Bank of America Merrill Lynch Leveraged Finance Conference December 1, 2011 Barry E. Davis President and CEO 1
Forward Looking Statements This presentation contains forward looking statements within the meaning of the federal securities laws. Forward looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results of Crosstex Energy, L.P. and its affiliates (collectively known as “Crosstex”) may differ materially from those expressed in the forward-looking statements contained throughout this presentation and in documents filed with the SEC. Many of the factors that will determine these results are beyond Crosstex’s ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; capital markets conditions; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; business and regulatory or legal decisions; the pace of deregulation of retail natural gas and electricity; the timing and success of business development efforts; and other uncertainties. You are cautioned not to put undue reliance on any forward looking statement. Crosstex has no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. 2
Crosstex Energy Focused Midstream Company Diversity of Services Over 2,800 miles of natural gas gathering Midstream energy services company focused and transmission pipeline on full value chain 9 natural gas processing plants Assets strategically located in key producing areas and market regions 3 fractionators Strategic focus on: Over 470 miles of NGL pipeline Maximizing earnings and growth of 2.4 MM barrels of NGL cavern storage existing business Growing business to enhance scale and diversification Natural Gas Consumers Transmission Lines Gathering, Dehydration, NGL Transportation Compression & Treating Petrochemical plants, Refineries & Other NGL Markets Wellhead Processing & Fractionation 3
Strategically Positioned Assets Permian North Texas • 50 MMcf/d new build gas processing plant • ~840 miles of pipeline • Mesquite rail terminal to transport stranded • 3 processing plants • 2 treating plants NGLs from this region PNGL • ~440 miles of NGL pipeline • 4 processing plants • 3 fractionation facilities Eagle Ford • Strategic partnership LIG • ~2,100 miles of pipeline with Howard and Quanta • 2 processing plants to pursue opportunities • 2 treating plants in Eagle Ford Cajun Sibon • ~130-mile NGL pipeline Crude • From Mt. Belvieu to • Crude rail unloading facilities expanded fractionation on CN and UP railroads assets in LA 4
Crosstex Today Segment Cash Flow 2011 YTD* Financial Highlights 2011 YTD* • YTD adjusted EBITDA* of $159.4M and YTD $ in MM DCF* of $89.8M • $35.9 YTD distributions of $0.91/unit with 18% coverage of 1.43x and YTD dividends of NTX $94.8 $0.29/share LIG 47% • Third Quarter Debt-to-EBITDA of 3.96 to 1 $69.4 • PNGL No near term debt maturities and over 35% $300M available on revolver • 2011E and 2012E growth capital of $133M and $226M, respectively North Texas • ~85% of dedicated acres are in Core • Remaining locations to be drilled should double existing well count 2011 LIG EBITDA • Solid contracting for firm transport in Haynesville and market-based Key Guidance services Performance of $185MM • Exposure to Tuscaloosa Marine and Austin Chalk with growing producer Drivers - $215MM* activity targeting liquids PNGL • Leveraging available frac capacity, rail/ barge facilities, storage/ market connections 5 * Through 3Q 2011. Segment Cash Flow is a non-GAAP financial measure. See Reconciliation: Segment Cash Flow
Cajun Sibon NGL Expansion Strategically Located • Project includes building ~130-mile NGL pipeline from Mt. Belvieu and expanding fractionation assets in LA • Estimated in service date in first half of 2013 • Estimated capital costs of ~$180MM to $220MM 6
Permian Basin Expansion Strategically Located • Developing 20 mmcf/d refrigeration plant as interim solution and 50 mmcf/d cryogenic facility as permanent processing solution • Jointly invest $85MM with Apache; interim facility operational by Q1 2012 • Mesquite rail terminal (100% owned) acquired to transport stranded Permian Basin NGLs • Apache plans to drill ~700 wells in 2011 in the Permian, and in 2012 have plans to drill a similar number or more according to their third quarter 2011 earnings report 7
Eagle Ford Expansion Strategically Located • Strategic partnership to pursue opportunities in Eagle Ford Shale; Crosstex and Quanta Services each invested $35MM (35% ownership) in Howard Energy Partners • Completed a 30-mile, 12-inch diameter pipeline expansion since acquisition • Reviewing additional growth opportunities 8
Crude Terminal Opportunity • Unconventional resource plays focused on crude and liquids are driving substantial North America 1,200 increase in US crude production Crude Rig Count – Crude rig counts have increased from 1,000 less than 400 to over 1,000 in the last 2 years 800 • Regional infrastructure bottlenecks have created differentials to Louisiana Gulf 600 Coast Crude (LLS) markets • Eunice and Riverside have rail, truck, 400 pipeline, and barge facilities that are adding crude capabilities 200 – Facilities to be modified to receive up to 5,000 Bbls/d in Phase 1, with capital 0 expenditures less than $2M, and with contributions beginning in Q1 2012 – Ability to expand Riverside by an additional 8,000 barrels per day by second half of 2012 Source: Baker Hughes 9
Current Financial Focus • Maintaining strong liquidity position Crosstex Energy, L.P. Quarterly Distribution Per Unit for flexibility $0.35 – No near term debt maturities $0.31 $0.31 $0.29 – Over $300 million available on $0.30 $0.26 revolver $0.25 $0.25 • Maintaining conservative capital $0.20 structure and leverage ratios – $0.15 Match distributions with more reliable cash flows $0.10 – Reinvest excess coverage from less $0.05 sustainable cash flows – Third Quarter 2011 Debt-to-EBITDA $0.00 of 3.96 to 1 3Q 4Q 1Q 2Q 3Q 2010 2010 2011 2011 2011 • Improving cash flows by: – Investing in high-return projects 2011 YTD* Coverage of 1.43x – Improving efficiencies of existing assets We remain committed to distribution growth while maintaining disciplined balance sheet management 10 * Through 3Q 2011
Solid Performance in All Core Areas Years Ended December 31, Segment Cash Flow 2007 2008 2009 2010 2011* ($ in Millions) (Unaudited) NTX $62 $103 $113 $114 $126 LIG 72 82 80 82 85 PNGL 42 12 21 38 41 Total Asset Segments 176 197 214 235 252 • CAGR (2007 – 2011) for total segment cash flows of 9.4% • PNGL’s focus on NGL opportunities has provided fee -based diversified cash flows and improved business profitability • NTX growth projects (Benbrook and Fossil Creek) drive solid growth in 2011 Note: Segment Cash Flow is a non-GAAP financial measure. See Appendix for a reconciliation to Segment Profit. * 2011 represents mid-point of guidance 11
Guidance for 2011 Total Year 2011 Low High Net income $ (27) $ 4 Depreciation and amortization 119 119 Stock-based compensation 8 8 LOC Fees & Interest 83 82 Taxes and other 2 2 Adjusted EBITDA* $ 185 $ 215 Taxes and other (2) (2) LOC Fees & Interest (83) (82) Maintenance capital expenditures (14) (11) $ 86 $ 120 Distributable cash flow* Growth Capital $ 50 $ 150 Key Assumptions for Forecast Weighted Average Liquids Price $ 0.83 $ 1.18 Crude ($/bbl) $ 60.21 $ 85.69 Natural Gas ($/MMbtu) $ 4.50 $ 3.50 Natural Gas Liquids to Gas Ratio 208.5% 381.6% XTEX Distribution per Unit $ 1.04 $ 1.20 $ 0.32 $ 0.40 XTXI Dividends per Share * Adjusted EBITDA and Distributable cash flow are non-GAAP measures. There is a reconciliation of these non-GAAP measures to net income (loss) in the appendix. 12
Final Thoughts… High quality core assets across the entire midstream 1 value chain Key growth projects poised to take advantage of 2 macro trends Strong balance sheet with great access to capital 3 13
Appendix 14
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