Energy Transfer Investor Presentation — September 2021

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PORTFOLIO MANAGER COMMENTARY

620 Eighth Avenue, New York, NY 10018 | 800 691 6960 | ClearBridge.com

Michael Clarfeld CFA

Managing Director, Portfolio Manager

Managing Director, Portfolio Manager

 Souring reopening sentiment and concerns of slowing

energy demand in China in the third quarter led midstream energy to give back some of the very strong

gains made in the first half of 2021.

 The pathway to U.S. oil production approaching pre -

pandemic levels is through increasing drilling activity,

and, perhaps contrarian, our view remains that if

economic returns are there, capital will find its way to

drilling more wells.

 More drilling activity should increase throughputs across

energy infrastructure systems in the U.S. — allowing

growing cash flows to fully display the benefit of the evolved U.S. midstream business model.

Market Overview and Outlook

Souring reopening sentiment , in part due to the spread of the

Delta variant of COVID -19 over the summer, weighed on the

energy sector in the third quarter. Oil prices dipped in August as

Chinese PMIs indicated a slowing of the Chinese economy, raising

concerns about lower global demand , though demand turned out

to be res ilient and crude prices rose in September. U.S. midstream

picked up some ground late in the quarter , outperforming

equities in September , though for the three -month period the