The Company accounts for share-based compensation in accordance with FASB ASC 718, which requires compensation related to all stock-based awards, including stock options, be recognized in the consolidated financial statements.

The Company and the Partnership each have similar unit or share-based payment plans for employees, which are described below. Amounts recognized in the condensed consolidated financial statements with respect to these plans are as follows (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2011		2010		2011		2010
Cost of share-based compensation charged to general and
	administrative expense	$	1,596	$	2,342	$	3,386	$	4,503
Cost of share-based compensation charged to operating expense			265		443		729		864
Total amount charged to income		$	1,861	$	2,785	$	4,115	$	5,367
Interest of non-controlling partners in share-based compensation		$	763	$	1,105	$	1,672	$	2,137
Amount of related income tax benefit recognized in income		$	407	$	623	$	906	$	1,198

The restricted units are valued at their fair value at the date of grant which is equal to the market value of common units on such date. A summary of the restricted unit activity for the six months ended June 30, 2011 is provided below:

		Six Months Ended June 30, 2011
				Weighted Average Grant-Date Fair Value
		Number of
Crosstex Energy, L.P. Restricted Units:		Units
Non-vested, beginning of period			1,047,374	$	10.30
	Granted		289,800		15.16
	Vested*		(391,543)		14.19
	Forfeited		(23,518)		14.51
Non-vested, end of period			922,113	$	10.07
Aggregate intrinsic value, end of period (in thousands)		$	16,736
_____________________
* Vested units include 113,241 units withheld for payroll taxes paid on behalf of employees.

The Partnership issued restricted units in 2011 to officers and other employees. These restricted units typically vest at the end of three years and are included in the restricted units outstanding and the current share-based compensation cost calculations at June 30, 2011.

A summary of the restricted units' aggregate intrinsic value (market value at vesting date) and fair value of units vested (market value at date of grant) during the three and six months ended June 30, 2011 and 2010 are provided below (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Crosstex Energy, L.P. Restricted Units:	2011		2010		2011		2010
Aggregate intrinsic value of units vested	$	1,870	$	783	$	6,109	$	7,099
Fair value of units vested	$	2,383	$	337	$	5,556	$	2,856

As of June 30, 2011, there was $6.3 million of unrecognized compensation cost related to non-vested restricted units. That cost is expected to be recognized over a weighted-average period of 2 years.

A summary of the unit option activity for the six months ended June 30, 2011 is provided below:

		Six Months Ended June 30, 2011
				Weighted
		Number of		Average
Crosstex Energy, L.P. Unit Options:		Units		Exercise Price
Outstanding, beginning of period			611,311	$	6.77
	Exercised		(85,409)		4.69
	Forfeited		(14,539)		7.20
	Expired		-		-
Outstanding, end of period			511,363	$	7.14
Options exercisable at end of period			367,156
Weighted average contractual term (years) end of period:
	Options outstanding		7.7
	Options exercisable		7.4
Aggregate intrinsic value end of period (in thousands):
	Options outstanding	$	6,162
	Options exercisable	$	4,410

A summary of the unit options intrinsic value exercised (market value in excess of exercise price at date of exercise) and fair value of units vested (value per Black-Scholes-Merton option pricing model at date of grant) during the three and six months ended June 30, 2011 and June 30, 2010 are provided below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
Crosstex Energy, L.P. Unit Options:	2011		2010		2011		2010
Intrinsic value of unit options exercised	$	479	$	130	$	985	$	289
Fair value of units vested	$	236	$	259	$	561	$	294

As of June 30, 2011, there was $0.4 million of unrecognized compensation cost related to non-vested unit options. That cost is expected to be recognized over a weighted average period of 1.5 years.

The Company's restricted shares are included at their fair value at the date of grant which is equal to the market value of the common stock on such date. A summary of the restricted share activities for the six months ended June 30, 2011 is provided below:

		Six Months Ended
		June 30, 2011
		Number of Shares		Weighted Average Grant-Date Fair Value

Crosstex Energy, Inc. Restricted Shares:
Non-vested, beginning of period			1,108,998	$	8.64
	Granted		472,343		8.65
	Vested*		(392,452)		13.46
	Forfeited		(28,407)		10.61
Non-vested, end of period			1,160,482	$	6.96
Aggregate intrinsic value, end of period (in thousands)		$	13,810
________________________
* Vested shares include 109,032 shares withheld for payroll taxes paid on behalf of employees.

CEI issued restricted shares in 2011 to officers and other employees. These restricted shares typically vest at the end of three years and are included in restricted shares outstanding and the current share-based compensation cost calculations at June 30, 2011.

A summary of the restricted shares' aggregate intrinsic value (market value at vesting date) and fair value of shares vested (market value at date of grant) during the three and six months ended June 30, 2011 and June 30, 2010 are provided below (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Crosstex Energy, Inc. Restricted Shares:	2011		2010		2011		2010
Aggregate intrinsic value of shares vested	$	1,111	$	498	$	3,689	$	813
Fair value of shares vested	$	2,391	$	311	$	5,281	$	1,337

As of June 30, 2011 there was $5.5 million of unrecognized compensation costs related to CEI non-vested restricted shares. The cost is expected to be recognized over a weighted average period of 2 years.

CEI stock options have not been granted as a means of compensation since 2005. All options outstanding at December 31, 2009 were vested and exercisable with all associated costs recognized. The following is a summary of the CEI stock options outstanding as of June 30, 2011:


		Six Months Ended June 30, 2011
				Weighted
		Number of		Average
Crosstex Energy, Inc. Stock Options:		Shares		Exercise Price
Outstanding, beginning of period			37,500	$	6.50
	Forfeited		-		-
Outstanding, end of period			37,500	$	6.50
Options exercisable at end of period			37,500	$	6.50
Weighted average contractual term (years) end of period			3.5