Energy Transfer Equity Reports Third Quarter Results

  Energy Transfer Equity Reports Third Quarter Results

Business Wire

DALLAS -- November 5, 2013

Energy Transfer Equity, L.P. (NYSE:ETE) today reported financial results for
the quarter ended September30, 2013.

Distributable Cash Flow, as adjusted, for the three months ended September30,
2013 was $176 million as compared to $189 million for the three months ended
September30, 2012, a decrease of $13 million. ETE’s net income attributable
to partners was $151 million for the three months ended September30, 2013, as
compared to $35 million for the three months ended September30, 2012, an
increase of $116 million.

Distributable Cash Flow, as adjusted, for the nine months ended September30,
2013 was $534 million as compared to $476 million for the nine months ended
September30, 2012, an increase of $58 million. ETE’s net income attributable
to partners was $368 million for the nine months ended September30, 2013, as
compared to $255 million for the nine months ended September30, 2012, an
increase of $113 million.

The Partnership’s key accomplishments during or subsequent to the quarter
include the following:

  *ETE’s Board of Directors approved an increase in its quarterly
    distribution to $0.6725 per unit ($2.69 annualized) on ETE Common Units
    for the quarter ended September 30, 2013, representing an increase of
    $0.07 per common unit on an annualized basis.
  *ETP completed the sale of the assets of Missouri Gas Energy to Laclede Gas
    Company, a subsidiary of The Laclede Group, Inc., for $975 million.
  *The Department of Energy conditionally granted authorization to ETE,
    Energy Transfer Partners, L.P. (“ETP”) and BG Group to export from the
    existing Trunkline liquefied natural gas (“LNG”) import terminal up to 15
    million metric tons per annum of LNG to non-free trade agreement nations.
    ETE, ETP and BG Group subsequently announced their entry into a project
    development agreement to jointly develop the LNG export project at the
    existing Trunkline LNG import terminal in Lake Charles, Louisiana.
  *ETE exchanged 50.2 million ETP common units for newly issued Class H Units
    by ETP that track 50% of the underlying economics of the general partner
    interest and the incentive distribution rights of Sunoco Logistics
    Partners L.P.
  *ETP and Regency Energy Partners LP (“Regency”), both subsidiaries of ETE,
    announced that Lone Star NGL LLC (“Lone Star”), a joint venture between
    ETP and Regency, has placed in service a second natural gas liquids
    fractionator at its facility in Mont Belvieu, Texas, bringing Lone Star’s
    total fractionation capacity at Mont Belvieu to 200,000 barrels per day.

Furthermore, ETE commenced a tender offer on October 30, 2013 to purchase up
to $400 million in principal amount of its existing 7.50% Senior Notes due
2020. In conjunction with the tender offer, ETE intends to launch a
comprehensive refinancing of its existing debt. To that end, ETE intends to
refinance its current $900 million senior secured term loan due March 2017 and
is also finalizing a new five-year revolving credit facility for up to $600
million. Proceeds from a possible new issuance of senior secured notes and/or
a new term loan will be used to satisfy any proceeds required for a successful
tender of the Senior Notes. There can be no assurance that ETE will
successfully refinance its existing term loan or raise adequate funds for the
tender from any intended new issuance of senior secured notes or any term loan
financing.

The Partnership has scheduled a conference call for 8:30 a.m. Central Time,
Wednesday, November 6, 2013 to discuss its third quarter 2013 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.

The Partnership’s principal sources of cash flow are derived from
distributions related to its direct and indirect investments in the limited
and general partner interests in ETP and Regency, including 100% of ETP’s and
Regency’s incentive distribution rights, approximately 49.6 million of ETP’s
common units, approximately 26.3 million of Regency’s common units and
approximately 50.2 million ETP Class H Units. The Partnership’s primary cash
requirements are for general and administrative expenses, debt service
requirements and distributions to its partners.

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)
of Energy Transfer Partners, L.P. (NYSE:ETP), approximately 49.6 million ETP
common units, and approximately 50.2 million ETP Class H Units, which track
50% of the underlying economics of the general partners interest and IDRs of
Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general partner
and 100% of the IDRs of Regency Energy Partners LP (NYSE:RGP) and
approximately 26.3 million RGP common units. The Energy Transfer family of
companies owns more than 56,000 miles of natural gas, natural gas liquids,
refined products, and crude oil pipelines. For more information, visit the
Energy Transfer Equity, L.P. web site at www.energytransfer.com.

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 in the United States. ETP currently owns and operates
approximately 43,000 miles of natural gas, natural gas liquids, refined
products, and crude oil pipelines. ETP owns 100% of ETP Holdco Corporation,
which owns Southern Union Company and Sunoco, Inc., and a 70% interest in Lone
Star NGL LLC, a joint venture that owns and operates natural gas liquids
storage, fractionation and transportation assets. ETP also owns the general
partner, 100% of the incentive distribution rights, and approximately 33.5
million common units in Sunoco 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’s
general partner is owned by ETE. For more information, visit the Energy
Transfer Partners, L.P. web site at www.energytransfer.com.

Regency Energy Partners LP (NYSE: RGP) is a growth-oriented, midstream energy
partnership engaged in the gathering and processing, contract compression,
treating and transportation of natural gas and the transportation,
fractionation and storage of natural gas liquids. RGP also owns a 30% interest
in Lone Star NGL LLC, a joint venture that owns and operates natural gas
liquids storage, fractionation, and transportation assets in Texas, Louisiana
and Mississippi. Regency’s general partner is owned by Energy Transfer Equity,
L.P. (NYSE:ETE). For more information, visit the Regency Energy Partners LP
web site at www.regencyenergy.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
and refined product pipeline, terminalling, and acquisition and 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.

                                                               
ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
                                                                  
                                                  September 30,   December 31,
                                                  2013            2012
ASSETS
                                                                  
CURRENT ASSETS                                    $    6,887      $   5,597
                                                                  
PROPERTY, PLANT AND EQUIPMENT, net                     29,674         28,284
                                                                  
NON-CURRENT ASSETS HELD FOR SALE                       145            985
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED          4,087          4,737
AFFILIATES
NON-CURRENT PRICE RISK MANAGEMENT ASSETS               20             43
GOODWILL                                               6,428          6,434
INTANGIBLES ASSETS, net                                2,195          2,291
OTHER NON-CURRENT ASSETS, net                         607           533
Total assets                                      $    50,043     $   48,904
                                                                  
                                                                  
LIABILITIES AND EQUITY
                                                                  
CURRENT LIABILITIES                               $    6,047      $   5,845
                                                                  
NON-CURRENT LIABILITIES HELD FOR SALE                  70             142
LONG-TERM DEBT, less current maturities                22,011         21,440
DEFERRED INCOME TAXES                                  3,708          3,566
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES          78             162
SERIES A CONVERTIBLE PREFERRED UNITS                   —              331
OTHER NON-CURRENT LIABILITIES                          893            995
                                                                  
COMMITMENTS AND CONTINGENCIES
                                                                  
PREFERRED UNITS OF SUBSIDIARY                          32             73
                                                                  
EQUITY:
Total partners’ capital                                1,400          2,113
Noncontrolling interest                               15,804        14,237
Total equity                                          17,204        16,350
Total liabilities and equity                      $    50,043     $   48,904

                                                     
ENERGY TRANSFER EQUITY, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
(unaudited)
                                                        
                               Three Months Ended       Nine Months Ended
                               September 30,            September 30,
                                2013      2012      2013      2012  
REVENUES                       $ 12,486     $ 2,104     $ 35,728     $ 5,651
COSTS AND EXPENSES:
Cost of products sold            11,064       1,228       31,436       3,205
Operating expenses               403          208         1,127        614
Depreciation and                 332          211         962          571
amortization
Selling, general and            158        98        499        353   
administrative
Total costs and expenses        11,957     1,745     34,024     4,743 
OPERATING INCOME                 529          359         1,704        908
OTHER INCOME (EXPENSE):
Interest expense, net of         (298   )     (237  )     (913   )     (732  )
interest capitalized
Bridge loan related fees         —            —           —            (62   )
Equity in earnings of            38           21          182          118
unconsolidated affiliates
Gain on deconsolidation of       —            —           —            1,057
Propane Business
Losses on extinguishments of     —            —           (7     )     (123  )
debt
Gains (losses) on interest       3            (6    )     55           (23   )
rate derivatives
Gain on sale of AmeriGas         87           —           87           —
common units
Other, net                      33         (3    )    —          28    
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAX     392          134         1,108        1,171
EXPENSE
Income tax expense from         49         26        136        33    
continuing operations
INCOME FROM CONTINUING           343          108         972          1,138
OPERATIONS
Income (loss) from              13         (142  )    44         (136  )
discontinued operations
NET INCOME (LOSS)                356          (34   )     1,016        1,002
LESS: NET INCOME (LOSS)
ATTRIBUTABLE TO                 205        (69   )    648        747   
NONCONTROLLING INTEREST
NET INCOME ATTRIBUTABLE TO       151          35          368          255
PARTNERS
GENERAL PARTNER’S INTEREST      1          —         1          1     
IN NET INCOME
LIMITED PARTNERS’ INTEREST     $ 150       $ 35       $ 367       $ 254   
IN NET INCOME
INCOME FROM CONTINUING
OPERATIONS PER LIMITED
PARTNER UNIT:
Basic                          $ 0.52      $ 0.23     $ 1.24      $ 1.06  
Diluted                        $ 0.52      $ 0.23     $ 1.24      $ 1.06  
NET INCOME PER LIMITED
PARTNER UNIT:
Basic                          $ 0.54      $ 0.13     $ 1.31      $ 0.97  
Diluted                        $ 0.54      $ 0.13     $ 1.31      $ 0.97  
WEIGHTED AVERAGE NUMBER OF
UNITS OUTSTANDING:
Basic and diluted               280.7      280.0     280.4      262.3 

                                                        
ENERGY TRANSFER EQUITY, L.P.
DISTRIBUTABLE CASH FLOW
(Tabular dollar amounts in millions)
(unaudited)
                                                                             
                                    Three Months Ended    Nine Months Ended 
                                    September 30,          September 30,
                                    2013       2012       2013      2012
“Distributable Cash Flow,”
“Distributable Cash Flow, as
adjusted,” and “Distribution
Coverage Ratio” ^(1):
Cash distributions from ETP
associated with: ^(2)
Limited partner interest            $  45       $ 45       $ 223      $ 135
Class H Units                          16         —          16         —
General partner interest               5          5          15         15
Incentive distribution rights          165        147        528        381
IDR relinquishments                    (21  )     (31  )     (107 )     (59  )
Distributions credited to Holdco      —        —        (68  )    —    
consideration ^ (3)
Total cash distributions from ETP      210        166        607        472
Cash distributions from Regency
associated with: ^ (4)
Limited partner interest               12         12         36         36
General partner interest               1          1          3          4
Incentive distribution rights          3          2          8          6
IDR relinquishment                    (1   )    —        (2   )    —    
Total cash distributions from          15         15         45         46
Regency
Cash distributions from Holdco        —        —        50       —    
Total cash distributions from          225        181        702        518
ETP, Regency and Holdco
Distributable cash flow
attributable to Southern Union
(including acquisition-related         —          77         —          82
expenses) from March 26, 2012
through September 30, 2012 ^ (5)
Deduct expenses of the Parent
Company on a stand-alone basis:
Selling, general and
administrative expenses,               (8   )     (6   )     (38  )     (47  )
excluding non-cash compensation
expense
Interest expense, net of
amortization of financing costs,
interest income, and realized          (43  )     (64  )     (149 )     (172 )
gains and losses on interest rate
swaps
Bridge financing costs                —        —        —        (62  )
Distributable Cash Flow                174        188        515        319
Transaction-related expenses ^(6)     2        1        19       157  
Distributable Cash Flow, as         $  176     $ 189     $ 534     $ 476  
adjusted
                                                                             
Cash distributions to be paid to
the partners of ETE:
Distributions to be paid to         $  189      $ 175      $ 554      $ 525
limited partners
Distributions to be paid to           —        —        1        1    
general partner
Total cash distributions to be      $  189     $ 175     $ 555     $ 526  
paid to the partners of ETE ^(7)
                                                                             
Distribution Coverage Ratio ^(8)    0.93    x   1.08   x   0.96   x   0.90   x
                                                                             
Reconciliation of Non-GAAP
“Distributable Cash Flow” and
“Distributable Cash Flow, as
adjusted” to GAAP “Net income”
^(1):
Net income attributable to          $  151      $ 35       $ 368      $ 255
partners
Equity in income related to
investments in ETP, Regency and        (207 )     (101 )     (573 )     (562 )
Holdco
Total cash distributions from          225        181        702        518
ETP, Regency and Holdco
Amortization included in interest
expense (excluding ETP and             5          5          14         10
Regency)
Fair value adjustment of ETE           —          8          9          5
Preferred Units
Other non-cash (excluding ETP,        —        60       (5   )    93   
Regency and Holdco)
Distributable Cash Flow                174        188        515        319
Transaction-related expenses ^(6)     2        1        19       157  
Distributable Cash Flow, as         $  176     $ 189     $ 534     $ 476  
adjusted
                                                                             

^(1) This press release and accompanying schedules include the non-generally
accepted accounting principle (“non-GAAP”) financial measures of Distributable
Cash Flow. The schedule above provides a reconciliation of these non-GAAP
financial measures to their most directly comparable financial measure
calculated and presented in accordance with GAAP. The Partnership’s
Distributable Cash Flow should not be considered as an alternative to GAAP
financial measures such as net income, cash flow from operating activities or
any other GAAP measure of liquidity or financial performance.

Distributable Cash Flow. The Partnership defines Distributable Cash Flow for a
period as cash distributions expected to be received from ETP and Regency in
respect of such period in connection with the Partnership’s investments in
limited and general partner interests of ETP and Regency, net of the
Partnership’s cash expenditures for general and administrative costs and
interest expense. The Partnership’s definition of Distributable Cash Flow also
includes distributable cash flow related to Southern Union for the period from
March 26, 2012 (Southern Union acquisition date) until Southern Union was
contributed to Holdco on October 5, 2012. From October 5, 2012 until ETE’s 60%
interest in Holdco was contributed to ETP on April 30, 2013, Distributable
Cash Flow reflects dividends expected to be received from Holdco. The
Partnership defines distributable cash flow for Southern Union 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, and non-cash impairment
charges.

Distributable Cash Flow is a significant liquidity measure used by the
Partnership’s senior management to compare net cash flows generated by the
Partnership to the distributions the Partnership expects to pay its
unitholders. Using this measure, the Partnership’s management can compute the
coverage ratio of estimated cash flows for a period to planned cash
distributions for such period.

Distributable Cash Flow is also an important non-GAAP financial measure for
our limited partners since it indicates to investors whether the Partnership’s
investments are generating cash flows at a level that can sustain or support
an increase in quarterly cash distribution levels. Financial measures such as
Distributable Cash Flow are quantitative standards used by the investment
community with respect to publicly traded partnerships because the value of a
partnership unit is in part measured by its yield (which in turn is based on
the amount of cash distributions a partnership can pay to a unitholder). The
GAAP measure most directly comparable to Distributable Cash Flow is net income
for ETE on a stand-alone basis (“Parent Company”). The accompanying analysis
of Distributable Cash Flow is presented for the three and nine months ended
September30, 2013 and 2012 for comparative purposes.

Distributable Cash Flow, as adjusted. The Partnership defines Distributable
Cash Flow, as adjusted, for a period as cash distributions expected to be
received from ETP and Regency in respect of such period in connection with the
Partnership’s investments in limited and general partner interests of ETP and
Regency, plus the distributable cash flow related to Southern Union (as
described in the definition of Distributable Cash Flow above), dividends
expected to be received from Holdco (as described in the definition of
Distributable Cash Flow above), net of the Partnership’s cash expenditures for
general and administrative costs and interest expense, excluding certain
items, such as transaction-related expenses. Due to the cash expenses that
were incurred during the three and nine months ended September30, 2013 and
2012 in connection with the Partnership’s merger and acquisition activities
and other transactions, Distributable Cash Flow, as adjusted, for the three
and nine months ended September30, 2013 and 2012 is a significant liquidity
measure used by the Partnership’s senior management to compare net cash flows
generated by the Partnership to the distributions the Partnership expects to
pay its unitholders. Using this measure, the Partnership’s management can
compute the coverage ratio of estimated cash flows for a period to planned
cash distributions for such period. The GAAP measure most directly comparable
to Distributable Cash Flow, as adjusted, is net income for the Parent Company
on a stand-alone basis. The accompanying analysis of Distributable Cash Flow,
as adjusted, is presented for the three and nine months ended September30,
2013 and 2012 for comparative purposes.

^(2) For the three months ended September30, 2013, cash distributions
expected to be received from ETP consist of cash distributions in respect of
the quarter ended September30, 2013 payable on November 14, 2013 to holders
of record on November 4, 2013. For the three months ended September30, 2012,
cash distributions received from ETP consist of cash distributions paid on
November 14, 2012 in respect of the quarter ended September30, 2012.

For the nine months ended September 30, 2013, cash distributions received or
expected to be received from ETP consist of cash distributions paid on May 15,
2013 in respect of the quarter ended March 31, 2013, cash distributions paid
on August 14, 2013 in respect of the quarter ended June 30, 2013, and cash
distributions payable on November 14, 2013 to holders of record on November 4,
2013 in respect of the quarter ended September 30, 2013. For the nine months
ended September 30, 2012, cash distributions received or expected to be
received from 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 and cash distributions
paid on November 14, 2012 in respect of the quarter ended September 30, 2012.

^(3) For the nine months ended September 30, 2013, cash distributions paid by
ETP exclude distributions paid in respect of the quarter ended March 31, 2013
on 49.5 million ETP common units issued to ETE as a portion of the
consideration for ETP's acquisition of ETE's interest in Holdco on April 30,
2013. These newly acquired ETP common units received cash distributions on May
15, 2013; however, such distributions were reduced from the total cash portion
of the consideration paid to ETE in connection with the April 30, 2013 Holdco
transaction pursuant to the contribution agreement.

^(4) For the three months ended September30, 2013, cash distributions
expected to be received from Regency consist of cash distributions in respect
of the quarter ended September30, 2013 payable on November 14, 2013 to
holders of record on November 4, 2013. For the three months ended
September30, 2012, cash distributions received from Regency consist of cash
distributions paid on November 14, 2012 in respect of the quarter ended
September30, 2012.

For the nine months ended September 30, 2013, cash distributions received or
expected to be received from Regency consist of cash distributions paid on May
15, 2013 in respect of the quarter ended March 31, 2013, cash distributions
paid on August 14, 2013 in respect of the quarter ended June 30, 2013 and cash
distributions payable on November 14, 2013 to holders of record on November 4,
2013 in respect of the quarter ended September 30, 2013. For the nine months
ended September 30, 2012, cash distributions received or expected to be
received from Regency consist of cash distributions paid on May 14, 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 and cash distributions
paid on November 14, 2012 in respect of the quarter ended September30, 2012.

^(5) Distributable cash flow attributable to Southern Union was calculated as
follows:

                                                           Period from
                                     Three Months Ended  Acquisition
                                      September 30, 2012   (March 26, 2012) to
                                                           September 30, 2012
Net income (loss)                     $     17             $     (10     )
Amortization of finance costs               (12     )            (21     )
charged to interest
Depreciation and amortization               76                   155
Deferred income taxes                       27                   26
Non-cash equity-based compensation,
accretion expense and amortization          —                    5
of regulatory assets
Other, net                                  11                   17
Maintenance capital expenditures           (42     )           (90     )
Distributable cash flow                     77                   82
attributable to Southern Union
Acquisition-related expenses               1                  57      
recognized by Southern Union
Distributable cash flow, as
adjusted, attributable to Southern    $     78            $     139     
Union
                                                                         

Distributable cash flow attributable to Southern Union reflected above
includes change in control payments of $72 million, offset by benefit plan
curtailment gains of $15 million. The net amount of $57 million was added back
to calculate ETE’s Distributable Cash Flow, as adjusted.

^(6) Transaction-related expenses for the nine months ended September 30, 2012
related to ETE’s acquisition of Southern Union consisted of $62 million bridge
financing costs, $38 million of selling, general and administrative expenses
incurred by ETE and $57 million of merger-related expenses that were incurred
directly by Southern Union.

^(7) For the three months ended September30, 2013, cash distributions
expected to be paid by ETE consist of cash distributions in respect of the
quarter ended September30, 2013 payable on November 19, 2013 to holders of
record on November 4, 2013. For the three months ended September30, 2012,
cash distributions paid by ETE consist of cash distributions paid on November
16, 2012 in respect of the quarter ended September30, 2012.

For the nine months ended September 30, 2013, cash distributions paid or to be
paid by ETE consist of cash distributions paid on May 17, 2013 in respect of
the quarter ended March 31, 2013, cash distributions paid on August 19, 2013
in respect of the quarter ended June 30, 2013 and cash distributions payable
on November 19, 2013 to holders of record on November 4, 2013 in respect of
the quarter ended September 30, 2013. For the nine months ended September 30,
2012, cash distributions paid or to be paid by ETE consist of cash
distributions paid on May 18, 2012 in respect of the quarter ended March 31,
2012, cash distributions paid on August 17, 2012 in respect of the quarter
ended June 30, 2012 and cash distributions paid on November 16, 2012 in
respect of the quarter ended September 30, 2012.

^(8) Distribution Coverage Ratio is calculated as Distributable Cash Flow, as
adjusted, divided by total cash distributions to be paid to the partners of
ETE.

Contact:

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