DCP Midstream Partners Reports Third Quarter 2012 Results

DCP Midstream Partners, LP (NYSE: DPM), or the Partnership, today reported financial results for the three and nine months ended September 30, 2012. The table below reflects results for the three and nine months ended September 30, 2012 and 2011 on a consolidated basis and results for the 2011 periods as originally reported.

THIRD QUARTER AND YEAR TO DATE SUMMARY RESULTS
       
Three Months Ended Nine Months Ended
September 30, (2) (3) September 30, (2) (3)
  2012         2011    

As Reported in 2011
      2012       2011    

As Reported in 2011
(Unaudited)
(Millions, except per unit amounts)
               
Net income attributable to partners $ 1.3 $ 68.5 $ 66.3 $ 103.7 $ 116.2 $ 101.9
Net (loss) income per limited partner unit - basic $ (0.16 ) $ 1.35 $ 1.35 $ 1.37 $ 1.93 $ 1.93
Net (loss) income per limited partner unit - diluted $ (0.16 ) $ 1.35 $ 1.35 $ 1.36 $ 1.93 $ 1.93
Adjusted EBITDA (1) $ 47.1 $ 38.9 $ 32.3 $ 165.7 $ 157.8 $ 129.6
Adjusted net income attributable to partners (1) $ 23.8 $ 8.1 $ 7.0 $ 84.8 $ 68.9 $ 55.5
Adjusted net income per limited partner unit (1) - basic and diluted $ 0.22 $ 0.02 $ 0.02 $ 1.01 $ 0.87 $ 0.87
Distributable cash flow (1) $ 35.4 ** $ 27.6 $ 112.3 ** $ 113.0
 
(1)   Denotes a financial measure not presented in accordance with U.S. generally accepted accounting principles, or GAAP. Each such non-GAAP financial measure is defined below under “Non-GAAP Financial Information”, and each is reconciled to its most directly comparable GAAP financial measures under “Reconciliation of Non-GAAP Financial Measures” below.
(2) In March 2012, the Partnership completed the contribution from DCP Midstream, LLC (“DCP Midstream”) of the remaining 66.7 percent interest in DCP Southeast Texas Holdings, GP, in a transaction between entities under common control. This transfer of net assets between entities under common control was accounted for as if the transaction had occurred at the beginning of the period, and prior years were retrospectively adjusted to furnish comparative information similar to the pooling method. In addition, results are presented as originally reported in 2011 for comparative purposes.
(3) We recognized lower of cost or market adjustments during the three and nine months ended September 30, 2012 and 2011. Includes non-cash commodity derivative mark-to-market of $(22.9) million and $61.1 million for the three months ended September 30, 2012 and 2011, respectively, and $19.3 million and $49.0 million for the nine months ended September 30, 2012 and 2011, respectively.
** Distributable cash flow has not been calculated under the pooling method.
 

DROP DOWN OF A ONE-THIRD INTEREST IN THE EAGLE FORD JOINT VENTURE

Effective November 1, 2012, we formed a joint venture with DCP Midstream, LLC (“DCP Midstream”) and completed a drop down of a one-third interest in the Eagle Ford system. The $438.3 million transaction, which is subject to certain customary working capital and other purchase price adjustments, was financed at closing through a $343.5 million, 2-year term loan and the issuance of 1,912,663 DPM common units to DCP Midstream. In conjunction with the transaction, DCP Midstream provided a three-year direct commodity price hedge for the Partnership’s one-third interest.

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