Exhibit 99.1
Crosstex Energy, L.P. Reports Second Quarter Results
DALLAS, Aug. 10 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P.
(Nasdaq: XTEX) (the Partnership) today reported net income of $5.9 million, or
$0.24 per limited partner unit, in the quarter ended June 30, 2004, compared
to net income in the second quarter of 2003 of $5.0 million, or $0.32 per
unit. The Partnership's Distributable Cash Flow for the quarter was
$10.0 million, or 2.18 times the amount required to cover its Minimum
Quarterly Distribution of $0.25 per unit, and 1.11 times the amount required
to cover its recently increased distribution of $0.42 per unit. This is an
increase of $3.3 million, or 48 percent, over Distributable Cash Flow of
$6.8 million in the 2003 second 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.
The growth in Distributable Cash Flow was driven by growth in the
Partnership's gross margin, to $28.6 million compared to $13.1 million in the
corresponding 2003 period, an increase of 118 percent. Gross margin from the
Midstream business segment increased by $12.6 million, or 126 percent, to
$22.5 million, due to growth in on-system gathering and transmission volumes
of 147 percent, and to growth in processed volumes of 319 percent. The
acquisition of LIG Pipeline Company and its subsidiaries on April 1, 2004, and
the acquisition of the Mississippi system on June 30, 2003, were major drivers
of growth in gross margins. LIG contributed $8.1 million to gross margin in
the quarter while the Mississippi system and the other midstream assets
acquired with it contributed $3.4 million in the quarter. Additional organic
growth came through increases in pipeline throughput at CCNG, Vanderbilt, and
Arkoma.
"The LIG assets performed just as we expected during the first quarter of
our ownership," said Barry E. Davis, President and Chief Executive Officer.
"In the coming months, we will begin to implement our plans to further improve
results at LIG. Of course, our constant focus is improving performance for
all of our assets."
Gross margin from the Treating segment increased by $2.9 million, or
91 percent, to $6.1 million. The Seminole plant, acquired on June 30, 2003,
contributed $2.0 million to Treating gross margin in the quarter. Growth in
the number of treating plants in service from 43 at the end of the second
quarter of 2003 to 62 at the end of the second quarter of 2004 created the
remaining increase in Treating margins.
"We continue to be in a good environment to grow all our businesses,"
added Davis, "and we feel that our Treating business is uniquely positioned to
capture an ever-increasing market share, particularly as a larger and larger
percentage of our Treating business is with major integrated oil companies and
large independents."
Earnings Call
The Partnership will hold its quarterly conference call to discuss second
quarter results today at 10:00 am Central Time (11:00 am Eastern Time).
The dial-in number for the call is 800-299-7635, passcode Crosstex. A live
Webcast of the call can be accessed on the investor information page of
Crosstex Energy's Web site at http://www.crosstexenergy.com . The call will
be available for replay for 30 days by dialing 888-286-8010, passcode
16080860. A replay of the broadcast will also be available on the
Partnership'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
over 60 natural gas amine treating plants. The Partnership currently provides
services for over 1.5 BCF/day of natural gas.
Additional information about the Partnership can be found at
http://www.crosstexenergy.com .
Non-GAAP Financial Information
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. 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", "plan" 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.
(tables to follow)
CROSSTEX ENERGY, L.P.
Selected Financial and Operating Data
(All amounts in thousands except per unit numbers)
Quarter Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenues
Midstream $507,744 $224,030 $825,957 $469,345
Treating 7,568 5,222 14,712 10,477
515,312 229,252 840,669 479,822
Cost of Gas
Midstream 485,212 214,071 788,088 451,479
Treating 1,487 2,035 2,863 4,451
486,699 216,106 790,951 455,930
Gross Margin 28,613 13,146 49,718 23,892
Operating Expenses 10,316 3,335 16,529 6,545
General &
Administrative 4,741 1,891 8,332 3,391
Impairments --- --- --- ---
Profit on Energy
Trading Activities (826) (738) (1,246) (845)
Stock Based Compensation 269 568 478 3,072
Depreciation and
Amortization 5,921 2,611 10,339 5,046
Total 20,421 7,667 34,432 17,209
Operating Income 8,192 5,479 15,286 6,683
Interest Expense (2,186) (465) (3,341) (875)
Other Income (65) (39) (298) (1)
Total Other Income
(Expense) (2,251) (504) (3,639) (876)
Net Income $5,941 $4,975 $11,647 $5,807
General Partner Share
of Net Income $1,393 $155 $2,442 $172
Limited Partners Share
of Net Income $4,548 $4,820 $9,205 $5,635
Net Income per Limited
Partners' Unit $0.24 $0.32 $0.48 $0.38
Weighted Average
Limited Partners'
Units Outstanding
(Diluted) 19,156 14,842 19,122 14,732
CROSSTEX ENERGY. L.P.
Reconciliation of Net Income to Distributable Cash Flow
(All amounts in thousands except ratios)
Quarter Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Net Income $5,941 $4,975 $11,647 $5,807
Depreciation and
Amortization (A) 5,882 2,611 10,262 5,046
Impairments --- --- --- ---
Stock Based
Compensation 269 568 478 3,072
Loss (Gain) on Sale
of Property (22) --- 274 ---
Cash Flow 12,070 8,154 22,661 13,925
Maintenance Capital
Expenditures 2,028 1,375 2,972 1,719
Distributable Cash
Flow $10,042 $6,779 $19,689 $12,206
Minimum Quarterly
Distribution (MQD) $4,613 $3,725 $9,225 $7,449
Distributable Cash
Flow/MQD 2.18 1.82 2.13 1.64
Actual Distribution $9,076 $4,154 $17,429 $7,878
Distribution Coverage 1.11 1.63 1.13 1.55
(A) Excludes minority interest share of depreciation and amortization of
$38,000 and $76,000 for the three and six months ended June 30,
2004, respectively.
CROSSTEX ENERGY, L.P.
Operating Data
(All volumes, except Seminole Plant, in MMBtu/d)
Quarter Ended Six Months Ended
June 30, June 30,
Pipeline Throughput 2004 2003 2004 2003
Gulf Coast
Transmission 81,000 75,000 86,000 85,000
Vanderbilt 58,000 44,000 62,000 40,000
CCNG Transmission 285,000 210,000 272,000 211,000
Gregory Gathering 128,000 154,000 142,000 144,000
Mississippi 79,000 N/A 78,000 N/A
Arkoma 20,000 11,000 19,000 11,000
LIG Pipeline &
Marketing 561,000 N/A 561,000 (A) N/A
Other Midstream 36,000 12,000 35,000 12,000
Total Gathering and
Transmission Volume 1,248,000 506,000 1,255,000 503,000
Natural Gas Processed
Gregory Processing 99,000 93,000 116,000 94,000
Conroe Processing 28,000 N/A 26,000 N/A
LIG Processing 263,000 N/A 263,000 (A) N/A
Total Processed Volume 390,000 93,000 405,000 94,000
Total On-System
Volumes 1,638,000 599,000 1,660,000 597,000
Producer Services
Volumes 166,000 262,000 181,000 258,000
Treating Volumes (B) 79,000 89,000 81,000 89,000
Treating Plants in
Service (C) 62 43 62 43
Seminole Plant (Mcf/d
of CO2) 21,000 N/A 21,000 N/A
(A) Represents activity since April 1, 2004 acquisition.
(B) Represent volumes for treating plants operated by us whereby we
receive a fee based on the volumes treated.
(C) 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- 08/10/2004
/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 /
(XTEX)
CO: Crosstex Energy, L.P.
ST: Texas
IN: OIL UTI
SU: ERN CCA MAV