Exhibit 99.1
FOR IMMEDIATE RELEASE
MAY 7, 2010
|
|
|
| Contact: |
|
Meggan Stall, Public Relations Specialist
Phone: (214) 721-9487
Meggan.Stall@CrosstexEnergy.com |
CROSSTEX ENERGY REPORTS FIRST-QUARTER 2010 RESULTS
DALLAS, May 7, 2010 — The Crosstex Energy companies, Crosstex Energy, L.P. (NASDAQ: XTEX) (the
Partnership) and Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation) today reported earnings for
the first-quarter 2010.
First-Quarter 2010 — Crosstex Energy, L.P. Financial Results
The Partnership realized adjusted EBITDA of $43.8 million and distributable cash flow of $17.7
million for the first quarter of 2010, compared with adjusted EBITDA of $34.3 million and
distributable cash flow of $14.2 million for the first quarter of 2009. Adjusted EBITDA and
distributable cash flow are non-GAAP financial measures and are explained in greater detail under
“Non-GAAP Financial Information.” There is a reconciliation of these non-GAAP measures to net loss
in the tables at the end of this news release.
The Partnership reported a net loss of $17.3 million for the first quarter of 2010, compared with a
net loss of $15.3 million for the first quarter of 2009. The first quarter 2010 net loss included
a loss of $14.7 million on the extinguishment of debt and a $14.3 million gain on sale of property,
while first quarter 2009 included a $4.7 million loss on the extinguishment of debt and $3.8
million of income from discontinued operations.
“We are pleased with our solid first-quarter results and are making great progress this year
as we focus on the disciplined execution of our plan,” said Barry E. Davis, Crosstex President and
Chief Executive Officer. “We are optimizing results from our core assets while investing in
high-return projects. We believe Crosstex is strategically positioned for performance and long-term
growth.”
-more-
Crosstex Energy Reports First-Quarter 2010 Results
Page 2 of 8
The Partnership’s gross margin of $81.2 million for the first quarter of 2010 increased $12.3
million, or 18 percent, compared with the first quarter of 2009. Improvements of $11.5 million in
the natural gas processing and liquids marketing businesses resulted from increased plant inlet
volumes and higher natural gas liquids (NGL) prices. Gross margin from the Partnership’s gathering
and transmission business increased $2.9 million, the result of continued volume growth on the
Partnership’s LIG system from the Haynesville Shale gas play. This increase was partially offset by
reduced gathering volumes in north Texas. In addition, the Arkoma and east Texas assets, which were
sold and not included in discontinued operations, created a negative margin variance of $2.1
million between the periods. First-quarter 2010 north Texas volumes declined from the fourth
quarter of 2009 primarily due to a compressor outage on the Partnership’s north Johnson County
system.
The Partnership’s operating expenses for the first quarter of 2010 declined $1.4 million, or five
percent, compared with the first quarter of 2009, and general and administrative expenses decreased
$1.2 million, or eight percent, compared with the first quarter of 2009. Depreciation and
amortization expense decreased $1.7 million for the first quarter of 2010 compared with the first
quarter of 2009 due to the extension of the useful lives of various assets. Interest expense rose
to $26.9 million for the first quarter of 2010 from $17.5 million for the first quarter of 2009.
This was primarily the result of increased borrowing rates and amortization of costs from the
February 2009 amendments to the credit facility and senior secured notes and the 2010 refinancing.
The net loss per limited partner common unit for the first quarter of 2010 was $0.81 compared with
a net loss of $1.06 per common unit for the first quarter of 2009. The 2010 loss per limited
partner common unit was impacted by the allocation of $22.3 million of net income to the
Partnership’s preferred units, and the 2009 loss per limited partner common unit was impacted by
the allocation of $34.3 million of net income to the Partnership’s Senior Subordinated Series D
Units. These allocations relate to Beneficial Conversion Features (BCF) under accounting guidance.
The preferred units were issued in January 2010 and the Senior Subordinated Series D Units were
issued in March 2007 at discounts to the market price of the common units when these units were
issued. The BCF allocation is a noncash item equal to the discount to the common unit market price
that is treated in the same way as a cash distribution for earnings per unit calculations. The BCF
related to the preferred units, which are convertible into common units at any time at the option
of the preferred unitholder, was recognized upon their issuance in the first quarter of 2010. The
BCF related to the Senior Subordinated Series D Units, which had a contingency feature related to
their conversion into common units, was recognized when these units converted to common units in
the first quarter of 2009.
The preferred units discussed above are entitled to a preferential quarterly distribution of
$0.2125 per unit. Such quarterly distribution may be paid in cash, in additional preferred units
issued in kind or any combination thereof, provided that the distribution may not be paid in
additional preferred units if the Partnership pays a cash distribution on common units. The
Partnership has determined that payment of the $0.2125 distribution in cash for the first quarter
of 2010 will be consistent with its financial guidelines, which call for no cash distributions
unless the ratio of total debt to adjusted EBITDA is less than 4.5 to 1.0, pro forma for any
distribution. Therefore, the Partnership has elected to pay the distribution on the preferred units
of approximately $3.1 million in cash. The record date for the distribution will be May 10, 2010,
and the payment date will be May 14, 2010.
First-Quarter 2010 — Crosstex Energy, Inc. Financial Results
The Corporation reported a net loss of $5.4 million for the first quarter of 2010 compared with a
net loss of $8.8 million for the comparable period in 2009. The Corporation’s loss from continuing
operations before income taxes (which includes interest of non-controlling partners in the net loss
of the Partnership) was $17.6 million for the first quarter of 2010, compared with a loss of $19.3
million for the first quarter of 2009.
-more-
Crosstex Energy Reports First-Quarter 2010 Results
Page 3 of 8
In accordance with U.S. accounting standards, the Partnership and Corporation classified certain
assets, liabilities, and results of their operations as discontinued operations for the 2009
accounting periods presented. Included in this release are tables of selected financial data where
amounts have been reclassified as discontinued operations for the 2009 periods presented.
Crosstex to Hold Earnings Conference Call Today
The Partnership and the Corporation will hold their quarterly conference call to discuss
first-quarter 2010 results today, May 7, at 10:00 a.m. Central time (11:00 a.m. Eastern time). The
dial-in number for the call is 1-888-679-8038. Callers outside the United States should dial
1-617-213-4850. The passcode is 67779930 for all callers. Investors are advised to dial in to the
call at least 10 minutes prior to the call time to register. Participants may preregister for the
call at https://www.theconferencingservice.com/prereg/key.process? key=PBNRX4XCB. Preregistrants
will be issued a pin number to use when dialing in to the live call, which will provide quick
access to the conference by bypassing the operator upon connection. Interested parties also can
access a live Web cast of the call on the Investors page of Crosstex’s Web site at
www.crosstexenergy.com.
After the conference call, a replay can be accessed until August 6, 2010 by dialing 1-888-286-8010.
International callers should dial 1-617-801-6888 for a replay. The passcode for all callers
listening to the replay is 86087991. Interested parties also can visit the Investors page of
Crosstex’s Web site to listen to a replay of the call.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company headquartered in Dallas, operates
approximately 3,300 miles of pipeline, nine processing plants and three fractionators. The
Partnership currently provides services for 3.2 billion cubic feet of natural gas per day, or
approximately six percent of marketed U.S. daily production.
Crosstex Energy, Inc. owns the two percent general partner interest, a 25 percent limited partner
interest and the incentive distribution rights of Crosstex Energy, L.P.
Additional information about the Crosstex companies can be found at www.crosstexenergy.com
Non-GAAP Financial Information
This press release contains non-generally accepted accounting principle financial measures that the
Partnership refers to as adjusted EBITDA and distributable cash flow. Adjusted EBITDA is defined as
earnings before interest, income taxes, depreciation and amortization, impairments, loss on
extinguishment of debt, stock-based compensation, noncash derivative items, gain on the sale of
assets and other miscellaneous noncash items. Distributable cash flow is defined as earnings before
certain noncash charges and the gain on the sale of assets
less maintenance capital expenditures. 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 the assets and to extend their useful lives.
-more-
Crosstex Energy Reports First-Quarter 2010 Results
Page 4 of 8
The Partnership believes these measures are useful to investors because they 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.
Adjusted EBITDA and distributable cash flow are not measures of financial performance or liquidity
under GAAP. They should not be considered in isolation or as an indicator of the Partnership’s
performance. Furthermore, they should not be seen as measures of liquidity or a substitute for
metrics prepared in accordance with GAAP. A reconciliation of these measures to net loss is
included among the following tables.
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, financing plans, financial condition, liquidity 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 and NGLs;
(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 due to the deterioration of
the credit and capital markets and current economic conditions; (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 transported in the Partnership’s gathering and transmission lines 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 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, 2009, 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 Reports First-Quarter 2010 Results
Page 5 of 8
CROSSTEX ENERGY, L.P.
Selected Financial Data
(All amounts in thousands except per unit numbers)
| |
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|
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|
| |
|
Three Months Ended |
|
| |
|
March 31 |
|
| |
|
2010 |
|
|
2009 |
|
| |
|
(Unaudited) |
|
Revenues |
|
|
|
|
|
|
|
|
Midstream |
|
$ |
432,452 |
|
|
$ |
352,437 |
|
Gas and NGL marketing activities |
|
|
2,340 |
|
|
|
721 |
|
|
|
|
|
|
|
|
Total revenues |
|
|
434,792 |
|
|
|
353,158 |
|
|
|
|
|
|
|
|
|
|
Purchased gas |
|
|
353,597 |
|
|
|
284,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
81,195 |
|
|
|
68,946 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
26,465 |
|
|
|
27,879 |
|
General and administrative |
|
|
12,689 |
|
|
|
13,853 |
|
Gain on sale of property |
|
|
(14,343 |
) |
|
|
(828 |
) |
(Gain) loss on derivatives |
|
|
3,696 |
|
|
|
(4,336 |
) |
Impairments |
|
|
998 |
|
|
|
— |
|
Depreciation and amortization |
|
|
27,092 |
|
|
|
28,759 |
|
|
|
|
|
|
|
|
Total operating costs and expenses |
|
|
56,597 |
|
|
|
65,327 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
24,598 |
|
|
|
3,619 |
|
|
|
|
|
|
|
|
|
|
Interest expense, net of interest income |
|
|
(26,855 |
) |
|
|
(17,534 |
) |
Loss on extinguishment of debt |
|
|
(14,713 |
) |
|
|
(4,669 |
) |
Other income (expense) |
|
|
182 |
|
|
|
(51 |
) |
|
|
|
|
|
|
|
Total other income (expense) |
|
|
(41,386 |
) |
|
|
(22,254 |
) |
Loss from continuing operations before
non-controlling interest and income taxes |
|
|
(16,788 |
) |
|
|
(18,635 |
) |
Income tax provision |
|
|
(575 |
) |
|
|
(421 |
) |
|
|
|
|
|
|
|
Loss from continuing operations |
|
|
(17,363 |
) |
|
|
(19,056 |
) |
Income from discontinued operations, net of tax |
|
|
— |
|
|
|
3,750 |
|
|
|
|
|
|
|
|
Net loss |
|
|
(17,363 |
) |
|
|
(15,306 |
) |
|
|
|
|
|
|
|
Less: Net income (loss) from continuing operations
attributable to the non-controlling interest |
|
|
(35 |
) |
|
|
32 |
|
|
|
|
|
|
|
|
Net loss attributable to Crosstex Energy, L.P. |
|
$ |
(17,328 |
) |
|
$ |
(15,338 |
) |
|
|
|
|
|
|
|
Preferred interest in net income attributable
to Crosstex Energy, L.P. |
|
$ |
3,125 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
Beneficial conversion feature attributable
to preferred units |
|
$ |
22,279 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
General partner interest in net loss |
|
$ |
(1,496 |
) |
|
$ |
(940 |
) |
|
|
|
|
|
|
|
Limited partners’ interest in net loss
attributable to Crosstex Energy, L.P. |
|
$ |
(41,236 |
) |
|
$ |
(14,398 |
) |
|
|
|
|
|
|
|
Net income (loss) attributable to Crosstex Energy, L.P.
per limited partners’ unit: |
|
|
|
|
|
|
|
|
Basic and diluted common unit |
|
$ |
(0.81 |
) |
|
$ |
(1.06 |
) |
|
|
|
|
|
|
|
Basic and diluted senior subordinated series D unit |
|
$ |
— |
|
|
$ |
8.85 |
|
|
|
|
|
|
|
|
Weighted average basic and diluted limited partners’
common units outstanding |
|
|
49,739 |
|
|
|
45,318 |
|
|
|
|
|
|
|
|
Crosstex Energy Reports First-Quarter 2010 Results
Page 6 of 8
CROSSTEX ENERGY, L.P.
Reconciliation of Net Loss to Adjusted EBITDA and Distributable Cash Flow
(All amounts in thousands except those included in footnotes)
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
| |
|
March 31 |
|
| |
|
2010 |
|
|
2009 |
|
| |
|
(Unaudited) |
|
Net loss attributable to Crosstex Energy, L.P. |
|
$ |
(17,328 |
) |
|
$ |
(15,338 |
) |
Depreciation, amortization and impairments (1) |
|
|
28,017 |
|
|
|
28,688 |
|
Stock-based compensation |
|
|
2,532 |
|
|
|
1,606 |
|
Interest expense, net |
|
|
26,855 |
|
|
|
17,534 |
|
Loss on extinguishment of debt |
|
|
14,713 |
|
|
|
4,669 |
|
Gain on sale of property |
|
|
(14,343 |
) |
|
|
(828 |
) |
Discontinued operations |
|
|
— |
|
|
|
(3,750 |
) |
Noncash derivatives, taxes and other |
|
|
3,337 |
|
|
|
1,724 |
|
|
|
|
|
|
|
|
Adjusted EBITDA from continuing operations |
|
|
43,783 |
|
|
|
34,305 |
|
|
|
|
|
|
|
|
|
|
Interest (2) |
|
|
(23,205 |
) |
|
|
(17,916 |
) |
Cash taxes and other |
|
|
(699 |
) |
|
|
(713 |
) |
Maintenance capital expenditures |
|
|
(2,172 |
) |
|
|
(1,469 |
) |
|
|
|
|
|
|
|
Distributable cash flow from continuing operations |
|
$ |
17,707 |
|
|
$ |
14,207 |
|
|
|
|
|
|
|
|
| |
|
|
| (1) |
|
Excludes minority interest share of depreciation and amortization of $73 thousand for
the three months ended March 31, 2010, and $71 thousand for the three months ended March 31,
2009. |
| |
| (2) |
|
Excludes $678 thousand of debt issuance cost amortization and $894 thousand of senior
secured note make-whole and call premium paid-in-kind interest resulting from repayment of such
notes from the proceeds of the preferred unit sale and an asset sale, for the three months ended
March 31, 2010. |
Crosstex Energy Reports First-Quarter 2010 Results
Page 7 of 8
CROSSTEX ENERGY, L.P.
Operating Data
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
| |
|
March 31 |
|
| |
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
Pipeline Throughput (MMBtu/d) |
|
|
|
|
|
|
|
|
LIG Pipeline & Marketing |
|
|
916,000 |
|
|
|
894,000 |
|
North Texas — Gathering |
|
|
745,000 |
|
|
|
796,000 |
|
North Texas — Transmission |
|
|
337,000 |
|
|
|
303,000 |
|
Other Midstream |
|
|
— |
|
|
|
38,000 |
|
|
|
|
|
|
|
|
Total Gathering and Transmission Volume |
|
|
1,998,000 |
|
|
|
2,031,000 |
|
|
|
|
|
|
|
|
|
|
Natural Gas Processed (MMBtu/d) |
|
|
|
|
|
|
|
|
South Louisiana |
|
|
909,000 |
|
|
|
627,000 |
|
LIG System |
|
|
284,000 |
|
|
|
250,000 |
|
North Texas |
|
|
200,000 |
|
|
|
221,000 |
|
|
|
|
|
|
|
|
Total Gas Volumes Processed |
|
|
1,393,000 |
|
|
|
1,098,000 |
|
|
|
|
|
|
|
|
|
|
Realized weighted average
Natural Gas Liquids price ($/gallon) |
|
|
1.08 |
|
|
|
0.66 |
|
Actual weighted average
Natural Gas Liquids to Gas ratio |
|
|
236 |
% |
|
|
152 |
% |
|
|
|
|
|
|
|
|
|
Commercial Services Volume (MMBtu/d) |
|
|
57,000 |
|
|
|
110,000 |
|
|
|
|
|
|
|
|
|
|
North Texas Gathering (1) |
|
|
|
|
|
|
|
|
Wells connected |
|
|
37 |
|
|
|
44 |
|
| |
|
|
| (1) |
|
North Texas Gathering wells connected are as of the last day of the period and include
Centralized Delivery Point (“CDP”) connections where Crosstex connects multiple wells at a single
meter station. |
Crosstex Energy Reports First-Quarter 2010 Results
Page 8 of 8
CROSSTEX ENERGY, INC.
Selected Financial Data
(All amounts in thousands except per share numbers)
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
| |
|
March 31 |
|
| |
|
2010 |
|
|
2009 |
|
| |
|
(Unaudited) |
|
Revenues |
|
|
|
|
|
|
|
|
Midstream |
|
$ |
432,452 |
|
|
$ |
352,437 |
|
Gas and NGL marketing activities |
|
|
2,340 |
|
|
|
721 |
|
|
|
|
|
|
|
|
Total revenues |
|
|
434,792 |
|
|
|
353,158 |
|
Purchased gas |
|
|
353,597 |
|
|
|
284,212 |
|
|
|
|
|
|
|
|
Gross margin |
|
|
81,195 |
|
|
|
68,946 |
|
Operating expenses |
|
|
26,465 |
|
|
|
27,879 |
|
General and administrative |
|
|
13,481 |
|
|
|
14,500 |
|
Gain on sale of property |
|
|
(14,343 |
) |
|
|
(828 |
) |
(Gain) loss on derivatives |
|
|
3,696 |
|
|
|
(4,336 |
) |
Impairments |
|
|
998 |
|
|
|
— |
|
Depreciation and amortization |
|
|
27,110 |
|
|
|
28,777 |
|
|
|
|
|
|
|
|
Total operating costs and expenses |
|
|
57,407 |
|
|
|
65,992 |
|
Operating income |
|
|
23,788 |
|
|
|
2,954 |
|
Interest expense, net of interest income |
|
|
(26,855 |
) |
|
|
(17,534 |
) |
Loss on extinguishment of debt |
|
|
(14,713 |
) |
|
|
(4,669 |
) |
Other income (expense) |
|
|
182 |
|
|
|
(22 |
) |
|
|
|
|
|
|
|
Total other income (expense) |
|
|
(41,386 |
) |
|
|
(22,225 |
) |
Loss from continuing operations before income taxes |
|
|
(17,598 |
) |
|
|
(19,271 |
) |
Income tax (provision) benefit from continuing operations |
|
|
2,585 |
|
|
|
(2,041 |
) |
|
|
|
|
|
|
|
Loss from continuing operations, net of tax |
|
|
(15,013 |
) |
|
|
(21,312 |
) |
Income from discontinued operations, net of tax |
|
|
— |
|
|
|
3,265 |
|
|
|
|
|
|
|
|
Net loss |
|
|
(15,013 |
) |
|
|
(18,047 |
) |
Less: Interest of non-controlling partners in the Partnership’s
net loss |
|
|
(9,611 |
) |
|
|
(9,205 |
) |
|
|
|
|
|
|
|
Net loss attributable to Crosstex Energy, Inc. |
|
$ |
(5,402 |
) |
|
$ |
(8,842 |
) |
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.11 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
46,575 |
|
|
|
46,439 |
|
|
|
|
|
|
|
|
