Exhibit 99.1 CROSSTEX REPORTS FIRST QUARTER RESULTS DALLAS, May 10 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P. (Nasdaq: XTEX) (the Partnership) today reported earnings for the first quarter of 2005. Crosstex Energy, Inc. (Nasdaq: XTXI) (the Corporation) will report its results May 16. The Partnership reported net income of $3.2 million for the first quarter of 2005, or $.06 per limited partner unit, compared to net income in the first quarter of 2004 of $5.7 million, or $0.24 per unit. The Partnership's first quarter results were negatively impacted by $1.9 million of unusual events as described below: * A line leak in one of the Partnership's pipelines caused $1.1 million of gas to be vented to the atmosphere in March. The Partnership incurred approximately $800,000 of costs associated with this event in the month of April, which will be charged to income in the second quarter. * The Partnership accrued $500,000 representing the deductible under its liability coverage to cover a potential loss from a previously disclosed operational incident. * The Partnership charged to expense $285,000 of costs associated with the attempted acquisition of South Texas pipeline assets from Transco. "The one-time charges discussed above significantly impacted what would have been a very good quarter," said Barry E. Davis, President and Chief Executive Officer of Crosstex. "However, these incidences are by nature very rare occurrences and limited in their impact to the less than $3 million outlined above. Our newer supply and market connections are equipped with electronic flow measurement that would have provided earlier detection of the line leak. We were in the process of installing such devices on the affected pipeline when the leak occurred." The Partnership's Distributable Cash Flow for the quarter was $11.1 million or 2.4 times the amount required to cover its Minimum Quarterly Distribution of $0.25 per unit, and 1.05 times the amount required to cover its distribution of $0.46 per unit. During the quarter, the Partnership contracted to sell certain idle equipment for $9.0 million. The terms of the sale required a $1.8 million deposit from the purchaser that is included in distributable cash flow for the quarter. The sales proceeds will not be reflected in net income until the sale closes. Distributable Cash Flow was $9.6 million in the 2004 first 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. "Because of the one-time nature of events negatively impacting earnings last quarter and the pending receipt of the remaining proceeds from the contracted sale of idle equipment, we feel comfortable with a tighter distributable cash flow coverage of 1.05 times distributions," said Mr. Davis. "If not for the one-time charges, coverage would have been more in line with our historical coverages at 1.2 times distributions." The Partnership's gross margin increased to $31.6 million compared to $21.5 million in the corresponding 2004 period, an increase of 47 percent. Gross margin from the Midstream business segment increased by $7.3 million, or 47 percent, to $22.6 million, due to growth in on-system gathering and transmission volumes of 81 percent, and to growth in processed volumes of 159 percent. This growth was primarily a result of the acquisition of LIG assets in April 2004. Gross margin from the Treating segment increased by $2.8 million, or 48 percent, to $8.5 million. The Treating segment's increase in 2005 over 2004 is attributable to the growth in the number of treating plants in service from 56 at the end of the first quarter of 2004 to 87 at the end of the first quarter of 2005. Earnings Call The Partnership will hold its quarterly conference call to discuss first quarter results tomorrow, May 10, at 10:00 am Central Time (11:00 am Eastern Time). The dial-in number for the call is 800-561-2693, passcode Crosstex. A live Webcast of the call can be accessed on the investor information page of The Partnership's Web site at http://www.crosstexenergy.com . The call will be available for replay for 30 days by dialing 888-286-8010, passcode 88449774. A replay of the broadcast will also be available on the company's Web site. About Crosstex Crosstex Energy, L.P., a mid-stream natural gas company headquartered in Dallas, operates over 4,500 miles of pipeline, five processing plants, and approximately 90 natural gas amine treating plants. Crosstex currently provides services for approximately 1.9 BCF/day of natural gas. Crosstex Energy Inc. owns the general partner of, a 53 percent limited partner interest in 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, a cash deposit securing the contracted 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 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 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. (tables to follow) CROSSTEX ENERGY. L.P. Selected Financial and Operating Data (All amounts in thousands except per unit numbers) Three Months Ended March 31, ------------------------ 2005 2004 ---------- ---------- Revenues Midstream $ 539,043 $ 318,214 Treating 10,042 7,144 Profit From Energy Trading Activities 431 421 549,516 325,779 Cost of Gas Midstream 516,416 302,876 Treating 1,493 1,376 517,909 304,252 Gross Margin 31,607 21,527 Operating Expenses 11,497 6,213 General and Administrative 6,232 3,592 Stock Based Compensation 276 209 (Gain) Loss on Sale of Property (44) 296 Depreciation and Amortization 6,936 4,418 Total 24,897 14,728 Operating Income 6,710 6,799 Interest Expense (3,365) (1,156) Other Income 26 92 Total Other Income (Expense) (3,339) (1,064) Income Before Income Taxes and Interest of Non-controlling Partners in the Partnership's Net Income 3,371 5,735 Interest of Non-controlling Partners in the Partnership's Net Income (137) (29) Income Tax Provision (54) --- Net Income $ 3,180 $ 5,706 General Partner Share of Net Income $ 2,021 $ 1,048 Limited Partners Share of Net Income $ 1,159 $ 4,658 Net Income per Limited Partners' Unit: Basic $ 0.06 $ 0.26 Diluted $ 0.06 $ 0.24 Weighted Average Limited Partners' Units Outstanding Basic 18,098 18,072 Diluted 18,756 19,090 CROSSTEX ENERGY. L.P. Reconciliation of Net Income to Distributable Cash Flow (All amounts in thousands except ratios) Three Months Ended March 31, ------------------------ 2005 2004 ---------- ---------- Net Income $ 3,180 $ 5,706 Depreciation and Amortization (A) 6,873 4,380 Stock Based Compensation 276 209 (Gain) Loss on Sale of Property (44) 296 Proceeds From Sale of Property (B) 1,993 --- Deferred Tax Benefit (95) --- Cash Flow 12,183 10,591 Maintenance Capital Expenditures (1,114) (944) Distributable Cash Flow $ 11,069 $ 9,647 Minimum Quarterly Distribution (MQD) $ 4,619 $ 4,613 Distributable Cash Flow/MQD 2.40 2.09 Actual Distribution $ 10,537 $ 8,353 Distribution Coverage 1.05 1.15 (A) Excludes minority interest share of depreciation and amortization of $63,000 and $38,000 for the three months ended March 31, 2005 and 2004, respectively. (B) Includes a deposit from the contracted sale of equipment. CROSSTEX ENERGY, L.P. Operating Data (All volumes in MMBtu/d) Three Months Ended March 31, ------------------------ 2005 2004 ---------- ---------- Pipeline Throughput Gulf Coast Transmission 50,000 91,000 Vanderbilt 95,000 66,000 CCNG Transmission 236,000 259,000 Gregory Gathering 115,000 156,000 Mississippi 73,000 77,000 Arkoma 19,000 18,000 LIG Pipeline & Marketing 636,000 N/A Other Midstream 49,000 35,000 Total Gathering and Transmission Volume 1,273,000 702,000 Natural Gas Processed Gregory Processing 91,000 132,000 Conroe Processing 27,000 26,000 LIG Processing 292,000 N/A Total Processed Volume 410,000 158,000 Total On-System Volumes 1,683,000 860,000 Commercial Services Volumes 176,000 197,000 Treating Plants in Service (A) 87 56 (A) Plants in service represent plants in service on the last day of the quarter. Contact: Barry E. Davis, President and Chief Executive Officer William W. Davis, Executive V.P. and Chief Financial Officer Phone: (214) 953-9500 SOURCE Crosstex Energy, L.P. -0- 05/10/2005 /CONTACT: Barry E. Davis, President and Chief Executive Officer, or William W. Davis, Executive V.P. and Chief Financial Officer, both of Crosstex Energy, L.P., +1-214-953-9500/ /Web site: http://www.crosstexenergy.com