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•	Material projects that commenced operations in the quarter included: the Mariner South project, a LPG export/import facility with Sunoco Logistics Partners L.P. (“SXL”), which loaded its first propane cargo, and our Rebel processing facility in the Permian Basin, which helped contribute to overall volumes in our midstream segment.

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ETP, as a member of a consortium, was awarded two pipeline projects for the transportation of natural gas for Mexico's state power company, CFE, under long-term contracts.  The Trans-Pecos pipeline is an approximately 143-mile, 42-inch pipeline to deliver at least 1.356 Bcf/d of natural gas from the Waha Hub to the US/Mexico border near Presidio, Texas. The Comanche Trail pipeline is an approximately 195-mile, 42-inch pipeline to deliver at least 1.135 Bcf/d of natural gas from the Waha Hub to the US/Mexico border near San Elizario, Texas. ETP will be the construction manager and operator of both pipelines.  The expected all-in cost for these two pipelines is anticipated to be approximately $1.3 billion and we expect both pipelines to be in-service in the first quarter of 2017.

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In March 2015, ETE transfered 30.8 million ETP Common Units, ETE’s 45% interest in the Bakken pipeline project, and $879 million in cash to the Partnership in exchange for 30.8 million newly issued Class H Units of ETP that, when combined with the 50.2 million previously issued Class H Units, generally entitle ETE to receive 90.05% of the cash distributions and other economic attributes of the general partner interest and IDRs of SXL (the “Bakken Pipeline Transaction”). In connection with this transaction, ETP also issued to ETE 100 Class I Units that provide distributions to ETE to offset IDR subsidies previously provided to ETP. The IDR subsidies from ETE to ETP, including the impact from distributions on Class I Units, will be reduced by $55 million in 2015 and $30 million in 2016.

•	In addition, ETP and SXL have agreed to transfer 30% of the Bakken pipeline to SXL.

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In April 2015, Sunoco LP completed the acquisition of a 31.58% equity interest in Sunoco, LLC from ETP Retail Holdings (“Retail Holdings”). Sunoco LLC distributes approximately 5.3 billion gallons per year of motor fuel to customers in the east, midwest and southwest regions of the United States. The transaction was valued at approximately $816 million. Sunoco LP paid $775 million in cash and issued $41 million of Sunoco LP common units to Retail Holdings.

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In March 2015, we closed on the acquisition of the King Ranch project from Exxon Mobil Corporation, for a total purchase price of $370 million. This acquisition includes a 750 MMcf/d natural gas processing plant, a 42,000 Bbls/d NGL fractionator, a NGL pipeline that delivers products to Corpus Christi and the ETC King Ranch pipeline, which consists of 165 miles of mainline and gathering pipelines.

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Earlier this week, we announced that our subsidiary, Lone Star NGL LLC (“Lone Star”), would construct a fourth NGL fractionation facility at Mont Belvieu, Texas. Fractionator IV, estimated to cost approximately $450 million, is scheduled to be operational by December 2016. The 120,000 Bbls/d fractionator is fully subscribed by multiple long-term contracts and will provide off-take for the new 533-mile, 24- and 30-inch Lone Star Express pipeline.

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Regarding our Lake Charles LNG project, on April 10, 2015, the draft Environmental Impact Statement for Lake Charles LNG and the expansion of the Trunkline interstate pipeline was issued by the Federal Energy Regulatory Commission (“FERC”). ETE/ETP and BG Group plc (“BG”) were pleased with the findings and recommendations by FERC. It moves the Lake Charles LNG project one step closer to our goal of achieving a final investment decision (“FID”) in 2016.

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In March 2015, ETP issued $1.0 billion aggregate principal amount of 4.05% senior notes due March 2025, $500 million aggregate principal amount of 4.90% senior notes due March 2035, and $1.0 billion aggregate principal amount of 5.15% senior notes due March 2045. ETP used the $2.48 billion net proceeds to pay outstanding borrowings under the ETP Credit Facility, to fund growth capital expenditures and for general partnership purposes.

•	As of March 31, 2015, the ETP Credit Facility had no outstanding borrowings and its credit ratio, as defined by the credit agreement, was 4.05x. Pro forma for the Regency Merger, borrowings under the ETP Credit Facility increased to $1.5 billion and the pro forma credit ratio, as defined by the credit agreement, was 4.62x.

•	In the first quarter of 2015, ETP issued approximately 1.2 million Common Units through its at-the-market equity program, generating net proceeds of approximately $76 million.

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(1)	The Regency Merger is a combination of entities under common control. Beginning with the quarter ending June 30, 2015, ETP’s GAAP financial statements will reflect retrospective consolidation of Regency. The pro forma amounts reflect the retrospective consolidation of Regency.

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(1)	See Footnote 1 of the condensed consolidated balance sheets.

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(a)	Pro forma amounts reflect the combined results of ETP and Regency assuming the Regency Merger closed January 1, 2014.

(b)

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.

•	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.

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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. As of March 31, 2015, Lone Star was such a subsidiary, as it was 30% owned by Regency, which was an unconsolidated affiliate.

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(c)

Income tax expense is based on the earnings of our taxable subsidiaries. For the three months ended March 31, 2015, the Partnership’s income tax expense from continuing operations included favorable state income tax adjustments of $14 million. For the three months ended March 31, 2014, the Partnership’s income tax expense from continuing operations included unfavorable income tax adjustments of $85 million related to the Lake Charles LNG Transaction, which was treated as a sale for tax purposes.

(d)	Distributions from unconsolidated affiliates for the pro forma three months ended March 31, 2015 and 2014 include $16 million and $15 million, respectively, of distributions paid to a subsidiary of ETP related to Regency.

(e)

Transaction-related income taxes primarily included income tax expense related to the Lake Charles LNG Transaction. For the three months ended March 31, 2014, amounts previously reported for each of the interim periods have been adjusted to reflect income taxes related to other transactions, which amounts had not previously been reflected in the calculation of Distributable Cash Flow for such interim periods.

(f)	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.

(g)	Pro forma interest expense adjustment for $879 million cash payment received from ETE related to the Bakken Pipeline Transaction.

(h)	Distributions on ETP Common Units, as reflected above, exclude cash distributions on ETP Common Units held by subsidiaries of ETP.

(i)	For the three months ended March 31, 2015, the distributions to the partners of ETP reflected in the “actual” column exclude distributions related to the ETP Common Units that were issued in the Regency Merger.

(j)	Distributions on the Class H Units for the three months ended March 31, 2015 and 2014 were calculated as follows:

*	Incremental distributions previously paid to the Class H Unitholder were eliminated in Amendment No. 9 to ETP’s Amended and Restated Agreement of Limited Partnership effective in the first quarter of 2015.

(k)	Distribution coverage ratio for a period is calculated as Distributable Cash Flow attributable to the partners of ETP, as adjusted, divided by net distributions expected to be paid to the partners of ETP in respect of such period.

(l)	The Partnership defines Distributable Cash Flow per Common Unit for a period as the quotient of Distributable Cash Flow attributable to the partners of ETP, as adjusted, net of distributions related to the Class H Units, Class I Units and the General Partner and IDR interests, divided by the weighted average number of Common Units outstanding.

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•	Gross margin, operating expenses, and selling, general and administrative expenses. 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 inventory 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.

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•	an increase of $19 million from crude oil acquisition and marketing activities, primarily due to an increase of $17 million from higher realized crude margins and an increase of $1 million from increased crude oil volumes resulting from recent acquisitions and the expansion of the crude oil trucking fleet;

•	an increase of $26 million from products pipelines, primarily due to an increase of $12 million from higher throughput volumes and higher average pipeline revenue per barrel of $10 million, which were largely driven by contributions from Sunoco Logistics’ Mariner NGL pipeline projects, and increased contributions from Sunoco Logistics’ joint venture interests of $5 million; and

•	an increase of $2 million from crude oil pipelines, primarily due to higher throughput volumes of $10 million largely driven by expansion projects placed into service in Texas and Oklahoma during 2014, largely offset by lower average pipeline revenue per barrel of $7 million, which was impacted by reduced volumes on higher-priced tariff movements; partially offset by

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a decrease of $34 million from terminal facilities, primarily due to lower results from products acquisition and marketing activities of $45 million. Sunoco Logistics utilized its storage capabilities to increase its level of certain refined products inventories in order to capture the contango market structure. These inventory positions, combined with the timing of butane blending sales, were negatively impacted by inventory valuation adjustments. This decrease in operating results was partially offset by higher contributions from Sunoco Logistics’ bulk marine and refined products terminals of $10 million.

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•	an increase of $184 million from the acquisition of Susser in August 2014;

•	favorable impact of $34 million from other recent acquisitions;

•	an increase of $33 million from stronger retail and wholesale motor fuel margins;

•	an increase of $4 million from other retail margins; partially offset by

•	a decrease of $45 million due to exceptionally strong results in 2014 from ethanol manufacturing and blending, largely related to weather related impacts and regional market dynamics;

•	unfavorable impact of $20 million in non-retail fuel activities; and

•	unfavorable impact of $7 million related to non-cash inventory valuation adjustments.

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•	our natural gas marketing and compression operations;

•	an approximate 33% non-operating interest in PES, a refining joint venture;

•	our investment in Regency common and Class F units; and

•	our investment in AmeriGas until August 2014.

•	a decrease of $77 million in Adjusted EBITDA related to unconsolidated affiliates, primarily due to a decrease of $51 million related to our investment in AmeriGas driven by a reduction in our investment due to the sale of AmeriGas common units in 2014 and lower earnings from our investment in PES of $21 million; and

•	Adjusted EBITDA related to discontinued operations of $27 million in the prior period related to a marketing business that was sold effective April 1, 2014.

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(1)	Indirect capital expenditures comprise those funded by our publicly traded subsidiaries; all other capital expenditures are reflected as direct capital expenditures.

(2)	Includes 100% of Lone Star, Bakken and Rover’s capital expenditures.

(3)	The retail marketing segment includes the investment in Sunoco LP, as well as ETP’s wholly-owned retail marketing operations. Capital expenditures by Sunoco LP are reflected as indirect because Sunoco LP is a publicly traded subsidiary.

(1)	Indirect capital expenditures comprise those funded by our publicly traded subsidiaries; all other capital expenditures are reflected as direct capital expenditures.

(2)	Includes 100% of Lone Star’s capital expenditures.

(3)	Includes capital expenditures related to our proportionate ownership of the Bakken and Rover pipeline projects.

(4)	The retail marketing segment includes the investment in Sunoco LP, as well as ETP’s wholly-owned retail marketing operations. Capital expenditures by Sunoco LP are reflected as indirect because Sunoco LP is a publicly traded subsidiary.

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