we entered into agreements with DCP Midstream, LLC whereby DCP Midstream, LLC will reimburse East
Texas for certain expenditures on East Texas capital projects. These reimbursements are for certain capital
projects which have commenced within three years from the respective acquisition dates. DCP Midstream, LLC
made capital contributions to East Texas for capital projects of $19.0 million and $13.8 million for the years
ended December 31, 2011 and 2010, respectively.
On September 16, 2010, we entered into an agreement with DCP Midstream, LLC to sell certain surplus
equipment at Collbran, part of our Natural Gas Services segment, with a net book value of $6.2 million for net
proceeds of $3.6 million. The surplus equipment is the result of a consolidation of operations at our Anderson
Gulch plant in the Piceance Basin. The net proceeds of $3.6 million were distributed 75% to us and 25% to the
noncontrolling interest in Collbran, based upon proportionate ownership, during the year ended December 31,
2010. The sale was completed when title to the surplus equipment passed to DCP Midstream, LLC in March
2011. We have recognized a distribution of $2.6 million for year ended December 31, 2011 to DCP Midstream,
LLC in our consolidated statements of changes in equity representing the difference between the net book value
and the proceeds received for the surplus equipment.
In our Natural Gas Services segment, we sell NGLs processed at certain of our plants, and sell condensate
removed from the gas gathering systems that deliver to certain of our systems under contracts to a subsidiary of
DCP Midstream, LLC equal to that subsidiary’s net weighted-average sales price, adjusted for transportation,
processing and other charges from the tailgate of the respective asset.
In our NGL Logistics segment, we also have a contractual arrangement with a subsidiary of DCP
Midstream, LLC that provides that DCP Midstream, LLC will pay us to transport NGLs over our Seabreeze and
Wilbreeze pipelines, pursuant to fee-based rates that will be applied to the volumes transported. DCP
Midstream, LLC is the sole shipper on these pipelines under the transportation agreements. We generally report
revenues associated with these activities in the consolidated statements of operations as transportation,
processing and other to affiliates.
In conjunction with our acquisition of the Wattenberg pipeline, which is part of our NGL Logistics
segment, we signed a transportation agreement with DCP Midstream, LLC pursuant to fee-based rates that will
be applied to the volumes transported, which was effective through December 31, 2010. Effective January 1,
2011, we entered into a 10-year dedication and transportation agreement with a subsidiary of DCP Midstream,
LLC whereby certain NGL volumes produced at several of DCP Midstream, LLC’s processing facilities are
dedicated for transportation on the Wattenberg pipeline. We collect fee-based transportation revenues under our
tariff. We generally report revenues associated with these activities in the consolidated statements of operations
as transportation, processing and other to affiliates.
In conjunction with our acquisition of our DJ Basin NGL Fractionators in our NGL Logistics segment, we
pay a fee to DCP Midstream, LLC to operate our DJ Basin NGL Fractionators and receive fees for the
processing of DCP Midstream, LLC’s committed NGLs produced by them in Weld County at our DJ Basin
NGL Fractionators under agreements that are effective through March 2018. During the year ended
December 31, 2011 we incurred fees $0.6 million, which are included in operating and maintenance expense in
the consolidated statements of operations.
DCP Midstream, LLC has issued parental guarantees, totaling $70.0 million as of December 31, 2011, in
favor of certain counterparties to our commodity derivative instruments to mitigate a portion of our collateral
requirements with those counterparties. We pay DCP Midstream, LLC interest of 0.5% per annum on these
outstanding guarantees.
DCP Midstream, LLC has issued parental guarantees for its 49.9% limited liability company interest in
East Texas, totaling $6.0 million as of December 31, 2011, in favor of certain counterparties to processing and
transportation agreements at East Texas. Concurrently, we issued similar guarantees for our 50.1% interest. On
January 3, 2012, we completed the acquisition of the remaining 49.9% interest in East Texas from DCP
Midstream.
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