Good day, ladies and gentlemen, and welcome to the Energy Transfer's second quarter earnings call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). I would now like to turn the conference over to your host for today Mr. Martin Salinas, Chief Financial Officer. Please proceed.

Thank you, operator, and good morning, everyone. Welcome to Energy Transfer's second quarter 2013 earnings call. Well, I am accompanied by Kelcy, Mackie, John McReynolds, Jamie Welch and other members of our management team who are available to help answer your questions after our prepared remarks. On today's call, I will start with a few comments about yesterday's announcement regarding ETP's effective exchange of 50% of SXL GP and IDRs for ETP common units owned by ETE followed by a brief update on the status of our projects and some news we received yesterday from the DoE, before touching on our second quarter 2013 results and taking your questions. During the call, I will make forward-looking statements within the meaning of Section 21E of the SEC Act of 1934 based on our beliefs, as well as certain assumptions and information available to us. I would also refer to adjusted EBITDA and distributable cash flow or DCF, both of which are non-GAAP financial measures. Reconciliations of net income to adjusted EBITDA and DCF are provided on our website for your reference. Let's start with the joint announcement we made yesterday, another positive step in our strategic plan which has the added benefit of accelerating the resumption of ETP's distribution growth. If you look at the diagram we included in the press release, ETP will regain approximately 50 million ETP common units held by ETE in exchange for newly issued Class H units that will track 50% of the underlying economics of the GP interest in IDRs of Sunoco Logistics. As stated in the press release, this transaction is expected to deliver significant accretion to ETP and we expect to raise ETP's distribution rate by $0.01 per quarter for the third and fourth quarters of 2013 and will continue to broad the…

(Operator Instructions) Our first question comes from the line of Shneur Gershuni with UBS. Please proceed.

Congrats on the approval with respect to the LNG permit. One of the questions I guess I had with respect to it is, I was wondering if you can, A, remind us about the ownership structure with respect to the opportunity who owns what and so forth. As well as, I realize details are limited expression at this point in time, but are there other projects out that there's information on that you would direct it to us as a reasonable comparable?

Yes. This is Mackie. Our Trunkline project is owned 60% by ETE and 40% by ETP.

Would you push or would you say that the Cheniere project or [Sempra] or of the others that are out there as similar comparable projects dealers or do you think that yours would be unique and different than some of theirs?

Ours is similar in certain aspects. However comparing us to Cheniere, we have existing regasification facility, so we will be using the same footprint for our liquefaction project that already exist on our regasification and similar to Freeport, so those are more greenfield whereas ours is more brownfield. We already have the infrastructure as far as the pipelines taking volumes from regasification and we will be able to yield out and expand those pipelines to transport volumes into liquefaction facility from the liquefaction process, so that the primary difference of our project in the [approved] is that we are already there, already existing and we don't have to build the infrastructure to phase it.

Cool. One follow-up question if I may. I was wondering if you had any comment on the Trunkline opening season and sort of thoughts of how ETP would be financing its share I it comes to fruition.

On our Trunkline conversions to oil?

Yes. Correct.

Our crude pipeline, we are right now open season in, in about a week. However, there will be announced probably a day that we are extending it. We are continuing to negotiate with shippers to accommodate the shippers requested to deliver the barrels to the premium market and so we anticipate that extending to probably the end of September and we are very optimistic that we will fill up that pipeline where the initial market will be, whether it's St. James or another market remains to be seen, but things are going well from a financing perspective. We very likely will have a partner with that being SXL, bringing their expertise and their financial balance sheet, very likely will play a large role but that will be determined as time goes on after we see the project is initially and the commitments that we have.

Your next question comes from the line of Ted Durbin with Goldman Sachs. Please proceed.

If I could ask about the actual accretion about the (Inaudible), I think you said that press release it's about $0.25 to $0.35 accretive distribution by about a $0.01? I am just missing something there. I think there is a disconnect there.

Ted, this is Martin. We guided the Street of an increase for Q3 and Q4. Then as not only projects kick in related to what we are all working on today. Along with the continued growth in SXL, we expect to resume that growth at a little bit higher rate than the $0.01. As you saw in the press release, we are expecting that accretion to also build our coverage ratio up to 1.05 times that we believe is appropriate level for ETP. As part of the transaction, we also rightsized the net subsidies that ETE provided to us in previous transactions. We have kind of balanced that out a little bit in where we had (inaudible) come in from a roll off. We are been trying to smooth that out. So all that balanced out. So while we saw the accretion at that $0.25 to $0.35, we want to ease into the distribution increase while also hitting that 1.05 coverage ratio that we are targeting.

Got it, okay. Understood, it is based on coverage as well. Then the other question on that restructuring is, why not go ahead and do the entire 100% of the SXL GP, as the ultimate goal is to have ETE (inaudible) acquire 50% of this transaction?

Again, a balancing act, given what we see in the value in SXL will be from an ETP perspective. We still felt the desire to retain that 50% outside in SXL and balance that with the growth that we are seeing is from the ETP level. From an ETE perspective, also kind of the same thing. E think while we all agree we would have preferred a 100%, it is one of the things that we would step in at a 50% level today. See how things play out and I think ultimately, as we have stated before and as we have talked about in the press release the goal would be to get ETE back to be a pureplay GP and obviously with it now owning 100% of the GP and IDRs of both ETP and Regency and now effectively 50%, logically the next step would be to get to that 100% level, SXL level. We are just not ready to do that today.

Got it, and then the last one is on (inaudible) stakeholder. Just wondering on the contract (inaudible) would you be comfortable moving forward with potentially not all of the capacity contracts (inaudible) like when you have the entire amount contracted up for Eagle Ford, would BG be willing to take some (inaudible)? Just wondering what is the contract strategy out there?

Yes, this is Mackie again. No, we intend to 100% contract on a fee basis under a long-term agreement.

Your next question comes from the line of Stephen Maresca with Morgan Stanley. Please proceed.

I appreciate all that additional detail on the distributable cash flow. A couple. One first, a point of clarification. You mentioned the growth rate at ETE continuing at the same growth rate in 2014. Should I read that as, you will continue to raise it at that $0.01 a quarter that you mentioned for the remainder of this year? That will continue with ETE for 2014? Or is that not the way it really is? It could be more than that?

Yes, that's not the right way to read it. It could be more than that. I think you probably read a comment in there somewhere stable, we said we were going to resume a 1.0 coverage ratio. We think we are cleaning this up and simplifying ETE enough to get it back to that. We feel comfortable we can do that. So whatever the math suggest we do for our distributions, we will follow the math.

Okay, perfect. Then, another little point of clarification. Exhibit D on that release, that is right now, those numbers are jut now, what is the actual net IDR subsidy to ETP that is remaining? Is that right?

Yes, that is correct.

Okay, so after that schedule, there are no more subsidies for the IDRs between ETE and ETP?

That's right.

Wondering if you could just update us your latest thoughts on financing Lake Charles. Where are you thinking that could head in terms of the financing? Just some sort of color on how we should we be thinking about that? Then, also you mentioned you are still talking on more progress on BG. Is it something where we expect to hear something more this year on the commercial front?

It's Jamie Welch. So, let me take on the Lake Charles. With respect to financing, I think we will very much follow the model used by Cheniere as well as Freeport, in the way that we finance it, so the mix of bank debt, I presume. This is something that is more turnaround or a bond structure out-of-the-box. I think, given the depth of the bank market and probably an expected construction overnight build cost to between $9 billion to $10 billion. You are probably looking about $11 billion total financing. So, that will then mean a mix of debt and equity. Equity will be sourced from third-party outside investors, much like (Inaudible) done with Blackstone, and I think Freeport is doing right now as well for [train II]. I think it's given the universal embrace that has sort of captured and very much captured peoples' attention and focus on the on the LNG side. I don't expect it will have much in the way of challenges of trying to get this finance particularly given. We had some nuances as Mackie said relative to some of the other projects. Ours will be a soul sourced projects that BG will be our partner effectively, which will make it a little different than what obviously both, Freeport and Cheniere have followed. I think you will also see some nuances and differences the way that we approach both construction management and operations which we think will sort of all go well and the way people will look at our project. So, that I think should give you at least enough of a framework to basically think about how we are sort of going to plan to tackle it as far as timing is concerned, what our expectation is, we would like to get this thing done inside of two years from, so we are inside June 30, by 2015. I think as far as the BG side of the equation is concerned, we have had a lot of conversations for a long period of time on both, the liquefaction as well as the reset on the re-gas rates and I think you should expect, you certainly end of this year have very clear definition and specificity around the contractual relationship that will exist.

Okay. That was very helpful. Thank you. One follow-up. Timing in terms of when this potentially is online? Are we thinking something like a 2018 train?

I think it's '19 train, so basically 48 months depending upon what technology we use. Obviously, that is a decision for our partner and ourselves to sort of make, but I think 48 months is sort of pretty safe bet. Then if we do three trains, which is what we currently anticipating, you expected sort of nine month of the clip thereafter so effectively last in service that will be the end of 2020.

I would now like to turn the call back over to Martin Salinas for closing remarks.

Great. Again, thanks everyone for your time this morning and look forward to continued good news coming out of the Energy Transfer family.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day.