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Partners' Capital and Distributions (Tables)

6 Months Ended

Jun. 30, 2012

Partners' Capital and Distributions

Total cash distributions paid or to be paid

The following table details the distributions paid during or pertaining to the first half of 2012, net of reductions to the general partner’s incentive distributions (in millions, except per unit amounts):

				Distributions Paid												Distributions
				Common			General Partner									per limited
Date Declared		Date Paid or To Be Paid		Units			Incentive			2%			Total			partner unit
July 9, 2012		August 14, 2012 (1)		$	174		$	69		$	4		$	247		$	1.0650
April 10, 2012		May 15, 2012		$	169		$	65		$	3		$	237		$	1.0450
January 10, 2012		February 14, 2012		$	159		$	63		$	3		$	225		$	1.0250

(1) Payable to unitholders of record at the close of business on August 3, 2012, for the period April 1, 2012 through June 30, 2012.

Equity offerings of common units

During the first six months of 2012, we completed an equity offering of our common units that was not associated with our Continuous Offering Program, as shown in the table below (in millions, except unit and per unit data):

										General
				Gross			Proceeds			Partner						Net
Date		Units Issued		Unit Price			from Sale			Contribution			Costs			Proceeds
March 2012 (1)		5,750,000		$	80.03		$	460		$	9		$	(14	)	$	455

(1) This offering of common units was an underwritten transaction that required us to pay a gross spread. The net proceeds from this offering were used to fund a portion of the BP NGL Acquisition, to reduce outstanding borrowings under our credit facilities and for general partnership purposes.

Operational and financial benchmarks for conversion of the Series B subordinated units into Series A subordinated units

The following table presents the operational and financial benchmarks, as modified, for conversion of the Series B subordinated units into Series A subordinated units for each tranche (units in millions):

		Series B Subordinated Units to Convert into Series A Subordinated Units		Working Gas Storage Capacity (Bcf)		Annualized Distribution Level (1)
Tranche 1		2.6		29.6		$	1.71
Tranche 2		2.8		35.6		$	1.71
Tranche 3		2.1		41.6		$	1.71
Tranche 4		3.0		48.0		$	1.71
Tranche 5		3.0		48.0		$	1.80

(1) For satisfaction of this benchmark, PNG must, for two consecutive quarters, (i) generate distributable cash flow sufficient to pay a quarterly distribution of at least the annualized distribution benchmark on the weighted average number of common units and Series A subordinated units and all of such Series B subordinated units outstanding during such quarter plus (ii) distribute available cash of at least the annualized distribution benchmark on all outstanding common units and Series A subordinated units and the corresponding distributions on PNG’s general partner’s 2% interest and the related distributions on the incentive distribution rights. See Note 5 to our Consolidated Financial Statements included in Part IV of our 2011 Annual Report on Form 10-K for a complete discussion of our Series B subordinated units.

Schedule of changes in noncontrolling interests in partners' capital

The following table reflects the changes in the noncontrolling interests in partners’ capital (in millions):

		Six Months Ended
		June 30,
		2012			2011
Beginning balance		$	524		$	231
Sale of noncontrolling interests in a subsidiary		—			306
Net income attributable to noncontrolling interests		15			10
Distributions to noncontrolling interests		(24		)	(16		)
Equity compensation expense		1			2
Other comprehensive income/(loss):
Reclassification adjustments		(7		)	—
Net deferred gain on cash flow hedges		1			—
Ending balance		$	510		$	533