assets are part of a larger strategic investment for our partnership and DCP Midstream, LLC. (2) We
pursue organic build projects in which we provide the capital to construct all or part of an asset within
DCP Midstream, LLC’s footprint. Size of the capital investment, its cash flow, contract profile and capital
availability are key determinants for selection of an organic build project. (3) We pursue accretive
acquisition/dropdown opportunities from DCP Midstream, LLC and through the formation of additional
joint ventures with DCP Midstream, LLC. We believe there will continue to be significant opportunities as
DCP Midstream, LLC continues to build its infrastructure.
Given the significant level of growth opportunities currently in DCP Midstream, LLC’s footprint, we
would expect relatively more emphasis on our co-investment objective over the next few years.
Acquire: pursue strategic and accretive third party acquisitions.
We pursue strategic and accretive
third party acquisition opportunities within the midstream energy industry, both in new and existing lines
of business, and geographic areas of operation. We believe there will continue to be acquisition
opportunities as energy companies continue to divest their midstream assets.
Build: capitalize on organic expansion opportunities.
We continually evaluate economically
attractive organic expansion opportunities to construct midstream systems in new or existing operating
areas. For example, we believe there are opportunities to expand several of our gas gathering systems to
attach increased volumes of natural gas produced in the areas of our operations. We believe there are
opportunities to continue to expand our NGL Logistics and Wholesale Propane Logistics businesses.
Our Competitive Strengths
We believe that we are well positioned to execute our business strategies and achieve one of our primary
business objectives of increasing our cash distribution per unit because of the following competitive strengths:
Affiliation with DCP Midstream, LLC and its parents.
Our relationship with DCP Midstream, LLC
and its parents, Spectra Energy and ConocoPhillips, should continue to provide us with significant
business opportunities. DCP Midstream, LLC is one of the largest gatherers of natural gas (based on
wellhead volume), and one of the largest producers and marketers of NGLs in North America. This
relationship also provides us with access to a significant pool of management talent. We believe our strong
relationships throughout the energy industry, including with major producers of natural gas and NGLs in
the United States, will help facilitate the implementation of our strategies. Additionally, we believe DCP
Midstream, LLC, which operates most of our assets on our behalf, has established a reputation in the
midstream business as a reliable and cost-effective supplier of services to our customers, and has a track
record of safe, efficient and environmentally responsible operation of our facilities.
We believe we are an important growth vehicle and a key source of funding for DCP Midstream, LLC
to pursue the acquisition, expansion and organic construction of midstream natural gas, wholesale propane,
NGL and other complementary midstream energy businesses and assets. DCP Midstream, LLC has also
provided us with growth opportunities through acquisitions directly from it and joint ventures with it. We
believe we will have future opportunities to make additional acquisitions with or directly from DCP
Midstream, LLC as well as form joint ventures with it; however, we cannot say with any certainty which,
if any, of these opportunities may be made available to us, or if we will choose to pursue any such
opportunity. In addition, through our relationship with DCP Midstream, LLC and its parents, we believe
we have strong commercial relationships throughout the energy industry and access to DCP Midstream,
LLC’s broad operational, commercial, technical, risk management and administrative infrastructure.
DCP Midstream, LLC has a significant interest in us through its approximately 1% general partner
interest in us, its ownership of our incentive distribution rights and an approximately 26% limited partner
interest in us. We have entered into an omnibus agreement, or the Omnibus Agreement, with DCP
Midstream, LLC and some of its affiliates that governs our relationship among them regarding the
operation of most of our assets, as well as certain reimbursement and other matters.
Strategically located assets.
Each of our business segments has assets that are strategically located
in areas with the potential for increasing each of our business segments’ volume throughput and cash flow
generation. Our Natural Gas Services segment has a strategic presence in several active natural gas
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