ENERGY TRANSFER EQUITY Credit Suisse MLP & Energy Logistics Conference June 10 th 2014 Jamie Welch Group CFO
LEGAL DISCLAIMER This presentation relates to a meeting among members of management of Energy Transfer Equity L.P. (ETE) and securities analysts to be held New York on Tuesday June 10th 2014. At this meeting members of the Partnerships management may make statements about future events outlook and expectations related to Energy Transfer Partners L.P. (ETP) Regency Energy Partners LP (RGP) Sunoco Logistics Partners L.P. (SXL) ETE and Panhandle Eastern Pipe Line Company LP (PEPL) (collectively the Partnerships) and their subsidiaries and this presentation may contain statements about future events outlook and expectations related to the Partnerships and their subsidiaries all of which statements are forward-looking statements. Any statement made by a member of management of the Partnerships at this meeting and any statement in this presentation that is not a historical fact will be deemed to be a forward-looking statement. These forwardlooking statements rely on a number of assumptions concerning future events that members of management of the Partnerships believe to be reasonable but these statements are subject to a number of risks uncertainties and other factors many of which are outside the control of the Partnerships. While the Partnerships believe that the assumptions concerning these future events are reasonable we caution that there are inherent risks and uncertainties in predicting these future events that could cause the actual results performance or achievements of the Partnerships and their subsidiaries to be materially different. These risks and uncertainties are discussed in more detail in the filings made by the Partnerships with the Securities and Exchange Commission copies of which are available to the public. The Partnerships expressly disclaim any intention or obligation to revise or publicly update any forward-looking statements whether as a result of new information future events or otherwise. All references in this presentation to capacity of a pipeline processing plant or storage facility relate to maximum capacity under normal operating conditions and with respect to pipeline transportation capacity is subject to multiple factors (including natural gas injections and withdrawals at various delivery points along the pipeline and the utilization of compression) which may reduce the throughput capacity from specified capacity levels. 2
ENERGY TRANSFER FAMILY PRO FORMA ENERGY TRANSFER EQUITY L.P. (NYSE: ETE) General Partner / Parent Company 50.16 million Class H Units (1) SUNOCO LOGISTICS PARTNERS L.P. (NYSE: SXL) 32.2% LP Interest 2.0% GP Interest & IDRs 9.2% LP Interest 1.1% GP Interest & IDRs ENERGY TRANSFER PARTNERS L.P. (NYSE: ETP) 14.5% LP Interest 0.7% GP Interest & IDRs REGENCY ENERGY PARTNERS LP (NYSE: RGP) Refined Product Pipelines Crude Oil Acquisition & Marketing Terminal Facilities 100% GP Interest & IDRs 100% Interest (2) SUSSER HOLDINGS CORPORATION (NYSE: SUSS) SUSSER PETROLEUM PARTNERS LP (NYSE: SUSP) 50.2% LP Interest Intrastate Transportation & Storage Interstate Transportation & Storage Midstream LP Interest Lake Charles LNG LP GP and IDR interests (3) ENERGY TRANSFER LNG (NYSE: ETLN) Trunkline LNG Company LLC (TLNG) Gathering & Processing Contract Compression & Treating Natural Gas Transportation Crude Oil Pipelines Retail Operations Sunoco Inc. Retail Marketing Natural Resources NGL Transportation Fractionation & Storage NGL Transportation Fractionation & Storage ETP 70% Interest Lone Star NGL Joint Venture RGP 30% Interest (1) Class H Units track ~50% of the SXL GP and IDR economics. (2) Pro Forma pending Susser acquisition - subject to close. (3) Owner and operator of LNG Regasification facility in Lake Charles LA and expected nucleus of new stand-alone MLP. 3
SIGNIFICANT FINANCIAL SCALE AND DIVERSIFICATION ACROSS THE FAMILY Energy Transfer Equity L.P. (NYSE: ETE) Market Cap: $29.5 billion Unit Price: $54.27 Distribution: $1.44 LQA Yield: 2.80% Credit Ratings: Ba2/BB/BB+ Enterprise value in excess of ~$90 billion ETE ETP SXL RGP ETE: 139% SXL: 86% RGP: 34% ETP: 32% (1) Energy Transfer Partners L.P. (NYSE: ETP) Market Cap: $19.0 billion Unit Price: $56.83 Distribution: $3.74 LQA Yield: 6.60% Credit Ratings: Baa3/BBB-/BBB- Sunoco Logistics Partners L.P. (NYSE: SXL) Market Cap: $9.6 billion Unit Price: $92.65 Distribution: $2.78 LQA Yield: 3.00% (2) Credit Ratings: Baa3/BBB-/BBB Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Source: Bloomberg as of 06/06/14 Note: ETP RGP & SXL unit prices rebased to ETE as of 01/02/13 Regency Energy Partners LP (NYSE: RGP) Market Cap: $10.8 billion Unit Price: $29.01 Distribution: $1.92 LQA Yield: 6.62% Credit Ratings: Ba2/BB/BB (1) Enterprise Value is pro forma for pending EROC and SUSS transactions both of which are subject to close. (2) Pro forma for ETP s pending acquisition of SUSS. 4
BUSINESS OVERVIEW Energy Transfer Equity (ETE) a pure-play general partner (GP) is an MLP that receives all of its cash flow from limited partner interests GP interests and incentive distribution rights (IDRs) in Energy Transfer Partners L.P. (ETP) and Regency Energy Partners LP (RGP) as well as from securities that track 50% of the economics from GP interests and IDRs in Sunoco Logistics Partners L.P. (SXL) and its ownership of Trunkline LNG. ETP: a large-cap investment grade MLP with intrastate transportation and storage interstate transportation and storage midstream; natural gas liquid ( NGL ) transportation and services and retail marketing operations. RGP (2) : a growth-oriented MLP engaged in the G&P compression treating and storage of natural gas NGL transportation and services crude oil services and terminaling and coal and natural resource management. SXL: a large-cap investment grade MLP focused on acquiring owning & operating a diverse mix of crude oil & refined products & NGL pipelines terminalling & storage facilities as well as crude oil acq. & marketing assets. TLNG: the owner / operator of an LNG regasification facility in Lake Charles LA. 1Q 2014 Adjusted EBITDA: $1206 million 1Q 2014 Adjusted EBITDA: $205 million 1Q 2014 Adjusted EBITDA: $208 million 1Q 2014 Adjusted EBITDA: $48 million KEY ASSETS ~35000 miles of natural gas and NGL pipelines Owns subsidiaries including Panhandle Eastern engaged in natural gas transportation / storage; and 70% of Lone Star NGL engaged in NGL transportation / storage ~6398 combined retail locations with ownership in Sunoco Inc and pro forma SUSS with one of the largest retail/wholesale footprints in the Southwest KEY ASSETS ~19000 miles of natural gas gathering and transportation pipelines including its interests in the Midcontinent Express Pipeline ( MEP ) and the Haynesville Joint Venture Owns 30% of Lone Star NGL >25 treating / processing plants ~2.7 million of gathering and processing throughput (Mmbtu/d) KEY ASSETS ~5400 miles of crude oil pipelines ~2500 miles of refined product pipelines 39 active refined products marketing terminals Interests in 9 product and crude oil pipelines KEY ASSETS 3 LNG storage tanks At peak capacity the terminal can regasify LNG and send out natural gas has at a maximum rate of 2.1 Bcf/d and a run rate capability of 1.8 Bcf/d BG long-term contracts in place through 2030 (1) Retail locations pro forma for ETP s acquisition of SUSS. (2) RGP operating data shown is pro forma for PVR and Hoover. 5
BUSINESS MODEL TRANSFORMATION Natural Gas Transmission & Storage Interstate Intrastate Midstream Gathering and Processing NGLs Transportation / Frac and Storage / Export SXL Crude Oil / Refined Products / NGLs and Terminals (East Coast and Gulf Coast) LNG Regasification / Liquefaction Sunoco / Susser Retail 6
SHALE BASIN PRODUCTION GROWTH ALIGNED WITH ENERGY TRANSFER FAMILY OPERATING ASSETS Energy Transfer Asset Overview ETP Assets SXL Assets RGP Assets Hoover PVR Eagle Rock (1) Pro Forma Retail Locations includes Distributers Dealers and Co-ops Sunoco Susser 1046 1266 9 9 '03 '14 '03 '14 Bakken 114 316 2571 4242 14600 '03 '14 '03 '14 Niobrara 897 5330 5279 1535 6662 0 39 1 '03 '14 '03 '14 Marcellus '03 '14 '03 '14 Permian 1 53 84 '03 '14 '03 '14 Haynesville Energy Transfer Projects Crude Conversion Pipeline Mariner South Trunkline LNG Export Crude Production (Mbbl/d) Natural Gas Production (MMcf/d) Source: DI Desktop and EIA Drilling Productivity Report; May 2014. (1) Expected to close 2Q14. 6925 1418 0 0 '03 '14 '03 '14 Eagle Ford 7
UNIQUELY POSITIONED TO CAPITALIZE ON GROWING U.S. EXPORT STORY Asset base well-positioned to capture the changing supply and demand dynamics for condensates natural gas NGLs and LNG Europe Asia South America NGLs LNG Natural Gas Marcus Hook Mexico Europe India Nederland Lake Charles Asia Asia South America Europe 8
KEY INVESTMENT HIGHLIGHTS Diversified Revenue Stream ETE s cash flow comes from a highly diversified revenue stream supported by long-term fee-based contracts from large scale regulated operations ETP has six distinct business segments each making meaningful EBITDA contributions and no segment accounting for more than 25% of total ETP 1Q14 adjusted EBITDA Majority of RGP s cash flows are from gathering and processing across 6 diversified basins. Total cash flows are ~75% fee-based SXL continues to grow its crude oil business which accounts for over 2/3 of its EBITDA while its blue bar cash flow is expected to be approximately 80% over the long-term Consistent and Growing Distributions ETE receives stable growing distributions through its LP interest GP interest and IDRs in ETP and RGP as well in 50% interest tracking the economics from GP interests and IDRs in SXL SXL is also now in the high splits so as SXL cash distributions increase going forward growth of distributions to ETE will be significant It is expected that RGP will hit the high splits in 2015 Focused on Cost of Capital Committed to maintaining investment grade credit metrics at ETP and SXL and for RGP to achieve investment grade ratings Cash flow and distribution growth to drive unit price performance Experienced Management Team with Significant Ownership Management team and insiders own over 20% of ETE Motivated to effectively and efficiently manage business operations Management team has a proven track record of delivering on its commitments Well Positioned for 2014 and Beyond Increased financial flexibility and distribution growth potential Roll off of IDR subsidies creates built-in incremental cash flow growth at ETE Multi-MLP family offers a full suite of services to customers in the most prolific shale plays in the US and for customers through emerging export opportunities 9
TRANSFORMATION AND CONTINUED GROWTH ETP Adjusted EBITDA by Operating Segment ($ in millions) Propane Midstream Intrastate Interstate NGL Retail Crude All other 15% 18% 14% 53% 2009 $1477 17% 9% 13% 11% 10% 15% 25% LTM $4203 Adjusted EBITDA by Operating Segment ($ in millions) 20% 40% 28% 12% SXL Refined Products Pipeline Terminals Crude Acquisition & Marketing Crude Oil Pipeline 8% 45% 31% 2009 LTM $372 $843 16% RGP Adjusted Total Segment Margin by Business ($ in millions) G&P Transportation Contract Services NGL Coal / Natural Resources 37% 8% 55% 2009 $373 19% 12% 1% 17% 51% LTM $1126 10
ORGANIC DEVELOPMENT AND ACQUISITIONS DRIVE GROWTH RGP SXL ETP $1.20 11
CONSISTENT AND GROWING DISTRIBUTIONS FROM STRONG DIVERSIFIED OPERATING BUSINESSES ETE currently receives significant cash flow from Trunkline LNG and through its LP GP and IDR interests in ETP RGP and SXL Trunkline ($ in millions) Class H SXL GP + IDRs RGP LP RGP GP + IDRs ETP $13 LP ETP $11 $48 $7 $48 $35 $316 $370 $396 $441 $534 $196 $175 $222 $223 $191 $180 $180 $105 $14 $48 $504 $268 $191 $77 $29 $50 $588 $115 2007 2008 2009 2010 2011 2012 2013 1Q14 Annualized Cash flow contribution to ETE 2013 1Q14 Annualized ETP RGP SXL ETP RGP SXL Trunkline 11% 7% 7% 18% 82% 8% 67% Note: ETP distributions in 2007 are for the fiscal year ended 8/31/2007; all successive fiscal years end 12/31. During 2010 ETP redeemed 12.3 million ETP common units previously held by ETE in connection with its acquisition of the general partner of RGP. During 2Q10 ETE acquired its equity interest in RGP through a series of transactions completed May 26 2010. Figures exclude ETE SG&A. 2012 and 2013 ETP GP + IDRs includes dividends from Holdco. Class H includes ~50% of SXL GP and IDR cash flows excluding the impact of IDR subsidies and subsidy offsets. 12
TRUNKLINE AND LAKE CHARLES LNG Adding liquefaction transforms Trunkline into a bi-directional facility capable of importing and exporting LNG - Lake Charles LNG the liquefaction project in development is currently owned 60% ETE / 40% ETP - Lake Charles LNG has agreed on principal terms with BG on a tolling basis for a minimum 25-year term Second Largest Liquefaction Facility planned in U.S. after Cheniere s Sabine Pass BG responsible for all gas procurement and will utilize ETP s pipeline network to deliver gas to the facility - Additional revenue created with upstream transportation and logistics capabilities - ETP s pipelines are the only systems delivering to Lake Charles LNG so ETP provides 100% supply to BG DOE FTA & non-fta approval conditionally granted to export domestically produced LNG from the Lake Charles LNG - Revised DOE approach to approvals has no impact on Lake Charles LNG On March 25 2014 filed applications with FERC seeking authorization for the Lake Charles LNG export project - Approval sought by April 1 2015 Total all in cost estimated to be ~$11 billion including financing costs - No incremental capital or credit support required from ETP and ETE for construction Over $1.8 billion in projected annual cash flow from 2020 through 2045 13
LAKE CHARLES LNG ON TRACK FOR FINAL INVESTMENT DECISION IN MID-2015 DOE FTA & non-fta Approvals Pre-FEED & Feed Study FERC Pre-Filing & Application Preliminary Commercial Agreements Executed Definitive Agreements Q3 14 through mid-2015 FID Construction Start mid-2015 Train 1 In-Service mid-2019 Full In-service late 2020 Completed Pending DOE FTA authorization granted July 2011 Pre-FEED Study completed in February 2013 FERC Pre-Filing approved on April 6 2012 Commercial Term Sheet completed April 2013 DOE non-fta authorization for 15 MTPA granted August 2013 Project Development Agreement (PDA) executed September 2013 FEED Study complete by Technip and full FERC Application filed in March 2014 Issued EPC invitation to bid May 2014 Commercial Agreements with BG expected to be finalized in next 45 days Draft EIS requested by end of Sept ember 2014 EPC final submissions in late November 2014: - Award likely in January 2015 FERC Application approval expected April 1 2015 Likely early works expenditures commencing in February 2015 Financing (Debt & Equity) in March / April 2015 Final investment decision expected by mid-2015 Train 1 Commissioning & startup no later than mid-2019 Trains 2 & 3 - subsequent in-service at ~6 month intervals BG LSA for 25 years post Train 3 COD Full commercial operation in late 2020 14
APPENDIX
NET IDR RELINQUISHMENTS TO ETP FROM ETE ($ in millions) 2014 2015 2016 2017 2018 2019 Total Net IDR Relinquishments ($124) ($86) ($107) ($85) ($80) ($70) ($552) Management Fees (95) (95) (5) (195) Total ($219) ($181) ($112) ($85) ($80) ($70) ($747) Note: Pro forma for announced SUSS acquisition. (1) Includes the IDR subsidy givebacks that ETE will receive through the Class H distributions ($329 million including 2013 givebacks already received). 16
NON-GAAP RECONCILIATIONS Energy Transfer Equity L.P. ($ in millions) FY 2010 FY 2011 FY 2012 FY 2013 1Q14 ETP GP distributions (1) $396 $441 $459 $522 $116 ETP LP distributions 191 180 180 268 29 ETP distributions credited to Holdco consideration (68) Class H distributions 105 50 RGP GP distributions (1) 7 11 13 14 7 RGP LP distributions 35 48 48 48 13 Cash dividends from Holdco 75 50 Distributable cash flow attributable to SUG 82 Distributable cash flow attributable to Trunkline LNG 48 SG&A (2) (9) (8) (14) (15) (1) Management fees (15) (24) Adjusted EBITDA $619 $672 $843 $909 $238 (1) Includes distributions from both GP and IDR interests net of relinquishments. (2) Excludes transaction-related expenses of $13 $21 $38 $19 and $1 million in 2010 2011 2012 2013 and 1Q14 respectively. 17
NON-GAAP RECONCILIATIONS Energy Transfer Partners L.P. 2014 2013 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 FY Net income $ 491 $ - $ - $ - $ 491 $ 424 $ 413 $ 404 $ (473) $ 768 Interest expense net of interest capitalized 219 - - - 219 211 211 210 217 849 Gain on deconsolidation of Propane Business - - - - - - - - - - Gain on sale of AmeriGas common units (70) - - - (70) - - (87) - (87) Income tax expense (benefit) from continuing operations 146 - - - 146 3 89 47 (42) 97 Depreciation and amortization 266 - - - 266 260 251 253 268 1032 Non-cash compensation expense 14 - - - 14 14 10 12 11 47 (Gains) losses on interest rate derivatives 2 - - - 2 (7) (39) - 2 (44) Unrealized (gains) losses on commodity risk management activities 29 - - - 29 (19) (18) (8) (6) (51) Impairment Loss - - - - - - - - 689 689 Loss on extinguishment of debt - - - - - - - - - - LIFO valuation adjustment (14) - - - (14) (38) 22 (6) 19 (3) Non-operating environmental remediation - - - - - - - - 168 168 Equity in earnings of unconsolidated affiliates (79) - - - (79) (72) (37) (28) (35) (172) Adjusted EBITDA related to unconsolidated affiliates 196 - - - 196 165 158 151 155 629 Other net 6 - - - 6 15 9 (6) 13 31 Adjusted EBITDA 1206 - - - 1206 956 1069 942 986 3953 Adjusted EBITDA related to unconsolidated affiliates (196) - - - (196) (165) (158) (151) (155) (629) Distributions from unconsolidated affiliates 81 - - - 81 95 102 144 123 464 Interest expense net of interest capitalized (219) - - - (219) (211) (211) (210) (217) (849) Amortization included in interest expense (16) - - - (16) (23) (24) (16) (17) (80) Income tax (expense) benefit from continuing operations (146) - - - (146) (3) (89) (47) 42 (97) Income tax expense related to the Trunkline LNG Transaction 85 - - - 85 - - - - - Maintenance capital expenditures (39) - - - (39) (51) (121) (62) (109) (343) Other net 2 - - - 2 1 1 2-4 Distributable Cash Flow (consolidated) 758 - - - 758 599 569 602 653 2423 Distributable Cash Flow attributable to Sunoco Logistics (100%) (158) - - - (158) (195) (184) (121) (155) (655) Distributions from Sunoco Logistics to ETP 62 - - - 62 45 49 53 57 204 Distributions to ETE in respect of Holdco - - - - - (50) - - - (50) Distributions to Regency in respect of Lone Star (33) - - - (33) (23) (16) (23) (25) (87) Distributable Cash Flow attributable to the partners of ETP $ 629 $ - $ - $ - $ 629 $ 376 $ 418 $ 511 $ 530 $ 1835 18
NON-GAAP RECONCILIATIONS Sunoco Logistics Partners L.P. 19
NON-GAAP RECONCILIATIONS Regency Energy Partners LP 20