DCP SOUTHEAST TEXAS HOLDINGS, GP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Years Ended December 31, 2011, 2010 and 2009
The following table presents the financial instruments carried at fair value as of December 31, 2011 and
2010, by consolidated balance sheet caption and by valuation hierarchy as described above:
December 31, 2011
December 31, 2010
Level 1 Level 2 Level 3
Total
Carrying
Value Level 1 Level 2 Level 3
Total
Carrying
Value
(Millions)
Current assets:
Commodity derivatives (a) . . . . . . . $— $ — $— $ — $— $ 12.6 $ — $ 12.6
Long-term assets:
Commodity derivatives (b) . . . . . . . $— $ — $— $ — $— $ 0.5 $ — $ 0.5
Current liabilities:
Commodity derivatives (c) . . . . . . . $— $ — $— $ — $— $(13.6) $ — $(13.6)
Acquisition related contingent
consideration (d) . . . . . . . . . . . . . $— $ — $— $ — $— $ — $(2.1) $ (2.1)
Long-term liabilities:
Commodity derivatives (e) . . . . . . . $— $(2.6) $— $(2.6) $— $ (0.2) $ — $ (0.2)
(a) Included in current unrealized gains on derivative instruments in our consolidated balance sheets.
(b) Included in long-term unrealized gains on derivative instruments in our consolidated balance sheets.
(c) Included in current unrealized losses on derivative instruments in our consolidated balance sheets.
(d) Included in other current liabilities in our consolidated balance sheets.
(e) Included in long-term unrealized losses on derivative instruments in our consolidated balance sheets.
Changes in Level 3 Fair Value Measurements
The table below illustrates a rollforward of the amounts included in our consolidated balance sheets for
derivative financial instruments that we have classified within Level 3. The determination to classify a financial
instrument within Level 3 is based upon the significance of the unobservable factors used in determining the
overall fair value of the instrument. Since financial instruments classified as Level 3 typically include a
combination of observable components (that is, components that are actively quoted and can be validated to
external sources) and unobservable components, the gains and losses in the table below may include changes in
fair value due in part to observable market factors, or changes to our assumptions on the unobservable
components. Depending upon the information readily observable in the market, and/or the use of unobservable
inputs, which are significant to the overall valuation, the classification of any individual financial instrument
may differ from one measurement date to the next. In the event that there is a movement to/from the
classification of an instrument as Level 3, we have reflected such items in the table below within the “Transfers
into Level 3” and “Transfers out of Level 3” captions.
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