| Revolving Credit Facility
XTEX continues to have adequate liquidity to run business and has approximately $246 million available under revolver.
XTEX's revolving credit facility expires in June 2011, and has a total capacity of $1.185 billion. As of December 31, 2008, the partnership has $335 million available.
XTEX announced the decision to renegotiate its revolving credit facility terms to give the partnership flexibility and liquidity during an expected difficult 2009. The following terms are designed to create additional covenant relief in 2009 and 2010:
• Covenants for leverage ratios and cash interest coverage ratios for 2009 and 2010 have been relaxed; however, the cash interest rate will be increased on the credit agreement by 100 basis points and there will be a floor for the London Interbank Offered Rate (LIBOR) of 2.75% per annum.
• There will be a cash interest rate increase on the note agreement of 125 basis points and additional interest of 125 basis points in the form of an increase to the principal amount of notes (the "PIK notes"). If certain leverage metrics are met, the additional PIK note interest will cease to accrue. The PIK notes will be payable six months after the refinancing of the Credit Agreement, which is currently scheduled to mature in June 2011. Depending on future leverage metrics, additional interest of as much as 125 basis points could be assessed after the refinancing of the Credit Agreement.
• There will be potential fees assessed depending on the partnership’s ability to meet certain debt repayment levels for the three quarters ending September 2009, December 2009, and March 2010. XTEX must pay a leverage fee if it does not prepay debt and permanently reduce the banks' commitments by the cumulative amounts of $100 million on September 30, 2009, $200 million on December 31, 2009, and $300 million on March 31, 2010.
• If the partnership has debt offerings, equity issuance proceeds, asset sales, and certain "excess cash flow," they will be used as credit and note repayments.
Distributable Cash Flow (DCF)
The Partnership’s distributable cash flow in 1Q09 was $22.3 million compared with $43.7 million in 1Q08.
One analyst (Oppenheimer) lowered its 2009 DCF estimate to $50 million from $63 million and its 2010 estimate to $60 million from $105 million.
Financial Update
In 1Q09, adjusted cash flow was $51.5 million, a decrease of $16 million from 1Q08, but a strong improvement of $27.1 million compared to 4Q08.
Crosstex provided adjusted cash flow guidance of $184-$211 million, which was driven by lower commodity prices ($39-50/Bbl crude, $4-4.50/MMcf gas) and reduced drilling activity (particularly in North Texas).
As of 3/31/09, the partnership had total debt outstanding of $1.3 billion and a pro forma debt-to-EBITDA ratio of 6.7x.
Cash Distribution
The Company suspended its distribution until certain financial measurements are met. It is unlikely the partnership will pay a distribution for the foreseeable future.
Capital Expenditure
The Company has tightened 2009 capital expenditures budget and intends to fund only most important projects. This includes projects such as Red River expansion in Louisiana and Benbrook Project in North Texas. In 1Q09, growth capital expenditures were approximately $37.5 million and maintenance capital expenditures were approximately $2.1 million.
The Company has adequate liquidity to meet its current growth capital forecast of approximately $110 million remaining for 2009 and 2010 together.
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