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Crosstex Energy Reports Third-Quarter 2012 Results

This press release contains forward-looking statements within the meaning of the federal securities laws. These statements are based on certain assumptions made by the Partnership and the Corporation based upon management’s experience and perception of historical trends, current conditions, expected future developments and other factors the Partnership and the Corporation believe are appropriate in the circumstances. These statements include, but are not limited to, statements with respect to the Partnership’s and the Corporation’s guidance and future outlook, distribution and dividend guidelines and future estimates and results of operations. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Partnership and the Corporation, which may cause the Partnership’s and the Corporation’s actual results to differ materially from those implied or expressed by the forward-looking statements. These risks include the following: (1) the Partnership’s profitability is dependent upon prices and market demand for natural gas, NGLs and crude oil; (2) the Partnership’s substantial indebtedness could limit its flexibility and adversely affect its financial health; (3) the Partnership may not be able to obtain funding, which would impair its ability to grow; (4) the Partnership and the Corporation do not have diversified assets; (5) drilling levels may decrease due to deterioration in the credit and commodity markets; (6) the Partnership’s credit risk management efforts may fail to adequately protect against customer nonpayment; (7) the Partnership’s use of derivative financial instruments does not eliminate its exposure to fluctuations in commodity prices and interest rates; (8) the Partnership may not be successful in balancing its purchases and sales; (9) the amount of natural gas, NGLs and crude oil transported may decline as a result of reduced drilling by producers, competition for supplies, reserve declines and reduction in demand from key customers and markets; (10) the level of the Partnership’s processing, fractionation, crude oil handling and brine disposal operations may decline for similar reasons; (11) operational, regulatory and other asset-related risks, including weather conditions such as hurricanes, exist because a significant portion of the Partnership’s assets are located in southern Louisiana; and (12) other factors discussed in the Partnership’s and the Corporation’s Annual Reports on Form 10-K for the year ended December 31, 2011, and other filings with the Securities and Exchange Commission. 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 follow)

CROSSTEX ENERGY, L.P.
Selected Financial Data
(All amounts in thousands except per unit amounts)
       
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
 
(Unaudited) (Unaudited)
 
Revenues $ 406,968 $ 517,498 $ 1,129,871 $ 1,533,003
Purchased gas, NGLs and crude oil   307,223   426,539   840,070   1,255,650
 
Gross operating margin 99,745 90,959 289,801 277,353
 
Operating costs and expenses:
Operating expenses 35,551 28,126 93,928 81,083
General and administrative 16,470 13,712 44,398 38,111
(Gain) loss on sale of property 109 397 (395)

 

317
(Gain) loss on derivatives 759 563 (1,977) 5,520
Depreciation and amortization   45,059   31,912   110,107   93,200
Total operating costs and expenses 97,948 74,710 246,061 218,231
 
Operating income 1,797 16,249 43,740 59,122
 
Interest expense, net of interest income (23,229) (19,507) (63,932) (59,952)
Equity in earnings of limited liability company 1,511 - 1,511 -
Other income   4,439   786   4,464   656
Total other expense (17,279) (18,721) (57,957) (59,296)
Loss before non-controlling interest and income taxes (15,482) (2,472) (14,217) (174)
Income tax provision (672) (287) (1,507) (898)
Net loss (16,154) (2,759) (15,724) (1,072)
Less: Net loss attributable to the non-
controlling interest   (54)   (23)   (163)   (130)
Net loss attributable to Crosstex Energy, L.P. $ (16,100) $ (2,736) $ (15,561) $ (942)
Preferred interest in net loss attributable to
Crosstex Energy, L.P. $ 5,640 $ 4,558 $ 15,346 $ 13,382
General partner interest in net loss $ (309) $ (76) $ (420) $ (709)
Limited partners' interest in net loss attributable
to Crosstex Energy, L.P. $ (21,431) $ (7,218) $ (30,487) $ (13,615)
Net loss attributable to Crosstex Energy, L.P. per
limited partners' unit:
Basic and diluted common units $ (0.34) $ (0.14) $ (0.53) $ (0.26)
Weighted average limited partners' units outstanding:
Basic and diluted common units   62,027   50,650   56,315   50,562
Series A convertible preferred units outstanding   14,706   14,706   14,706   14,706
CROSSTEX ENERGY, L.P.
Reconciliation of Net Loss to Adjusted EBITDA and Distributable Cash Flow
(All amounts in thousands except ratios and per unit amounts)
     
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
 
(Unaudited) (Unaudited)
Net loss attributable to Crosstex Energy, L.P. $ (16,100) $ (2,736) $ (15,561) $ (942)
Depreciation and amortization 45,059 31,912 110,107 93,200
Stock-based compensation 2,503 1,509 7,496 5,504
Interest expense, net 23,229 19,507 63,932 59,952
Equity in earnings of limited liability company (1,511) - (1,511) -
(Gain) loss on sale of property 109 397 (395) 317
Noncash derivatives, taxes and other (1)   1,895   (537)   (1,731)   1,351
Adjusted EBITDA 55,184 50,052 162,337 159,382
 
Interest expense (23,150) (19,569) (63,977) (58,813)
Cash taxes and other (797) (412) (1,514) (1,274)
Maintenance capital expenditures   (4,222)   (4,264)   (10,800)   (9,460)
Distributable cash flow $ 27,015 $ 25,807 $ 86,046 $ 89,834
Actual distribution (common and preferred) $ 23,804 $ 21,602 $ 74,231 $ 62,881
Distribution coverage 1.13x 1.19x 1.16x 1.43x
 
Distributions declared per limited partner unit $ 0.33 $ 0.31 $ 0.99 $ 0.91
Distributions declared per preferred unit $ 0.33 $ 0.31 $ 0.99 $ 0.91
 
(1)

 Excludes $0.9 million and $2.5 million of transaction expenses related to successfully transacted acquisition projects for the three months and nine months ended September 30, 2012, respectively, and $0.1 million and $0.4 million of transaction expenses related to successfully transacted growth projects for the three months and nine months ended September 30, 2011, respectively.

CROSSTEX ENERGY, L.P.
Operating Data
   
 
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
 
Pipeline Throughput (MMBtu/d)
LIG 741,000 859,000 814,000 907,000
NTX - Gathering 819,000 779,000 824,000 769,000
NTX - Transmission 344,000 342,000 353,000 351,000
Total Gathering and Transmission Volume 1,904,000 1,980,000 1,991,000 2,027,000
 
Natural Gas Processed (MMBtu/d)
PNGL 602,000 699,000 769,000 837,000
LIG 215,000 236,000 241,000 244,000
NTX 386,000 258,000 353,000 248,000
Total Gas Volumes Processed 1,203,000 1,193,000 1,363,000 1,329,000
 
Crude Oil Handling (Bbls/d) (1) 12,000 - 12,000 -
Brine Disposal (Bbls/d) 8,000 - 8,000 -
 
NGLs Fractionated (Gal/d) 1,350,000 987,000 1,284,000 1,088,000
 
Realized weighted average
Natural Gas Liquids price ($/gallon) (2) 1.04 1.41 1.09 1.28
Actual weighted average
Natural Gas Liquids-to-Gas price ratio 378% 371% 445% 344%
 
North Texas Gathering (3)
Wells connected 17 22 101 94
 
(1)

 Crude oil handling includes barrels handled by both the ORV and PNGL segments.

(2)

 Ethane represents 34% and 40% of NGL gallons sold at realized prices of $0.33/gal and $0.44/gal for the three months and nine months ended September 30, 2012, respectively.

(3)

 North Texas Gathering wells connected are as of the last day of the period and include Centralized Delivery Point ("CDP") connections where the Partnership connects multiple wells at a single meter station.

CROSSTEX ENERGY, INC.
Selected Financial Data
(All amounts in thousands except per share amounts)
       
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
 
(Unaudited) (Unaudited)
 
Revenues $ 406,968 $ 517,498 $ 1,129,871 $ 1,533,003
Purchased gas, NGLs and crude oil   307,223   426,539   840,070   1,255,650
 
Gross operating margin 99,745 90,959 289,801 277,353
 
Operating costs and expenses:
Operating expenses 35,551 28,126 93,928 81,083
General and administrative 17,349 14,331 46,729 40,084
(Gain) loss on sale of property 109 397 (395) 317
(Gain) loss on derivatives 759 563 (1,977) 5,520
Depreciation and amortization   45,078   31,930   110,163   93,257
Total operating costs and expenses 98,846 75,347 248,448 220,261
 
Operating income 899 15,612 41,353 57,092
 
Interest expense, net of interest income (23,228) (19,506) (63,926) (59,946)
Equity in earnings of limited liability company 1,511 - 1,511 -
Other income   4,440   786   4,464   656
Total other expense (17,277) (18,720) (57,951) (59,290)
Loss before non-controlling interest
and income taxes (16,378) (3,108) (16,598) (2,198)
Income tax benefit   1,824   1,156   2,612   2,054
Net loss (14,554) (1,952) (13,986) (144)
Less: Net income (loss) attributable to the
non-controlling Interest   (10,240)   (364)   (7,176)   4,054
Net loss attributable to Crosstex Energy, Inc. $ (4,314) $ (1,588) $ (6,810) $ (4,198)
Net loss per common share:
Basic and diluted $ (0.09) $ (0.04) $ (0.14) $ (0.09)
Weighted average shares outstanding:
Basic and diluted   47,396   47,191   47,372   47,136
CROSSTEX ENERGY, INC.
Calculation of Cash Available for Dividends
(All amounts in thousands except per share amounts)
     
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
 
Distributions declared by Crosstex Energy, L.P.
associated with:
General Partner Interest $ 417 $ 413 $ 1,369 $ 1,212
Incentive Distribution Rights 1,024 612 3,176 1,631
L.P. Units owned   5,417   5,089   16,251   14,938
Total share of distributions declared $ 6,858 $ 6,114 $ 20,796 $ 17,781
Other non-partnership uses:
General and administrative expenses (890) (475) (1,794) (1,437)
Cash reserved *   (597)   (564)   (1,900)   (1,634)
Cash available for dividends $ 5,371 $ 5,075 $ 17,102 $ 14,710
Dividend declared per share $ 0.12 $ 0.10 $ 0.36 $ 0.29
 
 
* Cash reserved represents a holdback of cash by the Corporation to cover tax payments, equity matching investments in the Partnership and other miscellaneous cash expenditures. The amount is currently estimated at 10% of the Corporation's share of Partnership distributions declared, net of non-partnership general and administrative expenses.




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