Energy Transfer Partners Reports Third Quarter Results

  Energy Transfer Partners Reports Third Quarter Results

Business Wire

DALLAS -- November 07, 2012

Energy Transfer Partners, L.P. (NYSE:ETP) today reported its financial results
for the quarter ended September30, 2012.

Adjusted EBITDA for Energy Transfer Partners, L.P. ("ETP" or the
"Partnership") for the three months ended September 30, 2012 totaled $481.7
million, an increase of $77.5 million over the three months ended September
30, 2011. Distributable Cash Flow for the three months ended September 30,
2012 totaled $339.5 million, an increase of $73.4 million over the three
months ended September 30, 2011. Income from continuing operations for the
three months ended September 30, 2012 was $193.4 million, an increase of
$115.8 million over the three months ended September 30, 2011. Net income for
the three months ended September 30, 2012 totaled $46.2 million, a decrease of
$29.8 million from the three months ended September 30, 2011.

Adjusted EBITDA for ETP for the nine months ended September 30, 2012 totaled
$1.48 billion, an increase of $220.5 million over the nine months ended
September 30, 2011. Distributable Cash Flow for the nine months ended
September 30, 2012 totaled $935.2 million, an increase of $108.7 million from
the nine months ended September 30, 2011. Income from continuing operations
for the nine months ended September 30, 2012 was $1.45 billion, an increase of
$961.8 million over the nine months ended September 30, 2011. Net income for
the nine months ended September 30, 2012 totaled $1.30 billion, an increase of
$816.2 million over the nine months ended September 30, 2011.

As of and during the nine months ended September 30, 2012, ETP's financial
position and operating results were impacted by the following transactions:

  *Citrus Dropdown. ETP acquired a 50% interest in Citrus Corp. (“Citrus”) in
    exchange for approximately $1.9 billion in cash and $105.0 million of ETP
    common units. Citrus was reflected as an equity method investment in ETP's
    consolidated financial statements from the date of acquisition, March 26,
    2012. In connection with this transaction, ETE also relinquished its
    rights to $220.0 million of the incentive distributions from ETP that it
    would otherwise be entitled to receive over 16 consecutive quarters.
  *Propane Contribution. On January 12, 2012, ETP completed the contribution
    of its retail propane operations to AmeriGas Partners, L.P. (“AmeriGas”)
    in exchange for approximately $2.7 billion, consisting of cash and
    AmeriGas common units (the "Propane Contribution"), which resulted in the
    recognition of a $1.1 billion gain on deconsolidation in ETP's
    consolidated financial statements during the nine months ended September
    30, 2012, and ETP's consolidated financial statements now reflect ETP's
    equity method investment in AmeriGas.
  *Tender Offer. ETP used the cash proceeds from the Propane Contribution
    discussed above to repay borrowings under its existing revolving credit
    facility and to extinguish approximately $750.0 million of senior notes
    outstanding through a tender offer. As a result of the tender offer, a
    loss on extinguishment of debt of $115.0 million was recorded during the
    three months ended March 31, 2012.
  *Discontinued Operations. In October 2012, we sold ETC Canyon Pipeline, LLC
    (“Canyon”) for approximately $207 million. For the three and nine months
    ended September 30, 2012, the results of continuing operations of Canyon
    have been reclassified to loss from discontinued operations and the prior
    year amounts have been restated to present Canyon's operations as
    discontinued operations. Canyon's assets and liabilities have been
    reclassified and reported as assets and liabilities held for sale as of
    September 30, 2012, and a $145 million non-cash write-down of the carrying
    amounts of the Canyon assets to net recoverable value was recorded during
    the three months ended September 30, 2012.

An analysis of the Partnership's segment results and other supplementary data
is provided after the financial tables shown below. The Partnership has
scheduled a conference call for 8:30 a.m. Central Time, Thursday November 8,
2012 to discuss the third quarter 2012 results. The conference call will be
broadcast live via an internet web cast which can be accessed through
www.energytransfer.com and will also be available for replay on the
Partnership's website for a limited time.

Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial measures
used by industry analysts, investors, lenders, and rating agencies to assess
the financial performance and the operating results of the Partnership's
fundamental business activities and should not be considered in isolation or
as a substitute for net income, income from operations, cash flows from
operating activities, or other GAAP measures. A table reconciling Adjusted
EBITDA and Distributable Cash Flow with appropriate GAAP financial measures is
included in the summarized financial information included in this release.

Energy Transfer Partners, L.P. (NYSE:ETP) is a master limited partnership
owning and operating one of the largest and most diversified portfolios of
energy assets inthe United States. ETP currently has natural gas operations
that include approximately 24,000 miles of gathering and transportation
pipelines, treating and processing assets, and storage facilities. ETP also
owns the general partner interests, 100% of the incentive distribution rights,
and a 32.4% limited partnership interest inSunoco Logistics Partners
L.P.(NYSE:SXL), which operates a geographically diverse portfolio of crude
oil and refined products pipelines, terminalling and crude oil acquisition and
marketing assets. ETP also holds a 70% interest in Lone Star NGL, a joint
venture that owns and operates natural gas liquids storage, fractionation and
transportation assets inTexas, LouisianaandMississippi. In addition, ETP
holds controlling interest in a corporation (ETP Holdco Corporation) that
ownsSouthern Union CompanyandSunoco, Inc.ETP’s general partner is owned by
Energy Transfer Equity, L.P. (NYSE:ETE). For more information, visit the
Energy Transfer Partners, L.P. website at www.energytransfer.com.

Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership, which
owns the general partner and 100% of the incentive distribution rights (IDRs)
ofEnergy Transfer Partners, L.P.(NYSE:ETP) and approximately 50.2 million
ETP limited partner units; and owns the general partner and 100% of the IDRs
of Regency Energy Partners LP(NYSE:RGP) and approximately 26.3 million RGP
limited partner units. ETE also owns a non-controlling interest in a
corporation (ETP Holdco Corporation) that ownsSouthern Union Company
andSunoco, Inc.The ETE family of companies owns approximately 69,000 miles
of natural gas, natural gas liquids, refined products, and crude pipelines.
For more information, visit theEnergy Transfer Equity, L.P.website at
www.energytransfer.com.

Sunoco Logistics Partners L.P. (NYSE:SXL), headquartered in Philadelphia, is a
master limited partnership that owns and operates a logistics business
consisting of a geographically diverse portfolio of complementary pipeline,
terminalling and crude oil acquisition and marketing assets. The Crude Oil
Pipelines segment consists of approximately 5,400 miles of crude oil
pipelines, located principally in Oklahoma and Texas. The Crude Oil
Acquisition and Marketing segment consists of acquisition and marketing of
crude oil and is principally conducted in the midcontinent and consists of
approximately 200 crude oil transport trucks and approximately 120 crude oil
truck unloading facilities. The Terminal Facilities segment consists of
approximately 42 million shell barrels of refined products and crude oil
terminal capacity (including approximately 22 million shell barrels of
capacity at the Nederland Terminal on the Gulf Coast of Texas and
approximately 5 million shell barrels of capacity at the Eagle Point terminal
on the banks of the Delaware River in New Jersey). The Refined Products
Pipelines segment consists of approximately 2,500 miles of refined products
pipelines located in the northeast, midwest and southwest United States, and
equity interests in four refined products pipelines. Sunoco Logistics' general
partner is owned by Energy Transfer Partners, L.P. For more information, visit
the Sunoco Logistics Partners, L.P. web site at  www.sunocologistics.com.

The information contained in this press release is available on our website at
www.energytransfer.com.

                                                               
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(unaudited)

                                                                  
                                                  September 30,   December 31,
                                                  2012            2011
ASSETS
                                                                  
CURRENT ASSETS                                    $  1,089,717    $ 1,275,494
                                                                  
PROPERTY, PLANT AND EQUIPMENT, net                   12,858,320     12,306,366
                                                                  
NON-CURRENT ASSETS HELD FOR SALE                     190,996        —
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED        3,197,520      200,612
AFFILIATES
LONG-TERM PRICE RISK MANAGEMENT ASSETS               41,879         25,537
GOODWILL                                             600,152        1,219,597
INTANGIBLE ASSETS, net                               161,847        331,409
OTHER NON-CURRENT ASSETS, net                       157,129       159,601
Total assets                                      $  18,297,560   $ 15,518,616
                                                                  
LIABILITIES AND EQUITY
                                                                  
CURRENT LIABILITIES                               $  1,570,481    $ 1,585,169
                                                                  
LONG-TERM DEBT, less current maturities              8,690,740      7,388,170
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES          72,660         42,303
OTHER NON-CURRENT LIABILITIES                        174,351        152,550
                                                                  
COMMITMENTS AND CONTINGENCIES
                                                                  
EQUITY:
Total partners' capital                              6,913,196      5,721,707
Noncontrolling interest                             876,132       628,717
Total equity                                        7,789,328     6,350,424
Total liabilities and equity                      $  18,297,560   $ 15,518,616

                                               
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per unit data)
(unaudited)
                                                  
                  Three Months Ended              Nine Months Ended
                  September 30,                   September 30,
                   2012         2011          2012         2011      
REVENUES:
Natural gas       $ 603,449       $ 679,889       $ 1,480,729     $ 1,963,135
sales
NGL sales           326,841         333,078         1,011,735       756,740
Gathering,
transportation      399,494         392,080         1,162,386       1,094,762
and other fees
Retail propane      —               213,496         87,082          962,258
sales
Other              90,690        82,920        198,830       217,085   
Total revenues     1,420,474     1,701,463     3,940,762     4,993,980 
COSTS AND
EXPENSES:
Cost of             886,888         1,070,076       2,319,318       3,067,316
products sold
Operating           99,602          193,364         349,465         563,917
expenses
Depreciation
and                 94,812          106,419         282,485         294,356
amortization
Selling,
general and        47,295        57,745        151,310       158,000   
administrative
Total costs and    1,128,597     1,427,604     3,102,578     4,083,589 
expenses
OPERATING           291,877         273,859         838,184         910,391
INCOME
OTHER INCOME
(EXPENSE):
Interest
expense, net of     (112,141  )     (124,000  )     (383,271  )     (347,706  )
interest
capitalized
Equity in
earnings of         7,920           6,713           63,011          13,386
unconsolidated
affiliates
Gain on
deconsolidation     —               —               1,056,709       —
of Propane
Business
Loss on
extinguishment      —               —               (115,023  )     —
of debt
Losses on
non-hedged          (65       )     (68,595   )     (8,087    )     (64,705   )
interest rate
derivatives
Other, net         6,548         (6,345    )    9,547         (6,559    )
INCOME BEFORE
INCOME TAX          194,139         81,632          1,461,070       504,807
EXPENSE
Income tax         768           4,039         14,915        20,417    
expense
INCOME FROM
CONTINUING          193,371         77,593          1,446,155       484,390
OPERATIONS
Loss from
discontinued       (147,162  )    (1,543    )    (150,062  )    (4,522    )
operations
NET INCOME          46,209          76,050          1,296,093       479,868
LESS: NET
INCOME
ATTRIBUTABLE TO    9,184         9,285         32,914        17,673    
NONCONTROLLING
INTEREST
NET INCOME
ATTRIBUTABLE TO     37,025          66,765          1,263,179       462,195
PARTNERS
GENERAL
PARTNER’S          116,583       104,810       341,925       318,241   
INTEREST IN NET
INCOME
LIMITED
PARTNERS’         $ (79,558   )   $ (38,045   )   $ 921,254      $ 143,954   
INTEREST IN NET
INCOME
INCOME (LOSS)
FROM CONTINUING
OPERATIONS PER
LIMITED PARTNER
UNIT:
Basic             $ 0.26         $ (0.18     )   $ 4.54         $ 0.70      
Diluted           $ 0.26         $ (0.18     )   $ 4.52         $ 0.70      
NET INCOME
(LOSS) PER
LIMITED PARTNER
UNIT:
Basic             $ (0.33     )   $ (0.19     )   $ 3.91         $ 0.68      
Diluted           $ (0.33     )   $ (0.19     )   $ 3.89         $ 0.68      

                                             
SUPPLEMENTAL INFORMATION
(Dollars in thousands)
(unaudited)
                                                
                    Three Months Ended          Nine Months Ended
                    September 30,               September 30,
                     2012       2011        2012          2011      
Reconciliation of
net income to
Adjusted EBITDA
(a):
Net income          $ 46,209      $ 76,050      $ 1,296,093      $ 479,868
Interest expense,
net of interest       112,141       124,000       383,271          347,706
capitalized
Income tax            768           4,039         14,915           20,417
expense
Depreciation and      94,812        106,419       282,485          294,356
amortization
Gain on
deconsolidation       —             —             (1,056,709 )     —
of Propane
Business
Loss on
extinguishment of     —             —             115,023          —
debt
Non-cash
compensation          9,198         10,350        30,190           31,139
expense
Losses on
non-hedged            65            68,595        8,087            64,705
interest rate
derivatives
Unrealized
(gains) losses on
commodity risk        (11,456 )     6,441         59,519           (1,213    )
management
activities
Write-down of
assets included
in loss from          145,214       —             145,214          —
discontinued
operations
Equity in
earnings of           (7,920  )     (6,713  )     (63,011    )     (13,386   )
unconsolidated
affiliates
Adjusted EBITDA
attributable to       105,359       15,229        301,559          37,623
unconsolidated
affiliates
Adjusted EBITDA
attributable to       (13,188 )     (13,152 )     (44,246    )     (23,737   )
noncontrolling
interest
Other, net           463         12,894      11,684         26,109    
Adjusted EBITDA     $ 481,665    $ 404,152    $ 1,484,074     $ 1,263,587 
                                                                 
Reconciliation of
net income to
Distributable
Cash Flow (a):
Net income          $ 46,209      $ 76,050      $ 1,296,093      $ 479,868
Amortization of
finance costs         2,382         2,536         7,774            7,199
charged to
interest
Deferred income       7,563         404           14,828           1,994
taxes
Depreciation and      94,812        106,419       282,485          294,356
amortization
Gain on
deconsolidation       —             —             (1,056,709 )     —
of Propane
Business
Loss on
extinguishment of     —             —             115,023          —
debt
Non-cash
compensation          9,198         10,350        30,190           31,139
expense
Unrealized losses
on non-hedged         5,730         78,969        15,021           70,468
interest rate
derivatives
Unrealized
(gains) losses on
commodity risk        (11,456 )     6,441         59,519           (1,213    )
management
activities
Write-down of
assets included
in loss from          145,214       —             145,214          —
discontinued
operations
Equity in
earnings of           (7,920  )     (6,713  )     (63,011    )     (13,386   )
unconsolidated
affiliates
Distributions
received from         80,562        22,736        188,976          31,294
unconsolidated
affiliates
Distributable
Cash Flow
attributable to       (12,512 )     (11,877 )     (41,901    )     (22,023   )
noncontrolling
interest
Maintenance
capital               (26,957 )     (31,390 )     (81,211    )     (80,520   )
expenditures
Other, net           6,693       12,210      22,948         27,396    
Distributable       $ 339,518    $ 266,135    $ 935,239       $ 826,572   
Cash Flow

(a) The Partnership has disclosed in this press release Adjusted EBITDA and
Distributable Cash Flow, which are non-GAAP financial measures. Management
believes Adjusted EBITDA and Distributable Cash Flow provide useful
information to investors as measures of comparison with peer companies,
including companies that may have different financing and capital structures.
The presentation of Adjusted EBITDA and Distributable Cash Flow also allows
investors to view our performance in a manner similar to the methods used by
management and provides additional insight into our operating results.

There are material limitations to using measures such as Adjusted EBITDA and
Distributable Cash Flow, including the difficulty associated with using either
as the sole measure to compare the results of one company to another, and the
inability to analyze certain significant items that directly affect a
company's net income or loss or cash flows. In addition, our calculations of
Adjusted EBITDA and Distributable Cash Flow may not be consistent with
similarly titled measures of other companies and should be viewed in
conjunction with measurements that are computed in accordance with GAAP, such
as gross margin, operating income, net income, and cash flow from operating
activities.

Definition of Adjusted EBITDA

The Partnership defines Adjusted EBITDA as total partnership earnings before
interest, taxes, depreciation, amortization and other non-cash items, such as
non-cash compensation expense, gains and losses on disposals of assets, the
allowance for equity funds used during construction, unrealized gains and
losses on commodity risk management activities, non-cash impairment charges,
loss on extinguishment of debt, gain on deconsolidation of our Propane
Business and other non-operating income or expense items. Unrealized gains and
losses on commodity risk management activities include unrealized gains and
losses on commodity derivatives and inventory fair value adjustments
(excluding lower of cost or market adjustments). Adjusted EBITDA reflects
amounts for less than wholly owned subsidiaries and unconsolidated affiliates
based on the Partnership's proportionate ownership.

Adjusted EBITDA is used by management to determine our operating performance
and, along with other financial and volumetric data, as internal measures for
setting annual operating budgets, assessing financial performance of our
numerous business locations, as a measure for evaluating targeted businesses
for acquisition and as a measurement component of incentive compensation.

Definition of Distributable Cash Flow

The Partnership defines Distributable Cash Flow as net income, adjusted for
certain non-cash items, less maintenance capital expenditures. Non-cash items
include depreciation and amortization, deferred income taxes, non-cash
compensation expense, gains and losses on disposals of assets, the allowance
for equity funds used during construction, unrealized gains and losses on
commodity risk management activities, and non-cash impairment charges.
Unrealized gains and losses on commodity risk management activities includes
unrealized gains and losses on commodity derivatives and inventory fair value
adjustments (excluding lower of cost or market adjustments). Distributable
Cash Flow reflects amounts for less than wholly owned subsidiaries based on
the Partnership's proportionate ownership and also reflects earnings from
unconsolidated affiliates on a cash basis.

Distributable Cash Flow is used by management to evaluate our overall
performance. Our partnership agreement requires us to distribute all available
cash, and Distributable Cash Flow is calculated to evaluate our ability to
fund distributions through cash generated by our operations.

Summary Analysis of Results by Segment
(tabular dollar amounts in thousands)

Following is a summary of ETP's results by segment:
                                                  
                           Three Months Ended        Nine Months Ended
                           September 30,             September 30,
                            2012      2011        2012        2011
Segment Adjusted EBITDA:
Intrastate
transportation and         $ 120,593   $ 170,183     $ 469,810     $ 514,547
storage
Interstate                   204,488     102,312       501,888       265,920
transportation
Midstream                    105,252     103,233       298,915       273,829
NGL transportation and       36,445      30,504        110,623       55,200
services
Retail propane and other     3,977       (3,667  )     94,476        150,924
retail propane related
All other                   10,910     1,587       8,362        3,167
                           $ 481,665   $ 404,152    $ 1,484,074   $ 1,263,587
                                                                     

Our segment results are presented based on the measure of Segment Adjusted
EBITDA. We previously reported segment operating income as a measure of
segment performance. We have revised certain reports provided to our chief
operating decision maker to assess the performance of our business to reflect
Segment Adjusted EBITDA. Segment Adjusted EBITDA reflects amounts for less
than wholly owned subsidiaries and unconsolidated affiliates based on our
proportionate ownership. We have recast the presentation of our segment
results for the prior years to be consistent with the current year
presentation. The tables below identify the components of Segment Adjusted
EBITDA, which is calculated as follows:

  *Gross margin, operating expenses, and selling, general and administrative.
    These amounts represent the amounts included in our consolidated financial
    statements that are attributable to each segment.
  *Unrealized gains or losses on commodity risk management activities. These
    are the unrealized amounts that are included in gross margin. These
    amounts are not included in Segment Adjusted EBITDA; therefore, the
    unrealized losses are added back and the unrealized gains are subtracted
    to calculate the segment measure.
  *Non-cash compensation expense. These amounts represent the total non-cash
    compensation recorded in operating expenses and selling, general and
    administrative. These amounts are not included in Segment Adjusted EBITDA
    and therefore are added back to calculated the segment measure.
  *Adjusted EBITDA attributable to unconsolidated affiliates. These amounts
    represent our proportionate share of the Adjusted EBITDA of our
    unconsolidated affiliates. Amounts reflected are calculated consistently
    with our definition of Adjusted EBITDA above.
  *Adjusted EBITDA attributable to noncontrolling interest. These amounts
    represent the portion of Segment Adjusted EBITDA attributable to
    noncontrolling interest. Currently, the only noncontrolling interest in
    ETP is the 30% interest in Lone Star that is held by Regency. We reflect
    this amount as noncontrolling interest because we consolidate 100% of Lone
    Star on our consolidated financial statements.

Intrastate Transportation and Storage

                Three Months Ended              Nine Months Ended
                 September 30,                    September 30,
                  2012         2011           2012         2011       
Natural gas
transported        9,942,575       11,148,186       9,995,218       11,367,812
(MMBtu/d)
Revenues         $ 554,843       $ 650,834        $ 1,531,377     $ 2,095,087
Cost of           362,186       422,801        949,254       1,396,001  
products sold
Gross margin       192,657         228,033          582,123         699,086
Unrealized
(gains) losses
on commodity       (12,364   )     5,342            54,289          (1,368     )
risk
management
activities
Operating
expenses,
excluding          (45,454   )     (49,336    )     (131,318  )     (144,631   )
non-cash
compensation
expense
Selling,
general and
administrative
expenses,          (12,230   )     (14,869    )     (33,858   )     (40,299    )
excluding
non-cash
compensation
expense
Adjusted
EBITDA
attributable      (2,016    )    1,013          (1,426    )    1,759      
to
unconsolidated
affiliates
Segment
Adjusted         $ 120,593      $ 170,183       $ 469,810      $ 514,547    
EBITDA
                                                                  
Distributions
from             $ 2,108         $ 1,109          $ 4,023         $ 3,581
unconsolidated
affiliates
Maintenance
capital            7,440           8,355            21,026          26,491
expenditures
                                                                               

Volumes. Transported volumes decreased due to an unfavorable natural gas price
environment during the three and nine months ended September 30, 2012 compared
to the same periods in 2011.

Segment Adjusted EBITDA. Segment Adjusted EBITDA for the intrastate
transportation and storage segment decreased for the three and nine months
ended September 30, 2012 compared to the same periods in 2011 primarily due to
the impacts of lower transported and retained volumes, lower demand fees and
lower margin from sales of natural gas, including negative impacts from
derivatives.

The components of our intrastate transportation and storage segment gross
margin were as follows:

                                Three Months Ended     Nine Months Ended
                                 September 30,           September 30,
                                  2012      2011       2012      2011
Transportation fees              $ 138,991   $ 148,331   $ 420,196   $ 448,669
Natural gas sales and other        21,557      42,981      68,064      106,570
Retained fuel revenues             21,735      32,560      55,102      104,222
Storage margin, including fees    10,374     4,161      38,761     39,625
Total gross margin               $ 192,657   $ 228,033   $ 582,123   $ 699,086
                                                                       

Storage margin was comprised of the following:

               Three Months Ended             Nine Months Ended
                September 30,                   September 30,
                 2012         2011          2012         2011       
Withdrawals
from storage
natural gas       5,258,344       8,661,359       9,698,738       24,443,485
inventory
(MMBtu)
Realized
margin (loss)
on natural      $ (3,188    )   $ 5,575         $ 76,323        $ 16,837
gas inventory
transactions
Fair value
inventory         19,335          (27,603   )     17,263          (22,772    )
adjustments
Unrealized
gains            (12,953   )    18,231        (77,620   )    20,024     
(losses) on
derivatives
Margin
recognized on
natural gas       3,194           (3,797    )     15,966          14,089
inventory and
related
derivatives
Revenues from
fee-based         7,364           8,072           23,254          25,891
storage
Other            (184      )    (114      )    (459      )    (355       )
Total storage   $ 10,374       $ 4,161        $ 38,761       $ 39,625     
margin
                                                                             

The increase in storage margin for the three months ended September 30, 2012
compared to the three months ended September 30, 2011 was principally driven
by an increase in inventory valuation and derivatives settled during the
period. The decrease in storage margin for the nine months ended September 30,
2012 compared to the nine months ended September 30, 2011 was due to fewer
withdrawals and a decline in fee-based revenue resulting from the cessation of
4.5 Bcf in fee-based contracts in 2011. These decreases were partially offset
by realized gains on the settlement of derivatives during the nine month
period compared to the same period in the prior year. For the three and nine
months ended September 30, 2012 compared to the same periods in the prior
year, intrastate transportation and storage Segment Adjusted EBITDA also
reflected lower operating expenses due to decreases in natural gas consumed
for compression and lower selling, general and administrative expenses due to
decreases in employee-related costs.

Interstate Transportation

                Three Months Ended             Nine Months Ended
                 September 30,                   September 30,
                  2012         2011          2012         2011      
Natural gas
transported        3,059,915       3,155,559       3,015,458       2,709,522
(MMBtu/d)
Natural gas        16,976          21,808          18,416          22,859
sold (MMBtu/d)
Revenues         $ 131,989       $ 120,065       $ 387,165       $ 330,016
Operating
expenses,
excluding
non-cash           (19,594   )     (21,338   )     (76,735   )     (73,513   )
compensation,
amortization
and accretion
expenses
Selling,
general and
administrative
expenses,
excluding          (9,034    )     (10,814   )     (27,896   )     (26,743   )
non-cash
compensation,
amortization
and accretion
expenses
Adjusted
EBITDA
attributable      101,127       14,399        219,354       36,160    
to
unconsolidated
affiliates
Segment
Adjusted         $ 204,488      $ 102,312      $ 501,888      $ 265,920   
EBITDA
                                                                 
Distributions
from             $ 54,800        $ 21,626        $ 115,100       $ 27,713
unconsolidated
affiliates
Maintenance
capital            8,946           5,864           25,131          15,290
expenditures
                                                                             

Volumes. Transported volumes increased for the three and nine months ended
September 30, 2012 compared to the same periods in the prior year primarily
due to additional transported volumes related to the expansion of the Tiger
pipeline which went in service in August 2011. Operational sales volumes
decreased in the Transwestern pipeline principally as a result of unfavorable
market conditions.

Segment Adjusted EBITDA. We experienced an increase in our interstate
transportation segment's Segment Adjusted EBITDA for the three and nine months
ended September 30, 2012 compared to the same periods in 2011 due to the
acquisition of a 50% interest in Citrus on March 26, 2012. Adjusted EBITDA
attributable to our investment in Citrus for the three and nine months ended
September 30, 2012 was $80.9 million and $162.2 million, respectively. The
remainder of the increase in Segment Adjusted EBITDA resulted from incremental
reservation fees from increased contractual commitments related to the Tiger
pipeline expansion and from increased Adjusted EBITDA attributable to our 50%
interest in the Fayetteville Express Pipeline.

Midstream

                Three Months Ended             Nine Months Ended
                 September 30,                   September 30,
                  2012         2011          2012         2011      
Gathered
volumes            2,463,987       2,204,792       2,327,284       1,939,398
(MMBtu/d)
NGLs produced      83,736          55,943          77,038          51,824
(Bbls/d)
Equity NGLs
produced           15,890          16,269          18,582          16,142
(Bbls/d)
Revenues         $ 656,915       $ 630,135       $ 1,742,241     $ 1,876,171
Cost of           528,311       507,806       1,366,428     1,541,158 
products sold
Gross margin       128,604         122,329         375,813         335,013
Unrealized
(gains) losses
on commodity       214             (919      )     2,381           (2,091    )
risk
management
activities
Operating
expenses,
excluding          (18,948   )     (17,930   )     (68,849   )     (59,795   )
non-cash
compensation
expense
Selling,
general and
administrative
expenses,          (9,378    )     (5,254    )     (25,613   )     (14,326   )
excluding
non-cash
compensation
expense
Adjusted
EBITDA
attributable      4,760         5,007         15,183        15,028    
to
discontinued
operations
Segment
Adjusted         $ 105,252      $ 103,233      $ 298,915      $ 273,829   
EBITDA
                                                                 
Maintenance
capital          $ 7,034         $ 3,550         $ 20,445        $ 13,690
expenditures
                                                                             

Volumes. The increases in NGL production reflected higher overall production
during the three and nine months ended September 30, 2012 compared to the same
periods in 2011 primarily due to increased inlet volumes at our La Grange and
Chisholm plants as a result of increased capacity and more production in the
Eagle Ford Shale.

Segment Adjusted EBITDA. Segment Adjusted EBITDA for the midstream segment
reflected increases in gross margin as follows:

                        Three Months Ended         Nine Months Ended
                         September 30,               September 30,
                          2012       2011        2012       2011    
Gathering and
processing fee-based     $ 81,336      $ 61,177      $ 226,225     $ 172,809
revenues
Non-fee-based
contracts and              54,572        66,830        169,441       174,433
processing
Other                     (7,304  )    (5,678  )    (19,853 )    (12,229 )
Total gross margin       $ 128,604    $ 122,329    $ 375,813    $ 335,013 
                                                                   

The increase in our fee-based revenues reflected higher overall production
during the three and nine months ended September 30, 2012 compared to the same
periods in 2011 primarily due to increased inlet volumes at our La Grange and
Chisholm plants as a result of increased capacity and more production in the
Eagle Ford Shale. For the three and nine months ended September 30, 2012, our
non-fee-based contracts and processing margin decreased primarily due to lower
NGL prices. For the three and nine months ended September 30, 2012, midstream
Segment Adjusted EBITDA also reflects the impacts of incremental operating
expenses and selling , general and administrative expenses from new assets
placed in service in the Eagle Ford Shale.

NGL Transportation and Services

                        Three Months Ended         Nine Months Ended
                         September 30,               September 30,
                          2012       2011        2012       2011    
NGL transportation         174,234       133,149       166,825       131,147
volumes (Bbls/d)
NGL fractionation          11,442        13,833        17,530        14,912
volumes (Bbls/d)
Revenues                 $ 168,313     $ 146,596     $ 496,341     $ 245,416
Cost of products sold     101,222     81,224      285,210     133,628 
Gross margin               67,091        65,372        211,131       111,788
Operating expenses,
excluding non-cash         (13,104 )     (16,575 )     (43,074 )     (23,062 )
compensation expense
Selling, general and
administrative
expenses, excluding        (5,230  )     (4,958  )     (15,421 )     (9,606  )
non-cash compensation
expense
Adjusted EBITDA
attributable to            876           (183    )     2,233         (183    )
unconsolidated
affiliates
Adjusted EBITDA
attributable to           (13,188 )    (13,152 )    (44,246 )    (23,737 )
noncontrolling
interest
Segment Adjusted         $ 36,445     $ 30,504     $ 110,623    $ 55,200  
EBITDA
                                                                   
Distributable cash
flow attributable to     $ 12,512      $ 11,877      $ 41,901      $ 22,023
noncontrolling
interest
Maintenance capital        2,708         4,221         8,980         5,497
expenditures
                                                                             

Our NGL Transportation and Services segment primarily reflects the results
from Lone Star, which was formed in 2011 and acquired all of the membership
interests in LDH on May2, 2011 as well as other wholly-owned or joint venture
pipelines that were recently placed in service.

Volumes. NGL transportation volumes for the three and nine month periods ended
September 30, 2012 as compared to the same periods in 2011 increased primarily
due to an increase in volumes transported on our wholly-owned NGL pipelines
originating from our La Grange and Chisholm plants as a result of increased
production in the Eagle Ford Shale. Additionally, fractionation volumes
decreased for the three and nine months ended September 30, 2012 as compared
to the same periods in 2011 primarily due to refinery closures at our Geismar,
Louisiana fractionation complex as a result of Hurricane Isaac and refinery
downtime.

Segment Adjusted EBITDA. For the three months ended September 30, 2012
compared to the same periods in 2011, the increase in NGL Transportation and
Services Segment Adjusted EBITDA was attributable to increased volumes on our
wholly-owned NGL pipelines due to increased activity related to the Eagle Ford
Shale and increased transportation rates on our West Texas NGL pipeline due to
increased capacity out of West Texas.

For the nine months ended September 30, 2012 compared to the same period in
2011, the increase in NGL Transportation and Services Segment Adjusted EBITDA
were attributable to the full-period impacts from the formation of Lone Star
in May 2011 as well as the impacts from multiple other wholly-owned or joint
venture pipelines that have recently become operational. Lone Star is a
consolidated joint venture; therefore, 100% of Lone Star's revenues, operating
expenses, and selling, general and administrative expenses are included in the
NGL Transportation and Services segment data above, and the Adjusted EBITDA
attributable to the 30% noncontrolling interest is reflected separately.

The components of our NGL transportation and services segment gross margin
were as follows:

                                  Three Months Ended   Nine Months Ended
                                   September 30,         September 30,
                                    2012     2011      2012      2011
Storage margin                     $ 33,986   $ 34,287   $ 96,177   $ 57,702
Transportation fees                  21,069     13,646     51,818      20,696
Processing and fractionation         11,587     16,602     62,692      33,324
margin
Other margin                        449       837       444        66
Total gross margin                 $ 67,091   $ 65,372   $ 211,131   $ 111,788
                                                                       

Supplemental Information on Unconsolidated Affiliates

The following table presents equity in earnings of affiliates, distributions
received from affiliates and the proportionate share of unconsolidated
affiliates' interest, depreciation, amortization, non-cash compensation
expense, loss on debt extinguishment and taxes by unconsolidated affiliate for
the three and nine months ended September 30, 2012 and 2011:

                              Three Months Ended      Nine Months Ended
                               September 30,            September 30,
                                2012       2011      2012       2011
Equity in earnings (losses)
of unconsolidated
affiliates:
AmeriGas                       $ (31,970 )   $ —        $ (28,920 )   $ —
Citrus                           25,225        —          49,039        —
FEP                              14,846        5,870      41,041        11,869
Other                           (181    )    843       1,851       1,517
Total equity in earnings of    $ 7,920      $ 6,713    $ 63,011     $ 13,386
unconsolidated affiliates
Proportionate share of
interest, depreciation,
amortization, non-cash
compensation expense, loss
on debt extinguishment and
taxes:
AmeriGas                       $ 35,946      $ —        $ 107,993     $ —
Citrus                           55,675        —          113,153       —
FEP                              5,381         8,495      16,121        24,156
Other                           437         21        1,281       81
Total proportionate share of
interest, depreciation,
amortization, non-cash         $ 97,439     $ 8,516    $ 238,548    $ 24,237
compensation expense, loss
on debt extinguishment and
taxes
Adjusted EBITDA attributable
to unconsolidated
affiliates:
AmeriGas                       $ 3,976       $ —        $ 79,073      $ —
Citrus                           80,900        —          162,192       —
FEP                              20,227        14,365     57,162        36,025
Other                           256         864       3,132       1,598
Total Adjusted EBITDA
attributable to                $ 105,359    $ 15,229   $ 301,559    $ 37,623
unconsolidated affiliates
Distributions from
unconsolidated affiliates:
AmeriGas                       $ 23,654      $ —        $ 69,853      $ —
Citrus                           37,500        —          62,500        —
FEP                              17,300        21,513     52,600        27,600
Other                           2,108       1,223     4,023       3,694
Total distributions from       $ 80,562     $ 22,736   $ 188,976    $ 31,294
unconsolidated affiliates
                                                                      

Contact:

Investor Relations:
Energy Transfer
Brent Ratliff, 214-981-0700
or
Media Relations:
Granado Communications Group
Vicki Granado, 214-599-8785 (office)
214-498-9272 (cell)
 
Press spacebar to pause and continue. Press esc to stop.