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Crosstex Energy Reports Third-Quarter 2012 Results

The Partnership reports results by operating segment principally based on regions served. Reportable segments consist of the natural gas gathering, processing and transmission operations in the Barnett Shale in north Texas and in the Permian Basin in west Texas (NTX); the pipelines and processing plants in Louisiana (LIG); the south Louisiana processing and natural gas liquids (NGL) assets, including NGL fractionation and marketing activities (PNGL) and rail, truck, pipeline and barge facilities in the Ohio River Valley (ORV). Each business segment’s contribution to the third-quarter 2012 gross operating margin compared with the third-quarter 2011, and the factors affecting those contributions, are described below:

  • The ORV segment contributed $12.4 million of gross operating margin during the third quarter of 2012. Crude oil and condensate and brine water handling and disposal gross operating margins were $8.5 million and $3.9 million, respectively.
  • The NTX segment’s gross operating margin improved by $2.7 million. The increased margin from the Permian Basin operations was partially offset by greater losses on a certain delivery contract.
  • The PNGL segment’s gross operating margin increased $0.6 million. Higher margins from NGL fractionation and marketing and crude oil terminal activity were partially offset by decreased plant processing margins due to the weaker natural gas processing environment.
  • The LIG segment’s gross operating margin decreased by $6.9 million, primarily the result of the weaker natural gas processing environment, lower processing volumes due to scheduled plant maintenance and the impact of the Bayou Corne slurry-filled sinkhole.

The Partnership’s third-quarter 2012 operating expenses of $35.6 million rose $7.4 million, or 26 percent, from the third quarter of 2011. The increase was primarily related to the direct operating cost of the ORV assets acquired in July 2012. General and administrative expenses grew $2.8 million, or 20 percent, versus the third quarter of 2011 largely due to an increase in headcount and higher professional fees and services costs related to the acquisition of the ORV assets. Depreciation and amortization expense for the third quarter of 2012 rose $13.1 million, or 41 percent, compared with the third quarter of 2011, primarily due to increased depreciation and amortization attributable to the ORV assets and accelerated depreciation on the Sabine processing plant in south Louisiana. Interest expense increased to $23.2 million for the third quarter of 2012 from $19.5 million for the third quarter of 2011, primarily due to interest on the 7.125% senior unsecured notes due 2022 issued in May 2012. Other income increased $3.7 million for the third quarter of 2012 versus the third quarter of 2012, primarily the result of $3.0 million related to the assignment of our rights, title and interest in a contract for the construction of a processing plant.

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