Our significant indebtedness and the restrictions in our debt agreements may adversely affect our future
financial and operating flexibility.
As of December 31, 2011, our consolidated indebtedness was $746.8 million. Our significant indebtedness
and the additional debt we may incur in the future for potential acquisitions may adversely affect our liquidity
and therefore our ability to make interest payments on our notes.
Debt service obligations and restrictive covenants in our credit facility and the indenture governing our
notes may adversely affect our ability to finance future operations, pursue acquisitions and fund other capital
needs as well as our ability to make cash distributions unitholders. In addition, this leverage may make our
results of operations more susceptible to adverse economic or operating conditions by limiting our flexibility in
planning for, or reacting to, changes in our business and the industry in which we operate and may place us at a
competitive disadvantage as compared to our competitors that have less debt.
If we incur any additional indebtedness, including trade payables, that ranks equally with our notes, the
holders of that debt will be entitled to share ratably with the holders of our notes in any proceeds distributed in
connection with any insolvency, liquidation, reorganization, dissolution or other winding up of us or DCP
Operating. This may have the effect of reducing the amount of proceeds paid to noteholders. If new debt is
added to our current debt levels, the related risks that we now face could intensify.
Due to our lack of industry diversification, adverse developments in our midstream operations or
operating areas would reduce our ability to make distributions to our unitholders.
We rely on the cash flow generated from our midstream energy businesses, and as a result, our financial
condition depends upon prices of, and continued demand for, natural gas, propane, condensate and NGLs. Due
to our lack of diversification in industry type, an adverse development in one of these businesses may have a
significant impact on our company.
We are exposed to the credit risks of our key producer customers and propane purchasers, and any
material nonpayment or nonperformance by our key producer customers or our propane purchasers could
reduce our ability to make distributions to our unitholders.
We are subject to risks of loss resulting from nonpayment or nonperformance by our producer customers
and propane purchasers. Any material nonpayment or nonperformance by our key producer customers or our
propane purchasers could reduce our ability to make distributions to our unitholders. Furthermore, some of our
producer customers or our propane purchasers may be highly leveraged and subject to their own operating and
regulatory risks, which could increase the risk that they may default on their obligations to us.
Terrorist attacks, the threat of terrorist attacks, and sustained military campaigns may adversely impact
our results of operations.
The long-term impact of terrorist attacks, such as the attacks that occurred on September 11, 2001 or the
attacks in London, and the threat of future terrorist attacks on our industry in general, and on us in particular, is
not known at this time. Increased security measures taken by us as a precaution against possible terrorist attacks
have resulted in increased costs to our business. Uncertainty surrounding continued hostilities in the Middle
East and North Africa or other sustained military conflicts may affect our operations in unpredictable ways,
including disruptions of crude oil supplies, propane shipments or storage facilities, and markets for refined
products, and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an
act of terror.
Recent acquisitions may not be beneficial to us.
Acquisitions involve numerous risks, including:
• the failure to realize expected profitability, growth or accretion;
• an increase in indebtedness and borrowing costs;
• potential environmental or regulatory compliance matters or liabilities;
• potential title issues;
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