1209821--3/1/2010--CROSSTEX_ENERGY

related topics

{gas, price, oil}

{operation, natural, condition}

{debt, indebtedness, cash}

{loss, insurance, financial}

{stock, price, operating}

{investment, property, distribution}

{acquisition, growth, future}

{customer, product, revenue}

{regulation, change, law}

We are largely prohibited from engaging in activities that compete with the Partnership. In our corporate charter, we have renounced business opportunities that may be pursued by the Partnership or by certain stockholders. Although we control the Partnership, the general partner owes fiduciary duties to the Partnership and the unitholders. If the general partner is not fully reimbursed or indemnified for obligations and liabilities it incurs in managing the business and affairs of the Partnership, its value, and therefore the value of our common stock, could decline. The Partnership s profitability is dependent upon prices and market demand for natural gas and NGLs, which are beyond its control and have been volatile. The Partnership s substantial indebtedness could limit its flexibility and adversely affect its financial health. The Partnership may not be able to obtain additional funding for future capital needs or to refinance its debt, either on acceptable terms or at all. Due to current economic conditions, the Partnership s ability to obtain funding under its new credit facility could be impaired. Due to the Partnership s lack of asset diversification, adverse developments in its gathering, transmission, processing and producer services businesses would materially impact its financial condition. Many of the Partnership s customers drilling activity levels and spending for transportation on its pipeline system or gathering and processing at its facilities have been, and may continue to be, impacted by the current deterioration in the credit markets. The Partnership is exposed to the credit risk of its customers and counterparties, and a general increase in the nonpayment and nonperformance by its customers could have an adverse effect on its financial condition and results of operations. The Partnership s use of derivative financial instruments does not eliminate its exposure to fluctuations in commodity prices and interest rates and has in the past and could in the future result in financial losses or reduced income. The Partnership may not be successful in balancing its purchases and sales. The Partnership must continually compete for natural gas supplies, and any decrease in its supplies of natural gas could adversely affect its financial condition and results of operations. The Partnership is vulnerable to operational, regulatory and other risks due to its concentration of assets in south Louisiana and the Gulf of Mexico, including the effects of adverse weather conditions such as hurricanes. Increased regulation of hydraulic fracturing could result in reductions or delays in natural gas production by the Partnership s customers, which could adversely impact its revenues. A substantial portion of the Partnership s assets are connected to natural gas reserves that will decline over time, and the cash flows associated with those assets will decline accordingly. Growing the Partnership s business by constructing new pipelines and processing facilities subjects it to construction risks, risks that natural gas supplies will not be available upon completion of the facilities and risks of construction delay and additional costs due to obtaining rights-of-way and complying with federal, state and local laws. Acquisitions typically increase the Partnership s debt and subjects it to other substantial risks, which could adversely affect its results of operations. The Partnership expects to encounter significant competition in any new geographic areas into which it seeks to expand and its ability to enter such markets may be limited. The Partnership may not be able to retain existing customers or acquire new customers, which would reduce its revenues and limit its future profitability. The Partnership depends on certain key customers, and the loss of any of its key customers could adversely affect its financial results. The Partnership s business involves many hazards and operational risks, some of which may not be fully covered by insurance. The threat of terrorist attacks has resulted in increased costs, and future war or risk of war may adversely impact the Partnership s results of operations and its ability to raise capital. Federal, state or local regulatory measures could adversely affect the Partnership s business.

Full 10-K form ▸

1209821--3/1/2010--CROSSTEX_ENERGY_INC