Energy Transfer Partners Reports Fourth Quarter and Annual Results

  Energy Transfer Partners Reports Fourth Quarter and Annual Results

Business Wire

DALLAS -- February 19, 2014

Energy Transfer Partners, L.P. (NYSE: ETP) today reported its financial
results for the quarter and year ended December31, 2013.

Adjusted EBITDA for Energy Transfer Partners, L.P. (“ETP”) for the three
months ended December31, 2013 totaled $986 million, an increase of $38
million over the same period last year. Distributable Cash Flow attributable
to the partners of ETP for the three months ended December31, 2013 totaled
$530 million, an increase of $284 million over the same period last year. Loss
from continuing operations for the three months ended December31, 2013 was
$462 million, a decrease of $796 million compared to the same period last
year, including the impact of a non-cash goodwill impairment, as discussed
below.

The increases in Adjusted EBITDA and Distributable Cash Flow were primarily
due to recent strategic transactions and organic growth. ETP has placed more
than $1.20 billion in growth projects into service over the last twelve months
that are now generating strong and consistent earnings and cash flow.

The decrease in income from continuing operations between periods was
primarily due to the recognition of a goodwill impairment of $689 million
during the fourth quarter of 2013 related to Trunkline LNG Company, LLC
(“Trunkline LNG”).

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

  *In October, ETP and Energy Transfer Equity, L.P. (“ETE”) exchanged 50.2
    million ETP Common Units, owned by ETE, for new Class H Units issued by
    ETP that track 50.05% of the underlying economics of the general partner
    interest and incentive distribution rights of Sunoco Logistics Partners
    L.P. (“Sunoco Logistics”).
  *In November, ETP and Regency Energy Partners LP (“Regency”) 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.
  *In November, ETP amended its credit facility to extend the maturity until
    October 2017.
  *In December, Trunkline LNG Export, LLC, an entity owned jointly by ETP and
    ETE, filed Draft Resource Report No. 13 with the Federal Energy Regulatory
    Commission for the Lake Charles LNG export project. The report, which
    details engineering and design aspects of the LNG project, is a major
    milestone toward the formal application for authorization of the LNG
    project.
  *In January, ETP’s Board of Directors approved a second consecutive
    increase in its quarterly distribution to $0.92 per unit ($3.68
    annualized) on ETP Common Units for the quarter ended December 31, 2013,
    representing an increase of $0.06 per Common Unit on an annualized basis
    compared to the quarter ended September 30, 2013 and an increase of $0.105
    per Common Unit on an annualized basis compared to the quarter ended
    December 31, 2012.

In addition, earlier today, ETE and ETP completed the previously announced
transfer to ETE of Trunkline LNG, the entity that owns a LNG regasification
facility in Lake Charles, Louisiana, from ETP in exchange for the redemption
by ETP of 18.71 million ETP Common Units held by ETE. This transaction was
effective as of January 1, 2014.

An analysis of ETP’s segment results and other supplementary data is provided
after the financial tables shown below. ETP has scheduled a conference call
for 8:30 a.m. Central Time, Thursday, February 20, 2014 to discuss the fourth
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 ETP’s web site for a limited time.

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 35,000 miles of natural gas and natural gas liquids pipelines.
ETP owns 100% of Panhandle Eastern Pipe Line Company, LP (the successor of
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.

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 30.8 million ETP
common units, and approximately 50.2 million ETP Class H Units, which track
50% of the underlying economics of the general partner interest and the 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.

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.

Forward-Looking Statements

This press release may include certain statements concerning expectations for
the future that are forward-looking statements as defined by federal law. Such
forward-looking statements are subject to a variety of known and unknown
risks, uncertainties, and other factors that are difficult to predict and many
of which are beyond management’s control. An extensive list of factors that
can affect future results are discussed in the Partnerships’ Annual Reports on
Form 10-K and other documents filed from time to time with the Securities and
Exchange Commission. The Partnerships undertake no obligation to update or
revise any forward-looking statement to reflect new information or events.

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

                                                      
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
                                                         
                                                         December 31,
                                                         2013       2012
ASSETS
                                                                      
CURRENT ASSETS                                           $ 6,239      $ 5,404
                                                                      
PROPERTY, PLANT AND EQUIPMENT, net                         25,947       25,773
                                                                      
NON-CURRENT ASSETS HELD FOR SALE                           —            985
ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED              4,436        3,502
AFFILIATES
NON-CURRENT PRICE RISK MANAGEMENT ASSETS                   17           42
GOODWILL                                                   4,729        5,606
INTANGIBLE ASSETS, net                                     1,568        1,561
OTHER NON-CURRENT ASSETS, net                             766         357
Total assets                                             $ 43,702     $ 43,230
                                                                      
                                                                      
LIABILITIES AND EQUITY
                                                                      
CURRENT LIABILITIES                                      $ 6,067      $ 5,548
                                                                      
NON-CURRENT LIABILITIES HELD FOR SALE                      —            142
LONG-TERM DEBT, less current maturities                    16,451       15,442
LONG-TERM NOTES PAYABLE — RELATED PARTY                    —            166
NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES              54           129
DEFERRED INCOME TAXES                                      3,762        3,476
OTHER NON-CURRENT LIABILITIES                              1,080        995
                                                                      
COMMITMENTS AND CONTINGENCIES
                                                                      
EQUITY:
Total partners’ capital                                    11,540       9,201
Noncontrolling interest                                   4,748       8,131
Total equity                                              16,288      17,332
Total liabilities and equity                             $ 43,702     $ 43,230
                                                                        

                                               
ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per unit data)
(unaudited)
                                                     
                     Three Months Ended              Years Ended December 31,
                     December 31,
                     2013         2012             2013         2012
REVENUES             $ 12,032       $ 10,981         $ 46,339       $ 15,702
COSTS AND
EXPENSES:
Cost of products       10,727         9,660            41,204         12,266
sold
Operating              376            419              1,388          951
expenses
Depreciation and       268            237              1,032          656
amortization
Selling, general
and                    123            202              485            435
administrative
Goodwill              689          —              689          —      
impairment
Total costs and       12,183       10,518         44,798       14,308 
expenses
OPERATING INCOME       (151   )       463              1,541          1,394
(LOSS)
OTHER INCOME
(EXPENSE):
Interest
expense, net of        (217   )       (186   )         (849   )       (665   )
interest
capitalized
Equity in
earnings of            35             78               172            142
unconsolidated
affiliates
Gain on
deconsolidation        —              —                —              1,057
of Propane
Business
Gain on sale of
AmeriGas common        —              —                87             —
units
Loss on
extinguishment         —              —                —              (115   )
of debt
Gains (losses)
on interest rate       (2     )       5                44             (4     )
derivatives
Non-operating
environmental          (168   )       —                (168   )       —
remediation
Other, net            (1     )      1              5            11     
INCOME (LOSS)
FROM CONTINUING
OPERATIONS             (504   )       361              832            1,820
BEFORE INCOME
TAX EXPENSE
Income tax
expense
(benefit) from        (42    )      27             97           63     
continuing
operations
INCOME (LOSS)
FROM CONTINUING        (462   )       334              735            1,757
OPERATIONS
Income (loss)
from                  (11    )      27             33           (109   )
discontinued
operations
NET INCOME             (473   )       361              768            1,648
(LOSS)
LESS: NET INCOME
ATTRIBUTABLE TO       68           54             312          79     
NONCONTROLLING
INTEREST
NET INCOME
(LOSS)                 (541   )       307              456            1,569
ATTRIBUTABLE TO
PARTNERS
GENERAL
PARTNER’S              77             119              506            461
INTEREST IN NET
INCOME
CLASS H
UNITHOLDER’S          48           —              48           —      
INTEREST IN NET
INCOME
LIMITED
PARTNERS’            $ (666   )     $ 188           $ (98    )     $ 1,108  
INTEREST IN NET
INCOME (LOSS)
INCOME (LOSS)
FROM CONTINUING
OPERATIONS PER
LIMITED PARTNER
UNIT:
Basic                $ (1.87  )     $ 0.56          $ (0.23  )     $ 4.93   
Diluted              $ (1.87  )     $ 0.56          $ (0.23  )     $ 4.91   
NET INCOME
(LOSS) PER
LIMITED PARTNER
UNIT:
Basic                $ (1.90  )     $ 0.62          $ (0.18  )     $ 4.43   
Diluted              $ (1.90  )     $ 0.62          $ (0.18  )     $ 4.42   
WEIGHTED AVERAGE
NUMBER OF UNITS
OUTSTANDING:
Basic                 345.1        296.3          343.4        248.3  
Diluted               345.1        297.0          343.4        249.0  
                                                                             

                                                
SUPPLEMENTAL INFORMATION
(Tabular dollar amounts in millions)
(unaudited)
                                                      
                     Three Months Ended               Years Ended December 31,
                     December 31,
                     2013            2012           2013        2012
Reconciliation
of net income
(loss) to
Adjusted EBITDA
and
Distributable
Cash Flow (a):
Net income           $  (473  )        $ 361          $ 768         $ 1,648
(loss)
Interest
expense, net of         217              186            849           665
interest
capitalized
Gain on
deconsolidation         —                —              —             (1,057 )
of Propane
Business
Gain on sale of
AmeriGas common         —                —              (87   )       —
units
Goodwill                689              —              689           —
impairment
Income tax
expense
(benefit) from          (42   )          27             97            63
continuing
operations
Depreciation and        268              237            1,032         656
amortization
Non-cash
compensation            11               11             47            42
expense
(Gains) losses
on interest rate        2                (5   )         (44   )       4
derivatives
Unrealized
(gains) losses
on commodity            (6    )          (51  )         (51   )       9
risk management
activities
Write-down of
assets included
in income (loss)        —                (13  )         —             132
from
discontinued
operations
LIFO valuation          19               75             (3    )       75
adjustment
Loss on
extinguishment          —                —              —             115
of debt
Non-operating
environmental           168              —              168           —
remediation
Equity in
earnings of             (35   )          (78  )         (172  )       (142   )
unconsolidated
affiliates
Adjusted EBITDA
related to              155              178            629           480
unconsolidated
affiliates
Other, net             13             20           31          54     
Adjusted EBITDA         986              948            3,953         2,744
(consolidated)
Adjusted EBITDA
related to              (155  )          (178 )         (629  )       (480   )
unconsolidated
affiliates
Distributions
from                    123              72             464           262
unconsolidated
affiliates
Interest
expense, net of         (217  )          (186 )         (849  )       (665   )
interest
capitalized
Amortization
included in             (17   )          (26  )         (80   )       (35    )
interest expense
Income tax
(expense)
benefit from            42               (27  )         (97   )       (63    )
continuing
operations
Maintenance
capital                 (109  )          (143 )         (343  )       (313   )
expenditures
Other, net             —              2            4           3      
Distributable
Cash Flow               653              462            2,423         1,453
(consolidated)
Distributable
Cash Flow
attributable to         (155  )          (165 )         (655  )       (165   )
Sunoco Logistics
(100%)
Distributions
from Sunoco             57               41             204           41
Logistics to ETP
(b)
Distributions to
ETE in respect          —                (75  )         (50   )       (75    )
of Holdco (c)
Distributions to
Regency in             (25   )         (17  )        (87   )      (63    )
respect of Lone
Star (d)
Distributable
Cash Flow
attributable to      $  530           $ 246         $ 1,835      $ 1,191  
the partners of
ETP
                                                                    
Distributions to
the partners of
ETP (e):
Limited
Partners:
Common units         $  265            $ 224          $ 1,005       $ 783
held by public
Common units            45               45             268           180
held by ETE
Class H Units
held by ETE             54               —              105           —
Holdings
General Partner
interests held          5                5              20            20
by ETE
Incentive
Distribution            173              148            701           529
Rights (“IDR”)
held by ETE
IDR
relinquishments
related to             (57   )         (31  )        (199  )      (90    )
previous
transactions
Total
distributions to        485              391            1,900         1,422
be paid to the
partners of ETP
Distributions
credited to            —              —            (68   )      —      
Holdco
transactions (f)
Net
distributions to     $  485           $ 391         $ 1,832      $ 1,422  
the partners of
ETP
Distribution
coverage ratio         1.09  x         0.63 x        1.00  x      0.84   x
(g)
                                                                             

(a) 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 ETP’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.

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

ETP 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 ETP’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

ETP 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.

On a consolidated basis, Distributable Cash Flow includes 100% of the
Distributable Cash Flow of ETP’s consolidated subsidiaries. However, to the
extent that noncontrolling interests exist among ETP’s subsidiaries, the
Distributable Cash Flow generated by ETP’s subsidiaries may not be available
to be distributed to the partners of ETP. In order to reflect the cash flows
available for distributions to the partners of ETP, ETP has reported
Distributable Cash Flow attributable to the partners of ETP, which is
calculated by adjusting Distributable Cash Flow (consolidated), as follows:

  *For subsidiaries with publicly traded equity interests, Distributable Cash
    Flow (consolidated) includes 100% of Distributable Cash Flow attributable
    to such subsidiary, and Distributable Cash Flow attributable to the
    partners of ETP includes distributions to be received by the parent
    company with respect to the periods presented. Currently, Sunoco Logistics
    is the only such subsidiary.
  *For consolidated joint ventures or similar entities, where the
    noncontrolling interest is not publicly traded, Distributable Cash Flow
    (consolidated) includes 100% of Distributable Cash Flow attributable to
    such subsidiary, but Distributable Cash Flow attributable to the partners
    of ETP is net of distributions to be paid by the subsidiary to the
    noncontrolling interests. Currently, Lone Star is such a subsidiary, as it
    is 30% owned by Regency, which is an unconsolidated affiliate. Prior to
    April 30, 2013, Holdco was also such a subsidiary, as ETE held a
    noncontrolling interest in Holdco.

The Partnership has presented Distributable Cash Flow in previous
communications; however, the Partnership changed its calculation of this
non-GAAP measure in the quarter ended December 31, 2013. Previously, the
Partnership’s calculation of Distributable Cash Flow reflected the impact of
amortization included in interest expense. Such amortization includes
amortization of deferred financing costs, premiums or discounts on the
issuance of long-term debt, and fair value adjustments on long-term debt
assumed in acquisitions. Beginning with the quarter ended December 31, 2013,
the Partnership’s calculation of Distributable Cash Flow excludes the impact
of such amortization. Management believes that this revised calculation is
more useful to and more accurately reflects the cash flows of the Partnership
that are available for payment of distributions.

(b) For the three months ended December31, 2013, cash distributions paid from
Sunoco Logistics to ETP consist of cash distributions paid on February 14,
2014 in respect of the quarter ended December31, 2013. For the three months
ended December31, 2012, cash distributions paid from Sunoco Logistics to ETP
consist of cash distributions paid on February14, 2013 in respect of the
quarter ended December31, 2012.

For the year ended December31, 2013, cash distributions paid from Sunoco
Logistics to ETP consist of cash distributions paid on May15, 2013 in respect
of the quarter ended March31, 2013, cash distributions paid on August 14,
2013 in respect of the quarter ended June30, 2013, cash distributions paid on
November 14, 2013 in respect to the quarter ended September30, 2013, and cash
distributions paid on February 14, 2014 in respect of the quarter ended
December31, 2013. For the year ended December31, 2012, cash distributions
paid from Sunoco Logistics to ETP consist of cash distributions paid on
February14, 2013 in respect of the quarter ended December31, 2012.

(c) For the year ended December31, 2013, cash distributions to ETE in respect
of Holdco consist of cash distributions paid in April 2013 in respect to the
quarter ended March31, 2013.

For the three months and year ended December31, 2012, cash distributions to
ETE in respect of Holdco consist of cash distributions paid on February 14,
2013 in respect of the quarter ended December 31, 2012.

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

(e) For the three months ended December31, 2013, cash distributions paid to
the partners of ETP consist of cash distributions paid on February 14, 2014 in
respect of the quarter ended December31, 2013. For the three months ended
December 31, 2012, cash distributions 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 year ended December31, 2013, cash distributions paid to the partners
of ETP consist of cash distributions paid on May15, 2013 in respect of the
quarter ended March31, 2013, cash distributions paid on August 14, 2013 in
respect of the quarter ended June30, 2013, cash distributions paid on
November 14, 2013 in respect of the quarter ended September30, 2013, and cash
distributions paid on February 14, 2014 in respect of the quarter ended
December31, 2013. For the year ended December31, 2012, cash distributions
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.

(f) For the year ended December31, 2013, net distributions to the partners of
ETP excluded distributions paid in respect of the quarter ended March31, 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 issued ETP Common Units received cash distributions on
May15, 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.

(g) Distribution coverage ratio is calculated as Distributable Cash Flow
attributable to the partners of ETP divided by net distributions to the
partners of ETP.

               SUMMARY ANALYSIS OF QUARTERLY RESULTS BY SEGMENT
                     (Tabular dollar amounts in millions)
                                 (unaudited)

Our segment results were presented based on the measure of Segment Adjusted
EBITDA. 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 cost of products sold to
    calculate 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. This expense is not included in Segment Adjusted EBITDA
    and therefore is 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.

                                        Three Months Ended  
                                          December 31,
                                          2013       2012      Change
Segment Adjusted EBITDA:
Midstream                                 $  129       $ 109     $ 20
NGL transportation and services              94          54        40
Interstate transportation and storage        301         312       (11 )
Intrastate transportation and storage        112         131       (19 )
Investment in Sunoco Logistics               210         219       (9  )
Retail marketing                             91          109       (18 )
All other                                   49         14       35  
                                          $  986       $ 948     $ 38  
                                                                       

Midstream

                            Three Months Ended               
                              December 31,
                              2013            2012              Change
Gathered volumes
(MMBtu/d):
ETP legacy assets               2,493,038         2,473,878         19,160
Southern Union gathering        —                 533,548           (533,548 )
and processing
NGLs produced (Bbls/d):
ETP legacy assets               119,878           87,389            32,489
Southern Union gathering        —                 42,346            (42,346  )
and processing
Equity NGLs produced
(Bbls/d):
ETP legacy assets               11,036            13,538            (2,502   )
Southern Union gathering        —                 6,724             (6,724   )
and processing
Revenues                      $ 563             $ 543             $ 20
Cost of products sold          400             367             33       
Gross margin                    163               176               (13      )
Unrealized gains on
commodity risk management       (2        )       —                 (2       )
activities
Operating expenses,
excluding non-cash              (33       )       (49       )       16
compensation expense
Selling, general and
administrative expenses,        (2        )       (12       )       10
excluding non-cash
compensation expense
Adjusted EBITDA related
to unconsolidated               —                 (6        )       6
affiliates
Other                          3               —               3        
Segment Adjusted EBITDA       $ 129            $ 109            $ 20       
                                                                             

Excluding the $10 million negative impact related to the deconsolidation of
Southern Union’s gathering and processing operations, midstream’s Segment
Adjusted EBITDA increased $30 million as a result of increased cash flows from
assets recently placed in service and an increase in production (primarily in
the Eagle Ford Shale) due to continued favorable market conditions.

Segment Adjusted EBITDA for the midstream segment reflected a decrease in
gross margin as follows:

                                              Three Months Ended  
                                                December 31,
                                                2013       2012      Change
Gathering and processing fee-based revenues     $  122       $ 101     $ 21
Non fee-based contracts and processing             37          73        (36 )
Other                                             4          2        2   
Total gross margin                              $  163       $ 176     $ (13 )
                                                                             

The assets recently placed in service and increased production, as discussed
above, had a favorable impact of $29 million on fee-based revenues, which was
offset by $8 million related to the deconsolidation of Southern Union’s
gathering and processing operations on April 30, 2013. Non fee-based gross
margin decreased primarily due to the deconsolidation of Southern Union’s
gathering and processing operations.

NGL Transportation and Services

                                 Three Months Ended           
                                   December 31,
                                   2013          2012            Change
NGL transportation volumes           360,480         187,821         172,659
(Bbls/d)
NGL fractionation volumes            125,275         18,424          106,851
(Bbls/d)
Revenues                           $ 776           $ 154           $ 622
Cost of products sold               643           76            567     
Gross margin                         133             78              55
Operating expenses, excluding        (38     )       (18     )       (20     )
non-cash compensation expense
Selling, general and
administrative expenses,             (2      )       (4      )       2
excluding non-cash
compensation expense
Adjusted EBITDA related to          1             (2      )      3       
unconsolidated affiliates
Segment Adjusted EBITDA            $ 94           $ 54           $ 40      
                                                                             

Segment Adjusted EBITDA for the NGL transportation and services segment
increased primarily due to higher gross margin, as discussed below, partially
offset by higher operating expenses primarily due to additional expenses from
assets recently placed in service.

Segment Adjusted EBITDA for the NGL transportation and services segment
reflected an increase in gross margin as follows:

                                      Three Months Ended  
                                        December 31,
                                        2013        2012     Change
Transportation margin                   $  52         $ 28     $  24
Processing and fractionation margin        40           18        22
Storage margin                             38           32        6
Other margin                              3           —        3
Total gross margin                      $  133        $ 78     $  55
                                                                  

Transportation margin increased as a result of higher volumes transported
primarily due to the completion of the Gateway pipeline resulting in increased
margin of $18 million on our Lone Star pipeline system for the three months
ended December 31, 2013. The completion of our Justice pipeline connection to
Mont Belvieu, Texas and additional NGL production from our processing plants
accounted for the remainder of the increase in transportation margin.

Processing and fractionation margin increased due to higher volumes from the
startup of Lone Star’s fractionators in Mont Belvieu, Texas in December 2012
and October 2013, respectively.

Interstate Transportation and Storage

                            Three Months Ended               
                              December 31,
                              2013            2012              Change
Natural gas transported         6,405,185         6,962,646         (557,461 )
(MMBtu/d)
Natural gas sold                19,244            17,020            2,224
(MMBtu/d)
Revenues                      $ 317             $ 334             $ (17      )
Operating expenses,
excluding non-cash
compensation,                   (91       )       (77       )       (14      )
amortization and
accretion expenses
Selling, general and
administrative expenses,
excluding non-cash              (14       )       (30       )       16
compensation,
amortization and
accretion expenses
Adjusted EBITDA related
to unconsolidated              89              85              4        
affiliates
Segment Adjusted EBITDA       $ 301            $ 312            $ (11      )
                                                                  
Distributions from            $ 83              $ 42              $ 41
unconsolidated affiliates
                                                                             

Segment Adjusted EBITDA for the interstate transportation and storage segment
decreased primarily due to a $17 million decrease in revenues as a result of
overall lower capacity sold and lower rates. Additionally, an increase of $14
million in operating expenses, due in part to the timing of maintenance
activities, was offset by a $16 million decrease in selling, general and
administrative expenses. Selling, general and administrative expenses were
lower primarily due to the impact of certain cost reduction initiatives in
2013.

Intrastate Transportation and Storage

                            Three Months Ended               
                              December 31,
                              2013            2012              Change
Natural gas transported         8,991,586         9,426,807         (435,221 )
(MMBtu/d)
Revenues                      $ 592             $ 659             $ (67      )
Cost of products sold          415             445             (30      )
Gross margin                    177               214               (37      )
Unrealized gains on
commodity risk management       (9        )       (35       )       26
activities
Operating expenses,
excluding non-cash              (51       )       (47       )       (4       )
compensation expense
Selling, general and
administrative expenses,        (5        )       (4        )       (1       )
excluding non-cash
compensation expense
Adjusted EBITDA related
to unconsolidated              —               3               (3       )
affiliates
Segment Adjusted EBITDA       $ 112            $ 131            $ (19      )
                                                                             

Segment Adjusted EBITDA for the intrastate transportation and storage segment
decreased primarily due to a decrease in transportation fees due to lower
transportation volumes from the cessation of certain long-term contracts, and
to a lesser extent, due to the renewal of long-term contracts at lower rates.

Investment in Sunoco Logistics

                                       Three Months Ended       
                                         December 31,
                                         2013        2012          Change
Revenue                                  $ 4,288       $ 3,189       $ 1,099
Cost of products sold                     4,040       2,885      1,155 
Gross margin                               248           304           (56   )
Unrealized (gains) losses on               11            (15   )       26
commodity risk management activities
Operating expenses, excluding              (30   )       (48   )       18
non-cash compensation expense
Selling, general and administrative
expenses, excluding non-cash               (20   )       (32   )       12
compensation expense
Adjusted EBITDA related to                 10            10            —
unconsolidated affiliates
Other                                     (9    )      —           (9    )
Segment Adjusted EBITDA                  $ 210        $ 219        $ (9    )
                                                                     
Distributions from unconsolidated        $ 4           $ 6           $ (2    )
affiliates
                                                                             

Segment Adjusted EBITDA for the investment in Sunoco Logistics segment
decreased due to lower crude oil margins in Sunoco Logistics’ crude oil
acquisition and marketing operations of $56 million driven by contracted crude
differentials compared to the prior year, partially offset by increased crude
oil volumes of $8 million as a result of the expansion of Sunoco Logistics’
crude oil trucking fleet and higher market demand. This net decrease was
partially offset by an increase in Sunoco Logistics’ crude oil pipeline
operations of $30 million primarily due to higher throughput volumes largely
attributable to expansion projects coming online in 2013 and strong demand for
West Texas crude as well as an increase in Sunoco Logistics’ terminal
facilities operations of $10 million primarily due to improved contributions
from the Nederland and Eagle Point terminals.

Retail Marketing

                                  Three Months Ended           
                                    December 31,
                                    2013          2012            Change
Total retail gasoline outlets,        5,112           4,988           124
end of period
Total company-operated outlets,       513             437             76
end of period
Gasoline and diesel throughput
per company-operated site             193,901         198,000         (4,099 )
(gallons/month)
Revenue                             $ 5,201         $ 5,926         $ (725   )
Cost of products sold                4,961         5,757         (796   )
Gross margin                          240             169             71
Unrealized gains on commodity         (2      )       —               (2     )
risk management activities
Operating expenses, excluding         (128    )       (119    )       (9     )
non-cash compensation expense
Selling, general and
administrative expenses,              (38     )       (17     )       (21    )
excluding non-cash compensation
expense
LIFO valuation adjustments            19              75              (56    )
Adjusted EBITDA related to           —             1             (1     )
unconsolidated affiliates
Segment Adjusted EBITDA             $ 91           $ 109          $ (18    )
                                                                             

Segment Adjusted EBITDA for the retail marketing segment decreased primarily
due to lower retail gasoline margins, offset by a $10 million positive impact
from the MACS acquisition in October 2013. In the prior period, retail
gasoline margins were unusually high as the cost of wholesale gasoline
declined sharply in line with the crude market decline.

All Other

                                             Three Months Ended   
                                               December 31,
                                               2013      2012        Change
Revenue                                        $ 725       $ 485       $ 240
Cost of products sold                           692       481       211 
Gross margin                                     33          4           29
Unrealized gains on commodity risk               (4  )       (1  )       (3  )
management activities
Operating expenses, excluding non-cash           (9  )       (15 )       6
compensation expense
Selling, general and administrative
expenses, excluding non-cash compensation        (35 )       (91 )       56
expense
Adjusted EBITDA related to discontinued          1           33          (32 )
operations
Adjusted EBITDA related to unconsolidated        57          87          (30 )
affiliates
Other                                            7           —           7
Elimination                                     (1  )      (3  )      2   
Segment Adjusted EBITDA                        $ 49       $ 14       $ 35  
                                                                       
Distributions from unconsolidated              $ 34        $ 24        $ 10
affiliates
                                                                             

Amounts reflected above primarily include:

  *our investment in AmeriGas;
  *our natural gas compression operations;
  *an approximate 33% non-operating interest in PES, a refining joint
    venture;
  *our investment in Regency related to the Regency common and Class F units
    received by Southern Union in exchange of its interest in Southern Union
    Gathering Company, LLC to Regency on April 30, 2013; and
  *our natural gas marketing operations.

Adjusted EBITDA related to discontinued operations reflected the results of
Southern Union’s local distribution operations.

Adjusted EBITDA related to unconsolidated affiliates reflected the results
from our investments in AmeriGas, PES and Regency. Additional information
related to unconsolidated affiliates is provided below in “Supplemental
Information on Unconsolidated Affiliates.”

Segment Adjusted EBITDA for all other increased primarily due to favorable
results from our natural gas marketing operations and due to merger-related
expenses incurred in 2012.

The increase in distributions from unconsolidated affiliates was primarily due
to cash distributions from our ownership in Regency of $15million during the
fourth quarter of 2013 slightly offset by a decrease in cash distributions
from our ownership in AmeriGas of $5million as a result of selling a portion
of these interests in July 2013.

               SUPPLEMENTAL INFORMATION ON CAPITAL EXPENDITURES
                        (Tabular amounts in millions)
                                 (unaudited)

The following is a summary of capital expenditures (net of contributions in
aid of construction costs) during the year ended December31, 2013:

                                        Growth    Maintenance   Total
Midstream^(1)                             $ 516       $    49         $ 565
NGL transportation and services^(2)         426            17           443
Interstate transportation and storage       55             97           152
Intrastate transportation and storage       18             29           47
Investment in Sunoco Logistics              965            53           1,018
Retail marketing                            113            63           176
All other (including eliminations)         19            35          54
Total capital expenditures                $ 2,112     $    343        $ 2,455
                                                                        

^(1) Amounts reflected above for the midstream segment include growth and
maintenance capital expenditures of $95 million and $10 million, respectively,
incurred by Southern Union’s gathering and processing operations prior to
deconsolidation on April30, 2013.

^(2) We received $147million in capital contributions from Regency related to
their 30% share of Lone Star.

We currently expect capital expenditures for the full year 2014 to be within
the following ranges:

                                   Growth                 Maintenance
                                     Low       High          Low     High
Midstream                            $ 275       $ 300         $ 10      $ 15
NGL transportation and                 300         330           20        25
services^(1)
Interstate transportation and          20          30            115       135
storage
Intrastate transportation and          30          40            25        30
storage
Investment in Sunoco Logistics         1,250       1,350         65        75
Retail marketing                       125         155           50        60
All other (including                  60         80           10       15
eliminations)
Total capital expenditures           $ 2,060     $ 2,285       $ 295     $ 355
                                                                           

^(1) We expect to receive capital contributions from Regency related to their
30% share of Lone Star of between $75 million and $100 million.

                                                                  
SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED AFFILIATES
(In millions)
(unaudited)
                                                                       
                                                Three Months Ended
                                                December 31,
                                                2013       2012      Change
Equity in earnings (losses) of
unconsolidated affiliates:
AmeriGas                                        $  26        $ 25      $ 1
Citrus                                             21          16        5
FEP                                                14          14        —
Regency                                            (2  )       —         (2  )
Other                                             (24 )      23       (47 )
Total equity in earnings of unconsolidated      $  35       $ 78      $ (43 )
affiliates
Proportionate share of interest,
depreciation, amortization, non-cash
compensation expense, loss on debt
extinguishment and taxes:
AmeriGas                                        $  27        $ 35      $ (8  )
Citrus                                             49          50        (1  )
FEP                                                4           6         (2  )
Regency                                            26          —         26
Other                                             14        9        5   
Total proportionate share of interest,
depreciation, amortization, non-cash            $  120      $ 100     $ 20  
compensation expense, loss on debt
extinguishment and taxes
Adjusted EBITDA related to unconsolidated
affiliates:
AmeriGas                                        $  53        $ 60      $ (7  )
Citrus                                             70          66        4
FEP                                                18          20        (2  )
Regency                                            24          —         24
Other                                             (10 )      32       (42 )
Total Adjusted EBITDA related to                $  155      $ 178     $ (23 )
unconsolidated affiliates
Distributions received from unconsolidated
affiliates:
AmeriGas                                        $  19        $ 24      $ (5  )
Citrus                                             65          25        40
FEP                                                18          17        1
Regency                                            15          —         15
Other                                             6         6        —   
Total distributions received from               $  123      $ 72      $ 51  
unconsolidated affiliates

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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