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DCP Midstream Partners, LP (DPM) today announced its 2016 financial plan and business outlook.

DCP Midstream Partners, LP
($Millions, except per unit and ratio amounts) 2016
Adjusted EBITDA(1) target range $565-595
Distributable cash flow(1) target range $465-495
Annual distribution target $3.12/unit
Distribution coverage ratio ~1.0x
Growth capital expenditures range $75-150
Maintenance capital expenditures range $30-45

(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.

Key 2016e assumptions:

  • Distribution held flat to 2015 at $3.12/unit annualized, resulting in approximately 1.0 times coverage ratio
  • Bank facility debt-to-EBITDA ratio <4.0 times
  • No public debt or equity offerings required in 2016
  • Fee-based margins increasing to 75 percent in 2016 from 60 percent in 2015
  • Fee-based growth largely offsetting roll-off of hedges after Q1 2016
  • Total capital forecast of ~$105-195 million with minimal committed growth capital
  • Overall volumes down slightly to 2015, with volume growth in DJ basin and at Discovery offset by declines in the Eagle Ford and other lower margin areas
  • Slight volume growth in total NGL pipeline throughput driven by growth on Sand Hills, Southern Hills and Front Range NGL pipelines
  • 2016 annual commodity prices and sensitivities:
Assumption Price

NGLs ($/Gal) $ 0.42 +/- $0.01 ~$1.0
Natural Gas ($/Mmbtu) $ 2.50 +/- $0.10 ~$1.0
Crude Oil ($/Bbl) $ 45 +/- $1.00 ~ neutral

Wouter van Kempen, chairman and CEO of DCP Midstream Partners, will deliver remarks regarding the Partnership’s 2016 financial plan and business outlook during Spectra Energy Corp’s analyst/investor meeting today. The presentation is scheduled to begin at 8:30 a.m. ET and will be webcast via the Investors section of the Spectra Energy website. Interested parties can also call into the discussion by dialing (888) 252-3715 in the United States or (706) 634-8942 internationally. The conference ID is 7888893 or “Spectra Energy 2016 Plan.” A replay of the call will be available until 5 p.m. ET, May 3, 2016, by dialing (800) 585-8367, and using the above conference ID. The international replay number is (404) 537-3406. A replay and transcript also will be available via the Investors sections of the Spectra Energy website at The presentation slides and transcript in PDF format will also be available by accessing the Investors section of theDCP Midstream Partners website at


This press release and the accompanying financial schedules include the following non-GAAP financial measures: distributable cash flow and adjusted EBITDA. The accompanying schedules provide reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures. The Partnership’s non-GAAP financial measures should not be considered in isolation or as an alternative to its financial measures presented in accordance with GAAP, including operating revenues, net income or loss attributable to partners, net cash provided by or used in operating activities or any other measure of liquidity or financial performance presented in accordance with GAAP as a measure of operating performance, liquidity or ability to service debt obligations and make cash distributions to unitholders. The non-GAAP financial measures presented by us may not be comparable to similarly titled measures of other companies because they may not calculate their measures in the same manner.

We define distributable cash flow as net cash provided by or used in operating activities, less maintenance capital expenditures, net of reimbursable projects, plus or minus adjustments for non-cash mark-to-market of derivative instruments, proceeds from divestiture of assets, net income attributable to noncontrolling interests net of depreciation and income tax, net changes in operating assets and liabilities, and other adjustments to reconcile net cash provided by or used in operating activities. Historical distributable cash flow is calculated excluding the impact of retrospective adjustments related to any acquisitions presented under the pooling method. Maintenance capital expenditures are cash expenditures made to maintain the Partnership’s cash flows, operating capacity 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. Non-cash mark-to-market of derivative instruments is considered to be non-cash for the purpose of computing distributable cash flow because settlement will not occur until future periods, and will be impacted by future changes in commodity prices and interest rates. Distributable cash flow is used as a supplemental liquidity and performance measure by the Partnership’s management and by external users of its financial statements, such as investors, commercial banks, research analysts and others, to assess the Partnership’s ability to make cash distributions to its unitholders and its general partner.

We define adjusted EBITDA as net income or loss attributable to partners less interest income, noncontrolling interest in depreciation and income tax expense, non-cash commodity derivative gains, plus interest expense, income tax expense, depreciation and amortization expense, non-cash commodity derivative losses, and certain other non-cash charges. The commodity derivative non-cash losses and gains result from the marking to market of certain financial derivatives used by us for risk management purposes that we do not account for under the hedge method of accounting. These non-cash losses or gains may or may not be realized in future periods when the derivative contracts are settled, due to fluctuating commodity prices. We define adjusted segment EBITDA for each segment as segment net income or loss attributable to partners plus or minus adjustments for non-cash mark-to-market of commodity derivative instruments for that segment, plus depreciation and amortization expense, and certain other non-cash charges for that segment, adjusted for any noncontrolling interest portion of depreciation, amortization and income tax expense for that segment. The Partnership’s adjusted EBITDA equals the sum of the adjusted segment EBITDA reported for each of its segments, plus general and administrative expense.

Adjusted EBITDA is used as a supplemental liquidity and performance measure by the Partnership’s management and by external users of its financial statements, such as investors, commercial banks, research analysts and others to assess:

  • financial performance of the Partnership’s assets without regard to financing methods, capital structure or historical cost basis;
  • the Partnership’s 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;
  • performance of the Partnership’s business excluding non-cash commodity derivative gains or losses; and
  • in the case of Adjusted EBITDA, the ability of the Partnership’s assets to generate cash sufficient to pay interest costs, support its indebtedness, make cash distributions to its unitholders and general partner, and finance maintenance capital expenditures.


DCP Midstream Partners, LP (DPM) is a midstream master limited partnership engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling NGLs and recovering and selling condensate; and transporting, storing and selling propane in wholesale markets. DCP Midstream Partners, LP is managed by its general partner, DCP Midstream GP, LP, which in turn is managed by its general partner, DCP Midstream GP, LLC, which is 100 percent owned by DCP Midstream, LLC, a joint venture between Phillips 66 and Spectra Energy Corp. For more information, visit the DCP Midstream Partners, LP website at