respectively. The change in working capital is primarily attributable to the factors described above. We expect
that our future working capital requirements will be impacted by these same factors.
As of December 31, 2011, we had $6.7 million in cash and cash equivalents. Of this balance, as of
December 31, 2011, $5.1 million was held by subsidiaries we do not wholly own, which we consolidate in our
financial results. Other than the cash held by these subsidiaries, this cash balance was available for general
corporate purposes. In 2010, Congress passed Dodd Frank, which has the potential to impact our cash collateral
and reporting requirements for our derivative positions depending on the final regulations adopted by the
United States Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission.
Cash Flow
—
Operating, investing and financing activities was as follows:
Year Ended December 31,
2011
2010
2009
(Millions)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . $ 204.1 $ 139.7 $ 117.3
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . $(274.0) $(267.9) $(163.8)
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . $ 69.9 $ 132.8 $ (13.3)
Our predecessor’s sources of liquidity, prior to its acquisition by us, included cash generated from
operations and funding from DCP Midstream, LLC. Our predecessor’s cash receipts were deposited in DCP
Midstream, LLC’s bank accounts and all cash disbursements were made from these accounts. Cash transactions
for our predecessor were handled by DCP Midstream, LLC and were reflected in partners’ equity as net
changes in parent advances to predecessors from DCP Midstream, LLC.
Net Cash Provided by Operating Activities —
The changes in net cash provided by operating activities are
attributable to our net income adjusted for non-cash charges as presented in the consolidated statements of cash
flows and changes in working capital as discussed above.
We paid net cash for settlement of our commodity derivative instruments of approximately $29.7 million
for the year ended December 31, 2011, and paid $3.6 million for the year ended December 31, 2010, net of cash
receipts of $6.2 million associated with rebalancing our portfolio. We received cash for settlement of our
commodity derivative instruments for the year ended December 31, 2009 of $16.6 million, approximately $4.8
million of which was associated with rebalancing our portfolio. During the year ended December 31, 2011, we
made federal and state tax payments of $29.3 million and $0.3 million, respectively, related to our acquisition
of Marysville and the conversion of the entity’s organizational structure from a corporation to a limited liability
company. In addition, we received $3.6 million from DCP Midstream, LLC, related to the sale of surplus
equipment, for the year ended December 31, 2010.
We and our predecessors received cash distributions from unconsolidated affiliates of $46.2 million, $28.9
million and $29.6 million during the years ended December 31, 2011, 2010 and 2009, respectively.
Distributions exceeded earnings by $9.3 million for the year ended December 31, 2011.
Net Cash Used in Investing Activities —
Net cash used in investing activities during 2011 was comprised
of: (1) acquisition expenditures of $29.6 million related to our acquisition of our DJ Basin NGL Fractionators,
$23.4 million related to our acquisition of Eagle Plant construction work in progress, and a payment of $7.5
million to the seller of Michigan Pipeline & Processing, LLC in relation to our contingent payment agreement;
(2) acquisition expenditures of $114.3 million, representing the carrying value of the net assets acquired, related
to our acquisition of Southeast Texas; (3) capital expenditures of $104.2 million (our portion of which was
$85.0 million and the noncontrolling interest holders’ portion was $19.2 million), which includes $25.2 million
of capital expenditures related to our Eagle Plant construction; and (4) investments in unconsolidated affiliates
of $15.1 million; partially offset by (5) a return of investment from unconsolidated affiliates of $14.9 million;
and (6) proceeds from sales of assets of $5.2 million.
Net cash used in investing activities during 2010 was comprised of: (1) acquisition expenditures of $203.3
million related to our acquisition of Atlantic Energy, the Wattenberg NGL pipeline, Marysville and an
additional 55% interest in Black Lake; (2) capital expenditures of $50.7 million (our portion of which was
$35.9 million and the noncontrolling interest holders’ portion was $14.8 million); and (3) investments in
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