Page 82 - DCP AR2011 Dev

This is a SEO version of DCP AR2011 Dev. Click here to view full version

« Previous Page Table of Contents Next Page »
Year Ended December 31,
2011
2010
2009
(Millions)
Reconciliation of segment net income attributable to partners to
adjusted segment EBITDA:
Natural Gas Services segment:
Segment net income attributable to partners . . . . . . . . . . . . . . . . . . . . . $110.7 $ 91.7 $ 6.3
Non-cash commodity derivative mark-to-market . . . . . . . . . . . . . . .
(22.4)
4.4 84.2
Depreciation and amortization expense . . . . . . . . . . . . . . . . . . . . . . . 69.9 69.1 61.9
Noncontrolling interest on depreciation and income tax . . . . . . . . . .
(13.8)
(13.3)
(11.6)
Adjusted segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $144.4 $151.9 $140.8
NGL Logistics segment:
Segment net income attributable to partners . . . . . . . . . . . . . . . . . . . . . $ 28.4 $ 16.5 $ 6.9
Depreciation and amortization expense . . . . . . . . . . . . . . . . . . . . . . .
8.2
2.6
1.4
Adjusted segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36.6 $ 19.1 $ 8.3
Wholesale Propane Logistics segment:
Segment net income attributable to partners . . . . . . . . . . . . . . . . . . . . . $ 33.1 $ 17.4 $ 37.2
Non-cash commodity derivative mark-to-market . . . . . . . . . . . . . . .
(0.3)
1.0
(0.8)
Depreciation and amortization expense . . . . . . . . . . . . . . . . . . . . . . .
2.9
1.9
1.4
Adjusted segment EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35.7 $ 20.3 $ 37.8
Operating and Maintenance and General and Administrative Expense
— Operating and maintenance
expenses are costs associated with the operation of a specific asset and are primarily comprised of direct labor,
ad valorem taxes, repairs and maintenance, lease expenses, utilities and contract services. These expenses
fluctuate depending on the activities performed during a specific period. General and administrative expenses
are as follows:
Year Ended December 31,
2011
2010
2009
General and administrative expense
$17.9 $14.3 $11.9
General and administrative expense — affiliate: . . . . . . . . . . . . . . . . . . . . .
Omnibus Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 9.9 9.7
Other — DCP Midstream, LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9 9.3 10.4
Other — affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 0.2 0.3
Total affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.4 19.4 20.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $37.3 $33.7 $32.3
We have entered into an omnibus agreement, as amended, or the Omnibus Agreement, with DCP
Midstream, LLC. Under the Omnibus Agreement, we are required to reimburse DCP Midstream, LLC for
salaries of operating personnel and employee benefits, as well as capital expenditures, maintenance and repair
costs, taxes and other direct costs incurred by DCP Midstream, LLC on our behalf. We also pay DCP
Midstream, LLC an annual fee under the Omnibus Agreement for centralized corporate functions performed by
DCP Midstream, LLC on our behalf, including legal, accounting, cash management, insurance administration
and claims processing, risk management, health, safety and environmental, information technology, human
resources, credit, payroll, taxes and engineering.
On January 3, 2012, we extended the omnibus agreement through December 31, 2012 for an annual fee of
$17.6 million, with the primary increase resulting from the acquisition of the remaining 49.9% interest in East
Texas. The Omnibus Agreement also addresses the following matters:
• DCP Midstream, LLC’s obligation to indemnify us for certain liabilities and our obligation to indemnify
DCP Midstream, LLC for certain liabilities;
• DCP Midstream, LLC’s obligation to continue to maintain its credit support for our obligations related
to commercial contracts with respect to its business or operations that were in effect at December 7,
2005 until the expiration of such contracts; and
69