Investor Tools
Print PagePrint Page
E-mail PageE-mail Page
RSS FeedsRSS Feeds
E-mail AlertsE-mail Alerts
IR ContactsIR Contacts
Financial Tear SheetFinancial Tear Sheet


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

Printer Friendly Version View printer-friendly version
<< Back
Crosstex Energy Reports Third-Quarter 2006 Results

DALLAS--(BUSINESS WIRE)--Nov. 8, 2006--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 third quarter of 2006.

Crosstex Energy, L.P. Financial Results

The Partnership reported net income of $0.9 million in the third quarter of 2006, compared with net income of $1.1 million in the third quarter of 2005. The net loss per limited partner unit in the third quarter of 2006 was $0.12 per unit versus a net loss of $0.05 per unit in the corresponding quarter of 2005. The loss per limited partner unit was impacted by the preferential allocation of net income to the general partner of $4.1 million in the third quarter of 2006, 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 $3.2 million in the quarter.

The Partnership's Distributable Cash Flow in the third quarter of 2006 was $21.1 million, or 3.11 times the amount required to cover its Minimum Quarterly Distribution of $0.25 per unit and 1.04 times the amount required to cover its current distribution of $0.55 per unit. Distributable Cash Flow was $17.9 million in the third quarter of 2005. 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 pleased that our quarterly operating results allow us to continue our strong track record of distribution and dividend increases," said Barry E. Davis, Crosstex President and Chief Executive Officer. "The outstanding performance of our Louisiana Intrastate Gas System and Mississippi assets continued to offset the shortfalls of our South Louisiana processing plants due to the 2005 hurricanes. We have developed a plan and mobilized a team to enhance our focus on innovative strategies designed to provide these plants with new gas supplies during the coming year.

"As previously communicated, we look forward to significant improvement in the North Texas Pipeline as firm transport commitments will double by the end of the fourth quarter," Davis added.

The Partnership's gross margin increased 90 percent to $74.8 million in the third quarter of 2006 from $39.4 million in the corresponding 2005 period. Gross margin from the Midstream business segment rose $31.2 million, or 107 percent, to $60.3 million. The increase was due to improved processing economics and growth in processed volumes of 356 percent. This volume growth was the result of the November 2005 acquisition of South Louisiana processing assets from El Paso Corporation and significantly higher throughput in our Louisiana Intrastate Gas processing plants. Additionally, the Partnership completed construction of its North Texas Pipeline and began transporting gas from the Barnett Shale in April 2006.

Gross margin from the Treating business segment rose $4.2 million, or 40 percent, to $14.5 million in the third quarter of 2006. The increase was attributable to dramatic growth in the number of treating plants in service. There were 154 treating plants in service at the end of the third quarter of 2006 versus 111 at the end of the third quarter of 2005.

Crosstex Energy, Inc. Financial Results

The Corporation reported net income of $1.5 million for the third quarter of 2006, compared with net income of $0.8 million for the comparable period in 2005. The Corporation's net loss before income taxes and interest of non-controlling partners in the net income of the Partnership was $0.3 million in the third quarter of 2006, compared with income of $0.9 million in the third quarter of 2005.

The Corporation's share of Partnership distributions, including distributions on the Corporation's 10 million participating limited partner units, its two percent general partner interest and the incentive distribution rights, was $11.1 million in the third quarter of 2006. Its share of Partnership distributions in the third quarter of 2005 was $7.7 million. The recently announced increase in the Partnership's distribution of $0.01 per unit raised the Corporation's share of distributions by $0.3 million from $10.8 million in the second quarter of 2006 to $11.1 million in the third quarter of 2006.

Earnings Call

The Partnership and the Corporation will hold their quarterly conference call to discuss third quarter results today, November 8, at 10:00 a.m. Central Time (11:00 p.m. Eastern Time). The dial-in number for the call is 800-299-7635, and the passcode is "Crosstex." A live Webcast of the call can be accessed on the investor relations page of Crosstex Energy's Web site at www.crosstexenergy.com. The call will also be available for replay for 30 days by dialing 888-286-8010, passcode 18461086, or by going to the investor relations events page of Crosstex Energy's Web site.

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 160 natural gas amine-treating plants in service and approximately 35 dew point control plants. Crosstex currently provides services for over 3.0 Bcf/day of natural gas, or approximately 6.0 percent of marketed U.S. daily production based on August 2006 Department of Energy data.

Crosstex Energy, Inc. owns the two percent general partner interest, a 42 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 non-cash charges, less maintenance capital expenditures and amortization of costs of certain derivatives (puts) plus proceeds from the 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 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" 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, 2005, Form 10-Q's for the quarter ended June 30, 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.

                            (Tables follow)
                        CROSSTEX ENERGY, L.P.
                 Selected Financial & Operating Data
          (All amounts in thousands except per unit numbers)

                           Three Months Ended     Nine Months Ended
                              September 30,         September 30,
                           ------------------- -----------------------
                             2006      2005       2006        2005
                           --------- --------- ----------- -----------
Revenues
 Midstream                 $837,235  $769,334  $2,367,231  $1,928,330
 Treating                    17,350    13,117      47,899      34,064
 Profit from Energy Trading
  Activities                    700       306       1,930       1,157
                           --------- --------- ----------- -----------
                            855,285   782,757   2,417,060   1,963,551

Cost of Gas
 Midstream                  777,644   740,519   2,210,465   1,851,418
 Treating                     2,870     2,792       7,359       5,996
                           --------- --------- ----------- -----------
                            780,514   743,311   2,217,824   1,857,414

Gross Margin                 74,771    39,446     199,236     106,137

Operating Expenses           28,073    13,874      72,874      37,598
General and Administrative   11,476     8,127      33,751      22,337
(Gain) Loss on Derivatives   (3,605)   13,273      (1,839)     13,679
(Gain) Loss on Sale of
 Property                       132    (7,632)         23      (7,797)
Depreciation and
 Amortization                22,424     7,828      58,182      22,134
                           --------- --------- ----------- -----------
           Total             58,500    35,470     162,991      87,951

Operating Income             16,271     3,976      36,245      18,186

Interest Expense and Other  (15,269)   (2,730)    (35,671)     (8,943)
                           --------- --------- ----------- -----------
Net Income before Minority
 Interest and Taxes           1,002     1,246         574       9,243

Minority Interest in
 Subsidiary                     (41)     (106)       (223)       (331)
Income Tax Provision            (58)      (68)       (356)       (176)
                           --------- --------- ----------- -----------
Net Income before
 Cumulative Effect of
 Accounting Change              903     1,072          (5)      8,736

Cumulative Effect of
 Accounting Change                -         -         689           -
                           --------- --------- ----------- -----------
Net Income                 $    903  $  1,072  $      684  $    8,736
                           ========= ========= =========== ===========

General Partner Share of
 Net Income                $  4,143  $  1,990  $   12,181  $    5,216
                           ========= ========= =========== ===========

Limited Partners' Share of
 Net Income                $ (3,240) $   (918) $  (11,497) $    3,520
                           ========= ========= =========== ===========

Net Income per Limited
 Partners' Unit before
 Accounting Change:
 Basic                     $  (0.12) $  (0.05) $    (0.47) $     0.19
                           ========= ========= =========== ===========

 Diluted                   $  (0.12) $  (0.05) $    (0.47) $     0.18
                           ========= ========= =========== ===========

Weighted Average Limited
 Partners' Units
 Outstanding:

 Basic                       26,602    18,157      26,245      18,126
                           ========= ========= =========== ===========

 Diluted                     26,602    18,157      26,245      19,371
                           ========= ========= =========== ===========
                        CROSSTEX ENERGY, L.P.
       Reconciliation of Net Income to Distributable Cash Flow
 (All amounts in thousands except ratios and distributions per unit)

                                     Three Months    Nine Months Ended
                                         Ended
                                     September 30,     September 30,
                                   ----------------- -----------------
                                      2006     2005     2006     2005
                                   -------- -------- -------- --------

Net Income                         $   903  $ 1,072  $   684  $ 8,736
Depreciation and Amortization (1)   22,352    7,760   57,967   21,932
Stock-Based Compensation             2,328    1,143    6,210    2,659
(Gain) Loss on Sale of Idle
 Property                              132   (7,632)     132   (7,797)
Proceeds from Sale of Idle Property    783    5,400      783    9,313
Financial Derivatives Mark-to-
 Market                             (2,357)  11,547    1,936   11,547
Cumulative Effect of Acctg. Change       -        -     (689)       -
Deferred Tax Benefit                   347      (95)     639     (286)
                                   -------- -------- -------- --------
Cash Flow                           24,488   19,195   67,662   46,104

Amortization of Put Premiums        (1,305)       -   (2,992)       -
Maintenance Capital Expenditures    (2,044)  (1,251)  (4,773)  (3,727)
                                   -------- -------- -------- --------
Distributable Cash Flow            $21,139  $17,944  $59,897  $42,377
                                   ======== ======== ======== ========
Minimum Quarterly Distribution
 (MQD)                             $ 6,788  $ 5,120  $20,346  $13,955
Distributable Cash Flow/MQD           3.11     3.50     2.94     3.04
Actual Distribution                $20,274  $11,663  $59,167  $33,137
Distribution Coverage                 1.04     1.54     1.01     1.28

Distributions per Limited Partner
 Unit                              $  0.55  $  0.49  $  1.62  $  1.42
                                   ======== ======== ======== ========


(1) Excludes minority interest share of depreciation and amortization
 of $72,000 and $215,000 for the three and nine months ended September
 30, 2006, respectively, and $68,000 and $202,000 for the three months
 and nine months ended September 30, 2005, respectively.
                        CROSSTEX ENERGY, L.P.
                            Operating Data


                         Three Months Ended      Nine Months Ended
                           September 30,           September 30,
                       ---------------------- ------------------------
                         2006        2005       2006          2005
                       ----------- ---------- ------------- ----------

Pipeline Throughput
 (MMBtu/d)
 South Texas             464,000     465,000    473,000       448,000
 LIG Pipeline &
  Marketing              718,000     564,000    675,000       616,000
 North Texas             126,000           -     93,000 (1)         -
 Other Midstream         179,000     157,000    181,000       132,000
                       ----------- ---------- ------------- ----------
Total Gathering &
 Transmission Volume   1,487,000   1,186,000  1,422,000     1,196,000

Natural Gas Processed
 MMBtu/d               2,060,000     452,000  1,934,000       450,000

Commercial Services
 Volume (MMBtu/d)         95,000     188,000    152,000       186,000

Treating Plants in
 Service (2)                 154         111        154           111

 (1) North Texas first date of service was April 1, 2006. Average
  daily throughput for the nine months ended September 30, 2006 is
  from the first service date through September 30, 2006.
 (2) Plants in Service represents plants in service on the last day of
  the quarter.
                        CROSSTEX ENERGY, INC.
                 Selected Financial & Operating Data
         (All amounts in thousands except per share numbers)

                           Three Months Ended     Nine Months Ended
                              September 30,         September 30,
                           ------------------- -----------------------
                             2006      2005       2006        2005
                           --------- --------- ----------- -----------
Revenues
  Midstream                $837,235  $769,334  $2,367,231  $1,928,330
  Treating                   17,350    13,117      47,899      34,064
  Profit from Energy
   Trading Activities           700       306       1,930       1,157
                           --------- --------- ----------- -----------
                            855,285   782,757   2,417,060   1,963,551

Cost of Gas
  Midstream                 778,527   740,519   2,210,465   1,851,418
  Treating                    2,870     2,792       7,359       5,996
                           --------- --------- ----------- -----------
                            781,397   743,311   2,217,824   1,857,414

Gross Margin                 73,888    39,446     199,236     106,137

Operating Expenses           28,081    13,882      72,907      37,613
General and Administrative   11,977     8,471      35,354      23,295
(Gain) Loss on Derivatives   (3,605)   13,273      (1,839)     13,679
(Gain) Loss on Sale of
 Property                       132    (7,633)         23      (7,797)
Depreciation and
 Amortization                22,436     7,839      58,225      22,169
                           --------- --------- ----------- -----------
                    Total    59,021    35,832     164,670      88,959

Operating Income             14,867     3,614      34,566      17,178

Interest Expense and Other  (15,183)   (2,669)    (33,782)     (8,668)
                           --------- --------- ----------- -----------
Income before Gain on
 Issuance of Partnership
 Units, Income Taxes and
 Interest of  Non-
 controlling Partners in
 the Partnership's Net
 Income                        (316)      945         784       8,510
Income Tax Provision           (670)     (494)    (11,242)     (2,528)
Gain on Issuance of Units
 of the Partnership               -         -      18,955           -
Interest of Non-
 controlling Partners in
 the Partnership's Net
 (Income) Loss                2,502       304       7,323      (1,909)
Net Income before
 Cumulative Effect of
 Accounting Change            1,516       755      15,820       4,073
Cumulative Effect of
 Accounting Change                -         -         170           -
                           --------- --------- ----------- -----------
Net Income                 $  1,516  $    755  $   15,990  $    4,073
                           ========= ========= =========== ===========

Net Income per Common
 Share before Accounting
 Change:

  Basic Earnings per
   Common Share            $   0.10  $   0.06  $     1.16  $     0.32
                           ========= ========= =========== ===========

  Diluted Earnings per
   Common Share            $   0.10  $   0.06  $     1.15  $     0.32
                           ========= ========= =========== ===========

Weighted Average Shares
 Outstanding:

  Basic                      15,314    12,760      13,632      12,615
                           ========= ========= =========== ===========

  Diluted                    15,502    12,962      13,793      12,944
                           ========= ========= =========== ===========

  Dividends per Common
   Share                   $   0.64  $   0.46  $     1.86  $     1.30
                           ========= ========= =========== ===========

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

    SOURCE: Crosstex Energy, L.P.

 
 HomeSite IndexContact UsSafety & Environment