DALLAS, Aug. 4 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P.
(Nasdaq: XTEX) (the Partnership) today reported results for the second quarter
of 2005 that are in-line with accomplishing goals for the year. Crosstex
Energy, Inc. (Nasdaq: XTXI) will report results next week.
Crosstex Energy, L.P. Financial Results
The Partnership reported net income of $4.5 million for the second quarter
of 2005, or $0.17 per limited partner unit, compared to net income in the
second quarter of 2004 of $5.9 million, or $0.24 per unit. Partnership net
income in the second quarter of 2005 was negatively impacted by a $1.0 million
charge for non-cash stock based compensation, due to the exercise of Crosstex
Energy, Inc. stock options by employees of the Partnership, and by $800,000
associated with the gas leak reported in the first quarter's results.
The Partnership's Distributable Cash Flow for the quarter was $13.4
million, 2.89 times the amount required to cover its Minimum Quarterly
Distribution of $0.25 per unit, and 1.22 times the amount required to cover
its distribution of $0.47 per unit. As previously disclosed, the Partnership
has agreed to sell certain idle equipment for $9.0 million in 2005, and during
the second quarter, the Partnership received the second $1.8 million deposit
on such sale, which is included in Distributable Cash Flow for the quarter.
The sales proceeds will not be reflected in net income until the sale closes,
which is expected in the third quarter. Distributable Cash Flow for the
quarter increased $3.4 million, or 34 percent, over Distributable Cash Flow of
$10.0 million in the 2004 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.
In addition to the sale proceeds, the growth in Distributable Cash Flow
was driven by growth in the Partnership's gross margin, to $34.7 million in
the second quarter of 2005 compared to $29.4 million in the corresponding 2004
period, an increase of 18 percent. Gross margin from the midstream segment
increased by $2.4 million, or 11 percent, to $25 million, primarily due to a
25 percent increase in processed volumes and a five percent increase in on-
system gathering and transmission volumes. Midstream margin growth was
negatively impacted by the $800,000 loss associated with the gas leak
previously mentioned.
Gross margin from the Treating segment increased $3.2 million, or 53
percent, to $9.3 million. Plants in service increased to 100 at June 30, 2005
from 62 at June 30, 2004, contributing $2.2 million to the increase in gross
margin. Plant expansions made up $0.5 million of the increase with increased
volumes and fees contributed the remaining $0.5 million.
"We are pleased that our organic growth and the cash we received from the
sale of idle equipment allows us to continue our smooth distribution and
dividend growth while we work to complete our North Texas Pipeline. With the
results of the quarter, we feel comfortable with our current guidance for
2005," said Barry E. Davis, President and Chief Executive Officer of Crosstex
Energy, L.P. "We think it is especially noteworthy to reach the milestone of
having 100 treating plants in service. In the current environment, we expect
to see our organic treating growth continue to accelerate."
Earnings Call
The Partnership will hold its quarterly conference call to discuss second
quarter results today, August 4, at 10:00 a.m. Central Time (11:00 a.m.
Eastern Time). The dial-in number for the call is 866-831-6234, passcode
Crosstex. A live Webcast of the call can be accessed on the investor
information page of Crosstex Energy's Website at
http://www.crosstexenergy.com. The call will be available for replay for 30
days by dialing 888-286-8010, passcode 38739179. A replay of the broadcast
will also be available on the Partnership's Website.
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 100 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, a 54 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 assumptions and
expectations are subject to a wide range of business risks, so the Partnership
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.
CROSSTEX ENERGY, L.P.
Selected Financial and Operating Data
(All amounts in thousands except per unit numbers)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Revenues
Midstream $ 619,432 $ 507,744 $ 1,158,996 $ 825,957
Treating 11,040 7,568 20,947 14,712
Profit from
Energy Trading
Activities 399 826 444 1,246
630,871 516,138 1,180,387 841,915
Cost of Gas
Midstream 594,482 485,212 1,110,898 788,088
Treating 1,711 1,487 3,204 2,863
596,193 486,699 1,114,102 790,951
Gross Margin 34,678 29,439 66,285 50,964
Operating Expenses 12,178 10,366 23,722 16,630
General and
Administrative 7,750 4,960 14,211 8,709
(Gain) Loss on Sale
of Property (120) (22) (164) 274
Depreciation and
Amortization 7,370 5,921 14,306 10,339
Total 27,178 21,225 52,075 35,952
Operating Income 7,500 8,214 14,210 15,012
Interest Expense (3,196) (2,186) (6,561) (3,341)
Other Income 322 112 348 204
Total Other
Income (2,874) (2,074) (6,213) (3,137)
Income Before
Income Taxes and
Interest of Non-
controlling
Partners in the
Partnership's Net
Income 4,626 6,140 7,997 11,875
Interest of Non-
controlling
Partners in the
Partnership's Net
Income (88) (70) (225) (99)
Income Tax Provision (54) (129) (108) (129)
Net Income $ 4,484 $ 5,941 $ 7,664 $ 11,647
General Partner Share
of Net Income $ 1,205 $ 1,393 $ 3,226 $ 2,442
Limited Partners
Share of Net
Income $ 3,279 $ 4,548 $ 4,438 $ 9,205
Net Income per
Limited Partners'
Unit:
Basic $ 0.18 $ 0.25 $ 0.25 $ 0.51
Diluted $ 0.17 $ 0.24 $ 0.24 $ 0.48
Weighted Average
Limited Partners'
Units Outstanding:
Basic 18,124 18,081 18,111 18,077
Diluted 18,880 19,156 18,819 19,122
CROSSTEX ENERGY, L.P.
Reconciliation of Net Income to Distributable Cash Flow
(All amounts in thousands except ratios)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Net Income $ 4,484 $ 5,941 $ 7,664 $ 11,647
Depreciation and
Amortization (1) 7,301 5,882 14,175 10,262
Stock-Based
Compensation 1,240 269 1,516 478
(Gain) Loss on Sale
of Property (120) (22) (164) 274
Proceeds from Sale
of Property (2) 1,920 - 3,913 -
Deferred Tax Benefit (95) - (190) -
Cash Flow 14,730 12,070 26,914 22,661
Maintenance Capital
Expenditures (1,375) (2,028) (2,489) (2,972)
Distributable Cash
Flow $ 13,355 $ 10,042 $ 24,425 $ 19,689
Minimum Quarterly
Distribution (MQD) $ 4,628 $ 4,613 $ 9,247 $ 9,225
Distributable Cash
Flow/MQD 2.89 2.18 2.64 2.13
Actual Distribution $ 10,920 $ 9,076 $ 21,457 $ 17,429
Distribution
Coverage 1.22 1.11 1.14 1.13
(1) Excludes minority interest share of depreciation and amortization of
$69,000 and $131,000 for the three and six months ended June 30, 2005,
respectively, and $38,000 and $76,000 for the three and six months
ended June 30, 2004, respectively.
(2) Includes deposits from the contracted sale of equipment.
CROSSTEX ENERGY, L.P.
Operating Data
(All volumes in MMBtu/d)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Pipeline Throughput
Gulf Coast
Transmission & 144,000 139,000 143,000 148,000
Vanderbilt
CCNG Transmission 255,000 285,000 246,000 272,000
Gregory Gathering 123,000 128,000 123,000 142,000
LIG Pipeline &
Marketing 630,000 561,000 633,000 561,000
Other Midstream 146,000 135,000 145,000 132,000
Total Gathering and
Transmission Volume 1,288,000 1,248,000 1,281,000 1,255,000
Natural Gas Processed
Gregory Processing 100,000 99,000 95,000 116,000
Conroe Processing 25,000 28,000 26,000 26,000
LIG Processing 361,000 263,000 327,000 263,000
Total Processed Volume 486,000 390,000 448,000 405,000
Total On-System
Volumes 1,774,000 1,638,000 1,729,000 1,660,000
Commercial Services
Volume 194,000 166,000 185,000 181,000
Treating Plants in
Service (1) 100 62 100 62
(1) Plants in service represents 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.
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Related links:
http://www.crosstexenergy.com
CONTACT:
Barry E. Davis, President and Chief Executive
Officer, or William W. Davis, Executive V.P. and Chief Financial
Officer, +1-214-953-9500, both of Crosstex Energy, L.P.
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