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Press Release
Crosstex Reports Third Quarter Results

DALLAS, Nov. 8 /PRNewswire-FirstCall/ -- The Crosstex Energy companies, Crosstex Energy, L.P. (Nasdaq: XTEX) (the Partnership) and Crosstex Energy, Inc. (Nasdaq: XTXI) (the Corporation) today reported results for the third quarter of 2005.

Crosstex Energy, L.P. Financial Results

The Partnership reported net income of $1.1 million for the third quarter of 2005 compared to net income in the third quarter of 2004 of $5.9 million. As previously disclosed, the Partnership's net income in the third quarter of 2005 was negatively impacted by an $11.5 million charge for the mark-to-market valuation of the derivative financial instruments (puts) purchased to protect against liquids prices fluctuations in conjunction with the South Louisiana processing asset acquisition, and positively impacted by an $8.0 million gain on sale of property.

Net income per limited partner unit for the third quarter of 2005 decreased to a loss of $0.05 per unit from income of $0.24 per unit in the corresponding quarter in 2004. The current quarter loss per limited partner unit results from the preferential allocation of net income to the general partner equal to its incentive distribution rights, less certain costs. For the third quarter 2005, this allocation resulted in $2.0 million of net income allocated to the general partners' share of net income. This allocation reduced the limited partners' share of net income to a net loss of $0.9 million in the quarter.

The Partnership's Distributable Cash Flow for the quarter was $17.9 million, 3.50 times the amount required to cover its Minimum Quarterly Distribution of $0.25 per unit, and 1.54 times the amount required to cover its distribution of $0.49 per unit. As previously disclosed, the Partnership sold certain idle equipment for $9.0 million in 2005, and during the third quarter, the Partnership received the final $5.4 million of funds for the sale, which is included in Distributable Cash Flow for the quarter. The $11.5 million charge for the mark-to-market value of the puts did not affect Distributable Cash Flow. Excluding proceeds from the sale, Distributable Cash Flow for the quarter increased $2.1 million, or 20.2 percent, over Distributable Cash Flow of $10.4 million in the 2004 third quarter. 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.

In addition to the sale proceeds, the growth in Distributable Cash Flow was driven by growth in the Partnership's gross margin to $39.4 million in the third quarter of 2005, an increase of 33 percent compared to $29.7 million in the corresponding 2004 period. Gross margin from the midstream segment increased by $6.3 million, or 28 percent, to $28.8 million. The Partnership was able to benefit from natural gas price volatility and abnormal basis differentials during the current quarter, contributing $4.3 million to the margin increase. Operational efficiencies offset volume declines due to hurricanes, contributing the remaining $2.0 million increase.

Gross margin from the Treating segment increased $3.7 million, or 56 percent, to $10.3 million. Plants in service increased to 111 at September 30, 2005 from 67 at September 30, 2004, contributing $3.0 million to the increase in gross margin. Plant expansions and increased volumes made up $0.5 million of the increase and the acquisition and installation of dew point control plants contributed the remaining $0.2 million.

"We are pleased that, despite the challenges presented by Hurricane Katrina in the third quarter and later by Hurricane Rita, we have been able to continue to show improved results and consistent increases in our distributions and dividends," said Barry E. Davis, President and Chief Executive Officer. "As we look forward to next year we expect to see that growth continue with our acquisition of the South Louisiana processing assets from El Paso, the completion of the North Texas pipeline and our pursuit of other growth opportunities."

Crosstex Energy, Inc. Financial Results

The Corporation reported net income of $0.8 million for the third quarter of 2005, compared to net income of $1.7 million for the comparable period in 2004. The Corporation's net income before income taxes and interest of non- controlling partners in the net income of the Partnership was $0.9 million in the third quarter of 2005 and $4.6 million in the third quarter of 2004.

The Corporation's share of distributions, including distributions on its ten million limited partner units, its two percent general partner interest, and the incentive distribution rights, was $7.7 million for the third quarter. Its share of the distribution in the third quarter of 2004 was $6.0 million. The recently announced increase in the Partnership's distribution of $0.02 per unit increased the Corporation's share of distributions by $0.6 million, from $7.1 million in the second quarter of 2005 to $7.7 million in the third quarter of 2005.

Earnings Call

Crosstex will hold its quarterly conference call to discuss third quarter results today at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The dial- in number for the call is 800-561-2718, passcode Crosstex. A live Webcast of the call can be accessed on the investor information page of Crosstex Energy's Website at http://www.crosstexenergy.com. The call will be available for replay for 30 days by dialing 888-286-8010, passcode 33312060. A replay of the broadcast will also be available on the company's Website.

About Crosstex

Crosstex Energy, L.P., a mid-stream natural gas company headquartered in Dallas, operates approximately 5,000 miles of pipeline, nine processing plants, four fractionators and more than 100 natural gas amine treating plants.

Crosstex Energy Inc. owns the two percent general partner interest, a 44 percent limited partner interest, and the incentive distribution rights of Crosstex Energy, L.P.

Additional information about the Crosstex companies can be found at http://www.crosstexenergy.com.

Non-GAAP Financial Information

This press release contains a non-generally accepted accounting principle financial measure which we refer to as Distributable Cash Flow. Distributable Cash Flow includes earnings before non-cash charges, less maintenance capital expenditures plus, in this period, proceeds from the sale of idle equipment. 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" and "estimate". These statements are based on currently available information and assumptions and expectations that the Partnership believes are reasonable. However, the assumptions and expectations are subject to a wide range of business risks, so the Partnership 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 results of operations 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 has no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

    Contact:
     Barry E. Davis, President and Chief Executive Officer
     William W. Davis, Executive V.P. and Chief Financial Officer
     Phone: (214) 953-9500



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


                                 Three Months Ended         Nine Months Ended
                                    September 30,            September 30,
                                  2005         2004         2005        2004
    Revenues
      Midstream                $769,334     $501,004   $1,928,330  $1,327,181
      Treating                   13,117        7,880       34,064      22,592
      Profit from Energy
       Trading Activities           306          579        1,157       1,605
                                782,757      509,463    1,963,551   1,351,378

    Cost of Gas
      Midstream                 740,519      478,536    1,851,418   1,266,624
      Treating                    2,792        1,229        5,996       4,092
                                743,311      479,765    1,857,414   1,270,716

    Gross Margin                 39,446       29,698      106,137      80,662

    Operating Expenses           13,874       10,087       37,598      26,740
    General and Administrative    8,127        5,121       22,337      13,804
    (Gain) Loss on Derivatives   13,273         (187)      13,679        (187)
     Gain on Sale of
     Property                    (7,632)        (287)      (7,797)        (12)
    Depreciation and
     Amortization                 7,828        6,160       22,134      16,499

        Total                    35,470       20,894       87,951      56,844

    Operating Income              3,976        8,804       18,186      23,818

    Interest Expense             (2,762)      (2,872)      (9,323)     (6,214)
    Other Income                     32           51          380         254
        Total Other Income       (2,730)      (2,821)      (8,943)     (5,960)

    Net Income Before Minority
     Interest and Taxes           1,246        5,983        9,243      17,858

    Minority Interest in
     Subsidiary                    (106)         (51)        (331)       (150)
    Income Tax Provision            (68)          13         (176)       (116)
    Net Income                   $1,072       $5,945       $8,736     $17,592
    General Partner Share
     of Net Income               $1,990       $1,563       $5,216      $4,005
    Limited Partners Share
     of Net Income                $(918)      $4,382       $3,520     $13,587
    Net Income per Limited
     Partners' Unit:
      Basic                      $(0.05)       $0.24        $0.19       $0.75
      Diluted                    $(0.05)       $0.23        $0.18       $0.73
    Weighted Average Limited
     Partners' Units Outstanding:
      Basic                      18,157       18,083       18,126      18,079
      Diluted                    20,479       18,662       19,371      18,607



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

                                 Three Months Ended        Nine Months Ended
                                   September 30,             September 30,
                                 2005         2004         2005         2004

    Net Income                  $1,072       $5,945       $8,736      $17,592
    Depreciation and
     Amortization (1)            7,760        6,112       21,932       16,374
    Stock-Based Compensation     1,143          288        2,659          766
    Gain on Sale of Property    (7,632)        (287)      (7,797)         (12)
    Proceeds from Sale of
     Property                    5,400          385        9,313          611
    Puts Mark-to-Market         11,547            -       11,547            -

    Deferred Tax Benefit           (95)        (168)        (286)        (168)
    Cash Flow                   19,195       12,275       46,104       35,163

    Maintenance Capital
     Expenditures               (1,251)      (1,842)      (3,727)      (4,814)
    Distributable Cash Flow    $17,944      $10,433      $42,377      $30,349
    Minimum Quarterly
     Distribution (MQD)         $5,120       $4,612      $13,955      $13,840
    Distributable Cash Flow/MQD   3.50         2.26         3.04         2.19
    Actual Distribution        $11,663       $9,439      $33,137      $26,868
    Distribution Coverage         1.54         1.11         1.28         1.13

    (1) Excludes minority interest share of depreciation and amortization of
        $68,000 and $202,000 for the three and nine months ended September 30,
        2005, respectively, and $48,000 and $125,000 for the three and nine
        months ended September 30, 2004, respectively.



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

                                  Three Months Ended         Nine Months Ended
                                     September 30,             September 30,
                                  2005         2004         2005         2004

    Pipeline Throughput
      Gulf Coast Transmission
       & Vanderbilt             156,000      124,000      148,000      140,000

      CCNG Transmission         267,000      301,000      253,000      282,000

      Gregory Gathering         114,000      127,000      114,000      137,000

      LIG Pipeline & Marketing  583,000      628,000      616,000      594,000

      Other Midstream           193,000      129,000      160,000      132,000

    Total Gathering and
     Transmission Volume      1,313,000    1,309,000    1,291,000    1,285,000

    Natural Gas Processed
      Gregory Processing        108,000      100,000      100,000      110,000
      Conroe Processing          17,000       25,000       23,000       26,000
      LIG Processing            327,000      303,000      327,000      283,000
    Total Processed Volume      452,000      428,000      450,000      419,000

    Total On-System Volumes   1,765,000    1,737,000    1,741,000    1,704,000

    Commercial Services Volume  188,000      224,000      186,000      209,000

    Treating Plants in
     Service (1)                    111           67          111           67

    (1) Plants in service represents plants in service on the last day of the
        quarter.



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

                             Three Months Ended        Nine Months Ended
                                 September 30,            September 30,
                             2005         2004         2005         2004
    Revenues
      Midstream           $769,334     $501,004   $1,928,330   $1,327,181
      Treating              13,117        7,880       34,064       22,592
      Profit from Energy
       Trading Activities      306          579        1,157        1,605
                           782,757      509,463    1,963,551    1,351,378

    Cost of Gas
      Midstream            740,519      478,536    1,851,418    1,266,624
      Treating               2,792        1,229        5,996        4,092
                           743,311      479,765    1,857,414    1,270,716

    Gross Margin            39,446       29,698      106,137       80,662

    Operating Expenses      13,882       10,092       37,613       26,768
    General and
     Administrative          8,471        5,478       23,295       14,688
    (Gain) Loss on
     Derivatives            13,273         (187)      13,679         (187)
     Gain on Sale
     of Property            (7,633)        (287)      (7,797)         (12)
    Impairment                   -          981            -          981
    Depreciation and
     Amortization            7,839        6,160       22,169       16,499

        Total               35,832       22,237       88,959       58,737

    Operating Income         3,614        7,461       17,178       21,925

    Interest Expense        (2,701)      (2,869)      (9,046)      (6,166)
    Other Income                32           50          378          254
        Total Other Income  (2,669)      (2,819)      (8,668)      (5,912)

    Income Before Income
     Taxes and Interest of
     Non-controlling Partners
     in the Partnership's
     Net Income                945        4,642        8,510       16,013
    Income Tax Expense        (494)        (957)      (2,528)      (3,504)
    Interest of Non-controlling
     Partners in the
     Partnership's Net
     (Income) Loss             304       (2,005)      (1,909)      (6,216)
    Net Income                $755       $1,680       $4,073       $6,293
    Net Income per Common Share:
      Basic Earnings per
       Common Share          $0.06        $0.14        $0.32        $0.54
      Diluted Earnings
       per Common Share      $0.06        $0.13        $0.32        $0.49
    Weighted Average
     Shares Outstanding:
      Basic                 12,760       12,134       12,615       11,727
      Diluted               12,962       12,918       12,944       12,892
SOURCE  Crosstex Energy
    -0-                             11/08/2005
    /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:  http://www.crosstexenergy.com /
    (XTEX XTXI)

CO:  Crosstex Energy
ST:  Texas
IN:  OIL
SU:  ERN CCA

JC
-- NYTU089 --
9066 11/08/2005 07:04 EST http://www.prnewswire.com