in the deepwater Gulf of Mexico. The 149-mile pipeline is being designed with a capacity of 115 MBPD and would connect the Lucius-truss spar floating production platform to an existing junction platform which is part of our Poseidon pipeline system. The SEKCO Oil Pipeline is expected to begin service by mid-2014.

Petrochemical & Refined Products Services

The business of each significant investee included in our Petrochemical & Refined Products Services segment is briefly described as follows:

§	BRPC owns a propylene fractionation facility located in south Louisiana.

§	Centennial owns an interstate refined products pipeline extending from the upper Texas Gulf Coast to central Illinois that effectively loops our refined products pipeline system providing incremental transportation capacity into Mid-continent markets.

Other Investments

This segment reflects our noncontrolling ownership interest in Energy Transfer Equity, which was accounted for using the equity method as of December 31, 2011. In May 2007, Holdings paid $1.65 billion to acquire 38,976,090 limited partner common units of Energy Transfer Equity and approximately 34.9% of the membership interests of LE GP, which is the general partner of Energy Transfer Equity. In January 2009, Holdings acquired an additional 5.7% membership interest in LE GP for $0.8 million. In December 2010, we sold our entire membership interest in LE GP and recorded a nominal gain on the transaction.

Energy Transfer Equity is a publicly traded partnership, which currently owns the general partner of Energy Transfer Partners, L.P. (“ETP”) and approximately 50.2 million ETP limited partner units, as well as the general partner of Regency Energy Partners LP (“Regency”) and approximately 26.3 million Regency limited partner units. Energy Transfer Equity and its affiliates are part of the midstream energy industry.

At December 31, 2011, we owned 29,303,514 common units of Energy Transfer Equity. Equity investments are part of our business strategy; however, we may from time-to-time elect to divest all or a portion of our equity investments in order to redeploy capital. During 2011, we sold a total of 9,672,576 Energy Transfer Equity common units for net cash proceeds of $375.2 million and recorded aggregate gains of $27.2 million on the sales. Proceeds from these transactions were used for general company purposes, including funding capital expenditures.

In January 2012, we sold 22,762,636 million common units of Energy Transfer Equity in a private transaction, which generated cash proceeds of approximately $825.1 million. Proceeds from this sale were used for general company purposes, including funding capital expenditures. As of the date of this report, we own approximately 6 million common units of Energy Transfer Equity, which represent less than 3% of its common units outstanding at February 15, 2012.

Equity Earnings and Excess Cost

The following table presents our equity in income (loss) of unconsolidated affiliates by business segment for the periods presented:

	For Year Ended December 31,
	2011			2010			2009
NGL Pipelines & Services	$	21.8		$	17.7		$	11.3
Onshore Natural Gas Pipelines & Services		5.5			4.6			4.9
Onshore Crude Oil Pipelines & Services		(4.1	)		6.7			9.3
Offshore Pipelines & Services		27.1			44.8			36.9
Petrochemical & Refined Products Services		(18.7	)		(9.0	)		(11.2	)
Other Investments		14.8			(2.8	)		41.1
Total	$	46.4		$	62.0		$	92.3

On occasion, the price we pay to acquire an ownership interest in a company exceeds the underlying carrying value of the capital accounts we acquire. Such excess cost amounts are included within the carrying values of our investments in unconsolidated affiliates.

The following table presents the unamortized excess cost amounts by business segment at the dates indicated:

	December 31,
	2011		2010
NGL Pipelines & Services	$	24.7	$	25.7
Onshore Crude Oil Pipelines & Services		19.2		19.7
Offshore Pipelines & Services		14.8		16.0
Petrochemical & Refined Products Services		2.9		3.0
Other Investments (1)		1,119.0		1,525.1
Total	$	1,180.6	$	1,589.5

(1) Holdings' investment in Energy Transfer Equity exceeded its share of the historical cost of the underlying net assets of such investee by $1.66 billion in May 2007. At December 31, 2011, this basis differential decreased to $1.12 billion (after taking into account related amortization amounts and the sale of 9.67 million Energy Transfer Equity common units during 2011) and consisted of the following: $348.7 million attributed to fixed assets; $383.1 million attributed to the incentive distribution rights (an indefinite-life intangible asset) held by Energy Transfer Equity in the cash flows of ETP; $136.7 million attributed to amortizable intangible assets and $250.5 million attributed to equity method goodwill. These unamortized excess cost amounts are being amortized over their estimated economic lives of 20-27 years, as applicable.

We amortize such excess cost amounts as a reduction in equity earnings in a manner similar to depreciation. The following table presents our amortization of such excess cost amounts by business segment for the periods presented:

	For Year Ended December 31,
	2011		2010		2009
NGL Pipelines & Services	$	1.0	$	0.9	$	0.9
Onshore Crude Oil Pipelines & Services		0.7		0.7		0.7
Offshore Pipelines & Service		1.2		1.3		1.3
Petrochemical & Refined Products Services		0.1		1.0		3.9
Other Investments		31.5		36.3		36.6
Total	$	34.5	$	40.2	$	43.4

The following table presents forecasted amortization of excess cost amounts for the years indicated. The forecast takes into account the January 2012 sale of Energy Transfer Equity units and the resulting reduction in unamortized excess cost amounts.

2012				2013				2014				2015				2016
$	3.3			$	3.0			$	3.0			$	3.0			$	3.0

Summarized Combined Financial Information of Unconsolidated Affiliates

Combined balance sheet information for the last two years and results of operations data for the last three years for our unconsolidated affiliates, including Energy Transfer Equity, are summarized in the following table (all data presented on a 100% basis):

	At December 31,
	2011		2010
BALANCE SHEET DATA:
Current assets	$	1,680.3	$	1,490.3
Property, plant and equipment, net		16,413.5		13,775.5
Other assets		4,893.7		4,266.2
Total assets	$	22,987.5	$	19,532.0

Current liabilities	$	1,955.7	$	1,208.1
Other liabilities		11,897.1		10,277.0
Combined equity		9,134.7		8,046.9
Total liabilities and combined equity	$	22,987.5	$	19,532.0

	For Year Ended December 31,
		2011		2010		2009
INCOME STATEMENT DATA:
Revenues	$	9,119.9	$	7,437.0	$	6,155.4
Operating income		1,393.4		1,241.8		1,279.6
Net income		458.1		386.8		598.4

The credit agreements of Poseidon and Centennial restrict their ability to pay cash dividends if a default or event of default (as defined in each credit agreement) has occurred and is continuing at the time such payments are scheduled to be paid. These businesses were in compliance with the terms of their credit agreements at December 31, 2011.