Exhibit 99.1
Crosstex Energy Reports Third Quarter Results
DALLAS, Nov. 8 /PRNewswire-FirstCall/ -- The Crosstex Energy companies,
Crosstex Energy, L.P. (Nasdaq: XTEX) (the Partnership) and Crosstex Energy,
Inc. (Nasdaq: XTXI) (the Corporation) today reported solid growth in the third
quarter of 2004.
"We continue to realize substantial growth and solid returns every
quarter, and the credit goes to the tremendous group of employees at
Crosstex," said Barry E. Davis, President and Chief Executive Officer of the
Crosstex Energy companies. "I believe we have the best people in the industry
on our team, and our determination, loyalty and expertise have put us in the
leadership position we are in today."
Crosstex Energy, L.P. Financial Results
The Partnership reported net income of $5.9 million, or $0.23 per limited
partner unit, in the quarter ended September 30, 2004, compared to net income
in the third quarter of 2003 of $3.9 million, or $0.22 per unit. The
Partnership's Distributable Cash Flow for the quarter was $10.4 million, or
2.26 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 $0.43 per unit. This is an increase of $1.8
million, or 20.7 percent, over Distributable Cash Flow of $8.6 million in the
2003 third 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 $29.1 million compared to $17.3 million in the
corresponding 2003 period, an increase of 68.3 percent. Gross margin from the
Midstream business segment increased by $10.3 million, or 84.4 percent, to
$22.5 million, due to growth in on-system gathering and transmission volumes
of 94 percent, and to growth in processed volumes of 219 percent. The
acquisition of LIG Pipeline Company and its subsidiaries on April 1, 2004 was
the main driver of growth in Midstream gross margins. LIG contributed $8.8
million to gross margin in the quarter.
Gross margin from the Treating segment increased by $1.5 million, or 30.0
percent, to $6.7 million. Improvements in margins of the Seminole plant
provided $323 thousand of the increase. Growth in the number of treating
plants in service from 45 at the end of the third quarter of 2003 to 67 at the
end of the third quarter of 2004 created the remaining increase in Treating
margins.
Crosstex Energy, Inc. Financial Results
The Corporation reported net income of $1.7 million for the third quarter
of 2004, compared to net income of $11.4 million for the respective period in
2003. Net income for the third quarter of 2003 included a gain on issuance of
units of the Partnership of $18.1 million related to the Partnership's unit
offering. The Corporation's income before income taxes and interest of
non-controlling partners in the Partnership's net income was $4.6 million in
the third quarter of 2004 and $2.9 million in the third quarter of 2003. The
Corporation's share of distributions, including distributions to its ten
million limited partner units, its two percent general partner interest, and
the incentive distribution rights, is $6.0 million for the third quarter
(payable on November 14, 2004). Its share of the distribution in the third
quarter of 2003 was $4.0 million. The recently announced increase in the
Partnership's distribution increased the Corporation's share of the
distribution by $0.3 million, from $5.7 million to $6.0 million.
Earnings Call
Crosstex will hold its quarterly conference call to discuss first quarter
results today at 1:00 pm Central Time (2:00 pm Eastern Time). The dial-in
number for the call is 800-706-7748, 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 47107072. A replay of the
broadcast will also be available on the Partnership's Web site.
About the Crosstex Energy Companies
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. Crosstex currently provides
services for over 1.5 BCF/day of natural gas.
Crosstex Energy Inc. owns the general partner, a 54.2 percent limited
partner interest 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 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.
Contact: Barry E. Davis, President and Chief Executive Officer
William W. Davis, Executive V.P. and Chief Financial Officer
Phone: (214) 953-9500
CROSSTEX ENERGY, L.P.
Selected Financial and Operating Data
(All amounts in thousands except per unit numbers)
Quarter Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues
Midstream $501,004 $276,222 $1,327,181 $745,567
Treating 7,880 6,976 22,592 17,453
508,884 283,198 1,349,773 763,020
Cost of Gas
Midstream 478,536 264,035 1,266,624 715,514
Treating 1,229 1,860 4,092 6,311
479,765 265,895 1,270,716 721,825
Gross Margin 29,119 17,303 79,057 41,195
Operating Expenses 10,013 5,462 26,542 12,007
General & Administrative 4,907 1,721 13,236 5,112
Profit on Energy Trading
Activities (766) (646) (1,792) (1,491)
Stock Based Compensation 288 1,577 766 4,649
(Gain) Loss on Sale of
Property (287) -- (12) --
Depreciation and
Amortization 6,160 4,031 16,499 9,077
Total 20,315 12,145 55,239 29,354
Operating Income 8,804 5,158 23,818 11,841
Interest Expense (2,872) (1,321) (6,214) (2,196)
Other Income 13 51 (12) 50
Total Other Income
(Expense) (2,859) (1,270) (6,226) (2,146)
Net Income $5,945 $3,888 $17,592 $9,695
General Partner Share of
Net Income $1,563 $450 $4,005 $621
Limited Partners Share of
Net Income $4,382 $3,438 $13,587 $9,074
Net Income per Limited
Partners' Unit $0.23 $0.22 $0.73 $0.60
Weighted Average Limited
Partners' Units
Outstanding (Diluted) 18,662 15,860 18,607 15,096
CROSSTEX ENERGY. L.P.
Reconciliation of Net Income to Distributable Cash Flow
(All amounts in thousands except ratios)
Quarter Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Net Income $ 5,945 $ 3,888 $17,592 $ 9,695
Depreciation and
Amortization (1) 6,112 4,031 16,374 9,077
Stock Based Compensation 288 1,577 766 4,649
Loss (Gain) on Sale of Property (287) -- (12) --
Proceeds from Sale of Property 385 -- 611 --
Deferred Tax Benefit (168) -- (168) --
Cash Flow 12,275 9,496 35,163 23,421
Maintenance Capital
Expenditures (1,842) (852) (4,814) (2,571)
Distributable Cash Flow $10,433 $ 8,644 $30,349 $ 20,850
Minimum Quarterly
Distribution (MQD) $ 4,613 $ 4,605 $13,840 $ 12,054
Distributable Cash Flow/MQD 2.26 1.88 2.19 1.73
Actual Distribution $ 9,439 $ 6,834 $26,868 $ 14,712
Distribution Coverage 1.11 1.26 1.13 1.42
(1) Excludes minority interest share of depreciation and amortization of
$48,000 and $125,000 for the three and nine months ended September 30,
2004, respectively.
CROSSTEX ENERGY, L.P.
Operating Data
(All volumes, except Seminole Plant, in MMBtu/d)
Quarter Ended Nine Months Ended
September 30, September 30,
Pipeline Throughput 2004 2003 2004 2003
Gulf Coast Transmission 63,000 74,000 78,000 81,000
Vanderbilt 61,000 55,000 62,000 45,000
CCNG Transmission 198,000 170,000 180,000 166,000
CCNG Transmission -
Hallmark 103,000 62,000 102,000 52,000
Gregory Gathering 127,000 163,000 137,000 150,000
Mississippi 78,000 84,000 78,000 84,000
Arkoma 20,000 15,000 19,000 12,000
LIG Pipeline & Marketing 628,000 N/A 594,000 (1) N/A
Other Midstream 31,000 52,000 35,000 53,000
Total Gathering and
Transmission Volume 1,309,000 675,000 1,285,000 643,000
Natural Gas Processed
Gregory Processing 100,000 106,000 110,000 98,000
Conroe Processing 25,000 28,000 26,000 28,000
LIG Processing 303,000 N/A 283,000 (1) N/A
Total Processed Volume 428,000 134,000 419,000 126,000
Total On-System Volumes 1,737,000 809,000 1,704,000 769,000
Producer Services Volumes 224,000 274,000 209,000 263,000
Treating Volumes (2) 78,000 94,000 80,000 91,000
Treating Plants in Service (3) 67 45 67 45
Seminole Plant
(Mcf/d of CO(2)) 21,000 18,000 21,000 18,000
(1) Represents activity since April 1, 2004 acquisition.
(2) Represent volumes for treating plants operated by us whereby we
receive a fee based on the volumes treated.
(3) Plants in service represent plants in service on the last day of the
quarter.
CROSSTEX ENERGY, INC.
Selected Financial and Operating Data
(All amounts in thousands except per share numbers)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues
Midstream $501,004 $276,222 $1,327,181 $745,567
Treating 7,880 6,976 22,592 17,453
508,884 283,198 1,349,773 763,020
Cost of Gas
Midstream 478,536 264,035 1,266,624 715,514
Treating 1,229 1,860 4,092 6,311
479,765 265,895 1,270,716 721,825
Gross Margin 29,119 17,303 79,057 41,195
Operating Expenses 10,018 6,467 26,570 13,061
General and Administrative 5,263 2,720 14,117 7,392
Impairments 981 -- 981 --
Stock Based Compensation 289 1,577 769 4,649
(Gain) Loss on Sale of
Property (287) -- (12) --
(Profit) Loss on Energy
Trading Activities (766) (1,614) (1,792) (1,491)
Depreciation and Amortization 6,160 4,105 16,499 9,301
Total 21,658 13,255 57,132 32,912
Operating Income 7,461 4,048 21,925 8,283
Interest Expense (2,869) (1,247) (6,166) (1,978)
Other Income 50 51 254 50
Total Other Income
(Expense) (2,819) (1,196) (5,912) (1,928)
Income Before Income Taxes
and Interest of
Non-controlling Partners in
the Partnership's Net Income 4,642 2,852 16,013 6,355
Gain on Issuance of Units of
the Partnership -- 18,080 -- 18,080
Income Tax Provision (957) (8,228) (3,504) (8,833)
Interest of Non-controlling
Partners in the Partnership's
Net Income (2,005) (1,328) (6,216) (3,104)
Net Income $ 1,680 $ 11,376 $ 6,293 $ 12,498
Preferred Stock Dividends $ -- $ 866 $ -- $ 2,699
Net Income (Loss) Available
to Common $ 1,680 $ 10,510 $ 6,293 $ 9,799
Diluted Earnings (Loss) per
Common Share $ 0.13 $ 0.92 $ 0.49 $ 1.02
Weighted Average Shares
Outstanding:
Diluted 12,918 12,333 12,892 12,246
SOURCE Crosstex Energy, Inc.
-0- 11/08/2004
/CONTACT: Barry E. Davis, President and Chief Executive Officer, or
William W. Davis, Executive V.P. and Chief Financial Officer, both of Crosstex
Energy, Inc., +1-214-953-9500/
/Web site: http://www.crosstexenergy.com /
(XTEX XTXI)
CO: Crosstex Energy, Inc.; Crosstex Energy, L.P.
ST: Texas
IN: FIN OIL
SU: ERN CCA