Good day ladies and gentlemen and welcome to the first quarter 2010 Regency Energy Partners LP earnings conference call. My name is Eric; I’ll be your audio coordinator for today. At this time, all participants are in a listen-only mode, and we will facilitate a question-and-answer session at the end of the presentation. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to Shannon Ming, Vice President of Investor Relations and Corporate Finance Support. Please proceed.

Good morning, everyone. Welcome to our first conference call. Today, you will hear from Byron Kelley, our Chairman, President and CEO and from Stephen Arata, our Executive Vice President and Chief Financial Officer. Following our prepared remarks this morning, we will turn the call over for your questions. Distribution of the press release and the slides that we use today are available on our website at www.regencyenergy.com. The first slide is a presentation, describes our use of forward-looking statements and lists some of the risk factors that may affect actual results. Also included in the presentation today are various non-GAAP measures that have been reconciled back to GAAP or generally accepted accounting principles. These schedules are at the end of the presentation starting on slide 27. With that, I will turn the call over to Mr. Kelley.

Well, good morning. Let me add my welcome to each of you for joining us today. We always look forward to providing with you an update on the Company’s performance as well as reviewing with you the current market trends that are taking place in our industry. We will begin really the presentation on slide three, and I would invite you to turn to that page and presentation. I’d like to being with touching on some highlights from the first quarter and begin with our operational achievements. Our diversified assets generated a very solid adjusted EBITDA growth in the first quarter of 2010. I think this performance is a testament to our strong fee-based set of assets, and to the focus and hard work of all our employees. First quarter was also an important juncture for Regency as we placed the Haynesville expansion project in service in January, late January and this as you recall the first major pipeline extension to come online in the Haynesville region. Our capacity on both the expansion and on the Red River Lateral extension that we added after the project began are fully subscribed, and the time of completion of this project to meet our customer commitments as well as bringing the project to fruition on the budget is indicative of the quality of our commercial technical operation and the financial teams at Regency in. I certainly want to extend my sincere appreciation to all of the Regency employees for job well done with this project. Moving on to some highlights on our financial achievements; we successfully refinanced our credit facility in March extending the maturity date to June of 2014. Also during the first quarter, Regency’s outlook was modified from negative to stable by Moody's and Standard & Poor's. And as you're aware,…

Thanks Byron. If you turn to slide 16, we have our consolidated operating results year-over-year. For the three months ended March 31st, Regency had a net loss of $0.6 million compared to net income of $148 million for the first quarter 2009. The year-over-year change was primarily due to the assets of the gain associated with the contribution of rigs to the Haynesville joint venture, which accounted for $134 million of the difference. In addition, we had a $7 million decrease primarily related to a mark-to-market change in the value of our commodity derivatives and a $3 million decrease in other income and deductions, which primarily relates to the non-cash value change associated with the embedded derivative related to the Series A preferred units, which we issued in September of last year. Quarter-over-quarter, we reduced our O&M cost by 10% and while our G&A cost have increased less than 4% year-over-year. on slide 17, we show our commodity price risk management status. We currently have 73% of NGLs hedged, 84% of condensate and 74% of natural gas linked hedge for the balance of 2010. In the first quarter, we executed additional hedges for 2011, and as a result we have now for 2011 hedged 41% of our NGL equity linked. We’ve hedged 50% of our condensate equity linked through WTI crude swabs, and 23% of our 2011 natural gas links. A summary of our executed commodity hedges is shown on slide 18. Consistent with our quarterly hedging program, we implemented a few quarters ago, we plan to begin layering in our 2012 hedges during the current quarter. Slide 19 shows our sensitivity to commodity price changes for the balance of this year. As the chart shows the $10 per barrel movement include along with the similar percentage change in NGL…

Thank you. (Operator Instructions). Your first question comes from the line of Jeremy Tonet with UBS. Please proceed.

Hi. Good morning.

Hi, morning Jeremy.

I was wondering at the JV level, the Haynesville JV, is there any leverage currently employed or what’s the thinking around that for your future expansions?

This is Stephen, Jeremy. We have very small working capital facility at the joint venture now; it’s a $25 million facility. At the end of the first quarter we had about $4 million drawn on that just for purposes of running the business. We do not have any leverage now although we do expect future capital projects at the JV to be funded through that which would eventually give us capital structure more in line with our peers at that asset. But for now we don’t have any plans to put leverage there.

Okay great and then shifting over to the corporate and other segment, it came in a bit stronger than we anticipated. Would you be able to provide a bit more color on what the drivers were driving the increases year-over-year?

The biggest driver there is well there is two significant businesses there; one is our Gulf States, our pipeline interstate pipeline that connects into rigs. That business did a little bit better year-over-year but the real driver here is the function of how we account for the Haynesville joint venture. We get reimbursed by our partners for the general and administrative cost and that we bear to run that joint venture and that reimbursement shows up as a margin in our corporate and other segment. And so we would expect that to continue to be relatively strong throughout the rest of the year.

So, is this kind of a good run rate for us then at these levels or?

It's probably a little bit high but it's going to be much more in line than what you've seen historically.

Great, that’s helpful, thank you.

Your next question comes from the line of Lenny Brecken with Brecken Capital. Please proceed.

Yes, I know you've done this, I think at the annual meeting but the $148 million to be invested in the processing and gathering segment, can you just elaborate what opportunities exist?

Yes, I'd be happy to give you a little more insight. The vast majority of the dollars are related to the two Logansport projects we have. In addition we have some capital set aside to grow our business in South Texas. As you can see, as Byron talked about, that’s where most of our volume growth is coming from and we're going to spend some capital to achieve that growth. So I would say probably 80% of the capital is dedicated to those two regions and the rest of it is spread out among the rest of the business.

So is there any particular field that they are tied to that we should be aware of? The obvious ones are…?

Well in South Texas it’s the Eagle Ford Shale play and in Logansport, obviously it’s a Haynesville area and the bossier area and then out in West Texas we're spending a little money as oil prices have come up in a number of wells. A lot of activity there. We've been collecting some additional supplies out there and that’s principally where the capital is going.

Want to give us a hint that where your Eagle Ford capacity will be? Is that the processing or gathering you're investing in there?

It's all gathering and we have some capacity there that we've been filling up. I think we've said in the past that we expect to maybe get our gathering system recently full with existing capacity by the end of the year and then we're looking at options and ways to expand that capacity and increase efficiency down there while rerouting some of our flow lines in that direction to pick up additional volume.

In processing you don’t plan on making any investment?

We right now have capacity in some facilities down there that we will need to full utilize over time before we'll be looking in the market to do any expansion on the processing side.

So is that, just to be clear, is that a function of just over – not oversupply but supply from your competitors and excess capacity or do you have and you don’t think the business opportunities will be able to fulfill?

There is a sizable amount of processing capacity in the area that if you just look at a general market trend, will need to be utilized before there are major investments in processing and so somewhere down the road, someone is going to be looking at some bigger projects but it's where we're looking for investments this year. We don’t see any investments really in the processing side of the business down there which are really focused on gathering.

Okay.

Now that’s aside from maybe a little efficiency increases that we're doing on some of our existing facilities.

Okay, just one last question. It seems the industry as a whole is just expanding capacity. Can you just give us some color as to, at the macro level, what's driving that? Is that the exports to Asia or something? Is it the replacement that’s going on in the petrochemical industry? It's just maybe a simple question but I just want to hear your opinion about that and depending on your answer is there any risk you see in maybe the industry maybe going into investing too much money in supply.

Thank you to answer that. You really need to backup about three or four years ago, and look at the supply-demand dynamics that were taking place. There were several things taken place. First of all, projections of decreasing Gulf Coast supply over time, some of that’s still going to happen. Lot of the traditional basins were decreasing, you had some pretty good forecast for growth in the power market because we’re back before the recession came in, and slowed that down a little bit. Those factors were showing a big supply-demand imbalance. You overly that with some technological improvements that came into the industry that allowed the horizontal drilling in the Shale plays, which made those plays generally much more economically than conventional plays to drill and so you had some tremendous activity that began when the Barnet, Barnett, Woodford, Fayetteville and then moved on and to the Haynesville area. Now we’re seeing that activity in Marcellus and South Texas and so it’s really economic-driven that this is where the producers can get their better returns and so they have addressed within drilling those. Now in general is there a little slowdown in demand that we’ve seen from the recession, yes and so you’ll have to work back through that. But if you look at the longer term hitch in the U.S. these basins that have been drilling are all going to be needed in the capacity to move this gas, it’s going to need, is will be needed and actually there will be some incremental capacity, it’s going to have to be build. If you want to start looking at post, say four, five years down the road because conventional supplies will declines. We also – I don't know if anybody has a full handle on LNG gas, but it’s certainly looking like LNG is going to be directed more to Asia, and a lot more to Asia and to some extent in Europe and the United States. So, our analysis which shows that we’re going to need all of this gas it’s been real – we're short of a little bubble right now. There is no question, and that's what's beginning to push some of the prices back.

Okay. Thank you. I will enter another question in queue.

Your next question comes from the line of John Edward with Morgan, Keegan. Please proceed.

Yes. Hi, it's John Edwards. Good morning everybody.

Good morning, John.

Just real quick, are you changing your guidance at all for the acquisition of the 7% from GE?

No, that was built in to our original guidance that we previously gave, and so we're not making any modifications to that number.

Okay, great, all right. That's all I have. Thank you.

Okay. Thank you.

(Operator Instructions).

Thank you for taking the time to join us today. If you any additional questions, feel free to give us a call.

Thank you for your participation in today's conference. This concludes our presentation. You may now disconnect. Have a good day.