On July 2, 2012, the Partnership, through a wholly-owned subsidiary, completed the acquisition of all of the issued and outstanding common stock of Clearfield Energy, Inc. and Clearfield Energy's wholly-owned subsidiaries (collectively, “Clearfield”). Clearfield is a well-established crude oil, condensate and water services company with operations in Ohio, Kentucky and West Virginia. Clearfield's business includes crude oil pipelines, a barge loading terminal on the Ohio River, a rail loading terminal on the Ohio Central Railroad network, a trucking fleet, and brine water disposal wells. All of these assets are included in the Partnership's ORV segment.

The Partnership paid approximately $212.5 million in cash (before working capital and certain purchase price adjustments) for the acquisition and the purchase was funded with proceeds from the Partnership's senior notes offering in May 2012.

Included in the Clearfield acquisition were three local distributions companies, or LDCs, which the Partnership marketed for sale and were classified as held for disposition on the balance sheet as of September 30, 2012. The Partnership chose not to apply discontinued operations presentation on the income statement as the related amounts are immaterial. On October 15, 2012, the Partnership entered into an agreement to sell the LDCs for an amount of $19.5 million. The assets held for disposition are recorded at the sales price of $19.5 million.

The goodwill recognized from the Clearfield acquisition results primarily from the value of opportunity created from the strategic asset positioning in the Utica and Marcellus shale plays which provides the Partnership with a substantial growth platform in a new geographic area.

The Partnership recognized intangible assets related to customer relationships. The acquired intangible assets will be amortized on a straight-line basis over the estimated customer contract life of approximately 20 years.

The Partnership assumed a long-term liability related to additional benefit obligations. Also, the Partnership assumed a long-term liability related to right-of-way options for a period of 10 years.

The Partnership formed a wholly-owned corporate entity to acquire the common stock of Clearfield and assumed the carryover basis of the Clearfield assets. The difference between the purchase price for the Clearfield assets and the carryover tax basis for such assets resulted in the recognition of a deferred tax liability of $67.7 million. This deferred liability is expected to become payable no later than 2027.

Based on currently available information, the following table is a summary of the consideration paid for the Clearfield acquisition and the preliminary purchase price allocation for the fair value of the assets acquired and liabilities assumed at the acquisition date:


Purchase Price Allocation (in thousands):
Purchase Price to Clearfield Energy, Inc.		$	212,521
	Total purchase price	$	212,521

Assets acquired:
	Current assets	$	15,466
	Assets held for disposition		19,500
	Property, plant, and equipment		93,671
	Goodwill		150,630
	Intangibles		37,600
Liabilities assumed:
	Current liabilities		(23,575)
	Liabilities held for disposition		(2,642)
	Deferred taxes		(67,700)
	Long term liabilities		(10,429)
	Total purchase price	$	212,521

For the period from July 2, 2012 to September 30, 2012, the Partnership recognized $52.9 million of crude oil buy/sell, crude oil transportation and brine disposal sales related to properties acquired in the Clearfield acquisition. For the period from July 2, 2012 to September 30, 2012, the Partnership recognized $46.1 million net operating expense related to properties acquired in the Clearfield acquisition.

The following unaudited pro forma condensed financial data for the nine months ended September 30, 2012 and three and nine months ended September 30, 2011 gives effect to the Clearfield acquisition as if it had occurred on January 1, 2011. The unaudited pro forma condensed financial information has been included for comparative purposes only and is not necessarily indicative of the results that might have occurred had the transactions taken place on the dates indicated and is not intended to be a projection of future results.

	Three Months Ended		Nine Months Ended
	September 30, 2011		September 30, 2012		September 30, 2011
Pro forma total revenues	$	564,198	$	1,235,782	$	1,676,004
Pro forma net loss	$	(5,259)	$	(16,267)	$	(8,403)
Pro forma net income (loss) from discontinued operations,
net of tax	$		$		$
Pro forma net income loss attributable to Crosstex Energy, Inc.	$	(4,896)	$	(9,091)	$	(12,457)

Pro forma net income loss per common share:
Basic and Diluted	$	(0.10)	$	(0.19)	$	(0.26)