|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
03-0567133
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
370 17th Street, Suite 2500
Denver, Colorado
|
|
80202
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
Item
|
|
Page
|
|
PART I. FINANCIAL INFORMATION
|
|
1.
|
Financial Statements (unaudited):
|
|
|
Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016
|
|
|
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2017 and 2016
|
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2017 and 2016
|
|
|
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016
|
|
|
Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2017
|
|
|
Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2016
|
|
|
Notes to the Condensed Consolidated Financial Statements
|
|
2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
4.
|
Controls and Procedures
|
|
|
PART II. OTHER INFORMATION
|
|
1.
|
Legal Proceedings
|
|
1A.
|
Risk Factors
|
|
6.
|
Exhibits
|
|
|
Signatures
|
|
|
Exhibit Index
|
|
|
|
Bbl
|
|
barrel
|
Bbls/d
|
|
barrels per day
|
Bcf
|
|
billion cubic feet
|
Bcf/d
|
|
billion cubic feet per day
|
Btu
|
|
British thermal unit, a measurement of energy
|
Fractionation
|
|
the process by which natural gas liquids are separated
into individual components
|
MBbls
|
|
thousand barrels
|
MBbls/d
|
|
thousand barrels per day
|
MMBtu
|
|
million Btus
|
MMBtu/d
|
|
million Btus per day
|
MMcf
|
|
million cubic feet
|
MMcf/d
|
|
million cubic feet per day
|
NGLs
|
|
natural gas liquids
|
Throughput
|
|
the volume of product transported or passing through a
pipeline or other facility
|
•
|
the extent of changes in commodity prices and the demand for our products and services, our ability to effectively limit a portion of the adverse impact of potential changes in commodity prices through derivative financial instruments, and the potential impact of price, and of producers’ access to capital on natural gas drilling, demand for our services, and the volume of NGLs and condensate extracted;
|
•
|
the demand for crude oil, residue gas and NGL products;
|
•
|
the level and success of drilling and quality of production volumes around our assets and our ability to connect supplies to our gathering and processing systems, as well as our residue gas and NGL infrastructure;
|
•
|
volatility in the price of our common units;
|
•
|
general economic, market and business conditions;
|
•
|
our ability to continue the safe and reliable operation of our assets;
|
•
|
our ability to construct and start up facilities on budget and in a timely fashion, which is partially dependent on obtaining required construction, environmental and other permits issued by federal, state and municipal governments, or agencies thereof, the availability of specialized contractors and laborers, and the price of and demand for materials;
|
•
|
our ability to access the debt and equity markets and the resulting cost of capital, which will depend on general market conditions, our financial and operating results, inflation rates, interest rates, our ability to comply with the covenants in our credit agreement and the indentures governing our notes, as well as our ability to maintain our credit ratings;
|
•
|
the creditworthiness of our customers and the counterparties to our transactions;
|
•
|
the amount of collateral we may be required to post from time to time in our transactions;
|
•
|
industry changes, including the impact of bankruptcies, consolidations, alternative energy sources, technological advances and changes in competition;
|
•
|
our ability to grow through organic growth projects, or acquisitions, and the successful integration and future performance of such assets;
|
•
|
our ability to hire, train, and retain qualified personnel and key management to execute our business strategy;
|
•
|
new, additions to, and changes in, laws and regulations, particularly with regard to taxes, safety and protection of the environment, including, but not limited to, climate change legislation, regulation of over-the-counter derivatives market and entities, and hydraulic fracturing regulations, or the increased regulation of our industry, and their impact on producers and customers served by our systems;
|
•
|
weather, weather-related conditions and other natural phenomena, including, but not limited to, their potential impact on demand for the commodities we sell and the operation of company-owned and third party-owned infrastructure;
|
•
|
security threats such as military campaigns, terrorist attacks, and cybersecurity breaches, against, or otherwise impacting, our facilities and systems;
|
•
|
our ability to obtain insurance on commercially reasonable terms, if at all, as well as the adequacy of insurance to cover our losses; and
|
•
|
the amount of natural gas we gather, compress, treat, process, transport, store and sell, or the NGLs we produce, fractionate, transport, store and sell, may be reduced if the pipelines and storage and fractionation facilities to which we deliver the natural gas or NGLs are capacity constrained and cannot, or will not, accept the natural gas or NGLs.
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
(Millions)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
251
|
|
|
$
|
1
|
|
Accounts receivable:
|
|
|
|
||||
Trade, net of allowance for doubtful accounts of $4 million
|
559
|
|
|
652
|
|
||
Affiliates
|
124
|
|
|
134
|
|
||
Other
|
7
|
|
|
6
|
|
||
Inventories
|
51
|
|
|
72
|
|
||
Unrealized gains on derivative instruments
|
46
|
|
|
42
|
|
||
Collateral cash deposits
|
9
|
|
|
71
|
|
||
Other
|
18
|
|
|
16
|
|
||
Total current assets
|
1,065
|
|
|
994
|
|
||
Property, plant and equipment, net
|
8,950
|
|
|
9,069
|
|
||
Goodwill
|
231
|
|
|
236
|
|
||
Intangible assets, net
|
132
|
|
|
137
|
|
||
Investments in unconsolidated affiliates
|
2,994
|
|
|
2,969
|
|
||
Unrealized gains on derivative instruments
|
5
|
|
|
5
|
|
||
Other long-term assets
|
193
|
|
|
201
|
|
||
Total assets
|
$
|
13,570
|
|
|
$
|
13,611
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable:
|
|
|
|
||||
Trade
|
$
|
541
|
|
|
$
|
677
|
|
Affiliates
|
56
|
|
|
48
|
|
||
Other
|
9
|
|
|
10
|
|
||
Current maturities of long-term debt
|
500
|
|
|
500
|
|
||
Unrealized losses on derivative instruments
|
29
|
|
|
91
|
|
||
Accrued interest
|
72
|
|
|
72
|
|
||
Accrued taxes
|
66
|
|
|
49
|
|
||
Accrued wages and benefits
|
38
|
|
|
72
|
|
||
Capital spending accrual
|
18
|
|
|
20
|
|
||
Other
|
106
|
|
|
84
|
|
||
Total current liabilities
|
1,435
|
|
|
1,623
|
|
||
Long-term debt
|
4,710
|
|
|
4,907
|
|
||
Unrealized losses on derivative instruments
|
7
|
|
|
1
|
|
||
Deferred income taxes
|
29
|
|
|
28
|
|
||
Other long-term liabilities
|
190
|
|
|
199
|
|
||
Total liabilities
|
6,371
|
|
|
6,758
|
|
||
Commitments and contingent liabilities
|
|
|
|
||||
Equity:
|
|
|
|
||||
Predecessor equity
|
—
|
|
|
4,220
|
|
||
Limited partners (143,302,328 and 114,749,848 common units issued and outstanding, respectively)
|
7,040
|
|
|
2,591
|
|
||
General partner
|
139
|
|
|
18
|
|
||
Accumulated other comprehensive loss
|
(9
|
)
|
|
(8
|
)
|
||
Total partners’ equity
|
7,170
|
|
|
6,821
|
|
||
Noncontrolling interests
|
29
|
|
|
32
|
|
||
Total equity
|
7,199
|
|
|
6,853
|
|
||
Total liabilities and equity
|
$
|
13,570
|
|
|
$
|
13,611
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions, except per unit amounts)
|
||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
||||||||
Sales of natural gas, NGLs and condensate
|
$
|
1,494
|
|
|
$
|
1,253
|
|
|
$
|
3,138
|
|
|
$
|
2,372
|
|
Sales of natural gas, NGLs and condensate to affiliates
|
278
|
|
|
238
|
|
|
567
|
|
|
413
|
|
||||
Transportation, processing and other
|
155
|
|
|
155
|
|
|
312
|
|
|
307
|
|
||||
Trading and marketing gains (losses), net
|
22
|
|
|
(23
|
)
|
|
53
|
|
|
(5
|
)
|
||||
Total operating revenues
|
1,949
|
|
|
1,623
|
|
|
4,070
|
|
|
3,087
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Purchases of natural gas and NGLs
|
1,419
|
|
|
1,167
|
|
|
2,978
|
|
|
2,199
|
|
||||
Purchases of natural gas and NGLs from affiliates
|
138
|
|
|
127
|
|
|
266
|
|
|
230
|
|
||||
Operating and maintenance expense
|
178
|
|
|
166
|
|
|
345
|
|
|
345
|
|
||||
Depreciation and amortization expense
|
94
|
|
|
95
|
|
|
188
|
|
|
190
|
|
||||
General and administrative expense
|
71
|
|
|
61
|
|
|
133
|
|
|
123
|
|
||||
Other expense (income), net
|
5
|
|
|
5
|
|
|
15
|
|
|
(82
|
)
|
||||
(Gain) loss on sale of assets, net
|
(34
|
)
|
|
6
|
|
|
(34
|
)
|
|
6
|
|
||||
Restructuring costs
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Total operating costs and expenses
|
1,871
|
|
|
1,635
|
|
|
3,891
|
|
|
3,019
|
|
||||
Operating income (loss)
|
78
|
|
|
(12
|
)
|
|
179
|
|
|
68
|
|
||||
Earnings from unconsolidated affiliates
|
86
|
|
|
73
|
|
|
160
|
|
|
139
|
|
||||
Interest expense, net
|
(73
|
)
|
|
(79
|
)
|
|
(146
|
)
|
|
(158
|
)
|
||||
Income (loss) before income taxes
|
91
|
|
|
(18
|
)
|
|
193
|
|
|
49
|
|
||||
Income tax expense
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(5
|
)
|
||||
Net income (loss)
|
89
|
|
|
(21
|
)
|
|
190
|
|
|
44
|
|
||||
Net income attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net income (loss) attributable to partners
|
88
|
|
|
(22
|
)
|
|
189
|
|
|
43
|
|
||||
Net loss attributable to predecessor operations
|
—
|
|
|
67
|
|
|
—
|
|
|
74
|
|
||||
General partner’s interest in net income
|
(41
|
)
|
|
(31
|
)
|
|
(83
|
)
|
|
(62
|
)
|
||||
Net income allocable to limited partners
|
$
|
47
|
|
|
$
|
14
|
|
|
$
|
106
|
|
|
$
|
55
|
|
Net income per limited partner unit — basic and diluted
|
$
|
0.33
|
|
|
$
|
0.12
|
|
|
$
|
0.74
|
|
|
$
|
0.48
|
|
Weighted-average limited partner units outstanding — basic and diluted
|
143.3
|
|
|
114.7
|
|
|
143.3
|
|
|
114.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended
June 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions)
|
||||||||||||||
Net income (loss)
|
$
|
89
|
|
|
$
|
(21
|
)
|
|
$
|
190
|
|
|
$
|
44
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Reclassification of cash flow hedge losses into earnings
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total comprehensive income (loss)
|
89
|
|
|
(21
|
)
|
|
191
|
|
|
44
|
|
||||
Total comprehensive income attributable to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Total comprehensive income (loss) attributable to partners
|
$
|
88
|
|
|
$
|
(22
|
)
|
|
$
|
190
|
|
|
$
|
43
|
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(Millions)
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
190
|
|
|
$
|
44
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
188
|
|
|
190
|
|
||
Earnings from unconsolidated affiliates
|
(160
|
)
|
|
(139
|
)
|
||
Distributions from unconsolidated affiliates
|
177
|
|
|
176
|
|
||
Net unrealized (gains) losses on derivative instruments
|
(60
|
)
|
|
89
|
|
||
(Gain) loss on sale of assets, net
|
(34
|
)
|
|
6
|
|
||
Deferred income tax, net
|
—
|
|
|
2
|
|
||
Other, net
|
21
|
|
|
11
|
|
||
Change in operating assets and liabilities, which provided (used) cash, net of effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
98
|
|
|
(87
|
)
|
||
Inventories
|
21
|
|
|
4
|
|
||
Accounts payable
|
(137
|
)
|
|
24
|
|
||
Other current assets and liabilities
|
51
|
|
|
(22
|
)
|
||
Other long-term assets and liabilities
|
5
|
|
|
6
|
|
||
Net cash provided by operating activities
|
360
|
|
|
304
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Capital expenditures
|
(159
|
)
|
|
(83
|
)
|
||
Change in restricted cash
|
—
|
|
|
(9
|
)
|
||
Investments in unconsolidated affiliates, net
|
(41
|
)
|
|
(27
|
)
|
||
Proceeds from sale of assets
|
129
|
|
|
2
|
|
||
Deposits received on assets held for sale
|
—
|
|
|
16
|
|
||
Net cash used in investing activities
|
(71
|
)
|
|
(101
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from long-term debt
|
—
|
|
|
2,252
|
|
||
Payments of long-term debt
|
(195
|
)
|
|
(2,301
|
)
|
||
Net change in advances to predecessor from DCP Midstream, LLC
|
418
|
|
|
100
|
|
||
Distributions to limited partners and general partner
|
(256
|
)
|
|
(242
|
)
|
||
Distributions to noncontrolling interests
|
(4
|
)
|
|
(3
|
)
|
||
Other
|
(2
|
)
|
|
(10
|
)
|
||
Net cash used in financing activities
|
(39
|
)
|
|
(204
|
)
|
||
Net change in cash and cash equivalents
|
250
|
|
|
(1
|
)
|
||
Cash and cash equivalents, beginning of period
|
1
|
|
|
3
|
|
||
Cash and cash equivalents, end of period
|
$
|
251
|
|
|
$
|
2
|
|
|
|
|
Partners’ Equity
|
|
|
|
|
||||||||||||||||
|
Predecessor
Equity
|
|
Limited
Partners
|
|
General
Partner
|
|
Accumulated Other
Comprehensive
(Loss) Income
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Balance, January 1, 2017
|
$
|
4,220
|
|
|
$
|
2,591
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
32
|
|
|
$
|
6,853
|
|
Net income
|
—
|
|
|
106
|
|
|
83
|
|
|
—
|
|
|
1
|
|
|
190
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Net change in parent advances
|
—
|
|
|
418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
418
|
|
||||||
Acquisition of the DCP Midstream Business
|
(4,220
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,220
|
)
|
||||||
Deficit purchase price under carrying value of the Transaction
|
—
|
|
|
3,094
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
3,092
|
|
||||||
Issuance of 28,552,480 common units and 2,550,644 general partner units to DCP Midstream, LLC and affiliates
|
—
|
|
|
1,033
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
1,125
|
|
||||||
Distributions to limited partners and general partner
|
—
|
|
|
(202
|
)
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
(256
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Balance, June 30, 2017
|
$
|
—
|
|
|
$
|
7,040
|
|
|
$
|
139
|
|
|
$
|
(9
|
)
|
|
$
|
29
|
|
|
$
|
7,199
|
|
|
Partners’ Equity
|
|
|
|
|
||||||||||||||||||
|
Predecessor
Equity |
|
Limited
Partners
|
|
General
Partner
|
|
Accumulated
Other Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total
Equity |
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Balance, January 1, 2016
|
$
|
4,287
|
|
|
$
|
2,762
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
33
|
|
|
$
|
7,092
|
|
Net (loss) income
|
(74
|
)
|
|
55
|
|
|
62
|
|
|
—
|
|
|
1
|
|
|
44
|
|
||||||
Net change in parent advances
|
100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100
|
|
||||||
Distributions to limited partners and general partner
|
—
|
|
|
(180
|
)
|
|
(62
|
)
|
|
—
|
|
|
—
|
|
|
(242
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||
Balance, June 30, 2016
|
$
|
4,313
|
|
|
$
|
2,637
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
31
|
|
|
$
|
6,991
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Millions)
|
||||||||||||||
Phillips 66 (including its affiliates):
|
|
|
|
|
|
|
|
|
||||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
251
|
|
|
$
|
225
|
|
|
$
|
525
|
|
|
$
|
396
|
|
Purchases of natural gas and NGLs from affiliates
|
|
$
|
8
|
|
|
$
|
6
|
|
|
$
|
15
|
|
|
$
|
6
|
|
Operating and maintenance and general administrative expenses
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Enbridge (including its affiliates):
|
|
|
|
|
|
|
|
|
||||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
—
|
|
Purchases of natural gas and NGLs from affiliates
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
19
|
|
|
$
|
18
|
|
Operating and maintenance and general administrative expenses
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Unconsolidated affiliates:
|
|
|
|
|
|
|
|
|
||||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
17
|
|
Transportation, storage and processing to affiliates
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Purchases of natural gas and NGLs from affiliates
|
|
$
|
119
|
|
|
$
|
113
|
|
|
$
|
232
|
|
|
$
|
206
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
(Millions)
|
||||||
Phillips 66 (including its affiliates):
|
|
|
|
||||
Accounts receivable
|
$
|
103
|
|
|
$
|
115
|
|
Accounts payable
|
$
|
4
|
|
|
$
|
4
|
|
Other assets
|
$
|
1
|
|
|
$
|
2
|
|
Enbridge (including its affiliates):
|
|
|
|
||||
Accounts receivable
|
$
|
5
|
|
|
$
|
1
|
|
Accounts payable
|
$
|
6
|
|
|
$
|
3
|
|
Other assets
|
$
|
—
|
|
|
$
|
1
|
|
Other liabilities
|
$
|
—
|
|
|
$
|
1
|
|
Unconsolidated affiliates:
|
|
|
|
||||
Accounts receivable
|
$
|
16
|
|
|
$
|
18
|
|
Accounts payable
|
$
|
46
|
|
|
$
|
41
|
|
Other assets
|
$
|
4
|
|
|
$
|
5
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
(Millions)
|
||||||
Natural gas
|
$
|
32
|
|
|
$
|
28
|
|
NGLs
|
19
|
|
|
44
|
|
||
Total inventories
|
$
|
51
|
|
|
$
|
72
|
|
|
Depreciable
Life
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
(Millions)
|
||||||
Gathering and transmission systems
|
20 — 50 Years
|
|
$
|
8,477
|
|
|
$
|
8,560
|
|
Processing, storage and terminal facilities
|
35 — 60 Years
|
|
5,142
|
|
|
5,134
|
|
||
Other
|
3 — 30 Years
|
|
502
|
|
|
502
|
|
||
Construction work in progress
|
|
|
259
|
|
|
171
|
|
||
Property, plant and equipment
|
|
|
14,380
|
|
|
14,367
|
|
||
Accumulated depreciation
|
|
|
(5,430
|
)
|
|
(5,298
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
8,950
|
|
|
$
|
9,069
|
|
|
June 30, 2017
|
||||||||||
|
(Millions)
|
||||||||||
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Total
|
||||||
Balance, January 1, 2017
|
$
|
164
|
|
|
$
|
72
|
|
|
$
|
236
|
|
Dispositions
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Balance, June 30, 2017
|
$
|
159
|
|
|
$
|
72
|
|
|
$
|
231
|
|
|
|
|
|
|
|
Carrying Value as of
|
||||||
|
Percentage
Ownership
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
(Millions)
|
||||||
DCP Sand Hills Pipeline, LLC
|
66.67%
|
|
$
|
1,543
|
|
|
$
|
1,507
|
|
Discovery Producer Services LLC
|
40.00%
|
|
382
|
|
|
385
|
|
||
DCP Southern Hills Pipeline, LLC
|
66.67%
|
|
747
|
|
|
754
|
|
||
Front Range Pipeline LLC
|
33.33%
|
|
166
|
|
|
165
|
|
||
Texas Express Pipeline LLC
|
10.00%
|
|
92
|
|
|
93
|
|
||
Panola Pipeline Company, LLC
|
15.00%
|
|
24
|
|
|
25
|
|
||
Mont Belvieu Enterprise Fractionator
|
12.50%
|
|
23
|
|
|
23
|
|
||
Mont Belvieu 1 Fractionator
|
20.00%
|
|
10
|
|
|
10
|
|
||
Other
|
Various
|
|
7
|
|
|
7
|
|
||
Total investments in unconsolidated affiliates
|
|
|
$
|
2,994
|
|
|
$
|
2,969
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions)
|
||||||||||||||
DCP Sand Hills Pipeline, LLC
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
68
|
|
|
$
|
56
|
|
Discovery Producer Services LLC
|
25
|
|
|
17
|
|
|
45
|
|
|
32
|
|
||||
DCP Southern Hills Pipeline, LLC
|
13
|
|
|
12
|
|
|
24
|
|
|
24
|
|
||||
Front Range Pipeline LLC
|
3
|
|
|
4
|
|
|
7
|
|
|
9
|
|
||||
Texas Express Pipeline LLC
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
||||
Mont Belvieu Enterprise Fractionator
|
4
|
|
|
4
|
|
|
7
|
|
|
8
|
|
||||
Mont Belvieu 1 Fractionator
|
3
|
|
|
2
|
|
|
4
|
|
|
5
|
|
||||
Other
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||
Total earnings from unconsolidated affiliates
|
$
|
86
|
|
|
$
|
73
|
|
|
$
|
160
|
|
|
$
|
139
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions)
|
||||||||||||||
Statements of operations:
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
$
|
368
|
|
|
$
|
329
|
|
|
$
|
705
|
|
|
$
|
636
|
|
Operating expenses
|
$
|
152
|
|
|
$
|
135
|
|
|
$
|
300
|
|
|
$
|
254
|
|
Net income
|
$
|
216
|
|
|
$
|
191
|
|
|
$
|
404
|
|
|
$
|
377
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
(Millions)
|
||||||
Balance sheets:
|
|
|
|
||||
Current assets
|
$
|
207
|
|
|
$
|
232
|
|
Long-term assets
|
5,259
|
|
|
5,274
|
|
||
Current liabilities
|
(147
|
)
|
|
(156
|
)
|
||
Long-term liabilities
|
(202
|
)
|
|
(205
|
)
|
||
Net assets
|
$
|
5,117
|
|
|
$
|
5,145
|
|
•
|
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.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Carrying
Value
|
||||||||||||||||
|
(Millions)
|
||||||||||||||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (a)
|
$
|
18
|
|
|
$
|
21
|
|
|
$
|
7
|
|
|
$
|
46
|
|
|
$
|
5
|
|
|
$
|
28
|
|
|
$
|
9
|
|
|
$
|
42
|
|
Short-term investments (b)
|
$
|
233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
233
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (c)
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (d)
|
$
|
(12
|
)
|
|
$
|
(15
|
)
|
|
$
|
(2
|
)
|
|
$
|
(29
|
)
|
|
$
|
(11
|
)
|
|
$
|
(57
|
)
|
|
$
|
(23
|
)
|
|
$
|
(91
|
)
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (e)
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
$
|
(7
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
(a)
|
Included in current unrealized gains on derivative instruments in our condensed consolidated balance sheets.
|
(b)
|
Includes short-term money market securities included in cash and cash equivalents in our condensed consolidated balance sheets.
|
(c)
|
Included in long-term unrealized gains on derivative instruments in our condensed consolidated balance sheets.
|
(d)
|
Included in current unrealized losses on derivative instruments in our condensed consolidated balance sheets.
|
(e)
|
Included in long-term unrealized losses on derivative instruments in our condensed consolidated balance sheets.
|
|
Commodity Derivative Instruments
|
||||||||||||||
|
Current
Assets
|
|
Long-Term
Assets
|
|
Current
Liabilities
|
|
Long-Term
Liabilities
|
||||||||
|
(Millions)
|
||||||||||||||
Three months ended June 30, 2017 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
(8
|
)
|
|
$
|
(3
|
)
|
Net unrealized gains included in earnings (b)
|
3
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Transfers out of Level 3 (c)
|
(3
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Settlements
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Ending balance
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
Net unrealized gains on derivatives still held included in earnings (b)
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Three months ended June 30, 2016 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
(17
|
)
|
|
$
|
(3
|
)
|
Net unrealized (losses) gains included in earnings (b)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Transfers out of Level 3 (c)
|
(2
|
)
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Ending balance
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
(8
|
)
|
|
$
|
(2
|
)
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(5
|
)
|
|
$
|
2
|
|
|
Commodity Derivative Instruments
|
||||||||||||||
|
Current
Assets |
|
Long-Term
Assets |
|
Current
Liabilities |
|
Long-Term
Liabilities |
||||||||
|
(Millions)
|
||||||||||||||
Six months ended June 30, 2017 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
Net unrealized gains (losses) included in earnings (b)
|
1
|
|
|
(3
|
)
|
|
13
|
|
|
(3
|
)
|
||||
Transfers out of Level 3 (c)
|
(2
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Settlements
|
(1
|
)
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Ending balance
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
6
|
|
|
$
|
(2
|
)
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
Six months ended June 30, 2016 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
35
|
|
|
$
|
4
|
|
|
$
|
(23
|
)
|
|
$
|
(6
|
)
|
Net unrealized (losses) gains included in earnings (b)
|
(3
|
)
|
|
(2
|
)
|
|
7
|
|
|
4
|
|
||||
Transfers out of Level 3 (c)
|
(2
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Settlements
|
(25
|
)
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Ending balance
|
$
|
5
|
|
|
$
|
2
|
|
|
$
|
(8
|
)
|
|
$
|
(2
|
)
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
(6
|
)
|
|
$
|
5
|
|
(a)
|
There were no purchases, issuances or sales of derivatives or transfers into Level 3 for the three and
six months ended
June 30, 2017
and
2016
.
|
(b)
|
Represents the amount of unrealized gains or losses for the period, included in trading and marketing gains (losses), net.
|
(c)
|
Amounts transferred out of Level 3 are reflected at fair value at the end of the period.
|
|
June 30, 2017
|
|
|
||||
Product Group
|
Fair Value
|
|
Forward
Curve Range
|
|
|
||
|
(Millions)
|
|
|
||||
Assets
|
|
|
|
|
|
||
NGLs
|
$
|
8
|
|
|
$0.25-$1.03
|
|
Per gallon
|
Natural gas
|
$
|
1
|
|
|
$2.35-$2.94
|
|
Per MMBtu
|
Liabilities
|
|
|
|
|
|
||
NGLs
|
$
|
(3
|
)
|
|
$0.20-$1.05
|
|
Per gallon
|
Natural gas
|
$
|
(2
|
)
|
|
$2.35-$2.94
|
|
Per MMBtu
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying Value (a)
|
|
Fair Value
|
|
Carrying Value (a)
|
|
Fair Value
|
||||||||
|
(Millions)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total debt
|
|
$
|
5,235
|
|
|
$
|
5,360
|
|
|
$
|
5,430
|
|
|
$
|
5,395
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
(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 semi-annually, due August 2030 (a)
|
300
|
|
|
300
|
|
||
Issued October 2006, interest at 6.450% payable semi-annually, due November 2036
|
300
|
|
|
300
|
|
||
Issued September 2007, interest at 6.750% payable semi-annually, 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 semi-annually, due May 2043
|
550
|
|
|
550
|
|
||
Credit facility with financial institutions:
|
|
|
|
||||
Revolving credit facility, weighted-average variable interest rate of 2.010%, as of December 31, 2016, due May 2019
|
—
|
|
|
195
|
|
||
Fair value adjustments related to interest rate swap fair value hedges (a)
|
23
|
|
|
24
|
|
||
Unamortized issuance costs
|
(25
|
)
|
|
(23
|
)
|
||
Unamortized discount
|
(13
|
)
|
|
(14
|
)
|
||
Total debt
|
5,210
|
|
|
5,407
|
|
||
Current maturities of long-term debt
|
500
|
|
|
500
|
|
||
Total long-term debt
|
$
|
4,710
|
|
|
$
|
4,907
|
|
|
Debt
Maturities
|
||
|
(Millions)
|
||
2018
|
$
|
—
|
|
2019
|
775
|
|
|
2020
|
600
|
|
|
2021
|
500
|
|
|
2022
|
350
|
|
|
Thereafter
|
2,500
|
|
|
Total long-term debt
|
$
|
4,725
|
|
•
|
If we were to have an effective event of default under our 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 Credit Agreement. As of
June 30, 2017
, we were not a party to any agreements that would trigger the cross-default provisions.
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross Amounts
of Assets and
(Liabilities)
Presented in the
Balance Sheet
|
|
Amounts Not
Offset in the
Balance Sheet -
Financial
Instruments
|
|
Net
Amount
|
|
Gross Amounts
of Assets and
(Liabilities)
Presented in the
Balance Sheet
|
|
Amounts Not
Offset in the
Balance Sheet -
Financial
Instruments
|
|
Net
Amount
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivatives
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
51
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivatives
|
$
|
(36
|
)
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
(92
|
)
|
|
$
|
—
|
|
|
$
|
(92
|
)
|
Balance Sheet Line Item
|
June 30,
2017 |
|
December 31,
2016 |
|
Balance Sheet Line Item
|
|
June 30,
2017 |
|
December 31,
2016 |
||||||||
|
(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
|
$
|
46
|
|
|
$
|
42
|
|
|
Unrealized losses on derivative instruments — current
|
|
$
|
(29
|
)
|
|
$
|
(91
|
)
|
Unrealized gains on derivative instruments — long-term
|
5
|
|
|
5
|
|
|
Unrealized losses on derivative instruments — long-term
|
|
(7
|
)
|
|
(1
|
)
|
||||
Total
|
$
|
51
|
|
|
$
|
47
|
|
|
Total
|
|
$
|
(36
|
)
|
|
$
|
(92
|
)
|
|
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
|
)
|
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
Deferred losses in AOCI expected to be reclassified into earnings over the next 12 months
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
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)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
Losses reclassified from AOCI to earnings — effective portion
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Deficit purchase price under carrying value of the Transaction
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
(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)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
|
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)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
(a)
|
Relates to Discovery, an unconsolidated affiliate.
|
Commodity Derivatives: Statements of Operations Line Item
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions)
|
|||||||||||||||
Realized (losses) gains
|
|
$
|
(2
|
)
|
|
$
|
21
|
|
|
$
|
(7
|
)
|
|
$
|
84
|
|
Unrealized gains (losses)
|
|
24
|
|
|
(44
|
)
|
|
60
|
|
|
(89
|
)
|
||||
Trading and marketing gains (losses), net
|
|
$
|
22
|
|
|
$
|
(23
|
)
|
|
$
|
53
|
|
|
$
|
(5
|
)
|
|
June 30, 2017
|
||||||||||
|
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
|
(282,000
|
)
|
|
(29,043,200
|
)
|
|
(15,547,868
|
)
|
|
2,075,000
|
|
2018
|
(772,000
|
)
|
|
(17,855,000
|
)
|
|
(2,262,338
|
)
|
|
2,350,000
|
|
2019
|
(150,000
|
)
|
|
—
|
|
|
292,700
|
|
|
2,025,000
|
|
2020
|
(50,000
|
)
|
|
—
|
|
|
238,548
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
|
June 30, 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)
|
||||
2016
|
(951,000
|
)
|
|
(13,980,700
|
)
|
|
(15,180,238
|
)
|
|
507,500
|
|
2017
|
(702,000
|
)
|
|
(24,962,500
|
)
|
|
(5,753,073
|
)
|
|
5,670,000
|
|
2018
|
—
|
|
|
—
|
|
|
253,190
|
|
|
—
|
|
2019
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
2020
|
(25,000
|
)
|
|
—
|
|
|
120,000
|
|
|
—
|
|
Payment Date
|
Per Unit
Distribution
|
|
Total Cash
Distribution
|
||||
|
|
|
|
(Millions)
|
|||
May 15, 2017
|
$
|
0.7800
|
|
|
$
|
135
|
|
February 14, 2017
|
0.7800
|
|
|
121
|
|
||
November 14, 2016
|
0.7800
|
|
|
120
|
|
||
August 12, 2016
|
0.7800
|
|
|
121
|
|
||
May 13, 2016
|
0.7800
|
|
|
121
|
|
||
February 12, 2016
|
0.7800
|
|
|
121
|
|
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
1,269
|
|
|
$
|
1,756
|
|
|
$
|
—
|
|
|
$
|
(1,076
|
)
|
|
$
|
1,949
|
|
Gross margin (a)
|
$
|
342
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
392
|
|
Operating and maintenance expense
|
(162
|
)
|
|
(13
|
)
|
|
(3
|
)
|
|
—
|
|
|
(178
|
)
|
|||||
Depreciation and amortization expense
|
(86
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
(94
|
)
|
|||||
General and administrative expense
|
(7
|
)
|
|
(2
|
)
|
|
(62
|
)
|
|
—
|
|
|
(71
|
)
|
|||||
Other expense
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Gain on sale of assets, net
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|||||
Earnings from unconsolidated affiliates
|
24
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
(73
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss)
|
$
|
142
|
|
|
$
|
92
|
|
|
$
|
(145
|
)
|
|
$
|
—
|
|
|
$
|
89
|
|
Net income attributable to noncontrolling interests
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
141
|
|
|
$
|
92
|
|
|
$
|
(145
|
)
|
|
$
|
—
|
|
|
$
|
88
|
|
Non-cash derivative mark-to-market (b)
|
$
|
16
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24
|
|
Capital expenditures
|
$
|
103
|
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
111
|
|
Investments in unconsolidated affiliates, net
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
1,037
|
|
|
$
|
1,457
|
|
|
$
|
—
|
|
|
$
|
(871
|
)
|
|
$
|
1,623
|
|
Gross margin (a)
|
$
|
288
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
329
|
|
Operating and maintenance expense
|
(151
|
)
|
|
(10
|
)
|
|
(5
|
)
|
|
—
|
|
|
(166
|
)
|
|||||
Depreciation and amortization expense
|
(87
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
(95
|
)
|
|||||
General and administrative expense
|
(4
|
)
|
|
(2
|
)
|
|
(55
|
)
|
|
—
|
|
|
(61
|
)
|
|||||
Other expense
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Loss on sale of assets, net
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Earnings from unconsolidated affiliates
|
17
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
(79
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net income (loss)
|
$
|
57
|
|
|
$
|
76
|
|
|
$
|
(154
|
)
|
|
$
|
—
|
|
|
$
|
(21
|
)
|
Net income attributable to noncontrolling interests
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
56
|
|
|
$
|
76
|
|
|
$
|
(154
|
)
|
|
$
|
—
|
|
|
$
|
(22
|
)
|
Non-cash derivative mark-to-market (b)
|
$
|
(29
|
)
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(44
|
)
|
Capital expenditures
|
$
|
22
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Investments in unconsolidated affiliates, net
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
2,628
|
|
|
$
|
3,683
|
|
|
$
|
—
|
|
|
$
|
(2,241
|
)
|
|
$
|
4,070
|
|
Gross margin (a)
|
$
|
718
|
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
826
|
|
Operating and maintenance expense
|
(315
|
)
|
|
(22
|
)
|
|
(8
|
)
|
|
—
|
|
|
(345
|
)
|
|||||
Depreciation and amortization expense
|
(171
|
)
|
|
(7
|
)
|
|
(10
|
)
|
|
—
|
|
|
(188
|
)
|
|||||
General and administrative expense
|
(13
|
)
|
|
(5
|
)
|
|
(115
|
)
|
|
—
|
|
|
(133
|
)
|
|||||
Other expense
|
(3
|
)
|
|
(11
|
)
|
|
(1
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Gain on sale of assets, net
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|||||
Earnings from unconsolidated affiliates
|
44
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
160
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
(146
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net income (loss)
|
$
|
294
|
|
|
$
|
179
|
|
|
$
|
(283
|
)
|
|
$
|
—
|
|
|
$
|
190
|
|
Net income attributable to noncontrolling interests
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
293
|
|
|
$
|
179
|
|
|
$
|
(283
|
)
|
|
$
|
—
|
|
|
$
|
189
|
|
Non-cash derivative mark-to-market (b)
|
$
|
47
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60
|
|
Capital expenditures
|
$
|
146
|
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
159
|
|
Investments in unconsolidated affiliates, net
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41
|
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
1,973
|
|
|
$
|
2,721
|
|
|
$
|
—
|
|
|
$
|
(1,607
|
)
|
|
$
|
3,087
|
|
Gross margin (a)
|
$
|
557
|
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
658
|
|
Operating and maintenance expense
|
(312
|
)
|
|
(20
|
)
|
|
(13
|
)
|
|
—
|
|
|
(345
|
)
|
|||||
Depreciation and amortization expense
|
(173
|
)
|
|
(8
|
)
|
|
(9
|
)
|
|
—
|
|
|
(190
|
)
|
|||||
General and administrative expense
|
(8
|
)
|
|
(5
|
)
|
|
(110
|
)
|
|
—
|
|
|
(123
|
)
|
|||||
Other income (expense)
|
87
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
82
|
|
|||||
Loss on sale of assets, net
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Earnings from unconsolidated affiliates
|
32
|
|
|
107
|
|
|
—
|
|
|
—
|
|
|
139
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(158
|
)
|
|
—
|
|
|
(158
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net income (loss)
|
$
|
177
|
|
|
$
|
170
|
|
|
$
|
(303
|
)
|
|
$
|
—
|
|
|
$
|
44
|
|
Net income attributable to noncontrolling interests
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
176
|
|
|
$
|
170
|
|
|
$
|
(303
|
)
|
|
$
|
—
|
|
|
$
|
43
|
|
Non-cash derivative mark-to-market (b)
|
$
|
(68
|
)
|
|
$
|
(21
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(89
|
)
|
Non-cash lower of cost or market adjustments
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Capital expenditures
|
$
|
72
|
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
83
|
|
Investments in unconsolidated affiliates, net
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
(a)
|
Gross margin consists of total operating revenues, including trading and marketing gains and losses, 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.
|
|
June 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
|
(Millions)
|
||||||
Segment long-term assets:
|
|
|
|
||||
Gathering and Processing
|
$
|
8,937
|
|
|
$
|
9,053
|
|
Logistics and Marketing
|
3,284
|
|
|
3,278
|
|
||
Other (a)
|
284
|
|
|
286
|
|
||
Total long-term assets
|
12,505
|
|
|
12,617
|
|
||
Current assets
|
1,065
|
|
|
994
|
|
||
Total assets
|
$
|
13,570
|
|
|
$
|
13,611
|
|
(a)
|
Other long-term assets not allocable to segments consist of unrealized gains on derivative instruments, corporate leasehold improvements and other long-term assets.
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(Millions)
|
||||||
Cash paid for interest:
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
$
|
143
|
|
|
$
|
160
|
|
Cash paid for income taxes, net of income tax refunds
|
$
|
2
|
|
|
$
|
2
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Property, plant and equipment acquired with accounts payable and accrued liabilities
|
$
|
33
|
|
|
$
|
15
|
|
Other non-cash changes in property, plant and equipment
|
$
|
(2
|
)
|
|
$
|
4
|
|
Property, plant and equipment reclassified to assets held for sale, net of accumulated depreciation
|
$
|
—
|
|
|
$
|
(116
|
)
|
Issuance of common and general partner units
|
$
|
1,125
|
|
|
$
|
—
|
|
Deficit purchase price in the Transaction
|
$
|
3,094
|
|
|
$
|
—
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
June 30, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
251
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
690
|
|
|
—
|
|
|
690
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|||||
Total current assets
|
—
|
|
|
250
|
|
|
815
|
|
|
—
|
|
|
1,065
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
8,950
|
|
|
—
|
|
|
8,950
|
|
|||||
Goodwill and intangible assets, net
|
—
|
|
|
—
|
|
|
363
|
|
|
—
|
|
|
363
|
|
|||||
Advances receivable — consolidated subsidiaries
|
2,697
|
|
|
2,165
|
|
|
—
|
|
|
(4,862
|
)
|
|
—
|
|
|||||
Investments in consolidated subsidiaries
|
4,473
|
|
|
7,339
|
|
|
—
|
|
|
(11,812
|
)
|
|
—
|
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
2,994
|
|
|
—
|
|
|
2,994
|
|
|||||
Other long-term assets
|
—
|
|
|
—
|
|
|
198
|
|
|
—
|
|
|
198
|
|
|||||
Total assets
|
$
|
7,170
|
|
|
$
|
9,754
|
|
|
$
|
13,320
|
|
|
$
|
(16,674
|
)
|
|
$
|
13,570
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
864
|
|
|
$
|
—
|
|
|
$
|
935
|
|
Current maturities of long-term debt
|
—
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|||||
Advances payable — consolidated subsidiaries
|
—
|
|
|
—
|
|
|
4,862
|
|
|
(4,862
|
)
|
|
—
|
|
|||||
Long-term debt
|
—
|
|
|
4,710
|
|
|
—
|
|
|
—
|
|
|
4,710
|
|
|||||
Other long-term liabilities
|
—
|
|
|
—
|
|
|
226
|
|
|
—
|
|
|
226
|
|
|||||
Total liabilities
|
—
|
|
|
5,281
|
|
|
5,952
|
|
|
(4,862
|
)
|
|
6,371
|
|
|||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net equity
|
7,170
|
|
|
4,477
|
|
|
7,344
|
|
|
(11,812
|
)
|
|
7,179
|
|
|||||
Accumulated other comprehensive loss
|
—
|
|
|
(4
|
)
|
|
(5
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Total partners’ equity
|
7,170
|
|
|
4,473
|
|
|
7,339
|
|
|
(11,812
|
)
|
|
7,170
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|||||
Total equity
|
7,170
|
|
|
4,473
|
|
|
7,368
|
|
|
(11,812
|
)
|
|
7,199
|
|
|||||
Total liabilities and equity
|
$
|
7,170
|
|
|
$
|
9,754
|
|
|
$
|
13,320
|
|
|
$
|
(16,674
|
)
|
|
$
|
13,570
|
|
|
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
|
|
|||||
Noncontrolling 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 Statement of Operations
|
||||||||||||||||||
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,772
|
|
|
$
|
—
|
|
|
$
|
1,772
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
155
|
|
|
—
|
|
|
155
|
|
|||||
Trading and marketing gains, net
|
—
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
22
|
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
1,949
|
|
|
—
|
|
|
1,949
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
1,557
|
|
|
—
|
|
|
1,557
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
178
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
94
|
|
|
—
|
|
|
94
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
|||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Other expense
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
1,871
|
|
|
—
|
|
|
1,871
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
78
|
|
|
—
|
|
|
78
|
|
|||||
Interest expense
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|||||
Income from consolidated subsidiaries
|
88
|
|
|
161
|
|
|
—
|
|
|
(249
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
86
|
|
|||||
Income before income taxes
|
88
|
|
|
88
|
|
|
164
|
|
|
(249
|
)
|
|
91
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income
|
88
|
|
|
88
|
|
|
162
|
|
|
(249
|
)
|
|
89
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net income attributable to partners
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
161
|
|
|
$
|
(249
|
)
|
|
$
|
88
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Net income
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
162
|
|
|
$
|
(249
|
)
|
|
$
|
89
|
|
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total comprehensive income
|
88
|
|
|
88
|
|
|
162
|
|
|
(249
|
)
|
|
89
|
|
|||||
Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
161
|
|
|
$
|
(249
|
)
|
|
$
|
88
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Three Months Ended June 30, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,491
|
|
|
$
|
—
|
|
|
$
|
1,491
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
155
|
|
|
—
|
|
|
155
|
|
|||||
Trading and marketing losses, net
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
1,623
|
|
|
—
|
|
|
1,623
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
1,294
|
|
|
—
|
|
|
1,294
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
95
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
|||||
Loss on sale of assets
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Other expense
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
1,635
|
|
|
—
|
|
|
1,635
|
|
|||||
Operating loss
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|||||
Interest expense, net
|
—
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|
(79
|
)
|
|||||
(Loss) income from consolidated subsidiaries
|
(22
|
)
|
|
57
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
|||||
(Loss) income before income taxes
|
(22
|
)
|
|
(22
|
)
|
|
61
|
|
|
(35
|
)
|
|
(18
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net (loss) income
|
(22
|
)
|
|
(22
|
)
|
|
58
|
|
|
(35
|
)
|
|
(21
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net (loss) income attributable to partners
|
$
|
(22
|
)
|
|
$
|
(22
|
)
|
|
$
|
57
|
|
|
$
|
(35
|
)
|
|
$
|
(22
|
)
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||||||
|
Three Months Ended June 30, 2016
|
||||||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Net (loss) income
|
$
|
(22
|
)
|
|
$
|
(22
|
)
|
|
$
|
58
|
|
|
$
|
(35
|
)
|
|
$
|
(21
|
)
|
||||
Total other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total comprehensive (loss) income
|
(22
|
)
|
|
(22
|
)
|
|
58
|
|
|
(35
|
)
|
|
(21
|
)
|
|||||||||
Total comprehensive loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||||
Total comprehensive (loss) income attributable to partners
|
$
|
(22
|
)
|
|
$
|
(22
|
)
|
|
$
|
57
|
|
|
$
|
(35
|
)
|
|
$
|
(22
|
)
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,705
|
|
|
$
|
—
|
|
|
$
|
3,705
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
312
|
|
|
—
|
|
|
312
|
|
|||||
Trading and marketing gains, net
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
4,070
|
|
|
—
|
|
|
4,070
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
3,244
|
|
|
—
|
|
|
3,244
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
345
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
188
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
133
|
|
|||||
Gain on sale of assets
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Other expense
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
3,891
|
|
|
—
|
|
|
3,891
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
179
|
|
|||||
Interest expense, net
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
—
|
|
|
(146
|
)
|
|||||
Income from consolidated subsidiaries
|
189
|
|
|
335
|
|
|
—
|
|
|
(524
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
160
|
|
|
—
|
|
|
160
|
|
|||||
Income before income taxes
|
189
|
|
|
189
|
|
|
339
|
|
|
(524
|
)
|
|
193
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net income
|
189
|
|
|
189
|
|
|
336
|
|
|
(524
|
)
|
|
190
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net income attributable to partners
|
$
|
189
|
|
|
$
|
189
|
|
|
$
|
335
|
|
|
$
|
(524
|
)
|
|
$
|
189
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Net income
|
$
|
189
|
|
|
$
|
189
|
|
|
$
|
336
|
|
|
$
|
(524
|
)
|
|
$
|
190
|
|
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 income
|
190
|
|
|
190
|
|
|
336
|
|
|
(525
|
)
|
|
191
|
|
|||||
Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
190
|
|
|
$
|
190
|
|
|
$
|
335
|
|
|
$
|
(525
|
)
|
|
$
|
190
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,785
|
|
|
$
|
—
|
|
|
$
|
2,785
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
307
|
|
|
—
|
|
|
307
|
|
|||||
Trading and marketing losses, net
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
3,087
|
|
|
—
|
|
|
3,087
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of natural gas and NGLs
|
—
|
|
|
—
|
|
|
2,429
|
|
|
—
|
|
|
2,429
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
345
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
|
190
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
|||||
Loss on sale of assets
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
3,019
|
|
|
—
|
|
|
3,019
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|||||
Interest expense, net
|
—
|
|
|
(158
|
)
|
|
—
|
|
|
—
|
|
|
(158
|
)
|
|||||
Income from consolidated subsidiaries
|
43
|
|
|
201
|
|
|
—
|
|
|
(244
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
139
|
|
|||||
Income before income taxes
|
43
|
|
|
43
|
|
|
207
|
|
|
(244
|
)
|
|
49
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net income
|
43
|
|
|
43
|
|
|
202
|
|
|
(244
|
)
|
|
44
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Net income attributable to partners
|
$
|
43
|
|
|
$
|
43
|
|
|
$
|
201
|
|
|
$
|
(244
|
)
|
|
$
|
43
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
Net income
|
$
|
43
|
|
|
$
|
43
|
|
|
$
|
202
|
|
|
$
|
(244
|
)
|
|
$
|
44
|
|
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total comprehensive income
|
43
|
|
|
43
|
|
|
202
|
|
|
(244
|
)
|
|
44
|
|
|||||
Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
43
|
|
|
$
|
43
|
|
|
$
|
201
|
|
|
$
|
(244
|
)
|
|
$
|
43
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(143
|
)
|
|
$
|
503
|
|
|
$
|
—
|
|
|
$
|
360
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
256
|
|
|
590
|
|
|
—
|
|
|
(846
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
—
|
|
|
(159
|
)
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Net cash provided by (used in) investing activities
|
256
|
|
|
590
|
|
|
(71
|
)
|
|
(846
|
)
|
|
(71
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(846
|
)
|
|
846
|
|
|
—
|
|
|||||
Payments of long-term debt
|
—
|
|
|
(195
|
)
|
|
—
|
|
|
—
|
|
|
(195
|
)
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
—
|
|
|
418
|
|
|
—
|
|
|
418
|
|
|||||
Distributions to limited partners and general partner
|
(256
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(256
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Other
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(256
|
)
|
|
(197
|
)
|
|
(432
|
)
|
|
846
|
|
|
(39
|
)
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
250
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
251
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
Six Months Ended June 30, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(Millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(153
|
)
|
|
$
|
457
|
|
|
$
|
—
|
|
|
$
|
304
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
242
|
|
|
221
|
|
|
—
|
|
|
(463
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
(83
|
)
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
(27
|
)
|
|||||
Change in restricted cash
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Deposits received on assets held for sale
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||
Net cash provided by (used in) investing activities
|
242
|
|
|
212
|
|
|
(92
|
)
|
|
(463
|
)
|
|
(101
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(463
|
)
|
|
463
|
|
|
—
|
|
|||||
Proceeds from long-term debt
|
—
|
|
|
2,252
|
|
|
—
|
|
|
—
|
|
|
2,252
|
|
|||||
Payments of long-term debt
|
—
|
|
|
(2,301
|
)
|
|
—
|
|
|
—
|
|
|
(2,301
|
)
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
—
|
|
|
100
|
|
|
—
|
|
|
100
|
|
|||||
Distributions to limited partners and general partner
|
(242
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(242
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Other
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(242
|
)
|
|
(59
|
)
|
|
(366
|
)
|
|
463
|
|
|
(204
|
)
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
•
|
Our growing fee-based business represents a significant portion of our 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 solid capital structure and balance sheet.
|
•
|
We believe we have access to sufficient capital to fund our growth.
|
•
|
Within our Logistics and Marketing segment, we are currently expanding the Sand Hills pipeline to 365 MBbls/d, expected to be in service in the fourth quarter of 2017, and have multiple Sand Hills lateral connections in flight throughout 2017.
|
•
|
Further Sand Hills pipeline expansion to 450 MBbls/d includes a partial looping of the pipeline and the addition of new pump stations, and is expected to be in service in the third quarter of 2018.
|
•
|
Within our Gathering and Processing segment, we are constructing a 200 MMcf/d natural gas processing plant, the Mewbourn 3 plant, and further expanding 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.
|
•
|
We approved the 200 MMcf/d O'Connor 2 plant in the DJ Basin. The O'Connor 2 plant and associated gathering infrastructure is expected to be in service in 2019.
|
•
|
Further, we increased capacity in the DJ Basin by up to 40 MMcf/d starting in June 2017 by placing additional field compression and plant bypass infrastructure in service.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance Three Months 2017 vs. 2016
|
|
Variance Six Months 2017 vs. 2016
|
||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||||
|
(Millions, except operating data)
|
|||||||||||||||||||||||||||||
Operating revenues (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gathering and Processing
|
|
$
|
1,269
|
|
|
$
|
1,037
|
|
|
$
|
2,628
|
|
|
$
|
1,973
|
|
|
$
|
232
|
|
|
22
|
%
|
|
$
|
655
|
|
|
33
|
%
|
Logistics and Marketing
|
|
1,756
|
|
|
1,457
|
|
|
3,683
|
|
|
2,721
|
|
|
299
|
|
|
21
|
%
|
|
962
|
|
|
35
|
%
|
||||||
Inter-segment eliminations
|
|
(1,076
|
)
|
|
(871
|
)
|
|
(2,241
|
)
|
|
(1,607
|
)
|
|
205
|
|
|
24
|
%
|
|
634
|
|
|
39
|
%
|
||||||
Total operating revenues
|
|
1,949
|
|
|
1,623
|
|
|
4,070
|
|
|
3,087
|
|
|
326
|
|
|
20
|
%
|
|
983
|
|
|
32
|
%
|
||||||
Purchases of natural gas and NGLs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gathering and Processing
|
|
(927
|
)
|
|
(749
|
)
|
|
(1,910
|
)
|
|
(1,416
|
)
|
|
178
|
|
|
24
|
%
|
|
494
|
|
|
35
|
%
|
||||||
Logistics and Marketing
|
|
(1,706
|
)
|
|
(1,416
|
)
|
|
(3,575
|
)
|
|
(2,620
|
)
|
|
290
|
|
|
20
|
%
|
|
955
|
|
|
36
|
%
|
||||||
Inter-segment eliminations
|
|
1,076
|
|
|
871
|
|
|
2,241
|
|
|
1,607
|
|
|
205
|
|
|
24
|
%
|
|
634
|
|
|
39
|
%
|
||||||
Total purchases
|
|
(1,557
|
)
|
|
(1,294
|
)
|
|
(3,244
|
)
|
|
(2,429
|
)
|
|
263
|
|
|
20
|
%
|
|
815
|
|
|
34
|
%
|
||||||
Operating and maintenance expense
|
|
(178
|
)
|
|
(166
|
)
|
|
(345
|
)
|
|
(345
|
)
|
|
12
|
|
|
7
|
%
|
|
—
|
|
|
—
|
%
|
||||||
Depreciation and amortization expense
|
|
(94
|
)
|
|
(95
|
)
|
|
(188
|
)
|
|
(190
|
)
|
|
(1
|
)
|
|
(1
|
)%
|
|
(2
|
)
|
|
(1
|
)%
|
||||||
General and administrative expense
|
|
(71
|
)
|
|
(61
|
)
|
|
(133
|
)
|
|
(123
|
)
|
|
10
|
|
|
16
|
%
|
|
10
|
|
|
8
|
%
|
||||||
Other (expense) income
|
|
(5
|
)
|
|
(5
|
)
|
|
(15
|
)
|
|
82
|
|
|
—
|
|
|
*
|
|
|
(97
|
)
|
|
*
|
|
||||||
Earnings from unconsolidated affiliates (b)
|
|
86
|
|
|
73
|
|
|
160
|
|
|
139
|
|
|
13
|
|
|
18
|
%
|
|
21
|
|
|
15
|
%
|
||||||
Interest expense
|
|
(73
|
)
|
|
(79
|
)
|
|
(146
|
)
|
|
(158
|
)
|
|
(6
|
)
|
|
(8
|
)%
|
|
(12
|
)
|
|
(8
|
)%
|
||||||
Income tax expense
|
|
(2
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|
(33
|
)%
|
|
(2
|
)
|
|
(40
|
)%
|
||||||
Restructuring costs
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
*
|
|
|
(8
|
)
|
|
*
|
|
||||||
Gain (loss) on sale of assets, net
|
|
34
|
|
|
(6
|
)
|
|
34
|
|
|
(6
|
)
|
|
40
|
|
|
*
|
|
|
40
|
|
|
*
|
|
||||||
Net income attributable to noncontrolling interests
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
*
|
|
|
—
|
|
|
*
|
|
||||||
Net income (loss) attributable to partners
|
|
$
|
88
|
|
|
$
|
(22
|
)
|
|
$
|
189
|
|
|
$
|
43
|
|
|
$
|
110
|
|
|
*
|
|
|
$
|
146
|
|
|
*
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gross margin (c):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gathering and Processing
|
|
$
|
342
|
|
|
$
|
288
|
|
|
$
|
718
|
|
|
$
|
557
|
|
|
$
|
54
|
|
|
19
|
%
|
|
$
|
161
|
|
|
29
|
%
|
Logistics and Marketing
|
|
50
|
|
|
41
|
|
|
108
|
|
|
101
|
|
|
$
|
9
|
|
|
22
|
%
|
|
$
|
7
|
|
|
7
|
%
|
||||
Total gross margin
|
|
$
|
392
|
|
|
$
|
329
|
|
|
$
|
826
|
|
|
$
|
658
|
|
|
$
|
63
|
|
|
19
|
%
|
|
$
|
168
|
|
|
26
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Non-cash commodity derivative mark-to-market
|
|
$
|
24
|
|
|
$
|
(44
|
)
|
|
$
|
60
|
|
|
$
|
(89
|
)
|
|
$
|
68
|
|
|
*
|
|
|
$
|
149
|
|
|
*
|
|
Natural gas wellhead (MMcf/d) (d)
|
|
4,483
|
|
|
5,255
|
|
|
4,532
|
|
|
5,343
|
|
|
(772
|
)
|
|
(15
|
)%
|
|
(811
|
)
|
|
(15
|
)%
|
||||||
NGL gross production (MBbls/d) (d)
|
|
366
|
|
|
415
|
|
|
359
|
|
|
405
|
|
|
(49
|
)
|
|
(12
|
)%
|
|
(46
|
)
|
|
(11
|
)%
|
||||||
NGL pipelines throughput (MBbls/d) (d)
|
|
451
|
|
|
430
|
|
|
439
|
|
|
415
|
|
|
21
|
|
|
5
|
%
|
|
24
|
|
|
6
|
%
|
(a)
|
Operating revenues include the impact of trading and marketing gains (losses), net.
|
(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 trading and marketing gains and losses, less purchases of natural gas and NGLs. Segment gross margin for each segment consists of total operating revenues for that segment, including trading and marketing gains and losses, net, less purchases of natural gas and NGLs 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 wellhead and throughput volumes and NGL production.
|
•
|
$299 million increase for our Logistics and Marketing segment primarily due to increased commodity prices,and favorable commodity derivative activity, partially offset by lower gas and NGL sales volumes; and
|
•
|
$232 million increase for our Gathering and Processing segment primarily due to higher commodity prices, higher gas and NGL sales volumes primarily related to our North region which impact both sales and purchases, favorable commodity derivative activity, partially offset by lower gas and NGL sales volumes in the South, Midcontinent and Permian regions;
|
•
|
$205 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 higher commodity prices, partially offset by lower gas and NGL sales volumes.
|
•
|
$290 million increase for our Logistics and Marketing segment for the reasons discussed above; and
|
•
|
$178 million increase for our Gathering and Processing segment for the reasons discussed above;
|
•
|
$205 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 higher commodity prices, partially offset by lower gas and NGL sales volumes.
|
•
|
$54 million
increase
for our Gathering and Processing segment primarily related to higher commodity prices, favorable commodity derivative activity, higher margins on a specific producer arrangement and higher NGL recoveries in our North region, and contract realignment efforts in our Permian region. This increase was partially offset by lower volumes across our South, Midcontinent, and Permian regions due to reduced drilling activity in prior periods and the sale of our Northern Louisiana system and Douglas gathering system; and
|
•
|
$9 million increase for our Logistics and Marketing segment primarily related to favorable commodity derivative activity and partially offset by lower margins on wholesale propane.
|
•
|
$962 million increase for our Logistics and Marketing segment primarily due to increased commodity prices and favorable commodity derivative activity, partially offset by lower gas and NGL sales volumes; and
|
•
|
$655 million
increase for our Gathering and Processing segment primarily due to higher commodity prices, higher gas and NGL sales volumes primarily related to our North region which impact both sales and purchases, favorable commodity derivative activity, partially offset by lower gas and NGL sales volumes in the South, Midcontinent and Permian regions;
|
•
|
$634 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 higher commodity prices, partially offset by lower gas and NGL sales volumes.
|
•
|
$955 million increase for our Logistics and Marketing segment for the reasons discussed above; and
|
•
|
$494 million increase for our Gathering and Processing segment for the reasons discussed above;
|
•
|
$634 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 higher commodity prices, partially offset by lower gas and NGL sales volumes.
|
•
|
$161 million
increase
for our Gathering and Processing segment primarily related to higher commodity prices, favorable commodity derivative activity, higher margins on a specific producer arrangement, higher NGL recoveries and a producer settlement in our North region, and contract realignment efforts in our Permian and Midcontinent regions. This increase was partially offset by lower volumes across our South, Midcontinent, and Permian regions due to reduced drilling activity in prior periods and the sale of our Northern Louisiana system and Douglas gathering system; and
|
•
|
$7 million increase for our Logistics and Marketing segment primarily related to favorable commodity derivative activity and higher NGL storage margins, partially offset by lower margins on wholesale propane.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions)
|
||||||||||||||
DCP Sand Hills Pipeline, LLC
|
$
|
37
|
|
|
$
|
31
|
|
|
$
|
68
|
|
|
$
|
56
|
|
Discovery Producer Services LLC
|
25
|
|
|
17
|
|
|
45
|
|
|
32
|
|
||||
DCP Southern Hills Pipeline, LLC
|
13
|
|
|
12
|
|
|
24
|
|
|
24
|
|
||||
Front Range Pipeline LLC
|
3
|
|
|
4
|
|
|
7
|
|
|
9
|
|
||||
Texas Express Pipeline LLC
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
||||
Mont Belvieu Enterprise Fractionator
|
4
|
|
|
4
|
|
|
7
|
|
|
8
|
|
||||
Mont Belvieu 1 Fractionator
|
3
|
|
|
2
|
|
|
4
|
|
|
5
|
|
||||
Other
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||
Total earnings from unconsolidated affiliates
|
$
|
86
|
|
|
$
|
73
|
|
|
$
|
160
|
|
|
$
|
139
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Millions)
|
||||||||||||||
DCP Sand Hills Pipeline, LLC
|
$
|
46
|
|
|
$
|
36
|
|
|
$
|
73
|
|
|
$
|
68
|
|
Discovery Producer Services LLC
|
24
|
|
|
22
|
|
|
49
|
|
|
45
|
|
||||
DCP Southern Hills Pipeline, LLC
|
19
|
|
|
15
|
|
|
31
|
|
|
30
|
|
||||
Front Range Pipeline LLC
|
5
|
|
|
5
|
|
|
7
|
|
|
10
|
|
||||
Texas Express Pipeline LLC
|
2
|
|
|
2
|
|
|
5
|
|
|
5
|
|
||||
Mont Belvieu Enterprise Fractionator
|
2
|
|
|
5
|
|
|
6
|
|
|
11
|
|
||||
Mont Belvieu 1 Fractionator
|
3
|
|
|
3
|
|
|
4
|
|
|
6
|
|
||||
Other
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||
Total distributions from unconsolidated affiliates
|
$
|
101
|
|
|
$
|
89
|
|
|
$
|
177
|
|
|
$
|
176
|
|
Operating Data
|
|||||||||||||||||||||
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
|||||||||||||||||
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) |
|
Natural Gas
Wellhead Volume (MMcf/d) (a) |
|
NGL
Production (MBbls/d) (a) |
|||||||
North
|
|
13
|
|
|
4,010
|
|
|
1,255
|
|
|
1,073
|
|
|
86
|
|
|
1,107
|
|
|
86
|
|
Permian
|
|
16
|
|
|
16,300
|
|
|
1,460
|
|
|
964
|
|
|
106
|
|
|
963
|
|
|
102
|
|
Midcontinent
|
|
12
|
|
|
29,185
|
|
|
1,765
|
|
|
1,194
|
|
|
86
|
|
|
1,197
|
|
|
87
|
|
South
|
|
20
|
|
|
7,415
|
|
|
3,295
|
|
|
1,252
|
|
|
88
|
|
|
1,265
|
|
|
84
|
|
Total
|
|
61
|
|
|
56,910
|
|
|
7,775
|
|
|
4,483
|
|
|
366
|
|
|
4,532
|
|
|
359
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance Three Months 2017 vs. 2016
|
|
Variance Six Months
2017 vs. 2016 |
||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||||
|
(Millions, except operating data)
|
|||||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
1,116
|
|
|
$
|
919
|
|
|
$
|
2,313
|
|
|
$
|
1,715
|
|
|
$
|
197
|
|
|
21
|
%
|
|
$
|
598
|
|
|
35
|
%
|
Transportation, processing and other
|
|
139
|
|
|
137
|
|
|
279
|
|
|
272
|
|
|
2
|
|
|
1
|
%
|
|
7
|
|
|
3
|
%
|
||||||
Trading and marketing gains (losses), net
|
|
14
|
|
|
(19
|
)
|
|
36
|
|
|
(14
|
)
|
|
33
|
|
|
*
|
|
|
50
|
|
|
*
|
|
||||||
Total operating revenues
|
|
1,269
|
|
|
1,037
|
|
|
2,628
|
|
|
1,973
|
|
|
232
|
|
|
22
|
%
|
|
655
|
|
|
33
|
%
|
||||||
Purchases of natural gas and NGLs
|
|
(927
|
)
|
|
(749
|
)
|
|
(1,910
|
)
|
|
(1,416
|
)
|
|
178
|
|
|
24
|
%
|
|
494
|
|
|
35
|
%
|
||||||
Operating and maintenance expense
|
|
(162
|
)
|
|
(151
|
)
|
|
(315
|
)
|
|
(312
|
)
|
|
11
|
|
|
7
|
%
|
|
3
|
|
|
1
|
%
|
||||||
General and administrative expense
|
|
(7
|
)
|
|
(4
|
)
|
|
(13
|
)
|
|
(8
|
)
|
|
3
|
|
|
75
|
%
|
|
5
|
|
|
63
|
%
|
||||||
Depreciation and amortization expense
|
|
(86
|
)
|
|
(87
|
)
|
|
(171
|
)
|
|
(173
|
)
|
|
(1
|
)
|
|
(1
|
)%
|
|
(2
|
)
|
|
(1
|
)%
|
||||||
Other (expense) income
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
87
|
|
|
(3
|
)
|
|
*
|
|
|
(90
|
)
|
|
*
|
|
||||||
Earnings from unconsolidated affiliates (a)
|
|
24
|
|
|
17
|
|
|
44
|
|
|
32
|
|
|
7
|
|
|
41
|
%
|
|
12
|
|
|
38
|
%
|
||||||
Gain (loss) on sale of assets, net
|
|
34
|
|
|
(6
|
)
|
|
34
|
|
|
(6
|
)
|
|
40
|
|
|
*
|
|
|
40
|
|
|
*
|
|
||||||
Segment net income
|
|
142
|
|
|
57
|
|
|
294
|
|
|
177
|
|
|
85
|
|
|
*
|
|
|
117
|
|
|
66
|
%
|
||||||
Segment net income attributable to noncontrolling interests
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||||||
Segment net income attributable to partners
|
|
$
|
141
|
|
|
$
|
56
|
|
|
$
|
293
|
|
|
$
|
176
|
|
|
$
|
85
|
|
|
*
|
|
|
$
|
117
|
|
|
66
|
%
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Segment gross margin (b)
|
|
$
|
342
|
|
|
$
|
288
|
|
|
$
|
718
|
|
|
$
|
557
|
|
|
$
|
54
|
|
|
19
|
%
|
|
$
|
161
|
|
|
29
|
%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
16
|
|
|
$
|
(29
|
)
|
|
$
|
47
|
|
|
$
|
(68
|
)
|
|
$
|
45
|
|
|
*
|
|
|
$
|
115
|
|
|
*
|
|
Natural gas wellhead (MMcf/d) (c)
|
|
4,483
|
|
|
5,255
|
|
|
4,532
|
|
|
5,343
|
|
|
(772
|
)
|
|
(15
|
)%
|
|
(811
|
)
|
|
(15
|
)%
|
||||||
NGL gross production (MBbls/d) (c)
|
|
366
|
|
|
415
|
|
|
359
|
|
|
405
|
|
|
(49
|
)
|
|
(12
|
)%
|
|
(46
|
)
|
|
(11
|
)%
|
(a)
|
Earnings from unconsolidated affiliates includes 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 trading and marketing gains (losses), net, 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 wellhead and throughput volumes and NGL production.
|
•
|
$302 million increase attributable to higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity;
|
•
|
$33 million increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of $45 million due to movements in forward prices of commodities, partially offset by a $12 million decrease in realized cash settlement gains in 2017;
|
•
|
$17 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;
|
•
|
$122 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods.
|
•
|
$49 million increase as a result of higher commodity prices;
|
•
|
$33 million increase as a result of commodity derivative activity as discussed above;
|
•
|
$2 million increase as a result of higher margins on a specific producer arrangement and higher NGL recoveries primarily related to our DJ Basin system in our North region;
|
•
|
$25 million decrease primarily as a result of lower volumes across our South, Permian and Midcontinent regions due to reduced drilling activity in prior periods, partially offset by fee based contract realignment efforts in the Permian region;
|
•
|
$5 million decrease as a result of the sale of our Northern Louisiana system in our South region and Douglas gathering system in our North region.
|
•
|
$825 million increase attributable to higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity;
|
•
|
$50 million increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of $115 million due to movements in forward prices of commodities, partially offset by a $65 million decrease in realized cash settlement gains in 2017;
|
•
|
$34 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;
|
•
|
$7 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;
|
•
|
$261 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods.
|
•
|
$148 million increase as a result of higher commodity prices;
|
•
|
$50 million increase as a result of commodity derivative activity as discussed above;
|
•
|
$21 million increase as a result of higher margins on a specific producer arrangement and higher NGL recoveries primarily related to our DJ Basin system and a producer settlement in our North region;
|
•
|
$49 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods, partially offset by fee based contract realignment efforts in the Permian and Midcontinent region;
|
•
|
$9 million decrease as a result of the sale of our Northern Louisiana system in our South region and Douglas gathering system in our North region.
|
Operating Data
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2017
|
|||||||||||
System
|
|
Approximate
System Length (Miles) |
|
Fractionators
|
|
Approximate
Throughput Capacity (MBbls/d) (a) |
|
Pipeline Throughput
(MBbls/d) (a) |
|
Fractionator Throughput
(MBbls/d) (a) |
|
Pipeline Throughput
(MBbls/d) (a) |
|
Fractionator Throughput
(MBbls/d) (a) |
|||||||
Sand Hills pipeline
|
|
1,325
|
|
|
—
|
|
|
186
|
|
|
180
|
|
|
—
|
|
|
175
|
|
|
—
|
|
Southern Hills pipeline
|
|
940
|
|
|
—
|
|
|
117
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|
—
|
|
Front Range pipeline
|
|
450
|
|
|
—
|
|
|
50
|
|
|
37
|
|
|
—
|
|
|
35
|
|
|
—
|
|
Texas Express pipeline
|
|
595
|
|
|
—
|
|
|
28
|
|
|
16
|
|
|
—
|
|
|
15
|
|
|
—
|
|
Other pipelines
|
|
2,490
|
|
|
—
|
|
|
172
|
|
|
150
|
|
|
—
|
|
|
146
|
|
|
—
|
|
Mont Belvieu fractionators
|
|
—
|
|
|
2
|
|
|
60
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
48
|
|
Total
|
|
5,800
|
|
|
2
|
|
|
613
|
|
|
451
|
|
|
53
|
|
|
439
|
|
|
48
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Variance Three Months 2017 vs. 2016
|
|
Variance Six Months 2017 vs. 2016
|
||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||||
|
(Millions, except operating data)
|
|||||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales of natural gas and NGLs
|
|
$
|
1,732
|
|
|
$
|
1,443
|
|
|
$
|
3,633
|
|
|
$
|
2,676
|
|
|
$
|
289
|
|
|
20
|
%
|
|
$
|
957
|
|
|
36
|
%
|
Transportation, processing and other
|
|
$
|
16
|
|
|
$
|
18
|
|
|
33
|
|
|
36
|
|
|
(2
|
)
|
|
(11
|
)%
|
|
(3
|
)
|
|
(8
|
)%
|
||||
Trading and marketing gains (losses), net
|
|
$
|
8
|
|
|
$
|
(4
|
)
|
|
17
|
|
|
9
|
|
|
12
|
|
|
*
|
|
|
8
|
|
|
*
|
|
||||
Total operating revenues
|
|
1,756
|
|
|
1,457
|
|
|
3,683
|
|
|
2,721
|
|
|
299
|
|
|
21
|
%
|
|
962
|
|
|
35
|
%
|
||||||
Purchases of natural gas and NGLs
|
|
(1,706
|
)
|
|
(1,416
|
)
|
|
(3,575
|
)
|
|
(2,620
|
)
|
|
290
|
|
|
20
|
%
|
|
955
|
|
|
36
|
%
|
||||||
Operating and maintenance expense
|
|
(13
|
)
|
|
(10
|
)
|
|
(22
|
)
|
|
(20
|
)
|
|
3
|
|
|
30
|
%
|
|
2
|
|
|
10
|
%
|
||||||
General and administrative expense
|
|
(2
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
||||||
Depreciation and amortization expense
|
|
(3
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(8
|
)
|
|
(1
|
)
|
|
(25
|
)%
|
|
(1
|
)
|
|
(13
|
)%
|
||||||
Other expense
|
|
(2
|
)
|
|
(5
|
)
|
|
(11
|
)
|
|
(5
|
)
|
|
(3
|
)
|
|
(60
|
)%
|
|
6
|
|
|
*
|
|
||||||
Earnings from unconsolidated affiliates (a)
|
|
62
|
|
|
56
|
|
|
116
|
|
|
107
|
|
|
6
|
|
|
11
|
%
|
|
9
|
|
|
8
|
%
|
||||||
Segment net income attributable to partners
|
|
$
|
92
|
|
|
$
|
76
|
|
|
$
|
179
|
|
|
$
|
170
|
|
|
$
|
16
|
|
|
21
|
%
|
|
$
|
9
|
|
|
5
|
%
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Segment gross margin (b)
|
|
$
|
50
|
|
|
$
|
41
|
|
|
$
|
108
|
|
|
$
|
101
|
|
|
$
|
9
|
|
|
22
|
%
|
|
$
|
7
|
|
|
7
|
%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
8
|
|
|
$
|
(15
|
)
|
|
$
|
13
|
|
|
$
|
(21
|
)
|
|
23
|
|
|
*
|
|
|
34
|
|
|
*
|
|
||
NGL pipelines throughput (MBbls/d) (c)
|
|
451
|
|
|
430
|
|
|
439
|
|
|
415
|
|
|
21
|
|
|
5
|
%
|
|
24
|
|
|
6
|
%
|
(a)
|
Earnings from unconsolidated affiliates 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 trading and marketing gains (losses), net, 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 wellhead and throughput volumes and NGL production.
|
•
|
$400 million increase as a result of higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity, and;
|
•
|
$12 million increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of $23 million due to movements in forward prices of commodities, partially offset by a $11 million decrease in realized cash settlement gains in 2017;
|
•
|
$96 million decrease attributable to lower gas and NGL sales volumes, which impacted both sales and purchases, and;
|
•
|
$17 million decrease due to the sale of our Northern Louisiana system.
|
•
|
$1,178 million increase as a result of higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity, and;
|
•
|
$8 million increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of $34 million due to movements in forward prices of commodities, partially offset by a $26 million decrease in realized cash settlement gains in 2017;
|
•
|
$188 million decrease attributable to lower gas and NGL sales volumes, which impacted both sales and purchases, and;
|
•
|
$36 million decrease due to the sale of our Northern Louisiana system.
|
•
|
$8 million increase as a result of commodity derivative activity discussed above, and;
|
•
|
$2 million increase primarily due to higher NGL storage margins;
|
•
|
$3 million of lower margins on wholesale propane.
|
•
|
cash generated from operations;
|
•
|
cash distributions from our unconsolidated affiliates;
|
•
|
borrowings under our Credit Agreement;
|
•
|
proceeds from asset rationalization;
|
•
|
reduction of incentive distribution right payments;
|
•
|
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 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.
|
|
Six Months Ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(Millions)
|
||||||
Net cash provided by operating activities
|
$
|
360
|
|
|
$
|
304
|
|
Net cash used in investing activities
|
$
|
(71
|
)
|
|
$
|
(101
|
)
|
Net cash used in financing activities
|
$
|
(39
|
)
|
|
$
|
(204
|
)
|
•
|
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).
|
|
Six Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
||||||||||||||||||||
|
Maintenance
Capital
Expenditures
|
|
Expansion
Capital
Expenditures
|
|
Total
Consolidated
Capital
Expenditures
|
|
Maintenance
Capital
Expenditures
|
|
Expansion
Capital
Expenditures
|
|
Total
Consolidated
Capital
Expenditures
|
||||||||||||
|
(Millions)
|
||||||||||||||||||||||
Our portion
|
$
|
44
|
|
|
$
|
113
|
|
|
$
|
157
|
|
|
$
|
42
|
|
|
$
|
39
|
|
|
$
|
81
|
|
Noncontrolling interest portion and reimbursable projects (a)
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Total
|
$
|
45
|
|
|
$
|
114
|
|
|
$
|
159
|
|
|
$
|
44
|
|
|
$
|
39
|
|
|
$
|
83
|
|
|
(a)
|
Represents the noncontrolling 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)
|
$
|
8,428
|
|
|
$
|
780
|
|
|
$
|
1,870
|
|
|
$
|
1,216
|
|
|
$
|
4,562
|
|
Operating lease obligations
|
195
|
|
|
49
|
|
|
68
|
|
|
43
|
|
|
35
|
|
|||||
Purchase obligations (b)
|
2,802
|
|
|
651
|
|
|
783
|
|
|
657
|
|
|
711
|
|
|||||
Other long-term liabilities (c)
|
137
|
|
|
—
|
|
|
13
|
|
|
9
|
|
|
115
|
|
|||||
Total
|
$
|
11,562
|
|
|
$
|
1,480
|
|
|
$
|
2,734
|
|
|
$
|
1,925
|
|
|
$
|
5,423
|
|
(a)
|
Includes interest payments on debt securities that have been issued. These interest payments are $
280 million
, $
495 million
, $
366 million
, and $
2,062 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
June 30, 2017
. Purchase obligations exclude accounts payable, accrued taxes and other current
|
(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
June 30, 2017
condensed consolidated balance sheet. The table above excludes non-cash obligations as well as $29 million of deferred state income taxes, $27 million of Executive Deferred Compensation Plan contributions and $8 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.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Reconciliation of Non-GAAP Measures
|
|
(Millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of net income attributable to partners to gross margin:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to partners
|
|
$
|
88
|
|
|
$
|
(22
|
)
|
|
$
|
189
|
|
|
$
|
43
|
|
Interest expense
|
|
73
|
|
|
79
|
|
|
146
|
|
|
158
|
|
||||
Income tax expense
|
|
2
|
|
|
3
|
|
|
3
|
|
|
5
|
|
||||
Operating and maintenance expense
|
|
178
|
|
|
166
|
|
|
345
|
|
|
345
|
|
||||
Depreciation and amortization expense, net of noncontrolling interests
|
|
94
|
|
|
95
|
|
|
188
|
|
|
190
|
|
||||
General and administrative expense
|
|
71
|
|
|
61
|
|
|
133
|
|
|
123
|
|
||||
Other expense (income), net
|
|
5
|
|
|
5
|
|
|
15
|
|
|
(82
|
)
|
||||
Restructuring costs
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Earnings from unconsolidated affiliates
|
|
(86
|
)
|
|
(73
|
)
|
|
(160
|
)
|
|
(139
|
)
|
||||
(Gain) loss on sale of assets, net
|
|
(34
|
)
|
|
6
|
|
|
(34
|
)
|
|
6
|
|
||||
Net income attributable to noncontrolling interests
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Gross margin
|
|
$
|
392
|
|
|
$
|
329
|
|
|
$
|
826
|
|
|
$
|
658
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
24
|
|
|
$
|
(44
|
)
|
|
$
|
60
|
|
|
$
|
(89
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of segment net income attributable to partners to segment gross margin:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Gathering and Processing segment:
|
|
|
|
|
|
|
|
|
||||||||
Segment net income attributable to partners
|
|
$
|
141
|
|
|
$
|
56
|
|
|
$
|
293
|
|
|
$
|
176
|
|
Operating and maintenance expense
|
|
162
|
|
|
151
|
|
|
315
|
|
|
312
|
|
||||
Depreciation and amortization expense
|
|
86
|
|
|
87
|
|
|
171
|
|
|
173
|
|
||||
General and administrative expense
|
|
7
|
|
|
4
|
|
|
13
|
|
|
8
|
|
||||
Other expense (income), net
|
|
3
|
|
|
—
|
|
|
3
|
|
|
(87
|
)
|
||||
Earnings from unconsolidated affiliates
|
|
(24
|
)
|
|
(17
|
)
|
|
(44
|
)
|
|
(32
|
)
|
||||
(Gain) loss on sale of assets, net
|
|
(34
|
)
|
|
6
|
|
|
(34
|
)
|
|
6
|
|
||||
Net income attributable to noncontrolling interests
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Segment gross margin
|
|
$
|
342
|
|
|
$
|
288
|
|
|
$
|
718
|
|
|
$
|
557
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
16
|
|
|
$
|
(29
|
)
|
|
$
|
47
|
|
|
$
|
(68
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Logistics and Marketing segment:
|
|
|
|
|
|
|
|
|
||||||||
Segment net income attributable to partners
|
|
$
|
92
|
|
|
$
|
76
|
|
|
$
|
179
|
|
|
$
|
170
|
|
Operating and maintenance expense
|
|
13
|
|
|
10
|
|
|
22
|
|
|
20
|
|
||||
Depreciation and amortization expense
|
|
3
|
|
|
4
|
|
|
7
|
|
|
8
|
|
||||
Other expense
|
|
2
|
|
|
5
|
|
|
11
|
|
|
5
|
|
||||
General and administrative expense
|
|
2
|
|
|
2
|
|
|
5
|
|
|
5
|
|
||||
Earnings from unconsolidated affiliates
|
|
(62
|
)
|
|
(56
|
)
|
|
(116
|
)
|
|
(107
|
)
|
||||
Segment gross margin
|
|
$
|
50
|
|
|
$
|
41
|
|
|
$
|
108
|
|
|
$
|
101
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
8
|
|
|
$
|
(15
|
)
|
|
$
|
13
|
|
|
$
|
(21
|
)
|
(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.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Millions)
|
||||||||||||||
Reconciliation of net income attributable to partners to adjusted segment EBITDA:
|
|
|
|
|
|
|
|
|
||||||||
Gathering and Processing segment:
|
|
|
|
|
|
|
|
|
||||||||
Segment net income attributable to partners (a)
|
|
$
|
141
|
|
|
$
|
56
|
|
|
$
|
293
|
|
|
$
|
176
|
|
Non-cash commodity derivative mark-to-market
|
|
(16
|
)
|
|
29
|
|
|
(47
|
)
|
|
68
|
|
||||
Depreciation and amortization expense
|
|
86
|
|
|
87
|
|
|
171
|
|
|
173
|
|
||||
(Gain) loss on sale of assets, net
|
|
(34
|
)
|
|
6
|
|
|
(34
|
)
|
|
6
|
|
||||
Distributions from unconsolidated affiliates, net of earnings
|
|
(1
|
)
|
|
5
|
|
|
4
|
|
|
13
|
|
||||
Other expense
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Adjusted segment EBITDA
|
|
$
|
179
|
|
|
$
|
183
|
|
|
$
|
390
|
|
|
$
|
436
|
|
Logistics and Marketing segment:
|
|
|
|
|
|
|
|
|
||||||||
Segment net income attributable to partners
|
|
$
|
92
|
|
|
$
|
76
|
|
|
$
|
179
|
|
|
$
|
170
|
|
Non-cash commodity derivative mark-to-market
|
|
(8
|
)
|
|
$
|
15
|
|
|
(13
|
)
|
|
21
|
|
|||
Depreciation and amortization expense
|
|
3
|
|
|
4
|
|
|
7
|
|
|
8
|
|
||||
Distributions from unconsolidated affiliates, net of earnings
|
|
16
|
|
|
$
|
11
|
|
|
13
|
|
|
24
|
|
|||
Other expense
|
|
—
|
|
|
$
|
—
|
|
|
9
|
|
|
—
|
|
|||
Adjusted segment EBITDA
|
|
$
|
103
|
|
|
$
|
106
|
|
|
$
|
195
|
|
|
$
|
223
|
|
(a)
|
There were no lower of cost or market adjustments for the three and
six months ended
June 30, 2017. There were no lower of cost or market adjustments for the
three months ended June 30, 2016
and
$3 million
for the
six months ended
June 30, 2016.
|
Period
|
|
Commodity
|
|
Notional
Volume
- Short
Positions
|
|
Reference Price
|
|
Price Range
|
July 2017 — September 2017
|
|
Natural Gas
|
|
(62,500) MMBtu/d
|
|
NYMEX Final Settlement Price (b)
|
|
$3.20-$4.27/MMBtu
|
October 2017 — December 2017
|
|
Natural Gas
|
|
(60,000) MMBtu/d
|
|
NYMEX Final Settlement Price (b)
|
|
$3.28-$4.27/MMBtu
|
January 2018 — March 2018
|
|
Natural Gas
|
|
(27,500) MMBtu/d
|
|
NYMEX Final Settlement Price (b)
|
|
$3.54-$3.68/MMBtu
|
July 2017 — December 2017
|
|
NGLs
|
|
(28,441) Bbls/d (d)
|
|
Mt.Belvieu (c)
|
|
$.28-$1.22/Gal
|
January 2018 — March 2018
|
|
NGLs
|
|
(10,524) Bbls/d (d)
|
|
Mt.Belvieu (c)
|
|
$.68-$.83/Gal
|
July 2017 — December 2017
|
|
Crude Oil
|
|
(3,078) Bbls/d (d)
|
|
NYMEX crude oil futures (a)
|
|
$49.50-$56.78/Bbl
|
January 2018 — February 2018
|
|
Crude Oil
|
|
(2,263) Bbls/d (d)
|
|
NYMEX crude oil futures (a)
|
|
$54.06-$56.61/Bbl
|
(a)
|
Monthly average of the daily close prices for the prompt month NYMEX light, sweet crude oil futures contract.
|
(b)
|
NYMEX final settlement price for natural gas futures contracts.
|
(c)
|
The average monthly OPIS price for Mt. Belvieu TET/Non-TET.
|
(d)
|
Average Bbls/d per time period.
|
|
Per Unit Decrease
|
|
Unit of
Measurement
|
|
Estimated
Decrease in
Annual Net
Income
Attributable to
Partners
|
||||
|
|
|
|
|
(Millions)
|
||||
Natural gas prices
|
$
|
0.10
|
|
|
MMBtu
|
|
$
|
7
|
|
Crude oil prices
|
$
|
1.00
|
|
|
Barrel
|
|
$
|
4
|
|
NGL prices
|
$
|
0.01
|
|
|
Gallon
|
|
$
|
5
|
|
|
Per Unit
Increase
|
|
Unit of
Measurement
|
|
Estimated
Mark-to-
Market Impact
(Decrease in
Net Income
Attributable to
Partners)
|
||||
|
|
|
|
|
(Millions)
|
||||
Natural gas prices
|
$
|
0.10
|
|
|
MMBtu
|
|
$
|
2
|
|
Crude oil prices
|
$
|
1.00
|
|
|
Barrel
|
|
$
|
1
|
|
NGL prices
|
$
|
0.01
|
|
|
Gallon
|
|
$
|
3
|
|
Period ended
|
|
Commodity
|
|
Notional Volume - Long
Positions
|
|
Fair Value
(millions)
|
|
Weighted
Average Price
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||
June 30, 2017
|
|
Natural Gas
|
|
11,098,390
|
|
|
MMBtu
|
|
$
|
32
|
|
|
$2.86/MMBtu
|
Period
|
|
Commodity
|
|
Notional Volume - (Short)/Long
Positions
|
|
Fair Value
(millions)
|
|
Price Range
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||
July 2017-April 2018
|
|
Natural Gas
|
|
(25,065,000
|
)
|
|
MMBtu
|
|
$
|
4
|
|
|
$2.95-$3.58/MMBtu
|
July 2017-October 2018
|
|
Natural Gas
|
|
14,120,000
|
|
|
MMBtu
|
|
$
|
1
|
|
|
$2.69-$3.12/MMBtu
|
Exhibit Number
|
|
|
|
Description
|
2.1
|
|
*#
|
|
Contribution Agreement, dated December 30, 2016, by and among DCP Midstream, LLC, DCP Midstream Partners, LP and DCP Midstream Operating, LP (attached as Exhibit 2.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 6, 2017).
|
3.1
|
|
*
|
|
Certificate of Limited Partnership of DCP Midstream Partners, LP dated August 5, 2005 (attached as Exhibit 3.1 to DCP Midstream Partners, LP's Registration Statement on Form S-1 (File No. 333-128378) filed with the SEC on September 16, 2005).
|
3.2
|
|
*
|
|
Certificate of Amendment to Certificate of Limited Partnership of DCP Midstream Partners, LP dated January 11, 2017 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 17, 2017).
|
3.3
|
|
*
|
|
Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated November 1, 2006 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on November 7, 2006).
|
3.4
|
|
*
|
|
Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated April 11, 2008 (attached as Exhibit 4.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on April 14, 2008).
|
3.5
|
|
*
|
|
Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated April 1, 2009 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on April 7, 2009).
|
3.6
|
|
*
|
|
Amendment No. 3 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated January 1, 2017 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 6, 2017).
|
3.7
|
|
*
|
|
Amendment No. 4 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated January 11, 2017 (attached as Exhibit 3.2 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 17, 2017).
|
10.1
|
|
*
|
|
Services and Employee Secondment Agreement, dated January 1, 2017, by and betweeen DCP Services, LLC and DCP Midstream Partners, LP (attached as Exhibit 10.1 to DCP Midstream Partners, LP's current report on Form 8-K (File No. 001 32678) filed with the SEC on January 6, 2017).
|
12.1
|
|
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
31.1
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
|
|
|
Financial statements from the Quarterly Report on Form 10-Q of DCP Midstream, LP for the three and six months ended June 30, 2017, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Equity, and (vi) the Notes to the Condensed Consolidated Financial Statements.
|
|
DCP Midstream, LP
|
|||
|
|
|
||
|
By:
|
DCP Midstream GP, LP
its General Partner
|
||
|
|
|
||
|
By:
|
DCP Midstream GP, LLC
its General Partner
|
||
|
|
|
||
Date: August 9, 2017
|
By:
|
/s/ Wouter T. van Kempen
|
||
|
|
Name:
|
Wouter T. van Kempen
|
|
|
|
Title:
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Date: August 9, 2017
|
By:
|
/s/ Sean P. O'Brien
|
||
|
|
Name:
|
Sean P. O'Brien
|
|
|
|
Title:
|
Group Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
Exhibit Number
|
|
|
|
Description
|
2.1
|
|
*#
|
|
Contribution Agreement, dated December 30, 2016, by and among DCP Midstream, LLC, DCP Midstream Partners, LP and DCP Midstream Operating, LP (attached as Exhibit 2.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 6, 2017).
|
3.1
|
|
*
|
|
Certificate of Limited Partnership of DCP Midstream Partners, LP dated August 5, 2005 (attached as Exhibit 3.1 to DCP Midstream Partners, LP's Registration Statement on Form S-1 (File No. 333-128378) filed with the SEC on September 16, 2005).
|
3.2
|
|
*
|
|
Certificate of Amendment to Certificate of Limited Partnership of DCP Midstream Partners, LP dated January 11, 2017 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 17, 2017).
|
3.3
|
|
*
|
|
Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated November 1, 2006 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on November 7, 2006).
|
3.4
|
|
*
|
|
Amendment No. 1 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated April 11, 2008 (attached as Exhibit 4.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on April 14, 2008).
|
3.5
|
|
*
|
|
Amendment No. 2 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated April 1, 2009 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on April 7, 2009).
|
3.6
|
|
*
|
|
Amendment No. 3 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated January 1, 2017 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 6, 2017).
|
3.7
|
|
*
|
|
Amendment No. 4 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated January 11, 2017 (attached as Exhibit 3.2 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 17, 2017).
|
10.1
|
|
*
|
|
Services and Employee Secondment Agreement, dated January 1, 2017, by and betweeen DCP Services, LLC and DCP Midstream Partners, LP (attached as Exhibit 10.1 to DCP Midstream Partners, LP's current report on Form 8-K (File No. 001 32678) filed with the SEC on January 6, 2017).
|
12.1
|
|
|
|
Computation of Ratio of Earnings to Fixed Charges.
|
31.1
|
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
|
|
|
Financial statements from the Quarterly Report on Form 10-Q of DCP Midstream, LP for the three and six months ended June 30, 2017, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Equity, and (vi) the Notes to the Condensed Consolidated Financial Statements.
|
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
||||||||||||||||||||
|
2017
|
|
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
|
$
|
351
|
|
|
$
|
(148
|
)
|
|
$
|
(1,157
|
)
|
|
$
|
476
|
|
|
$
|
554
|
|
|
$
|
546
|
|
Fixed charges
|
149
|
|
|
324
|
|
|
355
|
|
|
322
|
|
|
290
|
|
|
274
|
|
||||||
Amortization of capitalized interest
|
4
|
|
|
7
|
|
|
7
|
|
|
6
|
|
|
5
|
|
|
4
|
|
||||||
Distributed earnings from unconsolidated affiliates
|
160
|
|
|
282
|
|
|
184
|
|
|
82
|
|
|
35
|
|
|
34
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capitalized interest
|
(2
|
)
|
|
(1
|
)
|
|
(32
|
)
|
|
(34
|
)
|
|
(40
|
)
|
|
(79
|
)
|
||||||
Earnings from continuing operations before fixed charges
|
$
|
662
|
|
|
$
|
464
|
|
|
$
|
(643
|
)
|
|
$
|
852
|
|
|
$
|
844
|
|
|
$
|
779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense, net of capitalized interest
|
143
|
|
|
300
|
|
|
310
|
|
|
277
|
|
|
239
|
|
|
185
|
|
||||||
Capitalized interest
|
2
|
|
|
1
|
|
|
32
|
|
|
34
|
|
|
40
|
|
|
79
|
|
||||||
Estimate of interest within rental expense
|
1
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||||
Amortization of deferred loan costs
|
3
|
|
|
21
|
|
|
11
|
|
|
10
|
|
|
9
|
|
|
8
|
|
||||||
Total fixed charges
|
$
|
149
|
|
|
$
|
324
|
|
|
$
|
355
|
|
|
$
|
322
|
|
|
$
|
290
|
|
|
$
|
274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ratio of earnings to fixed charges (b)
|
4.44
|
|
|
1.43
|
|
|
—
|
|
|
2.65
|
|
|
2.91
|
|
|
2.84
|
|
(a)
|
The financial information for the the years ended December 31, 2016, 2015, 2014, 2013 and 2012 includes the results of The DCP Midstream Business, which we 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 were 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.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of DCP Midstream, LP for the
six months ended
June 30, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Wouter T. van Kempen
|
Wouter T. van Kempen
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
DCP Midstream GP, LLC, general partner of
DCP Midstream GP, LP, general partner of
DCP Midstream, LP
|
1.
|
I have reviewed this quarterly report on Form 10-Q of DCP Midstream, LP for the
six months ended
June 30, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Sean P. O'Brien
|
Sean P. O'Brien
|
Group Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
DCP Midstream GP, LLC, general partner of
DCP Midstream GP, LP, general partner of
DCP Midstream, LP
|
(a)
|
the quarterly report on Form 10-Q of the Partnership for the
six months ended
June 30, 2017
, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ Wouter T. van Kempen
|
Wouter T. van Kempen
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
August 9, 2017
|
(a)
|
the quarterly report on Form 10-Q of the Partnership for the
six months ended
June 30, 2017
, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ Sean P. O'Brien
|
Sean P. O'Brien
|
Group Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
August 9, 2017
|