Crosstex Energy (XTXI)

Q4 2010 Earnings Call

February 25, 2011 11:00 am ET

Executives

Compare to:
Previous Statements by XTXI
» Crosstex Energy CEO Discusses Q3 2010 Results - Earnings Call Transcript
» Crosstex Energy Inc. Q2 2010 Earnings Call Transcript
» Crosstex Energy, Inc. Q3 2009 Earnings Call Transcript

William Davis - Chief Financial Officer, Principal Accounting Officer, Executive Vice President, Chief Financial Officer of Crosstex Energy GP LLC and Executive Vice President of Crosstex Energy GP LLC

Jill McMillan - Manager of Public and Industry Affairs

Barry Davis - Chairman, Chief Executive Officer, President, Chief Executive Officer of Crosstex Energy GP LLC, President of Crosstex Energy GP LLC and Director of Crosstex Energy GP LLC

Analysts

John Edwards - Morgan Keegan & Company, Inc.

Sharon Lui - Wells Fargo Securities, LLC

Presentation

Operator

Great day, ladies and gentlemen, and welcome to the Fourth Quarter 2010 Crosstex Energy Earnings Conference Call. My name is Thelma and I will be your coordinator for today's event.

[Operator Instructions]

I would now like to turn the presentation over to Ms. Jill McMillan. Please proceed.

Jill McMillan

Thank you, Thelma and good morning, everyone. Thank you for joining us today to discuss Crosstex's fourth quarter and full-year 2010 results. On the call today are Barry Davis, President and Chief Executive Officer; and Bill Davis, Executive Vice President and Chief Financial Officer.

Our fourth quarter and full-year 2010 earnings release was issued early this morning. For those of you who didn't receive a copy, it is available on our website at crosstexenergy.com. If you want to listen to a recording of today's call, you have 90 days to access a replay by phone or webcast on our website.

I will remind you that any statements that might include our expectations or predictions should be considered forward-looking statements within the meaning of the Federal Securities Laws. Forward-looking statements are subject to a number of assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements, and we undertake no obligation to update or revise any forward-looking statements. We encourage you to review the cautionary statements and other disclosures made in our SEC filings, specifically those under the heading Risk Factors.

I would now turn the call over to Barry Davis.

Barry Davis

Thank you, Jill. Good morning and thank you all for joining us on the call today to discuss our fourth quarter and full-year 2010 earnings and our guidance for 2011. We'll also discuss the state of the industry and opportunities we believe we'll have in the current environment.

Looking briefly at our 2010 financial results, adjusted EBITDA for the year was $186.9 million, up 18% from 2009. Adjusted EBITDA for the fourth quarter was $50.2 million, up 17% from 2009. Distributable cash flow was $91.2 million in 2010, a 48% increase over 2009. We are forecasting continued growth in 2011, with adjusted EBITDA in the range of $185 million to $215 million. Bill Davis will provide more details on our fourth quarter and full-year 2010 results and our guidance later in the call.

When we began 2010, we said we would restore our financial and organizational strength and continue to reposition Crosstex for the future. We laid out our plans to complete our recapitalization, improve our balance sheet and restore our distributions and dividends. I am pleased to report that we have accomplished our goals. As a result, we have no significant near term debt maturities. We have over $300 million available under our existing debt facilities. We have access to debt and capital markets at attractive rates for growth. And we have organizational capabilities and experience to build and operate large-scale shale midstream projects including gathering, processing, and NGL handling. Today we are a leaner, more efficient organization, focused on performance and long-term growth.

Looking to the future in growth, we recently revamped our business development teams and have substantial resources committed to developing opportunities for growth. We are focusing our growth initiatives on three areas: First, we are aggressively pursuing infrastructure needs in the emerging liquid-rich shale plays where producer activity is focused. The development and growth of these plays and growth in power demand across the United States will create the need for $6 billion to $10 billion annually in infrastructure investment over the next several years. Second, we believe that increasing NGL production will create opportunities for us to better utilize and grow our existing NGL assets in Louisiana, where we have fractionation capacity and the ability to expand that capacity, as well as access to key Louisiana NGL markets. And third, we are evaluating opportunities to acquire assets that are synergistic with our existing assets or that provide a point of entry into new geographic areas. We believe that we have strategic advantages to be successful in growing our business. First, we have tremendous experience with large, rapidly expanding shale developments, such as the Barnett Shale, where we have established a significant gathering and transmission footprint. Second, we have substantial gas processing and NGL capabilities, and in-depth NGL market knowledge. Our capabilities include excess fractionation capacity in Louisiana, with truck, rail and barge access. This helps us compete to build new gathering and processing infrastructure for producers in liquid-rich plays . We should benefit from developing new gathering and processing infrastructure and from the NGL services we offer. And third, we have the organizational capabilities, the people and the systems to identify and develop opportunities and efficiently operate assets that we may develop or acquire.

Turning to operations, I will review our accomplishments in 2010 and update you on first quarter 2011 activities. I'll also provide some insight into what we see for 2011. In 2010, throughput on our North Texas pipeline averaged approximately 339,000 MMBtu per day versus 318,000 for 2009. Our fourth quarter, 2010, throughput on the North Texas pipeline was about 333,000 MMBtu per day, versus approximately 344,000 for the third quarter of 2010. Throughput on the North Texas pipeline is anticipated to remain in this range during 2011. Throughput in 2010 on our North Texas gathering systems was 730,000 MMBtu per day compared with 793,000 MMBtu per day in 2009. And our processing volumes where 209,000 per day versus 2009 volumes of 219,000 per day. Fourth quarter 2010 gathering throughput was about 711,000 MMBtu per day versus approximately 736,000 in the third quarter of 2010. And our plants processed 206,000 MMBtu per day for the fourth quarter of 2010, compared with 224,000 for the third quarter of 2010.

Read the rest of this transcript for free on seekingalpha.com