---

---

---

•

In July 2015, ETP, Sunoco Logistics Partners L.P. (“Sunoco Logistics”) and Phillips 66 announced they have formed a joint venture to construct the Bayou Bridge pipeline that will deliver crude oil from the Phillips 66 and Sunoco Logistics terminals in Nederland, Texas to Lake Charles, Louisiana. Phillips 66 holds a 40% interest in the joint venture and ETP and Sunoco Logistics each hold a 30% interest.

•

In July 2015, Sunoco LP acquired 100% of Susser Holdings Corporation (“Susser”) from ETP in a transaction valued at $1.93 billion. Sunoco LP paid approximately $997 million in cash (including payment for working capital) and issued 22 million Sunoco LP common units, valued at approximately $967 million, to ETP. In addition, there will be an exchange for 11 million Sunoco LP units owned by Susser for another 11 million new Sunoco LP units to a subsidiary of ETP.

•

In July 2015, ETE entered into an exchange and repurchase agreement with ETP, pursuant to which ETE would acquire 100% of the membership interests of Sunoco GP LLC, the general partner of Sunoco LP, and all of the IDRs of Sunoco LP from ETP, in exchange for the repurchase of 21 million ETP common units owned by ETE. In connection with ETP’s 2014 acquisition of Susser, ETE agreed to provide ETP a $35 million annual IDR subsidy for 10 years, which would terminate upon ETE’s acquisition of Sunoco GP. In connection with the exchange and repurchase, ETE agreed to provide ETP a $35 million annual IDR subsidy for two years. Following this transaction, Sunoco LP will no longer be consolidated for accounting purposes by ETP. This transaction is expected to close in August 2015.

•

During the second quarter 2015, progress on Lake Charles LNG Export Company, LLC (“Lake Charles LNG”), an entity owned 60% by ETE and 40% by ETP, continued as we purchased the land for the project from Alcoa Inc. and as we received the draft Environmental Impact Statement (“EIS”) and filed the additional data and information requests required thereunder. We have also continued our work with the short-listed EPC contractors as we continue to refine the cost structure for the project. We expect to receive the final EIS next week on August 14th. The next milestone after that will be the Federal Energy Regulatory Commission (“FERC”) authorization. With the expected emphasis on capital discipline and overall cost, we

---

•

Subsequent to the Regency Merger, ETP has undertaken a series of liability management steps, including (i) the repayment of $2.3 billion under Regency’s credit facility and cancellation of the facility upon the closing of the Regency Merger, (ii) the redemption in June 2015 of all of the outstanding $499 million aggregate principal amount of Regency’s 8.375% senior notes due 2019, (iii) the issuance in June 2015 of $3.0 billion aggregate principal amount of ETP senior notes with coupons ranging from 2.50% to 6.125% and maturities ranging from 2018 to 2045, and (iv) the repayment of outstanding borrowings under the ETP Credit Facility.

•	As of June 30, 2015, the ETP Credit Facility had no outstanding borrowings and its credit ratio, as defined by the credit agreement, was 4.59x.

•	In the second quarter of 2015, ETP issued 8.9 million common units through its at-the-market equity program, generating net proceeds of $493 million.

---

---

---

---

---

(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.

•	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.

•	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.

(b)

For the three and six months ended June 30, 2015, the Partnership’s income tax expense from continuing operations decreased primarily due to a decrease in earnings among the Partnership’s consolidated corporate subsidiaries, which resulted in decreases in income tax expense of $75 million and $135 million, respectively. The Partnership’s income tax expense also decreased for the three and six months ended June 30, 2015 by $12 million due to the exclusion of a portion of the dividend income

---

(c)	Distributions from unconsolidated affiliates for the six months ended June 30, 2015 include $16 million of distributions paid to a subsidiary of ETP. Distributions from unconsolidated affiliates for the three and six months ended June 30, 2014 include $15 million and $30 million, respectively, of distributions paid to a subsidiary of ETP.

(d)

Transaction-related income taxes primarily included income tax expense related to the Lake Charles LNG Transaction. For the three and six months ended June 30, 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.

(e)	Distributions on ETP Common Units, as reflected above, exclude cash distributions on Partnership common units held by subsidiaries of ETP.

(f)	Distributions on the Class H Units for the three and six months ended June 30, 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.

(g)	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.

(h)	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.

---

---

•	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.

---

---

---

---

•

an increase of $43 million from terminal facilities, primarily attributable to higher results from Sunoco Logistics’ products acquisition and marketing activities, which were positively impacted by inventory accounting resulting from the liquidation of certain inventories that were stored during the first quarter to capture the contango market structure. Improved operating results from Sunoco Logistics’ Marcus Hook and Nederland terminals also contributed to the increase. These positive impacts were partially offset by lower results from Sunoco Logistics’ refined products terminals; and

•	an increase of $30 million from products pipelines, primarily due to higher throughput volumes and higher average pipeline revenue per barrel associated with Sunoco Logistics’ Mariner NGL pipeline projects. These positive impacts were partially offset by lower contributions from Sunoco Logistics’ joint venture interests; partially offset by

•

a decrease of $15 million from crude oil pipelines, primarily due to lower average pipeline revenue per barrel primarily driven by reduced volumes on higher-priced tariff movements. Increased operating expenses, which included lower pipeline operating gains and higher line testing costs, and selling, general and administrative expenses on growth also contributed to the decrease. These impacts were partially offset by additional throughput volumes largely attributable to expansion projects placed into service in 2014; and

•

a decrease of $12 million from crude oil acquisition and marketing activities, primarily attributable to lower realized crude oil margins, which were negatively impacted by narrowing crude oil differentials compared to the prior year period. This impact was partially offset by increased crude oil volumes resulting from 2014 acquisitions and the expansion of Sunoco Logistics’ crude oil trucking fleet.

---

•	an increase of $199 million from the acquisition of Susser in August 2014;

•	favorable impact of $26 million from other recent acquisitions;

•	an increase of $36 million from non-retail margins;

•	an increase of $6 million from other retail margins;

•	favorable impact of $37 million related to non-cash inventory valuation adjustments; partially offset by

•	unfavorable impact of $77 million in fuel margins and volumes of $3 million.

---

•	our natural gas marketing and compression operations;

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

•	Regency’s investment in Coal Handling, an entity that owns and operates end-user coal handling facilities; and

•	our investment in AmeriGas until August 2014.

---

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

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

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

(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.

---