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
