In addition to co-investment opportunities with DCP Midstream, LLC, we have continued to capture
growth opportunities in our footprint. In January 2012, Williams Partners and DCP Midstream Partners
announced a $600.0 million expansion plan for the Discovery natural gas gathering pipeline system in the
deepwater Gulf of Mexico. The project, which is expected to be completed in mid-2014, is supported by long-
term, fee-based contracts with producers in the Lucius and Hadrian South producing fields. Our 40% ownership
interest in Discovery represents a $240.0 million capital project for the Partnership.
We successfully executed our acquisition integration efforts for the two DJ Basin acquisitions, as well as
for the Marysville NGL storage facility, the Chesapeake wholesale propane terminal and the Black Lake NGL
pipeline according to plan and are achieving results in line with our expectations.
Our capital markets execution has positioned us well in terms of both liquidity and cost of capital to
execute our growth plans, including co-investment opportunities with DCP Midstream, LLC. In November
2011, we entered into a new $1.0 billion, five-year revolving credit facility. In 2011, we raised $169.9 million
in capital through a public equity offering and issuance of common units under our equity distribution
agreement, which was used to finance a portion of our growth opportunities.
Financial results and distribution growth for the year were in line with our previously provided 2011
forecast. We raised our distributions for all four quarters, resulting in a 5.3% increase in our quarterly
distribution rate over the rate declared in the fourth quarter of 2010. The distributions reflect our business
results as well as our recent execution on growth opportunities.
General Trends and Outlook
In 2012, our strategic objectives will continue to focus on maintaining stable distributable cash flows from
our existing assets and executing on growth opportunities to increase our long-term distributable cash flows.
We believe the key elements to stable distributable cash flows are the diversity of our asset portfolio, our
significant fee-based business representing approximately 60% of our estimated margins, plus our highly
hedged commodity position, the objective of which is to protect against downside risk in our distributable cash
flows.
We incur capital expenditures for our consolidated entities and our unconsolidated affiliates. We anticipate
maintenance capital expenditures of between $15.0 million and $20.0 million, and expenditures for expansion
capital of between $250.0 million and $300.0 million, for the year ending December 31, 2012. Expansion
capital expenditures include construction of the Eagle Plant, Discovery’s Keathley Canyon, which is shown as
investments in unconsolidated affiliates, expansion and upgrades to our East Texas complex and acquisition
integration projects. The board of directors may approve additional growth capital during the year, at their
discretion.
In 2012, we expect to continue to pursue a multi-faceted growth strategy, which may include executing on
organic opportunities around our footprint, third party acquisitions, and investment opportunities with or from
our general partner in order to grow our distributable cash flows.
We anticipate our business to continue to be affected by the following key trends. Our expectations are
based on assumptions made by us and information currently available to us. To the extent our underlying
assumptions about or interpretations of available information prove to be incorrect, our actual results may vary
materially from our expected results.
Natural Gas Gathering and Processing Margins
— Except for our fee-based contracts, which may be
impacted by throughput volumes, our natural gas gathering and processing profitability is dependent upon
commodity prices, natural gas supply, and demand for natural gas, NGLs and condensate. Commodity prices,
which are impacted by the balance between supply and demand, have historically been volatile. Throughput
volumes could decline, particularly in areas with lower NGL content, should natural gas prices and drilling
levels continue to experience weakness. Our long-term view is that as economic conditions improve,
commodity prices should remain at levels that would support continued natural gas production in the United
States. During 2011, petrochemical demand remained strong for NGLs as NGLs were a lower cost feedstock
when compared to crude oil derived feedstocks. We anticipate this continuing in 2012.
Wholesale Propane Supply and Demand
— Due to our multiple propane supply sources, propane supply
contractual arrangements, significant storage capabilities, and multiple terminal locations for wholesale propane
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