CROSSTEX ENERGY, L.P.

Unaudited Pro Forma Combined Balance Sheet

March 31, 2012

(In thousands, except unit data)

	Crosstex Historical		Clearfield Historical		Pro Forma Adjustments			Pro Forma
ASSETS
Current Assets:
Cash and cash equivalents	$	20,630	$	—	$	245,000	(a)	$	86,684
					22,138		(b)
					(201,084		)(d)
Accounts and notes receivable, net:
Trade, accrued revenues, and other	130,975		21,475		—			152,450
Fair value of derivative assets	1,274				—			1,274
Natural gas and natural gas liquids, prepaid expenses and other	16,338		2,676		(2,459		)(c)	16,555
Total current assets	169,217		24,151		63,595			256,963
Property and equipment, net of accumulated depreciation	1,251,304		46,421		52,379		(d)	1,350,104
Fair value of derivative assets	131		—		—			131
Intangible assets, net of accumulated amortization	438,734		—		37,600		(d)	476,334
Goodwill	—		—		165,966		(d)	165,966
Investment in limited liability company	39,860		—		—			39,860
Assets held for sale	—		27,394		(27,394		)(c)	—
Other assets, net	24,204		10,147		5,000		(a)	29,820
					(9,531		)(c)
Total assets	$	1,923,450	$	108,113	$	287,615		$	2,319,178
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities:
Accounts payable, drafts payable, and other	$	16,389	$	39,671	$	—		$	56,060
Accrued gas purchases	80,203		—		—			80,203
Fair value of derivative liabilities	4,843		—		—			4,843
Other current liabilities	46,828		181		1,000		(d)	48,009
Accrued interest	8,991		—		—			8,991
Total current liabilities	157,254		39,852		1,000			198,106

Long-term debt	852,883		—		250,000		(a)	963,883
					(139,000		)(b)
Liabilities directly related to assets held for sale	—		3,514		(3,514		)(c)	—
Other long-term liabilities	23,156		3,726		(3,554		)(c)	37,328
					14,000		(d)
Deferred tax liability	7,067		1,688		68,478		(d)	77,233
Fair value of derivative liabilities	110		—		—			110
Commitments and contingencies	—		—		—			—
Partners’ equity	882,980		59,333		161,138		(b)	1,042,518
					(32,316		)(c)
					(1,600		)(d)
					(27,017		)(d)
Total liabilities and partners’ equity	$	1,923,450	$	108,113	$	287,615		$	2,319,178

Unaudited Pro Forma Combined Statement of Operations

Three Months ended March 31, 2012

(In thousands, except unit data)

	Crosstex Historical			Clearfield Historical			Pro Forma Adjustments			Pro Forma

Revenues	$	371,709		$	66,660		$	—		$	438,369
Operating costs and expenses:
Purchased oil, gas and NGLs	271,956			52,819			—			324,775
Operating expenses	27,806			6,664			—			34,470
General and administrative	14,963			1,669			—			16,632
Gain on sale of property	(98		)	(1		)	—			(99		)
Loss on derivatives	2,169			—			—			2,169
Depreciation and amortization	32,178			1,444			709		(e)	34,331
Total operating costs and expenses	348,974			62,595			709			412,278
Operating income (loss)	22,735			4,065			(709		)	26,091
Other income (expense):
Interest expense, net of interest income	(19,382		)	(44		)	(3,898		)(f)	(23,324		)
Other income	12			128			—			140
Total other (expense) income	(19,370		)	84			(3,898		)	(23,184		)
Income (loss) from continuing operations before non-controlling interest and income taxes	3,365			4,149			(4,607		)	2,907
Income tax provision	(424		)	(1,910		)	1,460		(g)	(874		)
Net income (loss) from continuing operations	2,941			2,239			(3,147		)	2,033
Less: Net (loss) income from continuing operations attributable to the non-controlling interest	(38		)	71			(71		)(h)	(38		)
Net income (loss) attributable to Crosstex Energy, L.P.	$	2,979		$	2,168		$	(3,076	)	$	2,071
Preferred interest in net income (loss) attributable to Crosstex Energy, L.P.	$	4,853					$	—		$	4,853
General partner interest in net income (loss)	$	(71	)				$	132	(i)	$	61
Limited partners’ interest in net income (loss)	$	(1,803	)				$	(1,040	)	$	(2,843	)

Net loss per limited partners’ unit:
Basic and diluted common unit	$	(0.03	)							$	(0.04	)

Weighted average units outstanding:
Basic and diluted common unit	50,857						10,120			60,977

CROSSTEX ENERGY, L.P.

Unaudited Pro Forma Combined Statement of Operations

Year Ended December 31, 2011

(In thousands, except unit data)

	Crosstex Historical			Clearfield Historical			Pro Forma Adjustments			Pro Forma
Revenues:
Midstream	$	2,013,942		$	252,926		$	—		$	2,266,868
Total revenues	2,013,942			252,926			—			2,266,868
Operating costs and expenses:
Purchased oil, gas and NGLs	1,638,777			208,823			—			1,847,600
Operating expenses	111,778			26,473			—			138,251
General and administrative	52,801			3,974			—			56,775
Loss (gain) on sale of property	264			(12		)	—			252
Loss on derivatives	7,776			—			—			7,776
Depreciation and amortization	125,284			5,543			3,070		(e)	133,897
Total operating costs and expenses	1,936,680			244,801			3,070			2,184,551
Operating income	77,262			8,125			(3,070		)	82,317
Other income (expense):
Interest expense, net of interest income	(79,233		)	(488		)	(17,655		)(f)	(97,376		)
Other income	707			311						1,018
Total other expense	(78,526		)	(177		)	(17,655		)	(96,358		)
(Loss) income from continuing operations before non-controlling interest and income taxes	(1,264		)	7,948			(20,725		)	(14,041		)
Income tax provision	(1,126		)	(2,540		)	739		(g)	(2,927		)
Net income (loss) from continuing operations	(2,390		)	5,408			(19,986		)	(16,968		)
Less: Net loss from continuing operations attributable to the non-controlling interest	(48		)	(5		)	5		(h)	(48		)
Net (loss) income attributable to Crosstex Energy, L.P.	$	(2,342	)	$	5,413		$	(19,991	)	$	(16,920	)
Preferred interest in net income attributable to Crosstex Energy, L.P.	18,088						$	—		$	18,088
General partner interest in net income (loss)	$	(732	)				$	76	(i)	$	(656	)
Limited partners’ interest in net income (loss)	$	(19,698	)				$	(14,654	)	$	(34,352	)

Net loss per limited partners’ unit:
Basic and diluted common unit	$	(0.38	)							$	(0.55	)

Weighted average units outstanding:
Basic and diluted common unit	50,590						10,120			60,710

Crosstex Energy, L.P.

Notes to Unaudited Pro Forma Combined Financial Statements

Offering and Transactions

The unaudited pro forma combined balance sheet assumes that the following transactions occurred on March 31, 2012:

· the acquisition (the “Clearfield Acquisition”) of Clearfield Energy, Inc. (“Clearfield”) for $210.0 million and direct acquisition costs of $1.6 million;

· our issuance of $250.0 million in aggregate principal amount of 7.125% senior unsecured notes for net proceeds of $245.0 million, net of transaction costs, the proceeds of which were used to partially finance the Clearfield Acquisition;

· our offering of 10,120,000 common units at a unit price of $16.28 ($15.63 net of transaction costs) for net proceeds of $161.1 million, including a $3.4 million capital contribution from our general partner, the proceeds of which were used to partially finance the Clearfield Acquisition.

Our unaudited pro forma combined statements of operations for the year ended December 31, 2011 and the three months ended March 31, 2012 reflect the aforementioned transactions as if each such transaction occurred as of January 1, 2011.

The following is a reconciliation of Clearfield’s Audited Financial Statements for the year ended March 31, 2012 to the year ended December 31, 2011 for Pro Forma presentation. Clearfield was on a year ended March 31 reporting year.

Reconciliation of Clearfield March 31, 2012 financials

to Year Ended December 31, 2011

(In thousands, except unit data)

	Clearfield Audited financial as of March 31, 2012			Less: Jan- March 2012			Plus: Jan- March 2011			Year ended December 31, 2011
Revenue	$	255,909		$	66,660		$	63,677		$	252,926
Total revenues	255,909			66,660			63,677			252,926
Operating costs and expenses:
Purchased gas and NGLs	210,177			52,819			51,465			208,823
Operating expenses	26,983			6,664			6,155			26,473
General and administrative	4,951			1,669			692			3,974
Gain on sale of property	(3		)	(1		)	(10		)	(12		)
Depreciation and amortization	5,656			1,444			1,330			5,543
Total operating costs and expenses	247,764			62,596			59,632			244,801
Operating income	8,145			4,065			4,045			8,125
Other income (expense):
Interest expense, net of interest income	(288		)	(44		)	(245		)	(488		)
Other income	360			128			80			311
Total other expense	72			84			(165		)	(177		)
Income from continuing operations before non-controlling interest and income taxes	8,217			4,149			3,879			7,948
Income tax provision	(3,783		)	(1,910		)	(667		)	(2,540		)
Income from continuing operations, before discontinued operations	4,434			2,239			3,212			5,408
Discontinued operations:
Income from discontinued operations, net of tax	3,866			1,947			2,603			4,521
Loss from sale of discontinued operations, net of tax	(11,427		)	(8,234		)	(1,944		)	(5,137		)
Discontinued operations, net of tax	(7,561		)	(6,287		)	658			(616		)
Net income (loss)	$	(3,127	)	$	(4,048	)	$	3,872		$	4,792
Less: Net income (loss) from continuing operations attributable to non-controlling interest	48			71			18			(5		)
Net income (loss) attributable to Clearfield	$	(3,175	)	$	(4,119	)	$	3,854		$	4,797

Pro Forma Adjustments to Balance Sheet

a) Reflects the issuance of $250.0 million in aggregate principal amount of the 2022 Notes for net proceeds of $245.0 million, net of $5.0 million of transaction costs.

b) Reflects the issuance of 10,120,000 common units for net proceeds of $161.1 million ($15.63 per common unit and including $3.4 million for the general partner’s contribution) and the use of proceeds to repay $139.0 million of all outstanding bank debt with the remaining net proceeds of $22.1 million in cash.

c) Reflects the elimination of assets reflected in Clearfield’s balance sheet as of March 31, 2012 that we did not acquire, including assets held for sale and affiliate receivables, and the elimination of certain liabilities reflected in Clearfield’s balance sheet as of March 31, 2012 that were not assumed in the acquisition, including liabilities directly related to assets held for sale and employee retirement obligations.

d) Reflects the use of $201.1 million of proceeds (net of working capital adjustments as of March 31, 2012 and $1.6 million of transaction costs) from the 2022 Notes issuance per (a) above to acquire the stock of Clearfield. The adjustments to property and equipment, intangible assets, goodwill, deferred taxes and equity reflect the preliminary purchase price allocation adjustments in accordance with FASB Accounting Standards Codification 805 — “Business Combinations.” The adjustments to liabilities reflect the recognition of additional purchase obligations of $10.0 million for right-of-way and $5.0 million for additional benefit obligations. The deferred tax liability was adjusted to reflect the impact of carryover tax basis as compared to the book purchase price due to the acquisition of the Clearfield stock as opposed to an asset acquisition, where the Partnership would not have a difference between financial and tax basis.

Pro Forma Adjustments to Consolidated Statement of Operations

e) Reflects additional depreciation and amortization expenses realized from the assets acquired from Clearfield as if the acquisition had occurred on January 1, 2011. The additional depreciation and amortization expenses were calculated based on a straight line basis over 15 years.

f) Represents the adjustment to historical interest expense on debt to be retired and interest expense on the 2022 Notes as follows (in thousands):

	Three Months Ended March 31 , 2012			Year Ended December 31, 2011
Increase in interest due to:
71/8% Senior Unsecured Notes due 2022	$	4,454		$	18,059
Decrease in interest due to:
Pay down of credit facility	(681		)	(904		)
Increase in amortization of deferred financing costs
71/8% Senior Unsecured Notes due 2022	125			500
Pro Forma increase to interest expense	$	3,898		$	17,655

g) Reflects the adjustment of income tax expense for the estimated tax expense associated with our new subsidiaries acquired in the Clearfield Acquisition (the “Clearfield Entities”). Certain of the Clearfield Entities, that primarily hold only fixed-rate financial instruments, will be treated as a C corporation for tax purposes and therefore are required to pay income tax of an estimated incremental annual amount of $1,800 on their net income, whereas the income (loss) from the remainder of the Clearfield assets will primarily passthrough to the unitholders of the Partnership similar to the Partnership’s legacy results. Historically, Clearfield was owned by a C-corporation and all of its results were subject to income tax.

h) Reflects the elimination of minority interest in conjunction with the Clearfield Acquisition.

	Year ended			Three months ended
	December 2011			March 2012
GP 2% share of loss	$	(291	)	$	(18	)
Increase for IDR	367			150

Net General Partner Adj.	$	76		132