Good day, ladies and gentlemen, and welcome to the Crosstex Energy NGL Business Update and 2013 Guidance Conference Call. My name is Derek, and I'll be your operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to Ms. Jill McMillan, Director of Public and Industry Affairs. Please proceed.

Thank you, Derek, and good morning, everyone. Thank you for joining us today for an update on Crosstex's NGL business and Cajun-Sibon project and to discuss 2013 guidance. On the call today are Barry Davis, President and Chief Executive Officer; and Mike Garberding, Senior Vice President and Chief Financial Officer. Bill Davis, Executive Vice President and Chief Operating Officer, also is on the call and will be available for questions. We issued a news release about our significant NGL project, Phase II of our Cajun-Sibon expansion [indiscernible]. We issued a news release about 2013 guidance early this morning. For those of you who didn't get a copy, they are available on the website at crosstexenergy.com. If you want to listen to a recording of today's call, you have 90 days to access the replay by phone or webcast on our website. During this call, we will be reviewing slides that are available on our website. I will remind you that any statements that might include our expectations or predictions should be considered forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are subject to a number of assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements, and we undertake no obligation to update or revise any forward-looking statement. We encourage you to review the cautionary statements and other disclosures made in our SEC filings, specifically those under the heading Risk Factors. In addition, some of the financial measures that we will be discussing today are not GAAP compliant. Please review the statements on Slide 3 for an explanation of these terms and the proper use of them. Before I turn the call to Barry Davis, I want to remind you about our 2013 Bank Group Meeting on January 22 and Analyst Conference on January 23. Please put these dates on your calendars. Both events will be held in Fort Worth at the Museum of Science and History's Energy Blast gallery. We will be communicating more details in the invitations, which we plan to distribute soon. But if you need more information now, please contact me. Today's discussion will only cover our growing NGL business, our Cajun-Sibon projects and 2013 guidance. We will provide an in-depth discussion of our 2013 financial expectations and company-wide operations at our upcoming meetings in January. I will now turn the call over to Barry.

Thank you, Jill. Good morning, everyone, and thank you for joining us on the call. As Jill previously mentioned, I want to quickly remind you about our 2013 Bank Group Meeting on January 22 and our Analyst Conference on January 23 in Fort Worth. We look forward to sharing more details about our 2013 strategic plan then. This morning, we will discuss our strategic position in the natural gas liquids business, update you on our Cajun-Sibon projects, discuss how these projects position us for additional growth in the NGL business and provide our financial guidance for 2013. Before I specifically address today's main topics, I'd like to remind you of our long-term strategy, which is outlined on Slide 4. During the past 3 years, we have focused on 2 primary objectives, to maximize the earnings and growth of our existing business and to enhance our scale and diversification, thereby creating value. One of the keys to our success has been, and will continue to be, a disciplined financial approach as we execute our plan. As part of enhancing our scale and diversification, we've concentrated on increasing our NGL business, growing our crude business and condensate business and developing our gas processing and transportation business in rich gas areas. We're confident that increasing our scale and diversification will strengthen us as a company, because we believe it will lead to less reliance on any geographic area or product line, offer us greater growth opportunities from a broader asset base and provide us with more sustainable fee-based cash flows. Turning to Slide 5, which provides a summary of our accomplishments to enhance scale and diversification and drive growth. We have been working to transform our asset base through projects that are focused on fee-based crude and NGL businesses. We plan to invest…

Thanks, Barry. If you look at Slide 13, we are providing preliminary low, midpoint and high guidance for 2013 that is based on a range of commodity pricing assumptions and other factors. We are forecasting that our midpoint 2013 adjusted EBITDA will be approximately $235 million, and distributable cash flow will be approximately $144 million. Depending on changes in commodity prices and other factors affecting the business, adjusted EBITDA could range from $220 million on the low side to $250 million on the high side. Key growth drivers of the business are: startup of Riverside Phase II crude terminal in the second quarter 2013, which is expected to provide a run rate adjusted EBITDA of approximately $10 million per year; startup of Cajun-Sibon Phase I NGL expansion in midyear 2013, which is expected to provide run rate adjusted EBITDA of approximately $40 million to $45 million per year; continued expansion of our Ohio River Valley assets; and a full year of operations from our Permian assets. Commodity prices have continued to provide potential headwind to growth in certain areas. Continued low gas prices have impacted drilling in both the Barnett and Louisiana. With the reduced rig count at these areas, we expect to see a decline in both our North Texas and LIG operations for 2013 as compared with 2012. We will go over this in greater detail in our analyst conference in late January. However, we believe these are strong businesses with great long-term value. The commodity prices have also impacted our processing business. For 2013, we expect processing margin contracts to represent only 5% of our gross operating margin as compared with 19% in 2011. Our guidance assumes a weighted average liquid price between $0.75 per gallon and $0.93 per gallon, implying a Brent crude price between $95…

Thank you, Mike. In closing, on Slide 17, I want to reiterate several top-line messages that we would like you to take away from today's discussion. The growth projects that are contracted and that we are constructing are expected to drive what we believe will be significant growth in the second half of 2013 and beyond. By fourth quarter 2013, we expect over 40% of our gross operating margin will be derived from crude, condensate and NGL businesses, all of which will be fee-based. We anticipate that the crude, condensate and NGL businesses will increase to more than 50% of our overall business in 2014. We project that the gross operating margin from all of our fee-based businesses will be over 85% in 2013. We estimate that Cajun-Sibon Phases I and II will make an adjusted EBITDA run rate contribution of $115 million to $130 million. By the end of 2013, we expect a total adjusted EBITDA run rate of $260 million to $290 million, which will be driven by our fee-based projects. And with the Cajun-Sibon enhancements, our Louisiana assets will provide a platform for significant complementary growth that could provide over $1 billion of additional capital investment opportunities. Some time ago, we laid out the plan to expand our services and geographic reach. With the projects we have completed and announced, we will achieve these objectives. Our focus will be on the execution required to deliver these important growth projects and the continued execution of our plans. We look forward to spending more time with you in January at our bank and analyst events. And now we'll turn the call back to our operator, and, Mike, Bill Davis and I will be happy to answer your questions. Thank you.

[Operator Instructions] Our first question is coming from the line of Paul Jacob, Raymond James.

So I guess, starting with the Cajun-Sibon Phase II project, do you expect that the fully annualized EBITDA contribution of $75 million to $85 million is going to scale up over a period of time? Or do you think that once that project is operational, you're going to be close to full utilization?

This is Bill Davis, Paul. We expect it to start basically at full capacity and continue at that level going forward. That would max it out. And with that project alone, without additional capital investment, you wouldn't see the project cash flows increase.

Okay. And then I guess on the guidance, on Slide 13, just trying to get an idea of the assumptions that you used to walk down from EBITDA to DCF. I guess, firstly, the 1x coverage at the low end seems a little bit conservative. Is the paid-in-kind agreement baked into those numbers? And then, if you could, how much of your capital expansion spending is baked into those estimates?

So your first -- thanks, Paul. First question on the paid-in-kind, when we think about distributions here, we're thinking cash distributions, so we're not showing it, to your point, on a fully diluted basis as those don't convert until the beginning of 2014. And secondly, we do assume the funding of the capital, which is the $465 million during the year, like we mentioned under long-term financing.

Okay. And then, as a follow-on, do you see any one-time items impacting the reconciliation from EBITDA to DCF? Or is it just, as usual, interest expense, maintenance and cash tax?

It should be consistent with what you saw in 2012.

Okay. And then, how much of the guidance depends on -- and you've mentioned this in prior calls recently, some of the opportunities related to offshore Gulf of Mexico that you see and maybe some of the onshore emerging shale plays around the Louisiana assets?

Well, this is Bill again. We do have contracted a new package of gas in the Pelican from the Gulf, and it's a relatively small piece of the guidance right now from the Gulf of Mexico. We are watching closely some developments in the Gulf that we are optimistic could be beneficial to us, but they're not currently in the guidance. And with regard to developments around some of those shale plays in Louisiana, I think we are staying in close touch with the producers. They are still working to try to crack the code there, it would seem.

Your next question is coming from the line of Gabe Moreen, Bank of America Merrill Lynch.

Don't want to preempt the Analyst Day in January, but just had a couple ones on guidance, if I could. And congrats on getting Cajun-Sibon II signed and agreed upon. But just was wondering, besides commodity prices, are there other key variables, I guess, that are moving around between the low point and the high point of your guidance, whether it's volumes on some of your systems? So in other words, are there also volumetric assumptions there? Or is it just really holding volumes constant and commodity prices being the swing factor?

The main difference is commodity prices. But as you know, in every business, there are things that could change during the year. But let's use January to really go through each of the businesses at a deeper level.

Okay. Then I'll try to follow up with this one to Mike, then. Just in terms of obvious exposure to absolute commodity prices, but whether at Riverside or the Ohio business, is there a lot of sensitivity just, I guess, you can even speak to it on a 10,000-foot-view level, just the sensitivity to crude oil spreads in terms of baked into your guidance whether at any of your other assets on the crude side?

When we think about Ohio, just like when we announced that acquisition, the Ohio assets are fee-based as far as just really on the logistics standpoint moving the barrel. So we don't have that commodity exposure in Ohio.

Next question is coming from the line of Sharon Lui, Wells Fargo.

A question. You indicated that the guidance does account for declines in North Texas and the Lake. Just wondering what's the magnitude in terms of the midpoint of your guidance that you're assuming?

Well, we -- I would assume, we'll go into a great detail with that in the January call. What we're seeing in Louisiana next year, I think, is about a $3 million drop in our FTE contract levels. And in North Texas, the dry gas areas are declining at the normal long-term rate for those wells given the lack of drilling, offset by some increases that we're seeing in the rich gas areas.

Okay. And I guess for North Texas, does the guidance include the recontracting of that contract, the short -- the one that rolled over to short-term?

It does include that assumption, but that's not a huge piece of the guidance.

Okay. And then in terms of the potential growth opportunities tied to Cajun-Sibon, you indicated that's approximately $1 billion. Can you maybe talk about what type of projects you're looking at and whether it's primarily fee-based?

Yes, Sharon. First of all, what's really driving that is an expanded asset base there and simply the fact that we're touching more product, have the opportunity to provide more services. I would say categorically or conceptually, it's all about optimizing and kind of creating additional margins along the value chain. We're not going to comment. I think that will be a big focus for us in January to give you a better feel for that. But if you can think of just expanding services, the connectivity of our facilities, upgrading products, importing more products, as we said, kind of categorically, those are the areas that we'll be focused on. But the important thing to note is that it all is synergy or bolt-on type expansion, high-return projects that we are focused on and we have the great luxury of being focused on for the next couple of years.

Okay. And is any of these opportunities baked into your CapEx guidance already for 2013?

No.

[Operator Instructions] The next question is coming from the line of Helen Ryoo, Barclays.

A few more on the Cajun-Sibon project. So the combined EBITDA run rate of $115 million to $130 million, that's between the Phase I and Phase II. How much of that EBITDA has volumetric exposure versus take-or-pay?

The take-or-pay nature of the contracts generally ranges between 85% to 90% of the minimum of the stated value. Does that make sense?

So would you say take-or-pay portion would be 85% to 90% of the $115 million to $130 million EBITDA? Is that sort of...

Yes, that's a good way to think about it.

Okay, great. That's very helpful. And then in terms of the capacity, the total "120,000 barrels per day" capacity that's been contracted out, you did indicate you had 40,000 with ethane contract with Dow, 25,000 with -- propane contract with Dow, and then you did have some Williams contract on the Phase I. Could you remind us what was the Williams piece and then other remaining contracts with other customers?

Well, Williams contract is for 20,000 to 25,000 barrels a day for 5 years on the ethane supply. And then with regard to other products, we have a variety of markets that we're very comfortable with for the butanes and the natural gas lane.

Okay so, I guess, just adding the 40, 25 and 25, that's 90. And the remainder, I guess, 30 has been contracted out with other parties?

Well, the key to these projects is contracting the ethane. And then, of course, in the case of Cajun-Sibon II, we've got a substantial propane supply contract. The other products, we feel very comfortable with the marketplace in Louisiana and where they're going to be disposed of, and we're working with a variety of markets to enter into long-term contracts there. We have agreements in principle on those, and we're working to finalize them.

Okay, great. And just lastly, in your guidance, just using the midpoint of your EBITDA to DCF, it seems like the implied interest expense is $77 million for next year. And that's a bit lower than your third quarter annualized run rate. Could you talk about your interest costs or debt balance assumption behind the guidance?

Yes. We'll give more -- thanks, Helen, we'll give more detail on that. But when you think about the interest expense, it's really the 2 notes we have. Then again, our revolver is utilized for a lot of the debt capital this year at a lower rate. Plus you take into consideration your capitalized interest you'll have on the main projects.

Your next question is coming from the line of Lin Shen [ph] from Height [ph].

Your 2013 guidance for the Crosstex Inc. dividend, what is your assumption for the tax rate in the C Corp level?

Lin, I'm sorry, we didn't hear the...

I just want -- what kind of income tax rate for the C Corp assumption you are using to for 2013 guidance?

For 2013, right now, we still are in a position where we're not paying taxes at Inc. And like we said in the last call, we expect over the next 2 to 3 years, we'll continue to be in that position, not only with the tax-loss carry-forwards we have up there, but also the allocation to depreciation.

Your next question is coming from the line of John Edwards, Credit Suisse. John D. Edwards - Morgan Keegan & Company, Inc., Research Division: Just kind of following on Sharon's question, out of the roughly $1 billion of additional capital investments you're looking at, what time period do you think those would hit? Would it be the next couple of years, or do you think it would be further out in the future? If you can just give a little flavor for that.

Well, as always, those are going to be subject to the commercial negotiations. And negotiations always involve other people that you really don't have control of. But I would say in general, the time frame for seeing that money start to get spent is probably the 2014, 2015 time frame.

And John, I would say that those projects are along the lines of what we typically talk about as the generic capital projects that we're always working on. I would say the $1 billion of backlog or project opportunities is not inconsistent with what we always have kind of in the pipeline. And as you can see, what we've done in the last couple of years, I think, this would represent the capital project opportunities beyond what we've currently got defined. So as Bill said, 2014 and beyond. John D. Edwards - Morgan Keegan & Company, Inc., Research Division: Okay. And then if you could just give a little color on -- I mean, this is quite a step up, I think, from in the past with regards to how many -- what kind of growth opportunities are under consideration, at least if I recall, anyway. And maybe if you can just give a little granularity on what do you attribute the increased opportunities from your standpoint?

John, I would say we agree with you. That's why we're excited about the communication that we've been able to give today and yesterday. It does represent a major accomplishment on our part of expanding our asset base, not only geographic diversification, but overall scale. As we've said, we felt like we had an asset base that would allow us to grow from. But as we expand it, we will continue to see additional opportunities. So we agree with you. It is a huge step forward for us. And I'd say one of the reasons that we've been able to execute that, in addition to strategically located assets and great people out developing these commercial opportunities, has been the robust NGL market that we're in. The huge influx of NGLs arriving at Mont Belvieu over the next couple of years created the opportunity for us to bridge over to Mont Belvieu and bring those products into South Louisiana. So I applaud the efforts of our commercial development teams to make that happen. And then also the environment that we operate in. It's a great time for us.

At this time, I'm showing no further questions in queue. I would like to turn the call back over to Mr. Barry Davis for any closing remarks.

Thank you, Derek, and again I think the -- maybe I just gave the closing. This does represent a great day for us in terms of our step forward in the diversification and scale that we've been executing on now for the last 2 to 3 years. We believe this is a beginning of communication to you that we'll continue in our January bank and analyst meetings. We look forward to sharing more details with you around these projects and our plans forward beyond the defined projects. So again, as always, we thank you for your support. Thank you for your participation in the call today. We look forward to talking to you in January and hope you have a great holiday if we don't talk to you between now and then. So have a great day. Thank you.

Ladies and gentlemen, that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great day.