Exhibit 99.1 Crosstex Reports Second Quarter 2003 Results DALLAS--(BUSINESS WIRE)--Aug. 7, 2003--Crosstex Energy, L.P. (NasdaqNM:XTEX), a Texas-based midstream natural gas company, reported second quarter net income of $4.975 million, or $0.65 per limited partner unit, compared to net income in the second quarter of 2002 of $224 thousand. (Limited partner units were not outstanding in the 2002 period, as the Partnership completed its initial public offering in December 2002.) For the first six months of 2003, Crosstex reported net income of $5.8 million, or $0.77 per unit, compared to a net loss of $28 thousand in the first half of 2002. Distributable Cash Flow for the quarter was $6.8 million, or 1.8 times the amount required to cover the Minimum Quarterly Distribution. Distributable Cash Flow was $2.4 million in the 2002 period. In the first half of 2003, Distributable Cash Flow was $12.2 million, or 1.6 times the amount required to cover the Minimum Quarterly Distribution. (See below for a discussion of the Partnership's use of Distributable Cash Flow, which is a non-generally accepted accounting principle financial measure. Also, in the tables at the end of this release is a reconciliation of this measure to net income.) Gross margin in the second quarter was $13.1 million, compared to $8.1 million in 2002, an increase of 63 percent. Midstream gross margin increased by $4.1 million, or 70 percent, to $10.0 million, while Treating gross margin increased by $1.0 million, or 44 percent, to $3.2 million. The acquisition of certain assets from Duke Energy Field Services, which closed on June 30, 2003, did not impact the results of operations in the first half of 2003. Net income was negatively impacted in the second quarter and six-month period by charges of $0.6 million and $3.1 million, respectively, in stock-based compensation. The charges primarily resulted from a modification in stock options held in Crosstex Energy Holdings by employees of the Partnership. Crosstex Energy Holdings is the owner of the Partnership's general partner. The charges, as previously discussed, had no impact on distributable cash or outstanding units of the Partnership. General and administrative expenses charged to the Partnership are capped at $1.5 million per quarter during 2003, plus costs associated with acquisition activities of $0.4 million incurred in the quarter, for a total of $1.9 million for the second quarter. Had the cap not been in place, those expenses would have been $2.6 million, reducing reported earnings and Distributable Cash Flow by approximately $0.7 million. In the second quarter of 2003, pipeline throughput increased approximately 26 percent over the second quarter of 2002, from 402,774 MMBtu/d to 506,403 MMBtu/d. Natural gas processed increased approximately 10 percent, from 85,073 MMBtu/d to 93,456 MMBtu/d for the same period, and treating plants in operation increased from 32 at the end of the second quarter of 2002 to 43 at the end of the second quarter in 2003. Revenues for the quarter were $229.3 million compared to $126.5 million for the second quarter of 2002. The increase in revenues was attributable to higher volumes and the increase in average natural gas prices. The Partnership has adjusted its forecast for net income and Distributable Cash Flow in the attached table. The Partnership now anticipates it will generate net income in 2003 of between $12.5 million and $13.6 million, and its estimate of Distributable Cash Flow for the year is a range of between $23.7 million and $25.8 million. Crosstex will hold its quarterly conference call to discuss first quarter results tomorrow, August 8, at 10:00 am Central Time (11:00 am Eastern Time). The dial-in number for the call is 800-884-5695, passcode Crosstex. A live Webcast of the call can be accessed on the investor relations page of Crosstex Energy's Web site at www.crosstexenergy.com. The call will be available for replay for 30 days by dialing 888-286-8010, passcode 39228573. A replay of the broadcast will also be available on the company's Web site. Crosstex Energy, L.P., a mid-stream natural gas company headquartered in Dallas, operates over 2,500 miles of pipeline, three processing plants, and over 40 natural gas amine treating plants. Crosstex currently provides services for more than 1 BCF/day of natural gas. Additional information about Crosstex can be found at www.crosstexenergy.com. This press release contains non-generally accepted accounting principle financial measures of earnings before non-cash charges and less maintenance capital expenditures, which we refer to as Distributable Cash Flow. 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, which are defined as capital expenditures (as defined by GAAP) that do not increase the capacity of the asset. We believe this measure is useful to investors because it enhances the investors' overall understanding of our current financial performance, our prospects for future performance, and the cash that our Partnership is generating. Management also uses Distributable Cash Flow to evaluate our financial performance. 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 Partnership's assumptions and expectations are subject to a wide range of business risks, so it 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 operation 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. Selected Financial and Operating Data (All amounts in thousands except per unit numbers) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 --------- --------- --------- --------- Revenues Midstream $224,030 $122,787 $469,345 $200,595 Treating 5,222 3,693 10,477 6,878 --------- --------- --------- --------- 229,252 126,480 479,822 207,473 Cost of Gas Midstream 214,071 116,916 451,479 189,675 Treating 2,035 1,486 4,451 2,599 --------- --------- --------- --------- 216,106 118,402 455,930 192,274 Gross Margin 13,146 8,078 23,892 15,199 Operating Expenses 3,335 2,610 6,545 5,050 General & Administrative 1,891 2,272 3,391 4,206 Impairments -- -- -- 3,150 (Profit) Loss on Energy Trading Contracts (738) 21 (845) (2,754) Stock Based Compensation 568 -- 3,072 -- Depreciation and Amortization 2,611 1,975 5,046 3,884 --------- --------- --------- --------- Total 7,667 6,878 17,209 13,536 Operating Income 5,479 1,200 6,683 1,663 Interest Expense (465) (1,016) (875) (1,696) Other (39) 40 (1) 5 --------- --------- --------- --------- Total Other (504) (976) (876) (1,691) --------- --------- --------- --------- Net Income (Loss) $4,975 $224 $5,807 $(28) ========= ========= ========= ========= General Partner Share of Net Income $155 $172 ========= ========= Limited Partners Share of Net Income $4,820 $5,635 ========= ========= Net Income per Limited Partners' Unit $0.65 $0.77 ========= ========= Weighted Average Limited Partners' Units Outstanding (diluted) 7,421 7,366 ========= ========= Reconciliation of Net Income to Distributable Cash Flow (All amounts in thousands except ratios) Quarter Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 ------- ------- -------- -------- Net Income (Loss) $4,975 $224 $5,807 $(28) Depreciation and Amortization 2,611 1,975 5,046 3,884 Impairments -- -- -- 3,150 (Profit) Loss on Energy Trading Contracts -- 472(1) -- (1,991)(1) Stock Based Compensation 568 -- 3,072 -- ------- ------- -------- -------- Cash Flow 8,154 2,671 13,925 5,015 Maintenance Capital Expenditures 1,375 269 1,719 592 ------- ------- -------- -------- Distributable Cash Flow $6,779 $2,402 $12,206 $4,423 ======= ======= ======== ======== Minimum Quarterly Distribution (MQD) $3,725 $7,449 Distributable Cash Flow/MQD 1.82 1.64 Actual Distribution $4,154 $7,878 Distribution Coverage 1.63 1.55 (1) Profit on energy trading contracts for the three and six months ended June 30, 2002 includes one-time (gains) and losses, primarily related to the company's Enron position, of $472 and ($1,991), respectively, which have been excluded from the computation of Distributable Cash Flow. Operating Data (All volumes in mmbtu/d) Quarter Ended Six Months Ended June 30, June 30, Pipeline Throughput 2003 2002 2003 2002 -------- -------- -------- -------- Gulf Coast Transmission 74,569 106,798 85,052 105,858 Vanderbilt 44,080 -- 39,604 -- CCNG Transmission 166,006 168,968 164,624 155,721 CCNG Transmission - Hallmark 44,052 -- 46,020 -- Gregory Gathering 153,914 101,206 144,045 98,636 Arkoma 10,859 10,871 10,670 11,028 Other Midstream 12,923 14,931 13,186 14,867 -------- -------- -------- -------- Total On-System Volume 506,403 402,774 503,201 386,110 Natural Gas Processed Gregory Processing 93,456 85,073 93,654 85,332 Total On-System Volumes 599,859 487,847 596,855 471,442 Producer Services Volumes 262,098 246,859 258,064 230,735 Treating Volumes (1) 88,944 100,162 88,994 95,895 Treating Plants in Service (2) 43 32 (1) Volumes represent volumes on volume sensitive plants only. (2) Plants in service represent plants in service on the last day of the quarter. Forecast for 2003 Net Income Reconciliation to Distributable Cash Flow (In millions) Range Low High ---------- ---------- Net Income (1) $12.5 $13.6 Depreciation and Amortization 12.9 12.9 Stock Based Compensation (1) 3.3 3.3 ---------- ---------- Cash Flow 28.7 29.8 Maintenance Capital (5.0) (4.0) ---------- ---------- Distributable Cash Flow $23.7 $25.8 ========== ========== (1) The results for net income assume that no further charges are incurred due to the modification of certain stock options of Crosstex Energy Holdings. Such charges are likely if the trading price of the partnership's units continue to exceed their average value in the second quarter of 2003, which was $29.54 per unit. These charges do not negatively impact the calculation of Distributable Cash Flow. See the Partnership's filing on Form 10-Q. CONTACT: Crosstex Energy, L.P., Dallas Barry E. Davis, 214-953-9500 or William W. Davis, 214-953-9500