Energy Transfer Partners Reports Second Quarter Results

  Energy Transfer Partners Reports Second Quarter Results  Business Wire  DALLAS -- August 6, 2014  Energy Transfer Partners, L.P. (NYSE: ETP) today reported its financial results for the quarter ended June30, 2014. Adjusted EBITDA for Energy Transfer Partners, L.P. (“ETP” or the “Partnership”) for the three months ended June 30, 2014 totaled $1.17billion, an increase of $100million over the same period last year. Distributable Cash Flow attributable to the partners of ETP for the three months ended June 30, 2014 totaled $538million, an increase of $55million over the same period last year. Income from continuing operations for the three months ended June 30, 2014 was $539million, an increase of $135million over the same period last year.  Adjusted EBITDA for ETP for the six months ended June 30, 2014 totaled $2.38billion, an increase of $350million over the same period last year. Distributable Cash Flow attributable to the partners of ETP for the six months ended June 30, 2014 totaled $1.25billion, an increase of $379million over the same period last year. Income from continuing operations for the six months ended June 30, 2014 was $1.01billion, an increase of $200million over the same period last year.  In July, ETP announced that its Board of Directors approved an increase in its quarterly distribution to $0.955 per unit ($3.82 annualized) on ETP Common Units for the quarter ended June30, 2014, representing an increase of $0.08 per Common Unit on an annualized basis compared to the first quarter of 2014. For the quarter ended June30, 2014, ETP’s distribution coverage ratio was 1.10x.  ETP’s other recent key accomplishments include the following:    *In June 2014, ETP announced that our Board of Directors approved the     construction of a pipeline (“ET Rover”) to transport natural gas from the     prolific Marcellus and Utica Shale areas to numerous market regions in the     United States and Canada. To date, ETP has secured 2.95 billion cubic feet     per day (“Bcf/d”) of binding, fee-based commitments under predominantly 20     year agreements, representing 91% of the 3.25 Bcf/d total design capacity,     and is still evaluating additional bids that were received in the open     season. The project is fully subscribed to the Dawn, Ontario hub at 1.3     Bcf/d, with the balance of capacity commitments delivered to interconnects     with other pipelines in the Midwest. ETP has ordered the pipe for the     project and expects the segment to the Midwest markets to be in-service by     December 2016 and in-service to Dawn, Ontario by July 2017.   *In June 2014, ETP also announced that our Board of Directors approved the     construction of an approximately 1,100 mile pipeline to transport crude     oil supply from strategic receipt points in the Bakken/Three Forks     production area in North Dakota to Patoka, Illinois, where the pipeline     will interconnect with ETP’s existing Trunkline Pipeline, which is being     converted from natural gas service to crude oil transportation service.     ETP currently expects to build the pipeline to a capacity as high as     570,000 barrels per day based on binding commitments received to date and     ongoing discussions with a number of key potential shippers. The pipeline     is expected to be in-service by December 2016.   *In June 2014, ETP sold 8.5million AmeriGas Partners, L.P. (“AmeriGas”)     common units for net proceeds of $377million, and sold an additional     1.2million AmeriGas common units for net proceeds of $55million in     August 2014.   *The Partnership continues to make progress toward the close of its     recently announced acquisition of Susser Holdings Corporation (“Susser”)     with Susser’s shareholders scheduled to vote on the acquisition at a     meeting to be held on August 28, 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, August7, 2014 to discuss the second quarter 2014 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 67.1 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 57.2 million RGP common units. The Energy Transfer family of companies owns approximately 71,000 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, refined products, and natural gas liquids pipeline, terminalling and acquisition and marketing assets which are used to facilitate the purchase and sale of crude oil, refined products, and natural gas liquids. 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 Partnership’s Annual Reports on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. The Partnership undertakes 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)                                                     June 30,   December 31,                                                      2014         2013 ASSETS                                                                    CURRENT ASSETS                                       $ 7,213      $   6,239                                                                    PROPERTY, PLANT AND EQUIPMENT, net                     26,491         25,947                                                                    ADVANCES TO AND INVESTMENTS IN UNCONSOLIDATED          3,850          4,436 AFFILIATES NON-CURRENT PRICE RISK MANAGEMENT ASSETS               —              17 GOODWILL                                               4,521          4,729 INTANGIBLE ASSETS, net                                 1,512          1,568 OTHER NON-CURRENT ASSETS, net                         636           766 Total assets                                         $ 44,223     $   43,702                                                                                                                                       LIABILITIES AND EQUITY                                                                    CURRENT LIABILITIES                                  $ 7,515      $   6,067                                                                    LONG-TERM DEBT, less current maturities                16,220         16,451 NON-CURRENT PRICE RISK MANAGEMENT LIABILITIES          69             54 DEFERRED INCOME TAXES                                  3,612          3,762 OTHER NON-CURRENT LIABILITIES                          1,037          1,080                                                                    COMMITMENTS AND CONTINGENCIES REDEEMABLE NONCONTROLLING INTERESTS                    15             —                                                                    EQUITY: Total partners’ capital                                10,816         11,540 Noncontrolling interest                               4,939         4,748 Total equity                                          15,755        16,288 Total liabilities and equity                         $ 44,223     $   43,702    ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per unit data) (unaudited)                       Three Months Ended          Six Months Ended                        June 30,                      June 30,                         2014       2013         2014       2013    REVENUES               $ 13,029       $ 11,551       $ 25,261       $ 22,405 COSTS AND EXPENSES: Cost of products         11,636         10,229         22,502         19,823 sold Operating expenses       308            327            627            654 Depreciation and         268            251            534            511 amortization Selling, general        81           112          174          251     and administrative Total costs and         12,293       10,919       23,837       21,239  expenses OPERATING INCOME         736            632            1,424          1,166 OTHER INCOME (EXPENSE): Interest expense, net of interest          (217   )       (211   )       (436   )       (422   ) capitalized Equity in earnings of unconsolidated        57             37             136            109 affiliates Gain on sale of AmeriGas common          93             —              163            — units Gains (losses) on interest rate            (46    )       39             (48    )       46 derivatives Other, net              (14    )      (4     )      (17    )      (1     ) INCOME FROM CONTINUING               609            493            1,222          898 OPERATIONS BEFORE INCOME TAX EXPENSE Income tax expense from continuing         70           89           216          92      operations INCOME FROM CONTINUING               539            404            1,006          806 OPERATIONS Income from discontinued            42           9            66           31      operations NET INCOME               581            413            1,072          837 LESS: NET INCOME ATTRIBUTABLE TO         110          93           186          195     NONCONTROLLING INTEREST NET INCOME ATTRIBUTABLE TO          471            320            886            642 PARTNERS GENERAL PARTNER’S INTEREST IN NET          125            155            238            283 INCOME CLASS H UNITHOLDER’S            51           —            100          —       INTEREST IN NET INCOME COMMON UNITHOLDERS’           $ 295         $ 165         $ 548         $ 359     INTEREST IN NET INCOME INCOME FROM CONTINUING OPERATIONS PER COMMON UNIT: Basic                  $ 0.79        $ 0.52        $ 1.47        $ 1.04    Diluted                $ 0.79        $ 0.52        $ 1.47        $ 1.04    NET INCOME PER COMMON UNIT: Basic                  $ 0.92        $ 0.53        $ 1.67        $ 1.08    Diluted                $ 0.92        $ 0.53        $ 1.67        $ 1.08    WEIGHTED AVERAGE NUMBER OF COMMON UNITS OUTSTANDING: Basic                   318.5        352.6        321.4        326.9   Diluted                 319.5        353.8        322.4        328.1      SUPPLEMENTAL INFORMATION (Tabular dollar amounts in millions) (unaudited)                           Three Months Ended        Six Months Ended                            June 30,                    June 30,                             2014      2013        2014      2013   Reconciliation of net income to Adjusted EBITDA and Distributable Cash Flow (a): Net income                 $ 581         $ 413         $ 1,072       $ 837 Interest expense, net of interest                  217           211           436           422 capitalized Gain on sale of              (93   )       —             (163  )       — AmeriGas common units Income tax expense from continuing              70            89            216           92 operations Depreciation and             268           251           534           511 amortization Non-cash compensation        13            10            27            24 expense (Gains) losses on interest rate                46            (39   )       48            (46   ) derivatives Unrealized (gains) losses on commodity          1             (18   )       30            (37   ) risk management activities LIFO valuation               (20   )       22            (34   )       (16   ) adjustment Equity in earnings of unconsolidated               (57   )       (37   )       (136  )       (109  ) affiliates Adjusted EBITDA related to                   170           158           366           323 unconsolidated affiliates Other, net                  (27   )      9           (21   )      24     Adjusted EBITDA              1,169         1,069         2,375         2,025 (consolidated) Adjusted EBITDA related to                   (170  )       (158  )       (366  )       (323  ) unconsolidated affiliates Distributions from unconsolidated               92            102           173           197 affiliates Interest expense, net of interest                  (217  )       (211  )       (436  )       (422  ) capitalized Amortization included        (18   )       (24   )       (34   )       (47   ) in interest expense Current income tax expense from                 (74   )       (24   )       (327  )       (19   ) continuing operations Income tax expense related to the               6             —             277           — Trunkline LNG Transaction Maintenance capital          (59   )       (121  )       (98   )       (172  ) expenditures Other, net                  1           1           3           2      Distributable Cash           730           634           1,567         1,241 Flow (consolidated) Distributable Cash Flow attributable to Sunoco Logistics             (223  )       (184  )       (381  )       (379  ) Partners L.P. (“Sunoco Logistics”) (100%) Distributions from Sunoco Logistics to          68            49            130           94 ETP Distributions to ETE in respect of ETP            —             —             —             (50   ) Holdco Corporation (“Holdco”) Distributions to Regency Energy Partners LP                 (37   )      (16   )      (70   )      (39   ) (“Regency”) in respect of Lone Star (b) Distributable Cash Flow attributable to       $ 538        $ 483        $ 1,246      $ 867    the partners of ETP                                                                       Distributions to the partners of ETP: Limited Partners: Common Units held by       $ 282         $ 246         $ 550         $ 487 public Common Units held by         29            89            58            178 ETE Class H Units held by ETE Common Holdings,         53            —             103           — LLC (“ETE Holdings”) (c) General Partner              5             5             10            10 interests held by ETE Incentive Distribution Rights (“IDRs”) held         178           183           346           363 by ETE IDR relinquishment related to previous         (58   )      (55   )      (115  )      (86   ) transactions Total distributions to be paid to the             $ 489         $ 468         $ 952         $ 952 partners of ETP Distributions credited to Holdco transactions      —           —           —           (68   ) (d) Net distributions to       $ 489        $ 468        $ 952        $ 884    the partners of ETP Distribution coverage      1.10x         1.03x         1.31x         0.98x ratio (e)  (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 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 and deferred income taxes. 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 recent periods and has revised amounts in prior periods to be consistent with the Partnership’s updated calculation of this measure.  Following is a summary of these changes:    *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. The Partnership revised its     calculation of Distributable Cash Flow to exclude the impact of such     amortization. Management believes that this revised calculation is more     useful and more accurately reflects the cash flows of the Partnership that     are available for payment of distributions.   *Previously, the Partnership’s calculation of Distributable Cash Flow     reflected income tax expense from continuing operations, which included     current and deferred income taxes. Current income tax expense represents     the estimated taxes that will be payable or refundable for the current     period, while deferred income taxes represent the estimated tax effects of     tax carryforwards and the reversal of temporary differences between     financial reporting carrying amounts and the tax basis of existing assets     and liabilities. The Partnership revised its calculation of Distributable     Cash Flow to reflect current income tax expense from continuing     operations, rather than total income tax expense from continuing     operations. Management believes that this revised calculation is more     useful and more accurately reflects the cash flows of the Partnership that     are available for payment of distributions.  Distributable Cash Flow previously reported for the three and six months ended June 30, 2013 has been revised to reflect these changes.  (b) Cash distributions to Regency in respect of Lone Star consist of cash distributions paid in arrears on a quarterly basis. These amounts are in respect of the periods then ended, including payments made in arrears subsequent to period end.  (c) Distributions on the Class H Units for the three and six months ended June30, 2014 were calculated as follows:                                       Three Months Ended   Six Months Ended                                        June 30, 2014          June 30, 2014 General partner distributions and incentive distributions from           $    43                $    82 Sunoco Logistics                                            50.05    %            50.05   % Share of Sunoco Logistics general partner and incentive                       21                     41 distributions payable to Class H Unitholder Incremental distributions payable          32                   62       to Class H Unitholder Total Class H Unit distributions       $    53               $    103       Incremental distributions to the Class H Unitholder is based on the scheduled amounts through the first quarter of 2017, as set forth in Amendment No. 5 to ETP’s Amended and Restated Agreement of Limited Partnership.  (d) For the six months ended June 30, 2013, net distributions to the partners of ETP excluded 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 issued 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.  (e) Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to the partners of ETP divided by net distributions expected to be paid to the partners of ETP in respect of such period.    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 and     LIFO valuation adjustments. 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 expenses. 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.                                          Three Months Ended                                              June 30,                                           2014      2013        Change Segment Adjusted EBITDA: Midstream                                 $ 157       $ 127       $ 30 NGL transportation and services             141         77          64 Interstate transportation and storage       265         361         (96 ) Intrastate transportation and storage       110         112         (2  ) Investment in Sunoco Logistics              280         244         36 Retail marketing                            136         97          39 All other                                  80         51         29                                             $ 1,169     $ 1,069     $ 100     Midstream                              Three Months Ended                                              June 30,                                2014          2013           Change Gathered volumes (MMBtu/d): ETP legacy assets               2,851,414         2,531,076         320,338 Southern Union gathering        —                 529,327           (529,327 ) and processing^(1) NGLs produced (Bbls/d): ETP legacy assets               163,780           112,951           50,829 Southern Union gathering        —                 43,777            (43,777  ) and processing^(1) Equity NGLs produced (Bbls/d): ETP legacy assets               14,968            14,854            114 Southern Union gathering        —                 8,216             (8,216   ) and processing^(1) Revenues                      $ 720             $ 577             $ 143 Cost of products sold          530             402             128       Gross margin                    190               175               15 Unrealized gains on commodity risk management       —                 (2        )       2 activities Operating expenses, excluding non-cash              (29       )       (41       )       12 compensation expense Selling, general and administrative expenses,       (4        )      (5        )      1         excluding non-cash compensation expense Segment Adjusted EBITDA       $ 157            $ 127            $ 30         ^(1) Southern Union contributed its gathering and processing operations to Regency, resulting in the deconsolidation of those operations on April 30, 2013.  For the ETP legacy assets, the increases in gathered volumes, NGLs produced and equity NGLs produced during the three months ended June30, 2014 compared to the same period last year were primarily due to increased production by our customers in the Eagle Ford Shale and a 400 MMcf/d increase in processing capacity. Volumes from Southern Union’s gathering and processing operations reflected the deconsolidation of those operations on April 30, 2013.  Segment Adjusted EBITDA for the midstream segment reflected an increase in gross margin as follows:                                              Three Months Ended                                                    June 30,                                                2014     2013      Change Gathering and processing fee-based            $ 134        $ 114        $ 20 revenues Non fee-based contracts and processing          59           64           (5 ) Other                                          (3   )      (3   )      —   Total gross margin                            $ 190       $ 175       $ 15   Midstream gross margin for the three months ended June30, 2014 compared to the same period last year reflected increases in fee-based revenues of $20million primarily due to increased production in the Eagle Ford Shale propelled mainly by a 400 MMcf/d increase in processing capacity from the same period last year. Excluding a $13 million reduction from the deconsolidation of Southern Union’s gathering and processing operations, non fee-based gross margin increased by $8 million due to operational efficiencies and a slightly better commodity price environment.  Segment Adjusted EBITDA for the midstream segment also was favorably impacted by lower operating expenses primarily due to the deconsolidation of Southern Union’s gathering and processing operations.    NGL Transportation and Services                                    Three Months Ended                                                June 30,                                      2014        2013         Change NGL transportation volumes            367,564         274,022         93,542 (Bbls/d) NGL fractionation volumes             191,255         98,915          92,340 (Bbls/d) Revenues                            $ 903           $ 438           $ 465 Cost of products sold                731           329           402     Gross margin                          172             109             63 Unrealized gains on commodity         —               (2      )       2 risk management activities Operating expenses, excluding         (29     )       (28     )       (1     ) non-cash compensation expense Selling, general and administrative expenses,              (4      )       (3      )       (1     ) excluding non-cash compensation expense Adjusted EBITDA related to           2             1             1       unconsolidated affiliates Segment Adjusted EBITDA             $ 141          $ 77           $ 64       The increase in NGL transportation volumes for the three months ended June30, 2014 compared to the same period last year reflected an increase of approximately 55,600 Bbls/d in volumes transported out of west Texas and the Eagle Ford Shale on our Lone Star NGL pipeline system. The remainder of the increase in volumes transported was primarily due to increases in NGL production from our Jackson processing plant and volumes destined for Mont Belvieu, Texas via our Justice pipeline. Average daily fractionated volumes increased for the three months ended June30, 2014 compared to the same period last year due to the recent commissioning of our second 100,000 Bbls/d fractionator at Mont Belvieu, Texas in October 2013. These volumes include all physical and contractual volumes where we collected a fractionation fee.  Segment Adjusted EBITDA for the NGL transportation and services segment reflected an increase in gross margin as follows:                                        Three Months Ended                                           June 30,                                         2014       2013      Change Transportation margin                   $  69        $ 45      $  24 Processing and fractionation margin        57          30         27 Storage margin                             37          34         3 Other margin                              9          —         9 Total gross margin                      $  172       $ 109     $  63  Transportation margin increased as a result of higher volumes transported from west Texas and the Eagle Ford Shale on our Lone Star pipeline system. This resulted in increased margin of $14 million for the three months ended June30, 2014. An increase in NGL production, as discussed above, accounted for the remainder of the increase in transportation margin.  Processing and fractionation margin increased primarily due to higher volumes resulting from the startup of Lone Star’s second fractionator at Mont Belvieu, Texas in October 2013.  Other margin increased as a result of increased commercial optimization activities related to our fractionators, primarily due to the recent commissioning of the second fractionator at Mont Belvieu.    Interstate Transportation and Storage                              Three Months Ended                                              June 30,                                2014          2013           Change Natural gas transported         5,594,099         6,204,788         (610,689 ) (MMBtu/d) Natural gas sold                15,733            16,795            (1,062   ) (MMBtu/d) Revenues                      $ 249             $ 357             $ (108     ) Operating expenses, excluding non-cash compensation,                   (67       )       (75       )       8 amortization and accretion expenses Selling, general and administrative expenses, excluding non-cash              (16       )       (19       )       3 compensation, amortization and accretion expenses Adjusted EBITDA related to unconsolidated              99              98              1         affiliates Segment Adjusted EBITDA       $ 265            $ 361            $ (96      )                                                                    Distributions from            $ 58              $ 55              $ 3 unconsolidated affiliates  For the three months ended June30, 2014 compared to the same period last year, transported volumes decreased due to declines in supply on the Tiger pipeline, lower contracted capacity on the Trunkline pipeline, and lower contract utilization on the Transwestern pipeline.  Segment Adjusted EBITDA for the interstate transportation and storage segment decreased for the three months ended June30, 2014 compared to the same period last year due to the deconsolidation of Trunkline LNG effective January 1, 2014, which reduced Segment Adjusted EBITDA by $47 million, and the recognition in the second quarter of 2013 of $52million received in connection with the buyout of a customer contract.    Intrastate Transportation and Storage                              Three Months Ended                                              June 30,                                2014          2013           Change Natural gas transported         9,069,215         9,654,524         (585,309 ) (MMBtu/d) Revenues                      $ 712             $ 623             $ 89 Cost of products sold          551             447             104       Gross margin                    161               176               (15      ) Unrealized gains on commodity risk management       (3        )       (12       )       9 activities Operating expenses, excluding non-cash              (43       )       (47       )       4 compensation expense Selling, general and administrative expenses,       (5        )      (5        )      —         excluding non-cash compensation expense Segment Adjusted EBITDA       $ 110            $ 112            $ (2       )  Transported volumes decreased for the three months ended June30, 2014 compared to the same period last year primarily due to the reduction of volumes under certain long-term transportation contracts offset by increased volumes due to a more favorable pricing environment.  Segment Adjusted EBITDA for the intrastate transportation and storage segment decreased primarily due to a decrease in margin from lower transportation fees as a result of the reduction of volumes under certain long-term contracts. In addition, storage margin decreased due to a less favorable storage environment leading to a decline in the spreads between the spot and forward prices on natural gas we own in the Bammel storage facility.    Investment in Sunoco Logistics                                            Three Months Ended                                                    June 30,                                              2014      2013       Change Revenues                                    $ 4,821       $ 4,311       $  510 Cost of products sold                        4,517       4,023        494 Gross margin                                  304           288            16 Unrealized (gains) losses on commodity        8             (1    )        9 risk management activities Operating expenses, excluding non-cash        (21   )       (25   )        4 compensation expense Selling, general and administrative expenses, excluding non-cash                  (25   )       (29   )        4 compensation expense Adjusted EBITDA related to                   14          11           3 unconsolidated affiliates Segment Adjusted EBITDA                     $ 280        $ 244        $  36                                                                          Distributions from unconsolidated           $ 4           $ 4           $  — affiliates  For the three months ended June30, 2014 compared to the same period last year, Segment Adjusted EBITDA related to Sunoco Logistics increased due to the net impacts of the following:    *An increase of $16 million from crude oil pipelines, primarily due to     higher throughput;   *An increase of $27 million from terminal facilities, primarily due to     higher volumes and increased margins from refined products acquisition and     marketing activities; and   *An increase of $10 million from refined products pipelines, primarily due     to operating results from Sunoco Logistics’ Mariner West project;     partially offset by   *A decrease of $17 million from crude oil acquisition and marketing     activities, primarily due to lower crude margins, the impact from which     was partially offset by $5 million from increased crude volumes resulting     from higher market demand and expansion in the crude oil trucking fleet.    Retail Marketing                                    Three Months Ended                                                June 30,                                      2014        2013         Change Total retail gasoline outlets,        5,152           4,974           178 end of period Total company-operated outlets,       568             440             128 end of period Gasoline and diesel throughput per company-operated site             197,824         204,320         (6,496 ) (gallons/month) Revenues                            $ 5,568         $ 5,291         $ 277 Cost of products sold                5,260         5,087         173     Gross margin                          308             204             104 Unrealized gains on commodity         (1      )       —               (1     ) risk management activities Operating expenses, excluding         (124    )       (106    )       (18    ) non-cash compensation expense Selling, general and administrative expenses,              (28     )       (23     )       (5     ) excluding non-cash compensation expense LIFO valuation adjustment             (20     )       22              (42    ) Adjusted EBITDA related to            1               1               — unconsolidated affiliates Other                                —             (1      )      1       Segment Adjusted EBITDA             $ 136          $ 97           $ 39       Segment Adjusted EBITDA for the retail marketing segment increased for the three months ended June30, 2014 compared to the same period last year primarily due to recent acquisitions and a favorable impact from increased fuel margins.    All Other                                             Three Months Ended                                                   June 30,                                               2014     2013      Change Revenues                                     $ 721        $ 485        $ 236 Cost of products sold                         710        466        244  Gross margin                                   11           19           (8  ) Unrealized gains on commodity risk             (3   )       (1   )       (2  ) management activities Operating expenses, excluding non-cash         3            (5   )       8 compensation expense Selling, general and administrative expenses, excluding non-cash                   (2   )       (20  )       18 compensation expense Adjusted EBITDA related to discontinued        —            23           (23 ) operations Adjusted EBITDA related to                     55           49           6 unconsolidated affiliates Other                                          19           (11  )       30 Elimination                                   (3   )      (3   )      —    Segment Adjusted EBITDA                      $ 80        $ 51        $ 29                                                                           Distributions from unconsolidated            $ 28         $ 40         $ (12 ) affiliates  Amounts reflected in our all other segment 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 for the contribution of its     interest in Southern Union Gathering Company, LLC to Regency on April 30,     2013; and   *our natural gas marketing operations.  For the three months ended June30, 2014 compared to the same period last year, Segment Adjusted EBITDA increased due to the net impact of the following:    *an increase of $19million in management fees, as further described below;   *a favorable impact of approximately $10million due to costs associated     with certain Sunoco activities that were included in the all other Segment     Adjusted EBITDA in the prior year;   *favorable results from our commodity marketing business of $5million;   *an increase of $6million in Adjusted EBITDA related to unconsolidated     affiliates, primarily due to higher earnings from our investments in PES     and Regency, including the impact of only recording a partial period of     earnings from Regency beginning on April 30, 2013;   *a refund of insurance premiums of $6million included in the three months     ended June30, 2014;   *Southern Union corporate expenses of $3million that were no longer     included in the all other segment subsequent to the merger of Southern     Union, PEPL Holdings and Panhandle in January 2014; offset by   *Adjusted EBITDA related to discontinued operations of $23million in the     prior period related to Southern Union’s local distribution operations     that were sold in 2013.  In connection with the Trunkline LNG Transaction, ETP agreed to continue to provide management services for ETE through 2015 in relation to both Trunkline LNG’s regasification facility and the development of a liquefaction project at Trunkline LNG’s facility, for which ETE has agreed to pay incremental management fees to ETP of $75million per year for the years ending December 31, 2014 and 2015. These fees were reflected in “Other” in the “All other” segment and for the three months ended June30, 2014 were reflected as an offset to operating expenses of $7million and selling, general and administrative expenses of $12million in the consolidated statements of operations.  The decrease in cash distributions from unconsolidated affiliates was primarily due to a decrease in cash distributions from our ownership in AmeriGas of $13million as a result of selling a portion of these interests in 2013 and 2014.    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 six months ended June 30, 2014:                                         Growth    Maintenance   Total Midstream                                $ 297       $   9           $ 306 NGL transportation and services^(1)        175           8             183 Interstate transportation and              20            27            47 storage Intrastate transportation and              67            14            81 storage Investment in Sunoco Logistics             1,092         31            1,123 Retail marketing                           34            18            52 All other (including eliminations)        5            (9   )       (4    ) Total capital expenditures               $ 1,690     $   98         $ 1,788   ^(1) Includes 100% of Lone Star’s capital expenditures, a portion of which are funded through capital contributions from Regency related to its 30% interest in Lone Star.  We currently expect capital expenditures (net of contributions in aid of construction costs) for the full year 2014 to be within the following ranges:                                       Growth                Maintenance                                        Low       High        Low     High Midstream                              $ 600       $ 650       $ 10      $ 15 NGL transportation and                   360         380         20        25 services^(1) Interstate transportation and            80          100         100       110 storage Intrastate transportation and            150         160         25        30 storage Investment in Sunoco Logistics           1,900       2,100       65        75 Retail marketing                         130         150         50        60 All other (including eliminations)      110        120        10       20 Total capital expenditures             $ 3,330     $ 3,660     $ 280     $ 335  ^(1) Includes 100% of Lone Star’s capital expenditures. We expect to receive capital contributions from Regency related to its 30% interest in Lone Star of between $85 million and $110 million.    SUPPLEMENTAL INFORMATION ON UNCONSOLIDATED AFFILIATES (In millions) (unaudited)                                             Three Months Ended                                                   June 30,                                               2014     2013      Change Equity in earnings (losses) of unconsolidated affiliates: AmeriGas                                     $ (8   )     $ (20  )     $ 12 Citrus                                         26           24           2 FEP                                            13           14           (1  ) Regency                                        1            2            (1  ) PES                                            18           13           5 Other                                         7          4          3    Total equity in earnings of                  $ 57        $ 37        $ 20   unconsolidated affiliates                                                                         Proportionate share of interest, depreciation, amortization, non-cash items and taxes: AmeriGas                                     $ 13         $ 36         $ (23 ) Citrus                                         55           55           — FEP                                            5            5            — Regency                                        24           14           10 PES                                            7            5            2 Other                                         9          6          3    Total proportionate share of interest, depreciation, amortization, non-cash         $ 113       $ 121       $ (8  ) items and taxes                                                                         Adjusted EBITDA related to unconsolidated affiliates: AmeriGas                                     $ 5          $ 16         $ (11 ) Citrus                                         81           79           2 FEP                                            18           19           (1  ) Regency                                        25           16           9 PES                                            25           18           7 Other                                         16         10         6    Total Adjusted EBITDA related to             $ 170       $ 158       $ 12   unconsolidated affiliates                                                                         Distributions received from unconsolidated affiliates: AmeriGas                                     $ 11         $ 24         $ (13 ) Citrus                                         41           39           2 FEP                                            16           16           — Regency                                        15           15           — Other                                         9          8          1    Total distributions received from            $ 92        $ 102       $ (10 ) unconsolidated affiliates  Contact:  Energy Transfer Partners, L.P. 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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