• issuance of additional partnership units;
• debt offerings;
• guarantees issued by DCP Midstream, LLC, which reduce the amount of collateral we may be required
to post with certain counterparties to our commodity derivative instruments; and
• letters of credit.
We anticipate our more significant uses of resources to include:
• capital expenditures;
• quarterly distributions to our unitholders;
• contributions to our unconsolidated affiliates to finance our share of their capital expenditures;
• business and asset acquisitions; and
• collateral with counterparties to our swap contracts to secure potential exposure under these contracts,
which may, at times, be significant depending on commodity price movements, and which is required to
the extent we exceed certain guarantees issued by DCP Midstream, LLC and letters of credit we have
posted.
We believe that cash generated from these sources will be sufficient to meet our short-term working
capital requirements, long-term capital expenditure and acquisition requirements, and quarterly cash
distributions for the next twelve months. In the event these sources are not sufficient, we would reduce our
discretionary spending.
We routinely evaluate opportunities for strategic investments or acquisitions. Future material investments
or acquisitions may require that we obtain additional capital, assume third party debt or incur other long-term
obligations. We have the option to utilize both equity and debt instruments as vehicles for the long-term
financing of our investment activities and acquisitions.
On August 17, 2011, we entered into an equity distribution agreement with Citigroup Global Markets Inc.,
or Citi. The agreement provides for the offer and sale from time to time through Citi, our sales agent, common
units having an aggregate offering amount of up to $150 million. During the year ended December 31, 2011, we
issued 761,285 of our common units pursuant to this equity distribution agreement. We received proceeds of
$30.2 million from the issuance of these common units, net of commissions and offering costs of $1.2 million,
which were used to finance growth opportunities.
In March 2011, we executed a public equity offering which generated net proceeds of $139.7 million. The
proceeds from the equity issuance were used primarily to fund our growth strategy, including acquisitions and
organic expansion. The 2011 acquisitions include our purchase of a 33.33% interest in Southeast Texas for total
cash consideration of $150.0 million and the DJ Basin NGL Fractionators for total cash consideration of $30.0
million. Our portion of expansion capital expenditures for 2011 was $75.5 million.
In 2010, we executed two public equity offerings which generated net proceeds $189.3 million. The
proceeds from the equity issuances were used primarily to fund our growth strategy, including acquisitions and
organic expansion. The 2010 acquisitions included our purchase of the Wattenberg NGL pipeline, the
Chesapeake marine terminal, an additional interest in our Black Lake NGL pipeline and the Marysville NGL
storage facility for total cash consideration, net of cash acquired of $203.3 million. Our portion of expansion
capital expenditures for 2010 was $30.3 million. Additionally, we used the proceeds to fund our January 2011
$150.0 million acquisition of a 33.33% interest in Southeast Texas from DCP Midstream, LLC. The balance of
the capital requirements were funded through borrowing on our revolving credit facility.
Based on current and anticipated levels of operations, we believe we have adequate committed financial
resources to conduct our business, although deterioration in our operating environment could limit our
borrowing capacity, raise our financing costs, as well as impact our compliance with our financial covenant
requirements under our Credit Agreement. Our sources of funding could include additional borrowings under
our Credit Agreement, the placement of public and private debt, and the issuance of our common units.
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