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
2010.
Third-Quarter 2010 – Crosstex Energy, L.P. Financial
Results
The Partnership realized adjusted EBITDA of $47.8 million and
distributable cash flow of $22.6 million for the third quarter of
2010, compared with adjusted EBITDA of $41.3 million and
distributable cash flow of $16.8 million for the third quarter of
2009. Adjusted EBITDA and distributable cash flow are non-GAAP
financial measures and are explained in greater detail under
“Non-GAAP Financial Information.” There is a reconciliation of
these non-GAAP measures to net income (loss) in the tables at the
end of this news release.
The Partnership’s net loss of $3.7 million for the third quarter
of 2010 compares with $74.2 million of net income for the third
quarter of 2009 which included $93.5 million of income related to
discontinued operations.
“We are pleased with our solid results for the third quarter.
The previously announced resumption of our distribution and
dividend payments, a benchmark achievement for us, reflects the
successful execution of our business plan,” said Barry E. Davis,
Crosstex President and Chief Executive Officer. “We believe we are
well positioned for the future as we have renewed financial
strength and continue to carry out our strategy with
discipline.”
The Partnership’s third-quarter 2010 gross operating margin of
$83.7 million rose $1.1 million versus the third quarter of 2009.
The increase was primarily the result of growth in the
Partnership’s natural gas liquids (NGL) business. Gross operating
margin is a non-GAAP financial measure and is explained in greater
detail under “Non-GAAP Financial Information.” There is a
calculation of this non-GAAP measure in the tables at the end of
this news release.
The Partnership reports results by operating segment principally
based on regions served. Reportable segments consist of the natural
gas gathering, processing and transmission operations located in
north Texas (NTX); the pipelines and processing plants located in
Louisiana (LIG); and the south Louisiana processing and NGL assets,
including gas and NGL marketing activities (PNGL). Operating
activity for assets sold in the comparative periods that were not
considered discontinued operations is shown in the corporate
segment. Each business segment’s contribution to the third-quarter
2010 operating margin change versus the third-quarter 2009, and the
factors affecting those contributions, are described below:
- The PNGL segment’s gross operating
margin rose $3.1 million primarily due to increased NGL marketing
and fractionation activity and higher processed volumes. The NGL
business continues to be an area of emphasis in the Partnership’s
growth strategy.
- The LIG segment’s gross operating
margin increased $0.4 million, primarily the result of firm
transport margin growth of approximately $1.9 million due to new
contracts on the northern part of the system serving Haynesville
Shale producers. This was partially offset by a $1.2 million
decline from gas processing due to a lower NGL-to-gas price ratio
in the current quarter.
- The NTX segment’s gross operating
margin declined by $0.9 million. The margin impact of lower
gathering volumes was somewhat offset by system optimization and
higher volumes on the transmission system for the third quarter of
2010 versus the third-quarter 2009. It is expected that the
recently announced expansions and supply additions to the
Partnership’s north Texas gathering system should increase volumes
significantly in 2011.
- The corporate segment’s gross operating
margin, which included 2009 margins for assets that were sold and
not considered discontinued operations, decreased $1.5 million due
to the January 2010 sale of the Partnership’s east Texas
assets.
The Partnership’s third-quarter 2010 operating expenses of $26.5
million declined $2.5 million, or nine percent, from the third
quarter of 2009. The decrease primarily resulted from reductions in
plant lease and compressor rental costs, workforce reductions and
asset sales. This was partially offset by increased repair and
maintenance costs. General and administrative expenses declined
$4.8 million, or 30 percent, versus the third quarter of 2009
largely due to lower labor costs, including the impact of 2009
workforce reductions, and lower professional fees and services
costs. Depreciation and amortization expense for the third quarter
of 2010 decreased $2.1 million or seven percent, compared with the
third quarter of 2009 due to the extension of the useful lives of
various assets in accordance with the findings of an engineering
study completed in the fourth quarter of 2009. Interest expense
declined to $20.3 million for the third quarter of 2010 from $27.9
million for the third quarter of 2009 primarily due to expense
associated with interest rate swaps included in the third quarter
of 2009 and reductions in debt outstanding beyond amounts
associated with asset sales.
The net loss per basic limited partner common unit for the third
quarter of 2010 was $0.13 compared with net income of $1.46 per
basic common unit for the third quarter of 2009. The 2009 income
per basic limited partner common unit included $1.81 of net income
on discontinued operations.
Third Quarter 2010 – Crosstex Energy, Inc. Financial
Results
The Corporation reported a $2.0 million net loss for the third
quarter of 2010 compared with net income of $15.5 million for the
third-quarter 2009. The Corporation’s loss from continuing
operations before income taxes (which includes interest of
non-controlling partners in the net loss of the Partnership) was
$4.2 million for the third quarter of 2010 compared to a loss of
$19.6 million for the third quarter of 2009.
In accordance with U.S. accounting standards, the Partnership
and the Corporation classified certain assets, liabilities and
results of their operations as discontinued operations for the 2009
accounting periods presented. Included in this release are tables
of selected financial data where amounts have been reclassified as
discontinued operations for the 2009 periods presented.
Crosstex to Hold Earnings Conference Call Today
The Partnership and the Corporation will hold their quarterly
conference call to discuss third-quarter 2010 results today,
November 5, at 10:00 a.m. Central time (11:00 a.m. Eastern time).
The dial-in number for the call is 1-888-680-0894. Callers outside
the United States should dial 1-617-213-4860. The passcode for all
callers is 23956365. Investors are advised to dial in to the call
at least 10 minutes prior to the call time to register.
Participants may preregister for the call at
https://www.theconferencingservice.com/prereg/key.process?key=P3NTQWAN8.
Preregistrants will be issued a pin number to use when dialing in
to the live call, which will provide quick access to the conference
call by bypassing the operator upon connection. Interested parties
also can access a live webcast of the call on the Investors page of
Crosstex’s website at www.crosstexenergy.com.
After the conference call, a replay can be accessed until
February 4, 2011, by dialing 1-888-286-8010. International callers
should dial 1-617-801-6888 for a replay. The passcode for all
callers listening to the replay is 79275844. Interested parties
also can visit the Investors page of Crosstex’s website 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 approximately 3,300 miles of
pipeline, nine processing plants and three fractionators. The
Partnership currently provides services for 3.2 billion cubic feet
of natural gas per day, or approximately six percent of marketed
U.S. daily production.
Crosstex Energy, Inc. owns the two percent general partner
interest, a 25 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 non-generally accepted accounting
principle financial measures that the Partnership refers to as
gross operating margin, adjusted EBITDA and distributable cash
flow. Gross operating margin is defined as revenue minus purchased
gas. Adjusted EBITDA is defined as earnings before interest, income
taxes, depreciation and amortization, impairments, loss on
extinguishment of debt, stock-based compensation, noncash
derivative items, gain on the sale of assets and other
miscellaneous noncash items. Distributable cash flow is defined as
earnings before certain noncash charges and the gain on the sale of
assets less maintenance capital expenditures. 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 the assets and to extend their useful
lives.
The Partnership believes these measures are useful to investors
because they 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.
Gross operating margin, adjusted EBITDA and distributable cash
flow, as defined above, are not measures of financial performance
or liquidity under GAAP. They should not be considered in isolation
or as an indicator of the Partnership’s performance. Furthermore,
they should not be seen as measures of liquidity or a substitute
for metrics prepared in accordance with GAAP. A reconciliation of
these measures to net income (loss) is included among the following
tables.
This press release contains forward-looking statements within
the meaning of the federal securities laws. These statements are
based on certain assumptions made by the Partnership and the
Corporation based upon management’s experience and perception of
historical trends, current conditions, expected future developments
and other factors the Partnership and the Corporation believe are
appropriate in the circumstances. These statements include, but are
not limited to, statements with respect to the Partnership’s and
the Corporation’s guidance and future outlook (including future
volumes), distribution and dividend guidelines and future
estimates, financing plans, financial condition, liquidity and
results of operations. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Partnership and the Corporation, which may cause the
Partnership’s and the Corporation’s actual results to differ
materially from those implied or expressed by the forward-looking
statements. These risks include the following: (1) the
Partnership’s profitability is dependent upon prices and market
demand for natural gas and NGLs; (2) the Partnership’s substantial
indebtedness could limit its flexibility and adversely affect its
financial health; (3) the Partnership may not be able to obtain
funding due to the deterioration of the credit and capital markets
and current economic conditions; (4) the Partnership and the
Corporation do not have diversified assets; (5) drilling levels may
decrease due to deterioration in the credit and commodity markets;
(6) the Partnership’s credit risk management efforts may fail to
adequately protect against customer nonpayment; (7) the
Partnership’s use of derivative financial instruments does not
eliminate its exposure to fluctuations in commodity prices and
interest rates; (8) the Partnership may not be successful in
balancing its purchases and sales; (9) the amount of natural gas
transported in the Partnership’s gathering and transmission lines
may decline as a result of reduced drilling by producers,
competition for supplies, reserve declines and reduction in demand
from key customers and markets; (10) the level of the Partnership’s
processing operations may decline for similar reasons; (11)
operational, regulatory and other asset-related risks, including
weather conditions such as hurricanes, exist because a significant
portion of the Partnership’s assets are located in southern
Louisiana; and (12) other factors discussed in the Partnership’s
and the Corporation’s Annual Reports on Form 10-K for the year
ended December 31, 2009, 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 Data (All
amounts in thousands except per unit numbers)
Three Months Ended Nine Months Ended
September 30
September 30 2010 2009 2010
2009 (Unaudited) (Unaudited)
Midstream revenues $ 454,735 $ 389,822 $ 1,365,441 $ 1,150,728
Purchased gas and NGLs 371,072 307,272
1,116,573 920,151 Gross
operating margin 83,663 82,550 248,868 230,577 Operating
costs and expenses: Operating expenses 26,476 29,027 78,365 84,733
General and administrative 11,277 16,051 35,669 43,616 Gain on sale
of property (588 ) (356 ) (14,367 ) (899 ) (Gain) loss on
derivatives 1,582 (1,672 ) 6,872 (6,723 ) Impairments - 900 1,311
900 Depreciation and amortization 28,185
30,255 82,097 89,924 Total
operating costs and expenses 66,932 74,205 189,947 211,551
Operating income 16,731 8,345 58,921 19,026 Interest
expense, net of interest income (20,334 ) (27,868 ) (67,188 )
(67,125 ) Loss on extinguishment of debt - - (14,713 ) (4,669 )
Other income 109 570 314
735 Total other income (expense) (20,225 ) (27,298 )
(81,587 ) (71,059 )
Loss from continuing operations before
non-controlling interest and income taxes
(3,494 ) (18,953 ) (22,666 ) (52,033 ) Income tax provision
(161 ) (369 ) (809 ) (1,244 ) Loss from
continuing operations, net of tax (3,655 ) (19,322 ) (23,475 )
(53,277 ) Income (loss) from discontinued operations, net of tax -
(3,962 ) - 4,378 Gain from sale of discontinued operations, net of
tax - 97,423 -
97,423 Net income (loss) (3,655 ) 74,139
(23,475 ) 48,524
Less: Net income (loss) from continuing
operations attributable to the non-controlling interest
13 (50 ) (11 ) (9 ) Net income
(loss) attributable to Crosstex Energy, L.P. $ (3,668 ) $ 74,189
$ (23,464 ) $ 48,533
Preferred interest in net income
attributable to Crosstex Energy, L.P.
$ 3,676 $ - $ 9,926 $ -
Beneficial conversion feature attributable
to preferred units
$ - $ - $ 22,279 $ - General partner
interest in net income (loss) $ (820 ) $ 681 $ (3,596 ) $
(1,210 )
Limited partners' interest in net income
(loss) attributable to Crosstex Energy, L.P.
$ (6,524 ) $ 73,508 $ (52,074 ) $ 49,743
Net income (loss) attributable to Crosstex
Energy, L.P. per limited partners' unit:
Basic common unit $ (0.13 ) $ 1.46 $ (1.02 ) $ 0.32
Diluted common unit $ (0.13 ) $ 1.44 $ (1.02 ) $ 0.31
Basic and diluted senior subordinated series D unit $ - $ -
$ - $ 8.85 Weighted average limited partners'
units outstanding: Basic common units 50,142
49,077 49,872 47,825 Diluted
common units 50,142 49,752
49,872 49,292 Series A convertible preferred
units outstanding 14,706 -
14,706 -
CROSSTEX ENERGY, L.P.
Reconciliation of Net Income (Loss) to Adjusted EBITDA and
Distributable Cash Flow (All amounts in thousands except ratios
and per unit amounts)
Three Months
Ended Nine Months Ended September 30 September
30 2010 2009 2010
2009 (Unaudited) (Unaudited) Net income (loss)
attributable to Crosstex Energy, L.P. $ (3,668 ) $ 74,189 $ (23,464
) $ 48,533 Depreciation, amortization and impairments (1) 28,112
31,083 83,189 90,607 Stock-based compensation 1,860 2,354 7,106
6,276 Interest expense, net 20,334 27,868 67,188 67,125 Loss on
extinguishment of debt - - 14,713 4,669 Gain on sale of property
(588 ) (356 ) (14,367 ) (899 ) (Income) loss from discontinued
operations, net of tax - 3,962 - (4,378 ) Gain from sale of
discontinued operations, net of tax - (97,423 ) - (97,423 ) Noncash
derivatives, taxes and other 1,720 (425 )
2,352 1,450 Adjusted EBITDA from
continuing operations 47,770 41,252 136,717 115,960 Interest
expense (2) (20,334 ) (22,558 ) (63,538 ) (65,233 ) Cash taxes and
other cash expenses (285 ) (495 ) (1,184 ) (1,788 ) Maintenance
capital expenditures (4,555 ) (1,364 ) (8,876
) (4,727 ) Distributable cash flow from continuing
operations $ 22,596 $ 16,835 $ 63,119 $ 44,212
Actual distribution (common and preferred) $ 16,832 $ - $
23,082 $ - Distribution coverage 1.34 n/a 2.73 n/a
Distributions declared per limited partner unit $ 0.25 $ -
$ 0.25 $ - Distributions declared per
preferred unit $ 0.25 $ - $ 0.68 $ -
(1) Excludes minority interest share of depreciation and
amortization of $73 thousand and $219 thousand for the three months
and nine months ended September 30, 2010, respectively, and $72
thousand and $217 thousand for the three months and nine months
ended September 30, 2009, respectively.
(2) Excludes $678 thousand of debt issuance cost amortization
and $894 thousand of senior secured note make-whole and call
premium paid-in-kind interest resulting from repayment of such
notes from the proceeds of the preferred unit sale and an asset
sale for the nine months ended September 30, 2010.
CROSSTEX ENERGY, L.P. Operating Data
Three Months Ended Nine Months
Ended September 30 September 30 2010
2009 2010 2009
Pipeline Throughput (MMBtu/d) LIG 883,000 898,000 895,000
906,000 NTX - Gathering 736,000 784,000 737,000 802,000 NTX -
Transmission 344,000 314,000 342,000 313,000 Corporate (1) -
31,000 - 33,000
Total Gathering and
Transmission Volume 1,963,000 2,027,000 1,974,000 2,054,000
Natural Gas Processed (MMBtu/d) PNGL 878,000 779,000
886,000 697,000 LIG 284,000 268,000 285,000 262,000 NTX 224,000
220,000 210,000 224,000
Total
Gas Volumes Processed 1,386,000 1,267,000 1,381,000 1,183,000
Commercial Services Volume (MMBtu/d) 123,000 95,000
73,000 87,000 Realized weighted average Natural Gas Liquids
price ($/gallon) 0.93 0.84 0.99 0.74 Actual weighted average
Natural Gas Liquids-to-Gas price ratio 237 % 268 % 245 % 206 %
North Texas Gathering (2) Wells connected 26 11 84 72
(1) Includes volumes for assets sold and not considered
discontinued operations.
(2) North Texas Gathering wells connected are as of the last day
of the period and include Centralized Delivery Point ("CDP")
connections where Crosstex connects multiple wells at a single
meter station.
CROSSTEX ENERGY, INC. Selected Financial Data (All
amounts in thousands except per unit numbers)
Three Months Ended Nine Months Ended
September 30
September 30 2010 2009 2010
2009 (Unaudited) (Unaudited)
Midstream revenues $ 454,735 $ 389,822 $ 1,365,441 $ 1,150,728
Purchased gas and NGLs 371,072 307,272
1,116,573 920,151 Gross
operating margin 83,663 82,550 248,868 230,577 Operating
costs and expenses: Operating expenses 26,476 29,027 78,365 84,733
General and administrative 11,964 16,674 37,900 45,638 Gain on sale
of property (588 ) (356 ) (14,367 ) (899 ) (Gain) loss on
derivatives 1,582 (1,672 ) 6,872 (6,723 ) Impairments - 900 1,311
900 Depreciation and amortization 28,203
30,274 82,153 89,980 Total
operating costs and expenses 67,637 74,847 192,234 213,629
Operating income 16,026 7,703 56,634 16,948 Interest
expense, net of interest income (20,334 ) (27,868 ) (67,184 )
(67,126 ) Loss on extinguishment of debt - - (14,713 ) (4,669 )
Other income 109 575 314
784 Total other income (expense) (20,225 ) (27,293 )
(81,583 ) (71,011 ) Loss from continuing operations before income
taxes (4,199 ) (19,590 ) (24,949 ) (54,063 ) Income tax benefit
(provision) 1,536 2,462 5,325
2,406 Loss from continuing operations, net of
tax (2,663 ) (17,128 ) (19,624 ) (51,657 ) Income (loss) from
discontinued operations, net of tax - (3,361 ) - 3,812 Gain from
sale of discontinued operations, net of tax -
84,827 - 84,827 Net income
(loss) (2,663 ) 64,338 (19,624 )
36,982
Less: Interest of non-controlling partners
in the Partnership's net income (loss):
Interest of non-controlling partners in
the Partnership's continuing operations
(683 ) (12,231 ) (10,061 ) (32,852 )
Interest of non-controlling partners in
the Partnership's discontinued operations
- (2,342 ) - 2,851
Interest of non-controlling partners in
the Partnership's gain on sale of discontinued operations
- 63,445 - 63,445
Total Interest of non-controlling partners
in the Partnership's net income (loss)
(683 ) 48,872 (10,061 ) 33,444
Net income (loss) attributable to Crosstex Energy, Inc. $
(1,980 ) $ 15,466 $ (9,563 ) $ 3,538 Net income
(loss) per common share: Basic and diluted $ (0.04 ) $ 0.33
$ (0.20 ) $ (0.08 ) Weighted average shares outstanding: Basic
46,887 46,488 46,677
46,462 Diluted 46,887 46,550
46,677 46,515 Dividends declared
per common share $ 0.07 - $ 0.07
-
Crosstex Energy, Inc. (MM) (NASDAQ:XTXI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Crosstex Energy, Inc. (MM) (NASDAQ:XTXI)
Historical Stock Chart
From Jul 2023 to Jul 2024
