NGL Business Update &
2013 Guidance Presentation
December 11, 2012
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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.
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Non-GAAP Financial Information
This presentation contains non-generally accepted accounting principle financial measures that Crosstex refers to as adjusted EBITDA, distributable cash flow and gross operating margin. Adjusted EBITDA is defined as net income (loss) plus interest expense, provision for income taxes and depreciation and amortization expense, impairments, stock-based compensation, loss on extinguishment of debt, (gain) loss on noncash derivatives, transaction costs associated with successful transactions, minority interest and certain severance and exit expenses, and accrued expense of a legal judgment under appeal, less (gain) loss on sale of property. Distributable cash flow is defined as earnings before certain noncash charges and the (gain) loss on the sale of assets less maintenance capital expenditures. Gross operating margin is defined as revenue minus the cost of purchased gas and natural gas liquids. 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. Crosstex 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 Crosstex’s cash flow after it has satisfied the capital and related requirements of its operations. Adjusted EBITDA, distributable cash flow and gross operating margin, 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 Crosstex’s performance. Furthermore, they should not be seen as measures of liquidity or a substitute for metrics prepared in accordance with GAAP.
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Our strategy over the past three years has been focused on:
• Maximizing earnings and growth of the existing business
• Growing business to enhance scale and diversification and to create value
To enhance our scale and diversification, we have been focused on:
• Increasing NGL business
• Growing crude and condensate business
• Developing GP&T business in rich gas areas
Long-Term Strategic
Business Plan
Business scale and diversification will lead to : (1) less reliance on any individual geographic area or product line; (2) greater opportunities for growth
from broader asset base; and (3) more sustainable fee-based cash flows.
• By Q4 2013, over 40% of gross
operating margin is expected to come
from crude/condensate and NGL
businesses, all of which is fee-based
• Projected 2013 gross operating margin
from fee-based businesses of ~ 86%, up
from 68% in 2008
• Expect run-rate adjusted EBITDA of
~$260-$290 million by the end of 2013,
driven by the fee-based projects
• Cajun-Sibon II expected annual run-rate
adjusted EBITDA contribution of $75-
$85 MM beginning in second half of
2014
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Focus on Scale & Diversity
to Drive Growth
• Growth projects focused on fee-based
crude and natural gas liquids (NGL)
businesses
• $1 billion+ in planned growth capital
expenditures from 2012-2014
₋ Ohio River Valley (in operation)
₋ Permian joint venture with Apache (in
operation)
₋ Riverside Crude Phase 2 (under
construction)
₋ Cajun-Sibon I (under construction)
₋ Cajun-Sibon II (long-lead equipment
ordered)
ASSET TRANSFORMATION RESULT
NGL Business
Overview
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Crosstex is transforming a business historically focused on processing of off-shore natural gas to an NGL focused business with additional opportunities for organic growth
• Re-started Eunice fractionator at 15 Mbpd capacity in April 2011
• Truck/rail NGL volumes from Marcellus and Eagle Ford currently being handled at Eunice and Riverside
• Permian NGL volumes currently transported via rail from Mesquite terminal to Eunice fractionator at 6.8 Mbpd in Q3 2012
• Storage of purity products at Napoleonville
• Connection of Mont Belvieu to Louisiana market via pipeline through Cajun-Sibon I
• Marketing of purity products in south Louisiana, including expanding end-user relationships
Creating a Strategic NGL Position
in Louisiana
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130-mile NGL pipeline
with 70 Mbpd capacity
Expand Eunice fractionator
from 15 Mbpd to 55 Mbpd
5-year ethane sales agreement
with Williams Companies
Cajun-Sibon I Expands Strategic
NGL Position in Louisiana
• ~ 130-mile, 12-inch NGL pipeline from Mt. Belvieu to Eunice
• Expansion of Eunice NGL fractionator from 15 Mbpd to 55 Mbpd, which will increase NGL
fractionation capacity in LA to ~97 Mbpd
• Pipeline NGL capacity of 70 Mbpd
• Project supported by long-term ethane sales agreement with Williams Companies
• Construction began in Q3 2012 with estimated in-service date mid-2013
• Estimated annual run-rate adjusted EBITDA contribution of $40-$45 million
Cajun-Sibon II Enhances Strategic
NGL Position in Louisiana
Cajun-Sibon II enhances our Louisiana NGL business with additions to
the Cajun-Sibon I NGL pipeline extension and fractionator expansion
• Add pumps with13,400 HP to expand NGL supply capacity from 70 Mbpd to 120 Mbpd
• Construct new 100 Mbpd fractionator at Plaquemine and convert Riverside fractionator to
Butanes-plus facility
• Extend LIG Bayou Jack lateral by 32 miles to Plaquemine gas plant
• Construct 57 miles of NGL pipelines
• 10-year sales agreement with Dow Hydrocarbons and Resources LLC including:
₋ Delivery of up to 40 Mbpd of ethane and 25 Mbpd of propane produced at Crosstex’s
new Plaquemine fractionator
₋ Deliver of 70,000 MMBtu/d of gas to Dow’s Plaquemine facility
• Expected to be in service during the second half of 2014 with an annual run-rate adjusted
EBITDA contribution of $75-$85 million
• Cajun-Sibon I and II combined run-rate adjusted EBITDA contribution of $115-$130 million
• Total capital investment for Cajun-Sibon I and II estimated at $680-$700 million
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Cajun-Sibon II Project Overview
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57 miles of new NGL pipeline
32-mile 16” extension of
LIG Bayou Jack lateral
Construction of 100
Mbpd fractionator
Fractionator converted
to Butanes-plus facility
New pump horsepower increases
pipeline capacity to 120 Mbpd
Pelican
Cajun-Sibon II
Cajun-Sibon I
Cajun-Sibon
Expansion Overview
Southern Louisiana & Texas
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Expansions leverage existing assets and
create significant platform to grow
crude/condensate and NGL businesses
Expand
Market
Optionality &
Connectivity
Upgrade
products
Create NGL
export
solutions
Expand
fractionation
& product
storage
capacity
These
complementary
opportunities
could represent
over $1 billion
in additional
capital
investments.
Cajun-Sibon Phase II
Cajun-Sibon Phase I
Cajun-Sibon Projects Create a
Platform for Significant Growth
Expand rail
imports
2013 Guidance
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2013 Guidance
* Adjusted EBITDA and Distributable cash flow are non-GAAP financial measures, and are explained in greater detail in “Non-GAAP Financial
Information” on page 3.
** EBITDA growth percentages represent 2013 estimates versus 2012 low guidance, adjusted for the acquisition of the Ohio River Valley assets (ORV).
*** Distribution and dividend growth percentages represent annualized fourth-quarter 2013 estimates versus our annualized current quarterly distribution
and dividend for 2012.
(Amounts in millions except for prices, percentages, ratios, per unit and per share amounts)
Low Midpoint High
Crosstex Energy, L.P.
Adjusted EBITDA* $220 $235 $250
Distributable Cash Flow (DCF) * $130 $144 $160
Distribution Per Unit $1.36 $1.41 $1.46
Distribution Coverage 1.0x 1.1x 1.2x
EBITDA Growth** 4% 11% 18%
Distribution Growth*** 6% 15% 21%
Growth Capital $520 $520 $520
Maintenance Capital $13 $13 $13
Crosstex Energy, Inc.
Cash available for dividends $26 $28 $31
Dividend Per Share $0.53 $0.57 $0.63
Dividend Growth*** 17% 42% 75%
Key Assumptions for Forecast
Weighted Average Liquids Price ($/gal) 0.75 0.86 0.93
Brent Crude Price ($/Bbl) 95 108 117
Natural Gas Price ($/MMBtu) 4.50 4.10 3.50
Natural Gas Liquids to Gas Ratio 189% 238% 302%
$128
$520$465
$121$110
$144$214 $213 $235
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Growth Trends: EBITDA, DCF &
Growth Capital Expenditures
Adjusted EBITDA Distributable Cash Flow Growth Capital
Expenditures
2011 2012* 2013** 2011 2012 2013
* 2012 estimates represent the low end of 2012 guidance, adjusted for the acquisition of the Ohio River Valley assets (ORV).
** 2013 estimates represent the midpoint of 2013 guidance.
*** Q4 2013 annualized guidance ranges shown.
Capital expenditures in 2012 and 2013 drive adjusted EBITDA and DCF growth
• Q4 2013 annualized adjusted EBITDA expected to be $260-$290 million
• Cajun-Sibon II expected annual run-rate adjusted EBITDA contribution of $75-$85 million beginning in second half of 2014
Q4 2013***
2011 2012* 2013** Q4 2013***
$260-$290 $175-$205
($ in millions) ($ in millions) ($ in millions)
$0.75
$0.85
$0.95
$1.05
$1.15
$1.25
$1.35
$1.45
$1.55
$1.65
2010 2011 2012 E * 2013 E
Midpoint of
Guidance
Distribution Growth Projections4th Quarter Annualized Distributions ($/unit)
Distributions Per Unit
• Target long-term coverage ratio of 1.0x to 1.2x, dependent upon the following:
– Capital project execution
– Growth expectations
– Commodity prices
– Capital market conditions
• Maintain conservative capital structure and leverage ratios
– Match distributions and dividends with more reliable cash flows
– Reinvest excess coverage from less sustainable cash flows
– Funded approximately $500 million of 2012 growth capital through recent debt and equity issuances
• Defined large scale growth projects in 2013 and 2014 will drive distribution and dividend growth in 2014 and beyond
Distribution & Dividend Growth
Projections
15 * 2012 estimates represent the low end of 2012 guidance, adjusted for the acquisition of the Ohio River Valley assets (ORV).
$0.15
$0.25
$0.35
$0.45
$0.55
$0.65
$0.75
2010 2011 2012 E * 2013 E
Midpoint of
Guidance
Dividend Growth Projections4th Quarter Annualized Dividends ($/share)
Dividends Per Share
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2013 Guidance:
Contract Mix
* Gross Operating Margin is a non-GAAP financial measure, and is explained in greater detail in “Non-GAAP Financial Information” on page 3.
54%64% 62%
19%17% 24%
10%8%
9%17% 11% 5%
0%
20%
40%
60%
80%
100%
Midpoint of Guidance2012
Year-to-Date9/30/12
Midpoint of Guidance2013
Processing Margin Percent of Liquids Processing
Fee Based Processing & Fractionation Gathering & Transmission
Gross Operating Margin *
Contract Mix
~ 86%
Fee-based
business
Focus on Scale & Diversity
to Drive Growth
• By Q4 2013, over 40% of Crosstex’s gross operating margin is expected to come from crude/condensate and NGL businesses, all of which is fee-based. This is expected to increase above 50% in 2014.
• Projected 2013 gross operating margin from fee-based businesses of ~ 86%
• Cajun-Sibon I and II expected run-rate adjusted EBITDA contribution of $115 - $130 million
• Expect run-rate adjusted EBITDA of ~$260-$290 million by the end of 2013, largely driven by fee-based projects
• Louisiana assets with Cajun-Sibon additions provide a platform for significant complementary growth opportunities that could represent over $1 billion in additional capital investments
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