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Crosstex Energy, L.P.
Trades on the NASDAQ Exchange under the symbol XTEX.
Press Release

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Crosstex Energy Reports Second-Quarter 2007 Results

DALLAS--(BUSINESS WIRE)--Aug. 9, 2007--The Crosstex Energy companies, Crosstex Energy, L.P. (NASDAQ: XTEX) (the Partnership) and Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation) today reported earnings for the second-quarter 2007.

    Second-Quarter 2007 -- Crosstex Energy, L.P. Financial Results

The Partnership reported net income of $2.9 million in the second quarter of 2007, compared with a net loss of $2.3 million in the second quarter of 2006. The Partnership's distributable cash flow in the second quarter of 2007 was $26.2 million, or 3.8 times the amount required to cover its minimum quarterly distribution of $0.25 per unit and 1.21 times the amount required to cover its recently increased quarterly distribution of $0.57 per unit. Distributable cash flow in the second-quarter 2007 increased $6.2 million, or 31 percent over distributable cash flow of $20.0 million in the second quarter of 2006. Distributable cash flow is a non-GAAP financial measure and is explained in greater detail under "Non-GAAP Financial Information." There is a reconciliation of this non-GAAP measure to net income in the tables at the end of this news release.

"We are very pleased with our results and the momentum that we have developed in the second quarter. During the quarter, we saw continued strong growth in our core North Texas area in the Barnett Shale play where major gas producers have confirmed better-than-expected results and plans for continued aggressive drilling plans. During the second quarter, there were 70 well connections to our gathering systems. As a result, Crosstex's gathered volumes have more than doubled in North Texas since the Chief acquisition only a year ago -- right on track with our expectations," said Barry E. Davis, Crosstex President and Chief Executive Officer. "And we are on schedule to more than triple our gas processing capacity next quarter in the Barnett Shale.

"During the second quarter, we also completed a 72-mile expansion of our Louisiana Intrastate Gas system, which performed on plan during the quarter. Current system throughput is more than one million MMBtu per day, a record flow rate since our ownership of the pipeline. Drilling is solid throughout our entire Louisiana system, and we have numerous opportunities to add attractive packages of wellhead supply," added Davis.

Second-quarter 2007 gross margin was $89.6 million, compared with $66.2 million in the corresponding 2006 period, a 35 percent increase. Gross margin from the Midstream segment rose 43 percent to $75.6 million in the second quarter of 2007 versus gross margin of $52.8 million for the year-ago quarter. The improvement was driven largely by higher volumes from the Partnership's North Texas gathering and transportation assets and from the expansion of the Partnership's Louisiana Intrastate Gas system that began operations in April 2007. Gross margin from the Treating segment increased five percent to $14.0 million, compared with a gross margin of $13.4 million for the second quarter of 2006 due to a greater number of plants in service. The Partnership had 195 treating and dew point control plants in service at the end of the second-quarter 2007 versus 178 plants in service at the end of second-quarter 2006.

Operating expenses were $30.0 million in the second quarter of 2007, compared with $22.8 million in the second-quarter 2006. The increase was related to the June 2006 acquisition and subsequent expansion of the Chief gathering assets in the Barnett Shale formation in North Texas and the completion of the Louisiana Intrastate Gas system expansion in April 2007. In the second quarter of 2007, general and administrative expenses rose to $14.8 million from $10.9 million in the year-ago quarter primarily due to staff additions to support the company's expanding asset base. Interest expense was $18.6 million in the second quarter of 2007 versus $11.9 million in the year-ago quarter due to increased debt for growth activities.

The net loss per limited partner unit in the second-quarter 2007 was $0.06 per unit versus a net loss of $0.23 per unit in the corresponding quarter of 2006. The loss per limited partner unit was impacted by the $4.5 million preferential allocation of net income to the general partner in the second quarter of 2007, which represented the general partner's incentive distribution rights less certain stock-based compensation costs. This allocation reduced the limited partners' share of net income to a net loss of $1.6 million in the quarter.

    Second-Quarter 2007 -- Crosstex Energy, Inc. Financial Results

The Corporation reported net income of $2.2 million for the second quarter of 2007, compared with net income of $1.6 million for the comparable period in 2006. The Corporation's net income before income taxes and interest of noncontrolling partners in the net income of the Partnership was $2.5 million in the second quarter of 2007, compared with a net loss of $0.9 million in the second quarter of 2006.

The Corporation's share of Partnership distributions, including distributions on its 10 million participating limited partner units, its two percent general partner interest, and the incentive distribution rights, was $11.9 million in the second quarter of 2007. Its share of Partnership distributions in the second quarter of 2006 was $10.8 million. The recently announced increase in the Partnership's distribution of $0.01 per unit raised the Corporation's share of distributions by $0.4 million from $11.5 million in the first quarter of 2007 to $11.9 million in the second quarter of 2007.

Crosstex to Hold Earnings Conference Call Today

The Partnership and the Corporation will hold their quarterly conference call to discuss second-quarter 2007 results today, August 9, at 10:00 a.m. Central Time (11:00 p.m. Eastern Time). The dial-in number for the call is 1-800-320-2978, and the passcode is "Crosstex." Callers outside the United States should dial 1-617-614-4923, and the passcode is "Crosstex." A live Web cast of the call can be accessed on the Investors page of Crosstex Energy's Web site at www.crosstexenergy.com. A replay of the call can be accessed for 30 days by dialing 888-286-8010. International callers should dial 1-617-801-6888 for a replay. The passcode for all callers listening to the replay is 88276841. Interested parties also can visit the Investors page of Crosstex's Web site to listen to a replay of the call.

About the Crosstex Energy Companies

Crosstex Energy, L.P., a midstream natural gas company headquartered in Dallas, operates over 5,000 miles of pipeline, 12 processing plants, four fractionators, and approximately 200 natural gas amine-treating plants and dew point control plants. Crosstex currently provides services for over 3.5 Bcf/day of natural gas, or approximately 7.0 percent of marketed U.S. daily production.

Crosstex Energy, Inc. owns the two percent general partner interest, a 38 percent limited partner interest, and the incentive distribution rights of Crosstex Energy, L.P.

Additional information about the Crosstex companies can be found at www.crosstexenergy.com.

Non-GAAP Financial Information

This press release contains a non-generally accepted accounting principle financial measure that we refer to as Distributable Cash Flow. Distributable Cash Flow includes earnings before noncash charges, less maintenance capital expenditures and amortization of costs of certain derivatives (puts). 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 and the amortization of put premiums. 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. The puts were acquired to hedge the future price of certain natural gas liquids. The net cost of the puts is being amortized against Distributable Cash Flow over their life.

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 among the following tables.

This press release contains forward-looking statements identified by the use of words such as "forecast," "anticipate," "expect" and "estimate." These statements are based on currently available information and assumptions and expectations that the Partnership and the Corporation believe are reasonable. However, the Partnership's and the Corporation's assumptions and expectations are subject to a wide range of business risks, so they 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 and the Corporation'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; (6) the Partnership may not adequately address construction and operating risks; and (7) other factors discussed in the Partnership's and the Corporation's Form 10-K's for the year ended December 31, 2006 and other filings with the Securities and Exchange Commission. The Partnership and the Corporation have 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 & Operating Data
          (All amounts in thousands except per unit numbers)

                          Three Months Ended      Six Months Ended
                               June 30,               June 30,
                         --------------------- -----------------------
                            2007       2006       2007        2006
                         ----------- --------- ----------- -----------
                                          (Unaudited)
Revenues
   Midstream             $  984,669  $728,398  $1,794,467  $1,530,965
   Treating                  16,256    15,450      32,607      29,580
   Profit from Energy
    Trading Activities          991       807       1,594       1,230
                         ----------- --------- ----------- -----------
                          1,001,916   744,655   1,828,668   1,561,775

Cost of Gas
   Midstream                910,061   676,370   1,661,943   1,432,821
   Treating                   2,257     2,056       4,591       4,489
                         ----------- --------- ----------- -----------
                            912,318   678,426   1,666,534   1,437,310

Gross Margin                 89,598    66,229     162,134     124,465

Operating Expenses           29,956    22,840      57,313      44,801
General and
 Administrative              14,849    10,919      26,882      22,275
Gain on Sale of Property       (971)     (160)     (1,821)       (109)
(Gain) Loss on
 Derivatives                 (1,280)    3,925      (4,494)      1,766
Depreciation and
 Amortization                25,509    18,708      50,495      35,758
                         ----------- --------- ----------- -----------
   Total                     68,063    56,232     128,375     104,491

Operating Income             21,535     9,997      33,759      19,974

Interest Expense and
 Other                      (18,402)  (11,891)    (35,679)    (20,402)
                         ----------- --------- ----------- -----------
Net Income (Loss) before
 Minority Interest and
 Taxes                        3,133    (1,894)     (1,920)       (428)

Minority Interest in
 Subsidiary                     (30)     (101)        (50)       (182)
Income Tax Provision           (215)     (264)       (419)       (298)
                         ----------- --------- ----------- -----------
Income (Loss) before
 Cumulative Effect of
 Accounting Change            2,888    (2,259)     (2,389)       (908)
                         ----------- --------- ----------- -----------

Cumulative Effect of
 Accounting Change                -         -           -         689
                         ----------- --------- ----------- -----------
Net Income (Loss)        $    2,888  $ (2,259) $   (2,389) $     (219)
                         =========== ========= =========== ===========
General Partner Share of
 Net Income (Loss)       $    4,538  $  3,890  $    8,707  $    8,038
                         =========== ========= =========== ===========
Limited Partners' Share
 of Net Income (Loss)    $   (1,650) $ (6,149) $  (11,096) $   (8,257)
                         =========== ========= =========== ===========

Net Income (Loss) per
 Limited Partners' Unit
 after Accounting
 Change:

   Basic and Diluted
    Common Unit          $    (0.06) $  (0.23) $    (0.42) $    (0.62)
                         =========== ========= =========== ===========
   Basic and Diluted
    Senior Subordinated
    A Unit               $        -  $      -  $        -  $     5.31
                         =========== ========= =========== ===========

Weighted Average Limited
 Partners' Units
 Outstanding:

   Basic and Diluted
    Common Units             26,685    26,572      26,664      26,064
                         =========== ========= =========== ===========
   Basic and Diluted
    Senior Subordinated
    A Units                       -         -           -       1,495
                         =========== ========= =========== ===========

                        CROSSTEX ENERGY, L.P.
       Reconciliation of Net Income to Distributable Cash Flow
 (All amounts in thousands except ratios and distributions per unit)

                                  Three Months Ended Six Months Ended
                                       June 30,          June 30,
                                  ------------------ -----------------
                                    2007      2006     2007     2006
                                  --------- -------- -------- --------
                                     (Unaudited)        (Unaudited)
Net Income (Loss)                  $ 2,888  $(2,259) $(2,389) $  (219)
Depreciation and Amortization (1)   25,437   18,637   50,351   35,615
Stock-based Compensation             2,852    2,238    5,086    3,883
Financial Derivatives Mark-to-
 Market                                 59    4,069   (2,022)   4,293
Cumulative Effect of Accounting
 Change                                  -        -        -     (689)
Other                                   45      236       89      291
                                  --------- -------- -------- --------
Cash Flow                           31,281   22,921   51,115   43,174

Amortization of Put Premiums        (2,517)  (1,065)  (3,468)  (1,687)
Maintenance Capital Expenditures    (2,597)  (1,710)  (3,629)  (2,729)
                                  --------- -------- -------- --------
Distributable Cash Flow            $26,167  $20,146  $44,018  $38,758
                                  ========= ======== ======== ========
Minimum Quarterly Distribution
 (MQD)                             $ 6,897  $ 6,785  $13,695  $13,558
Distributable Cash Flow/MQD           3.79     2.97     3.21     2.86
Actual Distribution                $21,683  $19,724  $42,522  $38,893
Distribution Coverage                 1.21     1.02     1.04     1.00

Distributions per Limited Partner
 Unit                              $  0.57  $  0.54  $  1.13  $  1.07
                                  ========= ======== ======== ========

(1) Excludes minority interest share of depreciation and amortization
 of $72,000 and $144,000 for the three and six months ended June 30,
 2007, respectively, and $72,000 and $143,000 for the three months and
 six months ended June 30, 2006, respectively.

                        CROSSTEX ENERGY, L.P.
                            Operating Data


                               Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                               ------------------- -------------------
                                 2007      2006      2007      2006
                               --------- --------- --------- ---------

Pipeline Throughput (MMBtu/d)
   South Texas                   511,000   476,000   496,000   484,000
   LIG Pipeline and Marketing    950,000   698,000   903,000   652,000
   North Texas - Gathering       288,000    13,000   264,000    13,000
   North Texas - Transmission    266,000    47,000   186,000    47,000
   Other Midstream               186,000   175,000   179,000   171,000
                               --------- --------- --------- ---------
Total Gathering and
 Transmission Volume           2,201,000 1,409,000 2,028,000 1,367,000

Natural Gas Processed
 (MMBtu/d)
   South Louisiana             1,466,000 1,486,000 1,430,000 1,427,000
   LIG System                    320,000   364,000   319,000   331,000
   South Texas                   143,000   111,000   138,000   108,000
   North Texas                    92,000     9,000    78,000     4,000
                               --------- --------- --------- ---------
Total Gas Volumes Processed    2,021,000 1,970,000 1,965,000 1,870,000

Commercial Services Volume
 (MMBtu/d)                       100,000   173,000    95,000   192,000

North Texas Gathering (1)
   Wells Connected                    70         -       105         -

Treating Plants and Dew Point
 Control Plants in Service (2)       195       178       195       178

(1) North Texas Gathering assets were acquired June 29, 2006.
(2) Treating Plants and Dew Point Control Plants in Service represents
 plants in service on the last day of the period.

                        CROSSTEX ENERGY, INC.
                 Selected Financial & Operating Data
         (All amounts in thousands except per share numbers)

                          Three Months Ended      Six Months Ended
                               June 30,               June 30,
                         --------------------- -----------------------
                            2007       2006       2007        2006
                         ----------- --------- ----------- -----------
                                          (Unaudited)
Revenues
    Midstream            $  984,669  $728,398  $1,794,467  $1,530,965
    Treating                 16,256    15,450      32,607      29,580
    Profit from Energy
     Trading Activities         991       807       1,594       1,230
                         ----------- --------- ----------- -----------
                          1,001,916   744,655   1,828,668   1,561,775

Cost of Gas
    Midstream               910,061   676,370   1,661,943   1,431,938
    Treating                  2,257     2,056       4,591       4,489
                         ----------- --------- ----------- -----------
                            912,318   678,426   1,666,534   1,436,427

Gross Margin                 89,598    66,229     162,134     125,348

Operating Expenses           29,965    22,856      57,329      44,826
General and
 Administrative              15,537    11,545      28,189      23,377
Gain on Sale of Property       (971)     (160)     (1,821)       (109)
(Gain) Loss on
 Derivatives                 (1,280)    3,925      (4,494)      1,766
Depreciation and
 Amortization                25,521    18,720      50,518      35,789
                         ----------- --------- ----------- -----------
    Total                    68,772    56,886     129,721     105,649

Operating Income             20,826     9,343      32,413      19,699

Interest Expense and
 Other                      (18,297)  (10,198)    (35,436)    (18,599)
                         ----------- --------- ----------- -----------
Income (Loss) before
 Gain on Issuance of
 Partnership Units,
 Income Taxes and
 Interest of
 Noncontrolling Partners
 in the Partnership's
 Net Loss                     2,529      (855)     (3,023)      1,100
Gain on Issuance of
 Units of the
 Partnership                      -         -           -      18,955
Income Tax Provision         (1,338)   (1,238)     (1,593)    (10,572)
Interest of
 Noncontrolling Partners
 in the Partnership's
 Net Loss                     1,002     3,734       6,883       4,821
                         ----------- --------- ----------- -----------
Net Income before
 Cumulative Effect of
 Accounting Change            2,193     1,641       2,267      14,304
                         ----------- --------- ----------- -----------
Cumulative Effect of
 Accounting Change                -         -           -         170
                         ----------- --------- ----------- -----------
Net Income               $    2,193  $  1,641  $    2,267  $   14,474
                         =========== ========= =========== ===========

Net Income per Common
 Share after Accounting
 Change:

    Basic Earnings per
     Common Share        $     0.05  $   0.04  $     0.05  $     0.38
                         =========== ========= =========== ===========

    Diluted Earnings per
     Common Share        $     0.05  $   0.04  $     0.05  $     0.37
                         =========== ========= =========== ===========

Weighted Average Shares
 Outstanding:

    Basic                    45,977    38,373      45,970      38,331
                         =========== ========= =========== ===========

    Diluted                  46,576    38,862      46,565      38,790
                         =========== ========= =========== ===========

    Dividends per Common
     Share               $     0.23  $   0.21  $     0.45  $     0.41
                         =========== ========= =========== ===========

    CONTACT: Crosstex Energy
             Investor Contact:
             Crystal C. Bell, 214-721-9407
             Investor Relations Specialist
             or
             Media Contact:
             Jill McMillan, 214-721-9271
             Public Relations Specialist

    SOURCE: Crosstex Energy, L.P. and Crosstex Energy, Inc.

 
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