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Notices 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., Crosstex Energy, Inc. and their respective
affiliates (collectively known as Crosstex) and Devon Energy Corporations
(Devon) midstream assets (DVNM which, together with Crosstex is referred
to herein as EnLink Midstream) may differ materially from those expressed
in the forward-looking statements contained throughout this presentation and
in documents filed with the Securities and Exchange Commission (SEC). Many
of the factors that will determine these results are beyond Crosstexs,
Devons or EnLink Midstreams ability to control or predict. These statements
are necessarily based upon various assumptions involving judgments with
respect to the future, including, among others, prices and market demand for
natural gas, natural gas liquids (NGLs), condensate and crude oil; drilling
levels; the ability to achieve synergies and revenue growth; failure to
satisfy closing conditions with respect to the announced combination between
Crosstex and DVNM; failure to successfully integrate, or integrate within the
contemplated timeframe, Crosstexs business with DVNM; failure to achieve, or
achieve within the contemplated timeframe, the anticipated synergies of the
combination between Crosstex and DVNM; 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 factors
discussed in Crosstexs Annual Reports on Form 10-K for the year ended
December 31, 2012 and Crosstexs Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2013, June 30, 2013 and September 30, 2013, in
EnLink Midstreams Registration Statement on Form S-4 and their other filings
with the SEC. You are cautioned not to put undue reliance on any
forward-looking statement. None of Crosstex, Devon or EnLink Midstream has any
obligation to publicly update or revise any forward-looking statement,
whether as a result of new information, future events or otherwise. This
presentation also contains non-generally accepted accounting principle
financial measures that Crosstex and EnLink Midstream refer to as adjusted
EBITDA, gross operating margin, distributable cash flow, growth capital
expenditures and maintenance capital expenditures. Adjusted EBITDA is defined
as net income (loss) plus interest expense, provision for income taxes,
depreciation and amortization expense, impairments, stock-based compensation,
(gain) loss on non-cash derivatives, transaction costs associated with
successful transactions, distribution from a limited liability company and
non-controlling interest; less (gain) loss on sale of property and equity in
income (loss) of a limited liability company. Gross operating margin is
defined as revenue less the cost of purchased gas, NGLs and crude oil.
Distributable cash flow is defined as Adjusted EBITDA less maintenance
capital expenditures and certain other 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. Growth capital expenditures are defined as all
construction-related direct labor and material costs, as well as indirect
construction costs including general engineering costs and the costs of funds
used in construction. 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 and EnLink Midstream believe 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 EnLink Midstreams and Crosstexs cash flow after it
has satisfied the capital and related requirements of its operations.
Adjusted EBITDA, gross operating margin, distributable cash flow, growth
capital expenditures and maintenance capital expenditures, 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 Crosstexs
performance. Furthermore, they should not be seen as measures of liquidity or
a substitute for metrics prepared in accordance with GAAP. 2
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