producing areas including Colorado, Louisiana, Michigan, Oklahoma, Texas, Wyoming and the Gulf of
Mexico. These natural gas gathering systems provide a variety of services to our customers including
natural gas gathering, compression, treating, processing, fractionation, storage and transportation services.
The strategic location of our assets, coupled with their geographic diversity, presents us with continuing
opportunities to provide competitive natural gas services to our customers and attract new natural gas
production. Our NGL Logistics segment has strategically located NGL transportation pipelines in
Colorado, Kansas, Louisiana and Texas, which are major NGL producing regions, and an NGL storage
facility in Michigan. Our NGL pipelines connect to various natural gas processing plants and transport the
NGLs to large fractionation facilities, a petrochemical plant or an underground NGL storage facility along
the Gulf Coast. Our NGL storage facility is strategically adjacent to the Sarnia, Canada refinery and
petrochemical corridor. Our Wholesale Propane Logistics Segment has terminals in the mid-Atlantic,
northeastern and upper midwestern states that are strategically located to receive and deliver propane to
some of the largest demand areas for propane in the United States.
Stable cash flows.
Our operations consist of a favorable mix of fee-based and commodity-based
services, which together with our commodity hedging program, generate relatively stable cash flows.
While certain of our gathering and processing contracts subject us to commodity price risk, we have
mitigated a portion of our currently anticipated natural gas, NGL and condensate commodity price risk
associated with the equity volumes from our gathering and processing operations through 2016 with fixed
price commodity swaps and collar arrangements.
Integrated package of midstream services.
We provide an integrated package of services to natural
gas producers, including gathering, compressing, treating, processing, transporting, storing and selling
natural gas, as well as producing, fractionating, transporting, storing and selling NGLs and condensate. We
believe our ability to provide all of these services gives us an advantage in competing for new supplies of
natural gas because we can provide substantially all services that producers, marketers and others require
to move natural gas and NGLs from wellhead to market on a cost-effective basis.
Comprehensive propane logistics systems.
We have multiple propane supply sources and terminal
locations for wholesale propane delivery. Our supply agreement with Spectra Energy is effective through
April 30, 2012. We are currently assessing several available options for future supply sources. We believe
our diversity of supply sources and logistics capabilities along with our propane storage assets and services
allow us to provide our customers with reliable supplies of propane during periods of tight supply. These
capabilities also allow us to moderate the effects of commodity price volatility and reduce significant
fluctuations in our sales volumes.
Experienced management team.
Our senior management team and board of directors include some
of the most senior officers of DCP Midstream, LLC and former senior officers from other energy
companies who have extensive experience in the midstream industry. We believe our management team
has a proven track record of enhancing value through the acquisition, optimization and integration of
midstream assets.
Midstream Natural Gas Industry Overview
General
The midstream natural gas industry is the link between exploration and production of natural gas and the
delivery of its components to end-use markets, and consists of the gathering, compression, treating, processing,
transporting, storing and selling of natural gas, and the production, fractionating, transporting, storing and
selling of NGLs.
5