Energy Transfer 8-K Reports Third Quarter Results

Exhibit 99.1

ENERGY TRANSFER PARTNERS

REPORTS THIRD QUARTER RESULTS

Distributable Cash Flow and Adjusted EBITDA Up Significantly Over Third Quarter 2010

Dallas—November 2, 2011—Energy Transfer Partners, L.P. (NYSE:ETP) today reported its financial results for the third quarter ended September 30, 2011.

Adjusted EBITDA for the three months ended September 30, 2011 totaled $404.2 million, an increase of $123.7 million from the three months ended September 30, 2010. Distributable Cash Flow for the three months ended September 30, 2011 totaled $266.1 million, an increase of $105.6 million from the three months ended September 30, 2010. Net income for the three months ended September 30, 2011 totaled $76.1 million, a decrease of $31.3 million from the three months ended September 30, 2010, primarily attributable to non-cash fair value adjustments on non-hedged interest rate derivatives of $68.6 million.

Adjusted EBITDA for the nine months ended September 30, 2011 totaled $1.26 billion, an increase of $133.8 million from the nine months ended September 30, 2010. Distributable Cash Flow for the nine months ended September 30, 2011 totaled $826.6 million, an increase of $81.4 million from the nine months ended September 30, 2010. Net income for the nine months ended September 30, 2011 totaled $479.9 million, an increase of $89.5 million from the nine months ended September 30, 2010.

An analysis of the Partnership's segment results and other supplementary data is provided after the financial tables shown below. The Partnership has scheduled a conference call for 8:30 a.m. Central Time, Thursday November 3, 2011 to discuss the third quarter 2011 results. The conference call will be broadcast live via an internet web cast which can be accessed throughwww.energytransfer.com and will also be available for replay on the Partnership's website for a limited time.

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 the Partnership'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. A table reconciling Adjusted EBITDA and Distributable Cash Flow with appropriate GAAP financial measures is included in the summarized financial information included in this release.

Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Arkansas, Colorado, Louisiana, New Mexico, Utah and West Virginia and owns the largest intrastate pipeline system in Texas. ETP currently has natural gas operations that include more than 17,500 miles of gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP also holds a 70 percent interest in Lone Star NGL LLC, a joint venture that owns and operates NGL storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country. ETP's general partner is owned by Energy Transfer Equity, L.P. (NYSE:ETE). For more information, visit the Energy Transfer Partners, L.P. web site atwww.energytransfer.com.

Energy Transfer Equity, L.P. (NYSE:ETE) is a publicly traded partnership, which owns the general partner and 100 percent of the incentive distribution rights (IDRs) of ETP and approximately 50.2 million ETP limited partner units; and owns the general partner and 100 percent of the IDRs of Regency Energy Partners LP and approximately 26.3 million Regency limited partner units. For more information, visit the Energy Transfer Equity, L.P. web site atwww.energytransfer.com.

The information contained in this press release is available on our website atwww.energytransfer.com.

Contacts

Investor Relations:

Energy Transfer

Brent Ratliff

214-981-0700 (office)

Media Relations:

Vicki Granado

Granado Communications Group

214-599-8785 (office)

214-498-9272 (cell)

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(unaudited)

	September 30, 2011		December 31, 2010
ASSETS
CURRENT ASSETS	$	1,237,170	$	1,121,423
PROPERTY, PLANT AND EQUIPMENT, net		11,903,288		9,801,369
ADVANCES TO AND INVESTMENTS IN AFFILIATES		206,505		8,723
LONG-TERM PRICE RISK MANAGEMENT ASSETS		19,827		13,948
GOODWILL		1,220,006		781,233
INTANGIBLE ASSETS, net		335,767		264,690
OTHER NON-CURRENT ASSETS, net		155,485		158,606
Total assets	$	15,078,048	$	12,149,992
LIABILITIES AND EQUITY
CURRENT LIABILITIES	$	1,470,228	$	842,450
LONG-TERM DEBT, less current maturities		7,652,318		6,404,916
LONG-TERM PRICE RISK MANAGEMENT LIABILITIES		36,628		18,338
OTHER NON-CURRENT LIABILITIES		151,000		140,851
COMMITMENTS AND CONTINGENCIES
EQUITY:
Total partners’ capital		5,152,790		4,743,437
Noncontrolling interest		615,084		—
Total equity		5,767,874		4,743,437
Total liabilities and equity	$	15,078,048	$	12,149,992

ENERGY TRANSFER PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands, except per unit data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
REVENUES:
Natural gas operations	$	1,476,107		$	1,082,866		$	3,985,661		$	3,435,521
Retail propane		213,496			183,786			962,258			914,372
Other		25,713			23,992			83,069			80,438
Total revenues		1,715,316			1,290,644			5,030,988			4,430,331
COSTS AND EXPENSES:
Cost of products sold — natural gas operations		926,026			666,022			2,470,159			2,232,867
Cost of products sold — retail propane		141,868			104,533			587,460			519,796
Cost of products sold — other		7,632			6,856			20,992			20,470
Operating expenses		196,737			174,740			574,528			515,021
Depreciation and amortization		112,942			85,612			313,878			252,765
Selling, general and administrative		57,768			44,734			158,074			137,743
Total costs and expenses		1,442,973			1,082,497			4,125,091			3,678,662
OPERATING INCOME		272,343			208,147			905,897			751,669
OTHER INCOME (EXPENSE):
Interest expense, net of interest capitalized		(124,000	)		(101,241	)		(347,706	)		(309,217	)
Equity in earnings of affiliates		6,713			595			13,386			10,848
Losses on non-hedged interest rate derivatives		(68,595	)		(11,963	)		(64,705	)		(11,963	)
Allowance for equity funds used during construction		636			12,432			705			18,039
Impairment of investments in affiliates		(5,355	)		—			(5,355	)		(52,620	)
Other, net		(1,653	)		1,410			(1,935	)		(3,929	)
INCOME BEFORE INCOME TAX EXPENSE		80,089			109,380			500,287			402,827
Income tax expense		4,039			1,993			20,419			12,486
NET INCOME		76,050			107,387			479,868			390,341
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST		9,285			—			17,673			—
NET INCOME ATTRIBUTABLE TO PARTNERS		66,765			107,387			462,195			390,341
GENERAL PARTNER’S INTEREST IN NET INCOME		104,810			97,046			318,241			287,644
LIMITED PARTNERS’ INTEREST IN NET INCOME (LOSS)	$	(38,045	)	$	10,341		$	143,954		$	102,697
BASIC NET INCOME (LOSS) PER LIMITED PARTNER UNIT	$	(0.19	)	$	0.05		$	0.68		$	0.54
BASIC AVERAGE NUMBER OF UNITS OUTSTANDING		209,151,808			185,247,021			203,918,940			186,761,917
DILUTED NET INCOME (LOSS) PER LIMITED PARTNER UNIT	$	(0.19	)	$	0.05		$	0.68		$	0.53
DILUTED AVERAGE NUMBER OF UNITS OUTSTANDING		209,151,808			186,214,685			205,085,770			187,708,683

SUPPLEMENTAL INFORMATION

(Dollars in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months  Ended September 30,
	2011			2010			2011			2010
Reconciliation of net income to Adjusted EBITDA (a):
Net income	$	76,050		$	107,387		$	479,868		$	390,341
Interest expense, net of interest capitalized		124,000			101,241			347,706			309,217
Income tax expense		4,039			1,993			20,419			12,486
Depreciation and amortization		112,942			85,612			313,878			252,765
Non-cash compensation expense		10,350			6,822			31,139			21,422
Losses on non-hedged interest rate derivatives		68,595			11,963			64,705			11,963
Allowance for equity funds used during construction		(636	)		(12,432	)		(705	)		(18,039	)
Unrealized (gains) losses on commodity risk management activities		6,441			(20,703	)		(1,213	)		70,682
Impairment of investments in affiliates		5,355			—			5,355			52,620
Proportionate share of unconsolidated affiliates’ interest, depreciation and allowance for equity funds used during construction		8,516			(1	)		24,237			22,434
Adjusted EBITDA attributable to noncontrolling interest		(13,152	)		—			(23,737	)		—
Other, net		1,653			(1,410	)		1,935			3,929
Adjusted EBITDA	$	404,153		$	280,472		$	1,263,587		$	1,129,820
Reconciliation of net income to Distributable Cash Flow (a):
Net income	$	76,050		$	107,387		$	479,868		$	390,341
Amortization of finance costs charged to interest		2,536			2,835			7,199			7,216
Deferred income taxes		404			4,337			1,996			4,492
Depreciation and amortization		112,942			85,612			313,878			252,765
Non-cash compensation expense		10,350			6,822			31,139			21,422
(Gains) losses on disposals of assets		968			(281	)		3,222			198
Unrealized losses on non-hedged interest rate derivatives		78,969			12,963			70,468			12,963
Allowance for equity funds used during construction		(636	)		(12,432	)		(705	)		(18,039	)
Unrealized (gains) losses on commodity risk management activities		6,441			(20,703	)		(1,213	)		70,682
Impairment of investments in affiliates		5,355			—			5,355			52,620
Distributions in excess of equity in earnings of unconsolidated affiliates, net		16,023			387			17,908			20,765
Distributable Cash Flow attributable to noncontrolling interest		(11,877	)		—			(22,023	)		—
Maintenance capital expenditures		(31,390	)		(26,411	)		(80,520	)		(70,266	)
Distributable Cash Flow	$	266,135		$	160,516		$	826,572		$	745,159

(a) The Partnership has disclosed in this press release Adjusted EBITDA and Distributable Cash Flow, which are non-GAAP financial measures. Management believes Adjusted EBITDA and Distributable Cash Flow provide useful information to investors as measures of comparison with peer companies, including companies that may have different financing and capital structures. The presentation of Adjusted EBITDA and Distributable Cash Flow also allows investors to view our performance in a manner similar to the methods used by management and provides additional insight into our operating results.

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

The Partnership defines Adjusted EBITDA as total partnership earnings before interest, taxes, depreciation, amortization and other non-cash items, such as non-cash compensation expense, gains and losses on disposals of assets, the allowance for equity funds used during construction, unrealized gains and losses on commodity risk management activities, non-cash impairment charges, and other non-operating income or expense items. 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). Adjusted EBITDA reflects amounts for less than wholly owned subsidiaries and unconsolidated affiliates based on the Partnership'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

The Partnership defines Distributable Cash Flow as net income, adjusted for certain non-cash items, less maintenance capital expenditures. Non-cash items include depreciation and amortization, deferred income taxes, 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 non-cash impairment charges. 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 amounts for less than wholly owned subsidiaries based on the Partnership's proportionate ownership and also 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.

REPORTABLE SEGMENTS (unaudited)

	Three Months Ended September 30, 2011
	Intrastate Transportation and Storage			Interstate Transportation		Midstream		NGL Transportation and Services			Retail Propane and Other Retail Propane Related			All Other (including unallocated selling, general and administrative)			Eliminations			Total
Results by segment:
Revenues from external customers	$	617,244		$	120,065	$	565,246	$	131,284		$	236,781		$	44,696		$	—		$	1,715,316
Intersegment revenues		33,590			—		78,742		15,312			—			5,059			(132,703	)		—
Total revenues		650,834			120,065		643,988		146,596			236,781			49,755			(132,703	)		1,715,316
Cost of products sold		422,801			—		513,256		81,224			147,225			42,733			(131,713	)		1,075,526
Gross margin		228,033			120,065		130,732		65,372			89,556			7,022			(990	)		639,790
Operating expenses		49,336			21,459		21,303		16,575			84,655			3,524			(115	)		196,737
Depreciation and amortization		29,975			20,298		28,344		12,904			20,248			1,173			—			112,942
Selling, general and administrative		20,180			11,122		6,954		4,958			11,906			2,648			—			57,768
Segment operating income (loss)	$	128,542		$	67,186	$	74,131	$	30,935		$	(27,253	)	$	(323	)	$	(875	)	$	272,343
Supplemental segment data:
Non-cash compensation expense	$	5,311		$	429	$	1,677	$	—		$	1,320		$	1,613		$	—		$	10,350
Losses on non-hedged interest rate derivatives		—			—		—		—			—			(68,595	)		—			(68,595	)
Allowance for equity funds used during construction		—			636		—		—			—			—			—			636
Unrealized gains (losses) on commodity risk management activities		(5,342	)		—		919		—			(2,018	)		—			—			(6,441	)
Proportionate share of unconsolidated affiliates’ interest, depreciation and allowance for equity funds used during construction		—			8,516		—		—			—			—			—			8,516
Adjusted EBITDA attributable to noncontrolling interest		—			—		—		13,152			—			—			—			13,152
Equity in earnings (losses) of affiliates		1,013			5,883		—		(183	)		—			—			—			6,713
Distributions from affiliates		1,109			21,626		—		—			—			—			—			22,735
Distributable cash flow attributable to noncontrolling interest		—			—		—		11,877			—			—			—			11,877
Maintenance capital expenditures		8,355			5,864		3,550		4,221			7,725			1,675			—			31,390
Volumes by segment:
Natural gas transported (MMBtu/d)		11,148,186			3,155,559		—		—			—
NGLs produced (Bbls/d)		—			—		56,638		—			—
Equity NGLs produced (Bbls/d)		—			—		16,772		—			—
NGL transportation volumes (Bbls/d)		—			—		—		133,149			—
NGL fractionation volumes (Bbls/d)		—			—		—		13,833			—
Retail propane gallons (in thousands)		—			—		—		—			84,193

	Three Months Ended September 30, 2010
	Intrastate Transportation and Storage		Interstate Transportation			Midstream		NGL Transportation and Services		Retail Propane and Other Retail Propane Related			All Other (including unallocated selling, general and administrative)			Eliminations			Total
Results by segment:
Revenues from external customers	$	529,507	$	74,659		$	458,381	$	—	$	205,833		$	22,264		$	—		$	1,290,644
Intersegment revenues		369,487		—			416,703		—		—			73,021			(859,211	)		—
Total revenues		898,994		74,659			875,084		—		205,833			95,285			(859,211	)		1,290,644
Cost of products sold		660,107		—			775,769		—		109,910			79,142			(847,517	)		777,411
Gross margin		238,887		74,659			99,315		—		95,923			16,143			(11,694	)		513,233
Operating expenses		56,167		19,886			19,734		—		75,990			3,047			(84	)		174,740
Depreciation and amortization		29,340		12,643			21,592		—		20,609			1,428			—			85,612
Selling, general and administrative		19,630		7,554			5,196		—		12,377			(23	)		—			44,734
Segment operating income (loss)	$	133,750	$	34,576		$	52,793	$	—	$	(13,053	)	$	11,691		$	(11,610	)	$	208,147
Supplemental segment data:
Non-cash compensation expense	$	3,083	$	417		$	864	$	—	$	1,057		$	1,401		$	—		$	6,822
Losses on non-hedged interest rate derivatives		—		—			—		—		—			(11,963	)		—			(11,963	)
Allowance for equity funds used during construction		—		12,432			—		—		—			—			—			12,432
Unrealized gains on commodity risk management activities		20,585		—			118		—		—			—			—			20,703
Proportionate share of unconsolidated affiliates' interest, depreciation and allowance for equity funds used during construction		—		(1	)		—		—		—			—			—			(1	)
Adjusted EBITDA attributable to noncontrolling interest		—		—			—		—		—			—			—			—
Equity in earnings of affiliates		578		17			—		—		—			—			—			595
Distributions from affiliates		926		56			—		—		—			—			—			982
Distributable cash flow attributable to noncontrolling interest		—		—			—		—		—			—			—			—
Maintenance capital expenditures		12,591		4,415			3,574		—		3,566			2,265			—			26,411
Volumes by segment:
Natural gas transported (MMBtu/d)		13,250,836		1,807,012			—		—		—
NGLs produced (Bbls/d)		—		—			53,004		—		—
Equity NGLs produced (Bbls/d)		—		—			20,670		—		—
NGL transportation volumes (Bbls/d)		—		—			—		—		—
NGL fractionation volumes (Bbls/d)		—		—			—		—		—
Retail propane gallons (in thousands)		—		—			—		—		85,722

	Nine Months Ended September 30, 2011
	Intrastate Transportation and Storage		Interstate Transportation		Midstream		NGL Transportation and Services			Retail Propane and Other Retail Propane Related			All Other (including unallocated selling, general and administrative)			Eliminations			Total
Results by segment:
Revenues from external customers	$	1,849,575	$	330,016	$	1,492,025	$	224,970		$	1,037,969		$	96,433		$	—		$	5,030,988
Intersegment revenues		245,512		—		421,154		20,446			—			45,958			(733,070	)		—
Total revenues		2,095,087		330,016		1,913,179		245,416			1,037,969			142,391			(733,070	)		5,030,988
Cost of products sold		1,396,001		—		1,552,453		133,628			602,117			117,779			(723,367	)		3,078,611
Gross margin		699,086		330,016		360,726		111,788			435,852			24,612			(9,703	)		1,952,377
Operating expenses		144,631		73,874		70,406		23,062			252,520			10,380			(345	)		574,528
Depreciation and amortization		89,412		59,368		79,658		20,043			61,676			3,721			—			313,878
Selling, general and administrative		56,756		27,660		19,597		9,606			37,861			6,594			—			158,074
Segment operating income	$	408,287	$	169,114	$	191,065	$	59,077		$	83,795		$	3,917		$	(9,358	)	$	905,897
Supplemental segment data:
Non-cash compensation expense	$	16,457	$	1,278	$	5,197	$	—		$	3,207		$	5,000		$	—		$	31,139
Losses on non-hedged interest rate derivatives		—		—		—		—			—			(64,705	)		—			(64,705	)
Allowance for equity funds used during construction		—		705		—		—			—			—			—			705
Unrealized gains (losses) on commodity risk management activities		1,368		—		2,091		—			(2,246	)		—			—			1,213
Proportionate share of unconsolidated affiliates’ interest, depreciation and allowance for equity funds used during construction		—		24,237		—		—			—			—			—			24,237
Adjusted EBITDA attributable to noncontrolling interest		—		—		—		23,737			—			—			—			23,737
Equity in earnings (losses) of affiliates		1,759		11,923		—		(183	)		—			(113	)		—			13,386
Distributions from affiliates		3,581		27,713		—		—			—			—			—			31,294
Distributable cash flow attributable to noncontrolling interest		—		—		—		22,023			—			—			—			22,023
Maintenance capital expenditures		26,491		15,290		13,690		5,497			15,249			4,303			—			80,520
Volumes by segment:
Natural gas transported (MMBtu/d)		11,367,812		2,709,522		—		—			—
NGLs produced (Bbls/d)		—		—		52,398		—			—
Equity NGLs produced (Bbls/d)		—		—		16,604		—			—
NGL transportation volumes (Bbls/d)		—		—		—		131,147			—
NGL fractionation volumes (Bbls/d)		—		—		—		14,912			—
Retail propane gallons (in thousands)		—		—		—		—			372,494

	Nine Months Ended September 30, 2010
	Intrastate Transportation and Storage			Interstate Transportation		Midstream			NGL Transportation and Services		Retail Propane and Other Retail Propane Related			All Other (including unallocated selling, general and administrative)			Eliminations			Total
Results by segment:
Revenues from external customers	$	1,662,037		$	213,007	$	1,484,211		$	—	$	987,114		$	83,962		$	—		$	4,430,331
Intersegment revenues		952,336			—		945,438			—		—			162,819			(2,060,593	)		—
Total revenues		2,614,373			213,007		2,429,649			—		987,114			246,781			(2,060,593	)		4,430,331
Cost of products sold		1,930,798			—		2,138,125			—		534,800			202,093			(2,032,683	)		2,773,133
Gross margin		683,575			213,007		291,524			—		452,314			44,688			(27,910	)		1,657,198
Operating expenses		145,497			56,147		56,597			—		247,692			9,340			(252	)		515,021
Depreciation and amortization		87,484			37,856		62,209			—		60,994			4,222			—			252,765
Selling, general and administrative		54,822			20,666		17,728			—		36,343			8,184			—			137,743
Segment operating income (loss)	$	395,772		$	98,338	$	154,990		$	—	$	107,285		$	22,942		$	(27,658	)	$	751,669
Supplemental segment data:
Non-cash compensation expense	$	9,390		$	1,253	$	2,649		$	—	$	3,599		$	4,531		$	—		$	21,422
Losses on non-hedged interest rate derivatives		—			—		—			—		—			(11,963	)		—			(11,963	)
Allowance for equity funds used during construction		—			18,039		—			—		—			—			—			18,039
Unrealized losses on commodity risk management activities		(55,775	)		—		(11,559	)		—		(3,348	)		—			—			(70,682	)
Proportionate share of unconsolidated affiliates’ interest, depreciation and allowance for equity funds used during construction		—			22,434		—			—		—			—			—			22,434
Adjusted EBITDA attributable to noncontrolling interest		—			—		—			—		—			—			—			—
Equity in earnings of affiliates		1,951			8,897		—			—		—			—			—			10,848
Distributions from affiliates		2,916			28,697		—			—		—			—			—			31,613
Distributable cash flow attributable to noncontrolling interest		—			—		—			—		—			—			—			—
Maintenance capital expenditures		21,209			16,134		10,559			—		18,109			4,255			—			70,266
Volumes by segment:
Natural gas transported (MMBtu/d)		12,132,099			1,625,469		—			—		—
NGLs produced (Bbls/d)		—			—		50,836			—		—
Equity NGLs produced (Bbls/d)		—			—		19,697			—		—
NGL transportation volumes (Bbls/d)		—			—		—			—		—
NGL fractionation volumes (Bbls/d)		—			—		—			—		—
Retail propane gallons (in thousands)		—			—		—			—		388,306

Summary Analysis of Results by Segment

(tabular dollar amounts in thousands)

The reportable segment data included in the tables above and the analysis that follows is presented on a comparable basis to prior periods, except that, following Lone Star's acquisition of LDH Energy Asset Holdings LLC (“LDH”) on May 2, 2011, we have added a NGL transportation and services segment, which includes all of Lone Star's operations.

Intrastate Transportation and Storage

Gross Margin. The components of our intrastate transportation and storage segment gross margin were as follows:

	Three Months Ended September 30,							Nine Months Ended September 30,
	2011		2010		Change			2011		2010		Change
Transportation fees	$	148,331	$	152,223	$	(3,892	)	$	448,669	$	447,775	$	894
Natural gas sales and other		42,981		27,504		15,477			106,570		83,464		23,106
Retained fuel revenues		32,560		35,930		(3,370	)		104,222		109,017		(4,795	)
Storage margin, including fees		4,161		23,230		(19,069	)		39,625		43,319		(3,694	)
Total gross margin	$	228,033	$	238,887	$	(10,854	)	$	699,086	$	683,575	$	15,511

Intrastate transportation and storage gross margin changes were primarily due to the following factors:

• Transportation fees decreased during the three months ended September 30, 2011 primarily due to lower transported volumes compared to the same period in the prior year as a result of unfavorable natural gas prices and basis differentials. Transportation fees increased for the nine months ended September 30, 2011 primarily due to increased demand fees offset by lower transported volumes.

• Retained fuel revenues decreased between periods due to lower transported volumes and a decrease in natural gas prices.

• Margin from the sales of natural gas and other activities increased for the three and nine months ended September 30, 2011 primarily due to an increase from sales of NGLs and favorable commodity related derivative activity.

Storage margin was comprised of the following:

	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
Withdrawals from storage natural gas inventory (MMBtu)		8,661,359			7,459,977			1,201,382			24,433,485			35,347,967			(10,914,482	)
Margin on physical sales	$	154		$	2,397		$	(2,243	)	$	10,845		$	68,049		$	(57,204	)
Settlements of derivatives		5,421			(8,479	)		13,900			5,992			(17,408	)		23,400
Realized margin on natural gas inventory transactions		5,575			(6,082	)		11,657			16,837			50,641			(33,804	)
Fair value inventory adjustments		(27,603	)		(7,908	)		(19,695	)		(22,772	)		(70,162	)		47,390
Unrealized gains (losses) on derivatives		18,231			27,867			(9,636	)		20,024			33,161			(13,137	)
Margin recognized on natural gas inventory and related derivatives		(3,797	)		13,877			(17,674	)		14,089			13,640			449
Revenues from fee-based storage		8,072			9,286			(1,214	)		25,891			30,913			(5,022	)
Other costs		(114	)		67			(181	)		(355	)		(1,234	)		879
Total storage margin	$	4,161		$	23,230		$	(19,069	)	$	39,625		$	43,319		$	(3,694	)

For the three months ended September 30, 2011, storage margin decreased primarily due to changes in the spread between spot price and the forward prices which resulted in non-cash adjustments of $27.6 million during the three months ended September 30, 2011 compared to $7.9 million for the three months ended September 30, 2010. Storage margins for the three months ended September 30, 2011 and 2010 were also impacted by the timing of financial derivative settlements as a result of optimizing the withdrawals of stored natural gas inventory. For the nine months ended September 30, 2011, storage margins decreased principally due to a decrease in fee-based storage margin.

Operating Expenses. Intrastate transportation and storage operating expenses decreased for the three months ended September 30, 2011 compared to the same period in the prior year primarily due to a decrease in compression expense, maintenance and operating expenses, and ad valorem taxes. For the nine months ended September 30, 2011 operating expenses decreased primarily due to a decrease in maintenance and operating expenses offset by an increase in the cost of natural gas consumed.

Depreciation and Amortization. Intrastate transportation and storage depreciation and amortization expense increased for the three and nine months ended September 30, 2011 compared to the same periods in the prior year primarily due to the completion of pipeline projects in connection with the continued expansion of our pipeline system.

Selling, General and Administrative.Intrastate transportation and storage selling, general and administrative expenses increased for the three and nine months ended September 30, 2011 compared to the same periods in the prior year as a result of an increase in employee-related costs, including allocated overhead expenses.

Interstate Transportation

For both the three and nine months ended September 30, 2011 compared to the same periods in the prior year, we experienced increases in our interstate transportation segment's revenues, operating expenses, depreciation and amortization, and selling, general and administrative expenses primarily due to activity on the Tiger pipeline, which was placed in service in December 2010 with an additional expansion placed in service on August 1, 2011. For both the three and nine months ended September 30, 2011, the incremental revenues from the Tiger pipeline were slightly offset by decreased transportation fees from the Transwestern pipeline as a result of lower transportation volumes.

Midstream

Gross Margin.The components of our midstream segment gross margin were as follows:

	Three Months Ended September 30,									Nine Months Ended September 30,
	2011			2010			Change			2011			2010			Change
Gathering and processing fee-based revenues	$	68,130		$	55,840		$	12,290		$	193,726		$	165,718		$	28,008
Non fee-based contracts and processing		68,281			48,799			19,482			179,229			146,295			32,934
Other		(5,679	)		(5,324	)		(355	)		(12,229	)		(20,489	)		8,260
Total gross margin	$	130,732		$	99,315		$	31,417		$	360,726		$	291,524		$	69,202

Midstream gross margin increased for the three and nine months ended September 30, 2011 compared to the same periods in prior year due to the following:

• An increase in fee-based revenues due to increased volumes from production in the Eagle Ford Shale and additional volumes due to growth projects located in Louisiana and West Virginia. For the nine months ended September 30, 2011, midstream gross margin was also favorably impacted by an increase in fee-based revenues due to increased gathering and processing volumes on our North Texas System.

• Non fee-based contracts and processing margins increased primarily due to favorable NGL prices. The impact of favorable NGL prices was partially offset by lower equity NGL production volumes.

• For the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010, the favorable variance in other midstream gross margin primarily reflected the impacts from favorable NGL prices on activities where third party processing capacity was utilized.

Operating Expenses.For the three months ended September 30, 2011 compared to the three months ended September 30, 2010, midstream operating expenses reflected an increase in maintenance and operating expenses offset by a decrease in ad valorem taxes. For the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010, midstream operating expenses reflected increases in ad valorem taxes, employee expenses, professional fees and maintenance and operating costs.

Depreciation and Amortization. For the three and nine months ended September 30, 2011 compared to the same periods in the prior year, depreciation and amortization expense increased primarily due to incremental depreciation from the continued expansion of our Louisiana and South Texas assets.

Selling, General and Administrative.For the three months ended September 30, 2011 compared to the same period in the prior year, selling, general and administrative expenses increased primarily due to an increase in employee expenses. For the nine months ended September 30, 2011 compared to the same period in the prior year, selling, general and administrative expenses increased primarily as a result of increased professional fees.

NGL Transportation and Services

Gross Margin.The components of our NGL transportation and services segment gross margin were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011		2010		Change		2011		2010		Change
Storage revenues	$	34,287	$	—	$	34,287	$	57,702	$	—	$	57,702
Transportation revenues		13,646		—		13,646		20,696		—		20,696
Processing and fractionation revenues		16,602		—		16,602		33,324		—		33,324
Other revenues		837		—		837		66		—		66
Total gross margin	$	65,372	$	—	$	65,372	$	111,788	$	—	$	111,788

We own a 70% controlling interest in Lone Star, which acquired all of the membership interests in LDH on May 2, 2011 and is primarily engaged in NGL transportation, storage and fractionation. Results reflected above represent 100% of Lone Star beginning May 2, 2011.

Retail Propane and Other Retail Propane Related

Gross Margin.Gross margin decreased during the nine months ended September 30, 2011 compared to the same period in the prior year primarily due to a decline in the average gross margin per gallon sold and a decrease in sales volumes resulting from weather patterns.

Operating Expenses. Operating expenses were higher for the three and nine months ended September 30, 2011 compared to the same periods in the prior year primarily due to increased vehicle fuel and repair service costs and net insurance reserves and claims. For the nine months ended September 30, 2011, the increase in operating expenses also reflected increases in wages and benefits and general business taxes and were partially offset by decreases in performance-based bonus awards and other general operating expenses.