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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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03-0567133
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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370 17th Street, Suite 2500
Denver, Colorado
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80202
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class:
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Name of Each Exchange on Which Registered:
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Common Units Representing Limited Partner Interests
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New York Stock Exchange
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item
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Page
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PART I
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1.
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Business
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1A.
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Risk Factors
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1B.
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Unresolved Staff Comments
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2.
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Properties
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3.
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Legal Proceedings
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4.
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Mine Safety Disclosures
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PART II
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5.
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Market for Registrant's Common Units, Related Unitholder Matters and Issuer Purchases of Common Units
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6.
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Selected Financial Data
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7.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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7A.
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Quantitative and Qualitative Disclosures about Market Risk
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8.
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Financial Statements and Supplementary Data
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9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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9A.
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Controls and Procedures
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9B.
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Other Information
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PART III
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10.
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Directors, Executive Officers and Corporate Governance
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11.
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Executive Compensation
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12.
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Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters
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13.
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Certain Relationships and Related Transactions, and Director Independence
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14.
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Principal Accountant Fees and Services
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PART IV
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15.
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Exhibits and Financial Statement Schedules
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16.
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Form 10-K Summary
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Signatures
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Bbl
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barrel
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Bbls/d
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barrels per day
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Bcf
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billion cubic feet
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Bcf/d
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billion cubic feet per day
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Btu
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British thermal unit, a measurement of energy
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Fractionation
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the process by which natural gas liquids are separated
into individual components
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MBbls
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thousand barrels
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MBbls/d
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thousand barrels per day
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MMBtu
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million Btus
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MMBtu/d
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million Btus per day
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MMcf
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million cubic feet
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MMcf/d
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million cubic feet per day
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NGLs
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natural gas liquids
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Throughput
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the volume of product transported or passing through a
pipeline or other facility
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•
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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;
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•
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the demand for crude oil, residue gas and NGL products;
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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;
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new, additions to, and changes in, laws and regulations, particularly with regard to taxes, safety, regulatory 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, including mandatory setbacks for oil and gas operations and additional local control over such activities, and their impact on producers and customers served by our systems;
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•
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volatility in the price of our common units;
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•
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general economic, market and business conditions;
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•
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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, 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 or we may be required to find alternative markets and arrangements for our natural gas and NGLs;
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•
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our ability to continue the safe and reliable operation of our assets;
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•
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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;
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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 $1.4 billion unsecured revolving credit facility or other credit facilities, and the indentures governing our notes, as well as our ability to maintain our credit ratings;
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•
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the creditworthiness of our customers and the counterparties to our transactions;
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the amount of collateral we may be required to post from time to time in our transactions;
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industry changes, including the impact of bankruptcies, consolidations, alternative energy sources, technological advances, infrastructure constraints and changes in competition;
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our ability to grow through organic growth projects, or acquisitions, and the successful integration and future performance of such assets;
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our ability to hire, train, and retain qualified personnel and key management to execute our business strategy;
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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;
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security threats such as terrorist attacks, and cybersecurity attacks and breaches, against, or otherwise impacting, our facilities and systems; and
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our ability to obtain insurance on commercially reasonable terms, if at all, as well as the adequacy of insurance to cover our losses.
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Operating Data
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|||||||||||||||||||||
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Year Ended December 31, 2018
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System
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Approximate
System Length (Miles) |
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Fractionators
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Approximate
Throughput Capacity (MBbls/d) (a) |
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Approximate NGL Storage Capacity (MMBbls)
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Approximate Natural Gas Storage Capacity (Bcf)
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Pipeline Throughput
(MBbls/d) (a) |
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Fractionator Throughput
(MBbls/d) (a) |
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Sand Hills pipeline
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1,400
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—
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323
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—
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—
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270
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—
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Southern Hills pipeline
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950
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—
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128
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—
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—
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91
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—
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Front Range pipeline
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450
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—
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50
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—
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—
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43
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—
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Texas Express pipeline
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600
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—
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28
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—
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—
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20
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—
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Other pipelines
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1,200
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—
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241
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—
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—
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158
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—
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Mont Belvieu fractionators
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—
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2
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60
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—
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—
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—
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58
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Storage facilities
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—
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—
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—
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8
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12
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—
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—
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Total
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4,600
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2
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830
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8
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12
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582
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58
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(a)
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Represents total NGL capacity or throughput allocated to our proportionate ownership share.
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Operating Data
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Year ended December 31, 2018
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Regions
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Plants
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Approximate
Gathering and Transmission Systems (Miles) |
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Approximate
Net Nameplate Plant Capacity (MMcf/d) (a) |
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Natural Gas
Wellhead Volume (MMcf/d) (a) |
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NGL
Production (MBbls/d) (a) |
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North
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13
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4,000
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1,390
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1,253
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94
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Permian
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11
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16,500
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1,260
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901
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107
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Midcontinent
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12
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29,000
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1,765
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1,301
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109
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South
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13
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7,500
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2,315
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1,314
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103
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Total
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49
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57,000
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6,730
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4,769
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413
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•
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certification and construction of new facilities;
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•
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abandonment of services and facilities;
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•
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maintenance of accounts and records;
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•
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acquisition and disposition of facilities;
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•
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initiation and discontinuation of transportation services;
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•
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terms and conditions of transportation services and service contracts with customers;
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•
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depreciation and amortization policies;
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•
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conduct and relationship with certain affiliates; and
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•
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various other matters.
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•
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requiring the acquisition of permits or authorizations to conduct regulated activities and imposing obligations in those permits, potentially including capital expenditures or operational requirements, that reduce or limit impacts to the environment;
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•
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restricting the ways that we can handle or dispose of our wastes;
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•
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limiting or prohibiting construction or operational activities in sensitive areas such as wetlands, coastal regions or areas inhabited by threatened and endangered species;
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•
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requiring remedial action to mitigate pollution conditions caused by our operations or attributable to former operations; and
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enjoining, or compelling changes to, the operations of facilities deemed not to be in compliance with environmental regulations or with permits issued pursuant to such environmental laws and regulations.
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Year Ended
December 31, 2018
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December 31, 2018
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Daily High
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Daily Low
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Commodity:
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NYMEX Natural Gas ($/MMBtu)
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$
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4.84
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$
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2.55
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$
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2.94
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NGLs ($/Gallon)
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$
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0.99
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$
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0.53
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$
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0.55
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Crude Oil ($/Bbl)
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$
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76.41
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$
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42.53
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$
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45.41
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•
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the level of domestic and offshore production;
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•
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the availability of natural gas, NGLs and crude oil and the demand in the U.S. and globally for these commodities;
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•
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a general downturn in economic conditions;
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•
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the impact of weather, including abnormally mild winter or summer weather that cause lower energy usage for heating or cooling purposes, respectively, or extreme weather that may disrupt our operations or related upstream or downstream operations;
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•
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actions taken by foreign oil and gas producing and importing nations;
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•
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the availability of local, intrastate and interstate transportation systems and condensate and NGL export facilities;
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•
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the availability and marketing of competitive fuels; and
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•
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the extent of governmental regulation and taxation.
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our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;
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•
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an increased amount of cash flow will be required to make interest payments on our debt;
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•
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our debt level will make us more vulnerable to competitive pressures or a downturn in our business or the economy generally; and
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our debt level may limit our flexibility in responding to changing business and economic conditions.
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perform ongoing assessments of pipeline integrity;
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identify threats to pipeline segments that could impact a high consequence area and assess the risks that such threats pose to pipeline integrity;
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collect, integrate, and analyze data regarding threats and risks posed to the pipeline;
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repair and remediate the pipeline as necessary; and
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implement preventive and mitigating actions.
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mistaken assumptions about volumes, future contract terms with customers, revenues and costs, including synergies;
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•
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an inability to successfully integrate the businesses we acquire;
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the assumption of unknown liabilities;
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•
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limitations on rights to indemnity from the seller;
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•
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mistaken assumptions about the overall costs of equity or debt;
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•
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the diversion of management’s and employees’ attention from other business concerns;
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•
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change in competitive landscape;
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•
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unforeseen difficulties operating in new product areas or new geographic areas; and
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customer or key employee losses at the acquired businesses.
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complete construction projects and consummate accretive acquisitions or joint ventures;
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identify businesses engaged in managing, operating or owning pipelines, processing and storage assets or other midstream assets for acquisitions, joint ventures and construction projects;
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appropriately identify liabilities associated with acquired businesses or assets;
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integrate acquired or constructed businesses or assets successfully with our existing operations and into our operating and financial systems and controls;
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hire, train and retain qualified personnel to manage and operate our growing business; and
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obtain required financing for our existing and new operations at reasonable rates.
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the failure to realize expected profitability, growth or accretion;
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•
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an increase in indebtedness and borrowing costs;
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potential environmental or regulatory compliance matters or liabilities;
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potential title issues;
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the incurrence of unanticipated liabilities and costs; and
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the temporary diversion of management’s attention from managing the remainder of our assets to the process of integrating the acquired businesses.
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the fees we charge and the margins we realize for our services;
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the prices of, level of production of, and demand for natural gas, condensate, and NGLs;
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the success of our commodity and interest rate hedging programs in mitigating fluctuations in commodity prices and interest rates;
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the volume and quality of natural gas we gather, compress, treat, process, transport and sell, and the volume of NGLs we process, transport, sell and store;
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the operational performance and efficiency of our assets, including our plants and equipment;
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the operational performance and efficiency of third party assets that provide services to us;
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the relationship between natural gas, NGL and crude oil prices;
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the level of competition from other energy companies;
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•
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the impact of weather conditions on the demand for natural gas and NGLs;
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•
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the level of our operating and maintenance and general and administrative costs; and
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prevailing economic conditions.
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•
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the level of capital expenditures we make;
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•
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the cost and form of payment for acquisitions;
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•
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our debt service requirements and other liabilities;
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•
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fluctuations in our working capital needs;
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our ability to borrow funds and access capital markets at reasonable rates;
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restrictions contained in our Credit Agreement and the indentures governing our notes;
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the timing of our producers' obligations to make volume deficiency payments to us;
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the amount of cash distributions we receive from our equity interests;
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the amount of cost reimbursements to our general partner;
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the amount of cash reserves established by our general partner; and
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•
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new, additions to and changes in laws and regulations.
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we have limited ability to control decisions with respect to the operations of these joint ventures, including decisions with respect to incurrence of expenses and distributions to us;
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these joint ventures may establish reserves for working capital, capital projects, environmental matters and legal proceedings which would reduce cash available for distribution to us;
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these joint ventures may incur additional indebtedness, and principal and interest made on such indebtedness may reduce cash otherwise available for distribution to us; and
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these joint ventures may require us to make additional capital contributions to fund working capital and capital expenditures, our funding of which could reduce the amount of cash otherwise available for distribution.
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damage to pipelines, plants, terminals, storage facilities and related equipment and surrounding properties caused by hurricanes, tornadoes, floods, fires and other natural disasters and acts of terrorism;
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•
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inadvertent damage from construction, farm and utility equipment;
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leaks of natural gas, NGLs and other hydrocarbons from our pipelines, plants, terminals, or storage facilities, or losses of natural gas or NGLs as a result of the malfunction of equipment or facilities;
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contaminants in the pipeline system;
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•
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fires and explosions; and
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•
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other hazards that could also result in personal injury and loss of life, pollution and suspension of operations.
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neither our Partnership Agreement nor any other agreement requires DCP Midstream, LLC to pursue a business strategy that favors us. DCP Midstream, LLC’s directors and officers have a fiduciary duty to make these decisions in the best interests of the owners of DCP Midstream, LLC, which may be contrary to our interests;
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our general partner is allowed to take into account the interests of parties other than us, such as DCP Midstream, LLC and its affiliates, including Phillips 66 and Enbridge, in resolving conflicts of interest;
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DCP Midstream, LLC and its affiliates, including Phillips 66 and Enbridge, are not limited in their ability to compete with us. Please read “DCP Midstream, LLC and its affiliates are not limited in their ability to compete with us” below;
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once certain requirements are met, our general partner may make a determination to receive a quantity of our Class B units in exchange for resetting the target distribution levels related to its incentive distribution rights without the approval of the special committee of our general partner or our unitholders;
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•
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our general partner has limited its liability and reduced its fiduciary duties, and has also restricted the remedies available to our unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;
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our general partner determines the amount and timing of asset purchases and sales, borrowings, issuance of additional partnership securities and reserves, each of which can affect the amount of cash that is distributed to unitholders;
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•
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our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is a maintenance capital expenditure, which reduces operating surplus, or an expansion capital expenditure, which does not reduce operating surplus. This determination can affect the amount of cash that is distributed to our unitholders;
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•
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our general partner determines which costs incurred by it and its affiliates are reimbursable by us;
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•
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our Partnership Agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with any of these entities on our behalf;
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•
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our general partner intends to limit its liability regarding our contractual and other obligations and, in some circumstances, is entitled to be indemnified by us;
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•
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our general partner may exercise its limited right to call and purchase common units if it and its affiliates own more than 80% of the common units;
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•
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our general partner controls the enforcement of obligations owed to us by our general partner and its affiliates; and
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•
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our general partner decides whether to retain separate counsel, accountants or others to perform services for us.
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•
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the exercise of its right to reset the target distribution levels of its incentive distribution rights at higher levels and receive, in connection with this reset, a number of Class B units that are convertible at any time following the first anniversary of the issuance of these Class B units into common units;
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•
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its limited call right;
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•
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its voting rights with respect to the units it owns;
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•
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its registration rights; and
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•
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its determination whether or not to consent to any merger or consolidation of the partnership or amendment to the Partnership Agreement.
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•
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provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, meaning it believed the decision was in the best interests of our partnership;
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•
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generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the special committee of the board of directors of our general partner and not involving a vote of our unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or must be “fair and reasonable” to us, as determined by our general partner in good faith and that, in determining whether a transaction or resolution is “fair and reasonable,” our general partner may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and provides that our general partner and its officers and directors will not be liable for monetary damages to us, our limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that the general partner or those other persons acted in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the conduct was criminal.
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•
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our unitholders’ proportionate ownership interest in us will decrease, including a relative dilution of any voting rights;
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•
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the amount of cash available for distribution on each unit may decrease;
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•
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the ratio of taxable income to distributions may increase;
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•
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the relative voting strength of each previously outstanding unit may be diminished; and
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•
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the market price of the common units may decline.
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•
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a court or government agency determined that we were conducting business in a state but had not complied with that particular state’s partnership statute; or
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•
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the right of holders of limited partner interests to act with other unitholders to remove or replace the general partner, to approve some amendments to our Partnership Agreement or to take other actions under our Partnership Agreement constitute “control” of our business.
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•
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less the amount of cash reserves established by our general partner to:
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•
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provide for the proper conduct of our business, including reserves for future capital expenditures and anticipated credit needs;
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•
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comply with applicable law or any debt instrument or other agreement or obligation;
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•
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provide funds to make payments on the Preferred Units; or
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•
|
provide funds for distributions to our common unitholders and to our general partner for any one or more of the next four quarters.
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•
|
plus, if our general partner so determines, all or a portion of cash and cash equivalents on hand on the date of determination of Available Cash for the quarter.
|
•
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Distributions on the Series A Preferred Units are payable semiannually in arrears on June 15th and December 15th of each year.
|
•
|
Distributions on the Series B Preferred Units are payable quarterly in arrears on the 15th day of March, June, September and December of each year to holders of record as of the close of business on the first business day of the month in which the distribution will be made.
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•
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Distributions on the Series C Preferred Units are payable quarterly in arrears on the 15th day of January, April, July and October of each year to holders of record as of the close of business on the first business day of the month in which the distribution will be made.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(millions, except per unit amounts)
|
||||||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
9,374
|
|
|
$
|
7,850
|
|
|
$
|
6,269
|
|
|
$
|
6,779
|
|
|
$
|
13,420
|
|
Transportation, processing and other
|
489
|
|
|
652
|
|
|
647
|
|
|
532
|
|
|
517
|
|
|||||
Trading and marketing (losses) gains, net
|
(41
|
)
|
|
(40
|
)
|
|
(23
|
)
|
|
119
|
|
|
88
|
|
|||||
Total operating revenues
|
9,822
|
|
|
8,462
|
|
|
6,893
|
|
|
7,430
|
|
|
14,025
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases and related costs
|
8,019
|
|
|
6,885
|
|
|
5,461
|
|
|
5,981
|
|
|
11,828
|
|
|||||
Operating and maintenance expense
|
760
|
|
|
661
|
|
|
670
|
|
|
732
|
|
|
773
|
|
|||||
Depreciation and amortization expense
|
388
|
|
|
379
|
|
|
378
|
|
|
377
|
|
|
348
|
|
|||||
General and administrative expense
|
276
|
|
|
290
|
|
|
292
|
|
|
281
|
|
|
277
|
|
|||||
Asset impairments
|
145
|
|
|
48
|
|
|
—
|
|
|
912
|
|
|
18
|
|
|||||
Other expense (income), net
|
11
|
|
|
11
|
|
|
(65
|
)
|
|
10
|
|
|
7
|
|
|||||
(Gain) loss on sale of assets, net
|
—
|
|
|
(34
|
)
|
|
(35
|
)
|
|
(42
|
)
|
|
7
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
13
|
|
|
11
|
|
|
—
|
|
|||||
Total operating costs and expenses
|
9,599
|
|
|
8,240
|
|
|
6,714
|
|
|
8,262
|
|
|
13,258
|
|
|||||
Operating income (loss)
|
223
|
|
|
222
|
|
|
179
|
|
|
(832
|
)
|
|
767
|
|
|||||
Loss on financing activities
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense
|
(269
|
)
|
|
(289
|
)
|
|
(321
|
)
|
|
(320
|
)
|
|
(287
|
)
|
|||||
Earnings from unconsolidated affiliates (a)
|
370
|
|
|
303
|
|
|
282
|
|
|
184
|
|
|
82
|
|
|||||
Income (loss) before income taxes
|
305
|
|
|
236
|
|
|
140
|
|
|
(968
|
)
|
|
562
|
|
|||||
Income tax (expense) benefit
|
(3
|
)
|
|
(2
|
)
|
|
(46
|
)
|
|
102
|
|
|
(11
|
)
|
|||||
Net income (loss)
|
302
|
|
|
234
|
|
|
94
|
|
|
(866
|
)
|
|
551
|
|
|||||
Net income attributable to noncontrolling interests
|
(4
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|||||
Net income (loss) attributable to partners
|
298
|
|
|
229
|
|
|
88
|
|
|
(871
|
)
|
|
547
|
|
|||||
Net loss (income) attributable to predecessor operations (b)
|
—
|
|
|
—
|
|
|
224
|
|
|
1,099
|
|
|
(130
|
)
|
|||||
General partner interest in net income
|
(164
|
)
|
|
(164
|
)
|
|
(124
|
)
|
|
(124
|
)
|
|
(114
|
)
|
|||||
Series A preferred limited partners' interest in net income
|
(37
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Series B preferred limited partners' interest in net income
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Series C preferred limited partners' interest in net income
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income allocable to limited partners
|
$
|
87
|
|
|
$
|
61
|
|
|
$
|
188
|
|
|
$
|
104
|
|
|
$
|
303
|
|
Net income per limited partner unit-basic and diluted
|
$
|
0.61
|
|
|
$
|
0.43
|
|
|
$
|
1.64
|
|
|
$
|
0.91
|
|
|
$
|
2.84
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(millions, except per unit amounts)
|
||||||||||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Property, plant and equipment, net
|
$
|
9,135
|
|
|
$
|
8,983
|
|
|
$
|
9,069
|
|
|
$
|
9,428
|
|
|
$
|
9,537
|
|
Total assets
|
$
|
14,266
|
|
|
$
|
13,878
|
|
|
$
|
13,611
|
|
|
$
|
13,885
|
|
|
$
|
13,628
|
|
Accounts payable
|
$
|
926
|
|
|
$
|
1,076
|
|
|
$
|
735
|
|
|
$
|
545
|
|
|
$
|
977
|
|
Long-term debt
|
$
|
4,782
|
|
|
$
|
4,707
|
|
|
$
|
4,907
|
|
|
$
|
5,669
|
|
|
$
|
5,191
|
|
Partners’ equity
|
$
|
7,268
|
|
|
$
|
7,408
|
|
|
$
|
2,601
|
|
|
$
|
2,772
|
|
|
$
|
2,993
|
|
Predecessor equity
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,220
|
|
|
$
|
4,287
|
|
|
$
|
2,189
|
|
Noncontrolling interests
|
$
|
29
|
|
|
$
|
30
|
|
|
$
|
32
|
|
|
$
|
33
|
|
|
$
|
33
|
|
Total equity
|
$
|
7,297
|
|
|
$
|
7,438
|
|
|
$
|
6,853
|
|
|
$
|
7,092
|
|
|
$
|
5,215
|
|
Other Information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash distributions declared per unit
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.0525
|
|
Cash distributions paid per unit
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.1200
|
|
|
$
|
3.0050
|
|
(a)
|
Includes our proportionate share of the earnings of our unconsolidated affiliates. Earnings include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.
|
(b)
|
Includes net (loss) income attributable to the DCP Midstream Business prior to the date of our acquisition from DCP Midstream, LLC.
|
•
|
Our growing fee-based business represents a significant portion of our margins.
|
•
|
We have positive operating cash flow from our well-positioned and diversified assets.
|
•
|
We have a well-defined and targeted hedging program.
|
•
|
We manage our disciplined capital growth program with a significant focus on fee-based agreements and projects with long term volume outlooks.
|
•
|
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 increased the capacity of the Sand Hills pipeline to 485 MBbls/d during the fourth quarter of 2018.
|
•
|
We increased the capacity of the Southern Hills pipeline at the end of the third quarter to approximately 190 MBbls/d.
|
•
|
We are participating in the Front Range 100 MBls/d and Texas Express 90 MBls/d expansions adding NGL takeaway from the DJ Basin. Both expansions are expected to go into service in the third quarter of 2019.
|
•
|
We have a 33% ownership option in the Cheyenne Connector pipeline. The Cheyenne Connector pipeline will have an initial capacity of at least 600 MMcf/day and is expected to be in service in the fourth quarter of 2019, subject to certain conditions, including required approvals from the Federal Energy Regulatory Commission.
|
•
|
We are adding NGL takeaway to the DJ Basin with our Southern Hills pipeline extension via the White Cliffs Pipeline, with capacity of 90 MBls/d, expandable to 120 MBls/d. Expected completion is in the fourth quarter of 2019.
|
•
|
We have a 25% ownership interest in the Gulf Coast Express pipeline, or "GCX". The GCX project is designed to transport approximately 2 Bcf/d of natural gas, and is fully subscribed. The natural gas takeaway pipeline is under construction and is anticipated to be in-service in the fourth quarter of 2019.
|
•
|
We hold an option to acquire a 30% ownership interest in two 150 MBbls/d fractionators to be constructed within Phillips 66's Sweeny Hub, exercisable at the in-service date, which is expected to be in late 2020.
|
•
|
Within our Gathering and Processing Segment, construction of our up to 300 MMcf/d O'Connor 2 facility and associated gathering infrastructure, located in the DJ Basin, is progressing. O'Connor 2 is comprised of 200 MMcf/d of processing capacity and up to 100 MMcf/d of bypass. We expect to place the plant into service in the second quarter of 2019, and the bypass into service in the third quarter of 2019.
|
•
|
We have secured land and filed permits for Bighorn, a natural gas processing facility in the DJ Basin, with capacity of up to 1.0 Bcf/d including bypass. The Bighorn facility is expected to be placed into service in phases beginning in the second quarter of 2020.
|
|
|
Year Ended December 31,
|
|
Variance 2018 vs. 2017
|
|
Variance 2017 vs. 2016
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||
|
(millions, except operating data)
|
|||||||||||||||||||||||||
Operating revenues (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Logistics and Marketing
|
|
$
|
9,014
|
|
|
$
|
7,757
|
|
|
$
|
6,186
|
|
|
$
|
1,257
|
|
|
16
|
%
|
|
$
|
1,571
|
|
|
25
|
%
|
Gathering and Processing
|
|
5,843
|
|
|
5,467
|
|
|
4,490
|
|
|
376
|
|
|
7
|
%
|
|
977
|
|
|
22
|
%
|
|||||
Inter-segment eliminations
|
|
(5,035
|
)
|
|
(4,762
|
)
|
|
(3,783
|
)
|
|
273
|
|
|
6
|
%
|
|
979
|
|
|
26
|
%
|
|||||
Total operating revenues
|
|
9,822
|
|
|
8,462
|
|
|
6,893
|
|
|
1,360
|
|
|
16
|
%
|
|
1,569
|
|
|
23
|
%
|
|||||
Purchases and related costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Logistics and Marketing
|
|
(8,789
|
)
|
|
(7,557
|
)
|
|
(5,981
|
)
|
|
1,232
|
|
|
16
|
%
|
|
1,576
|
|
|
26
|
%
|
|||||
Gathering and Processing
|
|
(4,265
|
)
|
|
(4,090
|
)
|
|
(3,263
|
)
|
|
175
|
|
|
4
|
%
|
|
827
|
|
|
25
|
%
|
|||||
Inter-segment eliminations
|
|
5,035
|
|
|
4,762
|
|
|
3,783
|
|
|
273
|
|
|
6
|
%
|
|
979
|
|
|
26
|
%
|
|||||
Total purchases
|
|
(8,019
|
)
|
|
(6,885
|
)
|
|
(5,461
|
)
|
|
1,134
|
|
|
16
|
%
|
|
1,424
|
|
|
26
|
%
|
|||||
Operating and maintenance expense
|
|
(760
|
)
|
|
(661
|
)
|
|
(670
|
)
|
|
99
|
|
|
15
|
%
|
|
(9
|
)
|
|
(1
|
)%
|
|||||
Depreciation and amortization expense
|
|
(388
|
)
|
|
(379
|
)
|
|
(378
|
)
|
|
9
|
|
|
2
|
%
|
|
1
|
|
|
—
|
%
|
|||||
General and administrative expense
|
|
(276
|
)
|
|
(290
|
)
|
|
(292
|
)
|
|
(14
|
)
|
|
(5
|
)%
|
|
(2
|
)
|
|
(1
|
)%
|
|||||
Asset impairments
|
|
(145
|
)
|
|
(48
|
)
|
|
—
|
|
|
97
|
|
|
*
|
|
|
48
|
|
|
*
|
|
|||||
Other (expense) income, net
|
|
(11
|
)
|
|
(11
|
)
|
|
65
|
|
|
—
|
|
|
—
|
%
|
|
(76
|
)
|
|
*
|
|
|||||
Gain on sale of assets, net
|
|
—
|
|
|
34
|
|
|
35
|
|
|
(34
|
)
|
|
*
|
|
|
(1
|
)
|
|
(3
|
)%
|
|||||
Restructuring costs
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
*
|
|
|
13
|
|
|
100
|
%
|
|||||
Loss from financing activities
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
19
|
|
|
*
|
|
|
—
|
|
|
*
|
|
|||||
Earnings from unconsolidated affiliates (b)
|
|
370
|
|
|
303
|
|
|
282
|
|
|
67
|
|
|
22
|
%
|
|
21
|
|
|
7
|
%
|
|||||
Interest expense
|
|
(269
|
)
|
|
(289
|
)
|
|
(321
|
)
|
|
(20
|
)
|
|
(7
|
)%
|
|
(32
|
)
|
|
(10
|
)%
|
|||||
Income tax expense
|
|
(3
|
)
|
|
(2
|
)
|
|
(46
|
)
|
|
1
|
|
|
50
|
%
|
|
(44
|
)
|
|
(96
|
)%
|
|||||
Net income attributable to noncontrolling interests
|
|
(4
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(20
|
)%
|
|
(1
|
)
|
|
(17
|
)%
|
|||||
Net income attributable to partners
|
|
$
|
298
|
|
|
$
|
229
|
|
|
$
|
88
|
|
|
$
|
69
|
|
|
30
|
%
|
|
$
|
141
|
|
|
*
|
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross margin (c):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Logistics and Marketing
|
|
$
|
225
|
|
|
$
|
200
|
|
|
$
|
205
|
|
|
$
|
25
|
|
|
13
|
%
|
|
$
|
(5
|
)
|
|
(2
|
)%
|
Gathering and Processing
|
|
1,578
|
|
|
1,377
|
|
|
1,227
|
|
|
201
|
|
|
15
|
%
|
|
150
|
|
|
12
|
%
|
|||||
Total gross margin
|
|
$
|
1,803
|
|
|
$
|
1,577
|
|
|
$
|
1,432
|
|
|
$
|
226
|
|
|
14
|
%
|
|
$
|
145
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-cash commodity derivative mark-to-market
|
|
$
|
108
|
|
|
$
|
(28
|
)
|
|
$
|
(139
|
)
|
|
$
|
136
|
|
|
*
|
|
|
$
|
111
|
|
|
*
|
|
Natural gas wellhead (MMcf/d) (d)
|
|
4,769
|
|
|
4,531
|
|
|
5,124
|
|
|
238
|
|
|
5
|
%
|
|
(593
|
)
|
|
(12
|
)%
|
|||||
NGL gross production (MBbls/d) (d)
|
|
413
|
|
|
375
|
|
|
393
|
|
|
38
|
|
|
10
|
%
|
|
(18
|
)
|
|
(5
|
)%
|
|||||
NGL pipelines throughput (MBbls/d) (d)
|
|
582
|
|
|
460
|
|
|
420
|
|
|
122
|
|
|
27
|
%
|
|
40
|
|
|
10
|
%
|
(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 less purchases and related costs. Segment gross margin for each segment consists of total operating revenues for that segment less purchases and related costs 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.
|
•
|
$1,257 million
increase for our Logistics and Marketing segment primarily due to higher NGL and crude prices, higher gas and NGL sales volumes which impacts both sales and purchases, partially offset by lower natural gas prices, unfavorable commodity derivative activity and the implementation of ASC 606; and
|
•
|
$376 million
increase for our Gathering and Processing segment due to higher NGL and crude prices, higher gas and NGL sales volumes impacting both sales and purchases due to increased drilling activity in our Eagle Ford system and the impact of Hurricane Harvey in 2017 in the South region, growth projects primarily related to our DJ Basin system in the North region and increased volumes, improved operational performance in our Midcontinent region and favorable commodity derivative activity. These increases were partially offset by lower natural gas prices, the sale of our Douglas gathering system in June 2017 and the implementation of ASC 606;
|
•
|
$273 million
change in inter-segment eliminations, which relate to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to higher gas and NGL sales volume, higher commodity prices and the implementation of ASC 606.
|
•
|
$1,232 million
increase for our Logistics and Marketing segment for the reasons discussed above.
|
•
|
$175 million
increase for our Gathering and Processing segment for the reasons discussed above;
|
•
|
$273 million
change in inter-segment eliminations, which relate to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to higher gas and NGL sales volumes and higher commodity prices and the implementation of ASC 606;
|
•
|
$201 million
increase
for our Gathering and Processing segment primarily related to increased volumes from increased drilling activity in our Eagle Ford system and the impact of Hurricane Harvey in 2017 in the South region, growth projects primarily related to our DJ Basin system in the North region, increased volumes and improved operational performance in the Midcontinent region, favorable commodity derivative activity and higher commodity prices. These increases were partially offset by lower volumes in our Permian region due to weather impacting operations, a third-party line strike and operational factors and the sale of our Douglas gathering system in June 2017;
|
•
|
$
25 million
increase for our Logistics and Marketing segment primarily related to higher gas marketing margins due to favorable commodity spreads primarily associated with Guadalupe and higher NGL marketing margins and transported volumes, partially offset by unfavorable commodity derivative activity, lower margins on wholesale propane and the expiration of a commercial arrangement.
|
•
|
$1,571 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 the sale of our Northern Louisiana System;
|
•
|
$977 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 impacts both sales and purchases, and higher transportation, processing and other, primarily related to fee based contract realignment efforts. These increases were partially offset by lower gas and NGL sales volumes in the South, Midcontinent and Permian regions, unfavorable commodity derivative activity and the sale of our Northern Louisiana system and Douglas gathering system;
|
•
|
$979 million increase in inter-segment eliminations, which relate to sales of gas and 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.
|
•
|
$1,576 million increase for our Logistics and Marketing segment for the reasons discussed above;
|
•
|
$827 million increase for our Gathering and Processing segment for the reasons discussed above;
|
•
|
$979 million increase in inter-segment eliminations, which relate to sales of gas and 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.
|
•
|
$150 million increase for our Gathering and Processing segment primarily related to higher commodity prices, increased volume from growth projects, higher margins associated with 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. These increases were partially offset by lower volumes across our South, Midcontinent, and Permian regions due to reduced drilling activity in prior periods, the impact of Hurricane Harvey primarily in the South and Permian regions, the sale of our Northern Louisiana system, the sale of our Douglas gathering system and unfavorable commodity derivative activity.
|
•
|
$5 million decrease for our Logistics and Marketing segment primarily related to lower margins on wholesale propane and the expiration of a contract, the sale of our Northern Louisiana system, lower gas storage margins and lower transportation volumes on certain of our NGL pipelines, partially offset by higher NGL marketing margins, higher gas marketing margins and favorable commodity derivative activity.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|||||||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
223
|
|
|
$
|
148
|
|
|
$
|
110
|
|
DCP Southern Hills Pipeline, LLC
|
|
68
|
|
|
47
|
|
|
44
|
|
|||
Front Range Pipeline LLC
|
|
24
|
|
|
17
|
|
|
19
|
|
|||
Texas Express Pipeline LLC
|
|
19
|
|
|
9
|
|
|
9
|
|
|||
Mont Belvieu Enterprise Fractionator
|
|
10
|
|
|
13
|
|
|
16
|
|
|||
Mont Belvieu 1 Fractionator
|
|
16
|
|
|
6
|
|
|
9
|
|
|||
Discovery Producer Services LLC
|
|
8
|
|
|
61
|
|
|
73
|
|
|||
Other
|
|
2
|
|
|
2
|
|
|
2
|
|
|||
Total earnings from unconsolidated affiliates
|
|
$
|
370
|
|
|
$
|
303
|
|
|
$
|
282
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|||||||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
252
|
|
|
$
|
169
|
|
|
$
|
139
|
|
DCP Southern Hills Pipeline, LLC
|
|
83
|
|
|
62
|
|
|
56
|
|
|||
Front Range Pipeline LLC
|
|
29
|
|
|
17
|
|
|
24
|
|
|||
Texas Express Pipeline LLC
|
|
20
|
|
|
12
|
|
|
11
|
|
|||
Mont Belvieu Enterprise Fractionator
|
|
9
|
|
|
13
|
|
|
18
|
|
|||
Mont Belvieu 1 Fractionator
|
|
15
|
|
|
6
|
|
|
11
|
|
|||
Discovery Producer Services LLC
|
|
30
|
|
|
85
|
|
|
94
|
|
|||
Other
|
|
3
|
|
|
3
|
|
|
3
|
|
|||
Total distributions from unconsolidated affiliates
|
|
$
|
441
|
|
|
$
|
367
|
|
|
$
|
356
|
|
|
|
Year Ended December 31,
|
|
Variance 2018 vs. 2017
|
|
Variance 2017 vs. 2016
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease)
|
|
Percent
|
||||||||||||
|
(millions, except operating data)
|
|||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
9,017
|
|
|
$
|
7,667
|
|
|
$
|
6,094
|
|
|
$
|
1,350
|
|
|
18
|
%
|
|
$
|
1,573
|
|
|
26
|
%
|
Transportation, processing and other
|
|
57
|
|
|
64
|
|
|
70
|
|
|
(7
|
)
|
|
(11
|
)%
|
|
(6
|
)
|
|
(9
|
)%
|
|||||
Trading and marketing (losses) gains, net
|
|
(60
|
)
|
|
26
|
|
|
22
|
|
|
(86
|
)
|
|
*
|
|
|
4
|
|
|
18
|
%
|
|||||
Total operating revenues
|
|
9,014
|
|
|
7,757
|
|
|
6,186
|
|
|
1,257
|
|
|
16
|
%
|
|
1,571
|
|
|
25
|
%
|
|||||
Purchases and related costs
|
|
(8,789
|
)
|
|
(7,557
|
)
|
|
(5,981
|
)
|
|
1,232
|
|
|
16
|
%
|
|
1,576
|
|
|
26
|
%
|
|||||
Operating and maintenance expense
|
|
(47
|
)
|
|
(41
|
)
|
|
(43
|
)
|
|
6
|
|
|
15
|
%
|
|
(2
|
)
|
|
(5
|
)%
|
|||||
Depreciation and amortization expense
|
|
(15
|
)
|
|
(14
|
)
|
|
(15
|
)
|
|
1
|
|
|
7
|
%
|
|
(1
|
)
|
|
(7
|
)%
|
|||||
General and administrative expense
|
|
(12
|
)
|
|
(11
|
)
|
|
(9
|
)
|
|
1
|
|
|
9
|
%
|
|
2
|
|
|
22
|
%
|
|||||
Other expense, net
|
|
(4
|
)
|
|
(11
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|
(64
|
)%
|
|
6
|
|
|
*
|
|
|||||
Earnings from unconsolidated affiliates (a)
|
|
362
|
|
|
243
|
|
|
209
|
|
|
119
|
|
|
49
|
%
|
|
34
|
|
|
16
|
%
|
|||||
Gain on sale of assets, net
|
|
—
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
*
|
|
|||||
Segment net income attributable to partners
|
|
$
|
509
|
|
|
$
|
366
|
|
|
$
|
358
|
|
|
$
|
143
|
|
|
39
|
%
|
|
$
|
8
|
|
|
2
|
%
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Segment gross margin (b)
|
|
$
|
225
|
|
|
$
|
200
|
|
|
$
|
205
|
|
|
$
|
25
|
|
|
13
|
%
|
|
$
|
(5
|
)
|
|
(2
|
)%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
*
|
|
|
$
|
16
|
|
|
(80
|
)%
|
NGL pipelines throughput (MBbls/d) (c)
|
|
582
|
|
|
460
|
|
|
420
|
|
|
122
|
|
|
27
|
%
|
|
40
|
|
|
10
|
%
|
(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 less purchases and related costs. Please read “Reconciliation of Non-GAAP Measures”.
|
(c)
|
For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the throughput volume.
|
•
|
$853 million increase as a result of higher NGL and crude prices, partially offset by lower natural gas prices, which impacted both sales and purchases, before the impact of derivative activity, and
|
•
|
$497 million increase attributable to higher gas and NGL sales volumes, which impacted both sales and purchases, offset by $149 million due to the implementation of ASC 606;
|
•
|
$86 million
decrease as a result of commodity derivative activity attributable to an increase in realized cash settlement losses due to movements in forward prices of commodities in 2018; and
|
•
|
$7 million decrease in transportation, processing and other primarily related to the expiration of a commercial arrangement in our wholesale propane business.
|
•
|
$104 million increase in gas marketing margins due to favorable commodity spreads primarily associated with Guadalupe; and
|
•
|
$13 million increase in NGL marketing margins and transported volumes;
|
•
|
$
86 million
decrease as a result of commodity derivative activity discussed above, and;
|
•
|
$6 million decrease as a result of lower margins and the expiration of a commercial arrangement in our wholesale propane business, partially offset by higher throughput volumes.
|
•
|
$1,934 million increase as a result of higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity; and
|
•
|
$4 million increase as a result of commodity derivative activity attributable to an decrease in unrealized commodity derivative losses of $16 million partially offset by a $12 million decrease in realized cash settlement gains due to movements in forward prices of commodities in 2017;
|
•
|
$325 million decrease attributable to lower gas and NGL sales volumes, which impacted both sales and purchases;
|
•
|
$36 million decrease due to the sale of our Northern Louisiana system; and
|
•
|
$6 million decrease in transportation, processing and other primarily related to lower gas storage margins and lower transportation volumes on certain of our NGL pipelines.
|
•
|
$11 million decrease as a result of lower margins and the expiration of a contract in our wholesale propane business;
|
•
|
$8 million decrease as a result of lower gas storage margins and lower transportation volumes on certain of our NGL pipelines; and
|
•
|
$7 million decrease as a result of the sale of our Northern Louisiana system;
|
•
|
$9 million increase as a result of higher NGL marketing margins;
|
•
|
$8 million increase as a result of higher gas marketing margins; and
|
•
|
$4 million increase as a result of commodity derivative activity discussed above.
|
|
|
Year Ended December 31,
|
|
Variance
2018 vs. 2017 |
|
Variance
2017 vs. 2016 |
||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
Increase
(Decrease) |
|
Percent
|
|
Increase
(Decrease) |
|
Percent
|
||||||||||||
|
(millions, except operating data)
|
|||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
5,392
|
|
|
$
|
4,943
|
|
|
$
|
3,955
|
|
|
$
|
449
|
|
|
9
|
%
|
|
$
|
988
|
|
|
25
|
%
|
Transportation, processing and other
|
|
432
|
|
|
590
|
|
|
580
|
|
|
(158
|
)
|
|
(27
|
)%
|
|
10
|
|
|
2
|
%
|
|||||
Trading and marketing gains (losses), net
|
|
19
|
|
|
(66
|
)
|
|
(45
|
)
|
|
85
|
|
|
*
|
|
|
(21
|
)
|
|
(47
|
)%
|
|||||
Total operating revenues
|
|
5,843
|
|
|
5,467
|
|
|
4,490
|
|
|
376
|
|
|
7
|
%
|
|
977
|
|
|
22
|
%
|
|||||
Purchases and related costs
|
|
(4,265
|
)
|
|
(4,090
|
)
|
|
(3,263
|
)
|
|
175
|
|
|
4
|
%
|
|
827
|
|
|
25
|
%
|
|||||
Operating and maintenance expense
|
|
(692
|
)
|
|
(602
|
)
|
|
(611
|
)
|
|
90
|
|
|
15
|
%
|
|
(9
|
)
|
|
(1
|
)%
|
|||||
Depreciation and amortization expense
|
|
(346
|
)
|
|
(343
|
)
|
|
(344
|
)
|
|
3
|
|
|
1
|
%
|
|
(1
|
)
|
|
—
|
%
|
|||||
General and administrative expense
|
|
(19
|
)
|
|
(19
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
%
|
|
5
|
|
|
36
|
%
|
|||||
Asset impairments
|
|
(145
|
)
|
|
(48
|
)
|
|
—
|
|
|
97
|
|
|
*
|
|
|
48
|
|
|
*
|
|
|||||
Other (expense) income, net
|
|
(6
|
)
|
|
—
|
|
|
73
|
|
|
(6
|
)
|
|
*
|
|
|
(73
|
)
|
|
*
|
|
|||||
Gain on sale of assets, net
|
|
—
|
|
|
34
|
|
|
19
|
|
|
(34
|
)
|
|
*
|
|
|
15
|
|
|
79
|
%
|
|||||
Earnings from unconsolidated affiliates (a)
|
|
8
|
|
|
60
|
|
|
73
|
|
|
(52
|
)
|
|
(87
|
)%
|
|
(13
|
)
|
|
(18
|
)%
|
|||||
Segment net income
|
|
378
|
|
|
459
|
|
|
423
|
|
|
(81
|
)
|
|
(18
|
)%
|
|
36
|
|
|
9
|
%
|
|||||
Segment net income attributable to noncontrolling interests
|
|
(4
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
(20
|
)%
|
|
(1
|
)
|
|
(17
|
)%
|
|||||
Segment net income attributable to partners
|
|
$
|
374
|
|
|
$
|
454
|
|
|
$
|
417
|
|
|
$
|
(80
|
)
|
|
(18
|
)%
|
|
$
|
37
|
|
|
9
|
%
|
Other data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment gross margin (b)
|
|
$
|
1,578
|
|
|
$
|
1,377
|
|
|
$
|
1,227
|
|
|
$
|
201
|
|
|
15
|
%
|
|
$
|
150
|
|
|
12
|
%
|
Non-cash commodity derivative mark-to-market
|
|
$
|
112
|
|
|
$
|
(24
|
)
|
|
$
|
(119
|
)
|
|
$
|
136
|
|
|
*
|
|
|
$
|
95
|
|
|
80
|
%
|
Natural gas wellhead (MMcf/d) (c)
|
|
4,769
|
|
|
4,531
|
|
|
5,124
|
|
|
238
|
|
|
5
|
%
|
|
(593
|
)
|
|
(12
|
)%
|
|||||
NGL gross production (MBbls/d) (c)
|
|
413
|
|
|
375
|
|
|
393
|
|
|
38
|
|
|
10
|
%
|
|
(18
|
)
|
|
(5
|
)%
|
(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, less purchases and related costs. 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 volume and NGL production.
|
•
|
$236 million increase primarily as a result of higher volumes due to increased drilling activity in our Eagle Ford system in the South region, growth projects primarily related to our DJ Basin system in the North region and
|
•
|
$213 million increase attributable to higher NGL and crude prices, partially offset by lower natural gas prices, which impacted both sales and purchases, before the impact of derivative activity; and
|
•
|
$
85 million
increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of
$136 million
, partially offset by a $51 million increase in realized cash settlement losses due to movements in forward prices of commodities in 2018;
|
•
|
$158 million decrease in transportation, processing and other primarily related to the implementation of ASC 606.
|
•
|
$84 million increase as a result of increased volume from increased drilling activity in our Eagle Ford system and the impact of Hurricane Harvey in 2017 in the South region, growth projects primarily related to our DJ Basin system in the North region and increased volumes and improved operational performance in the Midcontinent region;
|
•
|
$
85 million
increase as a result of commodity derivative activity as discussed above; and
|
•
|
$63 million increase as a result of higher commodity prices;
|
•
|
$16 million decrease primarily as a result of lower volumes due to operational factors, a third-party line strike and weather impacting operations in the Permian region; and
|
•
|
$15 million decrease primarily as a result of the sale of our Douglas gathering system in June 2017.
|
•
|
$1,280 million increase attributable to higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity;
|
•
|
$100 million increase attributable to higher gas and NGL sales volumes due to the impact of a specific producer arrangement and growth projects primarily related to our DJ Basin system in our North region;
|
•
|
$10 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 and Douglas gathering system;
|
•
|
$392 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods and the impact of Hurricane Harvey primarily related to the South and Permian regions; and
|
•
|
$21 million decrease as a result of commodity derivative activity attributable to a $116 million increase in realized cash settlement losses, partially offset by a decrease in unrealized commodity derivative losses of $95 million due to movements in forward prices of commodities in 2017.
|
•
|
$231 million increase as a result of higher commodity prices;
|
•
|
$35 million increase as a result of increased volume from growth projects, higher margins associated with a specific producer arrangement, and higher NGL recoveries primarily related to our DJ Basin system and a producer settlement in our North region;
|
•
|
$79 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods and the impact of Hurricane Harvey, partially offset by fee based contract realignment efforts in the Permian and Midcontinent regions and operational efficiencies associated with our investment in digital transformation;
|
•
|
$16 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; and
|
•
|
$21 million decrease as a result of commodity derivative activity as discussed above.
|
•
|
cash generated from operations;
|
•
|
cash distributions from our unconsolidated affiliates;
|
•
|
borrowings under our Credit Agreement;
|
•
|
proceeds from asset rationalization;
|
•
|
debt offerings;
|
•
|
issuances of additional common units, preferred units or other securities;
|
•
|
borrowings under term loans, securitization agreements or other credit facilities; and
|
•
|
letters of credit.
|
•
|
quarterly distributions to our common unitholders and General Partner, and distributions to our preferred unitholders;
|
•
|
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.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
662
|
|
|
$
|
896
|
|
|
$
|
645
|
|
Net cash used in investing activities
|
$
|
(945
|
)
|
|
$
|
(391
|
)
|
|
$
|
(34
|
)
|
Net cash provided by (used in) financing activities
|
$
|
128
|
|
|
$
|
(350
|
)
|
|
$
|
(613
|
)
|
•
|
Maintenance capital expenditures, which are cash expenditures to maintain our cash flows, operating or earnings capacity. These expenditures add on to or improve capital assets owned, including certain system integrity, compliance and safety improvements. Maintenance capital expenditures also include certain well connects, and may include the acquisition or construction of new capital assets; and
|
•
|
Expansion capital expenditures, which are cash expenditures to increase our cash flows, operating or earnings capacity. Expansion capital expenditures include acquisitions or capital improvements (where we add on to or improve the capital assets owned, or acquire or construct new gathering lines and well connects, treating facilities, processing plants, fractionation facilities, pipelines, terminals, docks, truck racks, tankage and other storage, distribution or transportation facilities and related or similar midstream assets).
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
||||||||||||||||||||
|
Maintenance
Capital
Expenditures
|
|
Expansion
Capital
Expenditures
|
|
Total
Consolidated
Capital
Expenditures
|
|
Maintenance
Capital
Expenditures
|
|
Expansion
Capital
Expenditures
|
|
Total
Consolidated
Capital
Expenditures
|
||||||||||||
|
(millions)
|
||||||||||||||||||||||
Our portion
|
$
|
99
|
|
|
$
|
502
|
|
|
$
|
601
|
|
|
$
|
90
|
|
|
$
|
279
|
|
|
$
|
369
|
|
Noncontrolling interest portion and reimbursable projects (a)
|
(2
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|
2
|
|
|
4
|
|
|
6
|
|
||||||
Total
|
$
|
97
|
|
|
$
|
498
|
|
|
$
|
595
|
|
|
$
|
92
|
|
|
$
|
283
|
|
|
$
|
375
|
|
|
|
Year Ended December 31, 2016
|
||||||||||
|
|
Maintenance
Capital Expenditures |
|
Expansion
Capital Expenditures |
|
Total
Consolidated Capital Expenditures |
||||||
|
|
|||||||||||
Our portion
|
|
$
|
86
|
|
|
$
|
57
|
|
|
$
|
143
|
|
Noncontrolling interest portion and reimbursable projects (a)
|
|
3
|
|
|
(2
|
)
|
|
1
|
|
|||
Total
|
|
$
|
89
|
|
|
$
|
55
|
|
|
$
|
144
|
|
(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)
|
$
|
7,900
|
|
|
$
|
577
|
|
|
$
|
1,548
|
|
|
$
|
1,201
|
|
|
$
|
4,574
|
|
Operating lease obligations
|
75
|
|
|
22
|
|
|
32
|
|
|
14
|
|
|
7
|
|
|||||
Purchase obligations (b)
|
4,839
|
|
|
1,163
|
|
|
1,210
|
|
|
1,055
|
|
|
1,411
|
|
|||||
Other long-term liabilities (c)
|
154
|
|
|
—
|
|
|
9
|
|
|
20
|
|
|
125
|
|
|||||
Total
|
$
|
12,968
|
|
|
$
|
1,762
|
|
|
$
|
2,799
|
|
|
$
|
2,290
|
|
|
$
|
6,117
|
|
(a)
|
Includes interest payments on debt securities that have been issued. These interest payments are $
252 million
, $
448 million
, $
351 million
, and $
2,074 million
for less than one year, one to three years, three to five years, and thereafter, respectively.
|
(b)
|
Our purchase obligations are contractual obligations and include purchase orders and non-cancelable construction agreements for capital expenditures, various non-cancelable commitments to purchase physical quantities of commodities in future periods and other items, including long-term fractionation agreements. For contracts where the price paid is based on an index or other market-based rates, the amount is based on the forward market prices or current market rates as of
December 31, 2018
. 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, and other miscellaneous liabilities recognized in the
December 31, 2018
consolidated balance sheet. The table above excludes non-cash obligations as well as $33 million of Executive Deferred Compensation Plan contributions and $10 million of long-term incentive plans as the amount and timing of any payments are not subject to reasonable estimation.
|
•
|
financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
|
•
|
our operating performance and return on capital as compared to those of other companies in the midstream energy industry, without regard to financing methods or capital structure;
|
•
|
viability and performance of acquisitions and capital expenditure projects and the overall rates of return on investment opportunities; and
|
•
|
in the case of Adjusted EBITDA, the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, make cash distributions to our unitholders and general partner, and finance maintenance capital expenditures.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Reconciliation of Non-GAAP Measures
|
(millions)
|
|||||||||||
|
|
|
|
|
|
|
||||||
Reconciliation of net income attributable to partners to gross margin:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Net income attributable to partners
|
|
$
|
298
|
|
|
$
|
229
|
|
|
$
|
88
|
|
Interest expense
|
|
269
|
|
|
289
|
|
|
321
|
|
|||
Income tax expense
|
|
3
|
|
|
2
|
|
|
46
|
|
|||
Operating and maintenance expense
|
|
760
|
|
|
661
|
|
|
670
|
|
|||
Depreciation and amortization expense
|
|
388
|
|
|
379
|
|
|
378
|
|
|||
General and administrative expense
|
|
276
|
|
|
290
|
|
|
292
|
|
|||
Asset impairments
|
|
145
|
|
|
48
|
|
|
—
|
|
|||
Loss from financing activities
|
|
19
|
|
|
—
|
|
|
—
|
|
|||
Other expense (income), net
|
|
11
|
|
|
11
|
|
|
(65
|
)
|
|||
Restructuring costs
|
|
—
|
|
|
—
|
|
|
13
|
|
|||
Earnings from unconsolidated affiliates
|
|
(370
|
)
|
|
(303
|
)
|
|
(282
|
)
|
|||
Gain on sale of assets, net
|
|
—
|
|
|
(34
|
)
|
|
(35
|
)
|
|||
Net income attributable to noncontrolling interests
|
|
4
|
|
|
5
|
|
|
6
|
|
|||
Gross margin
|
|
$
|
1,803
|
|
|
$
|
1,577
|
|
|
$
|
1,432
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
108
|
|
|
$
|
(28
|
)
|
|
$
|
(139
|
)
|
|
|
|
|
|
|
|
||||||
Reconciliation of segment net income attributable to partners to segment gross margin:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Logistics and Marketing segment:
|
|
|
|
|
|
|
||||||
Segment net income attributable to partners
|
|
$
|
509
|
|
|
$
|
366
|
|
|
$
|
358
|
|
Operating and maintenance expense
|
|
47
|
|
|
41
|
|
|
43
|
|
|||
Depreciation and amortization expense
|
|
15
|
|
|
14
|
|
|
15
|
|
|||
General and administrative expense
|
|
12
|
|
|
11
|
|
|
9
|
|
|||
Other expense, net
|
|
4
|
|
|
11
|
|
|
5
|
|
|||
Earnings from unconsolidated affiliates
|
|
(362
|
)
|
|
(243
|
)
|
|
(209
|
)
|
|||
Gain on sale of assets, net
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Segment gross margin
|
|
$
|
225
|
|
|
$
|
200
|
|
|
$
|
205
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
|
$
|
(20
|
)
|
|
|
|
|
|
|
|
||||||
Gathering and Processing segment:
|
|
|
|
|
|
|
||||||
Segment net income attributable to partners
|
|
$
|
374
|
|
|
$
|
454
|
|
|
$
|
417
|
|
Operating and maintenance expense
|
|
692
|
|
|
602
|
|
|
611
|
|
|||
Depreciation and amortization expense
|
|
346
|
|
|
343
|
|
|
344
|
|
|||
General and administrative expense
|
|
19
|
|
|
19
|
|
|
14
|
|
|||
Asset impairments
|
|
145
|
|
|
48
|
|
|
—
|
|
|||
Other expense (income), net
|
|
6
|
|
|
—
|
|
|
(73
|
)
|
|||
Earnings from unconsolidated affiliates
|
|
(8
|
)
|
|
(60
|
)
|
|
(73
|
)
|
|||
Gain on sale of assets, net
|
|
—
|
|
|
(34
|
)
|
|
(19
|
)
|
|||
Net income attributable to noncontrolling interests
|
|
4
|
|
|
5
|
|
|
6
|
|
|||
Segment gross margin
|
|
$
|
1,578
|
|
|
$
|
1,377
|
|
|
$
|
1,227
|
|
Non-cash commodity derivative mark-to-market (a)
|
|
$
|
112
|
|
|
$
|
(24
|
)
|
|
$
|
(119
|
)
|
(a)
|
Non-cash commodity derivative mark-to-market is included in gross margin and segment gross margin, along with cash settlements for our commodity derivative contracts.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(millions)
|
||||||||||
Reconciliation of net income attributable to partners to adjusted segment EBITDA:
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
Logistics and Marketing segment:
|
|
|
|
|
|
|
||||||
Segment net income attributable to partners (a)
|
|
$
|
509
|
|
|
$
|
366
|
|
|
$
|
358
|
|
Non-cash commodity derivative mark-to-market
|
|
4
|
|
|
4
|
|
|
20
|
|
|||
Depreciation and amortization expense, net of noncontrolling interest
|
|
15
|
|
|
14
|
|
|
15
|
|
|||
Distributions from unconsolidated affiliates, net of earnings
|
|
49
|
|
|
40
|
|
|
53
|
|
|||
Gain on sale of assets, net
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||
Other expense
|
|
—
|
|
|
9
|
|
|
—
|
|
|||
Adjusted segment EBITDA
|
|
$
|
577
|
|
|
$
|
433
|
|
|
$
|
430
|
|
|
|
|
|
|
|
|
||||||
Gathering and Processing segment:
|
|
|
|
|
|
|
||||||
Segment net income attributable to partners
|
|
$
|
374
|
|
|
$
|
454
|
|
|
$
|
417
|
|
Non-cash commodity derivative mark-to-market
|
|
(112
|
)
|
|
24
|
|
|
119
|
|
|||
Depreciation and amortization expense, net of noncontrolling interest
|
|
345
|
|
|
342
|
|
|
343
|
|
|||
Asset impairments
|
|
145
|
|
|
48
|
|
|
—
|
|
|||
Gain on sale of assets, net
|
|
—
|
|
|
(34
|
)
|
|
(19
|
)
|
|||
Distributions from unconsolidated affiliates, net of earnings
|
|
22
|
|
|
24
|
|
|
21
|
|
|||
Other expense
|
|
7
|
|
|
4
|
|
|
14
|
|
|||
Adjusted segment EBITDA
|
|
$
|
781
|
|
|
$
|
862
|
|
|
$
|
895
|
|
(a)
|
There were no lower of cost or market adjustments for the
year ended
December 31, 2018
, and lower of cost or market adjustments of $2 million and $3 million for the
years ended
December 31, 2017
and
2016
, respectively.
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Impairment of Goodwill
|
||||
We evaluate goodwill for impairment annually in the third quarter, and whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
|
|
We determine fair value using widely accepted valuation techniques, namely discounted cash flow and market multiple analyses. These techniques are also used when assigning the purchase price to acquired assets and liabilities. These types of analyses require us to make assumptions and estimates regarding industry and economic factors and the profitability of future business strategies. It is our policy to conduct impairment testing based on our current business strategy in light of present industry and economic conditions, as well as future expectations.
|
|
We primarily use a discounted cash flow analysis, supplemented by a market approach analysis, to perform the assessment. Key assumptions in the analysis include the use of an appropriate discount rate, terminal year multiples, and estimated future cash flows including an estimate of operating and general and administrative costs. In estimating cash flows, we incorporate current market information (including forecasted commodity prices and volumes), as well as historical and other factors. If our assumptions are not appropriate, or future events indicate that our goodwill is impaired, our net income would be impacted by the amount by which the carrying value exceeds the fair value of the reporting unit, to the extent of the balance of goodwill. Two of the three reporting units that contain goodwill are not significantly impacted by the prices of commodities. Rather, they are volume based businesses that have the potential to be impacted by commodity prices should such prices remain depressed for a period of such duration that NGLs cease to be produced at levels requiring storage and distribution to end users. The fair value of goodwill substantially exceeded its carrying value in our North reporting unit, the only reporting unit allocated goodwill included within our Gathering and Processing reportable segment and in our Marysville reporting unit included within our Logistics and Marketing reportable segment. For our Wholesale Propane reporting unit, which is included in our Logistics and Marketing reportable segment, the fair value exceeded the carrying value (including approximately $37 million of allocated goodwill) by approximately 10%. We did not record any goodwill impairment during the year ended December 31, 2018.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Impairment of Long-Lived Assets
|
||||
We periodically evaluate whether the carrying value of long-lived assets has been impaired when circumstances indicate the carrying value of those assets may not be recoverable. For purposes of this evaluation, long-lived assets with recovery periods in excess of the weighted average remaining useful life of our fixed assets are further analyzed to determine if a triggering event occurred. If it is determined that a triggering event has occurred, we prepare a quantitative evaluation based on undiscounted cash flow projections expected to be realized over the remaining useful life of the primary asset. The carrying amount is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment loss is measured as the excess of the asset’s carrying value over its fair value.
|
|
Our impairment analyses require management to apply judgment in estimating future cash flows including forecasting useful lives of the assets, future commodity prices, volumes, and operating costs, assessing the probability of different outcomes, and
with respect to any required fair value estimate,
selecting the discount rate that reflects the risk inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales and discounted cash flow models.
|
|
Using the impairment review methodology described herein, we recorded a $145 million impairment charge on long-lived assets during the year ended December 31, 2018 when it was determined that the carrying value of certain asset groups or portions of asset groups were not recoverable. If actual results are not consistent with our assumptions and estimates or our assumptions and estimates change due to new information, we may be exposed to additional impairment charges. If our forecast indicates lower commodity prices in future periods at a level and duration that results in producers curtailing or redirecting drilling in areas where we operate this may adversely affect our estimate of future operating results, which could result in future impairment due to the potential impact on our operations and cash flows.
|
|
|
|
|
|
Impairment of Investments in Unconsolidated Affiliates
|
||||
We evaluate our investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of such investment may have experienced a decline in value. When evidence of loss in value has occurred, we compare the estimated fair value of the investment to the carrying value of the investment to determine whether an impairment has occurred. We would then evaluate if the impairment is other than temporary.
|
|
Our impairment analyses require management to apply judgment in estimating future cash flows and asset fair values, including forecasting useful lives of the assets, assessing the probability of differing estimated outcomes, and selecting the discount rate that reflects the risk inherent in future cash flows. When there is evidence of an other than temporary loss in value, we assess the fair value of our unconsolidated affiliates using commonly accepted techniques, and may use more than one method, including, but not limited to, recent third party comparable sales and discounted cash flow models.
|
|
Using the impairment review methodology described herein, we have not recorded any significant impairment charges on investments in unconsolidated affiliates during the year ended December 31, 2018. If the estimated fair value of our unconsolidated affiliates is less than the carrying value, we would recognize an impairment loss for the excess of the carrying value over the estimated fair value only if the loss is other than temporary. A period of lower commodity prices may adversely affect our estimate of future operating results, which could result in future impairment due to the potential impact on the investee's operations and cash flows.
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
|
|
|
|
|
Accounting for Risk Management Activities and Financial Instruments
|
||||
Each derivative not qualifying for the normal purchases and normal sales exception is recorded on a gross basis in the consolidated balance sheets at its fair value as unrealized gains or unrealized losses on derivative instruments. Derivative assets and liabilities remain classified in our consolidated balance sheets as unrealized gains or unrealized losses on derivative instruments at fair value until the end of the contractual settlement period. Values are adjusted to reflect the credit risk inherent in the transaction as well as the potential impact of liquidating open positions in an orderly manner over a reasonable time period under current conditions.
|
|
When available, quoted market prices or prices obtained through external sources are used to determine a contract’s fair value. For contracts with a delivery location or duration for which quoted market prices are not available, fair value is determined based on pricing models developed primarily from historical information and the expected relationship with quoted market prices.
|
|
If our estimates of fair value are inaccurate, we may be exposed to losses or gains that could be material. A 10% difference in our estimated fair value of derivatives at December 31, 2018 would have affected net income by approximately $2 million based on our net derivative position for the year ended December 31, 2018.
|
|
|
|
|
|
Period
|
|
Commodity
|
|
Notional
Volume
- Short
Positions
|
|
Reference Price
|
|
Price Range
|
January 2019 — March 2019
|
|
Natural Gas
|
|
(66,667) MMBtu/d
|
|
NYMEX Final Settlement Price (c)
|
|
$3.01-$4.57/MMBtu
|
April 2019 — December 2019
|
|
Natural Gas
|
|
(50,000) MMBtu/d
|
|
NYMEX Final Settlement Price (c)
|
|
$3.01-$3.28/MMBtu
|
January 2019 — December 2019
|
|
NGLs
|
|
(11,851) Bbls/d (d)
|
|
Mt.Belvieu (b)
|
|
$.31-$1.10/Gal
|
January 2019 — February 2019
|
|
Crude Oil
|
|
(11,017) Bbls/d (d)
|
|
NYMEX crude oil futures (a)
|
|
$51.26-$64.87/Bbl
|
March 2019 — February 2020
|
|
Crude Oil
|
|
(3,781) Bbls/d (d)
|
|
NYMEX crude oil futures (a)
|
|
$57.12-$65.32/Bbl
|
|
Per Unit Decrease
|
|
Unit of
Measurement
|
|
Estimated
Decrease in
Annual Net
Income
Attributable to
Partners
|
||||
|
|
|
|
|
(millions)
|
||||
NGL prices
|
$
|
0.01
|
|
|
Gallon
|
|
$
|
3
|
|
Natural gas prices
|
$
|
0.10
|
|
|
MMBtu
|
|
$
|
7
|
|
Crude oil prices
|
$
|
1.00
|
|
|
Barrel
|
|
$
|
4
|
|
|
Per Unit
Increase
|
|
Unit of
Measurement
|
|
Estimated
Mark-to-
Market Impact
(Decrease in
Net Income
Attributable to
Partners)
|
||||
|
|
|
|
|
(millions)
|
||||
NGL prices
|
$
|
0.01
|
|
|
Gallon
|
|
$
|
2
|
|
Natural gas prices
|
$
|
0.10
|
|
|
MMBtu
|
|
$
|
2
|
|
Crude oil prices
|
$
|
1.00
|
|
|
Barrel
|
|
$
|
1
|
|
Period ended
|
|
Commodity
|
|
Notional Volume - Long
Positions
|
|
Fair Value
(millions)
|
|
Weighted
Average Price
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2018
|
|
Natural Gas
|
|
9,807,055
|
|
|
MMBtu
|
|
$
|
34
|
|
|
$3.48/MMBtu
|
Period
|
|
Commodity
|
|
Notional Volume - (Short)/Long
Positions
|
|
Fair Value
(millions)
|
|
Price Range
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||
January 2019-March 2019
|
|
Natural Gas
|
|
(15,512,500
|
)
|
|
MMBtu
|
|
$
|
5
|
|
|
$2.99-$4.65/MMBtu
|
January 2019
|
|
Natural Gas
|
|
4,417,500
|
|
|
MMBtu
|
|
$
|
—
|
|
|
$3.25-$4.13/MMBtu
|
DCP MIDSTREAM, LP CONSOLIDATED FINANCIAL STATEMENTS:
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
Consolidated Statements of Operations for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2018, 2017 and 2016
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
(millions)
|
||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1
|
|
|
$
|
156
|
|
Accounts receivable:
|
|
|
|
||||
Trade, net of allowance for doubtful accounts of $3 and $8 million, respectively
|
860
|
|
|
773
|
|
||
Affiliates
|
166
|
|
|
191
|
|
||
Other
|
7
|
|
|
17
|
|
||
Inventories
|
79
|
|
|
68
|
|
||
Unrealized gains on derivative instruments
|
108
|
|
|
30
|
|
||
Collateral cash deposits
|
34
|
|
|
75
|
|
||
Other
|
16
|
|
|
12
|
|
||
Total current assets
|
1,271
|
|
|
1,322
|
|
||
Property, plant and equipment, net
|
9,135
|
|
|
8,983
|
|
||
Goodwill
|
231
|
|
|
231
|
|
||
Intangible assets, net
|
97
|
|
|
106
|
|
||
Investments in unconsolidated affiliates
|
3,340
|
|
|
3,050
|
|
||
Unrealized gains on derivative instruments
|
8
|
|
|
3
|
|
||
Other long-term assets
|
184
|
|
|
183
|
|
||
Total assets
|
$
|
14,266
|
|
|
$
|
13,878
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable:
|
|
|
|
||||
Trade
|
$
|
807
|
|
|
$
|
989
|
|
Affiliates
|
96
|
|
|
68
|
|
||
Other
|
23
|
|
|
19
|
|
||
Current debt
|
525
|
|
|
—
|
|
||
Unrealized losses on derivative instruments
|
91
|
|
|
76
|
|
||
Accrued interest
|
71
|
|
|
71
|
|
||
Accrued taxes
|
64
|
|
|
58
|
|
||
Accrued wages and benefits
|
64
|
|
|
65
|
|
||
Capital spending accrual
|
63
|
|
|
39
|
|
||
Other
|
100
|
|
|
103
|
|
||
Total current liabilities
|
1,904
|
|
|
1,488
|
|
||
Long-term debt
|
4,782
|
|
|
4,707
|
|
||
Unrealized losses on derivative instruments
|
8
|
|
|
15
|
|
||
Deferred income taxes
|
32
|
|
|
29
|
|
||
Other long-term liabilities
|
243
|
|
|
201
|
|
||
Total liabilities
|
6,969
|
|
|
6,440
|
|
||
Commitments and contingent liabilities (see note 14)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Series A preferred limited partners (500,000 preferred units authorized, issued and outstanding, respectively)
|
489
|
|
|
491
|
|
||
Series B preferred limited partners (6,450,000 and zero preferred units authorized, issued and outstanding, respectively)
|
156
|
|
|
—
|
|
||
Series C preferred limited partners (4,400,000 and zero preferred units authorized, issued and outstanding, respectively)
|
106
|
|
|
—
|
|
||
General partner
|
107
|
|
|
154
|
|
||
Limited partners (143,317,328 and 143,309,828 common units authorized, issued and outstanding, respectively)
|
6,418
|
|
|
6,772
|
|
||
Accumulated other comprehensive loss
|
(8
|
)
|
|
(9
|
)
|
||
Total partners’ equity
|
7,268
|
|
|
7,408
|
|
||
Noncontrolling interests
|
29
|
|
|
30
|
|
||
Total equity
|
7,297
|
|
|
7,438
|
|
||
Total liabilities and equity
|
$
|
14,266
|
|
|
$
|
13,878
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions, except per unit amounts)
|
|||||||||||
Operating revenues:
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
7,764
|
|
|
$
|
6,576
|
|
|
$
|
5,317
|
|
Sales of natural gas, NGLs and condensate to affiliates
|
|
1,610
|
|
|
1,274
|
|
|
952
|
|
|||
Transportation, processing and other
|
|
489
|
|
|
652
|
|
|
647
|
|
|||
Trading and marketing losses, net
|
|
(41
|
)
|
|
(40
|
)
|
|
(23
|
)
|
|||
Total operating revenues
|
|
9,822
|
|
|
8,462
|
|
|
6,893
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
|
||||||
Purchases and related costs
|
|
7,123
|
|
|
6,308
|
|
|
4,978
|
|
|||
Purchases and related costs from affiliates
|
|
896
|
|
|
577
|
|
|
483
|
|
|||
Operating and maintenance expense
|
|
760
|
|
|
661
|
|
|
670
|
|
|||
Depreciation and amortization expense
|
|
388
|
|
|
379
|
|
|
378
|
|
|||
General and administrative expense
|
|
276
|
|
|
290
|
|
|
292
|
|
|||
Asset impairments
|
|
145
|
|
|
48
|
|
|
—
|
|
|||
Other expense (income), net
|
|
11
|
|
|
11
|
|
|
(65
|
)
|
|||
Gain on sale of assets, net
|
|
—
|
|
|
(34
|
)
|
|
(35
|
)
|
|||
Restructuring costs
|
|
—
|
|
|
—
|
|
|
13
|
|
|||
Total operating costs and expenses
|
|
9,599
|
|
|
8,240
|
|
|
6,714
|
|
|||
Operating income
|
|
223
|
|
|
222
|
|
|
179
|
|
|||
Loss from financing activities
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|||
Earnings from unconsolidated affiliates
|
|
370
|
|
|
303
|
|
|
282
|
|
|||
Interest expense, net
|
|
(269
|
)
|
|
(289
|
)
|
|
(321
|
)
|
|||
Income before income taxes
|
|
305
|
|
|
236
|
|
|
140
|
|
|||
Income tax expense
|
|
(3
|
)
|
|
(2
|
)
|
|
(46
|
)
|
|||
Net income
|
|
302
|
|
|
234
|
|
|
94
|
|
|||
Net income attributable to noncontrolling interests
|
|
(4
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
Net income attributable to partners
|
|
298
|
|
|
229
|
|
|
88
|
|
|||
Net loss attributable to predecessor operations
|
|
—
|
|
|
—
|
|
|
224
|
|
|||
Series A preferred limited partners' interest in net income
|
|
(37
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Series B preferred limited partners' interest in net income
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|||
Series C preferred limited partners' interest in net income
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
General partner’s interest in net income
|
|
(164
|
)
|
|
(164
|
)
|
|
(124
|
)
|
|||
Net income allocable to limited partners
|
|
$
|
87
|
|
|
$
|
61
|
|
|
$
|
188
|
|
Net income per limited partner unit — basic and diluted
|
|
$
|
0.61
|
|
|
$
|
0.43
|
|
|
$
|
1.64
|
|
Weighted-average limited partner units outstanding — basic and diluted
|
|
143.3
|
|
|
143.3
|
|
|
114.7
|
|
|
|
Year Ended
December 31, |
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|||||||||||
Net income
|
|
$
|
302
|
|
|
$
|
234
|
|
|
$
|
94
|
|
Other comprehensive income:
|
|
|
|
|
|
|
||||||
Reclassification of cash flow hedge losses into earnings
|
|
1
|
|
|
1
|
|
|
—
|
|
|||
Total other comprehensive income
|
|
1
|
|
|
1
|
|
|
—
|
|
|||
Total comprehensive income
|
|
303
|
|
|
235
|
|
|
94
|
|
|||
Total comprehensive income attributable to noncontrolling interests
|
|
(4
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|||
Total comprehensive income attributable to partners
|
|
$
|
299
|
|
|
$
|
230
|
|
|
$
|
88
|
|
|
Partners’ Equity
|
|
|
|
|
|||||||||||||||||||||||||||
|
|
Series A Preferred Limited Partners
|
|
Series B Preferred Limited Partners
|
|
Series C Preferred Limited Partners
|
|
Limited
Partners |
|
General
Partner
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||||||
|
(millions)
|
|||||||||||||||||||||||||||||||
Balance, January 1, 2018
|
|
$
|
491
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,772
|
|
|
$
|
154
|
|
|
$
|
(9
|
)
|
|
$
|
30
|
|
|
$
|
7,438
|
|
Cumulative-effect adjustment
(see Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||||
Net income
|
|
37
|
|
|
8
|
|
|
2
|
|
|
87
|
|
|
164
|
|
|
—
|
|
|
4
|
|
|
302
|
|
||||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||
Issuance of 6,450,000 Series B Preferred Units
|
|
—
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155
|
|
||||||||
Issuance of 4,400,000 Series C Preferred Units
|
|
—
|
|
|
—
|
|
|
106
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106
|
|
||||||||
Distributions to unitholders
|
|
(39
|
)
|
|
(7
|
)
|
|
(2
|
)
|
|
(447
|
)
|
|
(211
|
)
|
|
—
|
|
|
—
|
|
|
(706
|
)
|
||||||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||||||
Balance, December 31, 2018
|
|
$
|
489
|
|
|
$
|
156
|
|
|
$
|
106
|
|
|
$
|
6,418
|
|
|
$
|
107
|
|
|
$
|
(8
|
)
|
|
$
|
29
|
|
|
$
|
7,297
|
|
|
Partners’ Equity
|
|
|
|
|
||||||||||||||||||||||
|
Predecessor
Equity |
|
Series A Preferred Limited Partners
|
|
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
|
—
|
|
|
4
|
|
|
61
|
|
|
164
|
|
|
—
|
|
|
5
|
|
|
234
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Net change in parent advances
|
—
|
|
|
—
|
|
|
418
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
418
|
|
|||||||
Acquisition of the DCP Midstream Business
|
(4,220
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,220
|
)
|
|||||||
Issuance of 500,000 Series A Preferred Units
|
—
|
|
|
487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487
|
|
|||||||
Deficit purchase price
|
—
|
|
|
—
|
|
|
3,094
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
3,092
|
|
|||||||
Issuance of 28,552,480 common units and 2,550,644 general partner units to DCP Midstream, LLC and affiliate
|
—
|
|
|
—
|
|
|
1,033
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
1,125
|
|
|||||||
Distributions to limited partners and general partner
|
—
|
|
|
—
|
|
|
(425
|
)
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
(545
|
)
|
|||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||||
Balance, December 31, 2017
|
$
|
—
|
|
|
$
|
491
|
|
|
$
|
6,772
|
|
|
$
|
154
|
|
|
$
|
(9
|
)
|
|
$
|
30
|
|
|
$
|
7,438
|
|
|
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
|
(224
|
)
|
|
188
|
|
|
124
|
|
|
—
|
|
|
6
|
|
|
94
|
|
||||||
Net change in parent advances
|
157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
157
|
|
||||||
Distributions to limited partners and general partner
|
—
|
|
|
(359
|
)
|
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
(483
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
||||||
Balance, December 31, 2016
|
$
|
4,220
|
|
|
$
|
2,591
|
|
|
$
|
18
|
|
|
$
|
(8
|
)
|
|
$
|
32
|
|
|
$
|
6,853
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
||||||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
302
|
|
|
$
|
234
|
|
|
$
|
94
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
388
|
|
|
379
|
|
|
378
|
|
|||
Earnings from unconsolidated affiliates
|
(370
|
)
|
|
(303
|
)
|
|
(282
|
)
|
|||
Distributions from unconsolidated affiliates
|
441
|
|
|
367
|
|
|
356
|
|
|||
Net unrealized (gains) losses on derivative instruments
|
(108
|
)
|
|
28
|
|
|
139
|
|
|||
Gain on sale of assets, net
|
—
|
|
|
(34
|
)
|
|
(35
|
)
|
|||
Asset impairments
|
145
|
|
|
48
|
|
|
—
|
|
|||
Loss from financing activities
|
19
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
15
|
|
|
32
|
|
|
68
|
|
|||
Change in operating assets and liabilities, which (used) provided cash, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(55
|
)
|
|
(194
|
)
|
|
(247
|
)
|
|||
Inventories
|
(11
|
)
|
|
4
|
|
|
(21
|
)
|
|||
Accounts payable
|
(168
|
)
|
|
328
|
|
|
199
|
|
|||
Other assets and liabilities
|
64
|
|
|
7
|
|
|
(4
|
)
|
|||
Net cash provided by operating activities
|
662
|
|
|
896
|
|
|
645
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(595
|
)
|
|
(375
|
)
|
|
(144
|
)
|
|||
Investments in unconsolidated affiliates
|
(354
|
)
|
|
(148
|
)
|
|
(53
|
)
|
|||
Proceeds from sale of assets
|
4
|
|
|
132
|
|
|
163
|
|
|||
Net cash used in investing activities
|
(945
|
)
|
|
(391
|
)
|
|
(34
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from debt
|
5,161
|
|
|
116
|
|
|
3,353
|
|
|||
Payments of debt
|
(4,560
|
)
|
|
(811
|
)
|
|
(3,628
|
)
|
|||
Costs incurred to redeem senior notes
|
(18
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of preferred limited partner units, net of offering costs
|
261
|
|
|
487
|
|
|
—
|
|
|||
Distributions to preferred limited partners
|
(46
|
)
|
|
—
|
|
|
—
|
|
|||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
418
|
|
|
157
|
|
|||
Distributions to limited partners and general partner
|
(658
|
)
|
|
(545
|
)
|
|
(483
|
)
|
|||
Distributions to noncontrolling interests
|
(5
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||
Other
|
(7
|
)
|
|
(8
|
)
|
|
(5
|
)
|
|||
Net cash provided by (used in) financing activities
|
128
|
|
|
(350
|
)
|
|
(613
|
)
|
|||
Net change in cash and cash equivalents
|
(155
|
)
|
|
155
|
|
|
(2
|
)
|
|||
Cash and cash equivalents, beginning of period
|
156
|
|
|
1
|
|
|
3
|
|
|||
Cash and cash equivalents, end of period
|
$
|
1
|
|
|
$
|
156
|
|
|
$
|
1
|
|
Classification of Contract
|
Accounting Method
|
Presentation of Gains & Losses or Revenue & Expense
|
Trading Derivatives
|
Mark-to-market method (a)
|
Net basis in trading and marketing gains and losses
|
Non-Trading Derivatives:
|
|
|
Cash Flow Hedge
|
Hedge method (b)
|
Gross basis in the same consolidated statements of operations category as the related hedged item
|
|
|
|
Fair Value Hedge
|
Hedge method (b)
|
Gross basis in the same consolidated statements of operations category as the related hedged item
|
|
|
|
Normal Purchases or Normal Sales
|
Accrual method (c)
|
Gross basis upon settlement in the corresponding consolidated statements of operations category based on purchase or sale
|
|
|
|
Other Non-Trading Derivative Activity
|
Mark-to-market method (a)
|
Net basis in trading and marketing gains and losses, net
|
(a)
|
Mark-to-market method - An accounting method whereby the change in the fair value of the asset or liability is recognized in the consolidated statements of operations in trading and marketing gains and losses, net during the current period.
|
(b)
|
Hedge method - An accounting method whereby the change in the fair value of the asset or liability is recorded in the consolidated balance sheets as unrealized gains or unrealized losses on derivative instruments. For cash flow hedges, there is no recognition in the consolidated statements of operations for the effective portion until the service is provided or the associated delivery impacts earnings. For fair value hedges, the change in the fair value of the asset or liability, as well as the offsetting changes in value of the hedged item, are recognized in the consolidated statements of operations in the same category as the related hedged item.
|
(c)
|
Accrual method - An accounting method whereby there is no recognition in the consolidated balance sheets or consolidated statements of operations for changes in fair value of a contract until the service is provided or the associated delivery impacts earnings.
|
•
|
significant adverse change in legal factors or business climate;
|
•
|
a current-period operating or cash flow loss combined with a history of operating or cash flow losses, or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset;
|
•
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset;
|
•
|
significant adverse changes in the extent or manner in which an asset is used, or in its physical condition;
|
•
|
a significant adverse change in the market value of an asset; or
|
•
|
a current expectation that, more likely than not, an asset will be sold or otherwise disposed of before the end of its estimated useful life.
|
•
|
sales of natural gas, NGLs and condensate;
|
•
|
services related to gathering, compressing, treating, and processing natural gas; and
|
•
|
services related to transportation and storage of natural gas and NGLs.
|
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
|
As Reported
|
|
Effect of Change
|
|
Presentation Without Adoption of ASC 606
|
||||||
|
(millions)
|
|||||||||||
Statement of Operations
|
|
|
|
|
|
|
||||||
Operating revenues
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate
|
|
$
|
7,764
|
|
|
$
|
(148
|
)
|
|
$
|
7,912
|
|
Transportation, processing and other
|
|
$
|
489
|
|
|
$
|
(165
|
)
|
|
$
|
654
|
|
|
|
|
|
|
|
|
||||||
Costs and expenses
|
|
|
|
|
|
|
||||||
Purchases and related costs
|
|
$
|
7,123
|
|
|
$
|
(313
|
)
|
|
$
|
7,436
|
|
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
|
|
Year Ended December 31, 2018
|
||||||||||||||
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Eliminations
|
|
Total
|
||||||||
|
|
(millions)
|
||||||||||||||
Sales of natural gas
|
|
$
|
1,955
|
|
|
$
|
2,325
|
|
|
$
|
(1,752
|
)
|
|
$
|
2,528
|
|
Sales of NGLs and condensate (a)
|
|
3,437
|
|
|
6,692
|
|
|
(3,283
|
)
|
|
6,846
|
|
||||
Transportation, processing and other
|
|
432
|
|
|
57
|
|
|
—
|
|
|
489
|
|
||||
Trading and marketing losses, net (b)
|
|
19
|
|
|
(60
|
)
|
|
—
|
|
|
(41
|
)
|
||||
Total operating revenues
|
|
$
|
5,843
|
|
|
$
|
9,014
|
|
|
$
|
(5,035
|
)
|
|
$
|
9,822
|
|
|
|
December 31,
|
||
|
|
2018
|
||
|
|
(millions)
|
||
Balance, beginning of period
|
|
$
|
—
|
|
Cumulative effect of implementation of Topic 606
|
|
36
|
|
|
Revenue recognized (a)
|
|
(2
|
)
|
|
Balance, end of period
|
|
$
|
34
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|||||||||||
Employee related costs charged by DCP Midstream, LLC
|
|
|
|
|
|
|
||||||
Operating and maintenance expense
|
|
$
|
209
|
|
|
$
|
197
|
|
|
$
|
206
|
|
General and administrative expense
|
|
$
|
187
|
|
|
$
|
182
|
|
|
$
|
197
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|||||||||||
Phillips 66 (including its affiliates):
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
1,534
|
|
|
$
|
1,172
|
|
|
$
|
909
|
|
Purchases and related costs from affiliates
|
|
$
|
138
|
|
|
$
|
30
|
|
|
$
|
18
|
|
Operating and maintenance and general administrative expenses
|
|
$
|
13
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Enbridge (including its affiliates):
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
11
|
|
|
$
|
48
|
|
|
$
|
—
|
|
Purchases and related costs from affiliates
|
|
$
|
35
|
|
|
$
|
43
|
|
|
$
|
33
|
|
Operating and maintenance and general administrative expenses
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
4
|
|
Unconsolidated affiliates:
|
|
|
|
|
|
|
||||||
Sales of natural gas, NGLs and condensate to affiliates
|
|
$
|
65
|
|
|
$
|
54
|
|
|
$
|
43
|
|
Transportation, processing, and other to affiliates
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Purchases and related costs from affiliates
|
|
$
|
723
|
|
|
$
|
504
|
|
|
$
|
432
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(millions)
|
||||||
Phillips 66 (including its affiliates):
|
|
|
|
||||
Accounts receivable
|
$
|
145
|
|
|
$
|
156
|
|
Accounts payable
|
$
|
22
|
|
|
$
|
6
|
|
Other assets
|
$
|
—
|
|
|
$
|
—
|
|
Enbridge (including its affiliates):
|
|
|
|
||||
Accounts receivable
|
$
|
—
|
|
|
$
|
11
|
|
Accounts payable
|
$
|
2
|
|
|
$
|
9
|
|
Unconsolidated affiliates:
|
|
|
|
||||
Accounts receivable
|
$
|
21
|
|
|
$
|
24
|
|
Accounts payable
|
$
|
72
|
|
|
$
|
53
|
|
Other assets
|
$
|
—
|
|
|
$
|
4
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(millions)
|
||||||
Natural gas
|
$
|
34
|
|
|
$
|
30
|
|
NGLs
|
45
|
|
|
38
|
|
||
Total inventories
|
$
|
79
|
|
|
$
|
68
|
|
|
Depreciable
Life |
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
|
|
(millions)
|
||||||
Gathering and transmission systems
|
20 — 50 Years
|
|
$
|
8,492
|
|
|
$
|
8,473
|
|
Processing, storage and terminal facilities
|
35 — 60 Years
|
|
5,194
|
|
|
5,128
|
|
||
Other
|
3 — 30 Years
|
|
568
|
|
|
557
|
|
||
Construction work in progress
|
|
|
470
|
|
|
374
|
|
||
Property, plant and equipment
|
|
|
14,724
|
|
|
14,532
|
|
||
Accumulated depreciation
|
|
|
(5,589
|
)
|
|
(5,549
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
9,135
|
|
|
$
|
8,983
|
|
|
December 31,
|
||||||
|
2018 (a)
|
|
2017 (a)
|
||||
|
(millions)
|
||||||
Balance, beginning of period
|
$
|
126
|
|
|
$
|
124
|
|
Accretion expense
|
8
|
|
|
8
|
|
||
Change in ARO Estimate
|
6
|
|
|
(6
|
)
|
||
Balance, end of period
|
$
|
140
|
|
|
$
|
126
|
|
|
|
||||||||||||||||||||||
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
(millions)
|
||||||||||||||||||||||
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Total
|
|
Gathering and Processing
|
|
Logistics and Marketing
|
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
159
|
|
|
$
|
72
|
|
|
$
|
231
|
|
|
$
|
164
|
|
|
$
|
72
|
|
|
$
|
236
|
|
Dispositions
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
||||||
Balance, end of period
|
$
|
159
|
|
|
$
|
72
|
|
|
$
|
231
|
|
|
$
|
159
|
|
|
$
|
72
|
|
|
$
|
231
|
|
|
December 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(millions)
|
||||||
Gross carrying amount
|
$
|
410
|
|
|
$
|
410
|
|
Accumulated amortization
|
(170
|
)
|
|
(161
|
)
|
||
Accumulated impairment
|
(143
|
)
|
|
(143
|
)
|
||
Intangible assets, net
|
$
|
97
|
|
|
$
|
106
|
|
|
|
|
Carrying Value as of
|
||||||
|
Percentage
Ownership |
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
|
|
(millions)
|
||||||
DCP Sand Hills Pipeline, LLC
|
66.67%
|
|
$
|
1,791
|
|
|
$
|
1,633
|
|
DCP Southern Hills Pipeline, LLC
|
66.67%
|
|
728
|
|
|
739
|
|
||
Discovery Producer Services LLC
|
40.00%
|
|
344
|
|
|
362
|
|
||
Front Range Pipeline LLC
|
33.33%
|
|
175
|
|
|
165
|
|
||
Texas Express Pipeline LLC
|
10.00%
|
|
95
|
|
|
90
|
|
||
Gulf Coast Express Pipeline LLC
|
25.00%
|
|
146
|
|
|
—
|
|
||
Mont Belvieu Enterprise Fractionator
|
12.50%
|
|
24
|
|
|
23
|
|
||
Panola Pipeline Company, LLC
|
15.00%
|
|
23
|
|
|
24
|
|
||
Mont Belvieu 1 Fractionator
|
20.00%
|
|
10
|
|
|
10
|
|
||
Other
|
Various
|
|
4
|
|
|
4
|
|
||
Total investments in unconsolidated affiliates
|
|
|
$
|
3,340
|
|
|
$
|
3,050
|
|
|
|
Excess (deficit) of Carrying Value over (under) Underlying Equity in Unconsolidated Affiliates
|
||||||
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
|
(millions)
|
||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
634
|
|
|
$
|
648
|
|
Discovery Producer Services LLC
|
|
(15
|
)
|
|
(18
|
)
|
||
DCP Southern Hills Pipeline, LLC
|
|
142
|
|
|
145
|
|
||
Front Range Pipeline LLC
|
|
4
|
|
|
4
|
|
||
Texas Express Pipeline LLC
|
|
3
|
|
|
3
|
|
||
Mont Belvieu 1 Fractionator
|
|
—
|
|
|
(1
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|||||||||||
DCP Sand Hills Pipeline, LLC
|
|
$
|
223
|
|
|
$
|
148
|
|
|
110
|
|
|
DCP Southern Hills Pipeline, LLC
|
|
68
|
|
|
47
|
|
|
44
|
|
|||
Discovery Producer Services LLC
|
|
8
|
|
|
61
|
|
|
73
|
|
|||
Front Range Pipeline LLC
|
|
24
|
|
|
17
|
|
|
19
|
|
|||
Texas Express Pipeline LLC
|
|
19
|
|
|
9
|
|
|
9
|
|
|||
Mont Belvieu Enterprise Fractionator
|
|
10
|
|
|
13
|
|
|
16
|
|
|||
Mont Belvieu 1 Fractionator
|
|
16
|
|
|
6
|
|
|
9
|
|
|||
Other
|
|
2
|
|
|
2
|
|
|
2
|
|
|||
Total earnings from unconsolidated affiliates
|
|
$
|
370
|
|
|
$
|
303
|
|
|
$
|
282
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
||||||||||
Statements of operations:
|
|
|
|
|
|
||||||
Operating revenue
|
$
|
1,560
|
|
|
$
|
1,397
|
|
|
$
|
1,311
|
|
Operating expenses
|
$
|
613
|
|
|
$
|
647
|
|
|
$
|
539
|
|
Net income
|
$
|
945
|
|
|
$
|
747
|
|
|
$
|
768
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(millions)
|
||||||
Balance sheets:
|
|
|
|
||||
Current assets
|
$
|
411
|
|
|
$
|
244
|
|
Long-term assets
|
6,359
|
|
|
5,319
|
|
||
Current liabilities
|
(424
|
)
|
|
(196
|
)
|
||
Long-term liabilities
|
(221
|
)
|
|
(200
|
)
|
||
Net assets
|
$
|
6,125
|
|
|
$
|
5,167
|
|
•
|
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
|
•
|
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.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Net Carrying
Value |
|
Asset
Impairments |
|
Net Carrying
Value
|
|
Asset
Impairments
|
||||||||
|
|
|
|||||||||||||
|
(millions)
|
||||||||||||||
Property, plant and equipment
|
$
|
15
|
|
|
$
|
145
|
|
|
$
|
14
|
|
|
$
|
26
|
|
Intangible assets
|
—
|
|
|
—
|
|
|
11
|
|
|
21
|
|
||||
Investment in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total impairments
|
$
|
15
|
|
|
$
|
145
|
|
|
$
|
26
|
|
|
$
|
48
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Carrying
Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
Carrying
Value
|
||||||||||||||||
|
(millions)
|
||||||||||||||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (a)
|
$
|
62
|
|
|
$
|
32
|
|
|
$
|
14
|
|
|
$
|
108
|
|
|
$
|
10
|
|
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
30
|
|
Short-term investments (b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
156
|
|
Long-term assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (c)
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (d)
|
$
|
(39
|
)
|
|
$
|
(52
|
)
|
|
$
|
—
|
|
|
$
|
(91
|
)
|
|
$
|
(29
|
)
|
|
$
|
(34
|
)
|
|
$
|
(13
|
)
|
|
$
|
(76
|
)
|
Long-term liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commodity derivatives (e)
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
(2
|
)
|
|
$
|
(8
|
)
|
|
$
|
(3
|
)
|
|
$
|
(11
|
)
|
|
$
|
(1
|
)
|
|
$
|
(15
|
)
|
(a)
|
Included in current unrealized gains on derivative instruments in our consolidated balance sheets.
|
(b)
|
Includes short-term money market securities included in cash and cash equivalents in our consolidated balance sheets.
|
(c)
|
Included in long-term unrealized gains on derivative instruments in our consolidated balance sheets.
|
(d)
|
Included in current unrealized losses on derivative instruments in our consolidated balance sheets.
|
(e)
|
Included in long-term unrealized losses on derivative instruments in our consolidated balance sheets.
|
|
|
Commodity Derivative Instruments
|
||||||||||||||
|
Current
Assets |
|
Long-Term
Assets |
|
Current
Liabilities |
|
Long-Term
Liabilities |
||||||||
|
(millions)
|
||||||||||||||
Year ended December 31, 2018 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
Net unrealized gains (losses) included in earnings (b)
|
14
|
|
|
1
|
|
|
(6
|
)
|
|
(1
|
)
|
||||
Settlements
|
(3
|
)
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Ending balance
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
14
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Year ended December 31, 2017 (a):
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
Net unrealized gains (losses) included in earnings (b)
|
14
|
|
|
1
|
|
|
(44
|
)
|
|
(3
|
)
|
||||
Transfers out of Level 3 (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Settlements
|
(13
|
)
|
|
—
|
|
|
36
|
|
|
—
|
|
||||
CME Rule 814 adjustment
|
(7
|
)
|
|
(5
|
)
|
|
18
|
|
|
—
|
|
||||
Ending balance
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
Net unrealized gains (losses) on derivatives still held included in earnings (b)
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
(a)
|
There were no purchases, issuances or sales of derivatives or transfers into Level 3 for the
three and
years ended
December 31, 2018
and
2017
.
|
(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.
|
|
December 31, 2018
|
|
|
||||
Product Group
|
Fair Value
|
|
Forward
Curve Range
|
|
|
||
|
(millions)
|
|
|
||||
Assets
|
|
|
|
|
|
||
NGLs
|
$
|
14
|
|
|
$0.31-$0.96
|
|
Per gallon
|
Natural gas
|
$
|
2
|
|
|
$2.01-$2.56
|
|
Per MMBtu
|
Liabilities
|
|
|
|
|
|
||
Natural gas
|
$
|
(2
|
)
|
|
$2.46-$2.88
|
|
Per MMBtu
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
|
Carrying Value (a)
|
|
Fair Value
|
|
Carrying Value (a)
|
|
Fair Value
|
||||||||
|
(millions)
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total debt
|
|
$
|
5,337
|
|
|
$
|
5,170
|
|
|
$
|
4,736
|
|
|
$
|
4,885
|
|
|
December 31,
2018 |
|
December 31,
2017 |
||||
|
(millions)
|
||||||
Senior notes:
|
|
|
|
||||
Issued February 2009, interest at 9.750% payable semiannually, due March 2019 (a)
|
$
|
—
|
|
|
$
|
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 July 2018, interest at 5.375% payable semi-annually, due July 2025
|
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 agreement:
|
|
|
|
||||
Revolving credit facility, weighted-average variable interest rate of 3.901%, as of December 31, 2018, due December 2022
|
351
|
|
|
—
|
|
||
Accounts receivable securitization facility:
|
|
|
|
||||
Accounts receivable securitization facility, weighted-average variable interest rate of 3.303% as of December 31, 2018, due August 2019
|
200
|
|
|
—
|
|
||
Fair value adjustments related to interest rate swap fair value hedges (a)
|
21
|
|
|
23
|
|
||
Unamortized issuance costs
|
(30
|
)
|
|
(29
|
)
|
||
Unamortized discount
|
(10
|
)
|
|
(12
|
)
|
||
Total debt
|
5,307
|
|
|
4,707
|
|
||
Current debt
|
525
|
|
|
—
|
|
||
Total long-term debt
|
$
|
4,782
|
|
|
$
|
4,707
|
|
|
Debt
Maturities
|
||
|
(millions)
|
||
2019
|
$
|
525
|
|
2020
|
600
|
|
|
2021
|
500
|
|
|
2022
|
701
|
|
|
2023
|
500
|
|
|
Thereafter
|
2,500
|
|
|
Total debt
|
$
|
5,326
|
|
•
|
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
December 31, 2018
, we were not a party to any agreements that would trigger the cross-default provisions.
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
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
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
116
|
|
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
33
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity derivatives
|
$
|
(99
|
)
|
|
$
|
—
|
|
|
$
|
(99
|
)
|
|
$
|
(91
|
)
|
|
$
|
—
|
|
|
$
|
(91
|
)
|
Balance Sheet Line Item
|
December 31,
2018 |
|
December 31,
2017 |
|
Balance Sheet Line Item
|
|
December 31,
2018 |
|
December 31,
2017 |
||||||||
|
(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
|
$
|
108
|
|
|
$
|
30
|
|
|
Unrealized losses on derivative instruments — current
|
|
$
|
(91
|
)
|
|
$
|
(76
|
)
|
Unrealized gains on derivative instruments — long-term
|
8
|
|
|
3
|
|
|
Unrealized losses on derivative instruments — long-term
|
|
(8
|
)
|
|
(15
|
)
|
||||
Total
|
$
|
116
|
|
|
$
|
33
|
|
|
Total
|
|
$
|
(99
|
)
|
|
$
|
(91
|
)
|
|
|
Interest
Rate Cash Flow Hedges |
|
Commodity
Cash Flow Hedges |
|
Foreign
Currency Cash Flow Hedges (a) |
|
Total
|
||||||||
|
(millions)
|
||||||||||||||
Net deferred (losses) gains in AOCI (beginning balance)
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
Losses reclassified from AOCI to earnings — effective portion
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(8
|
)
|
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
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Net deferred (losses) gains in AOCI (ending balance)
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
1
|
|
|
$
|
(9
|
)
|
(a)
|
Relates to Discovery, an unconsolidated affiliate.
|
Commodity Derivatives: Statements of Operations Line Item
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
|
|
|||||||||
Realized (losses) gains
|
|
$
|
(149
|
)
|
|
$
|
(12
|
)
|
|
$
|
116
|
|
Unrealized gains (losses)
|
|
108
|
|
|
(28
|
)
|
|
(139
|
)
|
|||
Trading and marketing losses, net
|
|
$
|
(41
|
)
|
|
$
|
(40
|
)
|
|
$
|
(23
|
)
|
|
December 31, 2018
|
||||||||||
|
Crude Oil
|
|
Natural Gas
|
|
Natural Gas
Liquids
|
|
Natural Gas
Basis Swaps
|
||||
Year of Expiration
|
Net Short
Position
(Bbls)
|
|
Net Short Position
(MMBtu)
|
|
Net Short
Position
(Bbls)
|
|
Net (Short) Long
Position
(MMBtu)
|
||||
2019
|
(1,619,000
|
)
|
|
(40,291,250
|
)
|
|
(36,312,499
|
)
|
|
(2,165,000
|
)
|
2020
|
(204,000
|
)
|
|
—
|
|
|
(13,862,378
|
)
|
|
3,660,000
|
|
2021
|
—
|
|
|
—
|
|
|
(5,755,322
|
)
|
|
(3,650,000
|
)
|
|
|
|
|
|
|
|
|
||||
|
December 31, 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)
|
||||
2018
|
(2,701,000
|
)
|
|
(35,977,400
|
)
|
|
(19,656,392
|
)
|
|
3,202,500
|
|
2019
|
(631,000
|
)
|
|
—
|
|
|
(2,357,156
|
)
|
|
7,177,500
|
|
2020
|
(50,000
|
)
|
|
—
|
|
|
238,548
|
|
|
3,660,000
|
|
•
|
Distributions on the Series A Preferred Units are payable semiannually in arrears on June 15th and December 15th of each year.
|
•
|
Distributions on the Series B Preferred Units are payable quarterly in arrears on the 15th day of March, June, September and December of each year to holders of record as of the close of business on the first business day of the month in which the distribution will be made.
|
•
|
Distributions on the Series C Preferred Units are payable quarterly in arrears on the 15th day of January, April, July and October of each year to holders of record as of the close of business on the first business day of the month in which the distribution will be made.
|
•
|
less the amount of cash reserves established by our general partner to:
|
•
|
provide for the proper conduct of our business, including reserves for future capital expenditures and anticipated credit needs;
|
•
|
comply with applicable law or any debt instrument or other agreement or obligation;
|
•
|
provide funds to make payments on the Preferred Units; or
|
•
|
provide funds for distributions to our common unitholders and to our general partner for any one or more of the next four quarters.
|
•
|
plus, if our general partner so determines, all or a portion of cash and cash equivalents on hand on the date of determination of Available Cash for the quarter.
|
•
|
first,
to all unitholders and the general partner, in accordance with their pro rata interest, until each unitholder receives a total of
$0.4025
per unit for that quarter;
|
•
|
second,
13%
to the general partner, plus the general partner’s pro rata interest, and the remainder to all unitholders pro rata until each unitholder receives a total of
$0.4375
per unit for that quarter;
|
•
|
third,
23%
to the general partner, plus the general partner’s pro rata interest, and the remainder to all unitholders pro rata until each unitholder receives a total of
$0.525
per unit for that quarter; and
|
•
|
thereafter,
48%
to the general partner, plus the general partner’s pro rata interest, and the remainder to all unitholders.
|
Payment Date
|
Per Unit
Distribution
|
|
Total Cash
Distribution
|
||||
|
|
|
|
(millions)
|
|||
Distributions to common unitholders
|
|
|
|
||||
November 14, 2018
|
$
|
0.7800
|
|
|
$
|
155
|
|
August 14, 2018
|
$
|
0.7800
|
|
|
$
|
154
|
|
May 15, 2018
|
$
|
0.7800
|
|
|
$
|
155
|
|
February 14, 2018
|
$
|
0.7800
|
|
|
$
|
194
|
|
November 14, 2017
|
$
|
0.7800
|
|
|
$
|
155
|
|
August 14, 2017
|
$
|
0.7800
|
|
|
$
|
134
|
|
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
|
|
|
|
|
|
||||
Distributions to Series A Preferred unitholders
|
|
|
|
||||
December 17, 2018
|
$
|
36.8750
|
|
|
$
|
18
|
|
June 15, 2018
|
$
|
41.9965
|
|
|
$
|
21
|
|
|
|
|
|
||||
Distributions to Series B Preferred unitholders
|
|
|
|
||||
December 17, 2018
|
$
|
0.4922
|
|
|
$
|
3
|
|
September 17, 2018
|
$
|
0.6781
|
|
|
$
|
4
|
|
|
Vesting Period
(years)
|
|
Unrecognized
Compensation
Expense at
December 31, 2018
(millions)
|
|
Estimated
Forfeiture
Rate
|
|
Weighted-Average Remaining Vesting
(years)
|
||
DCP Midstream LTIP:
|
|
|
|
|
|
|
|
||
SPUs
|
3
|
|
$
|
4
|
|
|
0%-11%
|
|
2
|
Phantom Units
|
1-3
|
|
$
|
4
|
|
|
0%-11%
|
|
2
|
|
Units
|
|
Grant Date Weighted-Average Price Per Unit
|
|
Measurement Date Weighted-Average Price Per Unit
|
|||||
Outstanding at January 1, 2016
|
208,459
|
|
|
$
|
48.46
|
|
|
|
||
Granted
|
131,610
|
|
|
$
|
45.31
|
|
|
|
||
Forfeited
|
(8,463
|
)
|
|
$
|
46.27
|
|
|
|
||
Vested (a)
|
(98,295
|
)
|
|
$
|
54.05
|
|
|
|
||
Outstanding at December 31, 2016
|
233,311
|
|
|
$
|
44.41
|
|
|
|
||
Granted
|
98,628
|
|
|
$
|
76.38
|
|
|
|
||
Forfeited
|
(18,577
|
)
|
|
$
|
50.31
|
|
|
|
||
Vested (b)
|
(98,627
|
)
|
|
$
|
58.80
|
|
|
|
||
Outstanding at December 31, 2017
|
214,735
|
|
|
$
|
51.98
|
|
|
|
||
Granted
|
168,160
|
|
|
$
|
36.23
|
|
|
|
||
Forfeited
|
(10,933
|
)
|
|
$
|
47.79
|
|
|
|
||
Vested (c)
|
(120,643
|
)
|
|
$
|
48.41
|
|
|
|
||
Outstanding at December 31, 2018
|
251,319
|
|
|
$
|
43.33
|
|
|
$
|
34.30
|
|
Expected to vest
|
231,936
|
|
|
$
|
43.54
|
|
|
$
|
34.53
|
|
|
Units
|
|
Fair Value of Units Vested
|
|
Unit-Based Liabilities Paid
|
|||||
|
|
|
(millions)
|
|||||||
Vested or paid in cash in 2016
|
98,295
|
|
|
$
|
7
|
|
|
$
|
4
|
|
Vested or paid in cash in 2017
|
98,627
|
|
|
$
|
11
|
|
|
$
|
7
|
|
Vested or paid in cash in 2018
|
120,643
|
|
|
$
|
9
|
|
|
$
|
11
|
|
|
Units
|
|
Grant Date Weighted-Average Price Per Unit
|
|
Measurement Date Weighted-Average Price Per Unit
|
|||||
Outstanding at January 1, 2016
|
204,368
|
|
|
$
|
49.85
|
|
|
|
||
Granted
|
132,870
|
|
|
$
|
45.33
|
|
|
|
||
Forfeited
|
(3,240
|
)
|
|
$
|
48.62
|
|
|
|
||
Vested
|
(126,681
|
)
|
|
$
|
50.13
|
|
|
|
||
Outstanding at December 31, 2016
|
207,317
|
|
|
$
|
46.80
|
|
|
|
||
Granted
|
180,337
|
|
|
$
|
59.43
|
|
|
|
||
Forfeited
|
(16,677
|
)
|
|
$
|
51.73
|
|
|
|
||
Vested
|
(169,896
|
)
|
|
$
|
53.35
|
|
|
|
||
Outstanding at December 31, 2017
|
201,081
|
|
|
$
|
52.18
|
|
|
|
||
Granted
|
242,780
|
|
|
$
|
36.87
|
|
|
|
||
Forfeited
|
(17,696
|
)
|
|
$
|
45.35
|
|
|
|
||
Vested
|
(194,459
|
)
|
|
$
|
45.16
|
|
|
|
||
Outstanding at December 31, 2018
|
231,706
|
|
|
$
|
42.55
|
|
|
$
|
33.08
|
|
Expected to vest
|
215,482
|
|
|
$
|
42.52
|
|
|
$
|
33.06
|
|
|
Units
|
|
Fair Value of Units Vested
|
|
Unit-Based Liabilities Paid
|
|||||
|
|
|
(millions)
|
|||||||
Vested or paid in cash in 2016
|
126,681
|
|
|
$
|
4
|
|
|
$
|
5
|
|
Vested or paid in cash in 2017
|
169,896
|
|
|
$
|
7
|
|
|
$
|
4
|
|
Vested or paid in cash in 2018
|
194,459
|
|
|
$
|
5
|
|
|
$
|
7
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal income tax expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
State income tax expense
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal income tax expense
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||
State income tax expense
|
(3
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Total income tax expense
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
|
$
|
(46
|
)
|
|
|
|
|
|
|
•
|
In March 2018, the New Mexico Environment Department ("NMED") issued two separate Notices of Violation ("NOV") relating to upset and malfunction event emissions at two of our gas processing plants. Following information exchanges and discussions with NMED regarding the events and the propriety of the alleged violations, on February 14, 2019 we entered into preliminary settlement agreements to resolve the alleged violations under each NOV for administrative penalties in the amount of $
149,832
and $
142,233
, respectively. We intend to mitigate a portion of each administrative penalty through the implementation of environmentally beneficial projects.
|
•
|
In April 2018, the Colorado Department of Public Health and Environment ("CDPHE") issued a Compliance Advisory in relation to an improperly permitted facility flare and related air emissions from flare operations at one of our gas processing plants that we self-disclosed to CDPHE in December 2017. Following information exchanges and discussions with CDPHE, during the first quarter of 2019, a resolution was proposed pursuant to which the plant's air
|
|
|
Future Minimum Rental Payments as of December 31, 2018
|
||
|
|
(millions)
|
||
|
2019
|
$
|
22
|
|
|
2020
|
18
|
|
|
|
2021
|
14
|
|
|
|
2022
|
9
|
|
|
|
2023
|
5
|
|
|
|
Thereafter
|
7
|
|
|
|
Total minimum rental payments
|
$
|
75
|
|
|
|
|
Logistics and Marketing
|
|
Gathering and Processing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
9,014
|
|
|
$
|
5,843
|
|
|
$
|
—
|
|
|
$
|
(5,035
|
)
|
|
$
|
9,822
|
|
Gross margin (a)
|
$
|
225
|
|
|
$
|
1,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,803
|
|
Operating and maintenance expense
|
(47
|
)
|
|
(692
|
)
|
|
(21
|
)
|
|
—
|
|
|
(760
|
)
|
|||||
Depreciation and amortization expense
|
(15
|
)
|
|
(346
|
)
|
|
(27
|
)
|
|
—
|
|
|
(388
|
)
|
|||||
General and administrative expense
|
(12
|
)
|
|
(19
|
)
|
|
(245
|
)
|
|
—
|
|
|
(276
|
)
|
|||||
Asset impairments
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
(145
|
)
|
|||||
Other expense, net
|
(4
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Loss from financing activities
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Earnings from unconsolidated affiliates
|
362
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
370
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(269
|
)
|
|
—
|
|
|
(269
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net income (loss)
|
$
|
509
|
|
|
$
|
378
|
|
|
$
|
(585
|
)
|
|
$
|
—
|
|
|
$
|
302
|
|
Net income attributable to noncontrolling interests
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
509
|
|
|
$
|
374
|
|
|
$
|
(585
|
)
|
|
$
|
—
|
|
|
$
|
298
|
|
Non-cash derivative mark-to-market (b)
|
$
|
(4
|
)
|
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108
|
|
Capital expenditures
|
$
|
8
|
|
|
$
|
570
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
595
|
|
Investments in unconsolidated affiliates, net
|
$
|
350
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
354
|
|
|
Logistics and Marketing
|
|
Gathering and Processing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
7,757
|
|
|
$
|
5,467
|
|
|
$
|
—
|
|
|
$
|
(4,762
|
)
|
|
$
|
8,462
|
|
Gross margin (a)
|
$
|
200
|
|
|
$
|
1,377
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,577
|
|
Operating and maintenance expense
|
(41
|
)
|
|
(602
|
)
|
|
(18
|
)
|
|
—
|
|
|
(661
|
)
|
|||||
Depreciation and amortization expense
|
(14
|
)
|
|
(343
|
)
|
|
(22
|
)
|
|
—
|
|
|
(379
|
)
|
|||||
General and administrative expense
|
(11
|
)
|
|
(19
|
)
|
|
(260
|
)
|
|
—
|
|
|
(290
|
)
|
|||||
Asset impairments
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||||
Other expense
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||
Gain on sale of assets, net
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|||||
Earnings from unconsolidated affiliates
|
243
|
|
|
60
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(289
|
)
|
|
—
|
|
|
(289
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income (loss)
|
$
|
366
|
|
|
$
|
459
|
|
|
$
|
(591
|
)
|
|
$
|
—
|
|
|
$
|
234
|
|
Net income attributable to noncontrolling interests
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
366
|
|
|
$
|
454
|
|
|
$
|
(591
|
)
|
|
$
|
—
|
|
|
$
|
229
|
|
Non-cash derivative mark-to-market (b)
|
$
|
(4
|
)
|
|
$
|
(24
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(28
|
)
|
Non-cash lower of cost or market adjustments
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Capital expenditures
|
$
|
3
|
|
|
$
|
350
|
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
375
|
|
Investments in unconsolidated affiliates, net
|
$
|
147
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
148
|
|
|
Logistics and Marketing
|
|
Gathering and Processing
|
|
Other
|
|
Eliminations
|
|
Total
|
||||||||||
|
(millions)
|
||||||||||||||||||
Total operating revenue
|
$
|
6,186
|
|
|
$
|
4,490
|
|
|
$
|
—
|
|
|
$
|
(3,783
|
)
|
|
$
|
6,893
|
|
Gross margin (a)
|
$
|
205
|
|
|
$
|
1,227
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,432
|
|
Operating and maintenance expense
|
(43
|
)
|
|
(611
|
)
|
|
(16
|
)
|
|
—
|
|
|
(670
|
)
|
|||||
Depreciation and amortization expense
|
(15
|
)
|
|
(344
|
)
|
|
(19
|
)
|
|
—
|
|
|
(378
|
)
|
|||||
General and administrative expense
|
(9
|
)
|
|
(14
|
)
|
|
(269
|
)
|
|
—
|
|
|
(292
|
)
|
|||||
Other (expense) income
|
(5
|
)
|
|
73
|
|
|
(3
|
)
|
|
—
|
|
|
65
|
|
|||||
Gain on sale of assets, net
|
16
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Earnings from unconsolidated affiliates
|
209
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
282
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
(321
|
)
|
|
—
|
|
|
(321
|
)
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Net income (loss)
|
$
|
358
|
|
|
$
|
423
|
|
|
$
|
(687
|
)
|
|
$
|
—
|
|
|
$
|
94
|
|
Net income attributable to noncontrolling interests
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Net income (loss) attributable to partners
|
$
|
358
|
|
|
$
|
417
|
|
|
$
|
(687
|
)
|
|
$
|
—
|
|
|
$
|
88
|
|
Non-cash derivative mark-to-market (b)
|
$
|
(20
|
)
|
|
$
|
(119
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(139
|
)
|
Non-cash lower of cost or market adjustments
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Capital expenditures
|
$
|
10
|
|
|
$
|
107
|
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
144
|
|
Investments in unconsolidated affiliates, net
|
$
|
52
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
53
|
|
|
December 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(millions)
|
||||||
Segment long-term assets:
|
|
|
|
||||
Gathering and Processing
|
$
|
9,058
|
|
|
$
|
8,943
|
|
Logistics and Marketing
|
3,661
|
|
|
3,348
|
|
||
Other (c)
|
276
|
|
|
265
|
|
||
Total long-term assets
|
12,995
|
|
|
12,556
|
|
||
Current assets
|
1,271
|
|
|
1,322
|
|
||
Total assets
|
$
|
14,266
|
|
|
$
|
13,878
|
|
(a)
|
Gross margin consists of total operating revenues, including commodity derivative activity, less purchases and related costs. 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 net cash provided by operating activities as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.
|
(b)
|
Non-cash commodity derivative mark-to-market is included in gross margin, along with cash settlements for our commodity derivative contracts.
|
(c)
|
Other long-term assets not allocable to segments consist of corporate leasehold improvements and other long-term assets.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(millions)
|
||||||||||
Cash paid for interest:
|
|
|
|
|
|
||||||
Cash paid for interest, net of amounts capitalized
|
$
|
259
|
|
|
$
|
290
|
|
|
$
|
306
|
|
Cash paid for income taxes, net of income tax refunds
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Property, plant and equipment acquired with accounts payable and accrued liabilities
|
$
|
99
|
|
|
$
|
58
|
|
|
$
|
27
|
|
Other non-cash changes in property, plant and equipment
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
2018
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year ended December 31, 2018
|
||||||||||
|
|
(millions, except per unit amounts)
|
||||||||||||||||||
Total operating revenues
|
|
$
|
2,139
|
|
|
$
|
2,317
|
|
|
$
|
2,759
|
|
|
$
|
2,607
|
|
|
$
|
9,822
|
|
Operating income
|
|
$
|
53
|
|
|
$
|
34
|
|
|
$
|
66
|
|
|
$
|
70
|
|
|
$
|
223
|
|
Net income
|
|
$
|
63
|
|
|
$
|
62
|
|
|
$
|
82
|
|
|
$
|
95
|
|
|
$
|
302
|
|
Net income attributable to noncontrolling interests
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
Net income attributable to partners
|
|
$
|
62
|
|
|
$
|
61
|
|
|
$
|
81
|
|
|
$
|
94
|
|
|
$
|
298
|
|
Net income allocable to limited partners
|
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
26
|
|
|
$
|
39
|
|
|
$
|
87
|
|
Basic and diluted net income per limited partner unit
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
0.18
|
|
|
$
|
0.28
|
|
|
$
|
0.61
|
|
2017
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year Ended December 31, 2017
|
||||||||||
|
|
(millions, except per unit amounts)
|
||||||||||||||||||
Total operating revenues
|
|
$
|
2,121
|
|
|
$
|
1,949
|
|
|
$
|
2,055
|
|
|
$
|
2,337
|
|
|
$
|
8,462
|
|
Operating income (loss)
|
|
$
|
101
|
|
|
$
|
78
|
|
|
$
|
(19
|
)
|
|
$
|
62
|
|
|
$
|
222
|
|
Net income (loss)
|
|
$
|
101
|
|
|
$
|
89
|
|
|
$
|
(20
|
)
|
|
$
|
64
|
|
|
$
|
234
|
|
Net income attributable to noncontrolling interests
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
Net income (loss) attributable to partners
|
|
$
|
101
|
|
|
$
|
88
|
|
|
$
|
(20
|
)
|
|
$
|
60
|
|
|
$
|
229
|
|
Net income allocable to limited partners
|
|
$
|
59
|
|
|
$
|
47
|
|
|
$
|
(59
|
)
|
|
$
|
14
|
|
|
$
|
61
|
|
Basic and diluted net income per limited partner unit
|
|
$
|
0.41
|
|
|
$
|
0.33
|
|
|
$
|
(0.41
|
)
|
|
$
|
0.10
|
|
|
$
|
0.43
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
1,033
|
|
|
—
|
|
|
1,033
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|
158
|
|
|||||
Total current assets
|
—
|
|
|
—
|
|
|
1,271
|
|
|
—
|
|
|
1,271
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
9,135
|
|
|
—
|
|
|
9,135
|
|
|||||
Goodwill and intangible assets, net
|
—
|
|
|
—
|
|
|
328
|
|
|
—
|
|
|
328
|
|
|||||
Advances receivable — consolidated subsidiaries
|
2,452
|
|
|
1,883
|
|
|
—
|
|
|
(4,335
|
)
|
|
—
|
|
|||||
Investments in consolidated subsidiaries
|
4,818
|
|
|
8,113
|
|
|
—
|
|
|
(12,931
|
)
|
|
—
|
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
3,340
|
|
|
—
|
|
|
3,340
|
|
|||||
Other long-term assets
|
—
|
|
|
—
|
|
|
192
|
|
|
—
|
|
|
192
|
|
|||||
Total assets
|
$
|
7,270
|
|
|
$
|
9,996
|
|
|
$
|
14,266
|
|
|
$
|
(17,266
|
)
|
|
$
|
14,266
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
2
|
|
|
$
|
71
|
|
|
$
|
1,306
|
|
|
$
|
—
|
|
|
$
|
1,379
|
|
Current maturities of long-term debt
|
—
|
|
|
325
|
|
|
200
|
|
|
—
|
|
|
525
|
|
|||||
Advances payable — consolidated subsidiaries
|
—
|
|
|
—
|
|
|
4,335
|
|
|
(4,335
|
)
|
|
—
|
|
|||||
Long-term debt
|
—
|
|
|
4,782
|
|
|
—
|
|
|
—
|
|
|
4,782
|
|
|||||
Other long-term liabilities
|
—
|
|
|
—
|
|
|
283
|
|
|
—
|
|
|
283
|
|
|||||
Total liabilities
|
2
|
|
|
5,178
|
|
|
6,124
|
|
|
(4,335
|
)
|
|
6,969
|
|
|||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net equity
|
7,268
|
|
|
4,821
|
|
|
8,118
|
|
|
(12,931
|
)
|
|
7,276
|
|
|||||
Accumulated other comprehensive loss
|
—
|
|
|
(3
|
)
|
|
(5
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Total partners’ equity
|
7,268
|
|
|
4,818
|
|
|
8,113
|
|
|
(12,931
|
)
|
|
7,268
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
|||||
Total equity
|
7,268
|
|
|
4,818
|
|
|
8,142
|
|
|
(12,931
|
)
|
|
7,297
|
|
|||||
Total liabilities and equity
|
$
|
7,270
|
|
|
$
|
9,996
|
|
|
$
|
14,266
|
|
|
$
|
(17,266
|
)
|
|
$
|
14,266
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||||||
|
December 31, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
155
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
156
|
|
Accounts receivable, net
|
—
|
|
|
—
|
|
|
981
|
|
|
—
|
|
|
981
|
|
|||||
Inventories
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
117
|
|
|||||
Total current assets
|
—
|
|
|
155
|
|
|
1,167
|
|
|
—
|
|
|
1,322
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
—
|
|
|
8,983
|
|
|
—
|
|
|
8,983
|
|
|||||
Goodwill and intangible assets, net
|
—
|
|
|
—
|
|
|
337
|
|
|
—
|
|
|
337
|
|
|||||
Advances receivable — consolidated subsidiaries
|
2,895
|
|
|
1,614
|
|
|
—
|
|
|
(4,509
|
)
|
|
—
|
|
|||||
Investments in consolidated subsidiaries
|
4,513
|
|
|
7,522
|
|
|
—
|
|
|
(12,035
|
)
|
|
—
|
|
|||||
Investments in unconsolidated affiliates
|
—
|
|
|
—
|
|
|
3,050
|
|
|
—
|
|
|
3,050
|
|
|||||
Other long-term assets
|
—
|
|
|
—
|
|
|
186
|
|
|
—
|
|
|
186
|
|
|||||
Total assets
|
$
|
7,408
|
|
|
$
|
9,291
|
|
|
$
|
13,723
|
|
|
$
|
(16,544
|
)
|
|
$
|
13,878
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and other current liabilities
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
1,417
|
|
|
$
|
—
|
|
|
$
|
1,488
|
|
Advances payable — consolidated subsidiaries
|
—
|
|
|
—
|
|
|
4,509
|
|
|
(4,509
|
)
|
|
—
|
|
|||||
Long-term debt
|
—
|
|
|
4,707
|
|
|
—
|
|
|
—
|
|
|
4,707
|
|
|||||
Other long-term liabilities
|
—
|
|
|
—
|
|
|
245
|
|
|
—
|
|
|
245
|
|
|||||
Total liabilities
|
—
|
|
|
4,778
|
|
|
6,171
|
|
|
(4,509
|
)
|
|
6,440
|
|
|||||
Commitments and contingent liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Partners’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net equity
|
7,408
|
|
|
4,517
|
|
|
7,527
|
|
|
(12,035
|
)
|
|
7,417
|
|
|||||
Accumulated other comprehensive loss
|
—
|
|
|
(4
|
)
|
|
(5
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Total partners’ equity
|
7,408
|
|
|
4,513
|
|
|
7,522
|
|
|
(12,035
|
)
|
|
7,408
|
|
|||||
Noncontrolling interests
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|||||
Total equity
|
7,408
|
|
|
4,513
|
|
|
7,552
|
|
|
(12,035
|
)
|
|
7,438
|
|
|||||
Total liabilities and equity
|
$
|
7,408
|
|
|
$
|
9,291
|
|
|
$
|
13,723
|
|
|
$
|
(16,544
|
)
|
|
$
|
13,878
|
|
|
|
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,374
|
|
|
$
|
—
|
|
|
$
|
9,374
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
489
|
|
|
—
|
|
|
489
|
|
|||||
Trading and marketing losses, net
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
9,822
|
|
|
—
|
|
|
9,822
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases and related costs
|
—
|
|
|
—
|
|
|
8,019
|
|
|
—
|
|
|
8,019
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
760
|
|
|
—
|
|
|
760
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
388
|
|
|
—
|
|
|
388
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
276
|
|
|
—
|
|
|
276
|
|
|||||
Asset impairments
|
—
|
|
|
—
|
|
|
145
|
|
|
—
|
|
|
145
|
|
|||||
Other expense, net
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
9,599
|
|
|
—
|
|
|
9,599
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
223
|
|
|
—
|
|
|
223
|
|
|||||
Loss from financing activities
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|||||
Interest expense, net
|
—
|
|
|
(268
|
)
|
|
(1
|
)
|
|
—
|
|
|
(269
|
)
|
|||||
Income from consolidated subsidiaries
|
298
|
|
|
585
|
|
|
—
|
|
|
(883
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
370
|
|
|
—
|
|
|
370
|
|
|||||
Income before income taxes
|
298
|
|
|
298
|
|
|
592
|
|
|
(883
|
)
|
|
305
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Net income
|
298
|
|
|
298
|
|
|
589
|
|
|
(883
|
)
|
|
302
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Net income attributable to partners
|
$
|
298
|
|
|
$
|
298
|
|
|
$
|
585
|
|
|
$
|
(883
|
)
|
|
$
|
298
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
Net income
|
$
|
298
|
|
|
$
|
298
|
|
|
$
|
589
|
|
|
$
|
(883
|
)
|
|
$
|
302
|
|
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
|
299
|
|
|
299
|
|
|
589
|
|
|
(884
|
)
|
|
303
|
|
|||||
Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
299
|
|
|
$
|
299
|
|
|
$
|
585
|
|
|
$
|
(884
|
)
|
|
$
|
299
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-
Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,850
|
|
|
$
|
—
|
|
|
$
|
7,850
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
652
|
|
|
—
|
|
|
652
|
|
|||||
Trading and marketing losses, net
|
—
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(40
|
)
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
8,462
|
|
|
—
|
|
|
8,462
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases and related costs
|
—
|
|
|
—
|
|
|
6,885
|
|
|
—
|
|
|
6,885
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
661
|
|
|
—
|
|
|
661
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
379
|
|
|
—
|
|
|
379
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
290
|
|
|
—
|
|
|
290
|
|
|||||
Asset impairments
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|||||
Gain on sale of assets, net
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Other expense, net
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
8,240
|
|
|
—
|
|
|
8,240
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
222
|
|
|
—
|
|
|
222
|
|
|||||
Interest expense, net
|
—
|
|
|
(289
|
)
|
|
—
|
|
|
—
|
|
|
(289
|
)
|
|||||
Income from consolidated subsidiaries
|
229
|
|
|
518
|
|
|
—
|
|
|
(747
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
303
|
|
|
—
|
|
|
303
|
|
|||||
Income before income taxes
|
229
|
|
|
229
|
|
|
525
|
|
|
(747
|
)
|
|
236
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Net income
|
229
|
|
|
229
|
|
|
523
|
|
|
(747
|
)
|
|
234
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Net income attributable to partners
|
$
|
229
|
|
|
$
|
229
|
|
|
$
|
518
|
|
|
$
|
(747
|
)
|
|
$
|
229
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
Net income
|
$
|
229
|
|
|
$
|
229
|
|
|
$
|
523
|
|
|
$
|
(747
|
)
|
|
$
|
234
|
|
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
|
230
|
|
|
230
|
|
|
523
|
|
|
(748
|
)
|
|
235
|
|
|||||
Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
230
|
|
|
$
|
230
|
|
|
$
|
518
|
|
|
$
|
(748
|
)
|
|
$
|
230
|
|
|
Condensed Consolidating Statement of Operations
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales of natural gas, NGLs and condensate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,269
|
|
|
$
|
—
|
|
|
$
|
6,269
|
|
Transportation, processing and other
|
—
|
|
|
—
|
|
|
647
|
|
|
—
|
|
|
647
|
|
|||||
Trading and marketing losses, net
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||||
Total operating revenues
|
—
|
|
|
—
|
|
|
6,893
|
|
|
—
|
|
|
6,893
|
|
|||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases and related costs
|
—
|
|
|
—
|
|
|
5,461
|
|
|
—
|
|
|
5,461
|
|
|||||
Operating and maintenance expense
|
—
|
|
|
—
|
|
|
670
|
|
|
—
|
|
|
670
|
|
|||||
Depreciation and amortization expense
|
—
|
|
|
—
|
|
|
378
|
|
|
—
|
|
|
378
|
|
|||||
General and administrative expense
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
292
|
|
|||||
Gain on sale of assets, net
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|||||
Restructuring costs
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Other income, net
|
—
|
|
|
—
|
|
|
(65
|
)
|
|
—
|
|
|
(65
|
)
|
|||||
Total operating costs and expenses
|
—
|
|
|
—
|
|
|
6,714
|
|
|
—
|
|
|
6,714
|
|
|||||
Operating income
|
—
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
179
|
|
|||||
Interest expense, net
|
—
|
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
(321
|
)
|
|||||
Income from consolidated subsidiaries
|
88
|
|
|
409
|
|
|
—
|
|
|
(497
|
)
|
|
—
|
|
|||||
Earnings from unconsolidated affiliates
|
—
|
|
|
—
|
|
|
282
|
|
|
—
|
|
|
282
|
|
|||||
Income before income taxes
|
88
|
|
|
88
|
|
|
461
|
|
|
(497
|
)
|
|
140
|
|
|||||
Income tax expense
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Net income
|
88
|
|
|
88
|
|
|
415
|
|
|
(497
|
)
|
|
94
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Net income attributable to partners
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
409
|
|
|
$
|
(497
|
)
|
|
$
|
88
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
Net income
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
415
|
|
|
$
|
(497
|
)
|
|
$
|
94
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total comprehensive income
|
88
|
|
|
88
|
|
|
415
|
|
|
(497
|
)
|
|
94
|
|
|||||
Total comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Total comprehensive income attributable to partners
|
$
|
88
|
|
|
$
|
88
|
|
|
$
|
409
|
|
|
$
|
(497
|
)
|
|
$
|
88
|
|
|
Condensed Consolidating Statement of Cash Flows
|
||||||||||||||||||
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(263
|
)
|
|
$
|
925
|
|
|
$
|
—
|
|
|
$
|
662
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
443
|
|
|
(269
|
)
|
|
—
|
|
|
(174
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(595
|
)
|
|
—
|
|
|
(595
|
)
|
|||||
Investments in unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
(354
|
)
|
|
—
|
|
|
(354
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Net cash provided by (used in) investing activities
|
443
|
|
|
(269
|
)
|
|
(945
|
)
|
|
(174
|
)
|
|
(945
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(174
|
)
|
|
174
|
|
|
—
|
|
|||||
Proceeds from debt
|
—
|
|
|
4,961
|
|
|
200
|
|
|
—
|
|
|
5,161
|
|
|||||
Payments of debt
|
—
|
|
|
(4,560
|
)
|
|
—
|
|
|
—
|
|
|
(4,560
|
)
|
|||||
Costs incurred to redeem senior notes
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
Proceeds from issuance of preferred limited partner units, net of offering costs
|
261
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
261
|
|
|||||
Distributions to preferred limited partners
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|||||
Distributions to limited partners and general partner
|
(658
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(658
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Other
|
—
|
|
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(443
|
)
|
|
377
|
|
|
20
|
|
|
174
|
|
|
128
|
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
(155
|
)
|
|
—
|
|
|
—
|
|
|
(155
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
155
|
|
|
1
|
|
|
—
|
|
|
156
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(283
|
)
|
|
$
|
1,179
|
|
|
$
|
—
|
|
|
$
|
896
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
58
|
|
|
1,141
|
|
|
—
|
|
|
(1,199
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(375
|
)
|
|
—
|
|
|
(375
|
)
|
|||||
Investments in unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
(148
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
132
|
|
|
—
|
|
|
132
|
|
|||||
Net cash provided by (used in) investing activities
|
58
|
|
|
1,141
|
|
|
(391
|
)
|
|
(1,199
|
)
|
|
(391
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(1,199
|
)
|
|
1,199
|
|
|
—
|
|
|||||
Proceeds from long-term debt
|
—
|
|
|
116
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|||||
Payments of debt
|
—
|
|
|
(811
|
)
|
|
—
|
|
|
—
|
|
|
(811
|
)
|
|||||
Proceeds from issuance of preferred limited partner units, net of offering costs
|
487
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487
|
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
—
|
|
|
418
|
|
|
—
|
|
|
418
|
|
|||||
Distributions to limited partners and general partner
|
(545
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(545
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Other
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Net cash used in financing activities
|
(58
|
)
|
|
(703
|
)
|
|
(788
|
)
|
|
1,199
|
|
|
(350
|
)
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|||||
Cash and cash equivalents, beginning of period
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
—
|
|
|
$
|
155
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
Year Ended December 31, 2016
|
||||||||||||||||||
|
Parent
Guarantor
|
|
Subsidiary
Issuer
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
|
||||||||||
|
(millions)
|
||||||||||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
—
|
|
|
$
|
(305
|
)
|
|
$
|
950
|
|
|
$
|
—
|
|
|
$
|
645
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
483
|
|
|
585
|
|
|
—
|
|
|
(1,068
|
)
|
|
—
|
|
|||||
Capital expenditures
|
—
|
|
|
—
|
|
|
(144
|
)
|
|
—
|
|
|
(144
|
)
|
|||||
Investments in unconsolidated affiliates, net
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
|||||
Proceeds from sale of assets
|
—
|
|
|
—
|
|
|
163
|
|
|
—
|
|
|
163
|
|
|||||
Net cash (used in) provided by investing activities
|
483
|
|
|
585
|
|
|
(34
|
)
|
|
(1,068
|
)
|
|
(34
|
)
|
|||||
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany transfers
|
—
|
|
|
—
|
|
|
(1,068
|
)
|
|
1,068
|
|
|
—
|
|
|||||
Proceeds from long-term debt
|
—
|
|
|
3,353
|
|
|
—
|
|
|
—
|
|
|
3,353
|
|
|||||
Payments of long-term debt
|
—
|
|
|
(3,628
|
)
|
|
—
|
|
|
—
|
|
|
(3,628
|
)
|
|||||
Net change in advances to predecessor from DCP Midstream, LLC
|
—
|
|
|
—
|
|
|
157
|
|
|
—
|
|
|
157
|
|
|||||
Distributions to limited partners and general partner
|
(483
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(483
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Other
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(483
|
)
|
|
(280
|
)
|
|
(918
|
)
|
|
1,068
|
|
|
(613
|
)
|
|||||
Net change in cash and cash equivalents
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Cash and cash equivalents, beginning of year
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Cash and cash equivalents, end of year
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Name
|
|
Base Salary
|
|
Short-Term Incentive Target
|
|
Long-Term Incentive Target
|
|
Total
|
Wouter T. van Kempen
|
|
$695,000
|
|
100%
|
|
355%
|
|
$3,857,250
|
Sean P. O'Brien
|
|
$459,740
|
|
75%
|
|
225%
|
|
$1,838,960
|
Brent L. Backes
|
|
$436,560
|
|
65%
|
|
140%
|
|
$1,331,508
|
Don A. Baldridge
|
|
$403,650
|
|
75%
|
|
175%
|
|
$1,412,775
|
Brian S. Frederick
|
|
$402,220
|
|
75%
|
|
175%
|
|
$1,407,770
|
Andeavor Logistics LP
|
Equitrans Midstream Corporation
|
Phillips 66 Partners LP
|
Antero Midstream GP LP
|
Genesis Energy, L.P.
|
SemGroup Corporation
|
Buckeye Partners, L.P.
|
Holly Energy Partners, L.P.
|
Shell Midstream Partners, L.P.
|
Cheniere Energy, Inc.
|
Magellan Midstream Partners, L.P.
|
Summit Midstream Partners, LP
|
Crestwood Equity Partners LP
|
MPLX LP
|
Tallgrass Energy, LP
|
Enable Midstream Partners, LP
|
NGL Energy Partners LP
|
Targa Resources Corp.
|
EnLink Midstream, LLC
|
NuStar Energy L.P.
|
TC PipeLines, LP
|
EQM Midstream Partners, LP
|
ONEOK, Inc.
|
Western Gas Equity Partners, LP
|
Name
|
|
Age
|
|
Position with DCP Midstream GP, LLC
|
|
|
|
|
|
Wouter T. van Kempen
|
|
49
|
|
Chairman of the Board, President, Chief Executive Officer, and Director
|
Sean P. O'Brien
|
|
49
|
|
Group Vice President and Chief Financial Officer
|
Brent L. Backes
|
|
59
|
|
Group Vice President and General Counsel
|
Don Baldridge
|
|
49
|
|
President, Commercial
|
Brian S. Frederick
|
|
53
|
|
President, Asset Operations
|
Allen C. Capps
|
|
48
|
|
Director
|
Fred J. Fowler
|
|
72
|
|
Director
|
William F. Kimble
|
|
59
|
|
Director
|
Mark Maki
|
|
54
|
|
Director
|
Brian Mandell
|
|
55
|
|
Director
|
Bill W. Waycaster
|
|
80
|
|
Director
|
John Zuklic
|
|
51
|
|
Director
|
•
|
reviewed and discussed quarterly and annual earnings press releases, quarterly unaudited financial statements, and the annual audited financial statements included in this Annual Report on Form 10-K with management and Deloitte & Touche LLP, our independent auditors, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements;
|
•
|
reviewed with Deloitte & Touche LLP, who are responsible for expressing an opinion on the conformity of the audited financial statements with generally accepted accounting principles, their judgments as to the quality and acceptability of our accounting principles and such other matters as are required to be discussed with the audit committee under the auditing standards of the Public Company Accounting Oversight Board (PCAOB);
|
•
|
received the written disclosures and the letter required by PCAOB Ethics and Independence Rules (independence discussions with audit committees) provided to the audit committee by Deloitte & Touche LLP;
|
•
|
discussed with Deloitte & Touche LLP its independence from management and us and considered the compatibility of the provision of nonaudit service by the independent auditors with the auditors’ independence;
|
•
|
discussed with Deloitte & Touche LLP the matters required to be discussed by statement on auditing standards No. 16 (PCAOB Auditing Standard No. 16, Communications With Audit Committees, Related Amendments to PCAOB Standards and Transitional Amendments to AU Section 380);
|
•
|
discussed with our internal auditors and Deloitte & Touche LLP the overall scope and plans for their respective audits. The audit committee meets with the internal auditors and Deloitte & Touche LLP, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls and the overall quality of our financial reporting;
|
•
|
based on the foregoing reviews and discussions, recommended to the board of directors that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2018, for filing with the SEC; and
|
•
|
approved the reappointment of Deloitte & Touche LLP to serve as our independent auditors based on an annual consideration of, among other factors, the following: their historical and recent performance on our audit, the quality and candor of their communications with the audit committee and management, the depth of expertise of their audit team and the value provided by their national office, the appropriateness of their fees, how effectively they maintained their independence, their tenure as our independent auditors, their knowledge of our operations, accounting policies and practices, and internal control over financial reporting, and external data relating to audit quality and performance by them and their peer firms.
|
•
|
annually review the Partnership’s goals and objectives relevant to compensation of the NEOs;
|
•
|
annually evaluate the NEO’s performance in light of the Partnership’s goals and objectives, and approve the compensation levels for the NEOs;
|
•
|
periodically evaluate the terms and administration of short-term and long-term incentive plans to assure that they are structured and administered in a manner consistent with the Partnership’s goals and objectives;
|
•
|
periodically evaluate incentive compensation and equity-related plans and consider amendments if appropriate;
|
•
|
retain and terminate any compensation consultant to assist in the evaluation of compensation for directors who are not officers or employees of the General Partner or its affiliates, or our non-employee directors, and NEOs; and
|
•
|
periodically review the compensation of the non-employee directors.
|
•
|
attract, retain and reward talented executive officers and key management employees by providing total compensation competitive with that of other executive officers in our industry;
|
•
|
motivate executive officers and key management employees to achieve strong financial and operational performance;
|
•
|
emphasize performance-based compensation, balancing short-term and long-term results; and
|
•
|
reward individual performance.
|
Name and Principal Position
|
|
Base Salary
|
|
Short-Term Incentive Target
|
|
Long-Term Incentive Target
|
|
Total
|
Wouter T. van Kempen, Chairman, President & CEO
|
|
$682,900
|
|
100%
|
|
275%
|
|
$3,243,775
|
Sean P. O'Brien, Group Vice President & Chief Financial Officer
|
|
$437,850
|
|
75%
|
|
200%
|
|
$1,641,938
|
Brent L. Backes, Group Vice President & General Counsel
|
|
$423,840
|
|
65%
|
|
140%
|
|
$1,292,712
|
Don A. Baldridge, President, Commercial
|
|
$390,000
|
|
75%
|
|
175%
|
|
$1,365,000
|
Brian S. Frederick, President, Asset Operations
|
|
$402,220
|
|
75%
|
|
175%
|
|
$1,407,770
|
1.
|
Distributable Cash Flow
. An objective intended to capture the annual amount of cash that is available for the quarterly distributions to our unitholders. For this objective, we established a range of performance from a minimum of $600 million to a maximum of $670 million.
|
2.
|
Constant Price Cash Generation.
An objective intended to capture the cash generated from operations for the Partnership excluding the effect of commodity prices. For this objective, we established a range of performance from a minimum of $930 million to a maximum of $1,020 million.
|
3.
|
Cost.
An objective intended to capture the ongoing operating and general and administrative costs of the Partnership. For this objective, we established a range of performance from a minimum of $945 million to a maximum of $900 million.
|
1.
|
Plant Downtime.
An objective to measure operating reliability improvement with the intent to maximize our customers’ productivity.
|
2.
|
Operational EBITDA Improvement.
An objective intended to capture the additional EBITDA generated through DCP's Integrated Collaboration Center, which utilizes real-time data on our operations, financial systems, and other information to optimize asset performance to achieve higher reliability, margin, and cost savings.
|
1.
|
Total Recordable Injury Rate (TRIR).
An objective of both employee and contractor incident rates covering the assets of the Partnership. For this objective, the maximum level of performance is a TRIR of 0.32 and the minimum level of performance is a TRIR of 0.67.
|
2.
|
Process Safety Event Ratio (PSE Ratio).
An objective using a broad definition of process safety events covering the assets of the Partnership. For this objective, the maximum level of performance is a PSE Ratio of 2.37 and a minimum level of performance is a PSE Ratio of 4.39.
|
3.
|
Total Emissions.
An objective of air emissions, natural gas vented or flared, covering the assets of the Partnership. For this objective, we have established certain levels of emissions at such assets.
|
STI Objectives
|
|
Level of Performance Achieved
|
Distributable Cash Flow
|
|
At Maximum
|
Constant Price Cash Generation
|
|
At Maximum
|
Cost
|
|
Below Minimum
|
Plant Downtime
|
|
Below Minimum
|
Operational EBITDA Improvement
|
|
At Maximum
|
Total Recordable Injury Rate (TRIR)
|
|
At Maximum
|
Process Safety Event Ratio (PSE Ratio)
|
|
Between Target & Maximum
|
Total Emissions
|
|
Between Minimum & Target
|
Andeavor Logistics LP
|
Equitrans Midstream Corporation
|
Phillips 66 Partners LP
|
Antero Midstream GP LP
|
Genesis Energy, L.P.
|
SemGroup Corporation
|
Buckeye Partners, L.P.
|
Holly Energy Partners, L.P.
|
Shell Midstream Partners, L.P.
|
Cheniere Energy, Inc.
|
Magellan Midstream Partners, L.P.
|
Summit Midstream Partners, LP
|
Crestwood Equity Partners LP
|
MPLX LP
|
Tallgrass Energy, LP
|
Enable Midstream Partners, LP
|
NGL Energy Partners LP
|
Targa Resources Corp.
|
EnLink Midstream, LLC
|
NuStar Energy L.P.
|
TC PipeLines, LP
|
EQM Midstream Partners, LP
|
ONEOK, Inc.
|
Western Gas Equity Partners, LP
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
LTI
Awards (c) |
|
Non-Equity
Incentive Plan Compensation (d) |
|
All Other
Compensation (e) |
|
Total
|
|
||||||||||
Wouter T. van Kempen
,
Chairman of the Board, President and Chief Executive Officer
|
|
||||||||||||||||||||||
|
|
2018
|
|
$
|
679,292
|
|
|
$
|
1,877,950
|
|
|
$
|
1,039,657
|
|
|
$
|
650,366
|
|
|
$
|
4,247,265
|
|
|
|
|
2017
|
|
$
|
664,250
|
|
|
$
|
1,506,735
|
|
|
$
|
1,074,511
|
|
|
$
|
442,250
|
|
|
$
|
3,687,746
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,303,012
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sean P. O’Brien,
Group Vice President and Chief Financial Officer
|
|
||||||||||||||||||||||
|
|
2018
|
|
$
|
428,117
|
|
|
$
|
875,653
|
|
|
$
|
540,568
|
|
|
$
|
306,141
|
|
|
$
|
2,150,479
|
|
|
|
|
2017
|
|
$
|
398,550
|
|
|
$
|
662,999
|
|
|
$
|
451,295
|
|
|
$
|
204,895
|
|
|
$
|
1,717,739
|
|
|
|
|
2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
545,503
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Brent L. Backes,
Group Vice President and General Counsel (b)
|
|
||||||||||||||||||||||
|
|
2018
|
|
$
|
420,518
|
|
|
$
|
593,418
|
|
|
$
|
418,341
|
|
|
$
|
296,270
|
|
|
$
|
1,728,547
|
|
|
|
|
2017
|
|
$
|
408,538
|
|
|
$
|
576,480
|
|
|
$
|
429,562
|
|
|
$
|
215,903
|
|
|
$
|
1,630,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Don A. Baldridge,
President, Commercial (b)
|
|
||||||||||||||||||||||
|
|
2018
|
|
$
|
386,338
|
|
|
$
|
682,430
|
|
|
$
|
487,815
|
|
|
$
|
245,738
|
|
|
$
|
1,802,321
|
|
|
|
|
2017
|
|
$
|
373,438
|
|
|
$
|
469,399
|
|
|
$
|
392,655
|
|
|
$
|
175,427
|
|
|
$
|
1,410,919
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Brian S. Frederick,
President, Operations (b)
|
|
||||||||||||||||||||||
|
|
2018
|
|
$
|
399,065
|
|
|
$
|
704,141
|
|
|
$
|
366,461
|
|
|
$
|
251,846
|
|
|
$
|
1,721,513
|
|
|
|
|
2017
|
|
$
|
387,673
|
|
|
$
|
489,116
|
|
|
$
|
407,623
|
|
|
$
|
172,112
|
|
|
$
|
1,456,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Company retirement contributions to defined contribution plans
|
|
Nonqualified deferred compensation program contributions
|
|
DERs
|
|
Total
|
||||||||
Wouter T. van Kempen
|
$
|
27,500
|
|
|
$
|
280,884
|
|
|
$
|
341,982
|
|
|
$
|
650,366
|
|
Sean P. O’Brien
|
$
|
30,250
|
|
|
$
|
111,503
|
|
|
$
|
164,388
|
|
|
$
|
306,141
|
|
Brent L. Backes
|
$
|
33,000
|
|
|
$
|
146,469
|
|
|
$
|
116,801
|
|
|
$
|
296,270
|
|
Don A. Baldridge
|
$
|
30,250
|
|
|
$
|
89,254
|
|
|
$
|
126,234
|
|
|
$
|
245,738
|
|
Brian S. Frederick
|
$
|
35,750
|
|
|
$
|
103,891
|
|
|
$
|
112,205
|
|
|
$
|
251,846
|
|
|
|
|
|
Estimated Future Payouts under
Non-Equity Incentive Plan Awards (a)
|
|
Estimated Future Payouts under
Equity Incentive Plan Awards
|
|
|
|||||||||||||||||||
Name
|
|
Grant
Date (b) |
|
Minimum
($) |
|
Target
($) |
|
Maximum
($) |
|
Minimum
(#) |
|
Target
(#) |
|
Maximum
(#) |
|
Grant Date
Fair Value of LTIP Awards ($) |
|||||||||||
Wouter T. van Kempen
|
|
N/A
|
|
$
|
—
|
|
|
$
|
679,292
|
|
|
$
|
1,358,584
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
SPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
25,950
|
|
|
51,900
|
|
|
$
|
938,975
|
|
RPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
25,950
|
|
|
25,950
|
|
|
25,950
|
|
|
$
|
938,975
|
|
Sean P. O’Brien
|
|
N/A
|
|
$
|
—
|
|
|
$
|
321,088
|
|
|
$
|
642,176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
SPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
12,100
|
|
|
24,200
|
|
|
$
|
437,826
|
|
RPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
12,100
|
|
|
12,100
|
|
|
12,100
|
|
|
$
|
437,826
|
|
Brent L. Backes
|
|
N/A
|
|
$
|
—
|
|
|
$
|
273,336
|
|
|
$
|
546,673
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
SPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
8,200
|
|
|
16,400
|
|
|
$
|
296,709
|
|
RPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
8,200
|
|
|
8,200
|
|
|
8,200
|
|
|
$
|
296,709
|
|
Don A. Baldridge
|
|
N/A
|
|
$
|
—
|
|
|
$
|
289,754
|
|
|
$
|
579,508
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
SPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
9,430
|
|
|
18,860
|
|
|
$
|
341,215
|
|
RPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
9,430
|
|
|
9,430
|
|
|
9,430
|
|
|
$
|
341,215
|
|
Brian S. Frederick
|
|
N/A
|
|
$
|
—
|
|
|
$
|
299,298
|
|
|
$
|
598,597
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
SPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
9,730
|
|
|
19,460
|
|
|
$
|
352,070
|
|
RPUs
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
9,730
|
|
|
9,730
|
|
|
9,730
|
|
|
$
|
352,070
|
|
|
|
Outstanding LTIP Awards
|
|||||
Name
|
|
Equity Incentive
Plan Awards: Unearned Units That Have Not Vested(a) |
|
Equity Incentive
Plan Awards: Market Value of Unearned Units That Have Not Vested(b) |
|||
Wouter T. van Kempen
|
|
117,600
|
|
|
$
|
4,297,099
|
|
Sean P. O’Brien
|
|
53,790
|
|
|
$
|
1,949,245
|
|
Brent L. Backes
|
|
26,540
|
|
|
$
|
1,029,687
|
|
Don A. Baldridge
|
|
40,680
|
|
|
$
|
1,453,904
|
|
Brian S. Frederick
|
|
42,090
|
|
|
$
|
1,506,943
|
|
|
|
Stock Awards
|
|
|||||
Name
|
|
Number of Units Acquired on Vesting
|
|
Value Realized on Vesting(a)
|
|
|||
Wouter T. van Kempen
|
|
53,279
|
|
(c)
|
$
|
2,772,649
|
|
(c)
|
Sean P. O’Brien
|
|
29,184
|
|
(c)
|
$
|
1,548,918
|
|
(c)
|
Brent L. Backes
|
|
18,526
|
|
(b)
|
$
|
787,381
|
|
(b)
|
Don A. Baldridge
|
|
23,404
|
|
(c)
|
$
|
1,257,517
|
|
(c)
|
Brian S. Frederick
|
|
13,376
|
|
|
$
|
686,271
|
|
|
Name
|
|
Executive
Contributions in Last Fiscal Year(a) |
|
Registrant
Contributions in Last Fiscal Year(b) |
|
Aggregate
Earnings in Last Fiscal Year(c) |
|
Aggregate
Withdrawal/ Distributions |
|
Aggregate
Balance at December 31, 2018(d) |
||||||||||
Wouter T. van Kempen
|
|
$
|
269,226
|
|
|
$
|
280,884
|
|
|
$
|
138,366
|
|
|
$
|
—
|
|
|
$
|
2,604,253
|
|
Sean P. O’Brien
|
|
$
|
257,519
|
|
|
$
|
111,503
|
|
|
$
|
31,700
|
|
|
$
|
(128,520
|
)
|
|
$
|
707,824
|
|
Brent L. Backes
|
|
$
|
71,488
|
|
|
$
|
146,469
|
|
|
$
|
151,878
|
|
|
$
|
—
|
|
|
$
|
3,088,345
|
|
Don A. Baldridge
|
|
$
|
367,985
|
|
|
$
|
89,254
|
|
|
$
|
48,152
|
|
|
$
|
(23,863
|
)
|
|
$
|
1,166,857
|
|
Brian S. Frederick
|
|
$
|
47,888
|
|
|
$
|
103,891
|
|
|
$
|
(41,071
|
)
|
|
$
|
—
|
|
|
$
|
2,323,436
|
|
|
2018 STI
|
|
Severance
|
|
2016 LTI
|
|
Accelerated LTIP
|
|
Total
|
||||||||||
Wouter T. van Kempen
|
$
|
1,039,657
|
|
|
$
|
1,024,350
|
|
|
$
|
1,964,413
|
|
|
$
|
2,223,581
|
|
|
$
|
6,252,001
|
|
Sean P. O’Brien
|
$
|
540,568
|
|
|
$
|
437,850
|
|
|
$
|
825,253
|
|
|
$
|
1,006,943
|
|
|
$
|
2,810,614
|
|
Brent L. Backes (a)
|
$
|
418,341
|
|
|
$
|
423,840
|
|
|
$
|
846,717
|
|
|
$
|
778,423
|
|
|
$
|
2,467,321
|
|
Don A. Baldridge
|
$
|
487,815
|
|
|
$
|
390,000
|
|
|
$
|
551,916
|
|
|
$
|
748,953
|
|
|
$
|
2,178,684
|
|
Brian S. Frederick
|
$
|
366,461
|
|
|
$
|
402,220
|
|
|
$
|
632,514
|
|
|
$
|
776,535
|
|
|
$
|
2,177,730
|
|
1.
|
We determined that, as of December 31, 2018, our employee population consisted of approximately 2,650 individuals with all of these individuals located in the United States (as reported in Item 1,
Business
, in this Annual Report on Form 10-K). This population consisted of our full-time, part-time, and temporary employees, and was substantially the same as our employee population for the prior fiscal year.
|
2.
|
In originally identifying the "median employee" for purposes of our prior pay ratio disclosure for the fiscal year ended 2017, from our employee population, we compared the 2017 earnings eligible in the short-term incentive plan plus the 2016 actual incentive paid in 2017 of our employees as reflected in our payroll records for 2017. We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation.
Since all our employees are located in the United States, as is our CEO, we did not make any cost-of-living adjustments in identifying the "median employee."
|
3.
|
With respect to calculating the total annual compensation disclosed above for the median employee, we combined all of the elements of such employee’s total compensation for 2018.
|
4.
|
With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2018 Summary Compensation Table above.
|
Name
|
|
Fees Earned or Paid in Cash
|
|
Unit
Awards (a)
|
|
Total
|
||||||
Fred J. Fowler
|
|
$
|
90,000
|
|
|
$
|
100,475
|
|
|
$
|
190,475
|
|
William F. Kimble (b)
|
|
$
|
110,000
|
|
|
$
|
100,475
|
|
|
$
|
210,475
|
|
Bill W. Waycaster (c)
|
|
$
|
110,000
|
|
|
$
|
100,475
|
|
|
$
|
210,475
|
|
(a)
|
The amounts in this column reflect the grant date fair value of common unit awards computed in accordance with ASC 718.
|
(b)
|
Mr. Kimble received an additional $20,000 annually as the audit committee chair.
|
(c)
|
Mr. Waycaster received an additional $20,000 annually as the special committee chair.
|
•
|
each person known by us to be the beneficial owner of more than 5% of our common units;
|
•
|
each director of DCP Midstream GP, LLC;
|
•
|
each NEO of DCP Midstream GP, LLC; and
|
•
|
all directors and executive officers of DCP Midstream GP, LLC as a group.
|
Name of Beneficial Owner (a)
|
|
Common Units Beneficially Owned
|
|
Percentage of Common Units Beneficially Owned
|
|
Series A Preferred Units Beneficially Owned
|
|
Percentage of Series A Preferred Units Beneficially Owned
|
DCP Midstream, LLC (b)
|
|
52,762,526
|
|
36.8%
|
|
—
|
|
—
|
Harvest Fund Advisors LLC (c)
|
|
11,848,552
|
|
8.3%
|
|
—
|
|
—
|
ALPS Advisors, Inc. (d)
|
|
8,973,905
|
|
6.3%
|
|
—
|
|
—
|
Wouter T. van Kempen
|
|
2,540
|
|
*
|
|
750
|
|
*
|
Sean P. O'Brien
|
|
—
|
|
—
|
|
—
|
|
—
|
Brent L. Backes
|
|
10,406
|
|
*
|
|
150
|
|
*
|
Don Baldridge
|
|
10,689
|
|
*
|
|
50
|
|
*
|
Brian Frederick
|
|
5,500
|
|
*
|
|
—
|
|
—
|
Allen C. Capps
|
|
—
|
|
—
|
|
—
|
|
—
|
Fred J. Fowler
|
|
26,800
|
|
*
|
|
—
|
|
—
|
William F. Kimble
|
|
8,700
|
|
*
|
|
—
|
|
—
|
Mark Maki
|
|
—
|
|
—
|
|
—
|
|
—
|
Brian Mandell
|
|
—
|
|
—
|
|
—
|
|
—
|
Bill W. Waycaster
|
|
8,700
|
|
*
|
|
—
|
|
—
|
John Zuklic
|
|
—
|
|
—
|
|
—
|
|
—
|
All directors and executive officers as a group (12 persons)
|
|
73,335
|
|
*
|
|
950
|
|
*
|
(a)
|
Unless otherwise indicated, the address for all beneficial owners in this table is 370 17th Street, Suite 2500, Denver, Colorado 80202.
|
(b)
|
Includes 1,887,618 common units held by DCP Midstream GP, LP. DCP Midstream, LLC is the sole member of DCP Midstream GP, LLC, which is the general partner of DCP Midstream GP, LP, and therefore may be deemed to indirectly beneficially own such securities, but disclaims beneficial ownership except to the extent of its pecuniary interest therein.
|
(c)
|
As reported on Schedule 13G filed with the SEC on February 14, 2019 by Harvest Fund Advisors LLC ("HFA") and Eric M. Conklin each with an address of 100 West Lancaster Avenue, Suite 200, Wayne, Pennsylvania 19087. The Schedule 13G reports that HFA and Mr. Conklin, as the managing partner and chair of the investment committee of HFA, have sole voting and dispositive power over 11,848,552 of the reported units.
|
(d)
|
As reported on Schedule 13G/A filed with the SEC on February 4, 2019 by ALPS Advisors, Inc. and Alerian MLP ETF each with an address of 1290 Broadway, Suite 1100, Denver, Colorado 80203. The Schedule 13G/A reports that ALPS Advisors, Inc. (“AAI”), an investment adviser registered under the Investment Advisers Act of 1940, as amended, furnishes investment advice to investment companies registered under the Investment Company Act of 1940, as amended (collectively referred to as the “Funds”). In its role as investment advisor, AAI has voting and/or investment power over the registrant's common units that are owned by the Funds, and may be deemed to be the beneficial owner of such common units held by the Funds. Alerian MLP ETF is an investment company registered under the Investment Company Act of
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
|
(a)
|
(b)
|
(c)
|
||||
Equity compensation plans approved by unitholders (1)
|
—
|
|
$
|
—
|
|
878,100
|
|
Equity compensation plans not approved by unitholders
|
—
|
|
—
|
|
—
|
|
|
Total
|
—
|
|
$
|
—
|
|
878,100
|
|
(1)
|
This information relates to our 2016 LTIP, which was approved by unitholders at a special meeting on April 28, 2016. For more information on our 2016 LTIP, refer to Note 15. "Equity-Based Compensation" in the Notes to Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”
|
Operational Stage:
|
||
Distributions of Available Cash to our General Partner and its affiliates
|
We will generally make cash distributions to the unitholders and to our General Partner, in accordance with their pro rata interest. In addition, if distributions exceed the minimum quarterly distribution and other higher target levels, our General Partner will be entitled to increasing percentages of the distributions, up to 48% of the distributions above the highest target level. Currently, our distribution to our general partner related to its incentive distribution rights is at the highest level.
|
|
Payments to our General Partner and
its affiliates
|
For further information regarding payments to our General Partner, please see the “Services Agreement” section below.
|
|
Withdrawal or removal of our General Partner
|
If our General Partner withdraws or is removed, its general partner interest and its incentive distribution rights will either be sold to the new general partner for cash or converted into common units, in each case for an amount equal to the fair market value of those interests.
|
|
Liquidation Stage:
|
||
Liquidation
|
Upon our liquidation, the partners, including our General Partner, will be entitled to receive liquidating distributions according to their respective capital account balances.
|
•
|
approved by the conflicts committee;
|
•
|
approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partner or any of its affiliates;
|
•
|
on terms no less favorable to us than those generally being provided to or available from unrelated third parties; or
|
•
|
fair and reasonable to us, taking into account the totality of the relationships between the parties involved, including other transactions that may be particularly favorable or advantageous to us.
|
|
|
Year Ended December 31,
|
||||||
Type of Fees
|
|
2018
|
|
2017
|
||||
|
|
(millions)
|
||||||
Audit Fees (a)
|
|
$
|
3
|
|
|
$
|
4
|
|
(a)
|
Audit Fees are fees billed by Deloitte for professional services for the audit of our consolidated financial statements included in our annual report on Form 10-K and review of financial statements included in our quarterly reports on Form 10-Q, services that are normally provided by Deloitte in connection with statutory and regulatory filings or engagements or any other service performed by Deloitte to comply with generally accepted auditing standards and include comfort and consent letters in connection with SEC filings and financing transactions.
|
FINANCIAL STATEMENTS
|
Discovery Producer Services LLC
|
Years Ended December 31, 2018, 2017 and 2016
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
(In thousands)
|
||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,187
|
|
|
$
|
22,827
|
|
Trade accounts receivable:
|
|
|
|
||||
Affiliate
|
11,142
|
|
|
13,339
|
|
||
Other
|
6,674
|
|
|
3,911
|
|
||
Prepaid insurance
|
2,607
|
|
|
2,886
|
|
||
Inventory
|
3,509
|
|
|
2,923
|
|
||
Total current assets
|
42,119
|
|
|
45,886
|
|
||
Property, plant and equipment, net
|
1,079,375
|
|
|
1,124,864
|
|
||
Intangible assets, net
|
13,564
|
|
|
13,084
|
|
||
Total assets
|
$
|
1,135,058
|
|
|
$
|
1,183,834
|
|
|
|
|
|
||||
LIABILITIES AND MEMBERS’ CAPITAL
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable:
|
|
|
|
||||
Affiliate
|
$
|
344
|
|
|
$
|
1,110
|
|
Other
|
17,595
|
|
|
16,602
|
|
||
Asset retirement obligations
|
505
|
|
|
24,184
|
|
||
Deferred revenue
|
17,968
|
|
|
19,784
|
|
||
Other current liabilities
|
224
|
|
|
209
|
|
||
Total current liabilities
|
36,636
|
|
|
61,889
|
|
||
Non Current liabilities
|
|
|
|
||||
Asset retirement obligations
|
136,684
|
|
|
97,896
|
|
||
Deferred revenue
|
61,559
|
|
|
71,135
|
|
||
Customer deposits
|
2,795
|
|
|
3,491
|
|
||
Commitments and contingent liabilities (Note 6)
|
|
|
|
||||
Members' capital
|
|
|
|
||||
Members' capital accounts
|
896,055
|
|
|
948,030
|
|
||
Other comprehensive income
|
1,329
|
|
|
1,393
|
|
||
Total members’ capital
|
897,384
|
|
|
949,423
|
|
||
Total liabilities and members’ capital
|
$
|
1,135,058
|
|
|
$
|
1,183,834
|
|
|
Year Ended December 31,
|
|||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|||||||
Revenues:
|
|
|
|
|
|
|||||||
Product sales:
|
|
|
|
|
|
|||||||
Affiliate
|
$
|
46,699
|
|
|
$
|
165,525
|
|
|
$
|
129,609
|
|
|
Third-party
|
3,871
|
|
|
93
|
|
|
120
|
|
||||
Transportation services
|
22,675
|
|
|
46,395
|
|
|
60,112
|
|
||||
Gathering and processing services:
|
|
|
|
|
|
|||||||
Affiliate
|
1,005
|
|
|
687
|
|
|
330
|
|
||||
Third-party
|
69,504
|
|
|
191,351
|
|
|
200,723
|
|
||||
Commodity consideration
|
44,497
|
|
|
—
|
|
—
|
|
—
|
|
|||
Other revenues
|
9,606
|
|
|
8,793
|
|
|
9,012
|
|
||||
Total revenues
|
197,857
|
|
|
412,844
|
|
|
399,906
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|||||||
Product cost
|
|
|
|
|
|
|||||||
Affiliate
|
—
|
|
|
8,750
|
|
|
6,168
|
|
||||
Third-party
|
47,819
|
|
|
126,610
|
|
|
95,364
|
|
||||
Proceesing commodity expense:
|
|
|
|
|
|
|||||||
Affiliate
|
9,151
|
|
|
—
|
|
|
—
|
|
||||
Third-party
|
6,894
|
|
|
—
|
|
|
—
|
|
||||
Operating and maintenance expenses:
|
|
|
|
|
|
|||||||
Affiliate
|
9,610
|
|
|
9,510
|
|
|
8,679
|
|
||||
Third-party
|
28,692
|
|
|
28,719
|
|
|
23,479
|
|
||||
Depreciation, amortization and accretion
|
71,080
|
|
|
93,110
|
|
|
76,110
|
|
||||
Taxes other than income
|
2,932
|
|
|
2,913
|
|
|
2,702
|
|
||||
General and administrative expenses- affiliate
|
7,639
|
|
|
7,454
|
|
|
7,219
|
|
||||
Other (income) expense, net
|
(24
|
)
|
|
(6,553
|
)
|
|
129
|
|
||||
Total costs and expenses
|
183,793
|
|
|
270,513
|
|
|
219,850
|
|
||||
Operating income
|
14,064
|
|
|
142,331
|
|
|
180,056
|
|
||||
Interest income (expense)
|
(638
|
)
|
|
177
|
|
|
(46
|
)
|
||||
Net income
|
13,426
|
|
|
142,508
|
|
|
180,010
|
|
||||
Net loss from derivative instruments, including amounts reclassified into earnings
|
(64
|
)
|
|
(63
|
)
|
|
(63
|
)
|
||||
Comprehensive income
|
$
|
13,362
|
|
|
$
|
142,445
|
|
|
$
|
179,947
|
|
|
Williams Field Services Group, LLC
|
|
DCP Assets Holding, LP
|
|
Accumulated Other Comprehensive Income
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance December 31, 2015
|
$
|
642,896
|
|
|
$
|
427,570
|
|
|
$
|
1,519
|
|
|
$
|
1,071,985
|
|
Distributions
|
(140,540
|
)
|
|
(93,694
|
)
|
|
—
|
|
|
(234,234
|
)
|
||||
Net income
|
108,006
|
|
|
72,004
|
|
|
—
|
|
|
180,010
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
(63
|
)
|
||||
Balance December 31, 2016
|
$
|
610,362
|
|
|
$
|
405,880
|
|
|
$
|
1,456
|
|
|
$
|
1,017,698
|
|
Contributions
|
834
|
|
|
556
|
|
|
—
|
|
|
1,390
|
|
||||
Distributions
|
(127,266
|
)
|
|
(84,844
|
)
|
|
—
|
|
|
(212,110
|
)
|
||||
Net income
|
85,504
|
|
|
57,004
|
|
|
—
|
|
|
142,508
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
(63
|
)
|
||||
Balance December 31, 2017
|
$
|
569,434
|
|
|
$
|
378,596
|
|
|
$
|
1,393
|
|
|
$
|
949,423
|
|
Contributions
|
5,454
|
|
|
3,636
|
|
|
—
|
|
|
9,090
|
|
||||
Distributions
|
(45,420
|
)
|
|
(30,280
|
)
|
|
—
|
|
|
(75,700
|
)
|
||||
Net income
|
8,056
|
|
|
5,370
|
|
|
—
|
|
|
13,426
|
|
||||
Cumulative effect adjustments - Adoption of ASU 606 (Note 3)
|
725
|
|
|
484
|
|
|
—
|
|
|
1,209
|
|
||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
(64
|
)
|
|
(64
|
)
|
||||
Balance December 31, 2018
|
538,249
|
|
|
357,806
|
|
|
1,329
|
|
|
897,384
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
13,426
|
|
|
$
|
142,508
|
|
|
$
|
180,010
|
|
Adjustments to reconcile cash provided by operations:
|
|
|
|
|
|
||||||
Depreciation, amortization, and accretion
|
71,080
|
|
|
93,110
|
|
|
76,110
|
|
|||
Net loss on retirement of equipment
|
—
|
|
|
—
|
|
|
140
|
|
|||
Other non-cash item
|
800
|
|
|
(6,556
|
)
|
|
—
|
|
|||
Cash provided (used) by changes in assets and liabilities:
|
|
|
|
|
|
||||||
Trade accounts receivable
|
(567
|
)
|
|
25,726
|
|
|
(1,136
|
)
|
|||
Prepaid insurance
|
280
|
|
|
37
|
|
|
440
|
|
|||
Inventory
|
(126
|
)
|
|
(199
|
)
|
|
(10
|
)
|
|||
Accounts payable
|
1,504
|
|
|
6,221
|
|
|
2,368
|
|
|||
Asset retirement obligation
|
(4,724
|
)
|
|
(679
|
)
|
|
—
|
|
|||
Customer deposits
|
(696
|
)
|
|
147
|
|
|
2,683
|
|
|||
Other current liabilities
|
14
|
|
|
(50
|
)
|
|
(94
|
)
|
|||
Deferred revenue
|
(11,443
|
)
|
|
(30,452
|
)
|
|
(15,908
|
)
|
|||
Net cash provided by operating activities
|
69,548
|
|
|
229,813
|
|
|
244,603
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Property, plant and equipment - capital expenditures *
|
7,578
|
|
|
(7,390
|
)
|
|
(8,594
|
)
|
|||
Net cash used by investing activities
|
7,578
|
|
|
(7,390
|
)
|
|
(8,594
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Distributions to members
|
(75,700
|
)
|
|
(212,110
|
)
|
|
(234,234
|
)
|
|||
Capital contributions
|
9,090
|
|
|
1,390
|
|
|
—
|
|
|||
Net cash used by financing activities
|
(66,610
|
)
|
|
(210,720
|
)
|
|
(234,234
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(4,640
|
)
|
|
11,703
|
|
|
1,775
|
|
|||
Cash and cash equivalents beginning of period
|
22,827
|
|
|
11,124
|
|
|
9,349
|
|
|||
Cash and cash equivalents end of period
|
$
|
18,187
|
|
|
$
|
22,827
|
|
|
$
|
11,124
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosures
|
|
|
|
|
|
||||||
Non cash additions to PP&E
|
$
|
—
|
|
|
$
|
5,300
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
* Increase to property, plant and equipment
|
$
|
(6,302
|
)
|
|
$
|
(8,300
|
)
|
|
$
|
(8,756
|
)
|
Changes in related accounts payable - affiliate, accounts payable, and construction retainage payable
|
(1,276
|
)
|
|
910
|
|
|
162
|
|
|||
Capital expenditures
|
$
|
(7,578
|
)
|
|
$
|
(7,390
|
)
|
|
$
|
(8,594
|
)
|
•
|
Asset retirement obligations
|
•
|
Depreciable asset lives
|
|
|
Year-to-Date December 31. 2018
|
||
|
|
(Thousands)
|
||
Balance at beginning of period (January 1, 2018)
|
|
$
|
800
|
|
Payments received and deferred
|
|
(435
|
)
|
|
Impairment of contract asset
|
|
(365
|
)
|
|
Balance at end of period (December 31, 2018)
|
|
$
|
—
|
|
|
|
Year-to-Date December 31. 2018
|
||
|
|
(Thousands)
|
||
Balance at beginning of period (January 1, 2018)
|
|
$
|
90,918
|
|
Payments received and deferred
|
|
9,422
|
|
|
Recognized in revenue
|
|
(20,813
|
)
|
|
Balance at end of period (December 31, 2018)
|
|
$
|
79,527
|
|
|
As reported
|
|
Adjustments resulting from ASC 606
|
|
Balance without adoption of ASC 606
|
||||||
|
|
|
|||||||||
ASSETS
|
(In thousands)
|
||||||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
18,187
|
|
|
$
|
—
|
|
|
$
|
18,187
|
|
Trade accounts receivable:
|
|
|
|
|
|
||||||
Affiliate
|
11,142
|
|
|
—
|
|
|
11,142
|
|
|||
Other
|
6,674
|
|
|
—
|
|
|
6,674
|
|
|||
Prepaid insurance
|
2,607
|
|
|
—
|
|
|
2,607
|
|
|||
Inventory
|
3,509
|
|
|
(186
|
)
|
|
3,323
|
|
|||
Total current assets
|
42,119
|
|
|
(186
|
)
|
|
41,933
|
|
|||
Property, plant and equipment, net
|
1,079,375
|
|
|
—
|
|
|
1,079,375
|
|
|||
Intangible assets, net
|
13,564
|
|
|
—
|
|
|
13,564
|
|
|||
Total assets
|
$
|
1,135,058
|
|
|
$
|
(186
|
)
|
|
$
|
1,134,872
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND MEMBERS’ CAPITAL
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts payable:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
344
|
|
|
$
|
—
|
|
|
$
|
344
|
|
Other
|
17,595
|
|
|
—
|
|
|
17,595
|
|
|||
Asset retirement obligations
|
505
|
|
|
—
|
|
|
505
|
|
|||
Deferred revenue
|
17,968
|
|
|
—
|
|
|
17,968
|
|
|||
Other current liabilities
|
224
|
|
|
—
|
|
|
224
|
|
|||
Total current liabilities
|
36,636
|
|
|
—
|
|
|
36,636
|
|
|||
Non Current liabilities
|
|
|
|
|
|
||||||
Asset retirement obligations
|
136,684
|
|
|
—
|
|
|
136,684
|
|
|||
Deferred revenue
|
61,559
|
|
|
(575
|
)
|
|
60,984
|
|
|||
Customer deposits
|
2,795
|
|
|
—
|
|
|
2,795
|
|
|||
Commitments and contingent liabilities (Note 6)
|
|
|
|
|
|
||||||
Members' capital
|
|
|
|
|
|
||||||
Members' capital accounts
|
896,055
|
|
|
389
|
|
|
896,444
|
|
|||
Other comprehensive income
|
1,329
|
|
|
—
|
|
|
1,329
|
|
|||
Total members’ capital
|
897,384
|
|
|
389
|
|
|
897,773
|
|
|||
Total liabilities and members’ capital
|
$
|
1,135,058
|
|
|
$
|
(186
|
)
|
|
$
|
1,134,872
|
|
|
As reported
|
|
Adjustments resulting from ASC 606
|
|
Balance without adoption of ASC 606
|
||||||
|
|
|
|||||||||
|
(In thousands)
|
||||||||||
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product sales:
|
|
|
|
|
|
||||||
Affiliate
|
$
|
46,699
|
|
|
$
|
123,116
|
|
|
$
|
169,815
|
|
Third-party
|
3,871
|
|
|
5,199
|
|
|
9,070
|
|
|||
Transportation services
|
22,675
|
|
|
—
|
|
|
22,675
|
|
|||
Gathering and processing services:
|
|
|
|
|
|
||||||
Affiliate
|
1,005
|
|
|
(508
|
)
|
|
497
|
|
|||
Third-party
|
69,504
|
|
|
—
|
|
|
69,504
|
|
|||
Commodity consideration
|
44,497
|
|
|
(44,497
|
)
|
|
—
|
|
|||
Other revenues
|
9,606
|
|
|
800
|
|
|
10,406
|
|
|||
Total revenues
|
197,857
|
|
|
84,110
|
|
|
281,967
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Product cost
|
|
|
|
|
|
||||||
Affiliate
|
—
|
|
|
9,151
|
|
|
9,151
|
|
|||
Third-party
|
47,819
|
|
|
90,586
|
|
|
138,405
|
|
|||
Proceesing commodity expense:
|
|
|
|
|
|
||||||
Affiliate
|
9,151
|
|
|
(9,151
|
)
|
|
—
|
|
|||
Third-party
|
6,894
|
|
|
(6,894
|
)
|
|
—
|
|
|||
Operating and maintenance expenses:
|
|
|
|
|
|
||||||
Affiliate
|
9,610
|
|
|
—
|
|
|
9,610
|
|
|||
Third-party
|
28,692
|
|
|
(147
|
)
|
|
28,545
|
|
|||
Depreciation, amortization and accretion
|
71,080
|
|
|
—
|
|
|
71,080
|
|
|||
Taxes other than income
|
2,932
|
|
|
—
|
|
|
2,932
|
|
|||
General and administrative expenses- affiliate
|
7,639
|
|
|
—
|
|
|
7,639
|
|
|||
Other (income) expense, net
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
|||
Total costs and expenses
|
183,793
|
|
|
83,545
|
|
|
267,338
|
|
|||
Operating income
|
14,064
|
|
|
565
|
|
|
14,629
|
|
|||
Interest income (expense)
|
(638
|
)
|
|
1,033
|
|
|
395
|
|
|||
Net income
|
13,426
|
|
|
1,598
|
|
|
15,024
|
|
|||
Net loss from derivative instruments, including amounts reclassified into earnings
|
(64
|
)
|
|
—
|
|
|
(64
|
)
|
|||
Comprehensive income
|
$
|
13,362
|
|
|
$
|
1,598
|
|
|
$
|
14,960
|
|
|
As reported
|
|
Adjustments resulting from ASC 606
|
|
Balance without adoption of ASC 606
|
||||||
|
(Thousands)
|
||||||||||
Balance December 31, 2017
|
$
|
949,423
|
|
|
$
|
—
|
|
|
$
|
949,423
|
|
Contributions
|
9,090
|
|
|
—
|
|
|
9,090
|
|
|||
Distributions
|
(75,700
|
)
|
|
—
|
|
|
(75,700
|
)
|
|||
Net income
|
13,426
|
|
|
1,598
|
|
|
15,024
|
|
|||
Cumulative effect adjustments - Adoption of ASU 606 (Note 3)
|
1,209
|
|
|
(1,209
|
)
|
|
—
|
|
|||
Other comprehensive loss
|
(64
|
)
|
|
—
|
|
|
(64
|
)
|
|||
Balance December 31, 2018
|
897,384
|
|
|
389
|
|
|
897,773
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
||||||||||
Capitalized labor
|
$
|
321
|
|
|
$
|
464
|
|
|
$
|
754
|
|
Capitalized project fee
|
203
|
|
|
179
|
|
|
249
|
|
|||
Total
|
$
|
524
|
|
|
$
|
643
|
|
|
$
|
1,003
|
|
|
|
|
|
|
Estimated
|
||||
|
Years Ended December 31,
|
|
Depreciable
|
||||||
|
2018
|
|
2017
|
|
Lives
|
||||
|
(In thousands)
|
|
|
||||||
Property, plant, and equipment:
|
|
|
|
|
|
||||
Pipelines
|
$
|
1,110,217
|
|
|
$
|
1,108,031
|
|
|
25 - 35 years
|
Plant and other equipment
|
547,654
|
|
|
532,502
|
|
|
25 - 35 years
|
||
Buildings
|
31,521
|
|
|
31,521
|
|
|
25 - 35 years
|
||
Land and land rights
|
8,673
|
|
|
8,544
|
|
|
0 - 35 years
|
||
Construction work in progress
|
1,565
|
|
|
4,012
|
|
|
|
||
Total property, plant, and equipment
|
1,699,630
|
|
|
1,684,610
|
|
|
|
||
Less accumulated depreciation
|
620,255
|
|
|
559,746
|
|
|
|
||
Net property, plant, and equipment
|
$
|
1,079,375
|
|
|
$
|
1,124,864
|
|
|
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Balance at January 1
|
$
|
122,080
|
|
|
$
|
123,440
|
|
Accretion expense
|
7,231
|
|
|
7,553
|
|
||
Estimate revisions*
|
12,602
|
|
|
(10,909
|
)
|
||
New obligation incurred
|
—
|
|
|
2,675
|
|
||
Settlements
|
(4,724
|
)
|
|
(679
|
)
|
||
Balance at December 31
|
$
|
137,189
|
|
|
$
|
122,080
|
|
|
(In thousands)
|
||
2019
|
$
|
115
|
|
2020
|
115
|
|
|
2021
|
115
|
|
|
2022
|
115
|
|
|
2023
|
120
|
|
|
Thereafter
|
478
|
|
|
Total
|
$
|
1,058
|
|
|
December 31,
|
December 31,
|
||||
|
2018
|
2017
|
||||
|
(millions)
|
|||||
ASSETS
|
|
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
16.6
|
|
$
|
17.5
|
|
Accounts receivable:
|
|
|
||||
Affiliates
|
40.0
|
|
25.0
|
|
||
Trade and other
|
15.1
|
|
9.2
|
|
||
Other current assets
|
0.1
|
|
0.2
|
|
||
Total current assets
|
71.8
|
|
51.9
|
|
||
Property, plant and equipment, net
|
1,815.6
|
|
1,547.0
|
|
||
Other long-term assets
|
6.5
|
|
3.5
|
|
||
Total assets
|
$
|
1,893.9
|
|
$
|
1,602.4
|
|
|
|
|
||||
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
||||
Current liabilities:
|
|
|
||||
Accounts payable:
|
|
|
||||
Trade and other
|
$
|
12.7
|
|
$
|
14.4
|
|
Affiliates
|
6.2
|
|
4.5
|
|
||
Deferred revenue - affiliates
|
—
|
|
3.5
|
|
||
Accrued taxes
|
14.8
|
|
8.4
|
|
||
Accrued capital expenditures
|
9.7
|
|
12.9
|
|
||
Accrued liabilities and other
|
6.0
|
|
8.6
|
|
||
Total current liabilities
|
49.4
|
|
52.3
|
|
||
Contract liabilities - affiliates
|
34.0
|
|
—
|
|
||
Other long-term liabilities
|
5.3
|
|
4.5
|
|
||
Total liabilities
|
88.7
|
|
56.8
|
|
||
Commitments and contingent liabilities
|
|
|
||||
Total members’ equity
|
1,805.2
|
|
1,545.6
|
|
||
Total liabilities and members’ equity
|
$
|
1,893.9
|
|
$
|
1,602.4
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||
|
(millions)
|
||||||||||
Operating revenues:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
$
|
389.0
|
|
|
$
|
246.4
|
|
|
$
|
182.5
|
|
Transportation
|
91.4
|
|
|
85.6
|
|
|
86.3
|
|
|||
Other revenue - affiliates
|
—
|
|
|
—
|
|
|
0.2
|
|
|||
Total operating revenues
|
480.4
|
|
|
332.0
|
|
|
269.0
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of transportation - affiliates
|
6.0
|
|
|
3.6
|
|
|
6.8
|
|
|||
Cost of transportation
|
3.0
|
|
|
3.0
|
|
|
3.8
|
|
|||
Operating and maintenance expense
|
68.8
|
|
|
42.9
|
|
|
35.9
|
|
|||
Depreciation expense
|
36.4
|
|
|
30.1
|
|
|
28.9
|
|
|||
General and administrative expense - affiliates
|
5.2
|
|
|
5.2
|
|
|
5.2
|
|
|||
General and administrative expense
|
2.6
|
|
|
2.5
|
|
|
2.5
|
|
|||
Total operating costs and expenses
|
122.0
|
|
|
87.3
|
|
|
83.1
|
|
|||
Operating income
|
358.4
|
|
|
244.7
|
|
|
185.9
|
|
|||
Interest income
|
1.0
|
|
|
0.4
|
|
|
0.1
|
|
|||
Income tax expense
|
(2.7
|
)
|
|
(1.7
|
)
|
|
(1.6
|
)
|
|||
Net income
|
$
|
356.7
|
|
|
$
|
243.4
|
|
|
$
|
184.4
|
|
|
|
DCP Sand Holding, LLC
|
|
DCP Pipeline Holding LLC
|
|
Phillips 66 Sand Hills LLC
|
|
Total
Members’
Equity
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance, January 1, 2016
|
|
$
|
431.3
|
|
|
$
|
431.4
|
|
|
$
|
431.4
|
|
|
$
|
1,294.1
|
|
Contributions from members
|
|
22.0
|
|
|
21.8
|
|
|
21.9
|
|
|
65.7
|
|
||||
Distributions to members
|
|
(69.6
|
)
|
|
(69.6
|
)
|
|
(69.6
|
)
|
|
(208.8
|
)
|
||||
Net income
|
|
61.5
|
|
|
61.4
|
|
|
61.5
|
|
|
184.4
|
|
||||
Balance, December 31, 2016
|
|
445.2
|
|
|
445.0
|
|
|
445.2
|
|
|
1,335.4
|
|
||||
Contributions from members
|
|
73.3
|
|
|
73.2
|
|
|
73.3
|
|
|
219.8
|
|
||||
Distributions to members
|
|
(84.3
|
)
|
|
(84.4
|
)
|
|
(84.3
|
)
|
|
(253.0
|
)
|
||||
Net income
|
|
81.1
|
|
|
81.2
|
|
|
81.1
|
|
|
243.4
|
|
||||
Balance, December 31, 2017
|
|
515.3
|
|
|
515.0
|
|
|
515.3
|
|
|
1,545.6
|
|
||||
Contributions from members
|
|
27.1
|
|
|
155.6
|
|
|
91.4
|
|
|
274.1
|
|
||||
Distributions to members
|
|
(24.4
|
)
|
|
(227.7
|
)
|
|
(126.1
|
)
|
|
(378.2
|
)
|
||||
Cumulative effect adjustment (see Note 2)
|
|
2.3
|
|
|
2.4
|
|
|
2.3
|
|
|
7.0
|
|
||||
Transfer of interest in DCP Sand Hills Pipeline, LLC (see Note 1)
|
|
(555.7
|
)
|
|
555.7
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
35.4
|
|
|
202.5
|
|
|
118.8
|
|
|
356.7
|
|
||||
Balance, December 31, 2018
|
|
$
|
—
|
|
|
$
|
1,203.5
|
|
|
$
|
601.7
|
|
|
$
|
1,805.2
|
|
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
Year Ended December 31, 2016
|
||||||
|
(millions)
|
||||||||
OPERATING ACTIVITIES:
|
|
|
|
||||||
Net income
|
$
|
356.7
|
|
$
|
243.4
|
|
$
|
184.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation expense
|
36.4
|
|
30.1
|
|
28.9
|
|
|||
Other
|
(1.9
|
)
|
0.7
|
|
1.0
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable
|
(21.2
|
)
|
(13.3
|
)
|
(0.9
|
)
|
|||
Accounts payable
|
(0.6
|
)
|
2.9
|
|
(1.7
|
)
|
|||
Deferred revenues
|
(3.5
|
)
|
(11.2
|
)
|
(19.0
|
)
|
|||
Other current assets
|
—
|
|
—
|
|
0.1
|
|
|||
Other current liabilities
|
9.0
|
|
1.0
|
|
5.9
|
|
|||
Other long-term assets
|
(2.9
|
)
|
0.4
|
|
(2.7
|
)
|
|||
Other long-term liabilities
|
2.0
|
|
(0.1
|
)
|
(0.6
|
)
|
|||
Net cash provided by operating activities
|
374.0
|
|
253.9
|
|
195.4
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
||||||
Capital expenditures
|
(270.8
|
)
|
(211.2
|
)
|
(57.3
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
—
|
|
0.1
|
|
|||
Net cash used in investing activities
|
(270.8
|
)
|
(211.2
|
)
|
(57.2
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
||||||
Contributions from members
|
274.1
|
|
219.8
|
|
65.7
|
|
|||
Distributions to members
|
(378.2
|
)
|
(253.0
|
)
|
(208.8
|
)
|
|||
Net cash used in financing activities
|
(104.1
|
)
|
(33.2
|
)
|
(143.1
|
)
|
|||
Net change in cash and cash equivalents
|
(0.9
|
)
|
9.5
|
|
(4.9
|
)
|
|||
Cash and cash equivalents, beginning of period
|
17.5
|
|
8.0
|
|
12.9
|
|
|||
Cash and cash equivalents, end of period
|
$
|
16.6
|
|
$
|
17.5
|
|
$
|
8.0
|
|
•
|
a significant adverse change in legal factors or business climate;
|
•
|
a current-period operating or cash flow loss combined with a history of operating or cash flow losses, or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset;
|
•
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset;
|
•
|
significant adverse changes in the extent or manner in which an asset is used, or in its physical condition;
|
•
|
a significant adverse change in the market value of an asset; or
|
•
|
a current expectation that, more likely than not, an asset will be sold or otherwise disposed of before the end of its estimated useful life.
|
|
|
Balance at December 31, 2017
|
|
Adjustments due to ASU 2014-09
|
|
Balance at January 1, 2018
|
||||||
|
|
(millions)
|
||||||||||
Balance sheet
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
|
$
|
1,547.0
|
|
|
$
|
43.7
|
|
|
$
|
1,590.7
|
|
|
|
|
|
|
|
|
||||||
Liabilities and members’ equity
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Contract liabilities
|
|
$
|
—
|
|
|
$
|
36.7
|
|
|
$
|
36.7
|
|
|
|
|
|
|
|
|
||||||
Members’ equity
|
|
$
|
1,545.6
|
|
|
$
|
7.0
|
|
|
$
|
1,552.6
|
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
|
||||||
|
|
(millions)
|
||||||||||
Statement of operations
|
|
|
|
|
|
|
||||||
Operating revenues
|
|
|
|
|
|
|
||||||
Transportation
|
|
$
|
480.4
|
|
|
$
|
477.5
|
|
|
$
|
2.9
|
|
|
|
|
|
|
|
|
||||||
Operating costs and expenses
|
|
|
|
|
|
|
||||||
Depreciation expense
|
|
$
|
36.4
|
|
|
$
|
35.3
|
|
|
$
|
1.1
|
|
|
|
December 31, 2018
|
||||||||||
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
|
||||||
|
|
(millions)
|
||||||||||
Balance sheet
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
|
$
|
1,815.6
|
|
|
$
|
1,771.0
|
|
|
$
|
44.6
|
|
|
|
|
|
|
|
|
||||||
Liabilities and members’ equity
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Contract liabilities
|
|
$
|
34.0
|
|
|
$
|
—
|
|
|
$
|
34.0
|
|
|
|
|
|
|
|
|
||||||
Members’ equity
|
|
$
|
1,805.2
|
|
|
$
|
1,810.4
|
|
|
$
|
(5.2
|
)
|
|
|
December 31,
2018
|
||
|
|
(millions)
|
||
|
|
|
||
Balance, beginning of period
|
|
$
|
36.7
|
|
Additions
|
|
2.0
|
|
|
Revenue recognized (a)
|
|
(2.9
|
)
|
|
Other (b)
|
|
(1.8
|
)
|
|
Balance, end of period
|
|
$
|
34.0
|
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
Year Ended December 31, 2016
|
||||||
|
|
(millions)
|
|||||||||
DCP Midstream and its affiliates:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
|
$
|
384.1
|
|
|
$
|
236.7
|
|
$
|
169.8
|
|
Cost of transportation - affiliates
|
|
$
|
6.0
|
|
|
$
|
3.6
|
|
$
|
6.8
|
|
General and administrative expense - affiliates
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
$
|
5.0
|
|
Southern Hills:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
|
$
|
3.3
|
|
|
$
|
3.2
|
|
$
|
3.2
|
|
Phillips 66:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
|
$
|
1.5
|
|
|
$
|
6.5
|
|
$
|
9.5
|
|
General and administrative expense - affiliates
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
$
|
0.2
|
|
Enbridge:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
|
$
|
0.1
|
|
|
$
|
—
|
|
$
|
—
|
|
|
|
December 31,
|
December 31,
|
||||
|
|
2018
|
2017
|
||||
|
|
(millions)
|
|||||
DCP Midstream and its affiliates:
|
|
|
|
||||
Accounts receivable
|
|
$
|
39.7
|
|
$
|
23.8
|
|
Accounts payable
|
|
$
|
6.2
|
|
$
|
4.5
|
|
Deferred revenue
|
|
$
|
—
|
|
$
|
3.5
|
|
Contract liabilities
|
|
$
|
34.0
|
|
$
|
—
|
|
Southern Hills:
|
|
|
|
||||
Accounts receivable
|
|
$
|
0.3
|
|
$
|
0.3
|
|
Phillips 66:
|
|
|
|
||||
Accounts receivable
|
|
$
|
—
|
|
$
|
0.9
|
|
Other current assets
|
|
$
|
0.1
|
|
$
|
—
|
|
|
Depreciable
|
|
December 31,
|
December 31,
|
||||
|
Life
|
|
2018
|
2017
|
||||
|
|
|
(millions)
|
|||||
|
|
|
|
|
||||
Transmission systems
|
20-50 Years
|
|
$
|
1,957.9
|
|
$
|
1,530.3
|
|
Processing facilities
|
35-60 Years
|
|
0.3
|
|
0.3
|
|
||
Other
|
3-30 Years
|
|
3.4
|
|
3.2
|
|
||
Land
|
|
|
0.4
|
|
0.2
|
|
||
Construction work in progress
|
|
|
20.8
|
|
140.9
|
|
||
Property, plant and equipment
|
|
|
1,982.8
|
|
1,674.9
|
|
||
Accumulated depreciation
|
|
|
(167.2
|
)
|
(127.9
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
1,815.6
|
|
$
|
1,547.0
|
|
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
Year Ended December 31, 2016
|
||||||
|
(millions)
|
||||||||
Non-cash investing and financing activities:
|
|
|
|
||||||
Property, plant and equipment acquired with accrued liabilities and accounts payable
|
$
|
18.2
|
|
$
|
20.6
|
|
$
|
15.1
|
|
Cumulative effect of applying ASU 2014-09 on property, plant and equipment
|
$
|
43.7
|
|
$
|
—
|
|
$
|
—
|
|
Cumulative effect of applying ASU 2014-09 on contract liabilities
|
$
|
(36.7
|
)
|
$
|
—
|
|
$
|
—
|
|
Cumulative effect of applying ASU 2014-09 on members’ equity
|
$
|
(7.0
|
)
|
$
|
—
|
|
$
|
—
|
|
Other non-cash changes in property, plant and equipment, net
|
$
|
0.4
|
|
$
|
0.1
|
|
$
|
(0.3
|
)
|
|
December 31,
|
December 31,
|
||||
|
2018
|
2017
|
||||
|
(millions)
|
|||||
ASSETS
|
|
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
5.7
|
|
$
|
5.7
|
|
Accounts receivable:
|
|
|
||||
Affiliates
|
14.0
|
|
12.4
|
|
||
Trade and other
|
1.1
|
|
0.4
|
|
||
Other current assets
|
0.1
|
|
0.2
|
|
||
Total current assets
|
20.9
|
|
18.7
|
|
||
Property, plant and equipment, net
|
908.3
|
|
902.1
|
|
||
Total assets
|
$
|
929.2
|
|
$
|
920.8
|
|
|
|
|
||||
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
||||
Current liabilities:
|
|
|
||||
Accounts payable:
|
|
|
||||
Trade and other
|
$
|
7.3
|
|
$
|
5.9
|
|
Affiliates
|
1.8
|
|
1.4
|
|
||
Accrued taxes
|
1.8
|
|
1.3
|
|
||
Accrued capital expenditures
|
4.5
|
|
0.1
|
|
||
Accrued liabilities and other
|
3.0
|
|
4.1
|
|
||
Total current liabilities
|
18.4
|
|
12.8
|
|
||
Contract liabilities - affiliates
|
14.5
|
|
—
|
|
||
Other long-term liabilities
|
1.9
|
|
1.7
|
|
||
Total liabilities
|
34.8
|
|
14.5
|
|
||
Commitments and contingent liabilities
|
|
|
||||
Total members’ equity
|
894.4
|
|
906.3
|
|
||
Total liabilities and members’ equity
|
$
|
929.2
|
|
$
|
920.8
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||
|
(millions)
|
||||||||||
Operating revenues:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
$
|
157.6
|
|
|
$
|
127.7
|
|
|
$
|
125.7
|
|
Transportation
|
8.8
|
|
|
5.2
|
|
|
4.9
|
|
|||
Other revenue - affiliates
|
0.8
|
|
|
—
|
|
|
—
|
|
|||
Total operating revenues
|
167.2
|
|
|
132.9
|
|
|
130.6
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of transportation - affiliates
|
3.3
|
|
|
3.3
|
|
|
3.5
|
|
|||
Operating and maintenance expense
|
29.3
|
|
|
27.0
|
|
|
26.7
|
|
|||
Depreciation expense
|
21.2
|
|
|
20.9
|
|
|
20.7
|
|
|||
General and administrative expense - affiliates
|
5.2
|
|
|
5.2
|
|
|
5.2
|
|
|||
General and administrative expense
|
2.1
|
|
|
1.8
|
|
|
1.6
|
|
|||
Total operating costs and expenses
|
61.1
|
|
|
58.2
|
|
|
57.7
|
|
|||
Operating income
|
106.1
|
|
|
74.7
|
|
|
72.9
|
|
|||
Interest income
|
0.3
|
|
|
0.1
|
|
|
—
|
|
|||
Income tax expense
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|||
Net income
|
$
|
106.1
|
|
|
$
|
74.5
|
|
|
$
|
72.7
|
|
|
|
DCP Southern Holding, LLC
|
|
DCP Pipeline Holding LLC
|
|
Phillips 66 Southern Hills LLC
|
|
Total
Members’
Equity
|
||||||||
|
|
(millions)
|
||||||||||||||
Balance, January 1, 2016
|
|
$
|
311.0
|
|
|
$
|
310.0
|
|
|
$
|
311.0
|
|
|
$
|
932.0
|
|
Contributions from members
|
|
1.5
|
|
|
1.6
|
|
|
1.5
|
|
|
4.6
|
|
||||
Distributions to members
|
|
(28.1
|
)
|
|
(28.0
|
)
|
|
(28.1
|
)
|
|
(84.2
|
)
|
||||
Net income
|
|
24.2
|
|
|
24.3
|
|
|
24.2
|
|
|
72.7
|
|
||||
Balance, December 31, 2016
|
|
308.6
|
|
|
307.9
|
|
|
308.6
|
|
|
925.1
|
|
||||
Distributions to members
|
|
(31.1
|
)
|
|
(31.1
|
)
|
|
(31.1
|
)
|
|
(93.3
|
)
|
||||
Net income
|
|
24.8
|
|
|
24.9
|
|
|
24.8
|
|
|
74.5
|
|
||||
Balance, December 31, 2017
|
|
302.3
|
|
|
301.7
|
|
|
302.3
|
|
|
906.3
|
|
||||
Contributions from members
|
|
—
|
|
|
2.0
|
|
|
1.0
|
|
|
3.0
|
|
||||
Distributions to members
|
|
(7.8
|
)
|
|
(75.2
|
)
|
|
(41.5
|
)
|
|
(124.5
|
)
|
||||
Cumulative effect adjustment (see Note 2)
|
|
1.2
|
|
|
1.1
|
|
|
1.2
|
|
|
3.5
|
|
||||
Transfer of interest in DCP Southern Hills Pipeline, LLC (see Note 1)
|
|
(305.7
|
)
|
|
305.7
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
10.0
|
|
|
60.6
|
|
|
35.5
|
|
|
106.1
|
|
||||
Balance, December 31, 2018
|
|
$
|
—
|
|
|
$
|
595.9
|
|
|
$
|
298.5
|
|
|
$
|
894.4
|
|
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
Year Ended December 31, 2016
|
||||||
|
(millions)
|
||||||||
OPERATING ACTIVITIES:
|
|
|
|
||||||
Net income
|
$
|
106.1
|
|
$
|
74.5
|
|
$
|
72.7
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation expense
|
21.2
|
|
20.9
|
|
20.7
|
|
|||
Other
|
(1.1
|
)
|
0.1
|
|
0.3
|
|
|||
Change in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable
|
(2.2
|
)
|
(1.5
|
)
|
(1.5
|
)
|
|||
Accounts payable
|
1.6
|
|
0.9
|
|
(0.7
|
)
|
|||
Deferred revenues - affiliates
|
—
|
|
—
|
|
(13.3
|
)
|
|||
Other current liabilities
|
1.4
|
|
0.5
|
|
1.0
|
|
|||
Other long-term liabilities
|
1.6
|
|
—
|
|
—
|
|
|||
Net cash provided by operating activities
|
128.6
|
|
95.4
|
|
79.2
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
||||||
Capital expenditures
|
(7.1
|
)
|
(0.4
|
)
|
(0.5
|
)
|
|||
Proceeds from sale of assets
|
—
|
|
0.2
|
|
0.1
|
|
|||
Net cash used in investing activities
|
(7.1
|
)
|
(0.2
|
)
|
(0.4
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
||||||
Distributions to members
|
(124.5
|
)
|
(93.3
|
)
|
(84.2
|
)
|
|||
Contributions from members
|
3.0
|
|
—
|
|
4.6
|
|
|||
Net cash used in financing activities
|
(121.5
|
)
|
(93.3
|
)
|
(79.6
|
)
|
|||
Net change in cash and cash equivalents
|
—
|
|
1.9
|
|
(0.8
|
)
|
|||
Cash and cash equivalents, beginning of period
|
5.7
|
|
3.8
|
|
4.6
|
|
|||
Cash and cash equivalents, end of period
|
$
|
5.7
|
|
$
|
5.7
|
|
$
|
3.8
|
|
•
|
a significant adverse change in legal factors or business climate;
|
•
|
a current-period operating or cash flow loss combined with a history of operating or cash flow losses, or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset;
|
•
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset;
|
•
|
significant adverse changes in the extent or manner in which an asset is used, or in its physical condition;
|
•
|
a significant adverse change in the market value of an asset; or
|
•
|
a current expectation that, more likely than not, an asset will be sold or otherwise disposed of before the end of its estimated useful life.
|
|
|
Balance at December 31, 2017
|
|
Adjustments due to ASU 2014-09
|
|
Balance at January 1, 2018
|
||||||
|
|
(millions)
|
||||||||||
Balance sheet
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
|
$
|
902.1
|
|
|
$
|
17.9
|
|
|
$
|
920.0
|
|
|
|
|
|
|
|
|
||||||
Liabilities and members’ equity
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Contract liabilities
|
|
$
|
—
|
|
|
$
|
14.4
|
|
|
$
|
14.4
|
|
|
|
|
|
|
|
|
||||||
Members’ equity
|
|
$
|
906.3
|
|
|
$
|
3.5
|
|
|
$
|
909.8
|
|
|
|
Year Ended December 31, 2018
|
||||||||||
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
|
||||||
|
|
(millions)
|
||||||||||
Statement of operations
|
|
|
|
|
|
|
||||||
Operating revenues
|
|
|
|
|
|
|
||||||
Transportation
|
|
$
|
166.4
|
|
|
$
|
164.6
|
|
|
$
|
1.8
|
|
|
|
|
|
|
|
|
||||||
Operating costs and expenses
|
|
|
|
|
|
|
||||||
Depreciation expense
|
|
$
|
21.2
|
|
|
$
|
20.8
|
|
|
$
|
0.4
|
|
|
|
December 31, 2018
|
||||||||||
|
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Effect of Change
|
||||||
|
|
(millions)
|
||||||||||
Balance sheet
|
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Property, plant and equipment, net
|
|
$
|
908.3
|
|
|
$
|
889.4
|
|
|
$
|
18.9
|
|
|
|
|
|
|
|
|
||||||
Liabilities and members’ equity
|
|
|
|
|
|
|
||||||
Liabilities
|
|
|
|
|
|
|
||||||
Contract liabilities
|
|
$
|
15.5
|
|
|
$
|
—
|
|
|
$
|
15.5
|
|
|
|
|
|
|
|
|
||||||
Members’ equity
|
|
$
|
894.4
|
|
|
$
|
896.5
|
|
|
$
|
(2.1
|
)
|
|
|
December 31,
2018
|
||
|
|
(millions)
|
||
|
|
|
||
Balance, beginning of period
|
|
$
|
14.4
|
|
Additions
|
|
2.9
|
|
|
Revenue recognized (a)
|
|
(1.8
|
)
|
|
Balance, end of period
|
|
15.5
|
|
|
Current contract liabilities
|
|
(1.0
|
)
|
|
Long-term contract liabilities
|
|
$
|
14.5
|
|
|
|
Year Ended December 31, 2018
|
|
Year Ended December 31, 2017
|
Year Ended December 31, 2016
|
||||||
|
|
(millions)
|
|||||||||
DCP Midstream and its affiliates:
|
|
|
|
|
|
||||||
Transportation - affiliates
|
|
$
|
157.6
|
|
|
$
|
127.7
|
|
$
|
125.7
|
|
Other revenue - affiliates
|
|
$
|
0.8
|
|
|
$
|
—
|
|
$
|
—
|
|
General and administrative expense - affiliates
|
|
$
|
5.0
|
|
|
$
|
5.0
|
|
$
|
5.0
|
|
Cost of transportation - affiliates
|
|
$
|
—
|
|
|
$
|
0.1
|
|
$
|
0.3
|
|
Sand Hills:
|
|
|
|
|
|
||||||
Cost of transportation - affiliates
|
|
$
|
3.3
|
|
|
$
|
3.2
|
|
$
|
3.2
|
|
Phillips 66:
|
|
|
|
|
|
||||||
General and administrative expense - affiliates
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
$
|
0.2
|
|
|
|
December 31,
|
December 31,
|
||||
|
|
2018
|
2017
|
||||
|
|
(millions)
|
|||||
DCP Midstream and its affiliates:
|
|
|
|
||||
Accounts receivable
|
|
$
|
14.0
|
|
$
|
12.4
|
|
Accounts payable
|
|
$
|
1.5
|
|
$
|
1.1
|
|
Contract liabilities
|
|
$
|
14.5
|
|
$
|
—
|
|
Sand Hills:
|
|
|
|
||||
Accounts payable
|
|
$
|
0.3
|
|
$
|
0.3
|
|
Phillips 66:
|
|
|
|
||||
Other current assets
|
|
$
|
0.1
|
|
$
|
—
|
|
|
Depreciable
|
|
December 31,
|
December 31,
|
||||
|
Life
|
|
2018
|
2017
|
||||
|
|
|
(millions)
|
|||||
|
|
|
|
|
||||
Transmission systems
|
20-50 Years
|
|
$
|
1,010.6
|
|
$
|
988.8
|
|
Other
|
3-30 Years
|
|
3.9
|
|
3.3
|
|
||
Land
|
|
|
2.0
|
|
2.0
|
|
||
Construction work in progress
|
|
|
6.7
|
|
0.2
|
|
||
Property, plant and equipment
|
|
|
1,023.2
|
|
994.3
|
|
||
Accumulated depreciation
|
|
|
(114.9
|
)
|
(92.2
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
908.3
|
|
$
|
902.1
|
|
|
Year Ended December 31, 2018
|
Year Ended December 31, 2017
|
Year Ended December 31, 2016
|
||||||
|
(millions)
|
||||||||
Non-cash investing and financing activities:
|
|
|
|
||||||
Property, plant and equipment acquired with accrued liabilities and accounts payable
|
$
|
4.6
|
|
$
|
0.1
|
|
$
|
—
|
|
Cumulative effect of applying ASU 2014-09 on property, plant and equipment
|
$
|
17.9
|
|
$
|
—
|
|
$
|
—
|
|
Cumulative effect of applying ASU 2014-09 on contract liabilities
|
$
|
(14.4
|
)
|
$
|
—
|
|
$
|
—
|
|
Cumulative effect of applying ASU 2014-09 on members’ equity
|
$
|
(3.5
|
)
|
$
|
—
|
|
$
|
—
|
|
Other non-cash changes in property, plant and equipment, net
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.3
|
)
|
Exhibit Number
|
|
|
|
Description
|
|
*#
|
|
||
|
*#
|
|
||
|
*#
|
|
||
|
*#
|
|
||
|
*#
|
|
||
|
*#
|
|
||
|
*#
|
|
||
|
*#
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*#
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*#
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*
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*#
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*#
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*#
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*
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*#
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Exhibit Number
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Description
|
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*#
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*#
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*#
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*
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*
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*#
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*
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*
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*
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*
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*
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*
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||
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*
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*
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*
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*
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Exhibit Number
|
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Description
|
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*
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||
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*
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||
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*
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||
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*
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*
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*
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*
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*
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*
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*
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*
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*
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Exhibit Number
|
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Description
|
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*
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||
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*
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||
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*
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*
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*+
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*+
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*+
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*+
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*+
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*+
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*+
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*+
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*+
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*+
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*+
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*+
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*
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*
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*
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*
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Exhibit Number
|
|
|
|
Description
|
|
|
|
||
|
|
|
||
|
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|
||
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||
101
|
|
|
|
Financial statements from the Annual Report on Form 10-K of DCP Midstream, LP for the year ended December 31, 2018, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Changes in Equity, and (vi) the Notes to the Consolidated Financial Statements.
|
|
DCP Midstream, LP
|
|||
|
|
|
||
|
By:
|
DCP Midstream GP, LP
its General Partner
|
||
|
|
|
||
|
By:
|
DCP Midstream GP, LLC
its General Partner
|
||
|
|
|
||
February 25, 2019
|
By:
|
/s/ Wouter T. van Kempen
|
||
|
|
Name:
|
Wouter T. van Kempen
|
|
|
|
Title:
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Signature
|
Title (Position with DCP Midstream GP, LLC)
|
Date
|
|
|
|
/s/ Wouter T. van Kempen
|
Chief Executive Officer, President,
Chairman of the Board and Director
|
February 25, 2019
|
Wouter T. van Kempen
|
(Principal Executive Officer)
|
|
|
|
|
/s/ Sean P. O'Brien
|
Group Vice President and Chief Financial Officer
|
February 25, 2019
|
Sean P. O'Brien
|
(Principal Financial Officer)
|
|
|
|
|
/s/ Richard A. Loving
|
Chief Accounting Officer
|
February 25, 2019
|
Richard A. Loving
|
(Principal Accounting Officer)
|
|
|
|
|
/s/ Allen C. Capps
|
Director
|
February 25, 2019
|
Allen C. Capps
|
|
|
|
|
|
/s/ Fred J. Fowler
|
Director
|
February 25, 2019
|
Fred J. Fowler
|
|
|
|
|
|
/s/ William F. Kimble
|
Director
|
February 25, 2019
|
William F. Kimble
|
|
|
|
|
|
/s/ Mark Maki
|
Director
|
February 25, 2019
|
Mark Maki
|
|
|
|
|
|
/s/ Brian Mandell
|
Director
|
February 25, 2019
|
Brian Mandell
|
|
|
|
|
|
/s/ Bill Waycaster
|
Director
|
February 25, 2019
|
Bill Waycaster
|
|
|
|
|
|
/s/ John Zuklic
|
Director
|
February 25, 2019
|
John Zuklic
|
|
|
Entity
|
Jurisdiction of Organization
|
Centana Intrastate Pipeline, LLC
|
Delaware
|
Cimarron River Pipeline, LLC
|
Delaware
|
Collbran Valley Gas Gathering, LLC (75%)
|
Colorado
|
Dauphin Island Gathering Partners
|
Texas
|
DCP Assets Holding GP, LLC
|
Delaware
|
DCP Assets Holding, LP
|
Delaware
|
DCP Black Lake Holdings, LP
|
Delaware
|
DCP Cheyenne Connector, LLC
|
Delaware
|
DCP Dauphin Island, LLC
|
Delaware
|
DCP East Texas Gathering, LLC
|
Delaware
|
DCP GCX Pipeline LLC
|
Delaware
|
DCP Grands Lacs LLC
|
Michigan
|
DCP Guadalupe Pipeline, LLC
|
Delaware
|
DCP Hinshaw Pipeline, LLC
|
Delaware
|
DCP Intrastate Network, LLC
|
Delaware
|
DCP Litchfield LLC
|
Michigan
|
DCP LP Holdings, LLC
|
Delaware
|
DCP Lucerne 2 Plant LLC
|
Delaware
|
DCP Michigan Holdings LLC
|
Delaware
|
DCP Michigan Pipeline & Processing LLC
|
Michigan
|
DCP Midstream Holding, LLC
|
Delaware
|
DCP Midstream Marketing, LLC
|
Delaware
|
DCP Midstream Operating, LLC
|
Delaware
|
DCP Midstream Operating, LP
|
Delaware
|
DCP Mobile Bay Processing, LLC
|
Delaware
|
DCP New Mexico Development, LLC
|
Delaware
|
DCP NGL Operating, LLC
|
Delaware
|
DCP NGL Services, LLC
|
Delaware
|
DCP Operating Company, LP
|
Delaware
|
DCP Partners Colorado LLC
|
Delaware
|
DCP Partners Logistics, LLC
|
Delaware
|
DCP Partners MB I LLC
|
Delaware
|
DCP Partners MB II LLC
|
Delaware
|
DCP Pipeline Holding LLC
|
Delaware
|
DCP Raptor Pipeline, LLC
|
Delaware
|
DCP Receivables LLC
|
Delaware
|
DCP Saginaw Bay Lateral LLC
|
Delaware
|
DCP South Central Texas LLC
|
Delaware
|
DCP Sweeny LLC
|
Delaware
|
DCP Tolar Gas Service, LLC
|
Delaware
|
DCP Tolar Pipeline, LLC
|
Delaware
|
DCP Wattenberg Pipeline LLC
|
Delaware
|
DCP Wyoming Assets LLC
|
Delaware
|
DCP Zia Plant LLC
|
Delaware
|
EasTrans, LLC
|
Delaware
|
Fuels Cotton Valley Gathering, LLC
|
Delaware
|
Gas Supply Resources Holdings, LLC
|
Delaware
|
Gas Supply Resources LLC
|
Texas
|
GSR Northeast Terminals LLC
|
Delaware
|
Jackson Pipeline Company (75%)
|
Michigan
|
Marysville Hydrocarbons Holdings, LLC
|
Delaware
|
Marysville Hydrocarbons LLC
|
Delaware
|
National Helium, LLC
|
Delaware
|
Rock Creek Midstream LLC
|
Delaware
|
Saginaw Bay Lateral Michigan Limited Partnership (46%)
|
Michigan
|
Wilbreeze Pipeline, LLC
|
Delaware
|
•
|
Registration Statement Nos. 333-142271 and 333-211905 on Form S-8 of DCP Midstream, LP, and
|
•
|
Registration Statement Nos. 333-221419, 333-219927, and 333-182642 on Form S-3 of DCP Midstream, LP.
|
1.
|
Registration Statement (Form S-3 No. 333-182642) of DCP Midstream, LP (the “Partnership”),
|
2.
|
Registration Statement (Form S-3 No. 333-219927) of the Partnership,
|
3.
|
Registration Statement (Form S-3 No. 333-221419) of the Partnership,
|
4.
|
Registration Statement (Form S-8 No. 333-142271) pertaining to the Partnership’s Long-Term Incentive Plan, and
|
5.
|
Registration Statement (Form S-8 No. 333-211905) pertaining to the Partnership’s Long-Term Incentive Plan;
|
1.
|
I have reviewed this annual report on Form 10-K of DCP Midstream, LP for the year ended
December 31, 2018
;
|
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 annual report on Form 10-K of DCP Midstream, LP for the year ended
December 31, 2018
;
|
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 annual report on Form 10-K of the Partnership for the year ended
December 31, 2018
, 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)
|
February 25, 2019
|
(a)
|
the annual report on Form 10-K of the Partnership for the year ended
December 31, 2018
, 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)
|
February 25, 2019
|