|
|
|
Delaware
|
001-32678
|
03-0567133
|
(State or other jurisdiction
of incorporation)
|
(Commission
File No.)
|
(IRS Employer
Identification No.)
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
(d)
|
Exhibits.
|
|
|
Exhibit No.
|
Description
|
|
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
23.1
|
Consent of Deloitte & Touche LLP.
|
|
|
99.1
|
Business.
|
|
|
99.2
|
Selected Financial Data.
|
|
|
99.3
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
99.4
|
Financial Statements and Supplementary Data.
|
|
|
99.5
|
Certain Relationships and Related Transactions, and Director Independence.
|
|
|
101
|
Financial statements of DCP Midstream, LP for the year ended December 31, 2016, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows,and (vi) the Notes to the Consolidated Financial Statements.
|
DCP MIDSTREAM, LP
|
|||
|
|
||
By:
|
DCP MIDSTREAM GP, LP
|
||
|
its General Partner
|
||
|
|
|
|
|
By:
|
DCP MIDSTREAM GP, LLC
|
|
|
|
its General Partner
|
|
|
|
|
|
|
|
By:
|
/s/ Sean P. O'Brien
|
|
|
Name:
|
Sean P. O'Brien
|
|
|
Title:
|
Group Vice President and Chief Financial Officer
|
|
|
Exhibit No.
|
Description
|
|
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
|
23.1
|
Consent of Deloitte & Touche LLP.
|
|
|
99.1
|
Business.
|
|
|
99.2
|
Selected Financial Data.
|
|
|
99.3
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
99.4
|
Financial Statements and Supplementary Data.
|
|
|
99.5
|
Certain Relationships and Related Transactions, and Director Independence.
|
|
|
101
|
Financial statements of DCP Midstream, LP for the year ended December 31, 2016, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Equity, (v) the Consolidated Statements of Cash Flows,and (vi) the Notes to the Consolidated Financial Statements.
|
|
DCP Midstream, LP
|
||||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2016 (a)
|
|
2015 (a)
|
|
2014 (a)
|
|
2013 (a)
|
|
2012 (a)
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Earnings from continuing operations before fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Pretax income from continuing operations attributable to partners before earnings from unconsolidated affiliates
|
$
|
(148
|
)
|
|
$
|
(1,157
|
)
|
|
$
|
476
|
|
|
$
|
554
|
|
|
$
|
546
|
|
Fixed charges
|
324
|
|
|
355
|
|
|
322
|
|
|
290
|
|
|
274
|
|
|||||
Amortization of capitalized interest
|
7
|
|
|
7
|
|
|
6
|
|
|
5
|
|
|
4
|
|
|||||
Distributed earnings from unconsolidated affiliates
|
282
|
|
|
184
|
|
|
82
|
|
|
35
|
|
|
34
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
(1
|
)
|
|
(32
|
)
|
|
(34
|
)
|
|
(40
|
)
|
|
(79
|
)
|
|||||
Earnings from continuing operations before fixed charges
|
$
|
464
|
|
|
$
|
(643
|
)
|
|
$
|
852
|
|
|
$
|
844
|
|
|
$
|
779
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net of capitalized interest
|
300
|
|
|
310
|
|
|
277
|
|
|
239
|
|
|
185
|
|
|||||
Capitalized interest
|
1
|
|
|
32
|
|
|
34
|
|
|
40
|
|
|
79
|
|
|||||
Estimate of interest within rental expense
|
2
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|||||
Amortization of deferred loan costs
|
21
|
|
|
11
|
|
|
10
|
|
|
9
|
|
|
8
|
|
|||||
Total fixed charges
|
$
|
324
|
|
|
$
|
355
|
|
|
$
|
322
|
|
|
$
|
290
|
|
|
$
|
274
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges (b)
|
1.43
|
|
|
—
|
|
|
2.65
|
|
|
2.91
|
|
|
2.84
|
|
(a)
|
The financial information for the years ended December 31, 2016, 2015, 2014, 2013 and 2012 includes the results of The DCP Midstream Business, which was acquired from DCP Midstream, LLC on January 1, 2017. This transfer of net assets between entities under common control was accounted for as if the transfer occurred at the beginning of the period, and prior years are retrospectively adjusted to furnish comparative information similar to the pooling method.
|
(b)
|
Earnings for the year ended December 31, 2015 were inadequate to cover fixed charges by $998 million.
|
Operating Data
|
|||||||||||||||
|
|
Year Ended December 31, 2016
|
|||||||||||||
Regions
|
|
Plants
|
|
Approximate
Gathering and Transmission Systems (Miles) |
|
Approximate
Net Nameplate Plant Capacity (MMcf/d) (a) |
|
Natural Gas
Wellhead Volume (MMcf/d) (a) |
|
NGL
Production (MBbls/d) (a) |
|||||
North
|
|
13
|
|
|
5,445
|
|
|
1,255
|
|
|
1,126
|
|
|
82
|
|
Permian
|
|
16
|
|
|
16,300
|
|
|
1,460
|
|
|
1,041
|
|
|
107
|
|
Midcontinent
|
|
12
|
|
|
29,420
|
|
|
1,765
|
|
|
1,269
|
|
|
94
|
|
South
|
|
20
|
|
|
7,415
|
|
|
3,295
|
|
|
1,688
|
|
|
110
|
|
Total
|
|
61
|
|
|
58,580
|
|
|
7,775
|
|
|
5,124
|
|
|
393
|
|
Operating Data
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|||||||||
System
|
|
Approximate
System Length (Miles) |
|
Fractionators
|
|
Approximate
Throughput Capacity (MBbls/d) (a) |
|
Approximate NGL Storage Capacity (MMBbls)
|
|
Approximate Natural Gas Storage Capacity (Bcf)
|
|
Pipeline Throughput
(MBbls/d) (a) |
|
Fractionator Throughput
(MBbls/d) (a) |
|||||||
Sand Hills pipeline
|
|
1,325
|
|
|
—
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
—
|
|
Southern Hills pipeline
|
|
940
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
Front Range pipeline
|
|
450
|
|
|
—
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
Texas Express pipeline
|
|
595
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
Other pipelines
|
|
2,480
|
|
|
—
|
|
|
172
|
|
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
Mont Belvieu fractionators
|
|
—
|
|
|
2
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
Storage facilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
12
|
|
|
—
|
|
|
—
|
|
Total
|
|
5,790
|
|
|
2
|
|
|
613
|
|
|
8
|
|
|
12
|
|
|
420
|
|
|
50
|
|
(a)
|
Represents total NGL capacity or throughput allocated to our proportionate ownership share for 2016 divided by 365 days.
|
•
|
certification and construction of new facilities;
|
•
|
abandonment of services and facilities;
|
•
|
maintenance of accounts and records;
|
•
|
acquisition and disposition of facilities;
|
•
|
initiation and discontinuation of transportation services;
|
•
|
terms and conditions of transportation services and service contracts with customers;
|
•
|
depreciation and amortization policies;
|
•
|
conduct and relationship with certain affiliates; and
|
•
|
various other matters.
|
•
|
requiring the acquisition of permits or authorizations to conduct regulated activities and imposing obligations in those permits, potentially including capital expenditures or operational requirements, that reduce or limit impacts to the environment;
|
•
|
restricting the ways that we can handle or dispose of our wastes;
|
•
|
limiting or prohibiting construction or operational activities in sensitive areas such as wetlands, coastal regions or areas inhabited by threatened and endangered species;
|
•
|
requiring remedial action to mitigate pollution conditions caused by our operations or attributable to former operations; and
|
•
|
enjoining, or compelling changes to, the operations of facilities deemed not to be in compliance with permits issued pursuant to such environmental laws and regulations.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012 (a)
|
||||||||||
|
(Millions, except per unit amounts)
|
||||||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
6,269
|
|
|
$
|
6,779
|
|
|
$
|
13,420
|
|
|
$
|
11,539
|
|
|
$
|
9,712
|
|
Transportation, processing and other
|
647
|
|
|
532
|
|
|
517
|
|
|
463
|
|
|
373
|
|
|||||
Trading and marketing (losses) gains, net
|
(23
|
)
|
|
119
|
|
|
88
|
|
|
36
|
|
|
86
|
|
|||||
Total operating revenues
|
6,893
|
|
|
7,430
|
|
|
14,025
|
|
|
12,038
|
|
|
10,171
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
5,461
|
|
|
5,981
|
|
|
11,828
|
|
|
9,967
|
|
|
8,172
|
|
|||||
Operating and maintenance expense
|
670
|
|
|
732
|
|
|
773
|
|
|
691
|
|
|
667
|
|
|||||
Depreciation and amortization expense
|
378
|
|
|
377
|
|
|
348
|
|
|
314
|
|
|
291
|
|
|||||
General and administrative expense
|
292
|
|
|
281
|
|
|
277
|
|
|
280
|
|
|
297
|
|
|||||
Asset impairments
|
—
|
|
|
912
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|||||
Other (income) expense, net
|
(65
|
)
|
|
10
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|||||
(Gain) loss on sale of assets, net
|
(35
|
)
|
|
(42
|
)
|
|
7
|
|
|
(22
|
)
|
|
—
|
|
|||||
Restructuring costs
|
13
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating costs and expenses
|
6,714
|
|
|
8,262
|
|
|
13,258
|
|
|
11,230
|
|
|
9,427
|
|
|||||
Operating income (loss)
|
179
|
|
|
(832
|
)
|
|
767
|
|
|
808
|
|
|
744
|
|
|||||
Interest expense, net
|
(321
|
)
|
|
(320
|
)
|
|
(287
|
)
|
|
(249
|
)
|
|
(193
|
)
|
|||||
Earnings from unconsolidated affiliates (b)
|
282
|
|
|
184
|
|
|
82
|
|
|
35
|
|
|
34
|
|
|||||
Income (loss) before income taxes
|
140
|
|
|
(968
|
)
|
|
562
|
|
|
594
|
|
|
585
|
|
|||||
Income tax benefit (expense) benefit
|
(46
|
)
|
|
102
|
|
|
(11
|
)
|
|
(10
|
)
|
|
(2
|
)
|
|||||
Net income (loss)
|
94
|
|
|
(866
|
)
|
|
551
|
|
|
584
|
|
|
583
|
|
|||||
Net income attributable to non-controlling interests
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||||
Net income (loss) attributable to partners
|
88
|
|
|
(871
|
)
|
|
547
|
|
|
579
|
|
|
578
|
|
|||||
Net loss (income) attributable to predecessor operations (c)
|
224
|
|
|
1,099
|
|
|
(130
|
)
|
|
(404
|
)
|
|
(413
|
)
|
|||||
General partner interest in net income
|
(124
|
)
|
|
(124
|
)
|
|
(114
|
)
|
|
(70
|
)
|
|
(41
|
)
|
|||||
Net income allocable to limited partners
|
$
|
188
|
|
|
$
|
104
|
|
|
$
|
303
|
|
|
$
|
105
|
|
|
$
|
124
|
|
Net income per limited partner unit-basic and diluted
|
$
|
1.64
|
|
|
$
|
0.91
|
|
|
$
|
2.84
|
|
|
$
|
1.34
|
|
|
$
|
2.28
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012 (a)
|
||||||||||
|
(Millions, except per unit amounts)
|
||||||||||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
$
|
9,069
|
|
|
$
|
9,428
|
|
|
$
|
9,537
|
|
|
$
|
8,420
|
|
|
$
|
7,331
|
|
Total assets
|
$
|
13,611
|
|
|
$
|
13,885
|
|
|
$
|
13,628
|
|
|
$
|
12,684
|
|
|
$
|
10,749
|
|
Accounts payable
|
$
|
735
|
|
|
$
|
545
|
|
|
$
|
977
|
|
|
$
|
1,413
|
|
|
$
|
1,153
|
|
Long-term debt
|
$
|
4,907
|
|
|
$
|
5,669
|
|
|
$
|
5,191
|
|
|
$
|
4,925
|
|
|
$
|
4,408
|
|
Partners’ equity
|
$
|
2,601
|
|
|
$
|
2,772
|
|
|
$
|
2,993
|
|
|
$
|
1,945
|
|
|
$
|
1,405
|
|
Predecessor equity
|
$
|
4,220
|
|
|
$
|
4,287
|
|
|
$
|
2,189
|
|
|
$
|
2,410
|
|
|
$
|
1,877
|
|
Non-controlling interests
|
$
|
32
|
|
|
$
|
33
|
|
|
$
|
33
|
|
|
$
|
34
|
|
|
$
|
35
|
|
Total equity
|
$
|
6,853
|
|
|
$
|
7,092
|
|
|
$
|
5,215
|
|
|
$
|
4,389
|
|
|
$
|
3,317
|
|
Other Information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash distributions declared per unit
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.0525
|
|
|
$
|
2.8630
|
|
|
$
|
2.7000
|
|
Cash distributions paid per unit
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.0050
|
|
|
$
|
2.8200
|
|
|
$
|
2.6600
|
|
(a)
|
Includes the effect of the following acquisitions prospectively from their respective dates of acquisition: (1) a 10% ownership interest in the Texas Express Pipeline acquired from Enterprise Products Partners, L.P. in April 2012; and (2) the Crossroads processing plant and 50% interest in CrossPoint Pipeline, LLC, acquired from Penn Virginia Resource Partners, L.P. in July 2012.
|
(b)
|
Includes our proportionate share of the earnings of our unconsolidated affiliates. Earnings include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.
|
(c)
|
Includes net (loss) income attributable to The DCP Midstream Business prior to the date of our acquisition from DCP Midstream, LLC.
|
•
|
Our growing fee-based business represents a significant portion of our estimated margins.
|
•
|
We have positive operating cash flow from our well-positioned and diversified assets.
|
•
|
We have a well-defined and targeted hedging program.
|
•
|
We prudently manage our capital expenditures with significant focus on fee-based growth projects.
|
•
|
We believe we have a strong capital structure and balance sheet.
|
•
|
We believe we have access to sufficient capital.
|
•
|
Within our Logistics and Marketing segment, the Sand Hills pipeline mainline capacity expansion was placed into service during the second quarter of 2016. We are currently further expanding the Sand Hills pipeline to 365 MBbls/d expected to be in service in the fourth quarter of 2017, and have multiple additional Sand Hills lateral connections in flight throughout 2017.
|
•
|
Within our Gathering and Processing segment, the construction of a 200 MMcf/d cryogenic natural gas processing plant, Mewbourn 3 plant, and further expansion of our Grand Parkway gathering system, both of which are located in the DJ Basin and expected to be in service in the fourth quarter of 2018.
|
•
|
On February 1, 2016, we began to participate in earnings for our 15% interest in the Panola intrastate NGL pipeline which completed an expansion in the third quarter of 2016 and is included in our Logistics and Marketing segment.
|
•
|
In the first quarter of 2016, we completed construction on our Grand Parkway gathering system in the DJ Basin, which is in our Gathering and Processing segment.
|
•
|
Fee-based arrangements -
Under fee-based arrangements, we receive a fee or fees for one or more of the following services: gathering, compressing, treating, processing, transporting or storing natural gas. The revenues we earn are directly related to the volume of natural gas or NGLs that flows through our systems and are not directly dependent on commodity prices. However, to the extent a sustained decline in commodity prices results in a decline in volumes, our revenues from these arrangements would be reduced.
|
•
|
Percent-of-proceeds/liquids arrangements
- Under percent-of-proceeds arrangements, we generally purchase natural gas from producers at the wellhead, or other receipt points, gather the wellhead natural gas through our gathering system, treat and process the natural gas, and then sell the resulting residue natural gas, NGLs and condensate based on index prices from published index market prices. We remit to the producers either an agreed-upon percentage of the actual proceeds that we receive from our sales of the residue natural gas, NGLs and condensate, or an agreed-upon percentage of the proceeds based on index related prices for the natural gas, NGLs and condensate, regardless of the actual amount of the sales proceeds we receive. We keep the difference between the proceeds received and the amount remitted back to the producer. Under percent-of-liquids arrangements, we do not keep any amounts related to residue natural gas proceeds and only keep amounts related to the difference between the proceeds received and the amount remitted back to the producer related to NGLs and condensate. Certain of these arrangements may also result in the producer retaining title to all or a portion of the residue natural gas and/or the NGLs, in lieu of us returning sales proceeds to the producer. Additionally, these arrangements may include fee-based components. Our revenues under percent-of-proceeds arrangements relate directly with the price of natural gas, NGLs and condensate. Our revenues under percent-of-liquids arrangements relate directly to the price of NGLs and condensate.
|
|
|
Year Ended December 31,
|
|
Variance 2016 vs. 2015
|
|
Variance 2015 vs. 2014
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||
|
|
(Millions, except operating data and percentages)
|
||||||||||||||||||||||||
Operating revenues (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gathering and Processing
|
|
$
|
4,490
|
|
|
$
|
4,910
|
|
|
$
|
9,873
|
|
|
$
|
(420
|
)
|
|
(9
|
)%
|
|
$
|
(4,963
|
)
|
|
(50
|
)%
|
Logistics and Marketing
|
|
6,186
|
|
|
6,487
|
|
|
12,649
|
|
|
(301
|
)
|
|
(5
|
)%
|
|
(6,162
|
)
|
|
(49
|
)%
|
|||||
Intra-segment eliminations
|
|
(3,783
|
)
|
|
(3,967
|
)
|
|
(8,497
|
)
|
|
184
|
|
|
5
|
%
|
|
4,530
|
|
|
53
|
%
|
|||||
Total operating revenues
|
|
6,893
|
|
|
7,430
|
|
|
14,025
|
|
|
(537
|
)
|
|
(7
|
)%
|
|
(6,595
|
)
|
|
(47
|
)%
|
|||||
Purchases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gathering and Processing
|
|
(3,263
|
)
|
|
(3,697
|
)
|
|
(7,902
|
)
|
|
(434
|
)
|
|
(12
|
)%
|
|
(4,205
|
)
|
|
(53
|
)%
|
|||||
Logistics and Marketing
|
|
(5,981
|
)
|
|
(6,251
|
)
|
|
(12,423
|
)
|
|
(270
|
)
|
|
(4
|
)%
|
|
(6,172
|
)
|
|
(50
|
)%
|
|||||
Intra-segment eliminations
|
|
3,783
|
|
|
3,967
|
|
|
8,497
|
|
|
184
|
|
|
5
|
%
|
|
4,530
|
|
|
53
|
%
|
|||||
Total purchases
|
|
(5,461
|
)
|
|
(5,981
|
)
|
|
(11,828
|
)
|
|
(520
|
)
|
|
(9
|
)%
|
|
(5,847
|
)
|
|
(49
|
)%
|
|||||
Operating and maintenance expense
|
|
(670
|
)
|
|
(732
|
)
|
|
(773
|
)
|
|
(62
|
)
|
|
(8
|
)%
|
|
(41
|
)
|
|
(5
|
)%
|
|||||
Depreciation and amortization expense
|
|
(378
|
)
|
|
(377
|
)
|
|
(348
|
)
|
|
1
|
|
|
—
|
%
|
|
29
|
|
|
8
|
%
|
|||||
General and administrative expense
|
|
(292
|
)
|
|
(281
|
)
|
|
(277
|
)
|
|
11
|
|
|
4
|
%
|
|
4
|
|
|
1
|
%
|
|||||
Asset impairments
|
|
—
|
|
|
(912
|
)
|
|
(18
|
)
|
|
(912
|
)
|
|
(100
|
)%
|
|
894
|
|
|
*
|
|
|||||
Other income (expense), net
|
|
65
|
|
|
(10
|
)
|
|
(7
|
)
|
|
75
|
|
|
*
|
|
|
(3
|
)
|
|
(43
|
)%
|
|||||
Earnings from unconsolidated affiliates (b)
|
|
282
|
|
|
184
|
|
|
82
|
|
|
98
|
|
|
53
|
%
|
|
102
|
|
|
*
|
|
|||||
Interest expense
|
|
(321
|
)
|
|
(320
|
)
|
|
(287
|
)
|
|
1
|
|
|
—
|
%
|
|
33
|
|
|
11
|
%
|
|||||
Income tax (expense) benefit
|
|
(46
|
)
|
|
102
|
|
|
(11
|
)
|
|
(148
|
)
|
|
*
|
|
|
113
|
|
|
*
|
|
|||||
Gain (loss) on sale of assets, net
|
|
35
|
|
|
42
|
|
|
(7
|
)
|
|
(7
|
)
|
|
(17
|
)%
|
|
49
|
|
|
*
|
|
|||||
Restructuring costs
|
|
(13
|
)
|
|
(11
|
)
|
|
—
|
|
|
2
|
|
|
18
|
%
|
|
11
|
|
|
*
|
|
|||||
Net income attributable to non-controlling interests
|
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
1
|
|
|
20
|
%
|
|
1
|
|
|
25
|
%
|
|||||
Net income (loss) attributable to partners
|
|
$
|
88
|
|
|
$
|
(871
|
)
|
|
$
|
547
|
|
|
$
|
959
|
|
|
*
|
|
|
$
|
(1,418
|
)
|
|
*
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross margin (c):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gathering and Processing
|
|
$
|
1,227
|
|
|
$
|
1,213
|
|
|
$
|
1,971
|
|
|
$
|
14
|
|
|
1
|
%
|
|
$
|
(758
|
)
|
|
(38
|
)%
|
Logistics and Marketing
|
|
205
|
|
|
236
|
|
|
226
|
|
|
(31
|
)
|
|
(13
|
)%
|
|
10
|
|
|
4
|
%
|
|||||
Total gross margin
|
|
$
|
1,432
|
|
|
$
|
1,449
|
|
|
$
|
2,197
|
|
|
$
|
(17
|
)
|
|
(1
|
)%
|
|
$
|
(748
|
)
|
|
(34
|
)%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
(139
|
)
|
|
$
|
46
|
|
|
$
|
43
|
|
|
$
|
(185
|
)
|
|
*
|
|
|
$
|
3
|
|
|
7
|
%
|
Natural gas wellhead (MMcf/d) (d)
|
|
5,124
|
|
|
5,604
|
|
|
5,896
|
|
|
(480
|
)
|
|
(9
|
)%
|
|
(292
|
)
|
|
(5
|
)%
|
|||||
NGL gross production (MBbls/d) (d)
|
|
393
|
|
|
408
|
|
|
454
|
|
|
(15
|
)
|
|
(4
|
)%
|
|
(46
|
)
|
|
(10
|
)%
|
|||||
NGL pipelines throughput (MBbls/d) (d)
|
|
420
|
|
|
298
|
|
|
224
|
|
|
122
|
|
|
41
|
%
|
|
74
|
|
|
33
|
%
|
(a)
|
Operating revenues include the impact of commodity derivative activity.
|
(b)
|
Earnings for Discovery, Sand Hills, Southern Hills, Front Range, Mont Belvieu 1 and Texas Express include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.
|
(c)
|
Gross margin consists of total operating revenues, including commodity derivative activity, less purchases of natural gas and NGLs. Segment gross margin for each segment consists of total operating revenues for that segment, including commodity derivative activity, less commodity purchases for that segment. Please read “Reconciliation of Non-GAAP Measures”.
|
(d)
|
For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the throughput volumes and NGL production.
|
•
|
$420 million
decrease
for our Gathering and Processing segment primarily due to lower commodity prices, lower gas and NGL volumes in the South, Midcontinent and Permian regions which impacted both sales and purchases, and unfavorable commodity derivative activity, which was partially offset by higher gas and NGL volumes in our North region and fee based contract realignment efforts; and improved operational efficiencies in the Permian and Midcontinent regions; and
|
•
|
$301 million decrease for our Logistics and Marketing segment primarily due to lower commodity prices, lower gas and NGL sales volumes, unfavorable commodity derivative activity and lower wholesale propane fees partially offset by new connections on certain of our NGL pipelines.
|
•
|
$184 million decrease in inter-segment eliminations, which related to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to lower commodity prices and lower gas and NGL sales volumes.
|
•
|
$434 million decrease for our Gathering and Processing segment for the reasons discussed above; and
|
•
|
$270 million decrease for our Logistics and Marketing segment for the reasons discussed above.
|
•
|
$184 million decrease in inter-segment eliminations, which related to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to lower commodity prices and lower gas and NGL sales volumes.
|
•
|
$31 million decrease for our Logistics and Marketing segment primarily related to unfavorable commodity derivative activity, the sale of our Northern Louisiana system in July 2016 and lower wholesale propane fees, partially offset by new connections on certain of our NGL pipelines.
|
•
|
$14 million increase for our Gathering and Processing segment primarily due to the ramp-up of the Lucerne 2 plant in June 2015, completion of the Grand Parkway gathering system in January 2016, higher margins on a specific producer arrangement, higher NGL recoveries in our North region, completion of the Zia II plant in August 2015 in our Permian region, ramp-up of the National Helium plant in September 2015 in our Midcontinent region, fee based contract realignment efforts and improved operational efficiencies in our Permian and Midcontinent regions, partially offset by lower commodity prices, lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods, unfavorable derivative activity and the sale of our Northern Louisiana system.
|
•
|
$4,963 million decrease for our Gathering and Processing segment primarily due to lower commodity prices and lower gas and NGL volumes in the South, Midcontinent and Permian regions which impacted both sales and purchases, partially offset by higher gas and NGL volumes in our North region, favorable commodity derivative activity and fee based contract realignment efforts and the sale of certain gas processing plants and gathering systems in our Midcontinent and Permian regions, partially offset by the completion and ramp-up of the Lucerne 2 plant in June 2015, completion and ramp-up of the Zia II plant in August 2015 and ramp-up of the National Helium plant in September 2015; and
|
•
|
$6,162 million decrease for our Logistics and Marketing segment primarily due to lower commodity prices, lower gas and NGL sales volumes and unfavorable commodity derivative activity, partially offset by the conversion of one of our assets to a butane export facility and higher NGL storage margins.
|
•
|
$4,530 million increase in inter-segment eliminations, which relate to sales of NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to lower commodity prices and lower gas and NGL sales volumes.
|
•
|
$4,205 million decrease for our Gathering and Processing segment for the reasons discussed above; and
|
•
|
$6,172 million decrease for our Logistics and Marketing segment for the reasons discussed above.
|
•
|
$4,530 million decrease in inter-segment eliminations, which relate to sales of NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to lower commodity prices and lower gas and NGL sales volumes.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(Millions)
|
||||||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
110
|
|
|
$
|
63
|
|
|
$
|
26
|
|
Discovery Producer Services LLC
|
|
73
|
|
|
54
|
|
|
7
|
|
|||
DCP Southern Hills Pipeline, LLC
|
|
44
|
|
|
18
|
|
|
15
|
|
|||
Front Range Pipeline LLC
|
|
19
|
|
|
17
|
|
|
2
|
|
|||
Mont Belvieu Enterprise Fractionator
|
|
16
|
|
|
15
|
|
|
17
|
|
|||
Mont Belvieu 1 Fractionator
|
|
9
|
|
|
9
|
|
|
12
|
|
|||
Texas Express Pipeline LLC
|
|
9
|
|
|
8
|
|
|
3
|
|
|||
Other
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Total earnings from unconsolidated affiliates
|
|
$
|
282
|
|
|
$
|
184
|
|
|
$
|
82
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(Millions)
|
||||||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
139
|
|
|
$
|
71
|
|
|
$
|
43
|
|
Discovery Producer Services LLC
|
|
94
|
|
|
69
|
|
|
15
|
|
|||
DCP Southern Hills Pipeline, LLC
|
|
56
|
|
|
24
|
|
|
23
|
|
|||
Front Range Pipeline LLC
|
|
24
|
|
|
17
|
|
|
15
|
|
|||
Mont Belvieu Enterprise Fractionator
|
|
18
|
|
|
13
|
|
|
19
|
|
|||
Mont Belvieu 1 Fractionator
|
|
11
|
|
|
12
|
|
|
14
|
|
|||
Texas Express Pipeline LLC
|
|
11
|
|
|
11
|
|
|
8
|
|
|||
Other
|
|
3
|
|
|
—
|
|
|
4
|
|
|||
Total distributions from unconsolidated affiliates
|
|
$
|
356
|
|
|
$
|
217
|
|
|
$
|
141
|
|
|
|
Year Ended December 31,
|
|
Variance
2016 vs. 2015 |
|
Variance
2015 vs. 2014 |
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||
|
(Millions, except operating data)
|
|
|
|
|
|||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
3,955
|
|
|
$
|
4,377
|
|
|
$
|
9,375
|
|
|
$
|
(422
|
)
|
|
(10
|
)%
|
|
$
|
(4,998
|
)
|
|
(53
|
)%
|
Transportation, processing and other
|
|
580
|
|
|
465
|
|
|
463
|
|
|
115
|
|
|
25
|
%
|
|
2
|
|
|
—
|
%
|
|||||
Trading and marketing (losses) gains, net
|
|
(45
|
)
|
|
68
|
|
|
35
|
|
|
(113
|
)
|
|
*
|
|
|
33
|
|
|
94
|
%
|
|||||
Total operating revenues
|
|
4,490
|
|
|
4,910
|
|
|
9,873
|
|
|
(420
|
)
|
|
(9
|
)%
|
|
(4,963
|
)
|
|
(50
|
)%
|
|||||
Purchases of natural gas and NGLs
|
|
(3,263
|
)
|
|
(3,697
|
)
|
|
(7,902
|
)
|
|
(434
|
)
|
|
(12
|
)%
|
|
(4,205
|
)
|
|
(53
|
)%
|
|||||
Operating and maintenance expense
|
|
(611
|
)
|
|
(668
|
)
|
|
(725
|
)
|
|
(57
|
)
|
|
(9
|
)%
|
|
(57
|
)
|
|
(8
|
)%
|
|||||
Depreciation and amortization expense
|
|
(344
|
)
|
|
(343
|
)
|
|
(315
|
)
|
|
1
|
|
|
—
|
%
|
|
28
|
|
|
9
|
%
|
|||||
General and administrative expense
|
|
(14
|
)
|
|
(22
|
)
|
|
(27
|
)
|
|
(8
|
)
|
|
(36
|
)%
|
|
(5
|
)
|
|
(19
|
)%
|
|||||
Asset impairments
|
|
—
|
|
|
(876
|
)
|
|
(18
|
)
|
|
(876
|
)
|
|
(100
|
)%
|
|
858
|
|
|
*
|
|
|||||
Other income (expense), net
|
|
73
|
|
|
(1
|
)
|
|
(5
|
)
|
|
74
|
|
|
*
|
|
|
4
|
|
|
*
|
|
|||||
Earnings from unconsolidated affiliates (a)
|
|
73
|
|
|
54
|
|
|
5
|
|
|
19
|
|
|
35
|
%
|
|
49
|
|
|
*
|
|
|||||
Gain (loss) on sale of assets, net
|
|
19
|
|
|
42
|
|
|
(7
|
)
|
|
(23
|
)
|
|
(55
|
)%
|
|
49
|
|
|
*
|
|
|||||
Segment net income (loss)
|
|
423
|
|
|
(601
|
)
|
|
879
|
|
|
1,024
|
|
|
*
|
|
|
(1,480
|
)
|
|
*
|
|
|||||
Segment net income attributable to non-controlling interests
|
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
1
|
|
|
20
|
%
|
|
1
|
|
|
25
|
%
|
|||||
Segment net income (loss) attributable to partners
|
|
$
|
417
|
|
|
$
|
(606
|
)
|
|
$
|
875
|
|
|
$
|
1,023
|
|
|
*
|
|
|
$
|
(1,481
|
)
|
|
*
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment gross margin (b)
|
|
$
|
1,227
|
|
|
$
|
1,213
|
|
|
$
|
1,971
|
|
|
$
|
14
|
|
|
1
|
%
|
|
$
|
(758
|
)
|
|
(38
|
)%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
(119
|
)
|
|
$
|
47
|
|
|
$
|
39
|
|
|
$
|
(166
|
)
|
|
*
|
|
|
$
|
8
|
|
|
21
|
%
|
Natural gas throughput wellhead (MMcf/d) (c)
|
|
5,124
|
|
|
5,604
|
|
|
5,896
|
|
|
(480
|
)
|
|
(9
|
)%
|
|
(292
|
)
|
|
(5
|
)%
|
|||||
NGL gross production (MBbls/d) (c)
|
|
393
|
|
|
408
|
|
|
454
|
|
|
(15
|
)
|
|
(4
|
)%
|
|
(46
|
)
|
|
(10
|
)%
|
(a)
|
For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the earnings of all unconsolidated affiliates which include our 40% ownership of Discovery. Earnings for Discovery include the amortization of the net difference between the carrying amount of our investment and the underlying equity of the entity.
|
(b)
|
Segment gross margin consists of total operating revenues, including commodity derivative activity, less purchases of natural gas and NGLs. Please read “Reconciliation of Non-GAAP Measures”.
|
(c)
|
For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the throughput volumes and NGL production.
|
•
|
$163 million decrease attributable to lower commodity prices, which impacted both sales and purchases, before the impact of derivative activity;
|
•
|
$444 million decrease attributable to lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods, partially offset by improved operational efficiencies in the Permian and Midcontinent regions; and
|
•
|
$113 million decrease as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative losses of $166 million in 2016 which were partially offset by a $53 million increase in realized cash settlement gains due to movements in forward prices of commodities.
|
•
|
$185 million increase attributable to higher gas and NGL sales volumes and the impact of a specific producer arrangement primarily related to our DJ Basin system in our North region;
|
•
|
$115 million increase in transportation, processing and other primarily related to fee based contract realignment efforts, partially offset by lower volumes in the South region and the sale of our Northern Louisiana System.
|
•
|
$76 million increase primarily as a result of higher volumes following the ramp-up of the Lucerne 2 plant, completion of the Grand Parkway gathering system in January 2016, higher margins on specific producer arrangements and higher NGL recoveries primarily related to our DJ Basin system in our North region;
|
•
|
$77 million increase primarily as a result of the completion of the Zia II plant in the Southeast New Mexico system in our Permian region in August 2015, ramp-up of the National Helium plant in the Liberal system in our Midcontinent region in September 2015 and improved operational efficiencies in the Permian and Midcontinent regions; and
|
•
|
$12 million increase primarily as a result of fee based contract realignment efforts in the Permian and Midcontinent regions, partially offset by lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods.
|
•
|
$113 million decrease as a result of commodity derivative activity as discussed above;
|
•
|
$30 million decrease as a result of lower commodity prices; and
|
•
|
$8 million decrease as a result of the sale of our Northern Louisiana system in our South Region.
|
•
|
$4,284 million decrease attributable to lower commodity prices, which impacted both sales and purchases, before the impact of derivative activity; and
|
•
|
$915 million decrease attributable to lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in the current period and the sale of certain gas processing plants and gathering systems in our Midcontinent and Permian regions, partially offset by the completion and ramp-up of the Lucerne 2 plant in June 2015, completion and ramp-up of the Zia II plant in August 2015 and ramp-up of the National Helium plant in September 2015.
|
•
|
$201 million increase attributable to higher gas and NGL sales volumes primarily related to our DJ Basin system in our North region;
|
•
|
$2 million increase in transportation, processing and other primarily related to fee based contract realignment efforts; and
|
•
|
$33 million increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of $8 million in 2015 and $25 million increase in realized cash settlement gains due to movements in forward prices of commodities.
|
•
|
$897 million decrease as a result of lower commodity prices; and
|
•
|
$44 million decrease primarily as a result of lower volumes across our Midcontinent, South and Permian regions due to reduced drilling activity in 2015 and the sale of certain gas processing plants in our Midcontinent and Permian regions, partially offset by fee based contract realignment efforts across our Midcontinent, South and Permian regions.
|
•
|
$83 million increase primarily as a result of higher volumes following the completion and ramp-up of the Lucerne 2 plant in June 2015, higher NGL recoveries primarily related to our DJ Basin system in our North region and higher margins on a specific producer arrangement;
|
•
|
$67 million increase primarily as a result of the completion and ramp-up of the Zia II plant in the Southeast New Mexico system in our Permian region in August 2015, ramp-up of the National Helium plant in the Liberal system in our Midcontinent region in September 2015 and improved plant operational efficiencies in the Permian and Midcontinent regions; and
|
•
|
$33 million increase as a result of commodity derivative activity as discussed above.
|
|
|
Year Ended December 31,
|
|
Variance 2016 vs. 2015
|
|
Variance 2015 vs. 2014
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease)
|
|
Percent
|
||||||||||||
|
(Millions, except operating data)
|
|||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
6,094
|
|
|
$
|
6,364
|
|
|
$
|
12,540
|
|
|
$
|
(270
|
)
|
|
(4
|
)%
|
|
$
|
(6,176
|
)
|
|
(49
|
)%
|
Transportation, processing and other
|
|
70
|
|
|
72
|
|
|
56
|
|
|
(2
|
)
|
|
(3
|
)%
|
|
16
|
|
|
29
|
%
|
|||||
Trading and marketing gains, net
|
|
22
|
|
|
51
|
|
|
53
|
|
|
(29
|
)
|
|
(57
|
)%
|
|
(2
|
)
|
|
(4
|
)%
|
|||||
Total operating revenues
|
|
6,186
|
|
|
6,487
|
|
|
12,649
|
|
|
(301
|
)
|
|
(5
|
)%
|
|
(6,162
|
)
|
|
(49
|
)%
|
|||||
Purchases of natural gas and NGLs
|
|
(5,981
|
)
|
|
(6,251
|
)
|
|
(12,423
|
)
|
|
(270
|
)
|
|
(4
|
)%
|
|
(6,172
|
)
|
|
(50
|
)%
|
|||||
Operating and maintenance expense
|
|
(43
|
)
|
|
(49
|
)
|
|
(44
|
)
|
|
(6
|
)
|
|
(12
|
)%
|
|
5
|
|
|
11
|
%
|
|||||
Depreciation and amortization expense
|
|
(15
|
)
|
|
(16
|
)
|
|
(17
|
)
|
|
(1
|
)
|
|
(6
|
)%
|
|
(1
|
)
|
|
(6
|
)%
|
|||||
General and administrative expense
|
|
(9
|
)
|
|
(11
|
)
|
|
(14
|
)
|
|
(2
|
)
|
|
(18
|
)%
|
|
(3
|
)
|
|
(21
|
)%
|
|||||
Asset impairments
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
(100
|
)%
|
|
9
|
|
|
*
|
|
|||||
Other expense, net
|
|
(5
|
)
|
|
(8
|
)
|
|
—
|
|
|
(3
|
)
|
|
(38
|
)%
|
|
8
|
|
|
*
|
|
|||||
Gain on sale of assets, net
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
*
|
|
|
—
|
|
|
*
|
|
|||||
Earnings from unconsolidated affiliates (a)
|
|
209
|
|
|
130
|
|
|
77
|
|
|
79
|
|
|
61
|
%
|
|
53
|
|
|
69
|
%
|
|||||
Segment net income
|
|
358
|
|
|
273
|
|
|
228
|
|
|
85
|
|
|
31
|
%
|
|
45
|
|
|
20
|
%
|
|||||
Segment net income attributable to non-controlling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
—
|
|
|
*
|
|
|||||
Segment net income attributable to partners
|
|
$
|
358
|
|
|
$
|
273
|
|
|
$
|
228
|
|
|
$
|
85
|
|
|
31
|
%
|
|
$
|
45
|
|
|
20
|
%
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment gross margin (b)
|
|
$
|
205
|
|
|
$
|
236
|
|
|
$
|
226
|
|
|
$
|
(31
|
)
|
|
(13
|
)%
|
|
$
|
10
|
|
|
4
|
%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
(20
|
)
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
(19
|
)
|
|
*
|
|
|
$
|
(5
|
)
|
|
*
|
|
NGL pipelines throughput (MBbls/d)
|
|
420
|
|
|
298
|
|
|
224
|
|
|
122
|
|
|
41
|
%
|
|
74
|
|
|
33
|
%
|
(a)
|
For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the throughput volumes of unconsolidated affiliates. Earnings for Sand Hills, Southern Hills, Front Range, Mont Belvieu 1 and Texas Express include the amortization of the net difference between the carrying amount of our investments and the underlying equity of the entities.
|
(b)
|
Segment gross margin consists of total operating revenues, including commodity derivative activity, less purchases of natural gas and NGLs. Please read “Reconciliation of Non-GAAP Measures”.
|
•
|
$250 million decrease attributable to lower commodity prices, which impacted both sales and purchases, before the impact of derivative activity;
|
•
|
$20 million decrease attributable to lower gas and NGL sales volumes, which impacted both sales and purchases
|
•
|
$29 million decrease as a result of commodity derivative activity attributable to a $10 million decrease in realized cash settlement gains in 2016 and an increase in unrealized commodity derivative losses of $19 million due to movements in forward prices of commodities; and
|
•
|
$2 million decrease primarily due to the sale of our Northern Louisiana system in July 2016 and lower wholesale propane fees partially offset by new connections on certain of our NGL pipelines.
|
•
|
$29 million decrease as a result of commodity derivative activity attributable to a $10 million decrease in realized cash settlement gains in 2016 and an increase in unrealized commodity derivative losses of $19 million due to movements in forward prices of commodities;
|
•
|
$2 million decrease primarily due to the sale of our Northern Louisiana system in July 2016 and lower wholesale propane fees, partially offset by new connections on certain of our NGL pipeline.
|
•
|
$5,682 million decrease attributable to lower commodity prices, which impacted both sales and purchases, before the impact of derivative activity;
|
•
|
$494 million decrease attributable to lower gas and NGL sales volumes, which impacted both sales and purchases; and
|
•
|
$2 million decrease as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative losses of $5 million in 2015 partially offset by a $3 million increase in realized cash settlement gains due to movements in forward prices of commodities.
|
•
|
$16 million increase primarily attributable to the conversion of one of our assets to a butane export facility and higher NGL storage margins.
|
•
|
$16 million increase primarily attributable to the conversion of one of our assets to a butane export facility and higher NGL storage margins; and
|
•
|
$27 million increase from wholesale propane primarily due to a partial recovery of lower of cost or market inventory adjustments recognized in the fourth quarter of 2014 and higher unit margins, partially offset by a decrease in volumes.
|
•
|
$31 million decrease primarily attributable lower volumes and unit margins on our natural gas storage assets and decreased gains from NGL marketing; and
|
•
|
$2 million decrease as a result of commodity derivative activity attributable to a an increase in unrealized commodity derivative losses of $5 million in 2015 partially offset by a $3 million increase in realized cash settlement gains due to movements in forward prices of commodities.
|
•
|
cash generated from operations;
|
•
|
cash distributions from our unconsolidated affiliates;
|
•
|
borrowings under our Amended and Restated Credit Agreement;
|
•
|
debt offerings;
|
•
|
issuances of additional common units;
|
•
|
borrowings under term loans; and
|
•
|
letters of credit.
|
•
|
quarterly distributions to our unitholders and general partner;
|
•
|
payments to service our debt;
|
•
|
growth and maintenance capital expenditures;
|
•
|
contributions to our unconsolidated affiliates to finance our share of their capital expenditures;
|
•
|
business and asset acquisitions; and
|
•
|
collateral with counterparties to our swap contracts to secure potential exposure under these contracts, which may, at times, be significant depending on commodity price movements.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
645
|
|
|
$
|
442
|
|
|
$
|
817
|
|
Net cash used in investing activities
|
$
|
(34
|
)
|
|
$
|
(711
|
)
|
|
$
|
(1,515
|
)
|
Net cash (used in) provided by financing activities
|
$
|
(613
|
)
|
|
$
|
245
|
|
|
$
|
694
|
|
•
|
$279 million
increase
in cash attributable to higher net income in 2016, after adjusting our net income for asset impairments in 2015 and other non-cash items;
|
•
|
$139 million
increase
in cash distributions from unconsolidated affiliates due to increased earnings. For additional information regarding fluctuations in our earnings from unconsolidated affiliates, please read "Results of Operations"; and
|
•
|
$215 million
decrease
in cash attributable to the timing of cash receipts and disbursements related to operations.
|
•
|
$667 million
decrease in capital expenditures attributable to the Lucerne 2 plant which started construction in April 2014 and was placed into service at the end of the second quarter of 2015, the Zia II plant which was placed into service in August 2015, the National Helium plant which was expanded and was placed into service in September 2015 and the Grand Parkway gathering project which began construction in the first quarter of 2015 and was completed in the first quarter of 2016; and
|
•
|
$11 million
decrease
in cash contributions to our unconsolidated affiliates. For the
year ended
December 31, 2016
, we primarily made contributions to the expansion projects at our Sand Hills and Southern Hills pipelines and the construction of our Panola pipeline. For the
year ended
December 31, 2015
, we primarily made contributions to the Keathley Canyon project at Discovery, our Panola pipeline and to the expansion projects at our Sand Hills pipeline.
|
•
|
$1 million
of lower proceeds received from the sale of assets in 2016.
|
•
|
$1,540 million decrease in advances from DCP Midstream, LLC primarily attributable to the $1,500 million contribution received from Phillips 66 in 2015;
|
•
|
$31 million
decrease
in proceeds from the issuance of common units to the public. We issued no common units to the public during the
year ended
December 31, 2016
as compared to approximately 1 million common units that were issued during the
year ended
December 31, 2015
;
|
•
|
$2 million
increase in distributions to non-controlling interests primarily due to Collbran; and
|
•
|
$1 million increase in distributions to limited and general partners.
|
•
|
$716 million
decrease in net debt payments primarily attributable to the repayment of outstanding commercial paper in 2015.
|
•
|
$76 million
increase
in cash distributions from unconsolidated affiliates primarily due to increased earnings. For additional information regarding fluctuations in our earnings from unconsolidated affiliates, please read "Results of Operations";
|
•
|
$301 million increase in cash attributable to the timing of cash receipts and disbursements related to operations; and
|
•
|
$752 million decrease in cash attributable to higher net income in 2014, after adjusting our net income for asset impairments and other non-cash items.
|
•
|
$573 million decrease in capital expenditures attributable to the completion of the Goliad plant and the O'Connor plant expansion, both of which were completed in the first quarter of 2014, the Lucerne 2 plant which started construction in April 2014 and was placed into service at the end of the second quarter of 2015, the Zia II plant which was placed into service in the August 2015, the National Helium plant which was expanded and placed into service in the September 2015, partially offset by the Grand Parkway gathering project which began construction in the first quarter of 2015;
|
•
|
$97 million decrease in cash contributions to our unconsolidated affiliates. In 2014, we primarily made contributions to the Keathley Canyon project at Discovery, which was placed into service in the first quarter of 2015, and Front Range, which was placed into service in February 2014. In 2015, we primarily made contributions to the Keathley Canyon project at Discovery, our Panola pipeline and to the expansion projects at our Sand Hills pipeline; and
|
•
|
$134 million of higher proceeds received from the sale of certain gas processing plants and gathering systems assets in 2015.
|
•
|
$970 million decrease in proceeds from the issuance of common units to the public. We issued approximately 1 million common units to the public during the year ended December 31, 2015 as compared to approximately 20 million units during the year ended December 31, 2014;
|
•
|
$1,415 million decrease in net debt borrowings primarily attributable to the higher repayments of outstanding commercial paper in 2015. In 2014, we received $719 million of proceeds from senior notes associated with the March 2014 Transactions; and
|
•
|
$62 million increase in cash distributions to our limited and general partners primarily attributable to units issued during 2014 and an increase in our quarterly distribution rate over the rate paid for the year ended December 31, 2014.
|
•
|
$1,998 million increase in advances from DCP Midstream, LLC primarily attributable to the $1,500 million contribution received from Phillips 66 in 2015 and $222 million paid related to our March 2014 Transactions.
|
•
|
maintenance capital expenditures, which are cash expenditures to maintain our cash flows, operating or earnings capacity. These expenditures add on to or improve capital assets owned, including certain system integrity, compliance and safety improvements. Maintenance capital expenditures also include certain well connects, and may include the acquisition or construction of new capital assets; and
|
•
|
expansion capital expenditures, which are cash expenditures to increase our cash flows, operating or earnings capacity. Expansion capital expenditures include acquisitions or capital improvements (where we add on to or improve the capital assets owned, or acquire or construct new gathering lines and well connects, treating facilities, processing plants, fractionation facilities, pipelines, terminals, docks, truck racks, tankage and other storage, distribution or transportation facilities and related or similar midstream assets).
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||
|
Maintenance
Capital Expenditures |
|
Expansion
Capital Expenditures |
|
Total
Consolidated Capital Expenditures |
|
Maintenance
Capital Expenditures |
|
Expansion
Capital Expenditures |
|
Total
Consolidated Capital Expenditures |
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Our portion
|
$
|
86
|
|
|
$
|
57
|
|
|
$
|
143
|
|
|
$
|
181
|
|
|
$
|
633
|
|
|
$
|
814
|
|
Non-controlling interest portion and reimbursable projects (a)
|
3
|
|
|
(2
|
)
|
|
1
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||
Total
|
$
|
89
|
|
|
$
|
55
|
|
|
$
|
144
|
|
|
$
|
178
|
|
|
$
|
633
|
|
|
$
|
811
|
|
|
|
Year Ended December 31, 2014
|
||||||||||
|
|
Maintenance
Capital Expenditures |
|
Expansion
Capital Expenditures |
|
Total
Consolidated Capital Expenditures |
||||||
|
(Millions)
|
|||||||||||
Our portion
|
|
$
|
344
|
|
|
$
|
1,039
|
|
|
$
|
1,383
|
|
Non-controlling interest portion and reimbursable projects (a)
|
|
2
|
|
|
(1
|
)
|
|
1
|
|
|||
Total
|
|
$
|
346
|
|
|
$
|
1,038
|
|
|
$
|
1,384
|
|
(a)
|
Represents the non-controlling interest and reimbursable portion of our capital expenditures. We have entered into agreements with third parties whereby we will be reimbursed for certain expenditures. Depending on the timing of these payments, we may be reimbursed prior to incurring the capital expenditure.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Thereafter
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Debt (a)
|
$
|
8,740
|
|
|
$
|
786
|
|
|
$
|
1,491
|
|
|
$
|
1,494
|
|
|
$
|
4,969
|
|
Operating lease obligations
|
225
|
|
|
61
|
|
|
72
|
|
|
50
|
|
|
42
|
|
|||||
Purchase obligations (b)
|
2,911
|
|
|
619
|
|
|
768
|
|
|
674
|
|
|
850
|
|
|||||
Other long-term liabilities (c)
|
145
|
|
|
—
|
|
|
11
|
|
|
8
|
|
|
126
|
|
|||||
Total
|
$
|
12,021
|
|
|
$
|
1,466
|
|
|
$
|
2,342
|
|
|
$
|
2,226
|
|
|
$
|
5,987
|
|
(a)
|
Includes interest payments on debt securities that have been issued. These interest payments are $
286 million
, $
521 million
, $
394 million
, and $
2,119 million
for less than one year, one to three years, three to five years, and thereafter, respectively.
|
(b)
|
Our purchase obligations are contractual obligations and include purchase orders and non-cancelable construction agreements for capital expenditures, various non-cancelable commitments to purchase physical quantities of commodities in future periods and other items, including long-term fractionation agreements. For contracts where the price paid is based on an index or other market-based rates, the amount is based on the forward market prices or current market rates as of
December 31, 2016
. Purchase obligations exclude accounts payable, accrued interest payable and other current liabilities recognized in the consolidated balance sheets. Purchase obligations also exclude current and long-term unrealized losses on derivative instruments included in the consolidated balance sheet, which represent the current fair value of various derivative contracts and do not represent future cash purchase obligations. These contracts may be settled financially at the difference between the future market price and the contractual price and may result in cash payments or cash receipts in the future, but generally do not require delivery of physical quantities of the underlying commodity. In addition, many of our gas purchase contracts include short and long-term commitments to purchase produced gas at market prices. These contracts, which have no minimum quantities, are excluded from the table.
|
(c)
|
Other long-term liabilities include asset retirement obligations, long-term environmental remediation liabilities, gas purchase liabilities, right of way liabilities and other miscellaneous liabilities recognized in the
December 31, 2016
condensed consolidated balance sheet. The table above excludes non-cash obligations as well as $28 million of deferred state income taxes, $26 million of Executive Deferred Compensation Plan contributions and $12 million of long-term incentive plans as the amount and timing of any payments are not subject to reasonable estimation.
|
•
|
financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
|
•
|
our operating performance and return on capital as compared to those of other companies in the midstream energy industry, without regard to financing methods or capital structure;
|
•
|
viability and performance of acquisitions and capital expenditure projects and the overall rates of return on investment opportunities; and
|
•
|
in the case of Adjusted EBITDA, the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, make cash distributions to our unitholders and general partner, and finance maintenance capital expenditures.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
Reconciliation of Non-GAAP Measures
|
(Millions)
|
|||||||||||
|
|
|
|
|
|
|
||||||
Reconciliation of net income attributable to partners to gross margin:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net income (loss) attributable to partners
|
|
$
|
88
|
|
|
$
|
(871
|
)
|
|
$
|
547
|
|
Interest expense
|
|
321
|
|
|
320
|
|
|
287
|
|
|||
Income tax expense (benefit)
|
|
46
|
|
|
(102
|
)
|
|
11
|
|
|||
Operating and maintenance expense
|
|
670
|
|
|
732
|
|
|
773
|
|
|||
Depreciation and amortization expense
|
|
378
|
|
|
377
|
|
|
348
|
|
|||
General and administrative expense
|
|
292
|
|
|
281
|
|
|
277
|
|
|||
Asset impairments
|
|
—
|
|
|
912
|
|
|
18
|
|
|||
Other (income) expense, net
|
|
(65
|
)
|
|
10
|
|
|
7
|
|
|||
Earnings from unconsolidated affiliates
|
|
(282
|
)
|
|
(184
|
)
|
|
(82
|
)
|
|||
(Gain) loss on sale of assets, net
|
|
(35
|
)
|
|
(42
|
)
|
|
7
|
|
|||
Restructuring costs
|
|
13
|
|
|
11
|
|
|
—
|
|
|||
Net income attributable to non-controlling interests
|
|
6
|
|
|
5
|
|
|
4
|
|
|||
Gross margin
|
|
$
|
1,432
|
|
|
$
|
1,449
|
|
|
$
|
2,197
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
(139
|
)
|
|
$
|
46
|
|
|
$
|
43
|
|
|
|
|
|
|
|
|
||||||
Reconciliation of segment net income attributable to partners to segment gross margin:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Gathering and Processing Segment:
|
|
|
|
|
|
|
||||||
Segment net income (loss) attributable to partners
|
|
$
|
417
|
|
|
$
|
(606
|
)
|
|
$
|
875
|
|
Operating and maintenance expense
|
|
611
|
|
|
668
|
|
|
725
|
|
|||
Depreciation and amortization expense
|
|
344
|
|
|
343
|
|
|
315
|
|
|||
General and administrative
|
|
14
|
|
|
22
|
|
|
27
|
|
|||
Other (income) expense, net
|
|
(73
|
)
|
|
1
|
|
|
5
|
|
|||
Earnings from unconsolidated affiliates
|
|
(73
|
)
|
|
(54
|
)
|
|
(5
|
)
|
|||
(Gain) loss on sale of assets, net
|
|
(19
|
)
|
|
(42
|
)
|
|
7
|
|
|||
Asset impairments
|
|
—
|
|
|
876
|
|
|
18
|
|
|||
Net income attributable to non-controlling interests
|
|
6
|
|
|
5
|
|
|
4
|
|
|||
Segment gross margin
|
|
$
|
1,227
|
|
|
$
|
1,213
|
|
|
$
|
1,971
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
(119
|
)
|
|
$
|
47
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Logistics and Marketing Segment:
|
|
|
|
|
|
|
||||||
Segment net income attributable to partners
|
|
$
|
358
|
|
|
$
|
273
|
|
|
$
|
228
|
|
Operating and maintenance expense
|
|
43
|
|
|
49
|
|
|
44
|
|
|||
Depreciation and amortization expense
|
|
15
|
|
|
16
|
|
|
17
|
|
|||
General and administrative
|
|
9
|
|
|
11
|
|
|
14
|
|
|||
Other expense, net
|
|
5
|
|
|
8
|
|
|
—
|
|
|||
Earnings from unconsolidated affiliates
|
|
(209
|
)
|
|
(130
|
)
|
|
(77
|
)
|
|||
Gain on sale of assets, net
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||
Asset impairments
|
|
—
|
|
|
9
|
|
|
—
|
|
|||
Segment gross margin
|
|
$
|
205
|
|
|
$
|
236
|
|
|
$
|
226
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
(20
|
)
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
(a)
|
Non-cash commodity derivative mark-to-market is included in gross margin and segment gross margin, along with cash settlements for our commodity derivative contracts.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
|||||||||||
Reconciliation of net income attributable to partners to adjusted segment EBITDA:
|
|
|
|
|
|
|
||||||
Gathering and Processing segment:
|
|
|
|
|
|
|
||||||
Segment net income (loss) attributable to partners
|
|
$
|
417
|
|
|
$
|
(606
|
)
|
|
$
|
875
|
|
Non-cash commodity derivative mark-to-market
|
|
119
|
|
|
(47
|
)
|
|
(39
|
)
|
|||
Depreciation and amortization expense
|
|
344
|
|
|
343
|
|
|
315
|
|
|||
Distributions from unconsolidated affiliates, net of earnings
|
|
21
|
|
|
15
|
|
|
14
|
|
|||
Asset impairments
|
|
—
|
|
|
876
|
|
|
18
|
|
|||
(Gain) loss on sale of assets, net
|
|
(19
|
)
|
|
(42
|
)
|
|
7
|
|
|||
Discontinued construction projects
|
|
14
|
|
|
2
|
|
|
5
|
|
|||
Non-controlling interest portion of depreciation and income tax
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Adjusted segment EBITDA
|
|
$
|
895
|
|
|
$
|
540
|
|
|
$
|
1,194
|
|
|
|
|
|
|
|
|
||||||
Logistics and Marketing segment:
|
|
|
|
|
|
|
||||||
Segment net income attributable to partners (a)
|
|
$
|
358
|
|
|
$
|
273
|
|
|
$
|
228
|
|
Non-cash commodity derivative mark-to-market
|
|
20
|
|
|
1
|
|
|
(4
|
)
|
|||
Depreciation and amortization expense
|
|
15
|
|
|
16
|
|
|
17
|
|
|||
Distributions from unconsolidated affiliates, net of earnings
|
|
53
|
|
|
18
|
|
|
45
|
|
|||
Asset impairments
|
|
—
|
|
|
9
|
|
|
—
|
|
|||
Gain on sale of assets, net
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||
Discontinued construction projects
|
|
—
|
|
|
—
|
|
|
2
|
|
|||
Adjusted segment EBITDA
|
|
$
|
430
|
|
|
$
|
317
|
|
|
$
|
288
|
|
(a)
|
Includes $3 million, $8 million and $24 million in the lower of cost or market adjustments for the years ended December 31, 2016, 2015 and 2014, respectively.
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Impairment of Goodwill
|
||||
We evaluate goodwill for impairment annually in the third quarter, and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
|
|
We determine fair value using widely accepted valuation techniques, namely discounted cash flow and market multiple analyses. These techniques are also used when assigning the purchase price to acquired assets and liabilities. These types of analyses require us to make assumptions and estimates regarding industry and economic factors and the profitability of future business strategies. It is our policy to conduct impairment testing based on our current business strategy in light of present industry and economic conditions, as well as future expectations.
|
|
We primarily use a discounted cash flow analysis, supplemented by a market approach analysis, to perform the assessment. Key assumptions in the analysis include the use of an appropriate discount rate, terminal year multiples, and estimated future cash flows including an estimate of operating and general and administrative costs. In estimating cash flows, we incorporate current market information (including forecasted commodity prices and volumes), as well as historical and other factors. If our assumptions are not appropriate, or future events indicate that our goodwill is impaired, our net income would be impacted by the amount by which the carrying value exceeds the fair value of the reporting unit, to the extent of the balance of goodwill. The two of the three reporting units that contain goodwill are not significantly impacted by the prices of commodities. Rather, they are volume based businesses that have the potential to be impacted by commodity prices should such prices remain depressed for a period of such duration that NGLs cease to be produced at levels requiring storage and distribution to end users. We did not record any goodwill impairment during the year ended December 31, 2016.
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Impairment of Long-Lived Assets
|
||||
We periodically evaluate whether the carrying value of long-lived assets has been impaired when circumstances indicate the carrying value of those assets may not be recoverable. For purposes of this evaluation, long-lived assets with recovery periods in excess of the weighted average remaining useful life of our fixed assets are further analyzed to determine if a triggering event occurred. If it is determined that a triggering event has occurred, we prepare a quantitative evaluation based on undiscounted cash flow projections expected to be realized over the remaining useful life of the primary asset. The carrying amount is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment loss is measured as the excess of the asset’s carrying value over its fair value.
|
|
Our impairment analyses require management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting useful lives of the assets, future commodity prices, volumes, and operating costs, assessing the probability of different outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales and discounted cash flow models.
|
|
Using the impairment review methodology described herein, we have not recorded any impairment charges on long-lived assets during the year ended December 31, 2016. If actual results are not consistent with our assumptions and estimates or our assumptions and estimates change due to new information, we may be exposed to an impairment charge. If our forecast indicates lower commodity prices in future periods at a level and duration that results in producers curtailing or redirecting drilling in areas where we operate this may adversely affect our estimate of future operating results, which could result in future impairment due to the potential impact on our operations and cash flows.
|
|
|
|
|
|
Impairment of Investments in Unconsolidated Affiliates
|
||||
We evaluate our investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of such investment may have experienced a decline in value. When evidence of loss in value has occurred, we compare the estimated fair value of the investment to the carrying value of the investment to determine whether an impairment has occurred. We would then evaluate if the impairment is other than temporary.
|
|
Our impairment analyses require management to apply judgment in estimating future cash flows and asset fair values, including forecasting useful lives of the assets, assessing the probability of differing estimated outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. When there is evidence of an other than temporary loss in value, we assess the fair value of our unconsolidated affiliates using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales and discounted cash flow models.
|
|
Using the impairment review methodology described herein, we have not recorded any significant impairment charges on investments in unconsolidated affiliates during the year ended December 31, 2016. If the estimated fair value of our unconsolidated affiliates is less than the carrying value, we would recognize an impairment loss for the excess of the carrying value over the estimated fair value only if the loss is other than temporary. A period of lower commodity prices may adversely affect our estimate of future operating results, which could result in future impairment due to the potential impact on our operations and cash flows.
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Accounting for Risk Management Activities and Financial Instruments
|
||||
Each derivative not qualifying for the normal purchases and normal sales exception is recorded on a gross basis in the consolidated balance sheets at its fair value as unrealized gains or unrealized losses on derivative instruments. Derivative assets and liabilities remain classified in our consolidated balance sheets as unrealized gains or unrealized losses on derivative instruments at fair value until the end of the contractual settlement period. Values are adjusted to reflect the credit risk inherent in the transaction as well as the potential impact of liquidating open positions in an orderly manner over a reasonable time period under current conditions.
|
|
When available, quoted market prices or prices obtained through external sources are used to determine a contract’s fair value. For contracts with a delivery location or duration for which quoted market prices are not available, fair value is determined based on pricing models developed primarily from historical information and the expected relationship with quoted market prices.
|
|
If our estimates of fair value are inaccurate, we may be exposed to losses or gains that could be material. A 10% difference in our estimated fair value of derivatives at December 31, 2016 would have affected net income by approximately $4 million based on our net derivative position for the year ended December 31, 2016.
|
|
|
|
|
|
DCP MIDSTREAM, LP CONSOLIDATED FINANCIAL STATEMENTS:
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2016 and 2015
|
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
(Millions)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1
|
|
|
$
|
3
|
|
Accounts receivable:
|
|
|
|
||||
Trade, net of allowance for doubtful accounts of $4 million
|
652
|
|
|
448
|
|
||
Affiliates
|
134
|
|
|
75
|
|
||
Other
|
6
|
|
|
21
|
|
||
Inventories
|
72
|
|
|
51
|
|
||
Unrealized gains on derivative instruments
|
42
|
|
|
156
|
|
||
Collateral cash deposits
|
71
|
|
|
7
|
|
||
Other
|
16
|
|
|
43
|
|
||
Total current assets
|
994
|
|
|
804
|
|
||
Property, plant and equipment, net
|
9,069
|
|
|
9,428
|
|
||
Goodwill
|
236
|
|
|
242
|
|
||
Intangible assets, net
|
137
|
|
|
149
|
|
||
Investments in unconsolidated affiliates
|
2,969
|
|
|
2,992
|
|
||
Unrealized gains on derivative instruments
|
5
|
|
|
19
|
|
||
Other long-term assets
|
201
|
|
|
251
|
|
||
Total assets
|
$
|
13,611
|
|
|
$
|
13,885
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable:
|
|
|
|
||||
Trade
|
$
|
677
|
|
|
$
|
480
|
|
Affiliates
|
48
|
|
|
40
|
|
||
Other
|
10
|
|
|
25
|
|
||
Current maturities of long-term debt
|
500
|
|
|
—
|
|
||
Unrealized losses on derivative instruments
|
91
|
|
|
69
|
|
||
Accrued interest
|
72
|
|
|
72
|
|
||
Accrued taxes
|
49
|
|
|
38
|
|
||
Accrued wages and benefits
|
72
|
|
|
71
|
|
||
Capital spending accrual
|
20
|
|
|
20
|
|
||
Other
|
84
|
|
|
84
|
|
||
Total current liabilities
|
1,623
|
|
|
899
|
|
||
Long-term debt
|
4,907
|
|
|
5,669
|
|
||
Unrealized losses on derivative instruments
|
1
|
|
|
12
|
|
||
Deferred income taxes
|
28
|
|
|
26
|
|
||
Other long-term liabilities
|
199
|
|
|
187
|
|
||
Total liabilities
|
6,758
|
|
|
6,793
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Predecessor equity
|
4,220
|
|
|
4,287
|
|
||
Limited partners (114,749,848 and 114,742,948 common units issued and outstanding, respectively)
|
2,591
|
|
|
2,762
|
|
||
General partner
|
18
|
|
|
18
|
|
||
Accumulated other comprehensive loss
|
(8
|
)
|
|
(8
|
)
|
||
Total partners’ equity
|
6,821
|
|
|
7,059
|
|
||
Non-controlling interests
|
32
|
|
|
33
|
|
||
Total equity
|
6,853
|
|
|
7,092
|
|
||
Total liabilities and equity
|
$
|
13,611
|
|
|
$
|
13,885
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions, except per unit amounts)
|
||||||||||
Operating revenues:
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate
|
$
|
5,317
|
|
|
$
|
6,014
|
|
|
$
|
11,390
|
|
Sales of natural gas, NGLs and condensate to affiliates
|
952
|
|
|
765
|
|
|
2,030
|
|
|||
Transportation, processing and other
|
647
|
|
|
532
|
|
|
517
|
|
|||
Trading and marketing (losses) gains, net
|
(23
|
)
|
|
119
|
|
|
88
|
|
|||
Total operating revenues
|
6,893
|
|
|
7,430
|
|
|
14,025
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Purchases of natural gas and NGLs
|
4,978
|
|
|
5,563
|
|
|
11,363
|
|
|||
Purchases of natural gas and NGLs from affiliates
|
483
|
|
|
418
|
|
|
465
|
|
|||
Operating and maintenance expense
|
670
|
|
|
732
|
|
|
773
|
|
|||
Depreciation and amortization expense
|
378
|
|
|
377
|
|
|
348
|
|
|||
General and administrative expense
|
292
|
|
|
281
|
|
|
277
|
|
|||
Asset impairments
|
—
|
|
|
912
|
|
|
18
|
|
|||
Other (income) expense, net
|
(65
|
)
|
|
10
|
|
|
7
|
|
|||
(Gain) loss on sale of assets, net
|
(35
|
)
|
|
(42
|
)
|
|
7
|
|
|||
Restructuring costs
|
13
|
|
|
11
|
|
|
—
|
|
|||
Total operating costs and expenses
|
6,714
|
|
|
8,262
|
|
|
13,258
|
|
|||
Operating income (loss)
|
179
|
|
|
(832
|
)
|
|
767
|
|
|||
Interest expense, net
|
(321
|
)
|
|
(320
|
)
|
|
(287
|
)
|
|||
Earnings from unconsolidated affiliates
|
282
|
|
|
184
|
|
|
82
|
|
|||
Income (loss) before income taxes
|
140
|
|
|
(968
|
)
|
|
562
|
|
|||
Income tax (expense) benefit
|
(46
|
)
|
|
102
|
|
|
(11
|
)
|
|||
Net income (loss)
|
94
|
|
|
(866
|
)
|
|
551
|
|
|||
Net income attributable to non-controlling interests
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|||
Net income (loss) attributable to partners
|
88
|
|
|
(871
|
)
|
|
547
|
|
|||
Net loss (income) attributable to predecessor operations
|
224
|
|
|
1,099
|
|
|
(130
|
)
|
|||
General partner’s interest in net income
|
(124
|
)
|
|
(124
|
)
|
|
(114
|
)
|
|||
Net income allocable to limited partners
|
$
|
188
|
|
|
$
|
104
|
|
|
$
|
303
|
|
Net income per limited partner unit — basic and diluted
|
$
|
1.64
|
|
|
$
|
0.91
|
|
|
$
|
2.84
|
|
Weighted-average limited partner units outstanding — basic and diluted
|
114.7
|
|
|
114.6
|
|
|
106.6
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
||||||||||
Net income (loss)
|
$
|
94
|
|
|
$
|
(866
|
)
|
|
$
|
551
|
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Reclassification of cash flow hedge losses into earnings
|
—
|
|
|
1
|
|
|
2
|
|
|||
Total other comprehensive income
|
—
|
|
|
1
|
|
|
2
|
|
|||
Total comprehensive income (loss)
|
94
|
|
|
(865
|
)
|
|
553
|
|
|||
Total comprehensive income attributable to non-controlling interests
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|||
Total comprehensive income (loss) attributable to partners
|
$
|
88
|
|
|
$
|
(870
|
)
|
|
$
|
549
|
|
|
|
|
Partners’ Equity
|
|
|
|
|
||||||||||||||||
|
Predecessor
Equity
|
|
Limited Partners
|
|
General Partner
|
|
Accumulated Other
Comprehensive
Loss
|
|
Non-controlling
Interests
|
|
Total
Equity
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Balance, January 1, 2016
|
$
|
4,287
|
|
|
$
|
2,762
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
33
|
|
|
$
|
7,092
|
|
Net (loss) income
|
(224
|
)
|
|
188
|
|
|
124
|
|
|
—
|
|
|
6
|
|
|
94
|
|
||||||
Net change in parent advances
|
157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
157
|
|
||||||
Distributions to limited partners and general partner
|
—
|
|
|
(359
|
)
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
(483
|
)
|
||||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||
Balance, December 31, 2016
|
$
|
4,220
|
|
|
$
|
2,591
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
32
|
|
|
$
|
6,853
|
|
|
|
|
Partners’ Equity
|
|
|
|
|
||||||||||||||||
|
Predecessor
Equity |
|
Limited
Partners |
|
General
Partner |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Non-controlling
Interests |
|
Total
Equity |
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Balance, January 1, 2015
|
$
|
2,189
|
|
|
$
|
2,984
|
|
|
$
|
18
|
|
|
$
|
(9
|
)
|
|
$
|
33
|
|
|
$
|
5,215
|
|
Net (loss) income
|
(1,099
|
)
|
|
104
|
|
|
124
|
|
|
—
|
|
|
5
|
|
|
(866
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Net change in parent advances
|
3,197
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,197
|
|
||||||
Issuance of 793,080 common units to the public
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||||
Distributions to limited partners and general partner
|
—
|
|
|
(358
|
)
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
(482
|
)
|
||||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||
Contributions from DCP Midstream, LLC
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Balance, December 31, 2015
|
$
|
4,287
|
|
|
$
|
2,762
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
33
|
|
|
$
|
7,092
|
|
|
|
|
Partners’ Equity
|
|
|
|
|
||||||||||||||||
|
Predecessor
Equity |
|
Limited
Partners |
|
General
Partner |
|
Accumulated
Other Comprehensive (Loss) Income |
|
Non-controlling
Interests |
|
Total
Equity |
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Balance, January 1, 2014
|
$
|
2,406
|
|
|
$
|
1,948
|
|
|
$
|
8
|
|
|
$
|
(11
|
)
|
|
$
|
34
|
|
|
$
|
4,385
|
|
Net income
|
130
|
|
|
303
|
|
|
114
|
|
|
—
|
|
|
4
|
|
|
551
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Net change in parent advances
|
(347
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(347
|
)
|
||||||
Issuance of 4,497,158 units to DCP Midstream, LLC and affiliates
|
—
|
|
|
225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225
|
|
||||||
Excess purchase price over carrying value of interests acquired in March 2014 Transactions
|
—
|
|
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
||||||
Issuance of 20,407,571 common units to the public
|
—
|
|
|
1,002
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,002
|
|
||||||
Distributions to limited partners and general partner
|
—
|
|
|
(316
|
)
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|
(420
|
)
|
||||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||
Balance, December 31, 2014
|
$
|
2,189
|
|
|
$
|
2,984
|
|
|
$
|
18
|
|
|
$
|
(9
|
)
|
|
$
|
33
|
|
|
$
|
5,215
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
||||||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
94
|
|
|
$
|
(866
|
)
|
|
$
|
551
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
378
|
|
|
377
|
|
|
348
|
|
|||
Earnings from unconsolidated affiliates
|
(282
|
)
|
|
(184
|
)
|
|
(82
|
)
|
|||
Distributions from unconsolidated affiliates
|
356
|
|
|
217
|
|
|
141
|
|
|||
Net unrealized losses (gains) on derivative instruments
|
139
|
|
|
(46
|
)
|
|
(43
|
)
|
|||
(Gain) loss on sale of assets
|
(35
|
)
|
|
(42
|
)
|
|
7
|
|
|||
Asset impairments
|
—
|
|
|
912
|
|
|
18
|
|
|||
Other, net
|
68
|
|
|
(68
|
)
|
|
36
|
|
|||
Change in operating assets and liabilities, which provided cash, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(247
|
)
|
|
479
|
|
|
400
|
|
|||
Inventories
|
(21
|
)
|
|
29
|
|
|
16
|
|
|||
Accounts payable
|
199
|
|
|
(381
|
)
|
|
(467
|
)
|
|||
Other, net
|
(4
|
)
|
|
15
|
|
|
(108
|
)
|
|||
Net cash provided by operating activities
|
645
|
|
|
442
|
|
|
817
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(144
|
)
|
|
(811
|
)
|
|
(1,384
|
)
|
|||
Investments in unconsolidated affiliates, net
|
(53
|
)
|
|
(64
|
)
|
|
(161
|
)
|
|||
Proceeds from sale of assets
|
163
|
|
|
164
|
|
|
30
|
|
|||
Net cash used in investing activities
|
(34
|
)
|
|
(711
|
)
|
|
(1,515
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from long-term debt
|
3,353
|
|
|
7,216
|
|
|
719
|
|
|||
Payments of long-term debt
|
(3,628
|
)
|
|
(7,196
|
)
|
|
—
|
|
|||
Payments of commercial paper, net
|
—
|
|
|
(1,012
|
)
|
|
(288
|
)
|
|||
Payments of deferred financing costs
|
(5
|
)
|
|
(4
|
)
|
|
(12
|
)
|
|||
Proceeds from issuance of common units, net of offering costs
|
—
|
|
|
31
|
|
|
1,001
|
|
|||
Net change in advances to predecessor from DCP Midstream, LLC
|
157
|
|
|
1,697
|
|
|
(301
|
)
|
|||
Distributions to limited partners and general partner
|
(483
|
)
|
|
(482
|
)
|
|
(420
|
)
|
|||
Distributions to non-controlling interests
|
(7
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|||
Net cash (used in) provided by financing activities
|
(613
|
)
|
|
245
|
|
|
694
|
|
|||
Net change in cash and cash equivalents
|
(2
|
)
|
|
(24
|
)
|
|
(4
|
)
|
|||
Cash and cash equivalents, beginning of period
|
3
|
|
|
27
|
|
|
31
|
|
|||
Cash and cash equivalents, end of period
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
27
|
|
Classification of Contract
|
Accounting Method
|
Presentation of Gains & Losses or Revenue & Expense
|
Trading Derivatives
|
Mark-to-market method (a)
|
Net basis in trading and marketing gains and losses
|
Non-Trading Derivatives:
|
|
|
Cash Flow Hedge
|
Hedge method (b)
|
Gross basis in the same consolidated statements of operations category as the related hedged item
|
|
|
|
Fair Value Hedge
|
Hedge method (b)
|
Gross basis in the same consolidated statements of operations category as the related hedged item
|
|
|
|
Normal Purchases or Normal Sales
|
Accrual method (c)
|
Gross basis upon settlement in the corresponding consolidated statements of operations category based on purchase or sale
|
|
|
|
Other Non-Trading Derivative Activity
|
Mark-to-market method (a)
|
Net basis in trading and marketing gains and losses, net
|
(a)
|
Mark-to-market method - An accounting method whereby the change in the fair value of the asset or liability is recognized in the consolidated statements of operations in trading and marketing gains and losses, net during the current period.
|
(b)
|
Hedge method - An accounting method whereby the change in the fair value of the asset or liability is recorded in the consolidated balance sheets as unrealized gains or unrealized losses on derivative instruments. For cash flow hedges, there is no recognition in the consolidated statements of operations for the effective portion until the service is provided or the associated delivery impacts earnings. For fair value hedges, the change in the fair value of the asset or liability, as well as the offsetting changes in value of the hedged item, are recognized in the consolidated statements of operations in the same category as the related hedged item.
|
(c)
|
Accrual method - An accounting method whereby there is no recognition in the consolidated balance sheets or consolidated statements of operations for changes in fair value of a contract until the service is provided or the associated delivery impacts earnings.
|
•
|
significant adverse change in legal factors or business climate;
|
•
|
a current-period operating or cash flow loss combined with a history of operating or cash flow losses, or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset;
|
•
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset;
|
•
|
significant adverse changes in the extent or manner in which an asset is used, or in its physical condition;
|
•
|
a significant adverse change in the market value of an asset; or
|
•
|
a current expectation that, more likely than not, an asset will be sold or otherwise disposed of before the end of its estimated useful life.
|
•
|
Fee-based arrangements -
Under fee-based arrangements, we receive a fee or fees for one or more of the following services: gathering, compressing, treating, processing, transporting or storing natural gas; and fractionating, storing and transporting NGLs. The revenues we earn are directly related to the volume of natural gas or NGLs that flows through our systems and are not directly dependent on commodity prices. However, to the extent a sustained decline in commodity prices results in a decline in volumes, our revenues from these arrangements would be reduced.
|
•
|
Percent-of-proceeds/index arrangements
- Under percent-of-proceeds arrangements, we generally purchase natural gas from producers at the wellhead, or other receipt points, gather the wellhead natural gas through our gathering system, treat and process the natural gas, and then sell the resulting residue natural gas, NGLs and condensate based on published index market prices. We remit to the producers either an agreed-upon percentage of the actual proceeds that we receive from our sales of the residue natural gas, NGLs and condensate, or an agreed-upon percentage of the proceeds based on index related prices for the natural gas, NGLs and condensate, regardless of the actual amount of the sales proceeds we receive. We keep the difference between the proceeds received and the amount remitted back to the producer. Under percent-of-liquids arrangements, we do not keep any amounts related to residue natural gas proceeds and only keep amounts related to the difference between the proceeds received and the amount remitted back to the producer related to NGLs and condensate. Certain of these arrangements may also result in the producer retaining title to all or a portion of the residue natural gas and/or the NGLs, in lieu of us returning sales proceeds to the producer. Additionally, these arrangements may include fee-based components. Our revenues under percent-of-proceeds/index arrangements relate directly with the price of natural gas, NGLs and condensate. Our revenues under percent-of-liquids arrangements relate directly with the price of NGLs and condensate.
|
•
|
Keep-whole and wellhead purchase arrangements
- Under the terms of a keep-whole processing contract, natural gas is gathered from the producer for processing, the NGLs and condensate are sold and the residue natural gas is returned to the producer with a British thermal unit, or Btu, content equivalent to the Btu content of the natural gas gathered. This arrangement keeps the producer whole to the thermal value of the natural gas received. Under the terms of a wellhead purchase contract, we purchase natural gas from the producer at the wellhead or defined receipt point for processing and then market the resulting NGLs and residue gas at market prices. Under these types of contracts, we are exposed to the difference between the value of the NGLs extracted from processing and the value of the Btu equivalent of residue natural gas, or frac spread. We benefit in periods when NGL prices are higher relative to natural gas prices when that frac spread exceeds our operating costs.
|
•
|
Persuasive evidence of an arrangement exists
- Our customary practice is to enter into a written contract.
|
•
|
Delivery
- Delivery is deemed to have occurred at the time custody is transferred, or in the case of fee-based arrangements, when the services are rendered. To the extent we retain product as inventory, delivery occurs when the inventory is subsequently sold and custody is transferred to the third party purchaser.
|
•
|
The fee is fixed or determinable
- We negotiate the fee for our services at the outset of our fee-based arrangements. In these arrangements, the fees are nonrefundable. For other arrangements, the amount of revenue, based on contractual terms, is determinable when the sale of the applicable product has been completed upon delivery and transfer of custody.
|
•
|
Collectability is reasonably assured
- Collectability is evaluated on a customer-by-customer basis. New and existing customers are subject to a credit review process, which evaluates the customers’ financial position (for example, credit metrics, liquidity and credit rating) and their ability to pay. If collectability is not considered probable at the outset of an arrangement in accordance with our credit review process, revenue is not recognized until the cash is collected.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(Millions)
|
||||||||||
Phillips 66 (including its affiliates):
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
909
|
|
|
$
|
695
|
|
|
$
|
1,960
|
|
Purchases of natural gas and NGLs from affiliates
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
11
|
|
Operating and maintenance and general administrative expenses
|
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
3
|
|
Enbridge (including Spectra Energy Corp.):
|
|
|
|
|
|
|
||||||
Transportation, storage and processing to affiliates
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Purchases of natural gas and NGLs from affiliates
|
|
$
|
33
|
|
|
$
|
50
|
|
|
$
|
88
|
|
Operating and maintenance and general administrative expenses
|
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
10
|
|
Unconsolidated affiliates:
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
43
|
|
|
$
|
70
|
|
|
$
|
70
|
|
Transportation, storage and processing
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
12
|
|
Purchases of natural gas and NGLs from affiliates
|
|
$
|
432
|
|
|
$
|
368
|
|
|
$
|
366
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Millions)
|
||||||
Phillips 66 (including its affiliates):
|
|
|
|
||||
Accounts receivable
|
$
|
115
|
|
|
$
|
54
|
|
Accounts payable
|
$
|
4
|
|
|
$
|
3
|
|
Other assets
|
$
|
2
|
|
|
$
|
1
|
|
Enbridge (including Spectra Energy Corp.):
|
|
|
|
||||
Accounts receivable
|
$
|
1
|
|
|
$
|
—
|
|
Accounts payable
|
$
|
3
|
|
|
$
|
4
|
|
Other assets
|
$
|
1
|
|
|
$
|
1
|
|
Other liabilities
|
$
|
1
|
|
|
$
|
—
|
|
Unconsolidated affiliates:
|
|
|
|
||||
Accounts receivable
|
$
|
18
|
|
|
$
|
21
|
|
Accounts payable
|
$
|
41
|
|
|
$
|
33
|
|
Other assets
|
$
|
5
|
|
|
$
|
31
|
|
|
|
|
December 31,
|
||||||
|
Depreciable
Life
|
|
2016
|
|
2015
|
||||
|
|
|
(Millions)
|
||||||
Gathering and transmission systems
|
20 — 50 Years
|
|
$
|
8,560
|
|
|
$
|
8,815
|
|
Processing, storage, and terminal facilities
|
35 — 60 Years
|
|
5,134
|
|
|
5,102
|
|
||
Other
|
3 — 30 Years
|
|
502
|
|
|
485
|
|
||
Construction work in progress
|
|
|
171
|
|
|
196
|
|
||
Property, plant and equipment
|
|
|
14,367
|
|
|
14,598
|
|
||
Accumulated depreciation
|
|
|
(5,298
|
)
|
|
(5,170
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
9,069
|
|
|
$
|
9,428
|
|
|
December 31,
|
||||||
|
2016 (a)
|
|
2015 (a)
|
||||
|
(millions)
|
||||||
Balance, beginning of period
|
$
|
120
|
|
|
$
|
117
|
|
Accretion expense
|
7
|
|
|
7
|
|
||
Revisions in estimated cash flows
|
(3
|
)
|
|
(4
|
)
|
||
Balance, end of period
|
$
|
124
|
|
|
$
|
120
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
|
2016
|
|
2015
|
||||||||||||||||||||
|
|
(Millions)
|
||||||||||||||||||||||
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Total
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Total
|
||||||||||||
Balance, beginning of period
|
|
$
|
170
|
|
|
$
|
72
|
|
|
$
|
242
|
|
|
$
|
632
|
|
|
$
|
72
|
|
|
$
|
704
|
|
Impairment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(460
|
)
|
|
—
|
|
|
(460
|
)
|
||||||
Dispositions
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Balance, end of period
|
|
$
|
164
|
|
|
$
|
72
|
|
|
$
|
236
|
|
|
$
|
170
|
|
|
$
|
72
|
|
|
$
|
242
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Millions)
|
||||||
Gross carrying amount
|
$
|
410
|
|
|
$
|
410
|
|
Accumulated amortization
|
(151
|
)
|
|
(139
|
)
|
||
Accumulated impairment
|
(122
|
)
|
|
(122
|
)
|
||
Intangible assets, net
|
$
|
137
|
|
|
$
|
149
|
|
|
|
|
|
Estimated Future Amortization
|
|||
(Millions)
|
|||
2017
|
$
|
11
|
|
2018
|
11
|
|
|
2019
|
11
|
|
|
2020
|
11
|
|
|
2021
|
11
|
|
|
Thereafter
|
82
|
|
|
Total
|
$
|
137
|
|
|
|
|
Carrying Value as of
|
||||||
|
Percentage
Ownership
|
|
December 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
(Millions)
|
||||||
DCP Sand Hills Pipeline, LLC
|
66.67%
|
|
$
|
1,507
|
|
|
$
|
1,492
|
|
DCP Southern Hills Pipeline, LLC
|
66.67%
|
|
754
|
|
|
764
|
|
||
Discovery Producer Services LLC
|
40.00%
|
|
385
|
|
|
405
|
|
||
Front Range Pipeline LLC
|
33.33%
|
|
165
|
|
|
170
|
|
||
Texas Express Pipeline LLC
|
10.00%
|
|
93
|
|
|
96
|
|
||
Panola Pipeline Company, LLC
|
15.00%
|
|
25
|
|
|
19
|
|
||
Mont Belvieu Enterprise Fractionator
|
12.50%
|
|
23
|
|
|
25
|
|
||
Mont Belvieu 1 Fractionator
|
20.00%
|
|
10
|
|
|
11
|
|
||
Other
|
Various
|
|
7
|
|
|
10
|
|
||
Total investments in unconsolidated affiliates
|
|
|
$
|
2,969
|
|
|
$
|
2,992
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
|||||||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
110
|
|
|
$
|
63
|
|
|
$
|
26
|
|
Discovery Producer Services LLC
|
|
73
|
|
|
54
|
|
|
7
|
|
|||
DCP Southern Hills Pipeline, LLC
|
|
44
|
|
|
18
|
|
|
15
|
|
|||
Front Range Pipeline LLC
|
|
19
|
|
|
17
|
|
|
2
|
|
|||
Mont Belvieu Enterprise Fractionator
|
|
16
|
|
|
15
|
|
|
17
|
|
|||
Mont Belvieu 1 Fractionator
|
|
9
|
|
|
9
|
|
|
12
|
|
|||
Texas Express Pipeline LLC
|
|
9
|
|
|
8
|
|
|
3
|
|
|||
Other
|
|
2
|
|
|
—
|
|
|
—
|
|
|||
Total earnings from unconsolidated affiliates
|
|
$
|
282
|
|
|
$
|
184
|
|
|
$
|
82
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
|||||||||||
Statements of operations (a):
|
|
|
|
|
|
|
||||||
Operating revenue
|
|
$
|
1,311
|
|
|
$
|
1,142
|
|
|
$
|
859
|
|
Operating expenses
|
|
$
|
539
|
|
|
$
|
541
|
|
|
$
|
503
|
|
Net income
|
|
$
|
768
|
|
|
$
|
600
|
|
|
$
|
354
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Millions)
|
||||||
Balance sheets (a):
|
|
|
|
||||
Current assets
|
$
|
232
|
|
|
$
|
240
|
|
Long-term assets
|
5,274
|
|
|
5,224
|
|
||
Current liabilities
|
(156
|
)
|
|
(167
|
)
|
||
Long-term liabilities
|
(205
|
)
|
|
(230
|
)
|
||
Net assets
|
$
|
5,145
|
|
|
$
|
5,067
|
|
•
|
Counterparty credit valuation adjustments are necessary when the market price of an instrument is not indicative of the fair value as a result of the credit quality of the counterparty. Generally, market quotes assume that all counterparties have near zero, or low, default rates and have equal credit quality. Therefore, an adjustment may be necessary to reflect the credit quality of a specific counterparty to determine the fair value of the instrument. We record counterparty credit valuation adjustments on all derivatives that are in a net asset position as of the measurement date in accordance with our established counterparty credit policy, which takes into account any collateral margin that a counterparty may have posted with us as well as any letters of credit that they have provided.
|
•
|
Entity valuation adjustments are necessary to reflect the effect of our own credit quality on the fair value of our net liability positions with each counterparty. This adjustment takes into account any credit enhancements, such as collateral margin we may have posted with a counterparty, as well as any letters of credit that we have provided. The methodology to determine this adjustment is consistent with how we evaluate counterparty credit risk, taking into account our own credit rating, current credit spreads, as well as any change in such spreads since the last measurement date.
|
•
|
Liquidity valuation adjustments are necessary when we are not able to observe a recent market price for financial instruments that trade in less active markets for the fair value to reflect the cost of exiting the position. Exchange traded contracts are valued at market value without making any additional valuation adjustments and, therefore, no liquidity reserve is applied. For contracts other than exchange traded instruments, we mark our positions to the midpoint of the bid/ask spread, and record a liquidity reserve based upon our total net position. We believe that such practice results in the most reliable fair value measurement as viewed by a market participant.
|
•
|
Level 1 — inputs are unadjusted quoted prices for
identical
assets or liabilities in active markets.
|
•
|
Level 2 — inputs include quoted prices for
similar
assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 — inputs are unobservable and considered significant to the fair value measurement.
|
|
Fair Value Measurements Using
|
||||||||||||||||||
|
Net Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Asset Impairments
|
||||||||||
|
(millions)
|
||||||||||||||||||
December 31, 2015:
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
460
|
|
Property, plant and equipment
|
87
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|
302
|
|
|||||
Intangible assets
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
122
|
|
|||||
Other assets
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|
28
|
|
|||||
Total non-recurring assets measured at fair value
|
$
|
173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
173
|
|
|
$
|
912
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Carrying
Value
|
||||||||||||||||
|
(Millions)
|
||||||||||||||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (a)
|
$
|
5
|
|
|
$
|
28
|
|
|
$
|
9
|
|
|
$
|
42
|
|
|
$
|
23
|
|
|
$
|
98
|
|
|
$
|
35
|
|
|
$
|
156
|
|
Short-term investments (b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
19
|
|
Mutual funds (d)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (e)
|
$
|
(11
|
)
|
|
$
|
(57
|
)
|
|
$
|
(23
|
)
|
|
$
|
(91
|
)
|
|
$
|
(16
|
)
|
|
$
|
(30
|
)
|
|
$
|
(23
|
)
|
|
$
|
(69
|
)
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (f)
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
(6
|
)
|
|
$
|
(12
|
)
|
(a)
|
Included in current unrealized gains on derivative instruments in our consolidated balance sheets.
|
(b)
|
Includes short-term money market securities included in cash and cash equivalents in our consolidated balance sheets.
|
(c)
|
Included in long-term unrealized gains on derivative instruments in our consolidated balance sheets.
|
(d)
|
Included in other long-term assets in our consolidated balance sheets.
|
(e)
|
Included in current unrealized losses on derivative instruments in our consolidated balance sheets.
|
(f)
|
Included in long-term unrealized losses on derivative instruments in our consolidated balance sheets.
|
|
Commodity Derivative Instruments
|
||||||||||||||
|
Current
Assets |
|
Long-
Term Assets |
|
Current
Liabilities |
|
Long-
Term Liabilities |
||||||||
|
(Millions)
|
||||||||||||||
Year ended December 31, 2016 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
35
|
|
|
$
|
4
|
|
|
$
|
(23
|
)
|
|
$
|
(6
|
)
|
Net unrealized gains (losses) included in earnings (b)
|
3
|
|
|
1
|
|
|
(15
|
)
|
|
6
|
|
||||
Settlements
|
(29
|
)
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Ending balance
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
9
|
|
|
$
|
3
|
|
|
$
|
(23
|
)
|
|
$
|
6
|
|
Year ended December 31, 2015 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
23
|
|
|
$
|
3
|
|
|
$
|
(45
|
)
|
|
$
|
(12
|
)
|
Net unrealized gains (losses) included in earnings (b)
|
(82
|
)
|
|
1
|
|
|
(29
|
)
|
|
6
|
|
||||
Transfers out of Level 3 (c)
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Settlements
|
(25
|
)
|
|
—
|
|
|
50
|
|
|
—
|
|
||||
Novation (d)
|
119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
$
|
35
|
|
|
$
|
4
|
|
|
$
|
(23
|
)
|
|
$
|
(6
|
)
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
(84
|
)
|
|
$
|
1
|
|
|
$
|
(23
|
)
|
|
$
|
4
|
|
(a)
|
There were no purchases, issuances or sales of derivatives or transfers into/out of Level 3 for the
years ended
December 31, 2016
and
2015
.
|
(b)
|
Represents the amount of total gains or losses for the period, included in trading and marketing gains or losses, net, in our consolidated statements of operations.
|
(c)
|
Amounts transferred out of Level 3 are reflected at fair value as of the end of the period.
|
(d)
|
Represents the March 2015 novation of certain fixed price commodity derivatives.
|
|
December 31, 2016
|
|
|
||||
Product Group
|
Fair Value
|
|
Forward
Curve Range
|
|
|
||
|
(Millions)
|
|
|
||||
Assets
|
|
|
|
|
|
||
NGLs
|
$
|
14
|
|
|
$0.25-$1.20
|
|
Per gallon
|
Liabilities
|
|
|
|
|
|
||
NGLs
|
$
|
(23
|
)
|
|
$0.25-$1.23
|
|
Per gallon
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||
|
|
Carrying Value (a)
|
|
Fair Value
|
|
Carrying Value (a)
|
|
Fair Value
|
||||
|
(Millions)
|
|||||||||||
Total debt
|
|
5,430
|
|
|
5,395
|
|
|
5,704
|
|
|
4,754
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Millions)
|
||||||
Senior notes:
|
|
|
|
||||
Issued November, 2012, interest at 2.500% payable semi-annually, due December, 2017
|
500
|
|
|
500
|
|
||
Issued February 2009, interest at 9.750% payable semiannually, due March 2019 (a)
|
450
|
|
|
450
|
|
||
Issued March, 2014, interest at 2.700% payable semi-annually, due April, 2019
|
325
|
|
|
325
|
|
||
Issued March 2010, interest at 5.350% payable semiannually, due March 2020 (a)
|
600
|
|
|
600
|
|
||
Issued September 2011, interest at 4.750% payable semiannually, due September 2021
|
500
|
|
|
500
|
|
||
Issued March, 2012, interest at 4.950% payable semi-annually, due April, 2022
|
350
|
|
|
350
|
|
||
Issued March, 2013, interest at 3.875% payable semi-annually, due March, 2023
|
500
|
|
|
500
|
|
||
Issued August 2000, interest at 8.125% payable semiannually, due August 2030 (a)
|
300
|
|
|
300
|
|
||
Issued October 2006, interest at 6.450% payable semiannually, due November 2036
|
300
|
|
|
300
|
|
||
Issued September 2007, interest at 6.750% payable semiannually, due September 2037
|
450
|
|
|
450
|
|
||
Issued March, 2014, interest at 5.600% payable semi-annually, due April, 2044
|
400
|
|
|
400
|
|
||
Junior subordinated notes:
|
|
|
|
||||
Issued May 2013, interest at 5.850% payable semiannually, due May 2043
|
550
|
|
|
550
|
|
||
Credit facilities with financial institutions:
|
|
|
|
||||
Revolving credit agreement terminated December, 2016, weighted average interest rate of 2.930% at December 31, 2015
|
—
|
|
|
96
|
|
||
Revolving credit agreement, weighted-average variable interest rate of 2.014% and 1.572%, as of December 31, 2016 and December 31, 2015, respectively, due May 2019
|
195
|
|
|
375
|
|
||
Fair value adjustments related to interest rate swap fair value hedges (a)
|
24
|
|
|
26
|
|
||
Unamortized issuance costs
|
(23
|
)
|
|
(35
|
)
|
||
Unamortized discount
|
(14
|
)
|
|
(18
|
)
|
||
Total debt
|
5,407
|
|
|
5,669
|
|
||
Current maturities of long-term debt
|
500
|
|
|
—
|
|
||
Total long-term debt
|
$
|
4,907
|
|
|
$
|
5,669
|
|
|
Debt
Maturities
|
||
|
(Millions)
|
||
2017
|
$
|
500
|
|
2018
|
—
|
|
|
2019
|
970
|
|
|
2020
|
600
|
|
|
2021
|
500
|
|
|
Thereafter
|
2,850
|
|
|
|
5,420
|
|
|
Fair value adjustments related to interest rate swap fair value hedges
|
24
|
|
|
Unamortized issuance costs
|
(23
|
)
|
|
Unamortized discount
|
(14
|
)
|
|
Total
|
$
|
5,407
|
|
•
|
If we were to have an effective event of default under our Amended and Restated Credit Agreement that occurs and is continuing, our ISDA counterparties may have the right to request early termination and net settlement of any outstanding derivative liability positions.
|
•
|
Our ISDA counterparties generally have collateral thresholds of zero, requiring us to fully collateralize any commodity contracts in a net liability position, when our credit rating is below investment grade.
|
•
|
Additionally, in some cases, our ISDA contracts contain cross-default provisions that could constitute a credit-risk related contingent feature. These provisions apply if we default in making timely payments under other credit arrangements and the amount of the default is above certain predefined thresholds, which are significantly high and are generally consistent with the terms of our Amended and Restated Credit Agreement. As of
December 31, 2016
, we were not a party to any agreements that would trigger the cross-default provisions.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross Amounts
of Assets and
(Liabilities)
Presented in the
Balance Sheet
|
|
Amounts Not
Offset in the
Balance Sheet -
Financial
Instruments (a)
|
|
Net
Amount
|
|
Gross Amounts
of Assets and
(Liabilities)
Presented in the
Balance Sheet
|
|
Amounts Not
Offset in the
Balance Sheet -
Financial
Instruments (a)
|
|
Net
Amount
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivatives
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
175
|
|
|
$
|
(1
|
)
|
|
$
|
174
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivatives
|
$
|
(92
|
)
|
|
$
|
—
|
|
|
$
|
(92
|
)
|
|
$
|
(81
|
)
|
|
$
|
—
|
|
|
$
|
(81
|
)
|
Balance sheet line item
|
December 31,
2016 |
|
December 31,
2015 |
|
Balance sheet line item
|
|
December 31,
2016 |
|
December 31,
2015 |
||||||||
|
(Millions)
|
|
|
|
(Millions)
|
||||||||||||
Derivative assets not designated as hedging instruments:
|
|
Derivative liabilities not designated as hedging instruments:
|
|||||||||||||||
Commodity derivatives:
|
|
|
|
|
Commodity derivatives:
|
|
|
|
|
||||||||
Unrealized gains on derivative instruments — current
|
$
|
42
|
|
|
$
|
156
|
|
|
Unrealized losses on derivative instruments — current
|
|
$
|
(91
|
)
|
|
$
|
(69
|
)
|
Unrealized gains on derivative instruments — long-term
|
5
|
|
|
19
|
|
|
Unrealized losses on derivative instruments — long-term
|
|
(1
|
)
|
|
(12
|
)
|
||||
Total
|
$
|
47
|
|
|
$
|
175
|
|
|
Total
|
|
$
|
(92
|
)
|
|
$
|
(81
|
)
|
|
Interest
Rate Derivatives |
|
Commodity
Derivatives |
|
Foreign
Currency Cash Flow Hedges (a) |
|
Total
|
||||||||
|
(Millions)
|
||||||||||||||
Net deferred (losses) gains in AOCI (beginning balance)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
(a)
|
Relates to Discovery, an unconsolidated affiliate.
|
|
Interest
Rate Cash Flow Hedges |
|
Commodity
Cash Flow Hedges |
|
Foreign
Currency Cash Flow Hedges (a) |
|
Total
|
||||||||
|
(Millions)
|
||||||||||||||
Net deferred (losses) gains in AOCI (beginning balance)
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
Losses reclassified from AOCI to earnings — effective portion (b)
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net deferred losses in AOCI (ending balance)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
(a)
|
Relates to Discovery, an unconsolidated affiliate.
|
(b)
|
Included in interest expense in our consolidated statements of operations.
|
|
|
Year Ended December 31,
|
||||||||||
Derivatives: Statements of Operations Line Item
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
|||||||||||
Realized gains
|
|
$
|
116
|
|
|
$
|
73
|
|
|
$
|
45
|
|
Unrealized (losses) gains
|
|
(139
|
)
|
|
46
|
|
|
43
|
|
|||
Trading and marketing (losses) gains, net
|
|
$
|
(23
|
)
|
|
$
|
119
|
|
|
$
|
88
|
|
|
|
December 31, 2016
|
||||||||||
|
|
Crude Oil
|
|
Natural Gas
|
|
Natural Gas Liquids
|
|
Natural Gas Basis Swaps
|
||||
Year of Expiration
|
|
Net Short Position (Bbls)
|
|
Net Short
Position (MMBtu)
|
|
Net (Short) Long Position (Bbls)
|
|
Net Long
Position (MMBtu)
|
||||
2017
|
|
(1,470,000
|
)
|
|
(44,981,850
|
)
|
|
(22,225,821
|
)
|
|
6,510,000
|
|
2018
|
|
(251,000
|
)
|
|
—
|
|
|
144,805
|
|
|
912,500
|
|
2019
|
|
(40,000
|
)
|
|
—
|
|
|
(2,203
|
)
|
|
—
|
|
2020
|
|
(50,000)
|
|
|
—
|
|
|
240,000
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
||||||||||
|
|
Crude Oil
|
|
Natural Gas
|
|
Natural Gas Liquids
|
|
Natural Gas Basis Swaps
|
||||
Year of Expiration
|
|
Net Short Position (Bbls)
|
|
Net Short
Position (MMBtu)
|
|
Net (Short) Long Position (Bbls)
|
|
Net Long
Position (MMBtu)
|
||||
2016
|
|
(1,566,672
|
)
|
|
(25,059,414
|
)
|
|
(23,575,094
|
)
|
|
2,207,500
|
|
2017
|
|
(237,000
|
)
|
|
(7,387,500
|
)
|
|
(2,082,157
|
)
|
|
4,050,000
|
|
2018
|
|
—
|
|
|
—
|
|
|
120,000
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
•
|
less the amount of cash reserves established by the general partner to:
|
•
|
provide funds for distributions to the unitholders and to our general partner for any one or more of the next four quarters;
|
•
|
plus, if our general partner so determines, all or a portion of cash and cash equivalents on hand on the date of determination of Available Cash for the quarter.
|
•
|
first,
to all unitholders and the general partner, in accordance with their pro rata interest, until each unitholder receives a total of
$0.4025
per unit for that quarter;
|
•
|
second,
13%
to the general partner, plus the general partner’s pro rata interest, and the remainder to all unitholders pro rata until each unitholder receives a total of
$0.4375
per unit for that quarter;
|
•
|
third,
23%
to the general partner, plus the general partner’s pro rata interest, and the remainder to all unitholders pro rata until each unitholder receives a total of
$0.525
per unit for that quarter; and
|
•
|
thereafter,
48%
to the general partner, plus the general partner’s pro rata interest, and the remainder to all unitholders.
|
Payment Date
|
Per Unit
Distribution
|
|
Total Cash
Distribution
|
||||
|
(Millions)
|
||||||
November 14, 2016
|
$
|
0.7800
|
|
|
$
|
120
|
|
August 12, 2016
|
$
|
0.7800
|
|
|
$
|
121
|
|
May 13, 2016
|
$
|
0.7800
|
|
|
$
|
121
|
|
February 12, 2016
|
$
|
0.7800
|
|
|
$
|
121
|
|
November 13, 2015
|
$
|
0.7800
|
|
|
$
|
120
|
|
August 14, 2015
|
$
|
0.7800
|
|
|
$
|
121
|
|
May 15, 2015
|
$
|
0.7800
|
|
|
$
|
121
|
|
February 13, 2015
|
$
|
0.7800
|
|
|
$
|
120
|
|
November 14, 2014
|
$
|
0.7700
|
|
|
$
|
117
|
|
August 14, 2014
|
$
|
0.7575
|
|
|
$
|
111
|
|
May 15, 2014
|
$
|
0.7450
|
|
|
$
|
106
|
|
February 14, 2014
|
$
|
0.7325
|
|
|
$
|
86
|
|
|
|
Vesting Period
(years)
|
|
Unrecognized
Compensation
Expense at
December 31, 2016
(millions)
|
|
Estimated
Forfeiture
Rate
|
|
Weighted-Average Remaining Vesting
(years)
|
||
DCP Midstream LTIP:
|
|
|
|
|
|
|
|
||
Strategic Performance Units (SPUs)
|
3
|
|
$
|
6
|
|
|
0%-11%
|
|
2
|
Phantom Units
|
1-3
|
|
$
|
5
|
|
|
0%-11%
|
|
2
|
|
|
Units
|
|
Grant Date Weighted-Average Price Per Unit
|
|
Measurement Date Weighted-Average Price Per Unit
|
|||||
Outstanding at January 1, 2014
|
|
230,900
|
|
|
$
|
39.30
|
|
|
|
||
Granted
|
|
116,790
|
|
|
$
|
54.05
|
|
|
|
||
Forfeited
|
|
(13,828
|
)
|
|
$
|
40.75
|
|
|
|
||
Vested (a)
|
|
(114,499
|
)
|
|
$
|
37.72
|
|
|
|
||
Outstanding at December 31, 2014
|
|
219,363
|
|
|
$
|
47.89
|
|
|
|
||
Granted
|
|
111,930
|
|
|
$
|
43.25
|
|
|
|
||
Forfeited
|
|
(29,283
|
)
|
|
$
|
48.02
|
|
|
|
||
Vested (b)
|
|
(93,551
|
)
|
|
$
|
41.02
|
|
|
|
||
Outstanding at December 31, 2015
|
|
208,459
|
|
|
$
|
48.46
|
|
|
|
||
Granted
|
|
131,610
|
|
|
$
|
45.31
|
|
|
|
||
Forfeited
|
|
(8,463
|
)
|
|
$
|
46.27
|
|
|
|
||
Vested (c)
|
|
(98,295
|
)
|
|
$
|
54.05
|
|
|
|
||
Outstanding at December 31, 2016
|
|
233,311
|
|
|
$
|
44.41
|
|
|
$
|
45.86
|
|
Expected to vest
|
|
219,844
|
|
|
$
|
44.35
|
|
|
$
|
45.98
|
|
|
Units
|
|
Fair Value of Units Vested
|
|
Unit-Based Liabilities Paid
|
|||||
|
|
|
(millions)
|
|||||||
Vested or paid in cash in 2014
|
114,499
|
|
|
$
|
7
|
|
|
$
|
8
|
|
Vested or paid in cash in 2015
|
93,551
|
|
|
$
|
4
|
|
|
$
|
7
|
|
Vested or paid in cash in 2016
|
98,295
|
|
|
$
|
7
|
|
|
$
|
4
|
|
|
Units
|
|
Grant Date Weighted-Average Price Per Unit
|
|
Measurement Date Weighted-Average Price Per Unit
|
|||||
Outstanding at January 1, 2014
|
207,522
|
|
|
$
|
40.18
|
|
|
|
||
Granted
|
122,650
|
|
|
$
|
53.73
|
|
|
|
||
Forfeited
|
(11,130
|
)
|
|
$
|
41.96
|
|
|
|
||
Vested
|
(147,840
|
)
|
|
$
|
42.10
|
|
|
|
||
Outstanding at December 31, 2014
|
171,202
|
|
|
$
|
48.11
|
|
|
|
||
Granted
|
147,540
|
|
|
$
|
47.84
|
|
|
|
||
Forfeited
|
(17,400
|
)
|
|
$
|
48.40
|
|
|
|
||
Vested
|
(96,974
|
)
|
|
$
|
44.00
|
|
|
|
||
Outstanding at December 31, 2015
|
204,368
|
|
|
$
|
49.85
|
|
|
|
||
Granted
|
132,870
|
|
|
$
|
45.33
|
|
|
|
||
Forfeited
|
(3,240
|
)
|
|
$
|
48.62
|
|
|
|
||
Vested
|
(126,681
|
)
|
|
$
|
50.13
|
|
|
|
||
Outstanding at December 31, 2016
|
207,317
|
|
|
$
|
46.80
|
|
|
$
|
45.97
|
|
Expected to vest
|
185,785
|
|
|
$
|
46.72
|
|
|
$
|
45.90
|
|
|
Units
|
|
Fair Value of Units Vested
|
|
Unit-Based Liabilities Paid
|
|||||
|
|
|
(millions)
|
|||||||
Vested or paid in cash in 2014
|
147,840
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Vested or paid in cash in 2015
|
96,974
|
|
|
$
|
3
|
|
|
$
|
5
|
|
Vested or paid in cash in 2016
|
126,681
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal income tax expense
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State income tax expense
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal income tax (expense) benefit
|
(22
|
)
|
|
97
|
|
|
—
|
|
|||
State income tax (expense) benefit
|
(3
|
)
|
|
5
|
|
|
(9
|
)
|
|||
Total income tax (expense) benefit
|
$
|
(46
|
)
|
|
$
|
102
|
|
|
$
|
(11
|
)
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Millions)
|
||||||
Deferred income tax assets:
|
|
|
|
||||
Net operating loss
|
$
|
—
|
|
|
$
|
58
|
|
Total deferred income tax assets
|
—
|
|
|
58
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Property, plant and equipment and intangibles - federal
|
—
|
|
|
(35
|
)
|
||
Property, plant and equipment and intangibles - state
|
(28
|
)
|
|
(26
|
)
|
||
Total deferred income tax liabilities
|
(28
|
)
|
|
(61
|
)
|
||
Net deferred income tax liabilities
|
(28
|
)
|
|
(3
|
)
|
||
|
|
|
|
||||
Deferred income tax assets, net - noncurrent
|
—
|
|
|
23
|
|
||
Deferred income tax liabilities, net - noncurrent
|
(28
|
)
|
|
(26
|
)
|
||
Net deferred income tax liabilities
|
$
|
(28
|
)
|
|
$
|
(3
|
)
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
4,490
|
|
|
$
|
6,186
|
|
|
$
|
—
|
|
|
$
|
(3,783
|
)
|
|
$
|
6,893
|
|
Gross margin (a)
|
$
|
1,227
|
|
|
$
|
205
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,432
|
|
Operating and maintenance expense
|
(611
|
)
|
|
(43
|
)
|
|
(16
|
)
|
|
—
|
|
|
(670
|
)
|
|||||
Depreciation and amortization expense
|
(344
|
)
|
|
(15
|
)
|
|
(19
|
)
|
|
—
|
|
|
(378
|
)
|
|||||
General and administrative expense
|
(14
|
)
|
|
(9
|
)
|
|
(269
|
)
|
|
—
|
|
|
(292
|
)
|
|||||
Other income (expense), net
|
73
|
|
|
(5
|
)
|
|
(3
|
)
|
|
—
|
|
|
65
|
|
|||||
Earnings from unconsolidated affiliates
|
73
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|
282
|
|
|||||
Interest expense, net
|
—
|
|
|
—
|
|
|
(321
|
)
|
|
—
|
|
|
(321
|
)
|
|||||
Gain on sale of assets, net
|
19
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Net income (loss)
|
$
|
423
|
|
|
$
|
358
|
|
|
$
|
(687
|
)
|
|
$
|
—
|
|
|
$
|
94
|
|
Net income attributable to non-controlling interests
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
417
|
|
|
$
|
358
|
|
|
$
|
(687
|
)
|
|
$
|
—
|
|
|
$
|
88
|
|
Non-cash derivative mark-to-market (b)
|
$
|
(119
|
)
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(139
|
)
|
Non-cash lower of cost or market adjustments
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Capital expenditures
|
$
|
107
|
|
|
$
|
10
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
144
|
|
Investments in unconsolidated affiliates, net
|
$
|
1
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
4,910
|
|
|
$
|
6,487
|
|
|
$
|
—
|
|
|
$
|
(3,967
|
)
|
|
$
|
7,430
|
|
Gross margin (a)
|
$
|
1,213
|
|
|
$
|
236
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,449
|
|
Operating and maintenance expense
|
(668
|
)
|
|
(49
|
)
|
|
(15
|
)
|
|
—
|
|
|
(732
|
)
|
|||||
Depreciation and amortization expense
|
(343
|
)
|
|
(16
|
)
|
|
(18
|
)
|
|
—
|
|
|
(377
|
)
|
|||||
General and administrative expense
|
(22
|
)
|
|
(11
|
)
|
|
(248
|
)
|
|
—
|
|
|
(281
|
)
|
|||||
Other expense, net
|
(1
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|
—
|
|
|
(10
|
)
|
|||||
Asset impairment
|
(876
|
)
|
|
(9
|
)
|
|
(27
|
)
|
|
—
|
|
|
(912
|
)
|
|||||
Earnings from unconsolidated affiliates
|
54
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|||||
Interest expense, net
|
—
|
|
|
—
|
|
|
(320
|
)
|
|
—
|
|
|
(320
|
)
|
|||||
Gain on sale of assets, net
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
|||||
Net income (loss)
|
$
|
(601
|
)
|
|
$
|
273
|
|
|
$
|
(538
|
)
|
|
$
|
—
|
|
|
$
|
(866
|
)
|
Net income attributable to non-controlling interests
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
(606
|
)
|
|
$
|
273
|
|
|
$
|
(538
|
)
|
|
$
|
—
|
|
|
$
|
(871
|
)
|
Non-cash derivative mark-to-market (b)
|
$
|
47
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46
|
|
Non-cash lower of cost or market adjustments
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
Capital expenditures
|
$
|
729
|
|
|
$
|
52
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
811
|
|
Investments in unconsolidated affiliates, net
|
$
|
15
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
9,873
|
|
|
$
|
12,649
|
|
|
$
|
—
|
|
|
$
|
(8,497
|
)
|
|
$
|
14,025
|
|
Gross margin (a)
|
$
|
1,971
|
|
|
$
|
226
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,197
|
|
Operating and maintenance expense
|
(725
|
)
|
|
(44
|
)
|
|
(4
|
)
|
|
—
|
|
|
(773
|
)
|
|||||
Depreciation and amortization expense
|
(315
|
)
|
|
(17
|
)
|
|
(16
|
)
|
|
—
|
|
|
(348
|
)
|
|||||
General and administrative expense
|
(27
|
)
|
|
(14
|
)
|
|
(236
|
)
|
|
—
|
|
|
(277
|
)
|
|||||
Other expense, net
|
(5
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Asset impairment
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
Earnings from unconsolidated affiliates
|
5
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|||||
Interest expense, net
|
—
|
|
|
—
|
|
|
(287
|
)
|
|
—
|
|
|
(287
|
)
|
|||||
Loss on sale of assets, net
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Net income (loss)
|
$
|
879
|
|
|
$
|
228
|
|
|
$
|
(556
|
)
|
|
$
|
—
|
|
|
$
|
551
|
|
Net income attributable to non-controlling interests
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
875
|
|
|
$
|
228
|
|
|
$
|
(556
|
)
|
|
$
|
—
|
|
|
$
|
547
|
|
Non-cash derivative mark-to-market (b)
|
$
|
39
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43
|
|
Non-cash lower of cost or market adjustments
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
Capital expenditures
|
$
|
1,272
|
|
|
$
|
62
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
1,384
|
|
Investments in unconsolidated affiliates, net
|
$
|
75
|
|
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
161
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Millions)
|
||||||
Segment long-term assets:
|
|
|
|
||||
Gathering and Processing
|
$
|
9,053
|
|
|
$
|
9,431
|
|
Logistics and Marketing
|
3,278
|
|
|
3,339
|
|
||
Other (c)
|
286
|
|
|
311
|
|
||
Total long-term assets
|
12,617
|
|
|
13,081
|
|
||
Current assets
|
994
|
|
|
804
|
|
||
Total assets
|
$
|
13,611
|
|
|
$
|
13,885
|
|
(a)
|
Gross margin consists of total operating revenues, including commodity derivative activity, less purchases of natural gas and NGLs. Gross margin is viewed as a non-GAAP financial measure under the rules of the SEC, but is included as a supplemental disclosure because it is a primary performance measure used by management as it represents the results of product sales versus product purchases. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.
|
(b)
|
Non-cash commodity derivative mark-to-market is included in gross margin, along with cash settlements for our commodity derivative contracts.
|
(c)
|
Other long-term assets not allocable to segments consist of unrealized gains on derivative instruments, corporate leasehold improvements and other long-term assets.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(Millions)
|
||||||||||
Cash paid for interest:
|
|
|
|
|
|
||||||
Cash paid for interest, net of amounts capitalized
|
$
|
306
|
|
|
$
|
293
|
|
|
$
|
274
|
|
Cash paid for income taxes, net of income tax refunds
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Property, plant and equipment acquired with accounts payable
|
$
|
27
|
|
|
$
|
35
|
|
|
$
|
145
|
|
Other non-cash changes in property, plant and equipment
|
$
|
(3
|
)
|
|
$
|
(19
|
)
|
|
$
|
27
|
|
Contribution of assets from our predecessor
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
2016
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year Ended December 31, 2016
|
||||||||||
Total operating revenues
|
|
$
|
1,464
|
|
|
$
|
1,623
|
|
|
$
|
1,823
|
|
|
$
|
1,983
|
|
|
$
|
6,893
|
|
Operating income (loss)
|
|
$
|
80
|
|
|
$
|
(12
|
)
|
|
$
|
92
|
|
|
$
|
19
|
|
|
$
|
179
|
|
Net income (loss)
|
|
$
|
65
|
|
|
$
|
(21
|
)
|
|
$
|
89
|
|
|
$
|
(39
|
)
|
|
$
|
94
|
|
Net income attributable to non-controlling interests
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
(6
|
)
|
Net income attributable to partners
|
|
$
|
65
|
|
|
$
|
(22
|
)
|
|
$
|
89
|
|
|
$
|
(44
|
)
|
|
$
|
88
|
|
Net loss attributable to predecessor operations
|
|
$
|
(7
|
)
|
|
$
|
(67
|
)
|
|
$
|
(31
|
)
|
|
$
|
(119
|
)
|
|
$
|
(224
|
)
|
Net income allocable to limited partners
|
|
$
|
41
|
|
|
$
|
14
|
|
|
$
|
89
|
|
|
$
|
44
|
|
|
$
|
188
|
|
Basic and diluted net income per limited partner unit
|
|
$
|
0.36
|
|
|
$
|
0.12
|
|
|
$
|
0.78
|
|
|
$
|
0.38
|
|
|
$
|
1.64
|
|
2015
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year Ended December 31, 2015
|
||||||||||
Total operating revenues
|
|
$
|
2,020
|
|
|
$
|
1,849
|
|
|
$
|
1,870
|
|
|
$
|
1,691
|
|
|
$
|
7,430
|
|
Operating income (loss)
|
|
$
|
40
|
|
|
$
|
(463
|
)
|
|
$
|
57
|
|
|
$
|
(466
|
)
|
|
$
|
(832
|
)
|
Net (loss) income
|
|
$
|
(17
|
)
|
|
$
|
(491
|
)
|
|
$
|
24
|
|
|
$
|
(382
|
)
|
|
$
|
(866
|
)
|
Net income attributable to non-controlling interests
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
Net income attributable to partners
|
|
$
|
(17
|
)
|
|
$
|
(491
|
)
|
|
$
|
23
|
|
|
$
|
(386
|
)
|
|
$
|
(871
|
)
|
Net loss attributable to predecessor operations
|
|
$
|
(86
|
)
|
|
$
|
(489
|
)
|
|
$
|
(48
|
)
|
|
$
|
(476
|
)
|
|
$
|
(1,099
|
)
|
Net income (loss) allocable to limited partners
|
|
$
|
38
|
|
|
$
|
(33
|
)
|
|
$
|
40
|
|
|
$
|
59
|
|
|
$
|
104
|
|
Basic and diluted net income (loss) per limited partner unit
|
|
$
|
0.33
|
|
|
$
|
(0.29
|
)
|
|
$
|
0.35
|
|
|
$
|
0.51
|
|
|
$
|
0.91
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
792
|
|
|
—
|
|
|
792
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Total current assets
|
—
|
|
|
—
|
|
|
994
|
|
|
—
|
|
|
994
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
9,069
|
|
|
—
|
|
|
9,069
|
|
|||||
Goodwill and intangible assets, net
|
—
|
|
|
—
|
|
|
373
|
|
|
—
|
|
|
373
|
|
|||||
Advances receivable — consolidated subsidiaries
|
2,953
|
|
|
2,760
|
|
|
—
|
|
|
(5,713
|
)
|
|
—
|
|
|||||
Investments in consolidated subsidiaries
|
3,868
|
|
|
6,587
|
|
|
—
|
|
|
(10,455
|
)
|
|
—
|
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
2,969
|
|
|
—
|
|
|
2,969
|
|
|||||
Other long-term assets
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
|||||
Total assets
|
$
|
6,821
|
|
|
$
|
9,347
|
|
|
$
|
13,611
|
|
|
$
|
(16,168
|
)
|
|
$
|
13,611
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
1,051
|
|
|
$
|
—
|
|
|
$
|
1,123
|
|
Current maturities of long-term debt
|
—
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|||||
Advances payable — consolidated subsidiaries
|
—
|
|
|
—
|
|
|
5,713
|
|
|
(5,713
|
)
|
|
—
|
|
|||||
Long-term debt
|
—
|
|
|
4,907
|
|
|
—
|
|
|
—
|
|
|
4,907
|
|
|||||
Other long-term liabilities
|
—
|
|
|
—
|
|
|
228
|
|
|
—
|
|
|
228
|
|
|||||
Total liabilities
|
—
|
|
|
5,479
|
|
|
6,992
|
|
|
(5,713
|
)
|
|
6,758
|
|
|||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net equity
|
6,821
|
|
|
3,871
|
|
|
6,592
|
|
|
(10,455
|
)
|
|
6,829
|
|
|||||
Accumulated other comprehensive loss
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Total partners’ equity
|
6,821
|
|
|
3,868
|
|
|
6,587
|
|
|
(10,455
|
)
|
|
6,821
|
|
|||||
Non-controlling interests
|
—
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|||||
Total equity
|
6,821
|
|
|
3,868
|
|
|
6,619
|
|
|
(10,455
|
)
|
|
6,853
|
|
|||||
Total liabilities and equity
|
$
|
6,821
|
|
|
$
|
9,347
|
|
|
$
|
13,611
|
|
|
$
|
(16,168
|
)
|
|
$
|
13,611
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
December 31, 2015
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
544
|
|
|
—
|
|
|
544
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
|||||
Total current assets
|
—
|
|
|
—
|
|
|
804
|
|
|
—
|
|
|
804
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
9,428
|
|
|
—
|
|
|
9,428
|
|
|||||
Goodwill and intangible assets, net
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
391
|
|
|||||
Advances receivable — consolidated subsidiaries
|
3,436
|
|
|
3,353
|
|
|
—
|
|
|
(6,789
|
)
|
|
—
|
|
|||||
Investments in consolidated subsidiaries
|
3,623
|
|
|
6,011
|
|
|
—
|
|
|
(9,634
|
)
|
|
—
|
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
2,992
|
|
|
—
|
|
|
2,992
|
|
|||||
Other long-term assets
|
—
|
|
|
—
|
|
|
270
|
|
|
—
|
|
|
270
|
|
|||||
Total assets
|
$
|
7,059
|
|
|
$
|
9,364
|
|
|
$
|
13,885
|
|
|
$
|
(16,423
|
)
|
|
$
|
13,885
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
—
|
|
|
$
|
72
|
|
|
$
|
827
|
|
|
$
|
—
|
|
|
$
|
899
|
|
Advances payable — consolidated subsidiaries
|
|
|
|
—
|
|
|
6,789
|
|
|
(6,789
|
)
|
|
—
|
|
|||||
Long-term debt
|
—
|
|
|
5,669
|
|
|
—
|
|
|
—
|
|
|
5,669
|
|
|||||
Other long-term liabilities
|
—
|
|
|
—
|
|
|
225
|
|
|
—
|
|
|
225
|
|
|||||
Total liabilities
|
—
|
|
|
5,741
|
|
|
7,841
|
|
|
(6,789
|
)
|
|
6,793
|
|
|||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net equity
|
7,059
|
|
|
3,626
|
|
|
6,016
|
|
|
(9,634
|
)
|
|
7,067
|
|
|||||
Accumulated other comprehensive loss
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Total partners’ equity
|
7,059
|
|
|
3,623
|
|
|
6,011
|
|
|
(9,634
|
)
|
|
7,059
|
|
|||||
Non-controlling interests
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|||||
Total equity
|
7,059
|
|
|
3,623
|
|
|
6,044
|
|
|
(9,634
|
)
|
|
7,092
|
|
|||||
Total liabilities and equity
|
$
|
7,059
|
|
|
$
|
9,364
|
|
|
$
|
13,885
|
|
|
$
|
(16,423
|
)
|
|
$
|
13,885
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,269
|
|
|
$
|
—
|
|
|
$
|
6,269
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
647
|
|
|
—
|
|
|
647
|
|
|||||
Trading and marketing losses, net
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
6,893
|
|
|
—
|
|
|
6,893
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
5,461
|
|
|
—
|
|
|
5,461
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
670
|
|
|
—
|
|
|
670
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
378
|
|
|
—
|
|
|
378
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
292
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(65
|
)
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
13
|
|
|
|
|
13
|
|
||||||
Gain on sale of assets, net
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
6,714
|
|
|
—
|
|
|
6,714
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
179
|
|
|||||
Interest expense, net
|
—
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
(321
|
)
|
|||||
Income from consolidated subsidiaries
|
88
|
|
|
409
|
|
|
—
|
|
|
(497
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
282
|
|
|
—
|
|
|
282
|
|
|||||
Income before income taxes
|
88
|
|
|
88
|
|
|
461
|
|
|
(497
|
)
|
|
140
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Net income
|
88
|
|
|
88
|
|
|
415
|
|
|
(497
|
)
|
|
94
|
|
|||||
Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Net income attributable to partners
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
409
|
|
|
$
|
(497
|
)
|
|
$
|
88
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Net income
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
415
|
|
|
$
|
(497
|
)
|
|
$
|
94
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reclassification of cash flow hedge losses into earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other comprehensive income from consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total comprehensive income
|
88
|
|
|
88
|
|
|
415
|
|
|
(497
|
)
|
|
94
|
|
|||||
Total comprehensive income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
409
|
|
|
$
|
(497
|
)
|
|
$
|
88
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,779
|
|
|
$
|
—
|
|
|
$
|
6,779
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
532
|
|
|
—
|
|
|
532
|
|
|||||
Trading and marketing gains, net
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
119
|
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
7,430
|
|
|
—
|
|
|
7,430
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
5,981
|
|
|
—
|
|
|
5,981
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
732
|
|
|
—
|
|
|
732
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
377
|
|
|
—
|
|
|
377
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
281
|
|
|
—
|
|
|
281
|
|
|||||
Asset impairments
|
—
|
|
|
—
|
|
|
912
|
|
|
—
|
|
|
912
|
|
|||||
Other expense, net
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Gain on sale of assets, net
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
8,262
|
|
|
—
|
|
|
8,262
|
|
|||||
Operating loss
|
—
|
|
|
—
|
|
|
(832
|
)
|
|
—
|
|
|
(832
|
)
|
|||||
Interest expense, net
|
—
|
|
|
(320
|
)
|
|
—
|
|
|
—
|
|
|
(320
|
)
|
|||||
Loss from consolidated subsidiaries
|
(871
|
)
|
|
(551
|
)
|
|
—
|
|
|
1,422
|
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
184
|
|
|
—
|
|
|
184
|
|
|||||
Loss before income taxes
|
(871
|
)
|
|
(871
|
)
|
|
(648
|
)
|
|
1,422
|
|
|
(968
|
)
|
|||||
Income tax benefit
|
—
|
|
|
—
|
|
|
102
|
|
|
—
|
|
|
102
|
|
|||||
Net loss
|
(871
|
)
|
|
(871
|
)
|
|
(546
|
)
|
|
1,422
|
|
|
(866
|
)
|
|||||
Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net loss attributable to partners
|
$
|
(871
|
)
|
|
$
|
(871
|
)
|
|
$
|
(551
|
)
|
|
$
|
1,422
|
|
|
$
|
(871
|
)
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Net loss
|
$
|
(871
|
)
|
|
$
|
(871
|
)
|
|
$
|
(546
|
)
|
|
$
|
1,422
|
|
|
$
|
(866
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reclassification of cash flow hedge losses into earnings
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Other comprehensive income from consolidated subsidiaries
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Total other comprehensive income
|
1
|
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|||||
Total comprehensive loss
|
(870
|
)
|
|
(870
|
)
|
|
(546
|
)
|
|
1,421
|
|
|
(865
|
)
|
|||||
Total comprehensive loss attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Total comprehensive loss attributable to partners
|
$
|
(870
|
)
|
|
$
|
(870
|
)
|
|
$
|
(551
|
)
|
|
$
|
1,421
|
|
|
$
|
(870
|
)
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended December 31, 2014
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,420
|
|
|
$
|
—
|
|
|
$
|
13,420
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
517
|
|
|
—
|
|
|
517
|
|
|||||
Trading and marketing gains, net
|
—
|
|
|
—
|
|
|
88
|
|
|
—
|
|
|
88
|
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
14,025
|
|
|
—
|
|
|
14,025
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
11,828
|
|
|
—
|
|
|
11,828
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
773
|
|
|
—
|
|
|
773
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
348
|
|
|
—
|
|
|
348
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
277
|
|
|
—
|
|
|
277
|
|
|||||
Asset impairments
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|||||
Other expense, net
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Loss on sale of assets, net
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
13,258
|
|
|
—
|
|
|
13,258
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
767
|
|
|
—
|
|
|
767
|
|
|||||
Interest expense, net
|
—
|
|
|
(287
|
)
|
|
—
|
|
|
—
|
|
|
(287
|
)
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
82
|
|
|
—
|
|
|
82
|
|
|||||
Income from consolidated subsidiaries
|
547
|
|
|
834
|
|
|
—
|
|
|
(1,381
|
)
|
|
—
|
|
|||||
Income before income taxes
|
547
|
|
|
547
|
|
|
849
|
|
|
(1,381
|
)
|
|
562
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Net income
|
547
|
|
|
547
|
|
|
838
|
|
|
(1,381
|
)
|
|
551
|
|
|||||
Net income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Net income attributable to partners
|
$
|
547
|
|
|
$
|
547
|
|
|
$
|
834
|
|
|
$
|
(1,381
|
)
|
|
$
|
547
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Year Ended December 31, 2014
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Net income
|
$
|
547
|
|
|
$
|
547
|
|
|
$
|
838
|
|
|
$
|
(1,381
|
)
|
|
$
|
551
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Reclassification of cash flow hedge losses into earnings
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Other comprehensive income from consolidated subsidiaries
|
2
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||
Total other comprehensive income
|
2
|
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
|||||
Total comprehensive income
|
549
|
|
|
549
|
|
|
838
|
|
|
(1,383
|
)
|
|
553
|
|
|||||
Total comprehensive income attributable to non-controlling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
549
|
|
|
$
|
549
|
|
|
$
|
834
|
|
|
$
|
(1,383
|
)
|
|
$
|
549
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(305
|
)
|
|
$
|
950
|
|
|
$
|
—
|
|
|
$
|
645
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
483
|
|
|
585
|
|
|
—
|
|
|
(1,068
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
—
|
|
|
(144
|
)
|
|||||
Investments in unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
|||||
Net cash provided by (used in) investing activities
|
483
|
|
|
585
|
|
|
(34
|
)
|
|
(1,068
|
)
|
|
(34
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(1,068
|
)
|
|
1,068
|
|
|
—
|
|
|||||
Proceeds from long-term debt
|
—
|
|
|
3,353
|
|
|
—
|
|
|
—
|
|
|
3,353
|
|
|||||
Payments of long-term debt
|
—
|
|
|
(3,628
|
)
|
|
—
|
|
|
—
|
|
|
(3,628
|
)
|
|||||
Payments of deferred financing costs
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
—
|
|
|
157
|
|
|
—
|
|
|
157
|
|
|||||
Distributions to limited partners and general partner
|
(483
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(483
|
)
|
|||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Net cash used in financing activities
|
(483
|
)
|
|
(280
|
)
|
|
(918
|
)
|
|
1,068
|
|
|
(613
|
)
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
Year Ended December 31, 2015
|
||||||||||||||||||
|
Parent
Guarantor |
|
Subsidiary
Issuer |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(311
|
)
|
|
$
|
753
|
|
|
$
|
—
|
|
|
$
|
442
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
(1,049
|
)
|
|
1,283
|
|
|
—
|
|
|
(234
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(811
|
)
|
|
—
|
|
|
(811
|
)
|
|||||
Investments in unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
(64
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|
164
|
|
|||||
Net cash (used in) provided by investing activities
|
(1,049
|
)
|
|
1,283
|
|
|
(711
|
)
|
|
(234
|
)
|
|
(711
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(234
|
)
|
|
234
|
|
|
—
|
|
|||||
Proceeds from long-term debt
|
—
|
|
|
7,216
|
|
|
—
|
|
|
—
|
|
|
7,216
|
|
|||||
Payments of long-term debt
|
—
|
|
|
(7,196
|
)
|
|
—
|
|
|
—
|
|
|
(7,196
|
)
|
|||||
Payments of commercial paper, net
|
—
|
|
|
(1,012
|
)
|
|
—
|
|
|
—
|
|
|
(1,012
|
)
|
|||||
Payment of deferred financing costs
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Proceeds from issuance of common units, net of offering costs
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
1,500
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
1,697
|
|
|||||
Distributions to limited partners and general partner
|
(482
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(482
|
)
|
|||||
Distributions to non-controlling interests
|
—
|
|
|
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net cash provided by (used in) financing activities
|
1,049
|
|
|
(996
|
)
|
|
(42
|
)
|
|
234
|
|
|
245
|
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
24
|
|
|
3
|
|
|
—
|
|
|
27
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
Year Ended December 31, 2014
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(271
|
)
|
|
$
|
1,088
|
|
|
$
|
—
|
|
|
$
|
817
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
(581
|
)
|
|
(141
|
)
|
|
—
|
|
|
722
|
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(1,384
|
)
|
|
—
|
|
|
(1,384
|
)
|
|||||
Investments in unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
(161
|
)
|
|
—
|
|
|
(161
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
Net cash used in investing activities
|
(581
|
)
|
|
(141
|
)
|
|
(1,515
|
)
|
|
722
|
|
|
(1,515
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
722
|
|
|
(722
|
)
|
|
—
|
|
|||||
Proceeds from long-term debt
|
—
|
|
|
719
|
|
|
—
|
|
|
—
|
|
|
719
|
|
|||||
Payments of issuance of commercial paper, net
|
—
|
|
|
(288
|
)
|
|
—
|
|
|
—
|
|
|
(288
|
)
|
|||||
Payment of deferred financing costs
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||
Proceeds from issuance of common units, net of offering costs
|
1,001
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,001
|
|
|||||
Distributions to limited partners and general partner
|
(420
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(420
|
)
|
|||||
Distributions to non-controlling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
—
|
|
|
(301
|
)
|
|
—
|
|
|
(301
|
)
|
|||||
Net cash provided by financing activities
|
581
|
|
|
419
|
|
|
416
|
|
|
(722
|
)
|
|
694
|
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
7
|
|
|
(11
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
—
|
|
|
17
|
|
|
14
|
|
|
—
|
|
|
31
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
27
|
|
Operational Stage:
|
||
Distributions of Available Cash to our General Partner and its affiliates
|
We will generally make cash distributions to the unitholders and to our General Partner, in accordance with their pro rata interest. In addition, if distributions exceed the minimum quarterly distribution and other higher target levels, our General Partner will be entitled to increasing percentages of the distributions, up to 48% of the distributions above the highest target level. Currently, our distribution to our general partner related to its incentive distribution rights is at the highest level.
|
|
Payments to our General Partner and
its affiliates
|
For further information regarding payments to our General Partner, please see the “Services Agreement” section below.
|
|
Withdrawal or removal of our General Partner
|
If our General Partner withdraws or is removed, its general partner interest and its incentive distribution rights will either be sold to the new general partner for cash or converted into common units, in each case for an amount equal to the fair market value of those interests.
|
|
Liquidation Stage:
|
||
Liquidation
|
Upon our liquidation, the partners, including our General Partner, will be entitled to receive liquidating distributions according to their respective capital account balances.
|
•
|
approved by the conflicts committee;
|
•
|
approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partner or any of its affiliates;
|
•
|
on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
|
•
|
fair and reasonable to us, taking into account the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us.
|