Second-Quarter 2009 -- Crosstex Energy, L.P. Financial Results

The Partnership realized adjusted cash flow of $57.8 million in the second quarter of 2009, compared with $61.1 million in the second quarter of 2008. Adjusted 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 (loss) in the tables at the end of this news release.

The Partnership reported a net loss of $10.3 million in the second quarter of 2009, compared with net income of $21.7 million in the second quarter of 2008. Second-quarter 2009 and second-quarter 2008 results include noncash income of $3.1 million and $15.4 million, respectively, mainly related to interest rate hedges as part of the Partnership's risk management program.

The Partnership's gross margin for the second quarter of 2009 increased to $92.3 million compared with $91.7 million in the second quarter of 2008. The Partnership maintained its gross margins even though second-quarter 2009 weighted average natural gas liquids prices were less than half the levels attained in second-quarter 2008, and processing volumes at the South Louisiana plants were 50 percent less than those achieved in second-quarter 2008. As a result of the reduction in natural gas liquids prices and processing volumes, second-quarter 2009 processing margins declined by approximately $9.2 million compared with second-quarter 2008. This decline was offset by $7.5 million from greater throughput on the Partnership's gathering and transmission systems, particularly in the Haynesville Shale and the Barnett Shale and a $2.2 million increase in the Treating segment's gross margin. The increase in the Treating segment's gross margin was primarily due to the timing, size and higher monthly fees on plants placed in service versus plants coming out of service and increased fees on existing month-to-month contracts.

"We are pleased with our results in the second quarter, particularly in light of the challenges we've faced in 2009," said Barry E. Davis, Crosstex President and Chief Executive Officer. "We have made considerable progress on our plan to increase liquidity, reduce leverage and improve profitability, which is reflected in our solid results and our improved guidance for 2009. We have taken important steps to delever the company, including improving our operating results and selling our Mississippi, Alabama and South Texas assets. We will continue to explore strategic asset sales at the right price that we believe are in the best interests of the company and our stakeholders.

"We also have enhanced our franchise assets in the Barnett and Haynesville shale plays with high-return projects, including the July start-up of a 100 MMcf/d pipeline expansion in Louisiana. By strengthening our balance sheet, closely managing costs and focusing on our most strategic assets, we have significantly improved the outlook for our business in 2010 and beyond," added Davis.

As a result of the Partnership's continued focus on expense reduction, during the second quarter of 2009 operating expenses declined $1.1 million, or three percent, compared with the second quarter of 2008. In addition general and administrative expenses decreased $3.2 million, or 18 percent compared with the second quarter of 2008, even with the addition of $0.8 million of expense associated with an additional reserve related to the SemStream bankruptcy. Depreciation and amortization expense increased $4.6 million in the second quarter of 2009 compared with the second quarter of 2008 due to the Partnership's investment in its North Texas and Louisiana assets. Interest expense rose to $26.1 million in the second quarter of 2009 from $2.0 million in the second quarter of 2008 primarily due to an increase in interest rates pursuant to the February 2009 amendments to the Partnership's debt agreements and the change in mark-to-market adjustments mentioned earlier.

The net loss per limited partner common unit in the second quarter of 2009 was $0.19 compared with net income per limited partner common unit of $0.23 in the second quarter of 2008.

Second-Quarter 2009 -- Crosstex Energy, Inc. Financial Results

The Corporation reported a net loss of $3.1 million in the second quarter of 2009 compared with net income of $17.5 million in the comparable 2008 period. The Corporation's loss from continuing operations before income taxes (which includes interest of non-controlling partners in the net income of the Partnership and gain on issuance of Partnership units) was $14.5 million in the second quarter of 2009, compared with income of $11.5 million in the second quarter of 2008.

In accordance with U.S. accounting standards, the Partnership and Corporation classified certain assets, liabilities and results of its operations as discontinued operations for all accounting periods presented. Included in this release are tables of selected financial data where amounts have been reclassified as discontinued operations for each period presented.

Crosstex Provides Updated 2009 Guidance

The Partnership is providing updated 2009 guidance to reflect increased activity in Louisiana, continued positive results from the Treating segment and an improved natural gas processing environment since the original guidance was issued in March 2009. The updated guidance also reflects the impact of the sale of the Partnership's Mississippi, Alabama and South Texas assets, which closed yesterday. The guidance divides 2009 into estimated results for the first seven months of the year (six months of actual results and one month of projected results) prior to the closing of the asset sale, and the forecasted results for the five months after the sale, which provide an indication of the anticipated run-rate.

The following are the updated ranges of estimated 2009 guidance for the Partnership:

                                                                                                                                                                   Crosstex Energy, L.P.                                                                                                                                            Forecast for 2009 Net Income                                                                                                                                     Reconciliation to Distributable Cash Flow*                                                                                                                       (In millions except prices and ratios)                                                                                                                                                                                                                                                                                                                                                          Aug - Dec (2)                 Total Year 2009                                                                                                   Jan - Jul (1)    Low            High           Low            High                                                                                                                                                                                                                   Net income                                   $  (32    )      $  (38    )    $  (30    )    $  (70    )    $  (62    )                                           Depreciation and amortization                   81               61             61             142            142                                                Stock-based compensation                        5                3              3              8              8                                                  Interest                                        71               47             48             118            119                                                Taxes and other                                 1                1              1              2              2                                                  Adjusted cash flow *                         $  126           $  74          $  83          $  200         $  209                                                Interest                                     $  (71    )      $  (47    )    $  (48    )    $  (118   )    $  (119   )                                           Taxes and other                              $  (2     )      $  (1     )    $  (1     )    $  (3     )    $  (3     )                                           Maintenance capital expenditures             $  (7     )      $  (8     )    $  (8     )    $  (15    )    $  (15    )                                           Distributable cash flow *                    $  46            $  18          $  26          $  64          $  72                                                                                                                                                                                                                  Growth Capital                               $  60            $  40          $  40          $  100         $  100                                                                                                                                                                                                                 Key Assumptions for Forecast                                                                                                                                                                                                                                                                                                      Weighted Average Liquids Price ($/gallon)    $  0.70          $  0.74        $  0.84        $  0.71        $  0.76                                               Crude ($/Bbl)                                $  54.00         $  65.00       $  73.00       $  59.00       $  62.00                                              Natural Gas ($/MMBtu)                        $  4.10          $  4.60        $  4.60        $  4.30        $  4.30                                               Natural Gas Liquids to Gas Ratio                196    %         184    %       210    %       188    %       202    %                                                                                                                                                                                                            (1) January through June Actual + July forecast including discontinued operations.                                                                               (2) August through December forecast excluding Mississippi, Alabama and South Texas assets sold.                                                                                                                                                                                                                                  * Adjusted cash flow and Distributable cash flow are non-GAAP financial measures and are explained in greater detail under "Non-GAAP Financial Information."                                                                                                                                                                      Processing Sensitivities:                                                                                                                                                                                                                                    Aug - Dec Impact                                                     Percent of Liquids Contracts - $0.10 change in Weighted Average Liquids Price               $ 2.5                                                                Processing Margin Contracts - 5% change in Natural Gas Liquids to Gas Ratio                 $ 1.2                                                                                                                                                                                                                                  -------------------------------------------------------------------------------  

Crosstex to Hold Earnings Conference Call Today

The Partnership and the Corporation will hold their quarterly conference call to discuss second quarter 2009 results today, August 7, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The dial-in number for the call is 1-888-679-8037. Callers outside the United States should dial 1-617-213-4849. The passcode for all callers is 54146916. 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=PHXYKGDFH. Preregistrants will be issued a pin number to use when dialing in to the live call, which will provide quick access to the conference by bypassing the operator upon connection. Interested parties also can access a live Web cast of the call on the Investors page of Crosstex's Web site at www.crosstexenergy.com.

After the conference call, a replay can be accessed until November 4, 2009, 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 59024267. 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 approximately 3,300 miles of pipeline, 10 processing plants, three fractionators, and approximately 180 natural gas amine-treating plants and dew-point control plants. The Partnership currently provides services for 3.2 billion cubic feet per day of natural gas, or approximately six percent of marketed U.S. daily production.

Crosstex Energy, Inc. owns the two percent general partner interest, a 33 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 Distributable Cash Flow and Adjusted Cash Flow. Distributable Cash Flow includes earnings before certain noncash charges, less maintenance capital. Adjusted Cash Flow includes net income before interest, income taxes, depreciation and amortization, stock-based compensation, noncash mark-to-market items and other miscellaneous noncash items. 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.