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Energy Transfer Partners Reports Fourth Quarter and Annual Results

  Energy Transfer Partners Reports Fourth Quarter and Annual Results

Business Wire

DALLAS -- February 20, 2013

Energy Transfer Partners, L.P. (NYSE:ETP) today reported its financial results
for the fourth quarter ended December31, 2012.

Adjusted EBITDA for the three months ended December31, 2012 totaled $948
million, an increase of $455 million over the three months ended December31,
2011. Distributable Cash Flow for the three months ended December31, 2012
totaled $488 million, an increase of $169 million over the three months ended
December31, 2011. Income from continuing operations for the three months
ended December31, 2012 totaled $334 million, an increase of $118 million from
the three months ended December31, 2011.

Adjusted EBITDA for the year ended December31, 2012 totaled $2.74 billion, an
increase of $963 million over the year ended December31, 2011. Distributable
Cash Flow for the year ended December31, 2012 totaled $1.49 billion, an
increase of $335 million over the year ended December31, 2011. Income from
continuing operations for the year ended December31, 2012 totaled $1.76
billion, an increase of $1.06 billion over the year ended December31, 2011.

The quarter ended December 31, 2012 included the following significant
achievements:

  *Sunoco Merger. On October 5, 2012, ETP completed its merger with Sunoco,
    Inc. ("Sunoco"). Under the terms of the merger agreement, Sunoco
    shareholders received 54,971,725 ETP Common Units and $2.6 billion of
    cash. Prior to the contribution of Sunoco to Holdco, as discussed below,
    Sunoco contributed $2.0 billion of cash and its interests in Sunoco
    Logistics Partners L.P. ("Sunoco Logistics") to ETP in exchange for
    90,706,000 Class F Units representing limited partner interests in ETP
    ("Class F Units"). The Class F Units are entitled to 35% of the quarterly
    cash distribution generated by ETP and its subsidiaries other than Holdco,
    subject to a maximum cash distribution of $3.75 per Class F Unit per year,
    which is the current distribution level. As a result ETP, now owns the
    general partner interest, 100% of the incentive distribution rights, and
    33,350,637 common units of Sunoco Logistics. Due to this ownership, ETP
    consolidated Sunoco Logistics into its financial statements as of the
    merger date.
  *Holdco Transaction.  Immediately following the closing of the Sunoco
    Merger, Energy Transfer Equity, L.P. ("ETE") contributed its interest in
    Southern Union Company ("Southern Union") to ETP Holdco Corporation
    ("Holdco"), an ETP-controlled entity, in exchange for a 60% equity
    interest in Holdco. In conjunction with ETE's contribution, ETP
    contributed its interest in Sunoco to Holdco and retained a 40% equity
    interest in Holdco. Pursuant to a stockholders agreement between ETE and
    ETP, ETP controls Holdco. Consequently, ETP consolidated Holdco (including
    Sunoco and Southern Union) in its financial statements subsequent to the
    consummation of the Holdco Transaction. In connection with this
    transaction, ETE relinquished its rights to $210 million of incentive
    distributions from ETP that ETE would otherwise be entitled to receive
    over 12 consecutive quarters.
  *Strategic Asset Sale. In December 2012, Southern Union entered into a
    purchase and sale agreement pursuant to which subsidiaries of Laclede Gas
    Company, Inc. have agreed to acquire the assets of Southern Union's
    Missouri Gas Energy and New England Gas Company divisions. Total
    consideration is expected to be $1.04 billion, subject to customary
    closing adjustments, less the assumption of $19 million of debt. For the
    period from March 26, 2012 to December 31, 2012, the distribution
    operations have been reclassified to discontinued operations. The assets
    and liabilities of the disposal group have been reclassified and reported
    as assets and liabilities held for sale as of December 31, 2012.
  *Lone Star Fractionator. In December 2012, we announced that Lone Star's
    100,000 Bbls/d NGL fractionation facility at Mont Belvieu, Texas is now in
    service. We will utilize a substantial amount of this fractionation
    capacity to handle NGL barrels we will deliver from the new processing
    facility we plan to build in Jackson County, Texas, a facility supported
    by multiple 10-year contracts with producers as part of our Eagle Ford
    Shale projects.
  *Lone Star West Texas Gateway NGL Pipeline. In December 2012, we completed
    construction of the 570-mile, 209,000 Bbls/d Lone Star West Texas Gateway
    NGL Pipeline ahead of schedule.

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, February 21,
2013 to discuss the 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.
Beginning with the quarter ended December 31, 2012 and applied retroactively
to all periods presented, the Partnership has revised its calculation of
Adjusted EBITDA and Distributable Cash Flow. (See notes under “Supplemental
Information” for further information.)

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
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 crude oil &
refined product pipeline, terminalling, and acquisition & marketing assets.
SXL's general partner is owned by Energy Transfer Partners, L.P. (NYSE: ETP).
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 millions)
(unaudited)
                                                         
                                                         December 31,
                                                         2012       2011
ASSETS
                                                                      
CURRENT ASSETS                                           $ 5,404      $ 1,275
                                                                      
PROPERTY, PLANT AND EQUIPMENT, net                         25,773       12,306
                                                                      
NON-CURRENT ASSETS HELD FOR SALE                           985          —
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED              3,502        201
AFFILIATES
NON-CURRENT PRICE RISK MANAGEMENT ASSETS                   42           26
GOODWILL                                                   5,606        1,220
INTANGIBLE ASSETS, net                                     1,561        331
OTHER NON-CURRENT ASSETS, net                             357         160
Total assets                                             $ 43,230     $ 15,519
                                                                      
                                                                      
LIABILITIES AND EQUITY
                                                                      
CURRENT LIABILITIES                                      $ 5,548      $ 1,586
                                                                      
NON-CURRENT LIABILITIES HELD FOR SALE                      142          —
LONG-TERM DEBT, less current maturities                    15,442       7,388
LONG-TERM NOTES PAYABLE - RELATED PARTY                    166          —
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES              129          42
DEFERRED INCOME TAXES                                      3,476        126
OTHER NON-CURRENT LIABILITIES                              995          27
                                                                      
COMMITMENTS AND CONTINGENCIES
                                                                      
EQUITY:
Total partners' capital                                    9,201        5,721
Noncontrolling interest                                   8,131       629
Total equity                                              17,332      6,350
Total liabilities and equity                             $ 43,230     $ 15,519
                                                                        

                                                
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per unit data)
(unaudited)
                                                      
                       Three Months Ended             Years Ended
                       December 31,                   December 31,
                       2012         2011            2012 ^(1)    2011
REVENUES               $ 10,981       $ 1,805         $ 15,702       $ 6,799
COSTS AND
EXPENSES:
Cost of products         9,660          1,108           12,266         4,175
sold
Operating expenses       407            197             900            760
Depreciation and         237            110             656            405
amortization
Selling, general        214          54            486          212   
and administrative
Total costs and         10,518       1,469         14,308       5,552 
expenses
OPERATING INCOME         463            336             1,394          1,247
OTHER INCOME
(EXPENSE):
Interest expense,
net of interest          (186   )       (126  )         (665   )       (474  )
capitalized
Equity in earnings
of unconsolidated        78             12              142            26
affiliates
Gain on
deconsolidation of       —              —               1,057          —
Propane Business
Loss on
extinguishment of        —              —               (115   )       —
debt
Gains (losses) on
non-hedged               5              (13   )         (4     )       (77   )
interest rate
derivatives
Other, net              1            5             11           (3    )
INCOME FROM
CONTINUING               361            214             1,820          719
OPERATIONS BEFORE
INCOME TAX EXPENSE
Income tax expense      27           (2    )        63           19    
(benefit)
INCOME FROM
CONTINUING               334            216             1,757          700
OPERATIONS
Income (loss) from
discontinued            27           1             (109   )      (3    )
operations
NET INCOME               361            217             1,648          697
LESS: NET INCOME
ATTRIBUTABLE TO         54           11            79           28    
NONCONTROLLING
INTEREST
NET INCOME
ATTRIBUTABLE TO          307            206             1,569          669
PARTNERS
GENERAL PARTNER’S
INTEREST IN NET         119          115           461          433   
INCOME
LIMITED PARTNERS’
INTEREST IN NET        $ 188         $ 91           $ 1,108       $ 236   
INCOME
INCOME FROM
CONTINUING
OPERATIONS PER
LIMITED PARTNER
UNIT:
Basic                  $ 0.56        $ 0.41         $ 4.93        $ 1.12  
Diluted                $ 0.56        $ 0.41         $ 4.91        $ 1.12  
NET INCOME PER
LIMITED PARTNER
UNIT:
Basic                  $ 0.62        $ 0.41         $ 4.43        $ 1.10  
Diluted                $ 0.62        $ 0.41         $ 4.42        $ 1.10  

^(1) In accordance with generally accepted accounting principles, amounts
previously reported for interim periods in 2012 have been revised to reflect
the retrospective consolidation of Southern Union into ETP as a result of the
Holdco Transaction as the transfer of Southern Union into Holdco met the
definition of a transaction between entities under common control. Thus,
Southern Union is retroactively consolidated beginning March 26, 2012, the
date that ETE completed its merger with Southern Union.

                                              
SUPPLEMENTAL INFORMATION
(Dollars in millions)
(unaudited)
                                                    
                     Three Months Ended             Years Ended
                     December 31,                   December 31,
                     2012       2011              2012 (a)       2011
Reconciliation
of net income to                  (Revised -        (Revised -       (Revised
Adjusted EBITDA                   see (c)           see (c)          - see (c)
and                               below)            below)           below)
Distributable
Cash Flow (b):
Net income           $ 361        $  217            $  1,648         $ 697
Interest
expense, net of        186           126               665             474
interest
capitalized
Income tax
expense                27            (2    )           63              19
(benefit)
Depreciation and       237           110               656             405
amortization
Gain on
deconsolidation        —             —                 (1,057  )       —
of Propane
Business
Loss on
extinguishment         —             —                 115             —
of debt
Non-cash
compensation           11            7                 42              38
expense
(Gains) losses
on non-hedged          (5   )        13                4               77
interest rate
derivatives
Unrealized
(gains) losses
on commodity           (51  )        13                9               11
risk management
activities
LIFO valuation         75            —                 75              —
reserve
Write-down of
assets included
in loss from           (13  )        —                 132             —
discontinued
operations
Equity in
earnings of            (78  )        (12   )           (142    )       (26   )
unconsolidated
affiliates
Adjusted EBITDA
related to             178           18                480             56
unconsolidated
affiliates
Other, net            20          3               54            30    
Adjusted EBITDA        948           493               2,744           1,781
Adjusted EBITDA
related to             (178 )        (18   )           (480    )       (56   )
unconsolidated
affiliates
Distributions
from                   72            19                262             51
unconsolidated
affiliates
Interest
expense, net of        (186 )        (126  )           (665    )       (474  )
interest
capitalized
Income tax
(expense)              (27  )        2                 (63     )       (19   )
benefit
Maintenance
capital                (143 )        (54   )           (313    )       (134  )
expenditures
Other, net            2           3               3             4     
Distributable        $ 488       $  319           $  1,488        $ 1,153 
Cash Flow
                                                                     
Distributions to
be paid to the
partners of ETP
(d):
Limited
Partners:
Common units         $ 45         $  45             $  180           $ 180
held by ETE
Common units           224           157               783             582
held by public
General Partner
interest held by       5             5                 20              20
ETE
Incentive
Distribution          148         112             529           422   
Rights ("IDR")
held by ETE
                       422           319               1,512           1,204
IDR
relinquishment
related to            (31  )       —               (90     )      —     
Citrus Dropdown
and Sunoco
Merger
Total
distributions to      391         319             1,422         1,204 
be paid to the
partners of ETP
                                                                     
Distributions to
be paid to
noncontrolling
interests:
Distributions to
ETE in respect         75            —                 75              —
of Holdco (e)
Distributions to
Regency in             15            13                60              35
respect of Lone
Star (f)
Distributions to
Sunoco Logistics
unitholders           38          —               38            —     
(common units
held by public)
(g)
Total
distributions to
be paid to            128         13              173           35    
noncontrolling
interests
Total
distributions to
be paid to the
partners of ETP      $ 519       $  332           $  1,595        $ 1,239 
and
noncontrolling
interests

(a) In accordance with generally accepted accounting principles, amounts
previously reported for interim periods in 2012 have been revised to reflect
the retrospective consolidation of Southern Union into ETP as a result of the
Holdco Transaction as the transfer of Southern Union into Holdco met the
definition of a transaction between entities under common control. Thus,
Southern Union is retroactively consolidated beginning March 26, 2012, the
date that ETE completed its merger with Southern Union. Southern Union's
Adjusted EBITDA and Distributable Cash Flow (both including
acquisition-related expenses) for the period from March 26, 2012 through
September 30, 2012 was $275 million and $82 million, respectively.
Acquisition-related expenses at Southern Union for the period from March 26,
2012 through September 30, 2012 were $57 million.

(b) 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 based on 100% of the
subsidiaries' results of operations and for 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, 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 and
gain on deconsolidation of our Propane Business. 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 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.

(c) The Partnership has presented Adjusted EBITDA and Distributable Cash Flow
in previous communications; however, the Partnership changed its definition
for these non-GAAP measures in the quarter ended December 31, 2012 to reflect
less than wholly-owned subsidiaries on a fully consolidated basis. Previously,
the Partnership presented less than wholly-owned subsidiaries on a
proportionate basis. The Partnership believes that with this change, Adjusted
EBITDA and Distributable Cash Flow more accurately reflect the Partnership's
operating performance and therefore are more useful measures. This change has
been applied retroactively to all periods presented. See “Non-GAAP Measures”
available on the Partnership's website at www.energytransfer.com for the
reconciliation of net income to Adjusted EBITDA for recent prior periods
reflecting the changes described above.

(d) For the three months ended December 31, 2012, cash distributions to be
paid to the partners of ETP consist of cash distributions paid on February 14,
2013 in respect of the quarter ended December 31, 2012. For the three months
ended December 31, 2011, cash distributions to be paid to the partners of ETP
consist of cash distributions paid on February 14, 2012 in respect of the
quarter ended December 31, 2011.

For the year ended December 31, 2012, cash distributions to be paid to the
partners of ETP consist of cash distributions paid on May 15, 2012 in respect
of the quarter ended March 31, 2012, cash distributions paid on August 14,
2012 in respect of the quarter ended June 30, 2012, cash distributions paid on
November 14, 2012 in respect of the quarter ended September 30, 2012 and cash
distributions paid on February 14, 2013 in respect of the quarter ended
December 31, 2012. For the year ended December 31, 2011, cash distributions to
be paid to the partners of ETP consist of cash distributions paid on May 16,
2011 in respect of the quarter ended March 31, 2011, cash distributions paid
on August 15, 2011 in respect of the quarter ended June 30, 2011, cash
distributions paid on November 14, 2011 in respect of the quarter ended
September 30, 2011 and cash distributions paid on February 14, 2012 in respect
of the quarter ended December 31, 2011.

(e) For the three months and year ended December 31, 2012, cash distributions
to ETE in respect of Holdco consist of cash distributions paid on February 13,
2013 in respect of the quarter ended December 31, 2012.

(f) Cash distributions to Regency in respect of Lone Star consist of cash
distributions paid on a monthly basis, one month in arrears. The amounts
reflected above are in respect of the periods then ended, including payments
made in arrears subsequent to period end.

(g) For the three months and year ended December 31, 2012, cash distributions
to be paid to the partners of Sunoco Logistics consist of cash distributions
paid on February 14, 2013 in respect of the quarter ended December 31, 2012.

                                       
Summary Analysis of Quarterly Results by Segment
(Tabular dollar amounts are in millions)
                                          
                                          Three Months Ended
                                          December 31,
                                          2012      2011
Segment Adjusted EBITDA
Intrastate transportation and storage     $ 131       $ 153
Interstate transportation and storage       306         107
Midstream                                   103         115
NGL transportation and services             54          48
Investment in Sunoco Logistics              219         —
Retail Marketing                            109         —
All other                                   29          72
Elimination                                (3  )      (2  )
                                          $ 948      $ 493 
                                                            

Subsequent to the Sunoco Merger and Holdco Transactions in October 2012, our
reportable segments changed, as follows:

  *Interstate Transportation and Storage segment now includes Southern
    Union's transportation and storage operations;
  *Midstream segment now includes Southern Union's gathering and processing
    operations;
  *Investment in Sunoco Logistics segment reflects the consolidated
    operations of Sunoco Logistics;
  *Retail Marketing segment reflects the consolidated operations of Sunoco's
    retail marketing business; and,
  *All Other now includes the investments and operations identified under the
    segment table below.

Our segment results were 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 reflected 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 was 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 calculate the segment measure.
  *Adjusted EBITDA related 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.

Intrastate Transportation and Storage

                                            Three Months Ended
                                              December 31,
                                              2012            2011
Natural gas MMBtu/d — transported               9,426,807         11,107,320
Revenues                                      $ 659             $ 579
Cost of products sold                          445             378        
Gross margin                                    214               201
Unrealized (gains) losses on commodity          (35       )       11
risk management activities
Operating expenses, excluding non-cash          (42       )       (47        )
compensation expense
Selling, general and administrative
expenses, excluding non-cash compensation       (9        )       (13        )
expense
Adjusted EBITDA related to unconsolidated      3               1          
affiliates
Segment Adjusted EBITDA                       $ 131            $ 153        
                                                                
Distributions from unconsolidated             $ —               $ 1
affiliates
Maintenance capital expenditures                8                 15
                                                                             

Segment Adjusted EBITDA Segment Adjusted EBITDA for the intrastate
transportation and storage segment decreased primarily due to lower realized
margin.

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

                                 Three Months Ended
                                   December 31,
                                   2012       2011
Transportation fees                $  129       $ 151
Natural gas sales and other           27          —
Retained fuel revenues                24          25
Storage margin, including fees       34         24
Total gross margin ^(1)            $  214       $ 201

^(1) Gross margin included unrealized gains and losses on commodity risk
management activities, which were excluded from the Segment Adjusted EBITDA
calculation, as reflected above.

The decrease in transportation fees was attributable to a decrease in
transported volumes as a result of less favorable market conditions and the
cessation of certain long-term transportation contracts. The increase in our
storage margin was principally driven by gains on settled derivatives.

Interstate Transportation and Storage

                                             Three Months Ended
                                               December 31,
                                               2012            2011
Natural gas transported (MMBtu/d)
ETP Legacy Assets                                2,868,070         3,071,083
Southern Union transportation and storage        4,094,576         —
Natural gas sold (MMBtu/d)                       17,020            21,057
Revenues                                       $ 334             $ 117
Operating expenses, excluding non-cash
compensation, amortization and accretion         (74       )       (20       )
expenses
Selling, general and administrative,
excluding non-cash compensation,                 (33       )       (7        )
amortization and accretion expenses
Adjusted EBITDA related to unconsolidated       79              17        
affiliates
Segment Adjusted EBITDA                        $ 306            $ 107       
                                                                 
Distributions from unconsolidated              $ 42              $ 18
affiliates
Maintenance capital expenditures                 45                15
                                                                             

Segment Adjusted EBITDA. Southern Union's transportation and storage business
recognized revenues of $205 million for the three months ended December 31,
2012. In addition Tiger pipeline revenues increased due to incremental
reservation fees related to the Tiger pipeline expansion. These increases were
offset slightly by a decrease in operational gas sales on the Transwestern
pipeline.

Adjusted EBITDA Related to Unconsolidated Affiliates. Adjusted EBITDA related
to unconsolidated affiliates increased primarily due to our acquisition of a
50% interest in Citrus which contributed $65 million during the three months
ended December 31, 2012.

Midstream

                                             Three Months Ended
                                               December 31,
                                               2012            2011
Gathered Volumes (MMBtu/d):
ETP Legacy Assets                                2,473,878         2,259,676
Southern Union gathering and processing          533,548           —
NGLs produced (Bbls/d):
ETP Legacy Assets                                87,389            61,756
Southern Union gathering and processing          42,346            —
Equity NGLs produced (Bbls/d):
ETP Legacy Assets                                13,538            17,107
Southern Union gathering and processing          6,724             —
Revenues                                       $ 930             $ 666
Cost of products sold                           758             529       
Gross margin                                     172               137
Unrealized (gains) losses on commodity           (1        )       (1        )
risk management activities
Operating expenses, excluding non-cash           (46       )       (24       )
compensation expense
Selling, general and administrative,             (16       )       (5        )
excluding non-cash compensation expense
Adjusted EBITDA related to unconsolidated        (6        )       —
affiliates
Adjusted EBITDA attributable to                 —               8         
discontinued operations
Segment Adjusted EBITDA                        $ 103            $ 115       
                                                                 
Maintenance capital expenditures               $ 19              $ 14
                                                                             

Segment Adjusted EBITDA. Segment Adjusted EBITDA for the midstream segment
decreased due to increases in operating expenses and selling, general and
administrative expenses primarily due to the consolidation of Southern Union's
gathering and processing operations effective March 26, 2012. These increased
expenses were offset by increases in gross margin, as follows:

                                              Three Months Ended
                                                December 31,
                                                2012      2011
Gathering and processing fee-based revenues     $ 101       $ 70
Non fee-based contracts and processing            73          70
Other                                            (2  )      (3  )
Total gross margin                              $ 172      $ 137 
                                                                  

Our fee-based revenues increased due to additional volumes from production in
the Eagle Ford Shale and additional volumes related to Southern Union's
gathering and processing segment. Non fee-based gross margins decreased
primarily due to lower NGL prices, partially offset by incremental non-fee
based revenue recognized in connection with the consolidation of Southern
Union's gathering and processing business.

While overall our midstream gross margin is up due to increases in volumes
associated with the system primarily from our gathering and processing
fee-based revenues and the consolidation of Southern Union gathering and
processing operations, this increase was offset by declines in the composite
price of NGL's during the three months ended December 31, 2012 compared to
2011.

NGL Transportation and Services

                                                 Three Months Ended
                                                   December 31,
                                                   2012          2011
NGL transportation volumes (Bbls/d)                  187,821         131,297
NGL fractionation volumes (Bbls/d)                   18,424          19,073
Revenues                                           $ 154           $ 152
Cost of products sold                               76            85      
Gross margin                                         78              67
Operating expenses, excluding non-cash               (17     )       (15     )
compensation expense
Selling, general and administrative, excluding       (5      )       (4      )
non-cash compensation expense
Adjusted EBITDA related to unconsolidated           (2      )      —       
affiliates
Segment Adjusted EBITDA                            $ 54           $ 48      
                                                                   
Maintenance capital expenditures                   $ 5             $ 3
                                                                             

Volumes. The volumes reflected above represent average daily volumes for the
period. NGL transportation volumes increased as compared to the same period in
the prior year primarily due to an increase in volumes transported on our
wholly-owned and joint venture NGL pipelines originating from our La Grange
and Chisholm processing plants as a result of more production from the Eagle
Ford area. The Lone Star West Texas Gateway NGL pipeline was placed into
service in late December 2012, but did contribute significantly to the
transported volumes for the three months ended December, 31, 2012.

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

                                        Three Months Ended
                                          December 31,
                                          2012       2011
Storage revenues                          $  32        $  35
Transportation revenues                      28           12
Processing and fractionation revenues       18          20
Total gross margin                        $  78        $  67
                                                          

Segment Adjusted EBITDA increased primarily due to the Freedom, Liberty,
Gateway, and Justice pipelines being placed in service in 2012.

Investment in Sunoco Logistics

                                                          Three Months Ended
                                                            December 31,
                                                            2012        2011
Revenue                                                     $ 3,194       $  —
Cost of products sold                                        2,843        —
Gross margin                                                  351            —
Unrealized gains on commodity risk management                 (15   )        —
activities
Operating expenses, excluding non-cash compensation           (95   )        —
expense
Selling, general and administrative, excluding non-cash       (32   )        —
compensation expense
Adjusted EBITDA related to unconsolidated affiliates         10         —
Segment Adjusted EBITDA                                     $ 219        $  —
                                                                          
Distributions from unconsolidated affiliates                $ 6           $  —
Maintenance capital expenditures                              21             —
                                                                             

We obtained control of Sunoco Logistics on October 5, 2012 in connection with
our acquisition of Sunoco; therefore, no comparative results were reflected in
our financial statements.

Retail Marketing

                                                        Three Months Ended
                                                          December 31,
                                                          2012          2011
Total retail gasoline outlets, end of period                4,988            —
Total company-operated outlets, end of period               437              —
Gasoline and diesel throughput per company-operated         198,000          —
site (gallons/month)
Revenue                                                   $ 5,926         $  —
Cost of products sold                                      5,757          —
Gross margin                                                169              —
Operating expenses, excluding non-cash compensation         (119    )        —
expense
Selling, general and administrative, excluding              (17     )        —
non-cash compensation expense
LIFO valuation reserve (included in gross margin)           75               —
Adjusted EBITDA related to unconsolidated affiliates       1              —
Segment Adjusted EBITDA                                   $ 109          $  —
                                                                          
Maintenance capital expenditures                          $ 20            $  —
                                                                             

We acquired our retail marketing segment on October 5, 2012 in connection with
our acquisition of Sunoco; therefore, no comparative results were reflected in
our financial statements.

All Other

                                                         Three Months Ended
                                                           December 31,
                                                           2012      2011
Revenue                                                    $ 88        $ 475
Cost of products sold                                       80        296 
Gross margin                                                 8           179
Unrealized losses on commodity risk management               —           2
activities
Operating expenses, excluding non-cash compensation          (15 )       (94 )
expense
Selling, general and administrative, excluding               (90 )       (15 )
non-cash compensation expense
Adjusted EBITDA related to unconsolidated affiliates         93          —
Adjusted EBITDA related to discontinued operations          33        —   
Segment Adjusted EBITDA                                    $ 29       $ 72  
                                                                       
Distributions from unconsolidated affiliates               $ 24        $ —
Maintenance capital expenditures                             25          6
                                                                             

Amounts reflected in our other segment primarily include:

  *Our retail propane and other retail propane related operations prior to
    our contribution of those operations to AmeriGas Partners, L.P.
    ("AmeriGas") in January 2012. Our investment in AmeriGas was reflected in
    the other segment subsequent to that transaction;
  *Southern Union's local distribution operations beginning March 26, 2012;
  *Our natural gas compression operations; and,
  *Sunoco's 33% non-operating interest in Philadelphia Energy Solutions
    ("PES"), a joint venture with The Carlyle Group, L.P. ("The Carlyle
    Group"), which owns a refinery in Philadelphia.

Contact:

Investor Relations:
Energy Transfer
Brent Ratliff, 214-981-0700
or
Media Relations:
Granado Communications Group
Vicki Granado, 214-599-8785
Cell: 214-498-9272
 
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