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Crosstex Reports Fourth Quarter and Full Year 2004 Results
 Seven Straight Quarters of Increases in Distributable Cash Flow Since IPO of

DALLAS, March 8 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P. (Nasdaq: XTEX) (the Partnership) today reported fourth quarter and full year earnings. Crosstex Energy, Inc. (Nasdaq: XTXI) (the Corporation) will report its results later this week. Both companies continued their track record of solid growth in the fourth quarter and full year 2004, which supported increases in distributions and dividends from both companies.

"With the LIG acquisition and the continued growth of our treating business, our employees continue to drive our results higher," said Barry E. Davis, President and Chief Executive Officer of the Crosstex Energy companies. "We have been able to continue this growth while maintaining our emphasis on return on total invested capital. Our emphasis on return, as opposed to accretion alone, will compel us to focus more resources on organic growth projects as the driver of our next growth steps in preference to acquisitions, given the current market environment."

The Partnership reported net income of $6.1 million, or $0.22 per limited partner unit, in the quarter ended December 31, 2004, compared to net income in the fourth quarter of 2003 of $5.5 million, or $0.26 per unit. Full year 2004 results for the Partnership were net income of $23.7 million, or $0.95 per unit, compared to net income of $15.2 million or $0.88 per unit in 2003.

The Partnership's Distributable Cash Flow for the quarter was $11.9 million, or 2.58 times the amount required to cover its Minimum Quarterly Distribution of $0.25 per unit, and 1.17 times the amount required to cover its recently increased distribution of $0.45 per unit. This is an increase of $3.2 million, or 37 percent, over Distributable Cash Flow of $8.7 million in the 2003 fourth quarter. For the full year of 2004, Distributable Cash Flow was $42.2 million, or 2.29 times the amount required to cover the Minimum Quarterly Distribution and 1.14 times the amount required to cover its actual distributions of $37.0 million. Distributable Cash Flow for the year increased more than 40 percent from the 2003 figure of $29.5 million. Distributable Cash Flow is a non-GAAP financial measure and is explained in greater detail under "Non-GAAP Financial Information." Also, in the tables at the end of this release is a reconciliation of this measure to net income.

The increase in Distributable Cash Flow was due to growth in the Partnership's gross margin, to $33.2 million compared to $18.5 million in the corresponding 2003 period, an increase of 80 percent. Gross margin from the Midstream business segment increased by $13.0 million, or 98 percent, to $26.3 million, due to growth in on-system gathering and transmission volumes of 104 percent, and to growth in processed volumes of 182 percent. The acquisition of Louisiana Intrastate Gas (LIG) Pipeline Company and its subsidiaries on April 1, 2004 was the main driver of growth in Midstream gross margins. LIG contributed $10.8 million to gross margin in the quarter.

Gross margin for the quarter from the Treating segment increased by $1.7 million, or 33 percent, to $7.0 million. Improvements in margins of the Seminole plant provided $266 thousand of the increase. Growth in the number of treating plants in service from 52 at the end of the fourth quarter of 2003 to 74 at the end of the fourth quarter of 2004 created the remaining increase in Treating margins.

For similar reasons, gross margin for the year increased from $59.7 million to $112.3 million, or 88 percent. Of the $52.6 million gross margin increase for the year, $43.5 million was contributed from the midstream segment. In addition to improvements from the LIG acquisition ($27.7 million for the nine months it was owned in 2004), midstream margins increased $7.9 million due to the DEFS assets acquired mid-year 2003. Treating margins improved $9.1 million year over year, $4.5 million of which is due to ownership of the Seminole plant for only six months in 2003, and $4.1 million due to the net growth in treating plants in service. These improvements were offset by increases in operating expenses of $5.9 million and $20.4 million for the quarter and year respectively, primarily associated with the new assets in service.

General and administrative expenses increased by $5.1 million and $13.2 million for the quarter and year, respectively. The Partnership's general and administrative costs were capped in 2003. Without such a cap, annual general and administrative expenses would have been $10.2 million in 2003 compared to $20.1 million in 2004, an increase of $9.9 million. This increase is related to the staffing increases around the LIG acquisition and the significant infrastructure improvements being made at the company to support future growth. Also included in general and administrative costs are $2.7 million associated with the implementation of new computer systems, outside consultants and audit work related to compliance with Sarbanes Oxley and corporate development costs.

Interest expense increased $1.8 million and $5.8 million for the quarter and year, respectively, as the Partnership has financed its growth in 2004 with debt. The Partnership's capital structure is still very conservative.

Crosstex Energy, Inc.

The Corporation's share of Partnership distributions, including distributions on its ten million limited partner units, its two percent general partner interest, and the incentive distribution rights, was $6.5 million in the fourth quarter, compared to $4.4 million in the fourth quarter of 2003, an increase of over 47 percent. The recently announced increase in the Partnership's distribution increased the Corporation's share of the distribution by $0.5 million, from $6.0 million in the third quarter of 2004 to $6.5 million for the fourth quarter.

"The accretive growth of the Partnership and the growth of the Corporation's distributions received from the Partnership have allowed it to increase its dividend payable to its stockholders by 30 percent in the first year of its existence as a public company," said Mr. Davis. "From the first quarter to the fourth quarter of 2004, we increased dividends from $0.30 per share to $0.39 per share."

Earnings Call

Crosstex will hold its quarterly conference call to discuss fourth quarter results today at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The dial- in number for the call is 800-706-7741, passcode Crosstex. A live Webcast of the call can be accessed on the investor information page of Crosstex Energy's Web site at . The call will be available for replay for 30 days by dialing 888-286-8010, passcode 76714886. A replay of the broadcast will also be available on the Partnership's Web site.

About the Crosstex Energy Companies

Crosstex Energy, L.P., a mid-stream natural gas company headquartered in Dallas, operates over 4,500 miles of pipeline, five processing plants, and over 80 natural gas amine treating plants. Crosstex currently provides services for over 1.9 BCF/day of natural gas.

Crosstex Energy, Inc. owns the general partner, a 54 percent limited partner interest and the incentive distribution rights of Crosstex Energy, L.P.

Additional information about the Crosstex companies can be found at .

Non-GAAP Financial Information

This press release contains non-generally accepted accounting principle financial measures of earnings before non-cash charges and less maintenance capital expenditures, which we refer to as Distributable Cash Flow. The amounts included in the calculation of these measures are computed in accordance with generally accepted accounting principles (GAAP), with the exception of maintenance capital expenditures. Maintenance capital expenditures are capital expenditures made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of our assets and to extend their useful lives. We believe this measure is useful to investors because it may provide users of this financial information with meaningful comparisons between current results and prior reported results and a meaningful measure of the Partnership's cash flow after it has satisfied the capital and related requirements of its operations. Distributable Cash Flow is not a measure of financial performance or liquidity under GAAP. It should not be considered in isolation or as an indicator of the Partnership's performance. Furthermore, it should not be seen as a measure of liquidity or a substitute for metrics prepared in accordance with GAAP. Our reconciliation of this measure to net income is included in the following tables.

This press release contains forward-looking statements identified by the use of words such as "forecast," "anticipate," "plan" and "estimate." These statements are based on currently available information and assumptions and expectations that the Partnership and the Corporation believe are reasonable. However, the assumptions and expectations are subject to a wide range of business risks, so it can give no assurance that actual performance will fall within the forecast ranges. Among the key risks that may bear directly on the Partnership's and the Corporation's results of operation and financial condition are: (1) the amount of natural gas transported in the Partnership's gathering and transmission lines may decline as a result of competition for supplies, reserve declines and reduction in demand from key customers and markets; (2) the level of the Partnership's processing and treating operations may decline for similar reasons; (3) fluctuations in natural gas and NGL prices may occur due to weather and other natural and economic forces; (4) there may be a failure to successfully integrate new acquisitions; (5) the Partnership's credit risk management efforts may fail to adequately protect against customer nonpayment; and (6) the Partnership may not adequately address construction and operating risks. The Partnership and the Corporation have no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

                              (tables to follow)

                            CROSSTEX ENERGY, L.P.
                    Selected Financial and Operating Data
              (All amounts in thousands except per unit numbers)

                                Quarter Ended         Twelve Months Ended
                                 December 31,              December 31,
                              2004         2003         2004         2003

      Midstream             $620,840     $244,130   $1,948,021     $989,697
      Treating                 8,163        6,513       30,755       23,966
                             629,003      250,643    1,978,776    1,013,663
    Cost of Gas
      Midstream              594,580      230,898    1,861,204      946,412
      Treating                 1,182        1,257        5,274        7,568
                             595,762      232,155    1,866,478      953,980

    Gross Margin              33,241       18,488      112,298       59,683

    Operating Expenses        11,599        5,685       38,141       17,692
    General & Administrative   6,828        1,732       20,064        6,844
    Profit on Energy Trading
     Activities                 (715)        (414)      (2,507)      (1,905)
    Stock Based Compensation     235          696        1,001        5,345
    (Gain) Loss on Sale
     of Property                 ---          ---          (12)         ---
    Depreciation and
     Amortization              6,535        4,191       23,034       13,268

             Total            24,482       11,890       79,721       41,244

    Operating Income           8,759        6,598       32,577       18,439

    Interest Expense          (3,006)      (1,196)      (9,220)      (3,392)
    Other Income                 544          129          798          179
        Total Other
         Income (Expense)     (2,462)      (1,067)      (8,422)      (3,213)
    Income Before Income
     Taxes and Interest of
     Partners in the
     Partnership's Net
     Income                    6,297        5,531       24,155       15,226

    Interest of Non-
     controlling Partners
     in the Partnership's
     Net Income                 (139)         ---         (289)         ---
    Income Tax Provision         (46)         ---         (162)         ---
    Net Income                $6,112       $5,531      $23,704      $15,226
    General Partner Share
     of Net Income            $1,908         $619       $5,913       $1,240
    Limited Partners Share
     of Net Income            $4,204       $4,912      $17,791      $13,986
    Net Income per Limited
     Partners' Unit            $0.22        $0.26        $0.95        $0.88
    Weighted Average Limited
     Partners' Units
     Outstanding (Diluted)    18,713       18,564       18,633       15,960

                            CROSSTEX ENERGY. L.P.
           Reconciliation of Net Income to Distributable Cash Flow
                   (All amounts in thousands except ratios)

                               Quarter Ended          Twelve Months Ended
                                 December 31,              December 31,
                              2004         2003         2004         2003

    Net Income                $6,112       $5,531      $23,704      $15,226
    Depreciation and
     Amortization (A)          6,478        4,191       22,852       13,268
    Stock Based Compensation     235          696        1,001        5,345
    Loss (Gain) on Sale of
     Property                    ---          ---          (12)         ---
    Proceeds from Sale of
     Property                    ---          ---          611          ---

    Deferred Tax Benefit         (22)         ---         (190)         ---
    Cash Flow                 12,803       10,418       47,966       33,839

    Maintenance Capital
     Expenditures               (915)      (1,738)      (5,729)      (4,310)
    Distributable Cash Flow  $11,888       $8,680      $42,237      $29,529
    Minimum Quarterly
     Distribution (MQD)       $4,615       $4,605      $18,458      $16,658
    Distributable Cash
     Flow/MQD                   2.58         1.89         2.29         1.77
    Actual Distribution      $10,164       $7,436      $37,032      $22,149
    Distribution Coverage       1.17         1.17         1.14         1.33

     (A)  Excludes minority interest share of depreciation and amortization of
          $57,000 and $182,000 for the three and twelve months ended
          December 31, 2004, respectively.

                            CROSSTEX ENERGY, L.P.
                                Operating Data
                           (All volumes in MMBtu/d)

                                Quarter Ended          Twelve Months Ended
                                 December 31,              December 31,

    Pipeline Throughput       2004         2003         2004         2003
      Gulf Coast
       Transmission           56,000       97,000       72,000       85,000

      Vanderbilt              89,000       61,000       68,000       49,000

      CCNG Transmission      175,000      127,000      179,000      157,000

      CCNG Transmission
       - Hallmark            108,000       73,000      103,000       57,000

      Gregory Gathering      120,000      151,000      133,000      151,000

      Mississippi             78,000       74,000       78,000       79,000

      Arkoma                  17,000       15,000       19,000       13,000

      LIG Pipeline &
       Marketing             619,000          N/A      603,000 (A)      N/A

      Other Midstream         30,000       35,000       34,000       35,000
    Total Gathering and
     Transmission Volume   1,292,000      633,000    1,289,000      626,000

    Natural Gas Processed
      Gregory Processing      93,000      128,000      106,000      106,000
      Conroe Processing       22,000       25,000       25,000       26,000
      LIG Processing         317,000          N/A      294,000 (A)      N/A
    Total Processed Volume   432,000      153,000      425,000      132,000

    Total On-System
     Volumes               1,724,000      786,000    1,714,000      758,000

    Producer Services
     Volumes                 212,000      246,000      210,000      259,000

    Treating Plants in
     Service (B)                  74           52

     (A)  Represents activity since April 1, 2004 acquisition.
     (B)  Plants in service represent plants in service on the last day of the

     Contact:  Barry E. Davis, President and Chief Executive Officer
               William W. Davis, Executive V.P. and Chief Financial Officer
     Phone:    (214) 953-9500
SOURCE  Crosstex Energy, L.P.
    -0-                             03/08/2005
    /CONTACT:  Barry E. Davis, President and Chief Executive Officer, or
William W. Davis, Executive V.P. and Chief Financial Officer, both of Crosstex
Energy, +1-214-953-9500/
    /Web site: /

CO:  Crosstex Energy, L.P.; Crosstex Energy, Inc.
ST:  Texas

-- DATU021 --
7116 03/08/2005 07:03 EST