DISCOVERY PRODUCER SERVICES, LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
July 1, 2012. By Order dated June 24, 2011 the filing was approved. The approval was subject to a 30-day
protest period, which passed without protest. During 2011, $1.2 million of L&U was retained from the shippers.
The system loss for 2011 was $24,000. These amounts were both recognized in operating income. DGT
recognized a net system loss of $2.6 million in 2010. At December 31, 2009, accrued liabilities on the
Consolidated Balance Sheet include an unrecognized net system gain of $211 thousand.
On November 15, 2011, DGT filed with the FERC its annual Hurricane Mitigation and Reliability
Enhancement (HMRE) surcharge adjustment. The filing proposed to increase the HMRE surcharge from
$0.0008 per Dt to $0.0040 per Dt, effective January 1, 2012. The FERC approved the filing on December 21,
2011.
Environmental Matters.
We are subject to extensive federal, state, and local environmental laws and
regulations which affect our operations related to the construction and operation of our facilities. Appropriate
governmental authorities may enforce these laws and regulations with a variety of civil and criminal
enforcement measures, including monetary penalties, assessment and remediation requirements and injunctions
as to future compliance. We have not been notified and are not currently aware of any material noncompliance
under the various environmental laws and regulations.
Other.
We are party to various other claims, legal actions and complaints arising in the ordinary course of
business. We estimate that for all matters for which we are able to reasonably estimate a range of loss our
aggregate reasonably possible losses beyond amounts accrued for all of our contingent liabilities are immaterial
to our expected future annual results of operations, liquidity, and financial position. These calculations have
been made without consideration of any potential recovery from third parties. There are no significant matters
for which we are unable to reasonably estimate a range of possible loss.
Note 8. Subsequent Events
On January 11, 2012 we entered into forward contracts for the purchase of 51,820,738 Euros to reduce our
foreign currency risk associated with Euro-denominated payments under the Keathley Canyon Connector
construction contract.
On February 3, 2012 we distributed $2.5 million to the partners.
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