1338613--3/2/2009--Regency_Energy_Partners

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{tax, income, asset}

{debt, indebtedness, cash}

{gas, price, oil}

{stock, price, operating}

{acquisition, growth, future}

{operation, natural, condition}

{customer, product, revenue}

{financial, litigation, operation}

{stock, price, share}

{regulation, change, law}

{investment, property, distribution}

{cost, regulation, environmental}

{operation, international, foreign}

{cost, operation, labor}

{loan, real, estate}

{control, financial, internal}

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{competitive, industry, competition}

We may not have sufficient cash from operations to enable us to pay our current quarterly distribution following the establishment of cash reserves and payment of fees and expenses, including reimbursement of fees and expenses of our general partner. We may have difficulty financing our planned capital expenditures, which could adversely affect our results and growth. Our leverage may limit our ability to borrow additional funds, make distributions, comply with the terms of our indebtedness or capitalize on business opportunities. Increases in interest rates could adversely impact our unit price and our ability to issue additional equity, in order to make acquisitions, to reduce debt, or for other purposes. Natural gas, NGLs and other commodity prices are volatile, and an unfavorable change in these prices could adversely affect our cash flow and operating results. Because of the natural decline in production from existing wells, our success depends on our ability to obtain new supplies of natural gas, which involves factors beyond our control. Any decrease in supplies of natural gas in our areas of operation could adversely affect our business and operating results. Many of our customers drilling activity levels and spending for transportation on our pipeline system may be impacted by the current deterioration in commodity prices and the credit markets. We depend on certain key producers and other customers for a significant portion of our supply of natural gas and contract compression revenue. The loss of, or reduction in, any of these key producers or customers could adversely affect our business and operating results. The completion of the joint venture with GECC and the Alinda Investors is subject numerous closing conditions and we may therefore not be able to successfully complete the joint venture. If the joint venture is completed, we may be required to make additional capital contributions to the joint venture. If the joint venture is completed, we will own a 38 percent equity interest and will not be able to exercise control over the joint venture. Our contract compression segment depends on particular suppliers and is vulnerable to product shortages and price increases, which could have a negative impact on our results of operations. In accordance with industry practice, we do not obtain independent evaluations of natural gas reserves dedicated to our gathering systems. Accordingly, volumes of natural gas gathered on our gathering systems in the future could be less than we anticipate, which could adversely affect our business and operating results. In our gathering and processing operations, we purchase raw natural gas containing significant quantities of NGLs, process the raw natural gas and sell the processed gas and NGLs. If we are unsuccessful in balancing the purchase of raw natural gas with its component NGLs and our sales of pipeline quality gas and NGLs, our exposure to commodity price risks will increase. Our results of operations and cash flow may be adversely affected by risks associated with our hedging activities. To the extent that we intend to grow internally through construction of new, or modification of existing, facilities, we may not be able to manage that growth effectively, which could decrease our cash flow and adversely affect our results of operations. Because we distribute all of our available cash to our unitholders, our future growth may be limited. We may be unable to integrate successfully the operations of future acquisitions with our operations and we may not realize all the anticipated benefits of the past and any future acquisitions. Our industry is highly competitive, and increased competitive pressure could adversely affect our business and operating results. If third-party pipelines interconnected to our processing plants become unavailable to transport NGLs, our cash flow and results of operations could be adversely affected. We are exposed to the credit risks of our key customers, and any material nonpayment or nonperformance by our key customers could adversely affect our cash flow and results of operations. Our business involves many hazards and operational risks, some of which may not be fully covered by insurance. If a significant accident or event occurs that is not fully insured, our operations and financial results could be adversely affected. Failure of the gas that we ship on our pipelines to meet the specifications of interconnecting interstate pipelines could result in curtailments by the interstate pipelines. We may incur significant costs and liabilities as a result of pipeline integrity management program testing and any related pipeline repair, or preventative or remedial measures. We do not own all of the land on which our pipelines and facilities have been constructed, and we are therefore subject to the possibility of increased costs or the inability to retain necessary land use. Our interstate gas transportation operations, including Section 311 service performed by our intrastate pipelines, are subject to FERC regulation; failure to comply with applicable regulation, future changes in regulations or policies, or the establishment of more onerous terms and conditions applicable to interstate or Section 311 natural gas transportation service could adversely affect our business. As a limited partnership entity, we may be disadvantaged in calculating its cost-of-service for rate-making purposes. A change in the jurisdictional characterization of some of our assets by federal, state or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may cause our revenues to decline and operating expenses to increase. We may incur significant costs and liabilities in the future resulting from a failure to comply with new or existing environmental regulations or an accidental release of hazardous substances into the environment. Our operations may incur substantial liabilities to comply with climate change legislation and regulatory initiatives. Massachusetts, et al. v. EPA We may not have the ability to raise funds necessary to finance any change of control offer required under our senior notes. Our ability to manage and grow our business effectively may be adversely affected if our General Partner loses key management or operational personnel. Terrorist attacks, the threat of terrorist attacks, hostilities in the Middle East, or other sustained military campaigns may adversely impact our results of operations. GE EFS controls our general partner, which has sole responsibility for conducting our business and managing our operations. GE EFS and affiliates of GECC may compete directly with us. Our reimbursement of our general partner s expenses will reduce our cash available for distribution to common unitholders. Our partnership agreement limits our General Partner s fiduciary duties to our unitholders and restricts the remedies available to unitholders for actions taken by our General Partner that might otherwise constitute breaches of fiduciary duty. Unitholders have limited voting rights and are not entitled to elect our general partner or its directors. Even if unitholders are dissatisfied, they cannot remove our general partner without its consent. Our partnership agreement restricts the voting rights of those unitholders owning 20 percent or more of our common units. Control of our general partner may be transferred to a third party without unitholder consent. We may issue an unlimited number of additional units without your approval, which would dilute your existing ownership interest. Certain of our investors may sell units in the public market, which could reduce the market price of our outstanding common units. Our general partner has a limited call right that may require you to sell your units at an undesirable time or price. Your liability may not be limited if a court finds that unitholder action constitutes control of our business. Unitholders may have liability to repay distributions that were wrongfully distributed to them. Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as our not being subject to a material amount of entity-level taxation by individual states or local entities. If the IRS treats us as a corporation or we become subject to a material amount of entity-level taxation for state or local tax purposes, it would substantially reduce the amount of cash available for payment for distributions on our common units. A successful IRS contest of the federal income tax positions we take may adversely affect the market for our common units, and the cost of any IRS contest will reduce our cash available for distribution to you. You may be required to pay taxes on income from us even if you do not receive any cash distributions from us. Tax gain or loss on disposition of common units could be more or less than expected. Tax-exempt entities and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them. We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units. We prorate our items of income, gain, loss and deduction between transferors and transferees of our units each month based upon the ownership of our units on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders. A unitholder whose units are loaned to a short seller to cover a short sale of units may be considered as having disposed of those units. If so, he would no longer be treated for tax purposes as a partner with respect to those units during the period of the loan and may recognize gain or loss from the disposition. We have adopted certain valuation methodologies that may result in a shift of income, gain, loss and deduction between the general partner and the unitholders. The IRS may challenge this treatment, which could adversely affect the value of the common units. The sale or exchange of 50 percent or more of our capital and profits interests during any twelve-month period will result in the termination of our partnership for federal income tax purposes. You may be subject to state and local taxes and tax return filing requirements.

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1338613--3/2/2009--Regency_Energy_Partners_LP