(Mark One)



ý			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2017~~March 31, 2023



¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-32678

DCP MIDSTREAM, LP

(Exact name of registrant as specified in its charter)


Delaware			03-0567133
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

~~Delaware~~		~~03-0567133~~
~~(State or other jurisdiction~~ ~~of incorporation or organization)~~	~~(I.R.S. Employer~~ ~~Identification No.)~~

~~370 17th Street,~~6900 E. Layton Ave, Suite ~~2500~~900 Denver, Colorado		~~80202~~80237
(Address of principal executive offices)			(Zip Code)

(303) 595-3331

(Registrant’s telephone number, including area ~~code: (303) 595-3331~~code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common units representing limited partnership interests

DCP

New York Stock Exchange

7.875% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

DCP PRB

New York Stock Exchange

7.95% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units

DCP PRC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesýNo¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ý No ¨

~~Yes~~ ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”,~~filer,” “smaller reporting company” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Emerging growth company

Non-accelerated filer

~~(Do not check if a smaller reporting company)~~

Smaller reporting company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)

of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of ~~November 2, 2017,~~April 28, 2023, there were ~~143,309,828~~208,657,950 common units representing limited ~~partner~~partnership interests outstanding.

DCP MIDSTREAM, LP

FORM 10-Q FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2023

TABLE OF CONTENTS



Item		Page
	PART I. FINANCIAL INFORMATION
1	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	2
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022	3
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2023 and 2022	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	5
	Condensed Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2023	6
	Condensed Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2022	7
	Notes to the Condensed Consolidated Financial Statements	8
2	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
3	Quantitative and Qualitative Disclosures about Market Risk	42
4	Controls and Procedures	44
	PART II. OTHER INFORMATION
1	Legal Proceedings	45
1A	Risk Factors	45

6	Exhibits	45
	Signatures	47

Item Page
PART I. FINANCIAL INFORMATION
1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016
1
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016
2
Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2017 and 2016
3
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016
4
Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2017
5
Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2016
6
Notes to the Condensed Consolidated Financial Statements
7
2. Management's Discussion and Analysis of Financial Condition and Results of Operations
41
3. Quantitative and Qualitative Disclosures about Market Risk
66
4. Controls and Procedures
69
PART II. OTHER INFORMATION
1. Legal Proceedings
69
1A. Risk Factors
6. Exhibits
69
Signatures
71

GLOSSARY OF TERMS

The following is a list of ~~certain~~terms used in the industry ~~terms used~~and throughout this report:


ASC		accounting standards codification
ASU		accounting standards update
Bbl		barrel
Bbls/d		barrels per day


Btu
~~Bbl~~	~~barrel~~
~~Bbls/d~~	~~barrels per day~~
~~Bcf~~	~~billion cubic feet~~
~~Bcf/d~~	~~billion cubic feet per day~~
~~Btu~~	British thermal unit, a measurement of energy
~~Fractionation~~
Credit Agreement		Credit Agreement governing our Credit Facility
Credit Facility		Our $1.4 billion unsecured revolving credit facility, maturing March 18, 2027
FASB		Financial Accounting Standards Board
Fractionation		the process by which natural gas liquids are separated into individual components
~~MBbls~~GAAP		~~thousand barrels~~generally accepted accounting principles in the United States of America


LIBOR		London Interbank Offered Rate
MBbls		thousand barrels
MBbls/d		thousand barrels per day
~~MMBtu~~		~~million Btus~~
MMBtu		million Btus
MMBtu/d		million Btus per day
MMcf		million cubic feet
MMcf/d		million cubic feet per day
NGLs		natural gas liquids
~~Throughput~~

OPIS		Oil Price Information Service

SEC		U.S. Securities and Exchange Commission
Securitization Facility		$350 million Accounts Receivable Securitization Facility, maturing August 12, 2024
SOFR		Secured Overnight Financing Rate
TBtu/d		trillion Btus per day
Throughput		the volume of product transported or passing through a pipeline or other facility

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Our reports, filings and other public announcements may from time to time contain statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You can typically identify forward-looking statements by the use of forward-looking words, such as “may,” “could,” “should,” “intend,” “assume,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “potential,” “plan,” “forecast” and other similar words.

All statements that are not statements of historical facts, including, but not limited to, statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements.

These forward-looking statements reflect our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Known risks and uncertainties include, but are not limited to, the risks set forth in "Managements Discussion and Analysis of Financial Condition and Results of Operations - Factors That May Significantly Affect Our Results" included as Exhibit 99.3 in our Current Report on Form 8-K filed with the Securities and Exchange Commission or the SEC, on May 25, 2017 (the "May 2017 8-K"), Item 1A. ~~"Risk~~“Risk Factors” ~~in this Quarterly Report on Form 10-Q and~~ in our Annual Report on Form 10-K for the year ended December 31, ~~2016 filed with the SEC on February 15, 2017,~~2022, including the following risks and uncertainties:

•the timing and completion of our pending merger with Phillips 66 pursuant to which Phillips 66 will acquire all of our issued and outstanding common units not already owned by DCP Midstream, LLC or its subsidiaries;

•conflicts of interest may exist between our individual unitholders and Phillips 66, which has the authority to conduct, direct and manage the activities of DCP Midstream, LLC associated with the Partnership and our general partner;

•risks related to the disruption of economies around the world including the oil, gas and NGL industry in which we operate and the resulting adverse impact on our business, liquidity, commodity prices, workforce, third-party and counterparty effects and resulting federal, state and local actions;

•the extent of changes in commodity prices and the demand for our products and services, our ability to effectively limit a portion of the adverse impact of potential changes in commodity prices through derivative financial instruments, and the potential impact of price, and of producers’ access to capital on natural gas drilling, demand for our services, and the volume of NGLs and condensate extracted;

•the demand for crude oil, residue gas and NGL products;

•the level and success of drilling and quality of production volumes around our assets and our ability to connect supplies to our gathering and processing systems, as well as our residue gas and NGL infrastructure;

~~volatility~~•new, additions to, and changes in, laws and regulations, particularly with regard to taxes, safety, regulatory and protection of the ~~price~~environment, including, but not limited to, climate change legislation, regulation of over-the-counter derivatives markets and entities, and hydraulic fracturing regulations, or the increased regulation of our ~~common units;~~industry, including additional local control over such activities, and their impact on producers and customers served by our systems;

•other factors beyond our control including the increased cost of labor, contractors, services, supplies and materials due to persistent inflation;

•general economic, market and business conditions;

•the amount of natural gas we gather, compress, treat, process, transport, store and sell, or the NGLs we produce, fractionate, transport, store and sell, may be reduced if the pipelines, storage and fractionation facilities to which we deliver the natural gas or NGLs are capacity constrained and cannot, or will not, accept the natural gas or NGLs or we may be required to find alternative markets and arrangements for our natural gas and NGLs;

•our ability to continue the safe and reliable operation of our assets;

•our ability to grow through organic growth projects, or acquisitions, and the successful integration and future performance of such assets;

•our ability to access the debt and equity markets and the resulting cost of capital, which will depend on general market conditions, our financial and operating results, inflation rates, interest rates, our ability to comply with the covenants in our Credit Agreement or other credit facilities, and the indentures governing our notes, as well as our ability to maintain our credit ratings;

iii

•the creditworthiness of our customers and the counterparties to our transactions, including the impact of bankruptcies;

•the amount of collateral we may be required to post from time to time in our transactions;

•industry changes, including consolidations, alternative energy sources, technological advances, infrastructure constraints and changes in competition;

•our ability to construct and start up facilities on budget and in a timely fashion, which is partially dependent on obtaining required construction, environmental and other permits issued by federal, state and municipal governments, or agencies thereof, the availability of specialized contractors and laborers, and the price of and demand for materials;

our ability to access the debt and equity markets and the resulting cost of capital, which will depend on general market conditions, our financial and operating results, inflation rates, interest rates, our ability to comply with the covenants in our credit agreement and the indentures governing our notes, as well as our ability to maintain our credit ratings;

~~the creditworthiness of our customers and the counterparties to our transactions;~~

~~the amount of collateral we may be required to post from time to time in our transactions;~~

~~industry changes, including the impact of bankruptcies, consolidations, alternative energy sources, technological advances and changes in competition;~~

~~our ability to grow through organic growth projects, or acquisitions, and the successful integration and future performance of such assets;~~

•our ability to hire, train, and retain qualified personnel and key management to execute our business strategy;

~~new, additions~~•our ability to ~~and changes~~successfully manage our ongoing integration with Phillips 66;

•volatility in ~~laws and regulations, particularly with regard to taxes, safety and protection of~~ the environment, including, but not limited to, climate change legislation, regulation of over-the-counter derivatives market and entities, and hydraulic fracturing regulations, or the increased regulationprice of our ~~industry,~~common units and ~~their impact on producers and customers served by our systems;~~preferred units;

•weather, weather-related conditions and other natural phenomena, including, but not limited to, their potential impact on demand for the commodities we sell and the operation of company-owned and third party-owned infrastructure;

•security threats such as ~~military campaigns,~~ terrorist attacks, and cybersecurity attacks and breaches, against, or otherwise impacting, our facilities and systems; and

•our ability to obtain insurance on commercially reasonable terms, if at all, as well as the adequacy of insurance to cover our ~~losses; and~~

the amount of natural gas we gather, compress, treat, process, transport, store and sell, or the NGLs we produce, fractionate, transport, store and sell, may be reduced if the pipelines and storage and fractionation facilities to which we deliver the natural gas or NGLs are capacity constrained and cannot, or will not, accept the natural gas or NGLs.losses.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. The forward-looking statements in this report speak as of the filing date of this report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

~~iii~~

PART I

Item 1.Financial Statements

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

~~(Unaudited)~~

(unaudited)

September 30,
2017 December 31,
2016
(Millions)
ASSETS
Current assets:
Cash and cash equivalents $ 312
$ 1
Accounts receivable:
Trade, net of allowance for doubtful accounts of $7 and $4 million, respectively 690
652
Affiliates 138
134
Other 18
6
Inventories 62
72
Unrealized gains on derivative instruments 32
42
Collateral cash deposits 42
71
Other 17
16
Total current assets 1,311
994
Property, plant and equipment, net 8,926
9,069
Goodwill 231
236
Intangible assets, net 109
137
Investments in unconsolidated affiliates 3,002
2,969
Unrealized gains on derivative instruments 4
5
Other long-term assets 188
201
Total assets $ 13,771
$ 13,611
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable:
Trade $ 845
$ 677
Affiliates 57
48
Other 17
10
Current maturities of long-term debt 500
500
Unrealized losses on derivative instruments 42
91
Accrued interest 69
72
Accrued taxes 88
49
Accrued wages and benefits 43
72
Capital spending accrual 17
20
Other 106
84
Total current liabilities 1,784
1,623
Long-term debt 4,711
4,907
Unrealized losses on derivative instruments 10
1
Deferred income taxes 30
28
Other long-term liabilities 193
199
Total liabilities 6,728
6,758
Commitments and contingent liabilities

Equity:
Predecessor equity —
4,220
Limited partners (143,309,828 and 114,749,848 common units issued and outstanding, respectively) 6,870
2,591
General partner 155
18
Accumulated other comprehensive loss (9 ) (8 )
Total partners’ equity 7,016
6,821
Noncontrolling interests 27
32
Total equity 7,043
6,853
Total liabilities and equity $ 13,771
$ 13,611


	March 31, 2023		December 31, 2022
ASSETS	(millions)
Current assets:
Cash and cash equivalents	$	1	$	1


Accounts receivable:
Trade, net of allowance for credit losses of $2 and $2 million, respectively	707		995
Affiliates	389		360
Other	6		3
Inventories	28		83
Unrealized gains on derivative instruments	87		140

Collateral cash deposits	32		93
Other	20		27
Total current assets	1,270		1,702
Property, plant and equipment, net	7,759		7,763

Intangible assets, net	33		34
Investments in unconsolidated affiliates	3,458		3,475
Unrealized gains on derivative instruments	20		26
Operating lease assets	119		112
Other long-term assets	225		222
Total assets	$	12,884	$	13,334
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable:
Trade	$	709	$	1,199
Affiliates	298		255
Other	37		29

Current debt	7		506
Unrealized losses on derivative instruments	68		148
Accrued interest	65		78
Accrued taxes	58		58
Accrued wages and benefits	35		72
Capital spending accrual	12		22

Other	100		137
Total current liabilities	1,389		2,504
Long-term debt	4,892		4,357
Unrealized losses on derivative instruments	20		35
Deferred income taxes	33		33
Operating lease liabilities	100		95
Other long-term liabilities	302		274
Total liabilities	6,736		7,298
Commitments and contingent liabilities (see note 1 2)
Equity:

Series B preferred limited partners (6,450,000 preferred units authorized, issued and outstanding, respectively)	156		156
Series C preferred limited partners (4,400,000 preferred units authorized, issued and outstanding, respectively)	106		106

Limited partners (208,649,649 and 208,396,558 common units authorized, issued and outstanding, respectively)	5,868		5,755
Accumulated other comprehensive loss	(6)		(6)
Total partners’ equity	6,124		6,011
Noncontrolling interests	24		25
Total equity	6,148		6,036
Total liabilities and equity	$	12,884	$	13,334

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~(Unaudited)~~(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions, except per unit amounts)
Operating revenues:
Sales of natural gas, NGLs and condensate $ 1,618
$ 1,397
$ 4,756
$ 3,769
Sales of natural gas, NGLs and condensate to affiliates 318
249
885
662
Transportation, processing and other 162
162
474
469
Trading and marketing (losses) gains, net (43 ) 15
10
10
Total operating revenues 2,055
1,823
6,125
4,910
Operating costs and expenses:
Purchases of natural gas and NGLs 1,550
1,311
4,528
3,510
Purchases of natural gas and NGLs from affiliates 145
126
411
356
Operating and maintenance expense 168
161
513
506
Depreciation and amortization expense 94
94
282
284
General and administrative expense 69
64
202
187
Asset impairments 48
—
48
—
Other expense (income), net —
14
15
(68 )
Gain on sale of assets, net —
(41 ) (34 ) (35 )
Restructuring costs —
2
—
10
Total operating costs and expenses 2,074
1,731
5,965
4,750
Operating (loss) income (19 ) 92
160
160
Earnings from unconsolidated affiliates 74
75
234
214
Interest expense, net (73 ) (77 ) (219 ) (235 )
(Loss) income before income taxes (18 ) 90
175
139
Income tax expense (2 ) (1 ) (5 ) (6 )
Net (loss) income (20 ) 89
170
133
Net income attributable to noncontrolling interests —
—
(1 ) (1 )
Net (loss) income attributable to partners (20 ) 89
169
132
Net loss attributable to predecessor operations —
31
—
105
General partner’s interest in net income (39 ) (31 ) (122 ) (93 )
Net (loss) income allocable to limited partners $ (59 ) $ 89
$ 47
$ 144
Net (loss) income per limited partner unit — basic and diluted $ (0.41 ) $ 0.78
$ 0.33
$ 1.26
Weighted-average limited partner units outstanding — basic and diluted 143.3
114.7
143.3
114.7


	Three Months Ended March 31,
		2023		2022
		(millions, except per unit amounts)
Operating revenues:
Sales of natural gas, NGLs and condensate		$	1,743	$	2,328
Sales of natural gas, NGLs and condensate to affiliates		733		1,127
Transportation, processing and other		163		155
Trading and marketing gains (losses), net		87		(235)

Total operating revenues		2,726		3,375
Operating costs and expenses:
Purchases and related costs		1,852		2,719
Purchases and related costs from affiliates		97		99
Transportation and related costs from affiliates		279		257
Operating and maintenance expense		197		152
Depreciation and amortization expense		90		90
General and administrative expense		80		55



Gain on sale of assets, net		—		(7)
Restructuring costs		10		—
Total operating costs and expenses		2,605		3,365
Operating income		121		10

Earnings from unconsolidated affiliates		160		143
Interest expense, net		(68)		(71)
Income before income taxes		213		82
Income tax expense		(1)		(1)
Net income		212		81
Net income attributable to noncontrolling interests		(1)		(1)
Net income attributable to partners		211		80

Series A preferred limited partners' interest in net income		—		(9)
Series B preferred limited partners' interest in net income		(3)		(3)
Series C preferred limited partners' interest in net income		(2)		(2)


Net income allocable to limited partners		$	206	$	66
Net income per limited partner unit — basic and diluted		$	0.99	$	0.32

Weighted-average limited partner units outstanding — basic		208.6		208.4
Weighted-average limited partner units outstanding — diluted		208.6		208.8

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME

~~(Unaudited)~~(unaudited)

Three Months Ended September 30, Nine Months Ended
September 30,
2017 2016 2017 2016
(Millions)
Net (loss) income $ (20 ) $ 89
$ 170
$ 133
Other comprehensive income:
Reclassification of cash flow hedge losses into earnings —
—
1
—
Total other comprehensive income —
—
1
—
Total comprehensive (loss) income (20 ) 89
171
133
Total comprehensive income attributable to noncontrolling interests —
—
(1 ) (1 )
Total comprehensive (loss) income attributable to partners $ (20 ) $ 89
$ 170
$ 132


	Three Months Ended March 31,
		2023		2022
		(millions)
Net income		$	212	$	81
Other comprehensive income:


Total other comprehensive income		—		—
Total comprehensive income		212		81
Total comprehensive income attributable to noncontrolling interests		(1)		(1)
Total comprehensive income attributable to partners		$	211	$	80

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~(Unaudited)~~(unaudited)


	Nine Months Ended September 30,							Three Months Ended March 31,
	2017			2016				2023		2022
	(Millions)							(millions)
OPERATING ACTIVITIES:							OPERATING ACTIVITIES:
Net income	$	170		$	133		Net income	$	212	$	81
Adjustments to reconcile net income to net cash provided by operating activities:							Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	282			284			Depreciation and amortization expense	90		90
Earnings from unconsolidated affiliates	(234		)	(214		)	Earnings from unconsolidated affiliates	(160)		(143)
Distributions from unconsolidated affiliates	270			274			Distributions from unconsolidated affiliates	168		168
Net unrealized (gains) losses on derivative instruments	(1		)	80			Net unrealized (gains) losses on derivative instruments	(40)		176

Gain on sale of assets, net	(34		)	(35		)	Gain on sale of assets, net	—		(7)
Asset impairments	48			—
Deferred income tax, net	—			3

Other, net	29			28			Other, net	23		2
Change in operating assets and liabilities, which provided (used) cash, net of effects of acquisitions:
Change in operating assets and liabilities, which (used) provided cash:							Change in operating assets and liabilities, which (used) provided cash:
Accounts receivable	(59		)	(137		)	Accounts receivable	256		(334)
Inventories	10			1			Inventories	33		31
Accounts payable	179			63			Accounts payable	(454)		327
Accrued interest	(4		)	(15		)
Other current assets and liabilities	19			38
Other long-term assets and liabilities	9			18

Other assets and liabilities							Other assets and liabilities	7		(202)
Net cash provided by operating activities	684			521			Net cash provided by operating activities	135		189
INVESTING ACTIVITIES:							INVESTING ACTIVITIES:
Capital expenditures	(258		)	(113		)	Capital expenditures	(81)		(23)
Investments in unconsolidated affiliates, net	(70		)	(38		)

Investments in unconsolidated affiliates							Investments in unconsolidated affiliates	—		(1)
Distribution from unconsolidated affiliate							Distribution from unconsolidated affiliate	9		—
Proceeds from sale of assets	130			160			Proceeds from sale of assets	—		16
Net cash (used in) provided by investing activities	(198		)	9

Net cash used in investing activities							Net cash used in investing activities	(72)		(8)
FINANCING ACTIVITIES:							FINANCING ACTIVITIES:
Proceeds from long-term debt	—			2,926
Payments of long-term debt	(195		)	(3,216		)
Net change in advances to predecessor from DCP Midstream, LLC	418			150
Proceeds from debt							Proceeds from debt	1,243		1,542
Payments of debt							Payments of debt	(1,210)		(1,632)

Distributions to preferred limited partners							Distributions to preferred limited partners	(5)		(5)

Distributions to limited partners and general partner	(390		)	(362		)	Distributions to limited partners and general partner	(90)		(81)
Distributions to noncontrolling interests	(6		)	(6		)	Distributions to noncontrolling interests	(2)		(1)
Other	(2		)	(10		)

Debt issuance costs							Debt issuance costs	—		(4)

Net cash used in financing activities	(175		)	(518		)	Net cash used in financing activities	(64)		(181)
Net change in cash and cash equivalents	311			12
Cash and cash equivalents, beginning of period	1			3
Cash and cash equivalents, end of period	$	312		$	15
Net change in cash, cash equivalents and restricted cash							Net change in cash, cash equivalents and restricted cash	(1)		—
Cash, cash equivalents and restricted cash, beginning of period							Cash, cash equivalents and restricted cash, beginning of period	5		1
Cash, cash equivalents and restricted cash, end of period							Cash, cash equivalents and restricted cash, end of period	$	4	$	1

Reconciliation of cash, cash equivalents, and restricted cash:							Reconciliation of cash, cash equivalents, and restricted cash:	March 31, 2023		March 31, 2022
Cash and cash equivalents							Cash and cash equivalents	$	1	$	1
Restricted cash included in other current assets							Restricted cash included in other current assets	3		—

Total cash, cash equivalents, and restricted cash							Total cash, cash equivalents, and restricted cash	$	4	$	1

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

~~(Unaudited)~~(unaudited)

Partners’ Equity

Predecessor
Equity

Limited
Partners

General
Partner

Accumulated Other
Comprehensive
(Loss) Income

Noncontrolling
Interests

Total
Equity
(Millions)
Balance, January 1, 2017 $ 4,220
$ 2,591
$ 18
$ (8 ) $ 32
$ 6,853
Net income —
47
122
—
1
170
Other comprehensive income —
—
—
1
—
1
Net change in parent advances —
418
—
—
—
418
Acquisition of the DCP Midstream Business (4,220 ) —
—
—
—
(4,220 )
Deficit purchase price under carrying value of the Transaction —
3,094
—
(2 ) —
3,092
Issuance of 28,552,480 common units and 2,550,644 general partner units to DCP Midstream, LLC and affiliates —
1,033
92
—
—
1,125
Distributions to limited partners and general partner —
(313 ) (77 ) —
—
(390 )
Distributions to noncontrolling interests —
—
—
—
(6 ) (6 )
Balance, September 30, 2017 $ —
$ 6,870
$ 155
$ (9 ) $ 27
$ 7,043


	Partners' Equity
		Series B Preferred Limited Partners		Series C Preferred Limited Partners		Limited Partners		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
	(millions)
Balance, January 1, 2023		$	156	$	106	$	5,755	$	(6)	$	25	$	6,036


















Net income		3		2		206		—		1		212


Distributions to unitholders		(3)		(2)		(90)		—		—		(95)
Distributions to noncontrolling interests		—		—		—		—		(2)		(2)
Equity based compensation		—		—		(3)		—		—		(3)
Balance, March 31, 2023		$	156	$	106	$	5,868	$	(6)	$	24	$	6,148

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

~~(Unaudited)~~(unaudited)

Partners’ Equity
Predecessor
Equity
Limited
Partners

General
Partner
Accumulated
Other
Comprehensive
Loss Noncontrolling
Interests Total
Equity
(Millions)
Balance, January 1, 2016 $ 4,287
$ 2,762
$ 18
$ (8 ) $ 33
$ 7,092
Net (loss) income (105 ) 144
93
—
1
133
Net change in parent advances 150
—
—
—
—
150
Distributions to limited partners and general partner —
(269 ) (93 ) —
—
(362 )
Distributions to noncontrolling interests —
—
—
—
(6 ) (6 )
Balance, September 30, 2016 $ 4,332
$ 2,637
$ 18
$ (8 ) $ 28
$ 7,007


	Partner's Equity
	Series A Preferred Limited Partners		Series B Preferred Limited Partners		Series C Preferred Limited Partners		Limited Partners		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
	(millions)
Balance, January 1, 2022	$	489	$	156	$	106	$	5,106	$	(6)	$	25	$	5,876



















Net income	9		3		2		66		—		1		81



Distributions to unitholders	—		(3)		(2)		(81)		—		—		(86)
Distributions to noncontrolling interests	—		—		—		—		—		(1)		(1)
Equity based compensation	—		—		—		1		—		—		1
Balance, March 31, 2022	$	498	$	156	$	106	$	5,092	$	(6)	$	25	$	5,871

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022

~~(Unaudited)~~(unaudited)

1. Description of Business and Basis of Presentation

DCP Midstream, LP, with its consolidated subsidiaries, or ~~"us", "we", "our"~~“us,”“we,”“our” or the ~~"Partnership"~~“Partnership” is a Delaware limited partnership formed in 2005 by DCP Midstream, LLC to own, operate, acquire and develop a diversified portfolio of complementary midstream energy assets.

Our Partnership includes our Logistics and Marketing and Gathering and Processing ~~and Logistics and Marketing~~ segments. For additional information regarding these segments, see Note 16 1 4 - Business Segments.

Our operations and activities are managed by our general partner, DCP Midstream GP, LP (“GP LP”), which in turn is managed by its general partner, DCP Midstream GP, LLC, which we refer to as the General Partner, and which is 100% owned by DCP Midstream, LLC.

On August 17, 2022, Phillips 66 and Enbridge Inc. (“Enbridge”), through their respective subsidiaries, entered into an Agreement and Plan of Merger (the “Realignment Transaction”) for the purpose of realigning their respective economic interests in, and governance responsibilities over, DCP Midstream, LP and Gray Oak Pipeline, LLC through the merger of existing joint ventures owned by Phillips 66 and Enbridge.

As part of the Realignment Transaction, Phillips Gas Company LLC (“PGC”), an indirect wholly owned subsidiary of Phillips 66, and Spectra DEFS Holding, LLC, an indirect wholly owned subsidiary of Enbridge, as the members of DCP Midstream, LLC, the owner of the General Partner, the general partner of GP LP, the general partner of the Partnership, entered into a Third Amended and Restated Limited Liability Agreement of DCP Midstream, LLC, effective on August 17, 2022 (the “Third A&R LLC Agreement”). Under the Third A&R LLC Agreement, PGC, except as otherwise provided therein, was delegated the power to control, direct and manage all activities of DCP Midstream, LLC associated with the Partnership and each of its subsidiaries, the General Partner and the GP LP, and, in each case, the businesses, activities, assets and liabilities thereof. The Third A&R LLC Agreement also delegated PGC the power to exercise DCP Midstream, LLC’s rights to appoint or remove any director of the General Partner and vote any common units representing limited partner interests of the Partnership that are owned directly or indirectly by DCP Midstream, LLC. Prior to the Realignment Transaction, Phillips 66 and Enbridge, through their respective subsidiaries, jointly governed DCP Midstream, LLC and its ~~subsidiaries and affiliates, collectively referred to as DCP Midstream, LLC, is owned 50% by~~subsidiaries.

On January 5, 2023, the Partnership, GP LP, the General Partner, Phillips 66, Phillips 66 Project Development Inc., a Delaware corporation and ~~50% by Enbridge, Inc~~indirect wholly owned subsidiary of Phillips 66 (“PDI”), and ~~its affiliates, or Enbridge. Spectra Energy Corp~~Dynamo Merger Sub LLC, a Delaware limited liability company and wholly owned ~~50%~~subsidiary of ~~DCP Midstream, LLC~~PDI (“Merger Sub”), entered into a Merger Agreement, pursuant to which Merger Sub will merge with and into the Partnership, with the Partnership surviving as a Delaware limited partnership (the “Merger”).

At the effective time of the Merger (the “Effective Time”), each common unit representing a limited partner interest in the Partnership (each, a “Common Unit”) issued and outstanding as of immediately prior to the ~~completion of its merger with Enbridge~~Effective Time (other than the Sponsor Owned Units, as defined below) (each, a “Public Common Unit”) will be converted into the right to receive $41.75 per Public Common Unit in cash, without any interest thereon.

The Partnership’s preferred units will be unaffected by the ~~first quarter of 2017. DCP Midstream, LLC directs our business operations through its ownership~~Merger and ~~control of~~will remain outstanding immediately following the ~~General Partner. As of September 30, 2017, DCP Midstream, LLC~~Merger. The Common Units owned ~~approximately 38.1% of us, including limited partner and general partner interests.~~

~~On December 30, 2016, we entered into a Contribution Agreement (the “Contribution Agreement”) with~~by DCP Midstream, LLC, and ~~DCP Midstream Operating, LP (the “Operating Partnership”~~the General Partner (collectively, the “Sponsor Owned Units”), will be unaffected by the Merger and will remain outstanding immediately following the Merger. At the Effective Time, PDI’s ownership interest in Merger Sub will be converted into a ~~100% owned subsidiary~~number of new Common Units equal to the number of Public Common Units. As a result of the Merger, Phillips 66’s economic interest in the Partnership ~~which closed effective January 1, 2017.~~ will increase from 43.3% to approximately 86.8%. Enbridge's economic interest in the Partnership will remain unchanged at approximately 13.2%.

The ~~transactions and documents contemplated~~Merger was unanimously approved by the ~~Contribution Agreement are collectively referred to hereafter as the “Transaction.” Our predecessor results consist~~board of ~~all~~directors of the ~~ownership interests~~General Partner, based on the unanimous approval and recommendation of a special committee comprised entirely of independent directors after evaluation of the Merger by the special committee in consultation with independent financial and legal advisors.

The Merger is expected to close in the second quarter of 2023. Completion of the Merger is subject to certain customary conditions as set forth in the Merger Agreement. There can be no assurance that the Merger will be consummated on the terms described above or at all.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2023 and 2022

As of March 31, 2023, DCP Midstream, LLC, ~~in all of its subsidiaries that~~together with the General Partner, owned operating assets ("The DCP Midstream Business"), which we acquired from DCP Midstream, LLC on January 1, 2017. This transfer of net assets between entities under common control was accounted for as if the transfer occurred at the beginningapproximately 56% of the period, and prior years were retrospectively adjusted to furnish comparative information, similar to the pooling method. Accordingly, our condensed consolidated financial statements include the historical results of The DCP Midstream Business for all periods presented. For additional information regarding the Transaction, see Note 3 - Acquisitions.Partnership’s common units representing limited partner interests.

The condensed consolidated financial statements include the accounts of the Partnership and all majority-owned subsidiaries where we have the ability to exercise control. Investments in greater than 20% owned affiliates that are not variable interest entities and where we do not have the ability to exercise control, and investments in less than 20% owned affiliates where we have the ability to exercise significant influence, are accounted for using the equity method.

The condensed consolidated financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States of America, or~~ GAAP. Conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and notes. Although these estimates are based on management’s best available knowledge of current and expected future events, actual results could differ from those estimates. All intercompany balances and transactions have been eliminated in consolidation.

~~The accompanying unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations~~

2. Revenue Recognition

We disaggregate our revenue from contracts with customers by type of ~~the SEC. Accordingly, these condensed consolidated financial statements reflect all adjustments, consisting~~contract for each of normal recurring adjustments, that are, in the opinion of management, necessary to present fairly the financial position and results of operations for the respective interim periods. Certain information and note disclosures normally included in our ~~annual financial statements prepared in accordance with GAAP have been condensed or omitted from these interim financial statements pursuant to such rules and regulations, although~~reportable segments, as we believe ~~that~~it best depicts the ~~disclosures made are adequate to make the information presented not misleading. Results~~nature, timing and uncertainty of ~~operations~~our revenue and cash flows. The following tables set forth our revenue by those categories:


	Three Months Ended March 31, 2023
	Logistics and Marketing		Gathering and Processing		Eliminations		Total
	(millions)
Sales of natural gas	$	802	$	680	$	(669)	$	813
Sales of NGLs and condensate (a)	1,528		898		(763)		1,663
Transportation, processing and other	19		144		—		163
Trading and marketing gains, net (b)	43		44		—		87
Total operating revenues	$	2,392	$	1,766	$	(1,432)	$	2,726

(a)Includes $479 million for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 of revenues from physical sales contracts and buy-sell exchange transactions in our Logistics and Marketing segment, which is net of $725 million of buy-sell purchases related to buy-sell revenues of $796 million which are not ~~necessarily indicative~~within the scope of Topic 606.

(b) Not within the ~~results that may be expected~~scope of Topic 606.


	Three Months Ended March 31, 2022
	Logistics and Marketing		Gathering and Processing		Eliminations		Total
	(millions)
Sales of natural gas	$	1,063	$	882	$	(821)	$	1,124
Sales of NGLs and condensate (a)	2,122		1,282		(1,073)		2,331
Transportation, processing and other	19		136		—		155
Trading and marketing losses, net (b)	(41)		(194)		—		(235)
Total operating revenues	$	3,163	$	2,106	$	(1,894)	$	3,375

(a) Includes $676 million of revenues from physical sales contracts and buy-sell exchange transactions in our Logistics and Marketing segment for the ~~year ending December~~three months ended March 31, ~~2017. These unaudited condensed consolidated financial statements and other information included in this Quarterly Report on Form 10-Q should~~2022, which is net of $756 million of buy-sell purchases related to buy-sell revenues of $851 million which are not within the scope of Topic 606.

(b) Not within the scope of Topic 606.

The revenue expected to be ~~read in conjunction with the 2016 audited consolidated financial statements and notes thereto included as Exhibit 99.4~~recognized in the ~~May 2017 8-K.~~future related to performance obligations that are not satisfied is approximately $370 million as of March 31, 2023. Our remaining performance obligations primarily consist of minimum volume commitment fee arrangements and are expected to be recognized through 2031 with a weighted average remaining life of three years as of March 31, 2023. As a practical expedient permitted by Topic 606, this amount excludes variable consideration as well as remaining performance obligations that have original expected durations of one year or less, as applicable. Our remaining performance obligations also exclude estimates of variable rate escalation clauses in our contracts with customers.

3. Agreements and Transactions with Affiliates

DCP Midstream, LLC

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

~~2. New Accounting Pronouncements~~

Financial Accounting Standards Board, or FASB, Accounting Standards Update, or ASU, 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” or ASU 2016-15 - In August 2016, the FASB issued ASU 2016-15, which amends certain cash flow statement classification guidance. We intend to adopt this ASU for interim and annual reporting periods beginning after December 15, 2017. The adoption of this ASU will have no impact on our condensed consolidated cash flows.

~~FASB ASU, 2016-02 “Leases (Topic 842),” or ASU 2016-02~~ - In February 2016, the FASB issued ASU 2016-02, which requires lessees to recognize a lease liability on a discounted basis and the right of use of a specified asset at the commencement date for all leases. This ASU is effective for interim and annual reporting periods beginning after December 15, 2018, with the option to early adopt for financial statements that have not been issued. We are currently evaluating the potential impact this standard will have on our condensed consolidated financial statements and related disclosures.

~~FASB ASU~~ ~~2014-09 “Revenue from Contracts with Customers (Topic 606),” or ASU 2014-09and related interpretations and amendments~~- In May 2014, the FASB issued ASU 2014-09, which supersedes the revenue recognition requirements of Accounting Standards Codification Topic 605 “Revenue Recognition.” This ASU is effective for annual reporting periods beginning after December 15, 2017, with the option to adopt as early as annual reporting periods beginning after December 15, 2016. We plan to adopt this ASU using the modified retrospective method. The initial cumulative effect will be recognized at the date of adoption. Our evaluation of ASU 2014-09 is ongoing and not complete. The FASB has issued and may issue in the future, interpretative guidance, which may cause our evaluation to change. Accordingly, at this time we cannot estimate the impact upon adoption.

~~3. Acquisitions~~

On January 1, 2017, DCP Midstream, LLC contributed to us: (i) its ownership interests in all of its subsidiaries owning operating assets, and (ii) $424 million of cash (together the “Contributions”). In consideration of the Partnership’s receipt of the Contributions, (i) the Partnership issued 28,552,480 common units to DCP Midstream, LLC and 2,550,644 general partner units to the General Partner in a private placement and (ii) the Operating Partnership assumed $3,150 million of DCP Midstream, LLC’s debt.

Pursuant to the Contribution Agreement, DCP Midstream, LLC agreed to cause the General Partner to enter into Amendment No. 3 (the “Third Amendment to the Partnership Agreement”) to the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated November 1, 2006, as amended (the “Partnership Agreement”). The Third Amendment to the Partnership Agreement includes terms that amend the Partnership Agreement to cause the incentive distributions payable to the holders of the Partnership’s incentive distribution rights with respect to the fiscal years 2017, 2018 and 2019 to, in certain circumstances, be reduced in an amount up to $100 million per fiscal year as necessary to provide that the distributable cash flow of the Partnership (as adjusted) during such year meets or exceeds the amount of distributions made by the Partnership (as adjusted) to the partners of the Partnership with respect to such year.

~~4. Dispositions~~

In June 2017, we closed a transaction with Tallgrass Midstream, LLC to sell our 100% interest in our Douglas gathering system, which primarily consisted of approximately 1,500 miles of gathering lines within our Gathering and Processing segment, for approximately $129 million, subject to customary purchase price adjustments. We recognized a gain of approximately $34 million, net of goodwill allocation, in the second quarter of 2017.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

~~5. Agreements and Transactions with Affiliates~~

~~DCP Midstream, LLC~~

Services Agreement and Other General and Administrative Charges

Pursuant to the Contribution Agreement, on January 1, 2017, the Partnership entered into the Services and Employee Secondment Agreement (the “Services Agreement”), which replaced the services agreement between the Partnership and DCP Midstream, LLC, dated February 14, 2013, as amended. Under the Services Agreement, we are required to reimburse DCP Midstream, LLC for costs, expenses, and expenditures incurred or payments made on our behalf for general and administrative functions including, but not limited to, legal, accounting, compliance, treasury, insurance administration and claims processing, risk management, health, safety and environmental, information technology, human resources, benefit plan maintenance and administration, credit, payroll, internal audit, taxes and engineering, as well as salaries and benefits of seconded employees, insurance coverage and claims, capital expenditures, maintenance and repair costs and taxes. There is no limit on the reimbursements we make to DCP Midstream, LLC under the Services Agreement for costs, expenses and expenditures incurred or payments made on our behalf. The following table summarizes employee related costs that were charged by DCP Midstream, LLC to the Partnership that are included in the condensed consolidated statements of operations:


	Three Months Ended March 31,
		2023		2022
		(millions)
Employee related costs charged by DCP Midstream, LLC
Operating and maintenance expense		$	43	$	40
General and administrative expense		$	58	$	33
Restructuring costs		$	10	$	—

Summary of Transactions with Affiliates

The following table summarizes our transactions with affiliates:


	Three Months Ended March 31,
		2023		2022
		(millions)
Phillips 66 (including its affiliates):
Sales of natural gas, NGLs and condensate to affiliates		$	704	$	1,095
Purchases and related costs from affiliates		$	75	$	62
Transportation and related costs from affiliates		$	41	$	43
Operating and maintenance and general administrative expenses		$	4	$	3
Enbridge (including its affiliates):
Sales of natural gas, NGLs and condensate to affiliates		$	1	$	—
Purchases and related costs from affiliates		$	—	$	13


Unconsolidated affiliates:
Sales of natural gas, NGLs and condensate to affiliates		$	28	$	32
Transportation, processing, and other to affiliates		$	4	$	4
Purchases and related costs from affiliates		$	22	$	24
Transportation and related costs from affiliates		$	238	$	214

We had balances with affiliates as follows:


	March 31, 2023		December 31, 2022
	(millions)
Phillips 66 (including its affiliates):
Accounts receivable	$	362	$	343
Accounts payable	$	195	$	167
Other assets	$	—	$	1
Enbridge (including its affiliates):
Accounts receivable	$	1	$	1
Accounts payable	$	—	$	1


Unconsolidated affiliates:
Accounts receivable	$	26	$	16
Accounts payable	$	103	$	87

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
Employee related costs charged by DCP Midstream, LLC
Operating and maintenance expense $ 50
$ 51
$ 149
$ 158
General and administrative expense (including restructuring charges) $ 46
$ 47
$ 116
$ 142

~~Phillips 66 and its Affiliates~~

We sell a portion of our residue gas and NGLs to Phillips 66 and Chevron Phillips Chemical LLC, or CPChem. In addition, we purchase NGLs from CPChem. CPChem is owned 50% by Phillips 66, and is considered a related party. Approximately 22% of our NGL production was committed to Phillips 66 and CPChem as of September 30, 2017. The primary production commitment on certain contracts began a ratable wind down period in December 2014 and expires in January 2019. We ant~~icipate continuing to purchase and sell commodities with Phillips 66 and CPChem in the ordinary course of business.~~

~~Enbridge and its Affiliates~~

~~We sell NGLs to and purchase NGLs from Enbridge and its affiliates.~~ ~~We anticipate continuing to sell commodities to and purchase commodities from Enbridge and its affiliates in the ordinary course of business.~~

~~Unconsolidated Affiliates~~

We have entered into 15-year transportation agreements, with Sand Hills Pipeline, LLC, or Sand Hills, Southern Hills Pipeline, LLC, or Southern Hills, Front Range Pipeline LLC, or Front Range, and Texas Express Pipeline LLC, or Texas Express. Under the terms of these 15-year agreements, which commenced at each of the pipelines’ respective in-service dates and expire between 2028 and 2029, we have committed to transport minimum throughput volumes at rates defined in each of the pipelines’ respective tariffs.

We also sell a portion of our residue gas and NGLs to, purchase natural gas and other NGL products from, and provide gathering and transportation services to other unconsolidated affiliates. We anticipate continuing to purchase and sell commodities and provide services to unconsolidated affiliates in the ordinary course of business.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

4. Inventories

~~Under~~Inventories were as follows:


	March 31, 2023		December 31, 2022
	(millions)
Natural gas	$	19	$	47
NGLs	9		36
Total inventories	$	28	$	83

We recognize lower of cost or net realizable value adjustments when the ~~terms~~carrying value of our inventories exceeds their net realizable value. These non-cash charges are a component of purchases and related costs in the ~~Sand Hills LLC Agreement~~condensed consolidated statements of operations. We recognized $22 million and no lower of cost or net realizable value adjustments for the ~~Southern Hills LLC Agreement, or~~three months ended March 31, 2023 and 2022, respectively.

5. Property, Plant and Equipment

A summary of property, plant and equipment by classification is as follows:


	Depreciable Life	March 31, 2023		December 31, 2022
		(millions)
Gathering and transmission systems	20 — 50 Years	$	7,896	$	7,865
Processing, storage and terminal facilities	35 — 60 Years	5,159		5,138
Other	3 — 30 Years	564		563
Finance lease assets	5 — 35 Years	32		32
Construction work in progress		215		183
Property, plant and equipment		13,866		13,781
Accumulated depreciation		(6,107)		(6,018)
Property, plant and equipment, net		$	7,759	$	7,763

Construction projects with capitalized interest were immaterial during the ~~Sand Hills~~three months ended March 31, 2023 and ~~Southern Hills LLC Agreements, Sand Hills~~2022.

Depreciation expense was $89 million and Southern Hills are required to reimburse us for any direct costs or expenses (other than general and administration services) which we incur on behalf of Sand Hills and Southern Hills. Additionally, Sand Hills and Southern Hills each pay us an annual service fee of $5$89 million for ~~centralized corporate functions provided by us as operator of Sand Hills~~the three months ended March 31, 2023 and Southern Hills, 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. Except with respect to the annual service fee, there is no limit on the reimbursements Sand Hills and Southern Hills make to us under the Sand Hills and Southern Hills LLC Agreements for other expenses and expenditures which we incur on behalf of Sand Hills or Southern Hills.2022, respectively.

~~Summary of Transactions with~~

6. Investments in Unconsolidated Affiliates

The following table summarizes our ~~transactions with~~investments in unconsolidated affiliates:


		Carrying Value as of
	Percentage Ownership	March 31, 2023		December 31, 2022
		(millions)
DCP Sand Hills Pipeline, LLC	66.67%	$	1,658	$	1,653
DCP Southern Hills Pipeline, LLC	66.67%	710		713
Gulf Coast Express LLC	25.00%	395		408
Front Range Pipeline LLC	33.33%	189		191
Texas Express Pipeline LLC	10.00%	90		91
Mont Belvieu 1 Fractionator	20.00%	9		7
Discovery Producer Services LLC	40.00%	214		219
Cheyenne Connector, LLC	50.00%	142		143
Mont Belvieu Enterprise Fractionator	12.50%	29		28


Other	Various	22		22
Total investments in unconsolidated affiliates		$	3,458	$	3,475

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
Phillips 66 (including its affiliates):
Sales of natural gas, NGLs and condensate to affiliates $ 289
$ 237
$ 814
$ 633
Purchases of natural gas and NGLs from affiliates $ 7
$ 6
$ 22
$ 12
Operating and maintenance and general administrative expenses $ —
$ 1
$ 1
$ 1
Enbridge (including its affiliates):
Sales of natural gas, NGLs and condensate to affiliates $ 14
$ —
$ 34
$ —
Purchases of natural gas and NGLs from affiliates $ 12
$ 7
$ 31
$ 25
Operating and maintenance and general administrative expenses $ 1
$ 1
$ 2
$ 3
Unconsolidated affiliates:
Sales of natural gas, NGLs and condensate to affiliates $ 15
$ 12
$ 37
$ 29
Transportation, storage and processing to affiliates $ 1
$ —
$ 4
$ 3
Purchases of natural gas and NGLs from affiliates $ 126
$ 113
$ 358
$ 319

~~We had balances with affiliates as follows:~~

September 30,
2017 December 31,
2016
(Millions)
Phillips 66 (including its affiliates):
Accounts receivable $ 113
$ 115
Accounts payable $ 4
$ 4
Other assets $ 1
$ 2
Enbridge (including its affiliates):
Accounts receivable $ 7
$ 1
Accounts payable $ 7
$ 3
Other assets $ —
$ 1
Other liabilities $ —
$ 1
Unconsolidated affiliates:
Accounts receivable $ 18
$ 18
Accounts payable $ 46
$ 41
Other assets $ 3
$ 5

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

~~6. Inventories~~

~~Inventories were as follows:~~

September 30,
2017 December 31,
2016
(Millions)
Natural gas $ 32
$ 28
NGLs 30
44
Total inventories $ 62
$ 72

We recognize lower of cost or market adjustments when the carrying value of our inventories exceeds their estimated market value. These non-cash charges are a component of purchases of natural gas and NGLs in the condensed consolidated statements of operations. We recognized no lower of cost or market adjustments during the three months ended September 30, 2017 or September 30, 2016. We recognized no lower of cost or market adjustments during the nine months ended September 30, 2017 and $3 million during the nine months ended September 30, 2016.

~~7. Property, Plant and Equipment~~

~~A summary of property, plant and equipment by classification is as follows:~~

Depreciable
Life
September 30,
2017 December 31,
2016
(Millions)
Gathering and transmission systems 20 — 50 Years $ 8,447
$ 8,560
Processing, storage and terminal facilities 35 — 60 Years 5,107
5,134
Other 3 — 30 Years 539
502
Construction work in progress 288
171
Property, plant and equipment 14,381
14,367
Accumulated depreciation (5,455 ) (5,298 )
Property, plant and equipment, net $ 8,926
$ 9,069

Interest capitalized on construction projects was $2 million and less than $1 million for the three months ended September 30, 2017 and 2016, respectively, and $4 million and less than $1 million for the nine months ended September 30, 2017 and 2016, respectively.

Depreciation expense was $90 million and $91 million for the three months ended September 30, 2017 and 2016, respectively, and $272 million and $275 million for the nine months ended September 30, 2017 and 2016, respectively.

~~8. Goodwill~~

We performed our annual goodwill assessment during the third quarter of 2017 at the reporting unit level, which is identified by assessing whether the components of our operating segments constitute businesses for which discrete financial information is available, whether segment management regularly reviews the operating results of those components and whether the economic and regulatory characteristics are similar. As a result of our assessment, we concluded that the fair value of goodwill substantially exceeded its carrying value in our North reporting unit, the only reporting unit allocated goodwill included within our Gathering and Processing reportable segment and in our Marysville reporting unit included within our Logistics and Marketing reportable segment. For our Wholesale Propane reporting unit, which is included in our Logistics and Marketing reportable segment, the fair value exceeded the carrying value (including approximately $37 million of allocated goodwill) by less than 10%. We concluded that the entire amount of goodwill disclosed on the condensed consolidated balance sheet is recoverable.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

We primarily used a discounted cash flow analysis, supplemented by a market approach analysis, to perform the assessment. Key assumptions in the analysis include the use of an appropriate discount rate, terminal year multiples, and estimated future cash flows, including an estimate of operating and general and administrative costs. In estimating cash flows, we incorporate current market information (including forecasted volumes and commodity prices), as well as historical and other factors. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to new information, we may be exposed to goodwill impairment charges, which would be recognized in the period in which the carrying value exceeds fair value.

We expect that the fair value of our Wholesale Propane reporting unit will continue to exceed carrying value so long as our estimate of future cash flows and the market valuation remain consistent with current levels. A continued period of volatile propane prices could result in further deterioration of market multiples, comparable sales transactions prices, weighted average costs of capital, and our cash flow estimates. Changes to any one or combination of these factors, would result in changes to the reporting unit fair values discussed above which could lead to future impairment charges. Such potential impairment could have a material effect on our results of operations.

~~The carrying amount of goodwill in each of our reportable segments was as follows:~~

September 30, 2017
(Millions)
Gathering and Processing Logistics and Marketing Total
Balance, January 1, 2017 $ 164
$ 72
$ 236
Dispositions (5 ) —
(5 )
Balance, September 30, 2017 $ 159
$ 72
$ 231

~~9. Investments in Unconsolidated Affiliates~~

~~The following table summarizes our investments in unconsolidated affiliates:~~

Carrying Value as of

Percentage
Ownership
September 30,
2017 December 31,
2016
(Millions)
DCP Sand Hills Pipeline, LLC 66.67% $ 1,563
$ 1,507
Discovery Producer Services LLC 40.00% 376
385
DCP Southern Hills Pipeline, LLC 66.67% 741
754
Front Range Pipeline LLC 33.33% 165
165
Texas Express Pipeline LLC 10.00% 90
93
Panola Pipeline Company, LLC 15.00% 24
25
Mont Belvieu Enterprise Fractionator 12.50% 24
23
Mont Belvieu 1 Fractionator 20.00% 13
10
Other Various 6
7
Total investments in unconsolidated affiliates $ 3,002
$ 2,969

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Earnings from investments in unconsolidated affiliates were as follows:


	Three Months Ended March 31,
			2023		2022
		(millions)
DCP Sand Hills Pipeline, LLC			$	87	$	71
DCP Southern Hills Pipeline, LLC			25		24
Gulf Coast Express LLC			17		16
Front Range Pipeline LLC			11		10
Texas Express Pipeline LLC			5		5
Mont Belvieu 1 Fractionator			4		4
Discovery Producer Services LLC			6		6
Cheyenne Connector, LLC			3		4
Mont Belvieu Enterprise Fractionator			1		2

Other			1		1
Total earnings from unconsolidated affiliates			$	160	$	143

Three Months Ended September 30,
Nine Months Ended September 30,
2017 2016
2017
2016
(Millions)
DCP Sand Hills Pipeline, LLC $ 37
$ 28

$ 105

$ 84
Discovery Producer Services LLC 14
20

59

52
DCP Southern Hills Pipeline, LLC 10
13

34

37
Front Range Pipeline LLC 5
5

12

14
Texas Express Pipeline LLC 4
2

7

6
Mont Belvieu Enterprise Fractionator 3
4

10

12
Mont Belvieu 1 Fractionator 2
2

6

7
Other (1 ) 1

1

2
Total earnings from unconsolidated affiliates $ 74
$ 75

$ 234

$ 214

The following tables summarize the combined financial information of our investments in unconsolidated affiliates:


	Three Months Ended March 31,
		2023		2022
	(millions)
Statements of operations:
Operating revenue		$	595	$	563
Operating expenses		$	222	$	217
Net income		$	379	$	344

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
Statements of operations:
Operating revenue $ 358
$ 335
$ 1,063
$ 971
Operating expenses $ 164
$ 136
$ 464
$ 390
Net income $ 194
$ 199
$ 598
$ 576

September 30,
2017 December 31,
2016
(Millions)
Balance sheets:
Current assets $ 242
$ 232
Long-term assets 5,253
5,274
Current liabilities (165 ) (156 )
Long-term liabilities (200 ) (205 )
Net assets $ 5,130
$ 5,145

~~10.~~7. Fair Value Measurement

~~Determination of Fair Value~~

Below is a general description of our valuation methodologies for derivative financial assets and liabilities which are measured at fair value. Fair values are generally based upon quoted market prices or prices obtained through external sources, where available. If listed market prices or quotes are not available, we determine fair value based upon a market quote, adjusted by other market-based or independently sourced market data such as historical commodity volatilities, crude oil future yield curves, and/or counterparty specific considerations. These adjustments result in a fair value for each asset or liability under an “exit price” methodology, in line with how we believe a marketplace participant would value that asset or liability. Fair values are adjusted to reflect the credit risk inherent in the transaction as well as the potential impact of liquidating open positions in an orderly manner over a reasonable time period under current conditions. These adjustments may include amounts to reflect counterparty credit quality, the effect of our own creditworthiness, and/or the liquidity of the market.

Counterparty credit valuation adjustments are necessary when the market price of an instrument is not indicative of the fair value as a result of the credit quality of the counterparty. Generally, market quotes assume that all counterparties have near zero, or low, default rates and have equal credit quality. Therefore, an adjustment may be necessary to reflect

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

the credit quality of a specific counterparty to determine the fair value of the instrument. We record counterparty credit valuation adjustments on all derivatives that are in a net asset position as of the measurement date in accordance with our established counterparty credit policy, which takes into account any collateral margin that a counterparty may have posted with us as well as any letters of credit that they have provided.

Entity valuation adjustments are necessary to reflect the effect of our own credit quality on the fair value of our net liability positions with each counterparty. This adjustment takes into account any credit enhancements, such as collateral margin we may have posted with a counterparty, as well as any letters of credit that we have provided. The methodology to determine this adjustment is consistent with how we evaluate counterparty credit risk, taking into account our own credit rating, current credit spreads, as well as any change in such spreads since the last measurement date.

Liquidity valuation adjustments are necessary when we are not able to observe a recent market price for financial instruments that trade in less active markets for the fair value to reflect the cost of exiting the position. Exchange traded contracts are valued at market value without making any additional valuation adjustments and, therefore, no liquidity reserve is applied. For contracts other than exchange traded instruments, we mark our positions to the midpoint of the bid/ask spread, and record a liquidity reserve based upon our total net position. We believe that such practice results in the most reliable fair value measurement as viewed by a market participant.

We manage our derivative instruments on a portfolio basis and the valuation adjustments described above are calculated on this basis. We believe that the portfolio level approach represents the highest and best use for these assets as there are benefits inherent in naturally offsetting positions within the portfolio at any given time, and this approach is consistent with how a market participant would view and value the assets and liabilities. Although we take a portfolio approach to managing these assets/liabilities, in order to reflect the fair value of any one individual contract within the portfolio, we allocate all valuation adjustments down to the contract level, to the extent deemed necessary, based upon either the notional contract volume, or the contract value, whichever is more applicable.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While we believe that our valuation methods are appropriate and consistent with other market participants, we recognize that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. We review our fair value policies on a regular basis taking into consideration changes in the marketplace and, if necessary, will adjust our policies accordingly. See Note 12 - Risk Management and Hedging Activities.

Valuation Hierarchy

Our fair value measurements are grouped into a three-level valuation hierarchy and are categorized in their entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows.

•Level 1 — inputs are unadjusted quoted prices for identical assets or liabilities in active markets.

•Level 2 — inputs include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•Level 3 — inputs are unobservable and considered significant to the fair value measurement.

A financial instrument’s categorization within the hierarchy is based upon the level of judgment involved in the most significant input in the determination of the instrument’s fair value. Following is a description of the valuation methodologies used as well as the general classification of such instruments pursuant to the hierarchy.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Commodity Derivative Assets and Liabilities

We enter into a variety of derivative financial instruments, which may include exchange traded instruments (such as New York Mercantile Exchange, or NYMEX, crude oil or natural gas futures) or over-the-counter, or OTC, instruments (such as natural gas contracts, crude oil or NGL swaps). The exchange traded instruments are generally executed with a highly rated broker dealer serving as the clearinghouse for individual transactions.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2023 and 2022

Our activities expose us to varying degrees of commodity price risk. To mitigate a portion of this risk and to manage commodity price risk related primarily to owned natural gas storage and pipeline assets, we engage in natural gas asset based trading and marketing, and we may enter into natural gas and crude oil derivatives to lock in a specific margin when market conditions are favorable. A portion of this may be accomplished through the use of exchange traded derivative contracts. Such instruments are generally classified as Level 1 since the value is equal to the quoted market price of the exchange traded instrument as of our balance sheet date, and no adjustments are required. Depending upon market conditions and our strategy we may enter into exchange traded derivative positions with a significant time horizon to maturity. Although such instruments are exchange traded, market prices may only be readily observable for a portion of the duration of the instrument. In order to calculate the fair value of these instruments, readily observable market information is utilized to the extent it is available; however, in the event that readily observable market data is not available, we may interpolate or extrapolate based upon observable data. In instances where we utilize an interpolated or extrapolated value, and it is considered significant to the valuation of the contract as a whole, we would classify the instrument within Level 3.

We also engage in the business of trading energy related products and services, which exposes us to market variables and commodity price risk. We may enter into physical contracts or financial instruments with the objective of realizing a positive margin from the purchase and sale of these commodity-based instruments. We may enter into derivative instruments for NGLs or other energy related products, primarily using the OTC derivative instrument markets, which are not as active and liquid as exchange traded instruments. Market quotes for such contracts may only be available for short dated positions (up to six months), and an active market itself may not exist beyond such time horizon. Contracts entered into with a relatively short time horizon for which prices are readily observable in the OTC market are generally classified within Level 2. Contracts ~~entered into~~ with a longer time horizon, for which ~~prices are not readily observable in the OTC market~~we internally generate a forward curve to value such instruments, are generally classified within Level 3. The internally generated curve may utilize a variety of assumptions including, but not limited to, data obtained from third-party pricing services, historical and future expected relationship of NGL prices to crude oil prices, the knowledge of expected supply sources coming online, expected weather trends within certain regions of the United States, and the future expected demand for NGLs.

Each instrument is assigned to a level within the hierarchy at the end of each financial quarter depending upon the extent to which the valuation inputs are observable. Generally, an instrument will move toward a level within the hierarchy that requires a lower degree of judgment as the time to maturity approaches, and as the markets in which the asset trades will likely become more liquid and prices more readily available in the market, thus reducing the need to rely upon our internally developed assumptions. However, the level of a given instrument may change, in either direction, depending upon market conditions and the availability of market observable data.

~~Interest Rate Derivative Assets and Liabilities~~

We periodically use interest rate swap agreements as part of our overall capital strategy. These instruments effectively exchange a portion of our fixed-rate debt for floating rate debt or floating rate debt for fixed-rate debt. The swaps are generally priced based upon a London Interbank Offered Rate, or LIBOR, instrument with similar duration, adjusted by the credit spread between our company and the LIBOR instrument. Given that a portion of the swap value is derived from the credit spread, which may be observed by comparing similar assets in the market, these instruments are classified within Level 2. Default risk on either side of the swap transaction is also considered in the valuation. We record counterparty credit and entity valuation adjustments in the valuation of interest rate swaps; however, these reserves are not considered to be a significant input to the overall valuation.

~~Nonfinancial Assets and Liabilities~~

We utilize fair value to perform impairment tests as required on our property, plant and equipment, goodwill, and other long-lived intangible assets. Assets and liabilities acquired in third party business combinations are recorded at their fair value as of the date of acquisition. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified within Level 3 in the event that we were required to measure and record such assets at fair value within our condensed consolidated financial statements. Additionally, we use fair value to determine the inception value of our asset retirement obligations. The inputs used to determine such fair value are primarily based upon costs

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

incurred historically for similar work, as well as estimates from independent third parties for costs that would be incurred to restore leased property to the contractually stipulated condition, and would generally be classified within Level 3.

During the nine months ended September 30, 2017, we recognized impairments of property, plant and equipment, intangible assets and investment in unconsolidated affiliates of $48 million in our condensed consolidated statement of operations as summarized in the table below. Our impairment determinations involved significant assumptions and judgments. Differing assumptions regarding any of these inputs could have a significant effect on the various valuations. As such, the fair value measurements utilized within these models are classified as non-recurring Level 3 measurements in the fair value hierarchy because they are not observable from objective sources.

The following tables present the carrying value of assets measured at fair value on a non-recurring basis, by consolidated balance sheet caption and by valuation hierarchy, as of and for the three and nine months ended September 30, 2017:

Net Carrying
Value
Fair Value Measurements Using
Asset
Impairments
Level 1 Level 2 Level 3
(millions)
Three and Nine Months Ended September 30, 2017
Property, plant and equipment $ 14
$ —
$ —
$ 14
$ 26
Intangible assets 11
—
—
11
21
Investment in unconsolidated affiliates 1
—
—
1
1
Total non-recurring assets at fair value $ 26
$ —
$ —
$ 26
$ 48

On January 3, 2017, the Chicago Mercantile Exchange ("CME") modified its exchange rules to characterize daily variation margin amounts as "final settlement" values. The modified rule ("CME Rule 814") impacts derivative financial instruments traded on exchanges administered by the CME, including the New York Mercantile Exchange. As a result of this rule change, we are reporting the affected derivative instruments on a net basis on our balance sheet. The netting process results in the elimination of offsetting derivative assets, derivative liabilities and associated collateral cash deposits and related amounts as if the underlying derivative instruments had settled on the balance sheet date. Through December 31, 2016, we historically reported such derivatives and associated collateral balances on a gross basis. Derivative transactions and associated collateral balances cleared on exchanges other than the CME continue to be reported on a gross basis.

The following table presents the financial instruments carried at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, by condensed consolidated balance sheet caption and by valuation hierarchy, as described above:


	March 31, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total Carrying Value		Level 1		Level 2		Level 3		Total Carrying Value
	(millions)
Current assets:
Commodity derivatives	$	1	$	71	$	15	$	87	$	2	$	121	$	17	$	140
Short-term investments (a)	$	—	$	1	$	—	$	1	$	—	$	1	$	—	$	1

Long-term assets:
Commodity derivatives	$	—	$	19	$	1	$	20	$	—	$	23	$	3	$	26
Investments in marketable securities (a)	$	45	$	—	$	—	$	45	$	42	$	—	$	—	$	42
Current liabilities:
Commodity derivatives	$	(1)	$	(66)	$	(1)	$	(68)	$	(4)	$	(142)	$	(2)	$	(148)

Long-term liabilities:
Commodity derivatives	$	—	$	(19)	$	(1)	$	(20)	$	—	$	(32)	$	(3)	$	(35)

September 30, 2017 December 31, 2016
Level 1 Level 2 Level 3
Total
Carrying
Value
Level 1 Level 2 Level 3
Total
Carrying
Value
(Millions)
Current assets:
Commodity derivatives (a) $ 9
$ 21
$ 2
$ 32
$ 5
$ 28
$ 9
$ 42
Short-term investments (b) $ 310
$ —
$ —
$ 310
$ —
$ —
$ —
$ —
Long-term assets:
Commodity derivatives (c) $ 1
$ 2
$ 1
$ 4
$ —
$ —
$ 5
$ 5
Current liabilities:
Commodity derivatives (d) $ (6 ) $ (28 ) $ (8 ) $ (42 ) $ (11 ) $ (57 ) $ (23 ) $ (91 )
Long-term liabilities:
Commodity derivatives (e) $ (2 ) $ (6 ) $ (2 ) $ (10 ) $ (1 ) $ —
$ —
$ (1 )


~~(a)~~	~~Included in current unrealized gains on derivative instruments in our condensed consolidated balance sheets.~~


~~(b)~~	~~Includes short-term money market securities included in cash and cash equivalents in our condensed consolidated balance sheets.~~


~~(c)~~	~~Included in long-term unrealized gains on derivative instruments in our condensed consolidated balance sheets.~~


~~(d)~~	~~Included in current unrealized losses on derivative instruments in our condensed consolidated balance sheets.~~


~~(e)~~	~~Included in long-term unrealized losses on derivative instruments in our condensed consolidated balance sheets.~~

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

~~Changes in Levels 1~~(a) $1 million and ~~2 Fair Value Measurements~~

~~The determination to classify a financial instrument~~$1 million recorded within ~~Level 1 or Level 2 is based upon the availability of quoted prices for identical or similar~~"Other" current assets and ~~liabilities in active markets. Depending upon the information readily observable in the market, and/or the use~~$45 million and $42 million recorded within "Other long-term assets" as of identical or similar quoted prices, which are significant to the overall valuation, the classification of any individual financial instrument may differ from one measurement date to the next. To qualify as a transfer, the asset or liability must have existed in the previous reporting periodMarch 31, 2023 and moved into a different level during the current period. In the event that there is a movement between the classification of an instrument as Level 1 or 2, the transfer would be reflected in a table as Transfers into or out of Level 1 and Level 2. During the three and nine months ended September 30, 2017 and 2016, there were no transfers between Level 1 and Level 2 of the fair value hierarchy.December 31, 2022, respectively.

Changes in Level 3 Fair Value Measurements

The ~~tables~~table below ~~illustrate~~illustrates a rollforward of the amounts included in our condensed consolidated balance sheets for derivative financial instruments that we have classified within Level 3. Since financial instruments classified as Level 3 typically include a combination of observable components (that is, components that are actively quoted and can be validated to external sources) and unobservable components, the gains and losses in the table below may include changes in fair value due in part to observable market factors, or changes to our assumptions on the unobservable components. Depending upon the information readily observable in the market, and/or the use of unobservable inputs, which are significant to the overall valuation, the classification of any individual financial instrument may differ from one measurement date to the next. The significant unobservable inputs used in determining fair value include adjustments by other market-based or independently sourced market data such as historical commodity volatilities, crude oil future yield curves, and/or counterparty specific considerations. In the event that there is a movement to/from the classification of an instrument as Level 3, we would reflect such items in the table below within the “Transfers into/out of Level 3” captions.

We manage our overall risk at the portfolio level and in the execution of our strategy, we may use a combination of financial instruments, which may be classified within any level. Since Level 1 and Level 2 risk management instruments are not included in the rollforward below, the gains or losses in the table do not reflect the effect of our total risk management activities.


	Commodity Derivative Instruments
	Current Assets		Long-Term Assets		Current Liabilities		Long-Term Liabilities
	(millions)
Three months ended March 31, 2023 (a):
Beginning balance	$	17	$	3	$	(2)	$	(3)
Net unrealized gains (losses) included in earnings	2		(1)		—		1

Transfers out of Level 3	—		(1)		—		1
Settlements	(4)		—		1		—


Ending balance	$	15	$	1	$	(1)	$	(1)
Net unrealized gains on derivatives still held included in earnings	$	2	$	—	$	—	$	—
Three months ended March 31, 2022 (a):
Beginning balance	$	—	$	2	$	(3)	$	(4)
Net unrealized gains (losses) included in earnings	2		3		(12)		(6)

Transfers out of Level 3	—		(1)		1		5
Settlements	—		—		4		—


Ending balance	$	2	$	4	$	(10)	$	(5)
Net unrealized gains (losses) on derivatives still held included in earnings	$	2	$	2	$	(8)	$	(3)

(a) There were no purchases, issuances or sales of derivatives or transfers into Level 3 for the three months ended March 31, 2023 and 2022.

Commodity Derivative Instruments

Current
Assets

Long-Term
Assets

Current
Liabilities

Long-Term
Liabilities
(Millions)
Three months ended September 30, 2017 (a):
Beginning balance $ 7
$ 2
$ (2 ) $ (3 )
Net unrealized gains (losses) included in earnings (b) —
2
(26 ) —
Transfers out of Level 3 (c) —
—
2
—
Settlements —
—
2
—
CME Rule 814 adjustment (5 ) (3 ) 16
1
Ending balance $ 2
$ 1
$ (8 ) $ (2 )
Net unrealized gains (losses) on derivatives still held included in earnings (b) $ 3
$ 2
$ (22 ) $ —
Three months ended September 30, 2016 (a):
Beginning balance $ 5
$ 2
$ (8 ) $ (2 )
Net unrealized gains included in earnings (b) 2
—
—
1
Transfers out of Level 3 (c) (2 ) —
2
—
Settlements (1 ) —
1
—
Ending balance $ 4
$ 2
$ (5 ) $ (1 )
Net unrealized gains on derivatives still held included in earnings (b) $ 1
$ —
$ —
$ 1

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

Commodity Derivative Instruments
Current
Assets Long-Term
Assets Current
Liabilities Long-Term
Liabilities
(Millions)
Nine months ended September 30, 2017 (a):
Beginning balance $ 9
$ 5
$ (23 ) $ —
Net unrealized gains (losses) included in earnings (b) 4
(1 ) (20 ) (3 )
Transfers out of Level 3 (c) (4 ) —
12
—
Settlements (2 ) —
7
—
CME Rule 814 adjustment (5 ) (3 ) 16
1
Ending balance $ 2
$ 1
$ (8 ) $ (2 )
Net unrealized gains (losses) on derivatives still held included in earnings (b) $ 7
$ (1 ) $ (21 ) $ (2 )
Nine months ended September 30, 2016 (a):
Beginning balance $ 35
$ 4
$ (23 ) $ (6 )
Net unrealized (losses) gains included in earnings (b) (3 ) (2 ) 12
5
Transfers out of Level 3 (c) (2 ) —
3
—
Settlements (26 ) —
3
—
Ending balance $ 4
$ 2
$ (5 ) $ (1 )
Net unrealized gains (losses) on derivatives still held included in earnings (b) $ 2
$ 1
$ (4 ) $ 5


~~(a)~~	~~There were no purchases, issuances or sales of derivatives or transfers into Level 3 for the three and nine months ended September 30, 2017 and~~ ~~2016~~.


~~(b)~~	~~Represents the amount of unrealized gains or losses for the period, included in trading and marketing gains (losses), net.~~


~~(c)~~	~~Amounts transferred out of Level 3 are reflected at fair value at the end of the period.~~

Quantitative Information and Fair Value Sensitivities Related to Level 3 Unobservable Inputs

We utilize the market approach to measure the fair value of our commodity contracts. The significant unobservable inputs used in this approach to fair value are longer dated price quotes. Our sensitivity to these longer dated forward curve prices are presented in the table below. Significant changes in any of those inputs in isolation would result in significantly different fair value measurements, depending on our short or long position in contracts.

March 31, 2023

Product Group

Fair Value

Valuation Techniques

Unobservable Input

Forward
Curve Range

Weighted Average (a)

(millions)

Assets

NGLs

Market approach

Longer dated forward curve prices

$0.21-$1.52

$0.86

Per gallon

Natural gas

Market approach

Longer dated forward curve prices

$2.76-$5.24

$2.92

Per MMBtu

Liabilities

NGLs

(2)

Market approach

Longer dated forward curve prices

$0.21-$1.56

$0.96

Per gallon

September 30, 2017
Product Group Fair Value
Forward
Curve Range

(Millions)
Assets
NGLs $ 3
$0.28-$1.22 Per gallon
Liabilities
NGLs $ (10 ) $0.21-$1.22 Per gallon
(a) Unobservable inputs were weighted by the instrument's notional amounts.

Estimated Fair Value of Financial Instruments

Valuation of a contract’s fair value is validated by an internal group independent of the marketing group. While common industry practices are used to develop valuation techniques, changes in pricing methodologies or the underlying assumptions could result in significantly different fair values and income recognition. When available, quoted market prices or prices obtained through external sources are used to determine a contract’s fair value. For contracts with a delivery location or duration for which quoted market prices are not available, fair value is determined based on pricing models developed primarily from historical and expected relationship with quoted market prices.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Values are adjusted to reflect the credit risk inherent in the transaction as well as the potential impact of liquidating open positions in an orderly manner over a reasonable time period under current conditions. Changes in market prices and management estimates directly affect the estimated fair value of these contracts. Accordingly, it is reasonably possible that such estimates may change in the near term.

The fair value of our interest rate swaps, if any, and commodity non-trading derivatives is based on prices supported by quoted market prices and other external sources and prices based on models and other valuation methods. The “prices supported by quoted market prices and other external sources” category includes our interest rate swaps, if any, our NGL and crude oil swaps and our NYMEX positions in natural gas. In addition, this category includes our forward positions in natural gas for which our forward price curves are obtained from a third party pricing service and then validated through an internal process which includes the use of independent broker quotes. This category also includes our forward positions in NGLs at points for which OTC broker quotes for similar assets or liabilities are available for the full term of the instrument. This category also includes “strip” transactions whose pricing inputs are directly or indirectly observable from external sources and then modeled to daily or monthly prices as appropriate. The “prices based on models and other valuation methods” category includes the value of transactions for which inputs to the fair value of the instrument are unobservable in the marketplace and are considered significant to the overall fair value of the instrument. The fair value of these instruments may be based upon an internally developed price curve, which was constructed as a result of the long dated nature of the transaction or the illiquidity of the specific market point.

We have determined fair value amounts using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. The use of different market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.

The fair value of accounts receivable and accounts payable ~~and short-term borrowings~~ are not materially different from their carrying amounts because of the short-term nature of these instruments or the stated rates approximating market rates. Derivative instruments are carried at fair value.

We determine the fair value of our fixed-rate senior notes and junior subordinated notes based on quotes obtained from bond dealers. ~~We determine the fair~~The carrying value of borrowings under ~~our revolving credit facility based upon~~ the ~~discounted present value of expected future cash flows, taking into account the difference between the contractual borrowing spread~~Credit Agreement and the ~~spread for similar credit facilities available in the marketplace.~~Securitization Facility approximate fair value as their interest rates are based on prevailing market interest rates. We classify the fair values of our outstanding debt balances within Level 2 of the valuation hierarchy. As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, the carrying value and fair value of our total debt, including current maturities, were as follows:

September 30, 2017 December 31, 2016
Carrying Value (a) Fair Value Carrying Value (a) Fair Value
(Millions)

Total debt $ 5,235
$ 5,365
$ 5,430
$ 5,395


		March 31, 2023				December 31, 2022
		Carrying Value (a)		Fair Value		Carrying Value (a)		Fair Value
	(millions)

Total debt		$	4,908	$	4,900	$	4,874	$	4,772

(a) Excludes unamortized issuance ~~costs.~~costs and finance lease liabilities.

8. Debt

Senior Notes Redemption

On March 15, 2023, we repaid, at par, all $500 million of aggregate principal amount outstanding of our 3.875% Senior Notes due March 15, 2023 using borrowings under our Credit Facility and Securitization Facility.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

~~11. Debt~~

September 30,
2017 December 31,
2016
(Millions)
Senior notes:
Issued November 2012, interest at 2.500% payable semi-annually, due December 2017 $ 500
$ 500
Issued February 2009, interest at 9.750% payable semiannually, due March 2019 (a) 450
450
Issued March 2014, interest at 2.700% payable semi-annually, due April 2019 325
325
Issued March 2010, interest at 5.350% payable semiannually, due March 2020 (a) 600
600
Issued September 2011, interest at 4.750% payable semiannually, due September 2021 500
500
Issued March 2012, interest at 4.950% payable semi-annually, due April 2022 350
350
Issued March 2013, interest at 3.875% payable semi-annually, due March 2023 500
500
Issued August 2000, interest at 8.125% payable semi-annually, due August 2030 (a) 300
300
Issued October 2006, interest at 6.450% payable semi-annually, due November 2036 300
300
Issued September 2007, interest at 6.750% payable semi-annually, due September 2037 450
450
Issued March 2014, interest at 5.600% payable semi-annually, due April 2044 400
400
Junior subordinated notes:
Issued May 2013, interest at 5.850% payable semi-annually, due May 2043 550
550
Credit facility with financial institutions:
Revolving credit facility, weighted-average variable interest rate of 2.010%, as of December 31, 2016, due May 2019 —
195
Fair value adjustments related to interest rate swap fair value hedges (a) 23
24
Unamortized issuance costs (24 ) (23 )
Unamortized discount (13 ) (14 )
Total debt 5,211
5,407
Current maturities of long-term debt 500
500
Total long-term debt $ 4,711
$ 4,907

~~(a) The swaps associated with this debt were previously terminated. The remaining long-term fair value of approximately~~

~~$23 million related to the swaps is being amortized as a reduction to interest expense through 2019, 2020 and 2030, the original maturity dates of the debt.~~

Credit ~~Facility with Financial Institutions~~Agreement

~~In February 2017, we further amended our $1.25~~We are party to a $1.4 billion ~~senior unsecured revolving credit agreement that matures on May 1, 2019, or the Credit Agreement, to increase the aggregate commitments under the~~ unsecured revolving credit facility ~~to approximately $1.4 billion. The Credit Agreement is used for working capital requirements and other general partnership purposes including acquisitions.~~

The Credit Agreement allows for unrestricted cash and cash equivalents to be netted against consolidated indebtedness for purposes of calculating the Partnership’s Consolidated Leverage Ratio (as defined in the Credit Agreement). Additionally, undergoverned by the Credit Agreement the maximum Consolidated Leverage Ratio of the Partnership as of the end of any fiscal quarter shall not exceed: (a) 5.75 to 1.0 for the quarters ending March 31, 2017 through December 31, 2017, (b) 5.50 to 1.0 for the quarter ending March 31, 2018, (c) 5.25 to 1.0 for the quarter ending June 30, 2018, and (d) 5.00 to 1.0 for the quarters thereafter; provided that if there is a Qualified Acquisition (as defined in the Credit Agreement) during any fiscal quarter ending June 30, 2018 or thereafter, the maximum Consolidated Leverage Ratio shall not exceed 5.50 to 1.0 at the end of such quarter and at the end of the two fiscal quarters immediately thereafter.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

~~Our cost of borrowing under the Credit Agreement is determined by a ratings-based pricing grid. Indebtedness under the Credit Agreement~~ bears interest at ~~either: (1) LIBOR,~~either the term SOFR rate or the base rate plus, in each case, an applicable margin ~~of 1.45%~~ based on our current credit rating; or (2) (a) the base rate which shall be the higher of the prime rate, the Federal Funds rate plus 0.50% or the LIBOR Market Index rate plus 1%, plus (b) an applicable margin of 0.45% based on our current credit rating. The Credit Agreement ~~incurs an annual~~matures on March 18, 2027. The Credit Agreement also includes sustainability linked key performance indicators that increase or decrease the applicable margin and facility fee ~~of 0.3%~~payable thereunder based on our ~~current credit rating. This fee is paid on drawn~~safety performance relative to our peers and ~~undrawn portions of the approximately $1.4 billion revolving credit facility.~~year-over-year change in our greenhouse gas emissions intensity rate.

As of ~~September 30, 2017~~,March 31, 2023, we had unused borrowing capacity of ~~$1,373~~$1,173 million, net of ~~$25~~$225 million of outstanding borrowings and $2 million of letters of credit, under the Credit ~~Agreement. Our borrowing capacity may be limited by~~Agreement, of which $1,173 million would have been available to borrow for working capital and other general partnership purposes based on the financial covenants set forth in the Credit Agreement. ~~The financial covenants set forth in the Credit Agreement limit the Partnership's ability to incur incremental debt by $1,373 million as of September 30, 2017.~~ Except in the case of a default, amounts borrowed under our Credit Agreement will not become due prior to the ~~May 1, 2019~~March 18, 2027 maturity date.

Accounts Receivable Securitization Facility

~~Senior Notes~~The Securitization Facility provides for up to $350 million of borrowing capacity through August 2024 at an adjusted SOFR and ~~Junior Subordinated Notes~~includes an uncommitted option to increase the total commitments under the Securitization Facility by up to an additional $400 million. Under this Securitization Facility, certain of the Partnership’s wholly owned subsidiaries sell or contribute receivables to another of the Partnership’s consolidated subsidiaries, DCP Receivables, a bankruptcy-remote special purpose entity created for the sole purpose of the Securitization Facility.

Our senior notes and junior subordinated notes, collectively referred to as our debt securities, mature and become payable on their respective due dates, and are not subject to any sinking fund or mandatory redemption provisions. The senior notes are senior unsecured obligations that are guaranteed by the Partnership and rank equally in a rightAs of ~~payment with our other senior unsecured indebtedness, including indebtedness under our Credit Agreement, and the junior subordinated notes are unsecured and rank subordinate in right of payment to all~~March 31, 2023, DCP Receivables had approximately $887 million of our ~~existing and future senior indebtedness. The debt securities include an optional redemption whereby we may elect to redeem~~accounts receivable securing borrowings of $350 million under the notes, in whole or in part from time-to-time for a premium. Additionally, we may defer the payment of all or part of the interest on the junior subordinated notes for one or more periods up to five consecutive years. The underwriters’ fees and related expenses are recorded in our condensed consolidated balance sheets within the carrying amount of long-term debt and will be amortized over the term of the notes.

Securitization Facility.

The maturities of our ~~long-term~~ debt as of March 31, 2023 are as follows:


	Debt Maturities
	(millions)
2023	$	—
2024	350
2025	825
2026	—
2027	725
Thereafter	3,000
Total debt	$	4,900

Debt
Maturities
(Millions)
2018 $ —
2019 775
2020 600
2021 500
2022 350
Thereafter 2,500
Total long-term debt $ 4,725

~~12.~~9. Risk Management and Hedging Activities

Our operations expose us to a variety of risks including but not limited to changes in the prices of commodities that we buy or sell, changes in interest rates, and the creditworthiness of each of our counterparties. We manage certain of these exposures with either physical or financial transactions. We have established a comprehensive risk management policy and a risk management committee ~~or the Risk~~(the “Risk Management ~~Committee,~~Committee”), to monitor and manage market risks associated with commodity prices and counterparty credit. The Risk Management Committee is composed of senior executives who receive regular briefings on positions and exposures, credit exposures and overall risk management in the context of market activities. The Risk Management Committee is responsible for the overall management of credit risk and commodity price risk, including monitoring exposure limits. ~~The following describes each of the risks that we manage.~~

~~Commodity Price Risk~~

Our portfolio of commodity derivative activity is primarily accounted for using the mark-to-market method of accounting; however, depending upon our risk profile and objectives, in certain limited cases, we may execute transactions that qualify for the hedge method of accounting. The risks, strategies and instruments used to mitigate such risks, as well as the method of accounting are discussed and summarized below.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

~~Natural Gas Asset Based Trading and Marketing~~

Our natural gas storage and pipeline assets are exposed to certain risks including changes in commodity prices. We manage commodity price risk related to our natural gas storage and pipeline assets through our commodity derivative program. The commercial activities related to our natural gas storage and pipeline assets primarily consist of the purchase and sale of gas and associated time spreads and basis spreads.

A time spread transaction is executed by establishing a long gas position at one point in time and establishing an equal short gas position at a different point in time. Time spread transactions allow us to lock in a margin supported by the injection, withdrawal, and storage capacity of our natural gas storage assets. We may execute basis spread transactions to mitigate the risk of sale and purchase price differentials across our system. A basis spread transaction allows us to lock in a margin on our physical purchases and sales of gas, including injections and withdrawals from storage. We typically use swaps to execute these transactions, which are not designated as hedging instruments and are recorded at fair value with changes in fair value recorded in the current period condensed consolidated statements of operations. While gas held in our storage locations is recorded at the lower of average cost or market, the derivative instruments that are used to manage our storage facilities are recorded at fair value and any changes in fair value are currently recorded in our condensed consolidated statements of operations. Even though we may have economically hedged our exposure and locked in a future margin, the use of lower-of-cost-or-market accounting for our physical inventory and the use of mark-to-market accounting for our derivative instruments may subject our earnings to market volatility.

~~Commodity Cash Flow Hedges~~

In order for our natural gas storage facility to remain operational, a minimum level of base gas must be maintained in each storage cavern, which is capitalized on our condensed consolidated balance sheets as a component of property, plant and equipment, net. During construction or expansion of our storage caverns, we may execute a series of derivative financial instruments to mitigate a portion of the risk associated with the forecasted purchase of natural gas when we bring the storage caverns into operation. These derivative financial instruments may be designated as cash flow hedges. While the cash paid upon settlement of these hedges economically fixes the cash required to purchase base gas, the deferred losses or gains would remain in accumulated other comprehensive income, or AOCI, until the cavern is emptied and the base gas is sold. The balance in AOCI of our previously settled base gas cash flow hedges was in a loss position of $6 million as of September 30, 2017.

~~Commodity Cash Flow Protection Activities~~

We are exposed to the impact of market fluctuations in the prices of natural gas, NGLs and condensate as a result of our gathering, processing, sales and storage activities. For gathering, processing and storage services, we may receive cash or commodities as payment for these services, depending on the contract type. We may enter into derivative financial instruments to mitigate a portion of the risk of weakening natural gas, NGL and condensate prices associated with our gathering, processing and sales activities, thereby stabilizing our cash flows. Our derivative financial instruments used to mitigate a portion of the risk of weakening natural gas, NGL and condensate prices extend through the first quarter of 2019. The commodity derivative instruments used for our hedging programs are a combination of direct NGL product, crude oil and natural gas hedges. Due to the limited liquidity and tenor of the NGL derivative market, we may use crude oil swaps to mitigate a portion of the commodity price risk exposure for NGLs. Historically, prices of NGLs have generally been related to crude oil prices; however, there are periods of time when NGL pricing may be at a greater discount to crude oil, resulting in additional exposure to NGL commodity prices. The relationship of NGLs to crude oil continues to be lower than historical relationships. When our crude oil swaps become short-term in nature, certain crude oil derivatives may be converted to NGL derivatives by entering into offsetting crude oil swaps while adding NGL swaps. Crude oil and NGL transactions are primarily accomplished through the use of forward contracts that effectively exchange floating price risk for a fixed price. The type of instrument used to mitigate a portion of the risk may vary depending on our risk management objectives. These transactions are not designated as hedging instruments for accounting purposes and the change in fair value is reflected in the current period within our condensed consolidated statements of operations as trading and marketing gains and (losses), net.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

~~NGL Proprietary Trading~~

Our NGL proprietary trading activity includes trading energy related products and services. We undertake these activities through the use of fixed forward sales and purchases, basis and spread trades, storage opportunities, put/call options, term contracts and spot market trading. These energy trading operations are exposed to market variables and commodity price risk with respect to these products and services, and these operations may enter into physical contracts and financial instruments with the objective of realizing a positive margin from the purchase and sale of commodity-based instruments. These physical and financial instruments are not designated as hedging instruments and are recorded at fair value with changes in fair value recorded in the current period condensed consolidated statements of operations.

~~We employ established risk limits, policies and procedures to manage risks associated with our natural gas asset based trading and marketing and NGL proprietary trading.~~

~~Interest Rate Risk~~

We enter into debt arrangements that have either fixed or floating rates, therefore we are exposed to market risks related to changes in interest rates. We periodically use interest rate swaps to convert our floating rate debt to fixed-rate debt or to convert our fixed-rate debt to floating rate debt. Our primary goals include: (1) maintaining an appropriate ratio of fixed-rate debt to floating-rate debt; (2) reducing volatility of earnings resulting from interest rate fluctuations; and (3) locking in attractive interest rates.

We previously had interest rate cash flow hedges and fair value hedges in place that were terminated. As the underlying transactions impact earnings, the remaining net loss deferred in AOCI relative to these cash flow hedges will be reclassified to interest expense, net from 2022 through 2030 and the remaining net loss included in long-term debt relative to these fair value hedges will be reclassified to interest expense, net from 2019 through 2030, the original maturity dates of the debt.

~~Credit Risk~~

Our principal customers range from large, natural gas marketers to industrial end-users for our natural gas products and services, as well as large multi-national petrochemical and refining companies, to small regional propane distributors for our NGL products and services. Substantially all of our natural gas and NGL sales are made at market-based prices. Approximately 22% of our NGL production was committed to Phillips 66 and CPChem as of September 30, 2017. This concentration of credit risk may affect our overall credit risk, in that these customers may be similarly affected by changes in economic, regulatory or other factors. Where exposed to credit risk, we analyze the counterparties’ financial condition prior to entering into an agreement, establish credit limits and monitor the appropriateness of these limits on an ongoing basis. We may use various master agreements that include language giving us the right to request collateral to mitigate credit exposure. The collateral language provides for a counterparty to po~~st cash or letters of credit for exposure in excess of the established threshold. The threshold amount represents an open~~ ~~credit limit, determined in accordance with our credit policy.~~ The collateral language also provides that the inability to post collateral is sufficient cause to terminate a contract and liquidate all positions. In addition, our master agreements and our standard gas and NGL sales contracts contain adequate assurance provisions, which allow us to suspend deliveries and cancel agreements, or continue deliveries to the buyer after the buyer provides security for payment in a satisfactory form.

~~Contingent Credit Features~~

Each of the above risks is managed through the execution of individual contracts with a variety of counterparties. Certain of our derivative contracts may contain credit-risk related contingent provisions that may require us to take certain actions in certain circumstances.

We have International Swaps and Derivatives Association, or ISDA, contracts which are standardized master legal arrangements that establish key terms and conditions which govern certain derivative transactions. These ISDA contracts contain standard credit-risk related contingent provisions. Some of the provisions we are subject to are outlined below.

If we were to have an effective event of default under our Credit Agreement that occurs and is continuing, our ISDA counterparties may have the right to request early termination and net settlement of any outstanding derivative liability positions.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Our ISDA counterparties generally have collateral thresholds of zero, requiring us to fully collateralize any commodity contracts in a net liability position, when our credit rating is below investment grade.

Additionally, in some cases, our ISDA contracts contain cross-default provisions that could constitute a credit-risk related contingent feature. These provisions apply if we default in making timely payments under other credit arrangements and the amount of the default is above certain predefined thresholds, which are significantly high and are generally consistent with the terms of our Credit Agreement. As of September 30, 2017, we were not a party to any agreements that would trigger the cross-default provisions.

Our commodity derivative contracts that are not governed by ISDA contracts do not have any credit-risk related contingent features. Depending upon the movement of commodity prices and interest rates, each of our individual contracts with counterparties to our commodity derivative instruments or interest rate swap instruments are in either a net asset or net liability position. As of September 30, 2017, we had less than $1 million of individual commodity derivative contracts that contain credit-risk related contingent features that were in a net liability position. If we were required to net settle our position with an individual counterparty, due to a credit-risk related event, our ISDA contracts may permit us to net all outstanding contracts with that counterparty, whether in a net asset or net liability position, as well as any cash collateral already posted. As of September 30, 2017, we have not been required to post additional collateral. Although our commodity derivative contracts that contain credit-risk related contingent features were in a net liability position as of September 30, 2017, the net liability position would be offset by contracts in a net asset position.

Collateral

As of ~~September 30, 2017,~~March 31, 2023, we had cash deposits of ~~$42~~$32 million, included in collateral cash deposits in our condensed consolidated balance ~~sheets, and~~sheets. Additionally, as of March 31, 2023, we held letters of credit of $13 million with counterparties to secure our obligations to provide future services or to perform under financial contracts. Additionally, as of September 30, 2017, we held cash of $19 million, included in other current liabilities in our condensed consolidated balance sheet, related to cash postings by third parties and letters of credit of $36$49 million from counterparties to secure their future performance under financial or physical contracts. Collateral amounts held or posted may be fixed or may vary, depending on the value of the underlying contracts, and could cover normal purchases and sales, services, trading and hedging contracts. In many cases, we and our counterparties have publicly disclosed credit ratings, which may impact the amounts of collateral requirements.

~~Physical forward contracts~~

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2023 and financial derivatives are generally cash settled at the expiration of the contract term. These transactions are generally subject to specific credit provisions within the contracts that would allow the seller, at its discretion, to suspend deliveries, cancel agreements or continue deliveries to the buyer after the buyer provides security for payment satisfactory to the seller.2022

Offsetting

Certain of our financial derivative instruments are subject to a master netting or similar arrangement, whereby we may elect to settle multiple positions with an individual counterparty through a single net payment. Each of our individual derivative instruments are presented on a gross basis on the condensed consolidated balance sheets, regardless of our ability to net settle our positions. Instruments that are governed by agreements that include net settle provisions allow final settlement, when presented with a termination event, of outstanding amounts by extinguishing the mutual debts owed between the parties in exchange for a net amount due. We have trade receivables and payables associated with derivative instruments, subject to master netting or similar agreements, which are not included in the table below. The following summarizes the gross and net amounts of our derivative instruments:


	March 31, 2023				December 31, 2022
	Gross Amounts of Assets and (Liabilities) Presented in the Balance Sheet		Amounts Not Offset in the Balance Sheet - Financial Instruments		Net Amount		Gross Amounts of Assets and (Liabilities) Presented in the Balance Sheet		Amounts Not Offset in the Balance Sheet - Financial Instruments		Net Amount
	(millions)
Assets:
Commodity derivatives	$	107	$	(3)	$	104	$	166	$	—	$	166

Liabilities:
Commodity derivatives	$	(88)	$	3	$	(85)	$	(183)	$	—	$	(183)

September 30, 2017 December 31, 2016

Gross Amounts
of Assets and
(Liabilities)
Presented in the
Balance Sheet

Amounts Not
Offset in the
Balance Sheet -
Financial
Instruments

Net
Amount

Gross Amounts
of Assets and
(Liabilities)
Presented in the
Balance Sheet

Amounts Not
Offset in the
Balance Sheet -
Financial
Instruments

Net
Amount
(Millions)
Assets:
Commodity derivatives $ 36
$ —
$ 36
$ 47
$ —
$ 47
Liabilities:
Commodity derivatives $ (52 ) $ —
$ (52 ) $ (92 ) $ —
$ (92 )

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

Summarized Derivative Information

The fair value of our derivative instruments that are marked-to-market each period, as well as the location of each within our condensed consolidated balance sheets, by major category, is summarized below. We have no derivative instruments that are designated as hedging instruments for accounting purposes as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~2022.


Balance Sheet Line Item	March 31, 2023		December 31, 2022		Balance Sheet Line Item	March 31, 2023		December 31, 2022
	(millions)					(millions)









Derivative Assets Not Designated as Hedging Instruments:					Derivative Liabilities Not Designated as Hedging Instruments:
Commodity derivatives:					Commodity derivatives:
Unrealized gains on derivative instruments — current	$	87	$	140	Unrealized losses on derivative instruments — current	$	(68)	$	(148)
Unrealized gains on derivative instruments — long-term	20		26		Unrealized losses on derivative instruments — long-term	(20)		(35)
Total	$	107	$	166	Total	$	(88)	$	(183)

Balance Sheet Line Item September 30,
2017 December 31,
2016 Balance Sheet Line Item September 30,
2017 December 31,
2016
(Millions) (Millions)
Derivative Assets Not Designated as Hedging Instruments: Derivative Liabilities Not Designated as Hedging Instruments:
Commodity derivatives: Commodity derivatives:
Unrealized gains on derivative instruments — current $ 32
$ 42
Unrealized losses on derivative instruments — current $ (42 ) $ (91 )
Unrealized gains on derivative instruments — long-term 4
5
Unrealized losses on derivative instruments — long-term (10 ) (1 )
Total $ 36
$ 47
Total $ (52 ) $ (92 )

~~The following summarizes the balance and activity within AOCI relative to our interest rate, commodity and foreign currency cash flow hedges as of and for~~For the three months ended ~~September 30, 2017:~~

Interest
Rate Cash
Flow
Hedges Commodity
Cash Flow
Hedges Foreign
Currency
Cash Flow
Hedges (a) Total
(Millions)
Net deferred (losses) gains in AOCI (beginning balance) $ (4 ) $ (6 ) $ 1
$ (9 )
Net deferred (losses) gains in AOCI (ending balance) $ (4 ) $ (6 ) $ 1
$ (9 )
Deferred losses in AOCI expected to be reclassified into earnings over the next 12 months $ (1 ) $ —
$ —
$ (1 )

~~The following summarizes the balance~~March 31, 2023 and ~~activity within AOCI relative to our interest rate, commodity and foreign currency cash flow hedges as of and for the nine months ended September 30, 2017:~~

Interest
Rate Cash
Flow
Hedges Commodity
Cash Flow
Hedges Foreign
Currency
Cash Flow
Hedges (a) Total
(Millions)
Net deferred (losses) gains in AOCI (beginning balance) $ (3 ) $ (6 ) $ 1
$ (8 )
Losses reclassified from AOCI to earnings — effective portion 1
—
—
1
Deficit purchase price under carrying value of the Transaction $ (2 ) $ —
$ —
$ (2 )
Net deferred (losses) gains in AOCI (ending balance) $ (4 ) $ (6 ) $ 1
$ (9 )


~~(a)~~	~~Relates to Discovery, an unconsolidated affiliate.~~

For the three and nine months ended September 30, 2017, no derivative losses attributable to the ineffective portion or to amounts excluded from effectiveness testing were recognized in trading and marketing gains, net or interest expense in our condensed consolidated statements of operations. For the three and nine months ended September 30, 2017, no derivative losses were reclassified from AOCI to trading and marketing gains, net or interest expense as a result of the discontinuance of cash flow hedges related to certain forecasted transactions that are not probable of occurring.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

~~The following summarizes the balance and activity within AOCI relative to our interest rate, commodity and foreign currency cash flow hedges as of and for the three months ended September 30, 2016:~~

~~The following summarizes the balance and activity within AOCI relative to our interest rate, commodity and foreign currency cash flow hedges as of and for the nine months ended September 30, 2016:~~


~~(a)~~	~~Relates to Discovery, an unconsolidated affiliate.~~

~~For the three and nine months ended September 30, 2016,~~2022, no derivative losses attributable to the ineffective portion or to amounts excluded from effectiveness testing were recognized in trading and marketing gains or losses, net or interest expense in our condensed consolidated statements of operations. For the three and nine months ended September 30, 2016, no derivative losses were reclassified from AOCI to trading and marketing gains or losses, net or interest expense as a result of the discontinuance of cash flow hedges related to certain forecasted transactions that are not probable of occurring.

Changes in the value of derivative instruments, for which the hedge method of accounting has not been elected from one period to the next, are recorded in the condensed consolidated statements of operations. The following summarizes these amounts and the location within the condensed consolidated statements of operations that such amounts are reflected:

Commodity Derivatives: Statements of Operations Line Item Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
Realized gains $ 16
$ 6
$ 9
$ 90
Unrealized (losses) gains (59 ) 9
1
(80 )
Trading and marketing (losses) gains, net $ (43 ) $ 15
$ 10
$ 10


Commodity Derivatives: Statements of Operations Line Item	Three Months Ended March 31,
		2023		2022
	(millions)
Realized gains (losses)		$	47	$	(59)
Unrealized gains (losses)		40		(176)
Trading and marketing gains (losses), net		$	87	$	(235)

We do not have any derivative financial instruments that ~~qualify~~are designated as a hedge of a net investment.

The following tables represent, by commodity type, our net long or short positions that are expected to partially or entirely settle in each respective year. To the extent that we have long dated derivative positions that span multiple calendar years, the

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended March 31, 2023 and 2022

contract will appear in more than one line item in the tables below.


	March 31, 2023
	Crude Oil	Natural Gas	Natural Gas Liquids	Natural Gas Basis Swaps
Year of Expiration	Net Short Position (Bbls)	Net Short Position (MMBtu)	Net Long (Short) Position (Bbls)	Net (Short) Long Position (MMBtu)
2023	—	(21,590,600)	1,065,818	(4,875,000)
2024	—	(7,100,000)	(85,500)	(5,630,000)
2025	—	—	(1,000)	2,072,500
2026	—	—	—	535,000


	March 31, 2022
	Crude Oil	Natural Gas	Natural Gas Liquids	Natural Gas Basis Swaps
Year of Expiration	Net Short Position (Bbls)	Net Short Position (MMBtu)	Net Short Position (Bbls)	Net (Short) Long Position (MMBtu)
2022	(1,047,000)	(56,954,500)	(5,419,927)	(5,217,500)
2023	(1,526,000)	(1,825,000)	(1,393,000)	(830,000)
2024	(360,000)	(2,745,000)	(1,335,000)	(2,280,000)
2025	—	—	(1,440,000)	4,967,500
2026	—	—	(1,440,000)	535,000
2027	—	—	(360,000)	—

10. Partnership Equity and Distributions

Common Units —During the three months ended March 31, 2023 and 2022, we issued no common units pursuant to our at-the-market program. As of March 31, 2023, $750 million of common units remained available for sale pursuant to our at-the-market program.

Our general partner and DCP Midstream LLC are entitled to a percentage of all quarterly distributions equal to their limited partner interest of approximately 56% as of March 31, 2023.

Distributions — The following table presents our cash distributions paid in 2023:


Payment Date	Per Unit Distribution		Total Cash Distribution
			(millions)
Distributions to common unitholders
February 14, 2023	$	0.43	$	90






















Distributions to Series B Preferred unitholders
March 15, 2023	$	0.4922	$	3













Distributions to Series C Preferred unitholders
January 17, 2023	$	0.4969	$	2

11. Net Income or Loss per Limited Partner Unit

We have the ability to elect to settle certain restricted phantom units at our discretion in either cash or common units. For a portion of restricted phantom units granted, we have the ability and intent to settle vested units through the issuance of common units.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

September 30, 2017
Crude Oil Natural Gas
Natural Gas
Liquids

Natural Gas
Basis Swaps
Year of Expiration
Net Short
Position
(Bbls)

Net Short Position
(MMBtu)

Net (Short) Long
Position
(Bbls)

Net Long
Position
(MMBtu)
2017 (81,000 ) (20,888,000 ) (9,288,558 ) 2,680,000
2018 (1,803,000 ) (29,277,400 ) (13,417,484 ) 9,190,000
2019 (367,000 ) —
(2,353,300 ) 9,317,500
2020 (50,000 ) —
238,548
3,660,000

September 30, 2016
Crude Oil Natural Gas
Natural Gas
Liquids

Natural Gas
Basis Swaps
Year of Expiration
Net Short
Position
(Bbls)

Net Short
Position
(MMBtu)

Net (Short) Long
Position
(Bbls)

Net (Short) Long
Position
(MMBtu)
2016 (380,000 ) (5,915,500 ) (10,018,903 ) (512,500 )
2017 (964,000 ) (27,686,850 ) (7,725,057 ) 6,515,000
2018 —
—
150,216
—
2019 (40,000 ) —
(1,984 ) —
2020 (50,000 ) —
240,000
—

~~13. Partnership Equity and Distributions~~

As part of the Transaction, Phillips 66 and Enbridge agreed, if required, to provide a reduction to incentive distributions payable to our General Partner under our Partnership Agreement of up to $100 million annually through 2019 to target an approximate 1.0 times distribution coverage ratio. Under the terms of our amended partnership agreement, the amount of incentive distributions paid to our General Partner will be evaluated by our General Partner on both a quarterly and annual basis and may be reduced each quarter by an amount determined by our General Partner (the “IDR giveback”). If no determination is made by our General Partner, the quarterly IDR giveback will be $20 million. The IDR giveback, of up to $100 million annually, will be subject to a true-up at the end of the year by taking our total distributable cash flow (as adjusted under our amended partnership agreement) less the total annual distribution payable to our unitholders, adjusted to target an approximate 1.0 times coverage ratio. Distributions paid to the holders of the Partnership's incentive distribution rights were reduced by $20 million and $40 million during the three and nine month periods ended September 30, 2017, respectively, in accordance with the Third Amendment to the Partnership Agreement.

In January 2017, we issued 28,552,480 common units to DCP Midstream, LLC and 2,550,644 general partner units to the General Partner in a private placement as consideration for the Transaction that closed on January 1, 2017. For additional information regarding the Transaction, see Note 3 - Acquisitions.

~~During the nine months ended September 30, 2017 and 2016, we issued no common units pursuant to our 2014 equity distribution agreement.~~

~~The following table presents our cash distributions paid in 2017 and 2016:~~

Payment Date
Per Unit
Distribution

Total Cash
Distribution

(Millions)
August 14, 2017 $ 0.7800
$ 134
May 15, 2017 0.7800
135
February 14, 2017 0.7800
121
November 14, 2016 0.7800
120
August 12, 2016 0.7800
121
May 13, 2016 0.7800
121
February 12, 2016 0.7800
121

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

~~14. Net Income or Loss per Limited Partner Unit~~

Basic and diluted net income ~~or loss~~ per limited partner unit ~~(or "LPU") is~~was calculated ~~by dividing net income or loss allocable to limited partners, by~~as follows for the weighted-average number of outstanding LPUs during the period. Diluted net income or loss per LPU is computed based on the weighted average number of units plus the effect of dilutive potential units outstanding during the period using the two-class method.periods indicated:


	Three Months Ended March 31,
			2023		2022
		(millions, except per unit amounts)

Net income allocable to limited partners			$	206	$	66
Weighted average limited partner units outstanding, basic			208,555,882		208,378,947
Dilutive effects of nonvested restricted phantom units			32,672		422,705
Weighted average limited partner units outstanding, diluted			208,588,554		208,801,652
Net income per limited partner unit, basic and diluted			$	0.99	$	0.32

~~15.~~12. Commitments and Contingent Liabilities

Litigation — We are not a party to any ~~significant~~material legal proceedings, but are a party to various administrative and regulatory proceedings and commercial disputes that have arisen in the ordinary course of our business. Management currently believes that the ultimate resolution of the foregoing matters, taken as a whole, and after consideration of amounts accrued, insurance coverage or other indemnification arrangements, will not have a material adverse effect on our results of operations, financial position, or cash flow.

Insurance — Our insurance coverage is carried with third-party insurers and with an affiliate of Phillips 66. Our insurance coverage includes: ~~(1)~~(i) general liability insurance covering third-party exposures; ~~(2)~~(ii) statutory workers’ compensation insurance; ~~(3)~~(iii) automobile liability insurance for all owned, non-owned and hired vehicles; ~~(4)~~(iv) excess liability insurance above the established primary limits for general liability and automobile liability insurance; ~~(5)~~(v) property insurance, which covers the replacement value of real and personal property and includes business interruption; and ~~(6)~~(vi) insurance covering our directors and officers for acts related to our business activities. All coverage is subject to certain limits and deductibles, the terms and conditions of which are common for companies with similar types of operations.

~~Environmental~~Environment, Health and Safety — The operation of pipelines, plants and other facilities for gathering, transporting, processing, treating, fractionating, or storing natural gas, NGLs and other products is subject to stringent and complex laws and regulations pertaining to the environment, health ~~safety~~ and ~~the environment.~~safety. As an owner or operator of these facilities, we must comply with laws and regulations at the federal, state and, in some cases, local levels that relate to worker health and safety, public health and safety, pipeline safety, air and water quality, solid and hazardous waste management and disposal, and other environmental matters. The cost of planning, designing, constructing and operating pipelines, plants, and other facilities incorporates compliance with environmental laws and regulations, ~~worker~~health and safety standards applicable to workers and the public, and safety standards applicable to our various facilities. In addition, there is increasing focus from (i) ~~from city, state~~regulatory bodies and ~~federal regulatory officials~~communities, and through litigation, on hydraulic fracturing as well as general oil and gas production facilities and the real or perceived environmental or public health impacts of ~~this technique,~~these activities, which indirectly presents some risk to our available supply of natural gas and the resulting supply of ~~NGLs,~~NGLs; (ii) ~~from federal~~ regulatory ~~agencies~~bodies regarding pipeline system safety which could impose additional regulatory burdens and increase the cost of our ~~operations, and~~operations; (iii) ~~from~~ state and federal regulatory ~~officials~~agencies regarding the emission of greenhouse gases and other air emissions associated with our operations or the materials managed as part of our business, which could impose regulatory burdens and increase the cost of our ~~operations.~~operations; and (iv) regulatory bodies and communities that could prevent or delay the development of fossil fuel energy infrastructure such as pipelines, plants, and other facilities used in our business. Failure to comply with these various health, safety and environmental laws and regulations may trigger a variety of administrative, civil and potentially criminal enforcement measures, including citizen suits, which can include the assessment of monetary penalties, the imposition of remedial requirements, and the issuance of injunctions or restrictions on operation. Management believes that, based on currently known information, compliance with these existing laws and regulations will not have a material adverse effect on our results of operations, financial position or cash flows.

The following pending proceedings involve governmental authorities as a party under federal, state, and local laws regulating the discharge of materials into the environment. We have elected to disclose matters where we reasonably believe such proceeding would result in monetary sanctions, exclusive of interest and costs, of $1 million or more. It is not possible for us to predict the final outcome of these pending proceedings; however, we do not expect the outcome of one or more of these proceedings to have a material adverse effect on our results of operations, financial position, or cash flows:

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

•In 2018, the Colorado Department of Public Health and Environment (“CDPHE”) issued a Compliance Advisory in relation to an improperly permitted facility flare and related air emissions from flare operations at one of our gas processing plants, which we had self-disclosed to CDPHE in December 2017. Following information exchanges and discussions with CDPHE, a resolution was proposed pursuant to which the plant's air permit would be revised to include the flare and emissions limits for such flare in addition to us paying an administrative penalty as well as an economic benefit payment generally covering the period when the flare was required to be included in the facility air permit. A revised air permit was issued in May 2019, but the parties had not yet entered into a final settlement agreement to complete the matter. Subsequently, in July 2020 CDPHE issued a Notice of Violation in relation to amine treater emissions at this gas processing plant, which we had self-disclosed to CDPHE in April 2020. We are still exchanging information and holding discussions with CDPHE as to this and the foregoing flare-related enforcement matter, including possible settlement terms, although these matters, which have since been combined, may end up in formal legal proceedings. It is possible that resolution of this matter may include an administrative penalty and economic benefit payment, further revising the facility air permit, or installation of emissions management equipment, or a combination of these, that could, in the aggregate, exceed the disclosure threshold amount described above, although we do not believe that resolution of this matter would have a material adverse effect on our results of operations, financial position, or cash flows.

~~16.~~

13. Restructuring Costs

We undertook restructuring actions, as well as other transformation and integration efforts as part of the Realignment Transaction. During the three months ended March 31, 2023, we incurred $10 million in severance and other employee related cost.


The following table presents a rollforward of the Company's restructuring liability as of March 31, 2023, which is primarily included in Other current liabilities in the condensed consolidated balance sheets:
	(millions)
Balance as of January 1, 2023	$	15
Severance and employee related charges	10
Other charges	—
Cash payments	(12)
Balance as of March 31, 2023	$	13

14. Business Segments

~~Concurrent with the completion of the Transaction in the first quarter of 2017, management reevaluated our reportable segments and determined that our~~Our operations are organized into two reportable segments: (i) Logistics and Marketing and (ii) Gathering and Processing and (ii) Logistics and Marketing. Segment information for prior periods has been retrospectively adjusted to furnish comparative information similar to the pooling method to reflect these reportable segments.Processing. These segments are monitored separately by management for performance against our internal forecast and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment and the expertise required for these operations. Our Gathering and Processing reportable segment includes operating segments that have been aggregated based on the nature of the products and services provided. ~~Gross~~Adjusted gross margin is a performance measure utilized by management to monitor the operations of each segment. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies included in Note 2 of the Notes to the Consolidated Financial Statements in "Financial Statements and Supplementary Data" included as ~~Exhibit 99.4~~Item 8 in our Annual Report on Form 10-K for the ~~May 2017 8-K.~~year ended December 31, 2022.

Our Logistics and Marketing segment includes transporting, trading, marketing, storing natural gas and NGLs, and fractionating NGLs. Our Gathering and Processing segment consists of gathering, compressing, treating, processing natural gas, producing and fractionating NGLs, and recovering ~~and selling~~ condensate. ~~Our Logistics and Marketing segment includes transporting, trading, marketing, and storing natural gas and NGLs, fractionating NGLs, and wholesale propane logistics.~~ The remainder of our business operations is presented as “Other,” and consists of unallocated corporate costs. Elimination of inter-segment transactions are reflected in the ~~eliminations~~Eliminations column. ~~The following tables set forth our segment information:~~

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

The following tables set forth our segment information:

Three Months Ended ~~September 30, 2017:~~March 31, 2023:


	Logistics and Marketing		Gathering and Processing		Other		Eliminations		Total
	(millions)
Total operating revenue	$	2,392	$	1,766	$	—	$	(1,432)	$	2,726
Adjusted gross margin (a)	$	54	$	444	$	—	$	—	$	498
Operating and maintenance expense	(9)		(182)		(6)		—		(197)
General and administrative expense	(2)		(4)		(74)		—		(80)
Depreciation and amortization expense	(2)		(84)		(4)		—		(90)





Restructuring costs	—		—		(10)		—		(10)
Earnings from unconsolidated affiliates	154		6		—		—		160
Interest expense	—		—		(68)		—		(68)
Income tax expense	—		—		(1)		—		(1)
Net income (loss)	$	195	$	180	$	(163)	$	—	$	212
Net income attributable to noncontrolling interests	—		(1)		—		—		(1)
Net income (loss) attributable to partners	$	195	$	179	$	(163)	$	—	$	211
Non-cash derivative mark-to-market	$	(5)	$	45	$	—	$	—	$	40
Non-cash lower of cost or net realizable value adjustments	$	22	$	—	$	—	$	—	$	22
Capital expenditures	$	—	$	79	$	2	$	—	$	81

Gathering and Processing Logistics and Marketing Other Eliminations Total
(Millions)
Total operating revenue $ 1,337
$ 1,913
$ —
$ (1,195 ) $ 2,055
Gross margin (a) $ 303
$ 57
$ —
$ —
$ 360
Operating and maintenance expense (154 ) (9 ) (5 ) —
(168 )
Depreciation and amortization expense (85 ) (4 ) (5 ) —
(94 )
General and administrative expense (2 ) (3 ) (64 ) —
(69 )
Asset impairments (48 ) —
—
—
(48 )
Other (expense) income —
(1 ) 1
—
—
Earnings from unconsolidated affiliates 15
59
—
—
74
Interest expense —
—
(73 ) —
(73 )
Income tax expense —
—
(2 ) —
(2 )
Net income (loss) $ 29
$ 99
$ (148 ) $ —
$ (20 )
Net income attributable to noncontrolling interests —
—
—
—
—
Net income (loss) attributable to partners $ 29
$ 99
$ (148 ) $ —
$ (20 )
Non-cash derivative mark-to-market (b) $ (51 ) $ (8 ) $ —
$ —
$ (59 )
Capital expenditures $ 91
$ 1
$ 7
$ —
$ 99
Investments in unconsolidated affiliates, net $ 1
$ 28
$ —
$ —
$ 29

Three Months Ended ~~September 30, 2016:~~March 31, 2022:


	Logistics and Marketing		Gathering and Processing		Other		Eliminations		Total
	(millions)
Total operating revenue	$	3,163	$	2,106	$	—	$	(1,894)	$	3,375
Adjusted gross margin (a)	$	16	$	284	$	—	$	—	$	300
Operating and maintenance expense	(8)		(140)		(4)		—		(152)
General and administrative expense	(1)		(4)		(50)		—		(55)
Depreciation and amortization expense	(3)		(81)		(6)		—		(90)



Gain on sale of assets, net	—		7		—		—		7

Earnings from unconsolidated affiliates	137		6		—		—		143
Interest expense	—		—		(71)		—		(71)
Income tax expense	—		—		(1)		—		(1)
Net income (loss)	$	141	$	72	$	(132)	$	—	$	81
Net income attributable to noncontrolling interests	—		(1)		—		—		(1)
Net income (loss) attributable to partners	$	141	$	71	$	(132)	$	—	$	80

Non-cash derivative mark-to-market	$	(45)	$	(131)	$	—	$	—	$	(176)

Capital expenditures	$	2	$	20	$	1	$	—	$	23
Investments in unconsolidated affiliates, net	$	—	$	1	$	—	$	—	$	1

Gathering and Processing Logistics and Marketing Other Eliminations Total
(Millions)
Total operating revenue $ 1,217
$ 1,641
$ —
$ (1,035 ) $ 1,823
Gross margin (a) $ 335
$ 51
$ —
$ —
$ 386
Operating and maintenance expense (146 ) (13 ) (2 ) —
(161 )
Depreciation and amortization expense (85 ) (4 ) (5 ) —
(94 )
General and administrative expense (2 ) (2 ) (60 ) —
(64 )
Other expense (13 ) —
(1 ) —
(14 )
Gain on sale of assets, net 25
16
—
—
41
Restructuring costs —
—
(2 ) —
(2 )
Earnings from unconsolidated affiliates 20
55
—
—
75
Interest expense —
—
(77 ) —
(77 )
Income tax expense —
—
(1 ) —
(1 )
Net income (loss) $ 134
$ 103
$ (148 ) $ —
$ 89
Net income attributable to noncontrolling interests —
—
—
—
—
Net income (loss) attributable to partners $ 134
$ 103
$ (148 ) $ —
$ 89
Non-cash derivative mark-to-market (b) $ (5 ) $ 14
$ —
$ —
$ 9
Capital expenditures $ 18
$ 4
$ 8
$ —
$ 30
Investments in unconsolidated affiliates, net $ —
$ 11
$ —
$ —
$ 11

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2023 and ~~2016 - (Continued)~~2022

~~(Unaudited)~~

~~Nine Months Ended September 30, 2017:~~


	March 31,		December 31,
	2023		2022
	(millions)
Segment long-term assets:
Gathering and Processing	$	7,603	$	7,594
Logistics and Marketing	3,788		3,814
Other (b)	223		224
Total long-term assets	11,614		11,632
Current assets	1,270		1,702
Total assets	$	12,884	$	13,334

(a) Adjusted gross margin consists of total operating revenues, including commodity derivative activity, less purchases and related costs. Adjusted gross margin is viewed as a non-GAAP financial measure under the rules of the SEC, but is included as a supplemental disclosure because it is a primary performance measure used by management as it represents the results of product sales versus product purchases. As an indicator of our operating performance, adjusted gross margin should not be considered an alternative to, or more meaningful than, net income, net cash provided by operating activities or gross margin as determined in accordance with GAAP. Our adjusted gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate adjusted gross margin in the same manner.

(b) Other long-term assets not allocable to segments consist of corporate leasehold improvements and other long-term assets.

Gathering and Processing Logistics and Marketing Other Eliminations Total
(Millions)
Total operating revenue $ 3,965
$ 5,596
$ —
$ (3,436 ) $ 6,125
Gross margin (a) $ 1,021
$ 165
$ —
$ —
$ 1,186
Operating and maintenance expense (469 ) (31 ) (13 ) —
(513 )
Depreciation and amortization expense (256 ) (11 ) (15 ) —
(282 )
General and administrative expense (15 ) (8 ) (179 ) —
(202 )
Asset impairments (48 ) —
—
—
(48 )
Other expense (3 ) (12 ) —
—
(15 )
Gain on sale of assets, net 34
—
—
—
34
Earnings from unconsolidated affiliates 59
175
—
—
234
Interest expense —
—
(219 ) —
(219 )
Income tax expense —
—
(5 ) —
(5 )
Net income (loss) $ 323
$ 278
$ (431 ) $ —
$ 170
Net income attributable to noncontrolling interests (1 ) —
—
—
(1 )
Net income (loss) attributable to partners $ 322
$ 278
$ (431 ) $ —
$ 169
Non-cash derivative mark-to-market (b) $ (4 ) $ 5
$ —
$ —
$ 1
Capital expenditures $ 237
$ 2
$ 19
$ —
$ 258
Investments in unconsolidated affiliates, net $ 1
$ 69
$ —
$ —
$ 70

~~Nine Months Ended September 30, 2016:~~

Gathering and Processing Logistics and Marketing Other Eliminations Total
(Millions)
Total operating revenue $ 3,190
$ 4,362
$ —
$ (2,642 ) $ 4,910
Gross margin (a) $ 892
$ 152
$ —
$ —
$ 1,044
Operating and maintenance expense (458 ) (33 ) (15 ) —
(506 )
Depreciation and amortization expense (258 ) (12 ) (14 ) —
(284 )
General and administrative expense (10 ) (7 ) (170 ) —
(187 )
Other income (expense) 74
(5 ) (1 ) —
68
Gain on sale of assets, net 19
16
—
—
35
Restructuring costs —
—
(10 ) —
(10 )
Earnings from unconsolidated affiliates 52
162
—
—
214
Interest expense —
—
(235 ) —
(235 )
Income tax expense —
—
(6 ) —
(6 )
Net income (loss) $ 311
$ 273
$ (451 ) $ —
$ 133
Net income attributable to noncontrolling interests (1 ) —
—
—
(1 )
Net income (loss) attributable to partners $ 310
$ 273
$ (451 ) $ —
$ 132
Non-cash derivative mark-to-market (b) $ (73 ) $ (7 ) $ —
$ —
$ (80 )
Non-cash lower of cost or market adjustments $ —
$ 3
$ —
$ —
$ 3
Capital expenditures $ 90
$ 7
$ 16
$ —
$ 113
Investments in unconsolidated affiliates, net $ —
$ 38
$ —
$ —
$ 38

~~(a)~~

Gross margin consists of total operating revenues, including trading and marketing gains and losses, less purchases of natural gas and NGLs. Gross margin is viewed as a non-GAAP financial measure under the rules of the SEC, but is included as a supplemental disclosure because it is a primary performance measure used by management as it represents the results of product sales versus product purchases. As an indicator of our operating performance, gross margin should not be considered an alternative to, or more meaningful than, net income or cash flow as determined in accordance with GAAP. Our gross margin may not be comparable to a similarly titled measure of another company because other entities may not calculate gross margin in the same manner.


~~(b)~~	~~Non-cash commodity derivative mark-to-market is included in gross margin, along with cash settlements for our commodity derivative contracts.~~

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

September 30, December 31,
2017 2016
(Millions)
Segment long-term assets:
Gathering and Processing $ 8,884
$ 9,053
Logistics and Marketing 3,293
3,278
Other (a) 283
286
Total long-term assets 12,460
12,617
Current assets 1,311
994
Total assets $ 13,771
$ 13,611


~~(a)~~	~~Other long-term assets not allocable to segments consist of corporate leasehold improvements and other long-term assets.~~

~~17.~~15. Supplemental Cash Flow Information


	Three Months Ended March 31,
	2023		2022
	(millions)
Cash paid for interest:
Cash paid for interest, net of amounts capitalized	$	81	$	84
Cash paid for income taxes, net of income tax refunds	$	2	$	(1)
Non-cash investing and financing activities:
Property, plant and equipment acquired with accounts payable and accrued liabilities	$	32	$	7

Other non-cash activities:

Right-of-use assets obtained in exchange for operating and finance lease liabilities	$	16	$	7

Nine Months Ended September 30,
2017 2016
(Millions)
Cash paid for interest:
Cash paid for interest, net of amounts capitalized $ 218
$ 248
Cash paid for income taxes, net of income tax refunds $ 2
$ 2
Non-cash investing and financing activities:
Property, plant and equipment acquired with accounts payable and accrued liabilities $ 27
$ 15
Other non-cash changes in property, plant and equipment $ (1 ) $ 1
Issuance of common and general partner units $ 1,125
$ —
Deficit purchase price in the Transaction $ 3,094
$ —

~~18. Condensed Consolidating Financial Information~~

The following condensed consolidating financial information presents the results of operations, financial position and cash flows of DCP Midstream, LP, or parent guarantor, DCP Midstream Operating LP, or subsidiary issuer, which is a ~~100%~~ owned subsidiary, and non-guarantor subsidiaries, as well as the consolidating adjustments necessary to present DCP Midstream, LP’s results on a consolidated basis. The parent guarantor has agreed to fully and unconditionally guarantee debt securities of the subsidiary issuer. For the purpose of the following financial information, investments in subsidiaries are reflected in accordance with the equity method of accounting. The financial information may not necessarily be indicative of results of operations, cash flows, or financial position had the subsidiaries operated as independent entities.

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Balance Sheet
September 30, 2017

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
ASSETS
Current assets:
Cash and cash equivalents $ —
$ 310
$ 2
$ —
$ 312
Accounts receivable, net —
—
846
—
846
Inventories —
—
62
—
62
Other —
—
91
—
91
Total current assets —
310
1,001
—
1,311
Property, plant and equipment, net —
—
8,926
—
8,926
Goodwill and intangible assets, net —
—
340
—
340
Advances receivable — consolidated subsidiaries 2,563
2,031
—
(4,594 ) —
Investments in consolidated subsidiaries 4,453
7,392
—
(11,845 ) —
Investments in unconsolidated affiliates —
—
3,002
—
3,002
Other long-term assets —
—
192
—
192
Total assets $ 7,016
$ 9,733
$ 13,461
$ (16,439 ) $ 13,771
LIABILITIES AND EQUITY
Accounts payable and other current liabilities $ —
$ 69
$ 1,215
$ —
$ 1,284
Current maturities of long-term debt —
500
—
—
500
Advances payable — consolidated subsidiaries —
—
4,594
(4,594 ) —
Long-term debt —
4,711
—
—
4,711
Other long-term liabilities —
—
233
—
233
Total liabilities —
5,280
6,042
(4,594 ) 6,728
Commitments and contingent liabilities

Equity:
Partners’ equity:
Net equity 7,016
4,457
7,397
(11,845 ) 7,025
Accumulated other comprehensive loss —
(4 ) (5 ) —
(9 )
Total partners’ equity 7,016
4,453
7,392
(11,845 ) 7,016
Noncontrolling interests —
—
27
—
27
Total equity 7,016
4,453
7,419
(11,845 ) 7,043
Total liabilities and equity $ 7,016
$ 9,733
$ 13,461
$ (16,439 ) $ 13,771

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Balance Sheet
December 31, 2016

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
ASSETS
Current assets:
Cash and cash equivalents $ —
$ —
$ 1
$ —
$ 1
Accounts receivable, net —
—
792
—
792
Inventories —
—
72
—
72
Other —
—
129
—
129
Total current assets —
—
994
—
994
Property, plant and equipment, net —
—
9,069
—
9,069
Goodwill and intangible assets, net —
—
373
—
373
Advances receivable — consolidated subsidiaries 2,953
2,760
—
(5,713 ) —
Investments in consolidated subsidiaries 3,868
6,587
—
(10,455 ) —
Investments in unconsolidated affiliates —
—
2,969
—
2,969
Other long-term assets —
—
206
—
206
Total assets $ 6,821
$ 9,347
$ 13,611
$ (16,168 ) $ 13,611
LIABILITIES AND EQUITY
Accounts payable and other current liabilities $ —
$ 72
$ 1,051
$ —
$ 1,123
Current maturities of long-term debt —
500
—
—
500
Advances payable — consolidated subsidiaries —
—
5,713
(5,713 ) —
Long-term debt —
4,907
—
—
4,907
Other long-term liabilities —
—
228
—
228
Total liabilities —
5,479
6,992
(5,713 ) 6,758
Commitments and contingent liabilities

Equity:
Partners’ equity:
Net equity 6,821
3,871
6,592
(10,455 ) 6,829
Accumulated other comprehensive loss —
(3 ) (5 ) —
(8 )
Total partners’ equity 6,821
3,868
6,587
(10,455 ) 6,821
Noncontrolling interests —
—
32
—
32
Total equity 6,821
3,868
6,619
(10,455 ) 6,853
Total liabilities and equity $ 6,821
$ 9,347
$ 13,611
$ (16,168 ) $ 13,611

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2017

Parent
Guarantor

Subsidiary
Issuer

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Operating revenues:
Sales of natural gas, NGLs and condensate $ —
$ —
$ 1,936
$ —
$ 1,936
Transportation, processing and other —
—
162
—
162
Trading and marketing losses, net —
—
(43 ) —
(43 )
Total operating revenues —
—
2,055
—
2,055
Operating costs and expenses:
Purchases of natural gas and NGLs —
—
1,695
—
1,695
Operating and maintenance expense —
—
168
—
168
Depreciation and amortization expense —
—
94
—
94
General and administrative expense —
—
69
—
69
Asset impairments —
—
48
—
48
Total operating costs and expenses —
—
2,074
—
2,074
Operating loss —
—
(19 ) —
(19 )
Interest expense —
(73 ) —
—
(73 )
(Loss) income from consolidated subsidiaries (20 ) 53
—
(33 ) —
Earnings from unconsolidated affiliates —
—
74
—
74
(Loss) income before income taxes (20 ) (20 ) 55
(33 ) (18 )
Income tax expense —
—
(2 ) —
(2 )
Net (loss) income (20 ) (20 ) 53
(33 ) (20 )
Net income attributable to noncontrolling interests —
—
—
—
—
Net (loss) income attributable to partners $ (20 ) $ (20 ) $ 53
$ (33 ) $ (20 )

Condensed Consolidating Statement of Comprehensive (Loss) Income
Three Months Ended September 30, 2017

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Net (loss) income $ (20 ) $ (20 ) $ 53
$ (33 ) $ (20 )
Total other comprehensive income —
—
—
—
—
Total comprehensive (loss) income (20 ) (20 ) 53
(33 ) (20 )
Total comprehensive income attributable to noncontrolling interests —
—
—
—
—
Total comprehensive (loss) income attributable to partners $ (20 ) $ (20 ) $ 53
$ (33 ) $ (20 )

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2016

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Operating revenues:
Sales of natural gas, NGLs and condensate $ —
$ —
$ 1,646
$ —
$ 1,646
Transportation, processing and other —
—
162
—
162
Trading and marketing gains, net —
—
15
—
15
Total operating revenues —
—
1,823
—
1,823
Operating costs and expenses:
Purchases of natural gas and NGLs —
—
1,437
—
1,437
Operating and maintenance expense —
—
161
—
161
Depreciation and amortization expense —
—
94
—
94
General and administrative expense —
—
64
—
64
Gain on sale of assets, net —
—
(41 ) —
(41 )
Restructuring costs —
—
2
—
2
Other expense, net —
—
14
—
14
Total operating costs and expenses —
—
1,731
—
1,731
Operating income —
—
92
—
92
Interest expense, net —
(77 ) —
—
(77 )
Income from consolidated subsidiaries 89
166
—
(255 ) —
Earnings from unconsolidated affiliates —
—
75
—
75
Income before income taxes 89
89
167
(255 ) 90
Income tax expense —
—
(1 ) —
(1 )
Net income 89
89
166
(255 ) 89
Net income attributable to noncontrolling interests —
—
—
—
—
Net income attributable to partners $ 89
$ 89
$ 166
$ (255 ) $ 89

Condensed Consolidating Statement of Comprehensive Income
Three Months Ended September 30, 2016

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Net income $ 89
$ 89
$ 166
$ (255 ) $ 89
Total other comprehensive income —
—
—
—
—
Total comprehensive income 89
89
166
(255 ) 89
Total comprehensive income attributable to noncontrolling interests —
—
—
—
—
Total comprehensive income attributable to partners $ 89
$ 89
$ 166
$ (255 ) $ 89

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2017

Parent
Guarantor

Subsidiary
Issuer

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Operating revenues:
Sales of natural gas, NGLs and condensate $ —
$ —
$ 5,641
$ —
$ 5,641
Transportation, processing and other —
—
474
—
474
Trading and marketing gains, net —
—
10
—
10
Total operating revenues —
—
6,125
—
6,125
Operating costs and expenses:
Purchases of natural gas and NGLs —
—
4,939
—
4,939
Operating and maintenance expense —
—
513
—
513
Depreciation and amortization expense —
—
282
—
282
General and administrative expense —
—
202
—
202
Asset impairments —
—
48
—
48
Gain on sale of assets, net —
—
(34 ) —
(34 )
Other expense, net —
—
15
—
15
Total operating costs and expenses —
—
5,965
—
5,965
Operating income —
—
160
—
160
Interest expense, net —
(219 ) —
—
(219 )
Income from consolidated subsidiaries 169
388
—
(557 ) —
Earnings from unconsolidated affiliates —
—
234
—
234
Income before income taxes 169
169
394
(557 ) 175
Income tax expense —
—
(5 ) —
(5 )
Net income 169
169
389
(557 ) 170
Net income attributable to noncontrolling interests —
—
(1 ) —
(1 )
Net income attributable to partners $ 169
$ 169
$ 388
$ (557 ) $ 169

Condensed Consolidating Statement of Comprehensive Income
Nine Months Ended September 30, 2017

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Net income $ 169
$ 169
$ 389
$ (557 ) $ 170
Other comprehensive income:
Reclassification of cash flow hedge losses into earnings —
1
—
—
1
Other comprehensive income from consolidated subsidiaries 1
—
—
(1 ) —
Total other comprehensive income 1
1
—
(1 ) 1
Total comprehensive income 170
170
389
(558 ) 171
Total comprehensive income attributable to noncontrolling interests —
—
(1 ) —
(1 )
Total comprehensive income attributable to partners $ 170
$ 170
$ 388
$ (558 ) $ 170

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2016

Parent
Guarantor

Subsidiary
Issuer

Non-
Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Operating revenues:
Sales of natural gas, NGLs and condensate $ —
$ —
$ 4,431
$ —
$ 4,431
Transportation, processing and other —
—
469
—
469
Trading and marketing gains, net —
—
10
—
10
Total operating revenues —
—
4,910
—
4,910
Operating costs and expenses:
Purchases of natural gas and NGLs —
—
3,866
—
3,866
Operating and maintenance expense —
—
506
—
506
Depreciation and amortization expense —
—
284
—
284
General and administrative expense —
—
187
—
187
Gain on sale of assets, net —
—
(35 ) —
(35 )
Restructuring costs —
—
10
—
10
Other income, net —
—
(68 ) —
(68 )
Total operating costs and expenses —
—
4,750
—
4,750
Operating income —
—
160
—
160
Interest expense, net —
(235 ) —
—
(235 )
Income from consolidated subsidiaries 132
367
—
(499 ) —
Earnings from unconsolidated affiliates —
—
214
—
214
Income before income taxes 132
132
374
(499 ) 139
Income tax expense —
—
(6 ) —
(6 )
Net income 132
132
368
(499 ) 133
Net income attributable to noncontrolling interests —
—
(1 ) —
(1 )
Net income attributable to partners $ 132
$ 132
$ 367
$ (499 ) $ 132

Condensed Consolidating Statement of Comprehensive Income
Nine Months Ended September 30, 2016

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
Net income $ 132
$ 132
$ 368
$ (499 ) $ 133
Total other comprehensive income —
—
—
—
—
Total comprehensive income 132
132
368
(499 ) 133
Total comprehensive income attributable to noncontrolling interests —
—
(1 ) —
(1 )
Total comprehensive income attributable to partners $ 132
$ 132
$ 367
$ (499 ) $ 132

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2017

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
OPERATING ACTIVITIES
Net cash (used in) provided by operating activities $ —
$ (217 ) $ 901
$ —
$ 684
INVESTING ACTIVITIES:
Intercompany transfers 390
724
—
(1,114 ) —
Capital expenditures —
—
(258 ) —
(258 )
Investments in unconsolidated affiliates —
—
(70 ) —
(70 )
Proceeds from sale of assets —
—
130
—
130
Net cash provided by (used in) investing activities 390
724
(198 ) (1,114 ) (198 )
FINANCING ACTIVITIES:
Intercompany transfers —
—
(1,114 ) 1,114
—
Payments of long-term debt —
(195 ) —
—
(195 )
Net change in advances to predecessor from DCP Midstream, LLC —
—
418
—
418
Distributions to limited partners and general partner (390 ) —
—
—
(390 )
Distributions to noncontrolling interests —
—
(6 ) —
(6 )
Other —
(2 ) —
—
(2 )
Net cash used in by financing activities (390 ) (197 ) (702 ) 1,114
(175 )
Net change in cash and cash equivalents —
310
1
—
311
Cash and cash equivalents, beginning of period —
—
1
—
1
Cash and cash equivalents, end of period $ —
$ 310
$ 2
$ —
$ 312

~~DCP MIDSTREAM, LP~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Three and Nine Months Ended September 30, 2017 and 2016 - (Continued)~~

~~(Unaudited)~~

Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2016

Parent
Guarantor

Subsidiary
Issuer

Non-Guarantor
Subsidiaries

Consolidating
Adjustments
Consolidated
(Millions)
OPERATING ACTIVITIES
Net cash (used in) provided by operating activities $ —
$ (244 ) $ 765
$ —
$ 521
INVESTING ACTIVITIES:
Intercompany transfers 362
559
—
(921 ) —
Capital expenditures —
—
(113 ) —
(113 )
Investments in unconsolidated affiliates —
—
(38 ) —
(38 )
Proceeds from sale of assets —
—
160
—
160
Net cash provided by investing activities 362
559
9
(921 ) 9
FINANCING ACTIVITIES:
Intercompany transfers —
—
(921 ) 921
—
Proceeds from long-term debt —
2,926
—
—
2,926
Payments of long-term debt —
(3,216 ) —
—
(3,216 )
Net change in advances to predecessor from DCP Midstream, LLC —
—
150
—
150
Distributions to limited partners and general partner (362 ) —
—
—
(362 )
Distributions to noncontrolling interests —
—
(6 ) —
(6 )
Other —
(10 ) —
—
(10 )
Net cash used in financing activities (362 ) (300 ) (777 ) 921
(518 )
Net change in cash and cash equivalents —
15
(3 ) —
12
Cash and cash equivalents, beginning of period —
—
3
—
3
Cash and cash equivalents, end of period $ —
$ 15
$ —
$ —
$ 15

~~19.~~16. Subsequent Events

Junior Notes Redemption—On ~~October~~April 19, ~~2017,~~2023, we announced our intent to redeem, at par, prior to maturity all $550 million of aggregate principal amount outstanding of our 5.850% Junior Notes due May 2043 on or about May 21, 2023. We expect to use borrowings under our Revolving Credit Facility and AR Securitization Facility.

Distributions — On April 19, 2023, we announced that the board of directors of the General Partner declared a quarterly distribution on our common units of ~~$0.78~~$0.43 per common unit. The distribution ~~is payable~~will be paid on ~~November 14, 2017~~May 15, 2023 to unitholders of record on ~~November 7, 2017.~~May 1, 2023.

Also on April 19, 2023, the board of directors of the General Partner declared a quarterly distribution on our Series B and Series C Preferred Units of $0.4922 and $0.4969 per unit, respectively. The Series B distribution will be paid on June 15, 2023 to unitholders of record on June 1, 2023. The Series C distribution will be paid on July 17, 2023 to unitholders of record on July 3, 2023.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion analyzes our financial condition and results of operations. You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto included ~~as Exhibit 99.4~~ in our Annual Report on Form 10-K for the ~~May 2017 8-K.~~year ended December 31, 2022.

Overview

We are a Delaware limited partnership formed by DCP Midstream, LLC to own, operate, acquire and develop a diversified portfolio of complementary midstream energy assets. ~~Concurrent with the completion of the Transaction in the first quarter of 2017, management reevaluated our reportable segments and determined that our~~Our operations are organized into two reportable segments: (i) Logistics and Marketing and (ii) Gathering and ~~Processing and (ii)~~Processing. Our Logistics and ~~Marketing. Segment information for earlier periods has been restated to reflect these reportable segments. Our Gathering and Processing~~Marketing segment includes ~~operating segments that have been aggregated based on the nature of the products~~transporting, trading, marketing and ~~services provided.~~storing natural gas and NGLs, and fractionating NGLs. Our Gathering and Processing segment consists of gathering, compressing, treating, and processing natural gas, producing and fractionating NGLs, and recovering condensate.

Realignment Transaction

On August 17, 2022, in connection with the closing of the Realignment Transaction between Phillips 66 and ~~selling condensate. Our Logistics~~Enbridge, PGC, an indirect wholly owned subsidiary of Phillips 66, and ~~Marketing segment includes transporting, trading, marketing~~Spectra DEFS Holding, LLC, an indirect wholly owned subsidiary of Enbridge, as the members of DCP Midstream, LLC, entered into the Third A&R LLC Agreement, which, among other things, designated PGC as the Class A Managing Member of DCP Midstream, LLC with the power to conduct, direct and ~~storing natural gas~~manage all activities of DCP Midstream, LLC associated with the Partnership and ~~NGLs, fractionating NGLs~~each of its subsidiaries, GP LP and ~~wholesale propane logistics.~~our General Partner, and, in each case, the businesses, activities and liabilities thereof. The ~~remainder~~Third A&R LLC Agreement also provided PGC with the power to exercise DCP Midstream, LLC’s rights to appoint or remove any director on the board of directors of our General Partner and vote the common units representing limited partner interests in the Partnership that are owned directly or indirectly by DCP Midstream, LLC.

Following the completion of the Realignment Transaction, we began to integrate certain of our operations with Phillips 66’s midstream segment, including the integration of operational services that are currently, or were previously, provided by DCP Services, LLC. As part of these integration efforts, continuing employees transferred employment to a Phillips 66 subsidiary on April 1, 2023, and general and administrative services will be provided by Phillips 66 or one or more of its subsidiaries going forward. We expect such integration efforts to continue regardless of the outcome of the pending Merger with Phillips 66 described below.

Pending Merger with Phillips 66

On January 5, 2023, we entered into the Merger Agreement with Phillips 66, PDI, Merger Sub, GP LP and our General Partner, pursuant to which, at the effective time of the Merger, each common unit representing a limited partner interest in the Partnership (other than the common units owned by DCP Midstream, LLC and GP LP) will be converted into the right to receive $41.75 per common unit in cash, without interest. GP LP has agreed to declare, and cause the Partnership to pay, a cash distribution in respect of the common units in an amount equal to $0.43 per common unit for each completed quarter ending on or after December 31, 2022 and prior to the effective time of the Merger.

The Merger Agreement and the transactions contemplated thereby, including the Merger, were unanimously approved on behalf of the Partnership by the special committee and the board of directors of the General Partner, which is the general partner of GP LP. The special committee, which is comprised of independent members of the board of directors of our general partner, retained independent legal and financial advisors to assist it in evaluating and negotiating the Merger Agreement and the Merger.

The Merger is expected to close in the second quarter of 2023, subject to customary closing conditions. There can be no assurance that the Merger will be consummated on the terms described above or at all.

General Trends and Outlook

We anticipate our business ~~operations is presented as "Other",~~will continue to be affected by the following key trends. Our expectations are based on assumptions made by us and ~~consists~~information currently available to us. To the extent our underlying assumptions about, or interpretations of, ~~unallocated corporate costs.~~available information prove to be incorrect, our actual results may vary materially from our expected results.

Our business is impacted by commodity prices and volumes. We mitigate a portion of commodity price risk on an overall Partnership basis ~~by growing~~through our fee based assets and by executing on our hedging program, in which we hedge commodity prices associated with a portion of our expected natural gas, NGL and condensate equity volumes in our Gathering and Processing segment.fee-based assets. Various factors impact both commodity prices and volumes, and as indicated in Item ~~3. "Quantitative~~3. “Quantitative and Qualitative Disclosures about Market Risk,"” we have sensitivities to certain cash and non-cash changes in commodity prices. ~~If commodity~~Commodity prices ~~weaken for a sustained period, our volumes may be impacted, particularly~~have been volatile during 2023 and are subject to global energy supply and demand fundamentals as ~~producers are curtailing or redirecting drilling.~~well as geopolitical disruptions. Drilling activity levels vary by geographic ~~area;~~area and we will continue to target our strategy in geographic areas where we expect producer drilling activity.

Our long-term view is that commodity prices will be at levels that we believe will support ~~growth~~sustained or increasing levels of domestic production. Our business is predominantly fee-based and we have a diversified portfolio to balance the upside of our earnings potential while reducing our commodity exposure. Our financial position has improved as a result of strong 2022 results and in ~~natural gas, condensate~~the first half of 2023, following a decrease in commodity prices and ~~NGL production.~~related increase in the fair value of our equity derivative assets, substantially all of our outstanding equity derivative contracts were settled prior to the expiration of the contractual maturities. Consequently, our equity exposure for 2023 and beyond is currently not hedged and is directly exposed to continued volatility in commodity prices, whether favorable or unfavorable. We ~~believe~~expect future commodity prices will be influenced by ~~the severity of winter~~global economic conditions and ~~summer weather,~~geopolitical disruptions, the level of North American production and drilling activity by exploration and production companies, ~~and~~ the balance of trade between imports and exports of liquid natural gas, NGLs and crude ~~oil.~~oil, and the severity of winter and summer weather.

~~NGL prices are impacted~~We expect to be a proactive participant in the transition to a lower carbon energy future through increased efficiency and modernization of existing operations, which we expect will reduce the greenhouse gas emissions from our base business. Going forward, our assets will be managed in a manner consistent with the emissions goals of Phillips 66.

Our business is primarily driven by the ~~demand~~level of production of natural gas by producers and of NGLs from ~~petrochemical~~processing plants connected to our pipelines and refining industries and export facilities. The petrochemical industry has been making significant investment in building and expanding facilities to convert chemical plants from a heavier oil-based feedstock to lighter NGL-based feedstocks, including ethane. This increased demand expected in the next year should provide support for the increasing supply of ethane. As these facilities commence operations, ethane prices could remain weak with supply in excess of demand. In addition, export facilities are being expanded and built, which provide support for the increasing supply of NGLs. Although therefractionators. These volumes can be impacted negatively by, among other things, reduced drilling activity, depressed commodity prices, severe weather disruptions, operational outages and ~~has been, volatility~~ethane rejection. Upstream producers response to changes in ~~NGL~~commodity prices ~~longer term we believe there will be sufficient~~and demand ~~in NGLs to support increasing supply.~~remain uncertain.

~~Although we have seen a number of bankruptcies by producers in recent years, we~~We believe our contract structure with our producers ~~protects~~provides us with significant protection from a credit ~~perspective~~risk since we generally hold the product, sell it and withhold our fees prior to remittance of payments to the producer. Currently, our top 20 producers account for a majority of the total natural gas that we gather and process and of these top 20 producers, ~~eight~~5 have investment grade credit ~~ratings while the remainder do not.~~ratings.

~~In addition~~The global economic outlook continues to ~~the~~be a cause for concern for U.S. financial markets ~~many~~and businesses and investors ~~continue to monitor global economic conditions. Uncertainty abroad~~alike. This uncertainty may contribute to volatility in ~~domestic~~ financial and commodity markets.

We believe we are positioned to withstand ~~current and~~ future commodity price volatility as a result of the following:

•Our ~~growing~~ fee-based business represents a significant portion of our margins.

•We have positive operating cash flow from our well-positioned and diversified assets.

~~We have a well-defined and targeted hedging program.~~

•We manage our disciplined capital growth program with a significant focus on fee-based agreements and projects with ~~long term~~long-term volume outlooks.

•We believe we have a solid capital structure and balance sheet.

•We believe we have access to sufficient capital to fund our ~~growth.~~

~~We have engaged in a disciplined~~ growth ~~strategy in recent years focusing on our key areas of operations. Our targeted strategy may take numerous forms such as organic build opportunities within our footprint, joint venture opportunities,~~including excess distribution coverage and acquisitions. Growth opportunities will be evaluated in cooperation with producers and customers based on the expected level of drilling activity in these geographic regions and the impacts of higher costs of capital.

~~Some of our growth projects include the following:~~

Within our Gathering and Processing segment, we increased capacity in the DJ Basin by up to 40 MMcf/d starting in June 2017 by placing additional field compression and plant bypass infrastructure in service.

We are constructing a 200 MMcf/d natural gas processing plant, the Mewbourn 3 plant, and further expanding our Grand Parkway gathering system, both of which are located in the DJ Basin and expected to be in service in the fourth quarter of 2018.

~~Our 200 MMcf/d O'Connor 2 plant and associated gathering infrastructure, located in the DJ Basin, is also approved and expected to be in service in mid 2019.~~

Within our Logistics and Marketing segment, we are currently expanding the Sand Hills pipeline to 365 MBbls/d, expected to be completed late fourth quarter of 2017 or early first quarter of 2018, and have multiple Sand Hills lateral connections in flight throughout 2017.

Further Sand Hills pipeline expansion to 450 MBbls/d is progressing and includes a partial looping of the pipeline and the addition of new pump stations, and is expected to be in service in the third quarter of 2018.

We signed a letter of intent with respect to the joint development of the Gulf Coast Express pipeline project (GCX project) with Kinder Morgan Texas Pipeline LLC and Targa Resources Corp, which would provide an outlet for increased natural gas production from the Permian Basin to growing markets along the Texas Gulf Coast. The capacity of the GCX project is expected to be 1.92 Bcf/d. The mostly 42-inch pipeline would traverse approximately 500 miles and be in service in the second half of 2019, pending final shipper commitments and a final investment decision by all three entities. Under the terms of the letter of intent, we will own a 25 percent equity interest in the project and would commit significant volumes.

~~Recent Events~~

We are jointly developing the Cheyenne Connector pipeline (“Cheyenne Connector”) with Tallgrass Energy Partners, LP and Western Gas Partners, LP, in which we have an option to invest in at a later date. Tallgrass Energy Partners, LP has announced the launch of an open season to transport natural gas on the Cheyenne Connector from the DJ Basin to the Rockies Express Pipeline (“REX”) Cheyenne Hub just south of the Colorado-Wyoming border. Cheyenne Connector has signed long-term precedent agreements to transport at least 600 MMcf/d of natural gas with affiliates of Anadarko Petroleum Corporation and the Partnership. Cheyenne Connector will provide takeaway solutions for DJ Basin gas producers, connecting natural gas to REX’s Cheyenne Hub where it can then be delivered to numerous demand markets across the country on either REX or other interconnected pipelines.

In August 2017, we experienced business interruptions at certain of our assets as a result of Hurricane Harvey. Our logistics facilities, including Sand Hills, Southern Hills and other NGL pipelines connecting to the Gulf Coast remained operational for the duration of the storm, but volumes were impacted due to downstream constraints. Based on current assessments, no significant damage has been identified to our assets, however, final assessments are still underway.

~~We announced a quarterly distribution of $0.78 per unit for the third quarter of 2017. This distribution per unit remains unchanged from the previous quarter and the third quarter of 2016.~~

~~General Trends and Outlook~~divestitures.

During ~~2017,~~2023, our strategic objectives ~~will continue~~are to ~~focus on maintaining stable Distributable~~generate Excess Free Cash Flows ~~from our existing assets~~(a non-GAAP measure defined in “Reconciliation of Non-GAAP Measures - Excess Free Cash Flows”) and ~~executing on opportunities to sustain our long-term Distributable Cash Flows in light of the significant changes to our business resulting from the Transaction.~~reduce leverage. We believe the key elements to ~~stable Distributable~~generating Excess Free Cash Flows are the diversity of our asset portfolio and our fee-based business which represents a significant portion of our estimated ~~margins, plus~~margins. We will continue to pursue incremental revenue, cost efficiencies and operating improvements of our ~~hedged commodity position, the objective of which is to protect against downside risk in our Distributable Cash Flows.~~assets through process and technology improvements.

We incur capital expenditures for our consolidated entities and our unconsolidated affiliates. Our ~~2017~~2023 plan includes ~~maintenance~~sustaining capital expenditures of ~~between $100 million and $145~~approximately $150 million and expansion capital expenditures ~~between $325 million and $375 million associated~~of approximately $125 million.

Recent Events

Integration with ~~approved projects. We forecast maintenance spending to be at the low end~~Phillips 66

As part of the ~~range,~~integration efforts with Phillips 66, continuing employees transferred employment to a Phillips 66 subsidiary on April 1, 2023.

Junior Notes Redemption

On April 19, 2023, we announced our intent to redeem, at par, prior to maturity all $550 million of aggregate principal amount outstanding of our 5.850% Junior Notes due May 2043 on or about May 21, 2023. We expect to use borrowings under our Revolving Credit Facility and ~~expansion spending to be at~~AR Securitization Facility.

Common and Preferred Distributions

On April 19, 2023, we announced that the ~~high end~~board of directors of the ~~range. Expansion capital expenditures include~~General Partner declared a quarterly distribution on our common units of $0.43 per common unit. The distribution will be paid on May 15, 2023 to unitholders of record on May 1, 2023.

Also on April 19, 2023, the ~~construction~~board of directors of the ~~Mewbourn~~General Partner declared a quarterly distribution on our Series B and Series C Preferred Units of $0.4922 and $0.4969 per unit, respectively. The Series B distribution will be paid on June 15, 2023 to unitholders of record on June 1, 2023. The Series C distribution will be paid on July 17, 2023 to unitholders of record on July 3, plant, Grand Parkway Phase 2 and O'Connor bypass in our DJ Basin system, and the capacity expansions of the Sand Hills pipeline, which are shown as an investment in unconsolidated affiliates in our condensed consolidated statements of cash flows.2023.

For an in-depth discussion of factors that may significantly affect our results, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors That May Significantly Affect Our Results” included as Exhibit 99.3 in our current report on the May 2017 8-K.

Results of Operations

Consolidated Overview

The following table and discussion isprovides a summary of our ~~condensed~~ consolidated results of operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~.2022. The results of operations by segment are discussed in further detail following this consolidated overview discussion.


		Three Months Ended September 30,						Nine Months Ended September 30,						Variance Three Months 2017 vs. 2016					Variance Nine Months 2017 vs. 2016							Three Months Ended March 31,					Variance 2023 vs. 2022
		2017			2016			2017			2016			Increase (Decrease)			Percent		Increase (Decrease)			Percent					2023		2022			Increase (Decrease)		Percent
	(Millions, except operating data)																								(millions, except operating data)
Operating revenues (a):																								Operating revenues (a):
Logistics and Marketing																								Logistics and Marketing			$	2,392	$	3,163		$	(771)	(24	%)
Gathering and Processing		$	1,337		$	1,217		$	3,965		$	3,190		$	120		10	%	$	775		24	%	Gathering and Processing			1,766		2,106			(340)		(16	%)
Logistics and Marketing		1,913			1,641			5,596			4,362			272			17	%	1,234			28	%
Inter-segment eliminations		(1,195		)	(1,035		)	(3,436		)	(2,642		)	160			15	%	794			30	%	Inter-segment eliminations			(1,432)		(1,894)			(462)		(24	%)
Total operating revenues		2,055			1,823			6,125			4,910			232			13	%	1,215			25	%	Total operating revenues			2,726		3,375			(649)		(19	%)
Purchases of natural gas and NGLs
Purchases and related costs																								Purchases and related costs
Logistics and Marketing																								Logistics and Marketing			(2,338)		(3,147)			(809)		(26	%)
Gathering and Processing		(1,034		)	(882		)	(2,944		)	(2,298		)	152			17	%	646			28	%	Gathering and Processing			(1,322)		(1,822)			(500)		(27	%)
Logistics and Marketing		(1,856		)	(1,590		)	(5,431		)	(4,210		)	266			17	%	1,221			29	%
Inter-segment eliminations		1,195			1,035			3,436			2,642			160			15	%	794			30	%	Inter-segment eliminations			1,432		1,894			(462)		(24	%)
Total purchases		(1,695		)	(1,437		)	(4,939		)	(3,866		)	258			18	%	1,073			28	%	Total purchases			(2,228)		(3,075)			(847)		(28	%)
Operating and maintenance expense		(168		)	(161		)	(513		)	(506		)	7			4	%	7			1	%	Operating and maintenance expense			(197)		(152)			45		30	%
Depreciation and amortization expense		(94		)	(94		)	(282		)	(284		)	—			—	%	(2		)	(1	)%	Depreciation and amortization expense			(90)		(90)			—		—	%
General and administrative expense		(69		)	(64		)	(202		)	(187		)	5			8	%	15			8	%	General and administrative expense			(80)		(55)			25		45	%
Asset impairments		(48		)	—			(48		)	—			48			*		48			*
Other (expense) income, net		—			(14		)	(15		)	68			14			*		(83		)	*

Gain on sale of assets, net																								Gain on sale of assets, net			—		7			(7)		*
Restructuring costs																								Restructuring costs			(10)		—			10		*

Earnings from unconsolidated affiliates (b)		74			75			234			214			(1		)	(1	)%	20			9	%	Earnings from unconsolidated affiliates (b)			160		143			17		12	%
Interest expense		(73		)	(77		)	(219		)	(235		)	(4		)	(5	)%	(16		)	(7	)%	Interest expense			(68)		(71)			(3)		(4	%)
Income tax expense		(2		)	(1		)	(5		)	(6		)	1			*		(1		)	(17	)%	Income tax expense			(1)		(1)			—		—	%
Restructuring costs		—			(2		)	—			(10		)	(2		)	*		(10		)	*
Gain on sale of assets, net		—			41			34			35			(41		)	*		(1		)	*
Net income attributable to noncontrolling interests		—			—			(1		)	(1		)	—			*		—			*		Net income attributable to noncontrolling interests			(1)		(1)			—		—	%
Net (loss) income attributable to partners		$	(20	)	$	89		$	169		$	132		$	(109	)	*		$	37		28	%
Net income attributable to partners																								Net income attributable to partners			$	211	$	80		$	131	*
Other data:																								Other data:
Gross margin (c):
Adjusted gross margin (c):																								Adjusted gross margin (c):
Logistics and Marketing																								Logistics and Marketing			$	54	$	16		$	38	*
Gathering and Processing		$	303		$	335		$	1,021		$	892		$	(32	)	(10	)%	$	129		14	%	Gathering and Processing			444		284			160		56	%
Logistics and Marketing		57			51			165			152			$	6		12	%	$	13		9	%
Total gross margin		$	360		$	386		$	1,186		$	1,044		$	(26	)	(7	)%	$	142		14	%
Total adjusted gross margin																								Total adjusted gross margin			$	498	$	300		$	198	66	%

Non-cash commodity derivative mark-to-market		$	(59	)	$	9		$	1		$	(80	)	$	(68	)	*		$	81		*		Non-cash commodity derivative mark-to-market			$	40	$	(176)		$	216	*
NGL pipelines throughput (MBbls/d) (d)																								NGL pipelines throughput (MBbls/d) (d)			723		682			41		6	%
Gas pipelines throughput (TBtu/d) (d)																								Gas pipelines throughput (TBtu/d) (d)			1.08		1.04			0.04		4	%
Natural gas wellhead (MMcf/d) (d)		4,460			5,005			4,508			5,230			(545		)	(11	)%	(722		)	(14	)%	Natural gas wellhead (MMcf/d) (d)			4,473		4,110			363		9	%
NGL gross production (MBbls/d) (d)		376			392			365			401			(16		)	(4	)%	(36		)	(9	)%	NGL gross production (MBbls/d) (d)			419		402			17		4	%
NGL pipelines throughput (MBbls/d) (d)		462			434			447			421			28			6	%	26			6	%

* Percentage change is not meaningful.


~~(a)~~	(a) Operating revenues include the impact of trading and marketing gains (losses), net.


~~(b)~~	Earnings for Discovery, Sand Hills, Southern Hills, Front Range, Mont Belvieu 1 and Texas Express include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.


~~(c)~~	Gross margin consists of total operating revenues less purchases of natural gas and NGLs. Segment gross margin for each segment consists of total operating revenues for that segment less purchases of natural gas and NGLs for that segment. Please read “Reconciliation of Non-GAAP Measures”.


~~(d)~~	~~For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the wellhead and throughput volumes and NGL production.~~

(b) Earnings for certain unconsolidated affiliates include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.

(c) Adjusted gross margin consists of total operating revenues less purchases and related costs. Segment adjusted gross margin for each segment consists of total operating revenues for that segment, less purchases and related costs for that segment. Please read “Reconciliation of Non-GAAP Measures”.

(d) For entities not wholly owned by us, includes our share, based on our ownership percentage, of the wellhead and throughput volumes and NGL production.

Three ~~months ended September 30, 2017~~Months Ended March 31, 2023 vs. Three ~~months ended September 30, 2016~~Months Ended March 31, 2022

Total Operating Revenues — Total operating revenues ~~increased $232~~decreased $649 million in ~~2017~~2023 compared to ~~2016~~2022, primarily as a result of the following:

•$~~272~~771 million ~~increase~~decrease for our Logistics and Marketing segment, primarily due to ~~higher~~lower commodity prices, partially offset by higher gas and NGL volumes, and favorable commodity derivative ~~activity, partially offset by lower gas~~activity; and ~~NGL sales volumes;~~

•$~~120~~340 million ~~increase~~decrease for our Gathering and Processing segment, primarily due to ~~higher~~lower commodity prices, ~~higher gas and NGL sales volumes primarily related to our North region which impact both sales and purchases. These increases were~~ partially offset by ~~lower gas and NGL sales volumes in the South, Midcontinent and Permian regions, unfavorable~~favorable commodity derivative activity, higher volumes across all regions, and ~~the sale of our Douglas gathering system;~~an increase in transportation, processing and other.

These ~~increases~~decreases were partially offset by:

•$~~160~~462 million ~~increase~~change in inter-segment eliminations, which relate to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to ~~higher~~lower commodity ~~prices, partially offset by lower gas and NGL sales volumes.~~prices.

Total Purchases — Total purchases ~~increased $258~~decreased $847 million in ~~2017~~2023 compared to ~~2016~~2022, primarily as a result of the following:

•$~~266~~809 million ~~increase~~decrease for our Logistics and Marketing segment for the commodity price and volume changes discussed above; and

•$500 million decrease for our Gathering and Processing segment for the commodity price and volume changes discussed above.

These decreases was partially offset by:

•$462 million change in inter-segment eliminations, for the reasons discussed ~~above;~~above.

Operating and Maintenance Expense — Operating and maintenance expense increased in 2023 compared to 2022 largely due to higher base costs primarily in the Permian region and higher reliability and pipeline integrity spend.

General and Administrative Expense — General and administrative expense increased in 2023 compared to 2022, primarily due to higher employee costs and benefits, and integration costs.

Gain on sale of assets, net — The net gain on sale of assets in 2022 represents the sale of a gathering system in the Permian region.

Restructuring Costs — Restructuring costs increased in 2023 compared to 2022 primarily as a result of severance for termination benefits and other costs as a result of our ongoing integration with Phillips 66 following the Realignment Transaction.

Earnings from Unconsolidated Affiliates — Earnings from unconsolidated affiliates increased in 2023 compared to 2022 primarily as a result of higher throughput volumes on the Sand Hills pipeline and higher NGL pipeline tariffs.

Net Income Attributable to Partners — Net income attributable to partners increased in 2023 compared to 2022 for all of the reasons discussed above.

Adjusted Gross Margin — Adjusted gross margin increased $198 million in 2023 compared to 2022, primarily as a result of the following:

•$~~152~~160 million increase for our Gathering and Processing segment, ~~for the reasons discussed above;~~

~~These increases were partially offset by:~~

$160 million increase in inter-segment eliminations, which relate to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to higher commodity prices, partially offset by lower gas and NGL sales volumes.

~~Operating and Maintenance Expense~~ ~~— Operating and maintenance expense increased in 2017 compared to 2016~~ primarily as a result of ~~increased asset reliability~~favorable derivative activity attributable to our corporate equity hedge program, higher volumes in the Permian, South and ~~planned maintenance spending associated with anticipated volume growth~~DJ Basin, and ~~investment~~improved performance in ~~process improvements,~~the Permian region, partially offset by ~~other cost savings initiatives and the sale of our Douglas system in June 2017.~~

~~General and Administrative Expense~~ ~~— General and administrative expense increased in 2017 compared to 2016 primarily as a result of investment in process and technology improvements.~~

~~Asset impairments~~ ~~— Asset impairments in 2017 represent the impairment of property, plant and equipment and intangible assets in our South region.~~

~~Other (Expense) Income~~ ~~— Other expense in 2016 represents the write-off of property, plant and equipment.~~

~~Interest Expense~~ ~~- Interest expense decreased in 2017 compared to 2016 as a result of~~ lower ~~average outstanding debt balances.~~

~~Restructuring Costs~~ ~~- Restructuring costs in 2016 related to our headcount reduction in April of 2016.~~

~~Gain on Sale of Assets, Net~~ ~~— The gain on sale in 2016 represents the sale of our Northern Louisiana system.~~

~~Net (Loss) Income Attributable to Partners~~ ~~— Net income attributable to partners decreased in 2017 compared to 2016 for the reasons discussed above.~~

~~Gross Margin~~ ~~— Gross margin decreased $26 million in 2017 compared to 2016 primarily as a result of the following:~~

~~$32 million decrease for our Gathering and Processing segment primarily related to~~ lower ~~volumes across our South, Midcontinent, and Permian regions due to reduced drilling activity in prior periods, the impact of Hurricane Harvey primarily~~margins in the South, DJ Basin and ~~Permian~~Midcontinent regions, ~~the sale of our Douglas gathering system~~ and ~~unfavorable~~lower commodity ~~derivative activity. These decreases were partially offset by higher commodity prices, increased volume from growth projects in our North region, higher NGL recoveries in our North region~~prices; and ~~contract realignment efforts in our Permian region;~~

~~These decreases were partially offset by:~~

•$638 million increase for our Logistics and Marketing segment, primarily ~~related to~~as a result of favorable commodity derivative activity on gas pipelines and ~~higher NGL and~~improved gas ~~marketing~~storage margins, partially offset by a decrease ~~in natural gas storage volumes.~~

~~Nine months ended September 30, 2017 vs. Nine months ended September 30, 2016~~

~~Total Operating Revenues~~ ~~— Total operating revenues increased $1,215 million in 2017 compared to 2016 primarily~~ as a result of ~~the following:~~unfavorable NGL marketing activity contract settlement.

~~$1,234 million increase for our Logistics and Marketing segment primarily~~NGL Pipelines Throughput — NGL pipelines throughput increased in 2023 compared to 2022 due to increased ~~commodity prices and favorable commodity derivative activity, partially offset by lower~~volumes on the Sand Hills pipeline.

Natural Gas Wellhead — Natural gas ~~and NGL sales volumes and the sale of our Northern Louisiana System;~~

~~$775 million increase for our Gathering and Processing segment primarily~~wellhead increased in 2023 compared to 2022 due to higher commodity prices, higher gas and NGL sales volumes primarily related to our North region which impacts both sales and purchases, and higher transportation, processing and other primarily related to fee based contract realignment efforts. These increases were partially offset by lower gas and NGL salesincreased volumes in the South, ~~Midcontinent~~Permian, and ~~Permian regions, unfavorable commodity derivative activity and the sale of our Northern Louisiana system and Douglas gathering system;~~DJ Basin.

~~These increases were partially offset by:~~

~~$794 million increase~~NGL Gross Production — NGL gross production increased in ~~inter-segment eliminations, which relate~~2023 compared to ~~sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily~~2022 due to ~~higher commodity prices, partially offset by lower gas and NGL sales volumes.~~

~~Total Purchases~~ ~~— Total purchases~~ increased ~~$1,073 million~~volumes in ~~2017 compared to 2016 primarily as a result of~~ the ~~following:~~

~~$1,221 million increase for our Logistics and Marketing segment for the reasons discussed above;~~

~~$646 million increase for our Gathering and Processing segment for the reasons discussed above;~~

~~These increases were partially offset by:~~

$794 million increase in inter-segment eliminations, which relate to sales of gas and NGL volumes from our Gathering and Processing segment to our Logistics and Marketing segment, primarily due to higher commodity prices, partially offset by lower gas and NGL sales volumes.

~~General and Administrative Expense~~ ~~— General and administrative expense increased in 2017 compared to 2016 primarily as a result of investment in process and technology improvements.~~

~~Asset impairments~~ ~~— Asset impairments in 2017 represent the impairment of property, plant and equipment and intangible assets in our South region.~~

~~Other (Expense) Income~~ — Other expense in 2017 primarily represents the write-off of property, plant and equipment associated with the expiration of a lease. Other income in 2016 primarily represents a producer settlement, net of legal fees, partially offset by the write-off of property, plant and equipment.

~~Earnings from Unconsolidated Affiliates~~ — Earnings from unconsolidated affiliates increased in 2017 compared to 2016 primarily as a result of the expansion and volume ramp up of the Sand Hills NGL pipeline in our Logistics and Marketing segment and an increase from Discovery in our Gathering and Processing segment primarily due to the accelerated recognition of previously deferred revenue associated with lower projections. We expect these projections to impact future earnings.

~~Interest Expense~~ ~~- Interest expense decreased in 2017 compared to 2016 as a result of lower average outstanding debt balances.~~

~~Restructuring Costs~~ ~~- Restructuring costs in 2016 related to our headcount reduction in April of 2016.~~

~~Gain on Sale of Assets, net~~ — The gain on sale in 2017 represents the sale of our Douglas gathering system. The gain on sale in 2016 represents the sale of our Northern Louisiana system, partially offset by a loss on sale of non-core assets.

~~Net Income Attributable to Partners~~ ~~— Net income attributable to partners increased in 2017 compared to 2016 for the reasons discussed above.~~

~~Gross Margin~~ ~~— Gross margin increased $142 million in 2017 compared to 2016 primarily as a result of the following:~~

$129 million increase for our Gathering and Processing segment primarily related to higher commodity prices, increased volume from growth projects, higher margins on a specific producer arrangement, higher NGL recoveries and a producer settlement in our NorthPermian region and contract realignment efforts in our Permian and Midcontinent regions. These increases were partially offset by lower volumes across our South, Midcontinent, and Permian regions due to reduced drilling activity in prior periods, the impact of Hurricane Harvey primarily in the South and Permian regions, the sale of our Northern Louisiana system, the sale of our Douglas gathering system and unfavorable commodity derivative activity; and

$13 million increase for our Logistics and Marketing segment primarily related to favorable commodity derivative activity and higher NGL marketing margins, partially offset by lower margins on wholesale propane.

DJ Basin.

Supplemental Information on Unconsolidated Affiliates

The following ~~table presents~~tables present financial information related to unconsolidated ~~affiliates:~~affiliates during the three months ended March 31, 2023 and 2022, respectively:

Earnings from investments in unconsolidated affiliates were as follows:


	Three Months Ended March 31,
			2023		2022
		(millions)
DCP Sand Hills Pipeline, LLC			$	87	$	71
DCP Southern Hills Pipeline, LLC			25		24
Gulf Coast Express LLC			17		16
Front Range Pipeline LLC			11		10
Texas Express Pipeline LLC			5		5
Mont Belvieu 1 Fractionator			4		4
Discovery Producer Services LLC			6		6
Cheyenne Connector, LLC			3		4
Mont Belvieu Enterprise Fractionator			1		2

Other			1		1
Total earnings from unconsolidated affiliates			$	160	$	143

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
DCP Sand Hills Pipeline, LLC $ 37
$ 28
$ 105
$ 84
Discovery Producer Services LLC 14
20
59
52
DCP Southern Hills Pipeline, LLC 10
13
34
37
Front Range Pipeline LLC 5
5
12
14
Texas Express Pipeline LLC 4
2
7
6
Mont Belvieu Enterprise Fractionator 3
4
10
12
Mont Belvieu 1 Fractionator 2
2
6
7
Other (1 ) 1
1
2
Total earnings from unconsolidated affiliates $ 74
$ 75
$ 234
$ 214

Distributions received from ~~investments in~~ unconsolidated affiliates were as follows:


	Three Months Ended March 31,
			2023		2022
		(millions)
DCP Sand Hills Pipeline, LLC			$	82	$	83
DCP Southern Hills Pipeline, LLC			28		28
Gulf Coast Express LLC			21		20
Front Range Pipeline LLC			13		12
Texas Express Pipeline LLC			6		6
Mont Belvieu 1 Fractionator			3		4
Discovery Producer Services LLC			11		8
Cheyenne Connector, LLC			4		5
Mont Belvieu Enterprise Fractionator			(1)		1

Other			1		1
Total distributions from unconsolidated affiliates			$	168	$	168

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
DCP Sand Hills Pipeline, LLC $ 45
$ 39
$ 118
$ 107
Discovery Producer Services LLC 19
24
68
69
DCP Southern Hills Pipeline, LLC 16
15
47
45
Front Range Pipeline LLC 5
8
12
18
Texas Express Pipeline LLC 5
4
10
9
Mont Belvieu Enterprise Fractionator 2
4
8
15
Mont Belvieu 1 Fractionator —
2
4
8
Other 1
2
3
3
Total distributions from unconsolidated affiliates $ 93
$ 98
$ 270
$ 274
Results of Operations — Logistics and Marketing Segment


Operating Data
					Three Months Ended March 31, 2023
System	Approximate System Length (Miles)	Fractionators	Approximate Throughput Capacity (MBbls/d) (a)	Approximate Gas Throughput Capacity (TBtus/d) (a)		Pipeline Throughput (MBbls/d) (a)	Pipeline Throughput (TBtus/d) (a)
Sand Hills pipeline	1,400	—	333	—		312	—
Southern Hills pipeline	950	—	128	—		115	—
Front Range pipeline	450	—	87	—		76	—
Texas Express pipeline	600	—	37	—		23	—
Other NGL pipelines (a)	1,050	—	310	—		197	—
Gulf Coast Express pipeline	500	—	—	0.50		—	0.50
Guadalupe pipeline	600	—	—	0.25		—	0.27
Cheyenne Connector	70	—	—	0.30		—	0.31
Mont Belvieu fractionators	—	2	—	—		—	—
Pipelines total	5,620	2	895	1.05		723	1.08

(a) Represents total capacity or total volumes allocated to our proportionate ownership share.

The results of operations for our Logistics and Marketing segment are as follows:


	Three Months Ended March 31,						Variance 2023 vs. 2022
			2023		2022			Increase (Decrease)		Percent
		(millions, except operating data)
Operating revenues:
Sales of natural gas, NGLs and condensate			$	2,330	$	3,185		$	(855)	(27	%)
Transportation, processing and other			19		19			—		—	%
Trading and marketing gains (losses), net			43		(41)			84		*
Total operating revenues			2,392		3,163			(771)		(24	%)
Purchases and related costs			(2,338)		(3,147)			(809)		(26	%)
Operating and maintenance expense			(9)		(8)			1		13	%
Depreciation and amortization expense			(2)		(3)			(1)		(33	%)
General and administrative expense			(2)		(1)			1		*


Earnings from unconsolidated affiliates (a)			154		137			17		12	%

Segment net income attributable to partners			$	195	$	141		$	54	38	%
Other data:
Segment adjusted gross margin (b)			$	54	$	16		$	38	*
Non-cash commodity derivative mark-to-market			$	(5)	$	(45)		$	40	89	%
NGL pipelines throughput (MBbls/d) (c)			723		682			41		6	%
Gas pipelines throughput (TBtu/d) (c)			1.08		1.04			0.04		4	%

* Percentage change is not meaningful.

(a) Earnings for certain unconsolidated affiliates include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.

(b) Adjusted gross margin consists of total operating revenues less purchases and related costs. Segment adjusted gross margin for each segment consists of total operating revenues for that segment less purchases and related costs for that segment. Please read “Reconciliation of Non-GAAP Measures”.

(c) For entities not wholly owned by us, includes our share, based on our ownership percentage, of the throughput volumes.

Three Months Ended March 31, 2023 vs. Three Months Ended March 31, 2022

Total Operating Revenues — Total operating revenues decreased $771 million in 2023 compared to 2022, primarily as a result of the following:

•$1,040 million decrease as a result of lower commodity prices before the impact of derivative activity.

This decrease was partially offset by:

•$185 million increase attributable to higher gas and NGL volumes; and

•$84 million increase as a result of commodity derivative activity attributable to a decrease in realized cash settlement losses of $124 million, partially offset by an increase in unrealized commodity derivative losses of $40 million due to movements in forward prices of commodities.

Purchases and Related Costs — Purchases and related costs decreased $809 million in 2023 compared to 2022, for the reasons discussed above.

Earnings from Unconsolidated Affiliates — Earnings from unconsolidated affiliates increased in 2023 compared to 2022 primarily as a result of a higher throughput volumes on the Sand Hills pipeline and higher NGL pipeline tariffs.

Segment Adjusted Gross Margin — Segment adjusted gross margin increased $38 million in 2023 compared to 2022, primarily as a result of the following:

•$37 million increase as a result of commodity derivative activity on gas pipelines; and

•$14 million increase as a result of improved gas storage margins.

These increases were partially offset by:

•$13 million decrease as a result of unfavorable NGL marketing activity contract settlement.

NGL Pipelines Throughput — NGL pipelines throughput increased in 2023 compared to 2022 due to increased volumes on the Sand Hills pipeline.

Results of Operations — Gathering and Processing Segment


Operating Data	Operating Data								Operating Data
					Three Months Ended September 30, 2017		Nine Months Ended September 30, 2017						Three Months Ended March 31, 2023
Regions		Plants	Approximate Gathering and Transmission Systems (Miles)	Approximate Net Nameplate Plant Capacity (MMcf/d) (a)	Natural Gas Wellhead Volume (MMcf/d) (a)	NGL Production (MBbls/d) (a)	Natural Gas Wellhead Volume (MMcf/d) (a)	NGL Production (MBbls/d) (a)	Regions	Plants	Approximate Gathering and Transmission Systems (Miles)	Approximate Net Nameplate Plant Capacity (MMcf/d) (a)	Natural Gas Wellhead Volume (MMcf/d) (a)	NGL Production (MBbls/d) (a)
North		13	4,000	1,260	1,134	87	1,116	86	North	13	3,500	1,580	1,575	157
Midcontinent									Midcontinent	6	23,000	1,110	803	62
Permian		16	16,500	1,460	927	101	951	102	Permian	10	15,000	1,220	1,091	134
Midcontinent		12	29,000	1,765	1,206	95	1,199	90
South		20	7,500	3,295	1,193	93	1,242	87	South	7	6,500	1,630	1,004	66
Total		61	57,000	7,780	4,460	376	4,508	365	Total	36	48,000	5,540	4,473	419

(a) Represents total capacity or total volumes allocated to our proportionate ownership share.

The results of operations for our Gathering and Processing segment are as follows:

Three Months Ended September 30, Nine Months Ended September 30, Variance Three Months 2017 vs. 2016 Variance Nine Months
2017 vs. 2016
2017 2016 2017 2016 Increase
(Decrease) Percent Increase
(Decrease) Percent
(Millions, except operating data)
Operating revenues:
Sales of natural gas, NGLs and condensate $ 1,249
$ 1,066
$ 3,562
$ 2,781
$ 183
17 % $ 781
28 %
Transportation, processing and other 145
146
424
418
(1 ) (1 )% 6
1 %
Trading and marketing (losses) gains, net (57 ) 5
(21 ) (9 ) (62 ) *
(12 ) *
Total operating revenues 1,337
1,217
3,965
3,190
120
10 % 775
24 %
Purchases of natural gas and NGLs (1,034 ) (882 ) (2,944 ) (2,298 ) 152
17 % 646
28 %
Operating and maintenance expense (154 ) (146 ) (469 ) (458 ) 8
5 % 11
2 %
General and administrative expense (2 ) (2 ) (15 ) (10 ) —
— % 5
50 %
Depreciation and amortization expense (85 ) (85 ) (256 ) (258 ) —
— % (2 ) (1 )%
Asset impairments (48 ) —
(48 ) —
(48 ) *
(48 ) *
Other (expense) income, net —
(13 ) (3 ) 74
13
*
(77 ) *
Earnings from unconsolidated affiliates (a) 15
20
59
52
(5 ) (25 )% 7
13 %
Gain on sale of assets, net —
25
34
19
(25 ) *
15
*
Segment net income 29
134
323
311
(105 ) *
12
4 %
Segment net income attributable to noncontrolling interests —
—
(1 ) (1 ) —
*
—
— %
Segment net income attributable to partners $ 29
$ 134
$ 322
$ 310
$ (105 ) *
$ 12
4 %
Other data:

Segment gross margin (b) $ 303
$ 335
$ 1,021
$ 892
$ (32 ) (10 )% $ 129
14 %
Non-cash commodity derivative mark-to-market $ (51 ) $ (5 ) $ (4 ) $ (73 ) $ (46 ) *
$ 69
*
Natural gas wellhead (MMcf/d) (c) 4,460
5,005
4,508
5,230
(545 ) (11 )% (722 ) (14 )%
NGL gross production (MBbls/d) (c) 376
392
365
401
(16 ) (4 )% (36 ) (9 )%

~~_____________~~


		Three Months Ended March 31,					Variance 2023 vs. 2022
			2023		2022			Increase (Decrease)		Percent
	(millions, except operating data)
Operating revenues:
Sales of natural gas, NGLs and condensate			$	1,578	$	2,164		$	(586)	(27	%)
Transportation, processing and other			144		136			8		6	%
Trading and marketing gains (losses), net			44		(194)			238		*
Total operating revenues			1,766		2,106			(340)		(16	%)
Purchases and related costs			(1,322)		(1,822)			(500)		(27	%)
Operating and maintenance expense			(182)		(140)			42		30	%
Depreciation and amortization expense			(84)		(81)			3		4	%
General and administrative expense			(4)		(4)			—		—	%


Gain on sale of assets, net			—		7			(7)		*
Earnings from unconsolidated affiliates (a)			6		6			—		—	%
Segment net income			180		72			108		*
Segment net income attributable to noncontrolling interests			(1)		(1)			—		—	%
Segment net income attributable to partners			$	179	$	71		$	108	*
Other data:
Segment adjusted gross margin (b)			$	444	$	284		$	160	56	%
Non-cash commodity derivative mark-to-market			$	45	$	(131)		$	176	*
Natural gas wellhead (MMcf/d) (c)			4,473		4,110			363		9	%
NGL gross production (MBbls/d) (c)			419		402			17		4	%

* Percentage change is not meaningful.

(a) Earnings for certain unconsolidated affiliates include the amortization of the net difference between the carrying amount of the investments and the underlying equity of the entities.


~~(a)~~	Earnings from unconsolidated affiliates includes our 40% ownership of Discovery. Earnings for Discovery include the amortization of the net difference between the carrying amount of our investment and the underlying equity of the entity.


~~(b)~~	~~Segment gross margin consists of total operating revenues, less purchases of natural gas and NGLs.~~(b) Segment adjusted gross margin for each segment consists of total operating revenues for that segment less purchases and related costs for that segment. Please read “Reconciliation of Non-GAAP Measures”.


~~(c)~~	~~For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the wellhead and throughput volumes and NGL production.~~

(c) For entities not wholly owned by us, includes our share, based on our ownership percentage, of the wellhead and NGL production

Three ~~months ended September 30, 2017~~Months Ended March 31, 2023 vs. Three ~~months ended September 30, 2016~~Months Ended March 31, 2022

Total Operating Revenues — Total operating revenues ~~increased $120~~decreased $340 million in ~~2017~~2023 compared to ~~2016,~~2022, primarily as a result of the following:

•$~~251~~739 million ~~increase~~decrease attributable to ~~higher~~lower commodity prices, ~~which impacted both sales and purchases,~~ before the impact of derivative ~~activity;~~activity.

~~$36 million increase attributable to higher gas and NGL sales volumes primarily related to our DJ Basin system in our North region;~~

~~These increases were~~This decrease was partially offset by:

•$~~104 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods;~~

$62 million decrease as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative losses of $46 million due to movements in forward prices of commodities, and a $16 million increase in realized cash settlement losses in 2017; and

$1 million decrease in transportation, processing and other primarily related to the sale of our Douglas gathering system, partially offset by fee based contract realignment efforts in our Permian region.

~~Purchases of Natural Gas and NGLs~~ — Purchases of natural gas and NGLs increased $152 million in 2017 compared to 2016 as a result of higher commodity prices and higher gas and NGL sales volumes in our North region, partially offset by decreased volumes in our South, Midcontinent and Permian regions.

~~Operating and Maintenance Expense~~ — Operating and maintenance expense increased in 2017 compared to 2016 primarily as a result of increased reliability spending and gathering pipeline remediation spending partially offset by cost savings initiatives and the sale of our Douglas gathering system in June 2017.

~~Asset impairments~~ ~~— Asset impairments in 2017 represent the impairment of property, plant and equipment and intangible assets in our South region.~~

~~Other (Expense) Income~~ ~~— Other expense in 2016 represents the write-off of property, plant and equipment.~~

~~Earnings from Unconsolidated Affiliates~~ ~~— Earnings from unconsolidated affiliates decreased in 2017 compared to 2016 primarily due to lower volumes at Discovery.~~

~~Gain on Sale of Assets, net~~ ~~— The gain on sale in 2016 primarily represents the sale of our Northern Louisiana system in our South Region.~~

~~Segment Gross Margin~~ ~~— Segment gross margin decreased $32 million in 2017 compared to 2016, primarily as a result of the following:~~

~~$62 million decrease as a result of commodity derivative activity as discussed above;~~

$22 million decrease primarily as a result of lower volumes across our South, Permian and Midcontinent regions due to reduced drilling activity in prior periods and the impact of Hurricane Harvey primarily related to the South and Permian regions, partially offset by fee based contract realignment efforts in the Permian region;

~~These decreases were partially offset by:~~

~~$46 million increase as a result of higher commodity prices; and~~

$6 million increase as a result of increased volume from growth projects and higher NGL recoveries primarily related to our DJ Basin system in our North region, partially offset by the sale of our Douglas gathering system.

~~Total Wellhead~~ — Natural gas wellhead decreased in 2017 compared to 2016 reflecting lower volumes primarily from (i) lower volumes associated with general declines within the South, Permian and Midcontinent regions, (ii) the sale of our Douglas gathering system within our North region, and (iii) the impact of Hurricane Harvey primarily related to the South and Permian regions, partially offset by general volume increases due to maximizing capacity utilization and growth projects within the North region.

~~NGL Gross Production~~ — NGL production decreased in 2017 compared to 2016 primarily as a result of (i) lower volumes associated with general declines within the South, Permian and Midcontinent regions, (ii) the sale of our Douglas gathering system within our North region and (iii) the impact of Hurricane Harvey primarily related to the South and Permian regions, partially offset by general volume increases due to maximizing capacity utilization within the North region.

~~Nine Months Ended September 30, 2017 vs. Nine Months Ended September 30, 2016~~

~~Total Operating Revenues~~ ~~— Total operating revenues increased $775 million in 2017 compared to 2016, primarily as a result of the following:~~

~~$1,076 million increase attributable to higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity;~~

~~$70 million increase attributable to higher gas and NGL sales volumes and the impact of a specific producer arrangement primarily related to our DJ Basin system in our North region;~~

$6 million increase in transportation, processing and other primarily related to fee based contract realignment efforts, partially offset by lower volumes in the South region and the sale of our Northern Louisiana system and Douglas gathering system;

~~These increases were partially offset by:~~

$365 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods and the impact of Hurricane Harvey primarily related to the South and Permian regions; and

$12 million decrease as a result of commodity derivative activity attributable to a $81 million increase in realized cash settlement losses, partially offset by a decrease in unrealized commodity derivative losses of $69 million due to movements in forward prices of commodities in 2017.

~~Purchases of Natural Gas and NGLs~~ — Purchases of natural gas and NGLs increased $646 million in 2017 compared to 2016 as a result of higher commodity prices and higher gas and NGL sales volumes in our North region, partially offset by decreased volumes in our South, Midcontinent and Permian regions.

~~Operating and Maintenance Expense~~ — Operating and maintenance expense increased in 2017 compared to 2016 primarily as a result of increased reliability spending and planned maintenance spending associated with anticipated volume growth partially offset by cost savings initiatives and the sale of our Northern Louisiana system in July 2016 and Douglas gathering system in June 2017.

~~General and Administrative Expense~~ ~~— General and administrative expense increased in 2017 compared to 2016 primarily as a result of investment in process improvements.~~

~~Asset impairments~~ ~~— Asset impairments in 2017 represent the impairment of property, plant and equipment and intangible assets in our South region.~~

~~Other (Expense) Income~~ — Other expense in 2017 represents the write-off of property, plant and equipment. Other income in 2016 represents a producer settlement, net of legal fees partially offset by the write-off of property, plant and equipment.

~~Earnings from Unconsolidated Affiliates~~ — Earnings from unconsolidated affiliates increased in 2017 compared to 2016 primarily due to the accelerated recognition of previously deferred revenue associated with lower projections at Discovery. We expect these projections to impact future earnings.

~~Gain on sale of assets, net~~ - The gain on sale in 2017 represents the sale of our Douglas gathering system. The gain on sale in 2016 represents the sale of our Northern Louisiana system partially offset by a loss on sale of non-core assets.

~~Segment Gross Margin~~ ~~— Segment gross margin increased $129 million in 2017 compared to 2016, primarily as a result of the following:~~

~~$194 million increase as a result of higher commodity prices;~~

$31 million increase as a result of increased volume from growth projects, higher margins on a specific producer arrangement, and higher NGL recoveries primarily related to our DJ Basin system and a producer settlement in our North region;

~~These increases were partially offset by:~~

$71 million decrease primarily as a result of lower volumes across our South, Midcontinent and Permian regions due to reduced drilling activity in prior periods, partially offset by fee based contract realignment efforts in the Permian and Midcontinent region;

~~$13 million decrease as a result of the sale of our Northern Louisiana system in our South region and Douglas gathering system in our North region; and~~

~~$12 million decrease as a result of commodity derivative activity as discussed above.~~

~~Total Wellhead~~ — Natural gas wellhead decreased in 2017 compared to 2016 reflecting lower volumes primarily from (i) lower volumes associated with general declines within the South, Permian and Midcontinent regions (ii) the sale of our Northern Louisiana system within our South region and (iii) the sale of our Douglas gathering system within our North region and (iv) the impact of Hurricane Harvey primarily related to the South and Permian regions, partially offset by (v) general volume increases due to maximizing capacity utilization and growth projects within the North region.

~~NGL Gross Production~~ — NGL production decreased in 2017 compared to 2016 primarily as a result of (i) lower volumes associated with general declines within the South, Permian and Midcontinent regions, (ii) the sale of our Northern Louisiana system within our South region and (iii) the sale of our Douglas gathering system within our North region and (iv) the impact of Hurricane Harvey primarily related to the South and Permian regions, partially offset by (v) general volume increases due to maximizing capacity utilization within the North region.

~~Results of Operations — Logistics and Marketing Segment~~

NGL Pipeline and Fractionator Operating Data
Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
System Approximate
System Length (Miles) Fractionators Approximate
Throughput Capacity
(MBbls/d) (a) Pipeline Throughput
(MBbls/d) (a) Fractionator Throughput
(MBbls/d) (a) Pipeline Throughput
(MBbls/d) (a) Fractionator Throughput
(MBbls/d) (a)
Sand Hills pipeline 1,300
—
190
193
—
181
—
Southern Hills pipeline 950
—
117
65
—
67
—
Front Range pipeline 450
—
50
36
—
36
—
Texas Express pipeline 600
—
28
16
—
15
—
Other NGL Pipelines (b) 1,200
—
172
152
—
148
—
Mont Belvieu fractionators —
2
60
—
49
—
48
Total 4,500
2
617
462
49
447
48

~~(a) Represents total capacity or total volumes allocated to our proportionate ownership share.~~

~~(b) Excludes other natural gas pipelines within our Logistics and Marketing segment.~~

~~The results of operations for our Logistics and Marketing segment are as follows:~~

Three Months Ended September 30, Nine Months Ended September 30, Variance Three Months 2017 vs. 2016 Variance Nine Months 2017 vs. 2016
2017 2016 2017 2016 Increase
(Decrease) Percent Increase
(Decrease) Percent
(Millions, except operating data)
Operating revenues:
Sales of natural gas and NGLs $ 1,882
$ 1,614
$ 5,515
$ 4,290
$ 268
17 % $ 1,225
29 %
Transportation, processing and other 17
17
50
53
—
— % (3 ) (6 )%
Trading and marketing gains, net

14
10
31
19
4
40 % 12
63 %
Total operating revenues 1,913
1,641

5,596
4,362
272
17 % 1,234
28 %
Purchases of natural gas and NGLs (1,856 ) (1,590 ) (5,431 ) (4,210 ) 266
17 % 1,221
29 %
Operating and maintenance expense (9 ) (13 ) (31 ) (33 ) (4 ) (31 )% (2 ) (6 )%
General and administrative expense (3 ) (2 ) (8 ) (7 ) 1
(50 )% 1
14 %
Depreciation and amortization expense (4 ) (4 ) (11 ) (12 ) —
— % (1 ) (8 )%
Other expense (1 ) —
(12 ) (5 ) 1
*
7
*
Earnings from unconsolidated affiliates (a) 59
55
175
162
4
7 % 13
8 %
Gain on sale of assets, net —
16
—
16
(16 ) *
(16 ) *
Segment net income attributable to partners $ 99
$ 103
$ 278
$ 273
$ (4 ) (4 )% $ 5
2 %
Other data:

Segment gross margin (b) $ 57
$ 51
$ 165
$ 152
$ 6
12 % $ 13
9 %
Non-cash commodity derivative mark-to-market $ (8 ) $ 14
$ 5
$ (7 ) (22 ) *
12
*
NGL pipelines throughput (MBbls/d) (c) 462
434
447
421
28
6 % 26
6 %


~~(a)~~	Earnings from unconsolidated affiliates for Sand Hills, Southern Hills, Front Range, Mont Belvieu 1 and Texas Express include the amortization of the net difference between the carrying amount of our investments and the underlying equity of the entities.


~~(b)~~	~~Segment gross margin consists of total operating revenues less purchases of natural gas and NGLs. Please read “Reconciliation of Non-GAAP Measures”.~~


~~(c)~~	~~For entities not wholly-owned by us, includes our share, based on our ownership percentage, of the wellhead and throughput volumes and NGL production.~~

~~Three months ended September 30, 2017 vs. Three months ended September 30, 2016~~

~~Total Operating Revenues~~ ~~— Total operating revenues increased $272 million in 2017 compared to 2016, primarily as a result of the following:~~

~~$387 million increase as a result of higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity;~~

$4238 million increase as a result of commodity derivative activity attributable to a ~~$26~~$176 million increase in unrealized commodity derivative gains and an increase in realized cash settlement gains ~~in 2017, partially offset by an increase in unrealized commodity derivative losses~~ of ~~$22 million due to movements in forward prices of commodities;~~

~~These increases were partially offset by:~~

~~$119 million decrease attributable to lower gas and NGL sales volumes, which impacted both sales and purchases.~~

~~Purchases of NGLs~~ ~~— Purchases of NGLs increased $266 million in 2017 compared to 2016, primarily as a result of higher commodity prices, partially offset by lower gas and NGL sales volumes.~~

~~Operating and Maintenance Expense~~ ~~— Operating and maintenance expense decreased in 2017 compared to 2016 primarily as a result of timing of planned maintenance spending.~~

~~Earnings from Unconsolidated Affiliates~~ — Earnings from unconsolidated affiliates increased in 2017 compared to 2016 primarily as a result of higher throughput volumes on Sand Hills due to the capacity expansion in 2017, partially offset by the impact of Hurricane Harvey primarily related to the Sand Hills and Southern Hills pipelines and the Mont Belvieu fractionators.

~~Gain on sale of assets, net~~ ~~— The gain on sale in 2016 primarily represents the sale of our Northern Louisiana system.~~

~~Segment Gross Margin~~ ~~— Segment gross margin increased $6 million in 2017 compared to 2016 primarily as a result of the following:~~

~~$4 million increase as a result of commodity derivative activity as discussed above;~~

~~$7 million increase as a result of higher NGL and gas marketing margins;~~

~~These increases are partially offset by:~~

~~$5 million decrease in natural gas storage volumes.~~

~~NGL Pipelines Throughput~~ — NGL pipelines throughput increased in 2017 compared to 2016 primarily as a result of higher throughput volumes on Sand Hills due to the capacity expansion in 2017, partially offset by the impact of Hurricane Harvey primarily related to the Sand Hills and Southern Hills pipelines.

~~Nine Months Ended September 30, 2017 vs. Nine Months Ended September 30, 2016~~

~~Total Operating Revenues~~ ~~— Total operating revenues increased $1,234 million in 2017 compared to 2016, primarily as a result of the following:~~

~~$1,565 million increase as a result of higher commodity prices, which impacted both sales and purchases, before the impact of derivative activity;~~

~~$12 million increase as a result of commodity derivative activity attributable to an increase in unrealized commodity derivative gains of $12~~$62 million due to movements in forward prices of commodities in ~~2017;~~2023;

•$153 million increase as a result of higher volumes in all regions; and

•$8 million increase in transportation, processing and other.

Purchases and Related Costs — Purchases and related costs decreased $500 million in 2023 compared to 2022, primarily as a result of the commodity price and volume changes discussed above.

Gain on Sale of Assets, net — The net gain on sale of assets in 2022 represents the sale of a gathering system in the Permian region.

Segment Adjusted Gross Margin — Segment adjusted gross margin increased $160 million in 2023 compared to 2022, primarily as a result of the following:

•$238 million increase as a result of favorable commodity derivative activity attributable to our corporate equity hedge program as discussed above; and

•$4 million increase due to higher volumes in the Permian, South and DJ Basin, and improved performance in the Permian region, partially offset by lower margins in the South, DJ Basin and Midcontinent regions.

These increases were partially offset by:

•$~~307~~82 million decrease ~~attributable to lower gas and NGL sales volumes, which impacted both sales and purchases, and;~~

~~$36 million decrease due to the sale of our Northern Louisiana system.~~

~~Purchases of NGLs~~ ~~— Purchases of NGLs increased $1,221 million in 2017 compared to 2016, primarily~~ as a result of ~~higher~~lower commodity ~~prices, partially offset by lower~~prices.

Natural Gas Wellhead — Natural gas ~~and NGL sales volumes.~~

~~Operating and Maintenance Expense~~ ~~— Operating and maintenance expense decreased~~wellhead increased in ~~2017~~2023 compared to ~~2016 primarily as a result of~~2022 due to increased volumes in the ~~timing of planned maintenance spending.~~South region, Permian region, and DJ Basin.

~~Other expense~~ NGL Gross Production— Other expense in 2017 primarily represents the write-off of property, plant and equipment associated with the expiration of a lease while other expense in 2016 primarily represents the write-off of property, plant and equipment and other long term assets.

~~Earnings from Unconsolidated Affiliates~~ ~~— Earnings from unconsolidated affiliates~~NGL gross production increased in ~~2017~~2023 compared to ~~2016 primarily as a result of higher throughput volumes on Sand Hills~~2022 due to ~~the capacity expansion~~increased volumes in the ~~second quarter of 2016, partially offset by the impact of Hurricane Harvey primarily related to the Sand Hills~~Permian region and ~~Southern Hills pipelines and the Mont Belvieu fractionators.~~DJ Basin.

~~Gain on sale of assets, net~~ ~~— The gain on sale in 2016 primarily represents the sale of our Northern Louisiana system.~~

~~Segment Gross Margin~~ ~~— Segment gross margin increased $13 million in 2017 compared to 2016, primarily as a result of the following:~~

~~$12 million increase as a result of commodity derivative activity discussed above;~~

~~$9 million increase as a result of higher NGL marketing margins;~~

~~These increases are partially offset by:~~

~~$8 million of lower margins on wholesale propane.~~

~~NGL Pipelines Throughput~~ — NGL pipelines throughput increased in 2017 compared to 2016 primarily as a result of higher throughput volumes on Sand Hills due to the capacity expansion in the second quarter of 2016, partially offset by the impact of Hurricane Harvey primarily related to the Sand Hills and Southern Hills pipelines.

Liquidity and Capital Resources

We expect our sources of liquidity to include:

•cash generated from operations;

•cash distributions from our unconsolidated affiliates;

•borrowings under our Credit ~~Agreement;~~Agreement and Securitization Facility;

•proceeds from asset rationalization;

~~reduction of incentive distribution right payments;~~

•debt offerings; and

~~issuances of additional common units or other securities;~~

•borrowings under term ~~loans; and~~

~~letters of credit.~~loans, or other credit facilities.

We anticipate our more significant uses of resources to include:

•quarterly distributions to our common unitholders and ~~General Partner;~~distributions to our preferred unitholders;

•payments to service or retire our ~~debt;~~debt or Preferred Units;

~~growth~~ •capital expenditures; and

•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.~~expenditures.

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~~expenditures and quarterly cash ~~distributions for the next twelve months.~~distributions.

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~~debt and ~~debt~~equity instruments as vehicles for the long-term financing of our investment activities ~~and~~or acquisitions.

Based on current and anticipated levels of operations, we believe we have adequate committed financial resources to conduct our ongoing business, although deterioration in our operating environment could limit our borrowing capacity, ~~further~~ impact our credit ratings, raise our financing costs, as well as impact our compliance with the financial covenants contained in the Credit Agreement and other debt instruments.

Senior Notes —On March 15, 2023, we repaid, at par, all $500 million of aggregate principal amount outstanding of our ~~financial covenant requirements~~3.875% Senior Notes due March 15, 2023 using borrowings under our Credit Facility and Securitization Facility.

Credit Agreement — We are party to a Credit Agreement that provides up to $1.4 billion of borrowing capacity and bears interest at either the term SOFR rate or the base rate plus, in each case, an applicable margin based on our credit rating. The Credit Agreement matures on March 18, 2027.

As of March 31, 2023, we had unused borrowing capacity of $1,173 million, net of $225 million of outstanding borrowings and $2 million letters of credit, under the Credit Agreement, ~~and the indentures governing our notes.~~

~~In February 2017, we further amended our Credit Agreement~~of which at least $1,173 million would have been available to ~~increase the aggregate commitments under the unsecured revolving credit facility to approximately $1.4 billion. The Credit Agreement is used~~borrow for working capital ~~requirements~~ and other general partnership purposes ~~including acquisitions.~~

~~As of September 30, 2017, there were no outstanding borrowings~~based on the ~~revolving credit facility under~~financial covenants set forth in the Credit Agreement. WeAs of April 28, 2023, we had unused borrowing capacity of ~~$1,373~~$1,173 million, net of ~~$25~~$225 million of outstanding borrowings and $2 million of letters of credit under the Credit Agreement. ~~The financial covenants set forth in the Credit Agreement limit the Partnership's ability to incur incremental debt by $1,373 million as of September 30, 2017.~~ Our cost of borrowing under the Credit Agreement is determined by a ratings-based pricing grid. ~~In the first quarter~~

Accounts Receivable Securitization Facility —As of ~~2017, our credit rating was lowered. As a result~~March 31, 2023, we had $350 million of ~~this action, interest rates on~~ outstanding borrowings under the ~~Credit Agreement increased. As~~Securitization Facility at SOFR market index rates plus a margin.

Issuance of November 2, 2017, we had no outstanding borrowings on the revolving credit facility and had approximately $1,373 million, net of $26 million of letters of credit, of unused borrowing capacity under the Credit Agreement. We used a portion of the cash received from the Transaction to repay outstanding debt on our revolving credit facility.

~~On January 1, 2017, DCP Midstream, LLC contributed to us: (i) its ownership interests in all of its subsidiaries owning operating assets, and (ii) $424 million of cash.~~Securities — In consideration of the Partnership’s receipt of the Contributions, (i) the Partnership issued 28,552,480 common units to DCP Midstream, LLC and 2,550,644 general partner units to DCP Midstream GP, LP, the General Partner, in a private placement, and (ii) the Operating Partnership assumed $3,150 million of DCP Midstream, LLC’s debt. The incentive distributions payable to the holders of the Partnership’s incentive distribution rights with respect to the fiscal years 2017, 2018 and 2019, in certain circumstances, may be reduced in an amount up to $100 million per fiscal year as necessary to provide that the Distributable Cash Flow of the Partnership (as adjusted) during such year meets or exceeds the amount of distributions made by the Partnership (as adjusted) to the partners of the Partnership with respect to such year.

~~In April 2015,~~October 2020, we filed a shelf registration statement with the SEC that became effective upon filing ~~which~~and allows us to issue an ~~unlimited amount~~indeterminate number of common units, preferred units, debt securities, and guarantees of debt securities. ~~We have issued no common units or debt securities under this registration statement.~~

In ~~August 2017,~~October 2020, we also filed a shelf registration statement with the SEC, which allows us to issue up to $750 million in common units pursuant to our ~~2014 equity distribution agreement to replace the expired shelf registration statement.~~at-the-market program. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2023, we ~~issued no~~did not issue any common units pursuant to ~~these~~this registration ~~statements.~~statement, and $750 million remained available for future sales.

Guarantee of Registered Debt Securities — The condensed consolidated financial statements of DCP Midstream, LP, or “parent guarantor”, include the accounts of DCP Midstream Operating LP, or “subsidiary issuer”, which is a 100% owned subsidiary, and all other subsidiaries which are all non-guarantor subsidiaries. The parent guarantor has agreed to fully and unconditionally guarantee the senior notes. The entirety of the Company’s operating assets and liabilities, operating revenues, expenses and other comprehensive income exist at its non-guarantor subsidiaries, and the parent guarantor and subsidiary issuer have no assets, liabilities or operations independent of their respective financing activities and investments in non-guarantor subsidiaries. All covenants in the indentures governing the notes limit the activities of subsidiary issuer, including limitations on the ability to pay dividends, incur additional indebtedness, make restricted payments, create liens, sell assets or make loans to parent guarantor.

The Company qualifies for alternative disclosure under Rule 13-01 of Regulation S-X, because the combined financial information of the subsidiary issuer and parent guarantor, excluding investments in subsidiaries that are not issuers or guarantors, reflect no material assets, liabilities or results of operations apart from their respective financing activities and investments in non-guarantor subsidiaries. Summarized financial information is presented as follows. The only assets, liabilities and results of operations of the subsidiary issuer and parent guarantor on a combined basis, independent of their respective investments in non-guarantor subsidiaries are:

•Accounts payable and other current liabilities of $67 million and $80 million as of March 31, 2023 and December 31, 2022, respectively;

•Balances related to debt of $4.549 billion and $4.823 billion as of March 31, 2023 and December 31, 2022, respectively; and

•Interest expense, net of $66 million and $69 million for the three months ended March 31, 2023 and 2022, respectively.

Commodity Swaps and Collateral — Changes in natural gas, NGL and condensate prices and the terms of our processing arrangements have a direct impact on our generation and use of cash from operations due to their impact on net income, along with the resulting changes in working capital. We have mitigated a portion of our anticipated commodity price risk associated with the equity volumes from our gathering and processing activities through the first quarter of 2019 with fixed price commodity swaps. For additional information regarding our derivative activities, please read Item 3. ~~"Quantitative~~“Quantitative and Qualitative Disclosures about Market ~~Risk"~~Risk” contained ~~herein.~~therein.

When we enter into commodity swap contracts, we may be required to provide collateral to the counterparties in the event that our potential payment exposure exceeds a predetermined collateral threshold. Collateral thresholds are set by us and each counterparty, as applicable, in the master contract that governs our financial transactions based on our and the counterparty’s assessment of creditworthiness. The assessment of our position with respect to the collateral thresholds are determined on a counterparty by counterparty basis, and are impacted by the representative forward price curves and notional quantities under our swap contracts. Due to the interrelation between the representative crude oil and natural gas forward price curves, it is not practical to determine a pricing point at which our swap contracts will meet the collateral thresholds as we may transact multiple commodities with the same counterparty. Depending on daily commodity prices, the amount of collateral posted can go up or down on a daily basis.

Working Capital — Working capital is the amount by which current assets exceed current liabilities. Current assets are reduced in part by our quarterly distributions, which are required under the terms of our Partnership Agreement based on Available Cash, as defined in the Partnership Agreement. In general, our working capital is impacted by changes in the prices of commodities that we buy and sell, inventory levels, and other business factors that affect our net income and cash flows. Our working capital is also impacted by the timing of operating cash receipts and disbursements, cash collateral we may be required to post with counterparties to our commodity derivative instruments, borrowings of and payments on debt and the Securitization Facility, capital expenditures, and increases or decreases in other long-term assets. We expect that our future working capital requirements will be impacted by these same recurring factors.

We had working capital deficits of ~~$473~~$119 million and ~~$629~~$802 million as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively, driven by current maturities of long term debt of $7 million and $506 million, respectively. ~~The change in working capital is primarily attributable to the cash received in the Transaction offset by the repayment of long-term debt outstanding on the revolving credit facility.~~ We had a net derivative working capital surplus of $19 million and deficit of ~~$10 million and $49~~$8 million as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, respectively.

~~As of September 30, 2017, we had $312 million in cash and cash equivalents, of which $1 million was held by consolidated subsidiaries we did not wholly own.~~

Cash Flow— Operating, investing and financing activities were as follows:


	Three Months Ended March 31,
	2023		2022
	(millions)
Net cash provided by operating activities	$	135	$	189
Net cash used in investing activities	$	(72)	$	(8)
Net cash used in financing activities	$	(64)	$	(181)

Nine Months Ended September 30,
2017 2016
(Millions)
Net cash provided by operating activities $ 684
$ 521
Net cash (used in) provided by investing activities $ (198 ) $ 9
Net cash used in financing activities $ (175 ) $ (518 )

~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2023 vs. ~~Nine~~Three Months Ended ~~September 30, 2016~~March 31, 2022

Operating Activities — Net cash provided by operating activities decreased $54 million in 2023 compared to the same period in 2022. The changes in net cash provided by operating activities are attributable to our net income adjusted for non-cash charges and changes in working capital as presented in the condensed consolidated statements of cash flows.

~~We received cash distributions in excess of earnings from unconsolidated affiliates of $36 million and $60 million during the nine months ended September 30, 2017 and 2016, respectively.~~ For additional information regarding fluctuations in our earnings and distributions from unconsolidated affiliates, please read ~~"Results~~“Supplemental Information on Unconsolidated Affiliates” under “Results of ~~Operations"~~Operations”.

Investing ~~Activities~~Activities — Net cash used in investing activities increased ~~$207~~$64 million in ~~2017~~2023 compared to the same period in ~~2016~~2022, primarily as a result of ~~the following:~~

~~Net cash used~~an increase in ~~investing activities during the nine months ended September 30, 2017 was comprised of~~ capital expenditures, of $258 million, primarily for (1) expansion capital expenditures including construction of the Mewbourn 3 plant, and (2) investment in unconsolidated affiliates, net of $70 million for the capacity expansion of the Sand Hills pipeline, partially offset by ~~(3) proceeds~~a return of capital from ~~the sale of our Douglas gathering system of $130 million.~~an investment.

Net cash provided by investing activities during the nine months ended September 30, 2016 was comprised of: (1) capital expenditures of $113 million, which generally consisted of maintenance capital expenditures for our existing facilities and expansion capital expenditures for construction of additional gathering systems, processing plants, fractionators and other facilities and infrastructure and well connections; (2) investment in unconsolidated affiliates, net of $38 million, which were partially offset by (3) proceeds from the sale of our Northern Louisiana system of $160 million.

Financing ~~Activities~~Activities — Net cash used in financing activities decreased ~~$343~~$117 million in ~~2017~~2023 compared to the same period in ~~2016~~2022, primarily as a result of lower net payments of debt.

Contractual Obligations — Material contractual obligations arising in the ~~following:~~

~~Net cash used~~normal course of business primarily consist of purchase obligations, long-term debt and related interest payments, leases, asset retirement obligations, and other long-term liabilities. See Note 8 to the Condensed Consolidated Financial Statements included in ~~financing activities during the nine months ended September 30, 2017 was primarily comprised of: (1) payment of debt~~Item 1 "Financial Statements" for amounts outstanding on ~~the revolving credit facility of $195 million~~March 31, 2023, related to debt. Lease and asset retirement obligations are not materially different from ~~cash received from the Transaction, (2) distributions paid to limited partners~~what was disclosed in Notes 14 and the general partner of $390 million, (3) distributions to noncontrolling interests of $6 million, and (4) payment of deferred financing costs of $2 million; which were partially offset by (5) cash received from the Transaction of $418 million.

Net cash used in financing activities during the nine months ended September 30, 2016 was primarily comprised of: (1) payment of long-term debt of $3,216 million, (2) distributions paid to limited partners and the general partner of $362 million, (3) distributions to noncontrolling interests of $6 million, and (4) payment of deferred financing costs of $10 million; which were partially offset by (5) proceeds from long-term debt of $2,926 million and (6) $150 million attributable15, respectively, to the ~~net change~~Consolidated Financial Statements included in ~~advances~~Item 8 "Financial Statements" in Part II of form 10-K for the year ended December 31, 2022.

Purchase Obligations are contractual obligations and include various non-cancelable commitments to purchase physical quantities of commodities in future periods and other items, including gas supply, fractionation and transportation agreements in the ordinary course of business.

Management believes that our ~~predecessor operations from DCP Midstream, LLC~~cash and investment position and operating cash flows as ~~a result of~~well as capacity under existing and available credit agreements will be sufficient to meet our liquidity and capital requirements for the ~~Transaction.~~foreseeable future. We believe that our current and projected asset position is sufficient to meet our liquidity requirements.

Capital Requirements — The midstream energy business can be capital intensive, requiring significant investment to maintain and upgrade existing operations. In the ordinary course of our business, we purchase physical commodities and enter into arrangements related to other items, including long-term fractionation and transportation agreements, in future periods. We establish a margin for these purchases by entering into physical and financial sale and exchange transactions to maintain a balanced position between purchases and sales and future delivery obligations. We expect to fund the obligations with the corresponding sales to entities that we deem creditworthy or that have provided credit support we consider adequate. We may enter into purchase order and non-cancelable construction agreements for capital expenditures. Our capital requirements have consisted primarily of, and we anticipate will continue to consist of the following:

~~maintenance~~•Sustaining capital expenditures, which are cash expenditures to maintain our cash flows, operating or earnings capacity. These expenditures add on to or improve capital assets owned, including certain system integrity,

compliance and safety improvements. ~~Maintenance~~Sustaining capital expenditures also include certain well connects, and may include the acquisition or construction of new capital assets; and

~~expansion~~•Expansion capital expenditures, which are cash expenditures to increase our cash flows, or operating or earnings capacity. Expansion capital expenditures include acquisitions or capital improvements (where we add on to or improve the capital assets owned, or acquire or construct new gathering lines and well connects, treating facilities, processing plants, fractionation facilities, pipelines, terminals, docks, truck racks, tankage and other storage, distribution or transportation facilities and related or similar midstream assets).

We incur capital expenditures for our consolidated entities and our unconsolidated affiliates. ~~We anticipate maintenance~~Our 2023 plan includes sustaining capital expenditures of ~~between $100~~$150 million and ~~$145 million, and approved~~ expansion capital expenditures of between $325 million and $375 million, for the year ending December 31, 2017. We forecast maintenance spending to be at the low end of the range, and expansion spending to approach the high end of the range. Expansion capital expenditures include the construction of the Mewbourn 3 plant, Grand Parkway Phase 2 and O'Connor bypass in our DJ Basin system, and the capacity expansions of the Sand Hills pipeline, which are shown as an investment in unconsolidated affiliates in our condensed consolidated statements of cash flows.

~~The following table summarizes our maintenance and expansion capital expenditures for our consolidated entities:~~

Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016

Maintenance
Capital
Expenditures

Expansion
Capital
Expenditures

Total
Consolidated
Capital
Expenditures

Maintenance
Capital
Expenditures

Expansion
Capital
Expenditures

Total
Consolidated
Capital
Expenditures
(Millions)
Our portion $ 64
$ 191
$ 255
$ 61
$ 53
$ 114
Noncontrolling interest portion and reimbursable projects (a) 1
2
3
1
(2 ) (1 )
Total $ 65
$ 193
$ 258
$ 62
$ 51
$ 113


~~(a)~~	Represents the noncontrolling interest and reimbursable portion of our capital expenditures. We have entered into agreements with third parties whereby we will be reimbursed for certain expenditures. Depending on the timing of these payments, we may be reimbursed prior to incurring the capital expenditure.

~~In addition, we invested cash in unconsolidated affiliates of $70 million and $38 million during the nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016, respectively, to fund our share of capital expansion projects.~~

We intend to make cash distributions to our unitholders and our general partner. Due to our cash distribution policy, we expect that we will distribute to our unitholders most of the cash generated by our operations. As a result, we expect that we will rely upon external financing sources, to fund future acquisitions and capital expenditures.$125 million.

We expect to fund future capital expenditures with funds generated from our operations, borrowings under our Credit Agreement, Securitization Facility and the issuance of additional ~~limited partnership units~~debt and equity securities. Future material investments may require that we obtain additional capital, assume third party debt or incur other long-term obligations. We have the ~~issuance~~option to utilize both equity and debt instruments as vehicles for the long-term financing of ~~long-term debt.~~our investment activities.

Cash Distributions to Unitholders — Our Partnership Agreement requires that, within 45 days after the end of each quarter, we distribute all Available Cash, as defined in the Partnership Agreement. We made cash distributions to our common unitholders and general partner of ~~$390~~$90 million and ~~$362~~$81 million during ~~the nine months ended~~ ~~September 30, 2017~~ ~~and~~ ~~2016~~, respectively. We intend to continue making quarterly distribution payments to our unitholders and general partner to the extent we have sufficient cash from operations after the establishment of reserves.

As part of the Transaction, Phillips 66 and Enbridge agreed, if required, to provide a reduction to incentive distributions payable to our General Partner under our Partnership Agreement of up to $100 million annually through 2019 to target an approximate 1.0 times distribution coverage ratio. Under the terms of our amended partnership agreement, the amount of incentive distributions paid to our General Partner will be evaluated by our General Partner on both a quarterly and annual basis and may be reduced each quarter by an amount determined by our general partner (the “IDR giveback”). If no determination is made by our General Partner, the quarterly IDR giveback will be $20 million. The IDR giveback, of up to $100 million annually, will be subject to a true-up at the end of the year by taking our total distributable cash flow (as adjusted under our amended partnership agreement) less the total annual distribution payable to our unitholders, adjusted to target an approximate

1.0 times coverage ratio. In accordance with our amended partnership agreement, distributions declared were $155 million and $424 million for the three and nine months ended September 30, 2017, respectively. Distributions declared reflected no IDR givebacks in the three months ended ~~September 30, 2017,~~March 31, 2023 and ~~reflected $40 million~~2022, respectively.

On April 19, 2023, we announced that the board of ~~IDR givebacks for~~directors of the ~~nine months ended September 30, 2017.~~General Partner declared a quarterly distribution on our common units of $0.43 per common unit. The distribution will be paid on May 15, 2023 to unitholders of record on May 1, 2023.

We expect to continue to use cash provided by operating activities for the payment of distributions to our ~~unitholders and general partner.~~unitholders. See Note ~~13. "Partnership~~1 0. “Partnership Equity and ~~Distributions"~~Distributions” in the Notes to the Condensed Consolidated Financial Statements in Item 1. “Financial ~~Statements.”~~Statements”.

~~Total Contractual Cash Obligations~~

~~A summary of our total contractual cash obligations as of September 30, 2017, was as follows:~~

Payments Due by Period
Total
Less than
1 year
1-3 years 3-5 years Thereafter
(Millions)
Debt (a) $ 8,354
$ 780
$ 1,832
$ 1,205
$ 4,537
Operating lease obligations 179
43
66
40
30
Purchase obligations (b) 2,782
750
758
659
615
Other long-term liabilities (c) 141
—
16
15
110
Total $ 11,456
$ 1,573
$ 2,672
$ 1,919
$ 5,292


~~(a)~~	Includes interest payments on debt securities that have been issued. These interest payments are $280 million, $457 million, $355 million, and $2,037 million for less than one year, one to three years, three to five years, and thereafter, respectively.

~~(b)~~

Our purchase obligations are contractual obligations and include purchase orders and non-cancelable construction agreements for capital expenditures, various non-cancelable commitments to purchase physical quantities of commodities in future periods and other items, including long-term fractionation agreements. For contracts where the price paid is based on an index or other market-based rates, the amount is based on the forward market prices or current market rates as of September 30, 2017. Purchase obligations exclude accounts payable, accrued taxes and other current

liabilities recognized in the condensed consolidated balance sheets. Purchase obligations also exclude current and long-term unrealized losses on derivative instruments included in the condensed consolidated balance sheets, which represent the current fair value of various derivative contracts and do not represent future cash purchase obligations. These contracts may be settled financially at the difference between the future market price and the contractual price and may result in cash payments or cash receipts in the future, but generally do not require delivery of physical quantities of the underlying commodity. In addition, many of our gas purchase contracts include short and long-term commitments to purchase produced gas at market prices. These contracts, which have no minimum quantities, are excluded from

~~the table.~~

~~(c)~~

Other long-term liabilities include asset retirement obligations, long-term environmental remediation liabilities, gas purchase liabilities, and other miscellaneous liabilities recognized in the September 30, 2017 condensed consolidated balance sheet. The table above excludes non-cash obligations as well as $28 million of Executive Deferred Compensation Plan contributions and $11 million of long-term incentive plans as the amount and timing of any payments are not subject to reasonable estimation.

~~Off-Balance Sheet Obligations~~

~~As of September 30, 2017, we had no items that were classified as off-balance sheet obligations.~~

Reconciliation of Non-GAAP Measures

Adjusted Gross Margin and Segment Adjusted Gross Margin — In addition to net income, we view our adjusted gross margin as an important performance measure of the core profitability of our operations. We review our adjusted gross margin monthly for consistency and trend analysis.

We define adjusted gross margin as total operating revenues, less purchases ~~of natural gas~~ and ~~NGLs,~~related costs, and we define segment adjusted gross margin for each segment as total operating revenues for that segment less ~~commodity~~ purchases and related costs for that segment. Our adjusted gross margin equals the sum of our segment adjusted gross margins. ~~Gross~~Adjusted gross margin and segment adjusted gross margin are primary performance measures used by management, as these measures represent the results of product sales and purchases, a key component of our operations. As an indicator of our operating performance, adjusted gross margin and segment adjusted gross margin should not be considered an alternative to, or more meaningful than, operating revenues, gross margin, segment gross margin, net income or loss, net income or loss attributable to partners, operating income, net cash ~~flows from~~provided by operating activities or any other measure of financial performance presented in accordance with ~~accounting principles generally accepted~~GAAP.

We believe adjusted gross margin provides useful information to our investors because our management views our adjusted gross margin and segment adjusted gross margin as important performance measures that represent the results of product sales and purchases, a key component of our operations. We review our adjusted gross margin and segment adjusted gross margin monthly for consistency and trend analysis. We believe that investors benefit from having access to the same financial measures that management uses in ~~the United States of America, or GAAP.~~evaluating our operating results.

Adjusted EBITDA — We define adjusted EBITDA as net income or loss attributable to partners adjusted for (i) distributions from unconsolidated affiliates, net of earnings, (ii) depreciation and amortization expense, (iii) net interest expense, (iv) noncontrolling interest in depreciation and income tax expense, (v) unrealized gains and losses from commodity derivatives, (vi) income tax expense or benefit, (vii) impairment expense, and (viii) certain other non-cash items. Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Management believes these measures provide investors meaningful insight into results from ongoing operations.

Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income or loss, net income or loss attributable to partners, operating income, net cash ~~flows from~~provided by operating activities or any other measure of financial performance presented in accordance with GAAP as measures of operating performance, liquidity or ability to service debt obligations.

Adjusted EBITDA is used as a supplemental liquidity and performance measure and adjusted segment EBITDA is used as a supplemental performance measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others to assess:

•financial performance of our assets without regard to financing methods, capital structure or historical cost basis;

•our operating performance and return on capital as compared to those of other companies in the midstream energy industry, without regard to financing methods or capital structure;

•viability and performance of acquisitions and capital expenditure projects and the overall rates of return on investment opportunities; and

•in the case of Adjusted EBITDA, the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness, make cash distributions to our unitholders and ~~general partner, and finance maintenance~~pay capital expenditures.

Adjusted Segment EBITDA — We define adjusted segment EBITDA for each segment as segment net income or loss attributable to partners adjusted for (i) distributions from unconsolidated affiliates, net of earnings, (ii) depreciation and amortization expense, (iii) net interest expense, (iv) noncontrolling interest in depreciation and income tax expense, (v) unrealized gains and losses from commodity derivatives, (vi) income tax expense or benefit, (vii) impairment expense, and (viii) certain other non-cash items. Adjusted segment EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations for that segment. Our adjusted segment EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted segment EBITDA in the same manner.

Adjusted segment EBITDA should not be considered in isolation or as an alternative to our financial measures presented in accordance with GAAP, including operating revenues, net income or loss attributable to partners, or any other measure of performance presented in accordance with GAAP.

Our adjusted gross margin, segment adjusted gross margin, adjusted EBITDA and adjusted segment EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate these measures in the

same manner. The accompanying schedules provide reconciliations of adjusted gross margin, segment adjusted gross margin and adjusted segment EBITDA to their most directly comparable GAAP financial measures.

Distributable Cash Flow — We define Distributable Cash Flow as adjusted EBITDA, as defined above, less ~~maintenance~~sustaining capital expenditures, net of reimbursable projects, less interest expense, less income attributable to preferred units, and certain other items. ~~Maintenance~~Sustaining capital

expenditures are cash expenditures made to maintain our cash flows, operating or earnings capacity. These expenditures add on to or improve capital assets owned, including certain system integrity, compliance and safety improvements. ~~Maintenance~~Sustaining capital expenditures also include certain well connects, and may include the acquisition or construction of new capital assets. Income attributable to preferred units represent cash distributions earned by the preferred units. Cash distributions to be paid to the holders of the preferred units assuming a distribution is declared by the board of directors of the General Partner, are not available to common unit holders. Non-cash mark-to-market of derivative instruments is considered to be non-cash for the purpose of computing Distributable Cash Flow because settlement will not occur until future periods, and will be impacted by future changes in commodity prices and interest rates. ~~We compare the Distributable Cash Flow we generate to the cash distributions we expect to pay our partners. Using this metric, we compute our distribution coverage ratio.~~ Distributable Cash Flow is used as a supplemental liquidity and performance measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others, to assess our ability to make cash distributions to our unitholders and our general partner.

Our Distributable Cash Flow may not be comparable to a similarly titled measure of another company because other entities may not calculate Distributable Cash Flow in the same manner.

Excess Free Cash Flow — We define Excess Free Cash Flow as Distributable Cash Flow, as defined above, less distributions to limited partners, less expansion capital expenditures, net of reimbursable projects, and contributions to equity method investments and certain other items. Expansion capital expenditures are cash expenditures to increase our cash flows, or operating or earnings capacity. Expansion capital expenditures include acquisitions or capital improvements (where we add on to or improve the capital assets owned, or acquire or construct new gathering lines and well connects, treating facilities, processing plants, fractionation facilities, pipelines, terminals, docks, truck racks, tankage and other storage, distribution or transportation facilities and related or similar midstream assets).

Excess Free Cash Flow is used as a supplemental liquidity and performance measure by our management and by external users of our financial statements, such as investors, commercial banks, research analysts and others, and is useful to investors and management as a measure of our ability to generate cash. Once business needs and obligations are met, including cash reserves to provide funds for distribution payments on our units and the proper conduct of our business, which includes cash reserves for future capital expenditures and anticipated credit needs, this cash can be used to reduce debt, reinvest in the company for future growth, or return to unitholders.

Our definition of Excess Free Cash Flow is limited in that it does not represent residual cash flows available for discretionary expenditures. Therefore, we believe the use of Excess Free Cash Flow for the limited purposes described above and in this report is not a substitute for net cash flows provided by operating activities, which is the most comparable GAAP measure. Excess Free Cash Flow may not be comparable to a similarly titled measure of another company because other entities may not calculate Excess Free Cash Flow in the same manner.

The following table sets forth our reconciliation of certain non-GAAP measures:


	Three Months Ended March 31,
		2023		2022
Reconciliation of Non-GAAP Measures		(millions)

Reconciliation of gross margin to adjusted gross margin:

Operating revenues		$	2,726	$	3,375
Cost of revenues
Purchases and related costs		1,852		2,719
Purchases and related costs from affiliates		97		99
Transportation and related costs from affiliates		279		257
Depreciation and amortization expense		90		90
Gross margin		408		210
Depreciation and amortization expense		90		90
Adjusted gross margin		$	498	$	300



Reconciliation of segment gross margin to segment adjusted gross margin:

Logistics and Marketing segment:
Operating revenues		$	2,392	$	3,163
Cost of revenues
Purchases and related costs		2,338		3,147
Depreciation and amortization expense		2		3
Segment gross margin		52		13
Depreciation and amortization expense		2		3
Segment adjusted gross margin		$	54	$	16



Gathering and Processing segment:
Operating revenues		$	1,766	$	2,106
Cost of revenues
Purchases and related costs		1,322		1,822
Depreciation and amortization expense		84		81
Segment gross margin		360		203
Depreciation and amortization expense		84		81
Segment adjusted gross margin		$	444	$	284

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Reconciliation of Non-GAAP Measures (Millions)

Reconciliation of net (loss) income attributable to partners to gross margin:

Net (loss) income attributable to partners $ (20 ) $ 89
$ 169
$ 132
Interest expense 73
77
219
235
Income tax expense 2
1
5
6
Operating and maintenance expense 168
161
513
506
Depreciation and amortization expense 94
94
282
284
General and administrative expense 69
64
202
187
Asset impairments 48
—
48
—
Other expense (income), net —
14
15
(68 )
Restructuring costs —
2
—
10
Earnings from unconsolidated affiliates (74 ) (75 ) (234 ) (214 )
Gain on sale of assets, net —
(41 ) (34 ) (35 )
Net income attributable to noncontrolling interests —
—
1
1
Gross margin $ 360
$ 386
$ 1,186
$ 1,044
Non-cash commodity derivative mark-to-market (a) $ (59 ) $ 9
$ 1
$ (80 )

Reconciliation of segment net income attributable to partners to segment gross margin:

Gathering and Processing segment:
Segment net income attributable to partners $ 29
$ 134
$ 322
$ 310
Operating and maintenance expense 154
146
469
458
Depreciation and amortization expense 85
85
256
258
General and administrative expense 2
2
15
10
Asset impairments 48
—
48
—
Other expense (income), net —
13
3
(74 )
Earnings from unconsolidated affiliates (15 ) (20 ) (59 ) (52 )
Gain on sale of assets, net —
(25 ) (34 ) (19 )
Net income attributable to noncontrolling interests —
—
1
1
Segment gross margin $ 303
$ 335
$ 1,021
$ 892
Non-cash commodity derivative mark-to-market (a) $ (51 ) $ (5 ) $ (4 ) $ (73 )

Logistics and Marketing segment:
Segment net income attributable to partners $ 99
$ 103
$ 278
$ 273
Operating and maintenance expense 9
13
31
33
Depreciation and amortization expense 4
4
11
12
Other expense, net 1
—
12
5
General and administrative expense 3
2
8
7
Earnings from unconsolidated affiliates (59 ) (55 ) (175 ) (162 )
Gain on sale of assets, net —
(16 ) —
(16 )
Segment gross margin $ 57
$ 51
$ 165
$ 152
Non-cash commodity derivative mark-to-market (a) $ (8 ) $ 14
$ 5
$ (7 )


	Three Months Ended March 31,
		2023		2022
		(millions)
Reconciliation of net income attributable to partners to adjusted segment EBITDA:

Logistics and Marketing segment:
Segment net income attributable to partners (a)		$	195	$	141
Non-cash commodity derivative mark-to-market		5		45
Depreciation and amortization expense, net of noncontrolling interest		2		3
Distributions from unconsolidated affiliates, net of earnings		3		23



Adjusted segment EBITDA		$	205	$	212

Gathering and Processing segment:
Segment net income attributable to partners		$	179	$	71
Non-cash commodity derivative mark-to-market		(45)		131
Depreciation and amortization expense, net of noncontrolling interest		84		81
Distributions from unconsolidated affiliates, net of earnings		5		2



Gain on sale of assets, net		—		(7)
Adjusted segment EBITDA		$	223	$	278

(a) We recognized $22 million of lower of cost or net realizable value adjustment for the three months ended March 31, 2023. We recognized no lower of cost or net realizable value adjustment for the three months ended March 31, 2022.


~~(a)~~	~~Non-cash commodity derivative mark-to-market is included in gross margin and segment gross margin, along with cash settlements for our commodity derivative contracts.~~

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
(Millions)
Reconciliation of net income attributable to partners to adjusted segment EBITDA:
Gathering and Processing segment:
Segment net income attributable to partners (a) $ 29
$ 134
$ 322
$ 310
Non-cash commodity derivative mark-to-market 51
5
4
73
Depreciation and amortization expense, net of noncontrolling interest 85
85
256
258
Asset impairments 48
—
48
—
Gain on sale of assets, net —
(25 ) (34 ) (19 )
Distributions from unconsolidated affiliates, net of earnings

6
5
10
18
Other expense 1
13
4
13
Adjusted segment EBITDA $ 220
$ 217
$ 610
$ 653
Logistics and Marketing segment:
Segment net income attributable to partners $ 99
$ 103
$ 278
$ 273
Non-cash commodity derivative mark-to-market

8
(14 ) (5 ) 7
Depreciation and amortization expense, net of noncontrolling interest 4
4
11
12
Distributions from unconsolidated affiliates, net of earnings
13
18
26
42
Gain on sale of assets, net —
(16 ) —
(16 )
Other expense —
—
9
—
Adjusted segment EBITDA $ 124
$ 95
$ 319
$ 318


~~(a)~~	There were no lower of cost or market adjustments for the three and nine months ended September 30, 2017. There were no lower of cost or market adjustments for the three months ended September 30, 2016 and $3 million for the nine months ended September 30, 2016.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are described in ~~Critical~~"Critical Accounting ~~Policies and Estimates~~Estimates" within ~~exhibit 99.3~~Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" toincluded in our Annual Report on Form 10-K for the ~~May 2017 8-K~~year ended December 31, 2022 and Note 2 of the Notes to Consolidated Financial Statements in ~~Exhibit 99.4 “Financial~~"Financial Statements and Supplementary ~~Data”~~Data" included as ~~Exhibit 99.4~~Item 8 in our Annual Report on Form 10-K for the ~~May 2017 8-K.~~year ended December 31, 2022. The accounting policies and estimates used in preparing our interim condensed consolidated financial statements for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 are the same as those described in our Annual Report on Form 10-K for the ~~May 2017 8-K.~~year ended December 31, 2022. Certain information and note disclosures normally included in our annual financial statements prepared in accordance with GAAP have been condensed or omitted from the interim financial statements included in this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to make the information not misleading. The unaudited condensed consolidated financial statements and other information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the ~~May 2017 8-K.~~year ended December 31, 2022.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

~~For an in-depth discussion of our market risks, see "Item 7A. Quantitative and Qualitative Disclosures about Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2016.~~

The following tables set forth additional information about our fixed price swaps used to mitigate a portion of our natural gas and NGL price risk associated with our percent-of-proceeds arrangements and our condensate price risk associated with our gathering and processing operations. Our positions as of November 2, 2017 were as follows:

~~Commodity Swaps~~



~~Period~~	~~Commodity~~	~~Notional~~ ~~Volume~~ ~~- Short~~ ~~Positions~~	~~Reference Price~~	~~Price Range~~
~~October 2017 — December 2017~~	~~Natural Gas~~	~~(60,000) MMBtu/d~~	~~NYMEX Final Settlement Price (b)~~	~~$3.28-$4.27/MMBtu~~
~~January 2018 — March 2018~~	~~Natural Gas~~	~~(27,500) MMBtu/d~~	~~NYMEX Final Settlement Price (b)~~	~~$3.54-$3.68/MMBtu~~
~~October 2017 — December 2017~~	~~NGLs~~	~~(29,355) Bbls/d (d)~~	~~Mt.Belvieu (c)~~	~~$.28-$1.22/Gal~~
~~January 2018 — December 2018~~	~~NGLs~~	~~(15,591) Bbls/d (d)~~	~~Mt.Belvieu (c)~~	~~$.29-$.96/Gal~~
~~October 2017 — December 2017~~	~~Crude Oil~~	~~(3,001) Bbls/d (d)~~	~~NYMEX crude oil futures (a)~~	~~$53.54-$56.76/Bbl~~
~~January 2018 — December 2018~~	~~Crude Oil~~	~~(4,282) Bbls/d (d)~~	~~NYMEX crude oil futures (a)~~	~~$51.20-$56.61/Bbl~~
~~January 2019 — February 2019~~	~~Crude Oil~~	~~(2,560) Bbls/d (d)~~	~~NYMEX crude oil futures (a)~~	~~$51.26-$51.29/Bbl~~


~~(a)~~	~~Monthly average of the daily close prices for the prompt month NYMEX light, sweet crude oil futures contract.~~


~~(b)~~	~~NYMEX final settlement price for natural gas futures contracts.~~


~~(c)~~	~~The average monthly OPIS price for Mt. Belvieu TET/Non-TET.~~


~~(d)~~	~~Average Bbls/d per time period.~~

Our sensitivities for ~~2017~~2023 as shown in the table below are estimated based on our average estimated commodity price exposure and commodity cash flow protection activities for the calendar year 2017, and exclude the impact of non-cash mark-to-market changes on our commodity derivatives. We utilize direct product crude oil, natural gas and NGL derivatives to mitigate a portion of our condensate, natural gas and NGL commodity price exposure. These sensitivities are associated with our condensate, natural gas and NGL volumes that are currently unhedged.

Commodity Sensitivities Net of Cash Flow Protection Activities

Per Unit Decrease
Unit of
Measurement

Estimated
Decrease in
Annual Net
Income
Attributable to
Partners
(Millions)
Natural gas prices $ 0.10
MMBtu $ 7
Crude oil prices $ 1.00
Barrel $ 4
NGL prices $ 0.01
Gallon $ 5


	Per Unit Decrease		Unit of Measurement	Estimated Decrease in Annual Net Income Attributable to Partners
				(millions)
NGL prices	$	0.01	Gallon	$	10
Natural gas prices	$	0.10	MMBtu	$	6
Crude oil prices	$	1.00	Barrel	$	5

In addition to the linear relationships in our commodity sensitivities above, additional factors may cause us to be less sensitive to commodity price declines. A portion of our net income is derived from fee-based contracts and a portion from percentage-of-proceeds and percentage-of-liquids processing arrangements that contain minimum fee clauses in which our processing margins convert to fee-based arrangements as commodity prices decline.

The above sensitivities exclude the impact from arrangements where producers on a monthly basis may elect to not process their natural gas in which case we retain a portion of the customers’ natural gas in lieu of NGLs as a fee. The above sensitivities also exclude certain related processing arrangements where we control the processing or by-pass of the production based upon individual economic processing conditions. Under each of these types of arrangements, our processing of the natural gas would yield favorable processing margins.

~~We estimate the following sensitivities related to the non-cash mark-to-market on our commodity derivatives associated with our open position on our commodity cash flow protection activities:~~

~~Non-Cash Mark-To-Market Commodity Sensitivities~~

Per Unit
Increase

Unit of
Measurement

Estimated
Mark-to-
Market Impact
(Decrease in
Net Income
Attributable to
Partners)
(Millions)
Natural gas prices $ 0.10
MMBtu $ 2
Crude oil prices $ 1.00
Barrel $ 1
NGL prices $ 0.01
Gallon $ 3

While the above commodity price sensitivities are indicative of the impact that changes in commodity prices may have on our annualized net income, changes during certain periods of extreme price volatility and market conditions or changes in the relationship of the price of NGLs and crude oil may cause our commodity price sensitivities to vary significantly from these estimates.

The midstream natural gas industry is cyclical, with the operating results of companies in the industry significantly affected by the prevailing price of NGLs, which in turn has been generally related to the price of crude oil. Although the prevailing price of residue natural gas has less short-term significance to our operating results than the price of NGLs, in the long-term the growth and sustainability of our business depends on natural gas prices being at levels sufficient to provide incentives and capital for producers to increase natural gas exploration and production. To minimize potential future commodity-based pricing and cash flow volatility, we have entered into a series of derivative financial instruments. As a result of these transactions, we have mitigated a portion of our expected commodity price risk relating to the equity volumes associated with our gathering and processing activities through the first quarter of 2018.

Based on historical trends, we generally expect NGL prices to directionally follow changes in crude oil prices over the long-term. However, the pricing relationship between NGLs and crude oil may vary, as we believe crude oil prices will in large part be determined by the level of production from major crude oil exporting countries and the demand generated by growth in the world economy, whereas NGL prices are more correlated to supply and U.S. petrochemical demand. ~~However,~~Additionally, the level of

NGL ~~exports has increased in recent years.~~export demand may also have an impact on prices. We believe that future natural gas prices will be influenced by ~~the severity of winter and summer weather,~~ the level of North American production and drilling activity of exploration and production companies, ~~and~~ the balance of trade between imports and exports of liquid natural gas and ~~NGLs.~~NGLs and the severity of winter and summer weather. Drilling activity can be adversely affected as natural gas prices decrease. Energy market uncertainty could also reduce North American drilling activity.

Limited access to capital could also decrease drilling. Lower drilling levels over a sustained period would reduce natural gas volumes gathered and processed, but could increase commodity prices, if supply were to fall relative to demand levels.

Natural Gas Storage and Pipeline Asset Based Commodity Derivative Program — Our natural gas storage and pipeline assets are exposed to certain risks including changes in commodity prices. We manage commodity price risk related to our natural gas storage and pipeline assets through our commodity derivative program. The commercial activities related to our natural gas storage and pipeline assets primarily consist of the purchase and sale of gas and associated time spreads and basis spreads.

A time spread transaction is executed by establishing a long gas position at one point in time and establishing an equal short gas position at a different point in time. Time spread transactions allow us to lock in a margin supported by the injection, withdrawal, and storage capacity of our natural gas storage assets. We may execute basis spread transactions to mitigate the risk of sale and purchase price differentials across our system. A basis spread transaction allows us to lock in a margin on our physical purchases and sales of gas, including injections and withdrawals from storage. We typically use swaps to execute these transactions, which are not designated as hedging instruments and are recorded at fair value with changes in fair value recorded in the current period condensed consolidated statements of operations. While gas held in our storage locations is recorded at the lower of average cost or ~~market,~~net realizable value, the derivative instruments that are used to manage our storage facilities are recorded at fair value and any changes in fair value are currently recorded in our condensed consolidated statements of operations. Even though we may have economically hedged our exposure and locked in a future margin, the use of ~~lower-of-cost-or-market~~lower-of-cost-or-net realizable value accounting for our physical inventory and the use of mark-to-market accounting for our derivative instruments may subject our earnings to market volatility.

The following tables set forth additional information about our derivative instruments, used to mitigate a portion of our natural gas price risk associated with our inventory within our natural gas storage operations as of ~~September 30, 2017~~:March 31, 2023:

Inventory

Period ended

Commodity

Notional Volume - Long
Positions

Fair Value
(millions)

Weighted
Average Price

March 31, 2023

Natural Gas

11,374,264

MMBtu

$1.64/MMBtu

Commodity Swaps

Period

Commodity

Notional Volume - (Short)/Long
Positions

Fair Value
(millions)

Price Range

April 2023 — January 2024

Natural Gas

(19,852,500)

MMBtu

$2.14-$5.98/MMBtu

April 2023 — October 2023

Natural Gas

9,922,500

MMBtu

(5)

$1.99-$5.20/MMBtu

Natural Gas Asset Based Trading and Marketing - Our trading and marketing activities are subject to commodity price fluctuations in response to changes in supply and demand, market conditions and other factors.

We may enter into physical contracts and financial instruments with the objective of realizing a positive margin from the purchase and sale of commodity-based instruments. The following table sets forth our commodity derivative instruments as of March 31, 2023:

Commodity Swaps

Period

Commodity

Notional Volume - (Short)/Long Positions

Fair Value (millions)

Price Range (a)

April 2023 — Decemeber 2025

Natural Gas

(50,400,000)

MMBtu

$0.01-$0.13/MMBtu

April 2023 — October 2026

Natural Gas

48,577,500

MMBtu

(34)

$0.16-$0.64/MMBtu

(a) Represents the basis differential from NYMEX final settlement price for natural gas futures contracts for stated time period

Period ended Commodity
Notional Volume - Long
Positions

Fair Value
(millions)

Weighted
Average Price

September 30 2017 Natural Gas 11,055,842
MMBtu $ 32
$2.88/MMBtu

~~Commodity Swaps~~

Period Commodity
Notional Volume - (Short)/Long
Positions

Fair Value
(millions)
Price Range

October 2017-April 2018 Natural Gas (25,937,500 ) MMBtu $ 2
$2.86-$3.58/MMBtu
October 2017-October 2018 Natural Gas 14,585,000
MMBtu $ 1
$2.69-$3.00/MMBtu

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the SEC under the Securities Exchange Act of 1934, as amended ~~or the Exchange Act,~~(the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to the management of our ~~General Partner,~~general partner, including our ~~General Partner’s~~general partner’s interim principal executive and interim principal financial officers (whom we refer to as the ~~"Certifying Officers"~~“Certifying Officers”), as appropriate to allow timely decisions regarding required disclosure. The management of our general partner evaluated, with the participation of the Certifying Officers, the effectiveness of our disclosure controls and procedures as of ~~September 30, 2017,~~March 31, 2023, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, the Certifying Officers concluded that, as of ~~September 30, 2017,~~March 31, 2023, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended ~~September 30, 2017~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART ~~II. OTHER INFORMATION~~II

Item 1.Legal Proceedings

The information provided in “Commitments and Contingent ~~Liabilities,”~~Liabilities” included in (a) Note 1922 of the Notes to Consolidated Financial Statements included in Item 8 of our Annual Report on Form 10-K for the ~~2016 audited consolidated financial statements~~year ended December 31, 2022 and ~~notes thereto~~(b) Note 1 2 of the Notes to Condensed Consolidated Financial Statements included ~~as Exhibit 99.4~~ in ~~the May 2017 8-K and in Note 15~~Item 1 of Part I of this Quarterly Report on Form 10-Q isare incorporated herein by reference. For the disclosure of environmental proceedings with a governmental entity as a party pursuant to Item 103(c)(3)(iii) of Regulation S-K, the Company has elected to disclose matters where the Company reasonably believes such proceeding would result in monetary sanctions, exclusive of interest costs, of $1 million or more.

Item 1A. Risk Factors

~~In addition to the other information set forth~~An investment in ~~this report,~~our securities involves various risks. When considering an investment in us, careful consideration should be given to the risk factors discussed in Part I, “Item ~~1A.~~1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016. An investment in our securities involves various risks. When considering an investment in us, you should consider carefully all of the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2016.2022. There are no material changes to the risk factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

Item 6. Exhibits

Exhibit Number

Description

2.1

*#+

~~Contribution~~ Agreement and Plan of Merger, dated ~~December 30, 2016,~~January 5, 2023, by and among ~~DCP Midstream,~~Phillips 66, Phillips 66 Project Development Inc., Dynamo Merger Sub LLC, DCP Midstream, ~~Partners,~~LP, DCP Midstream GP, LP and DCP Midstream ~~Operating, LP (attached~~GP, LLC (attached as Exhibit 2.1 to DCP Midstream Partners, ~~LP’s~~LP's Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 6, ~~2017)~~2023).

3.1

Certificate of Limited Partnership of DCP Midstream Partners, LP dated August 5, 2005 (attached as Exhibit 3.1 to DCP Midstream Partners, LP's Registration Statement on Form S-1 (File No. 333-128378) filed with the SEC on September 16, 2005).

3.2

Certificate of Amendment to Certificate of Limited Partnership of DCP Midstream Partners, LP dated January 11, 2017 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 17, 2017).

3.3

~~Second~~Fifth Amended and Restated Agreement of Limited Partnership of DCP Midstream, ~~Partners,~~ LP dated November ~~1, 2006~~6, 2019 (attached as Exhibit 3.1 to DCP Midstream, ~~Partners,~~ LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on November ~~7, 2006)~~8, 2019).

~~3.4~~10.1

~~Amendment No. 1 to Second Amended~~Form of Terms and ~~Restated~~Conditions for Performance Share Program Award

10.2

Form of Terms and Conditions for Stock Option Program Award

10.3

Form of Terms and Conditions for Restricted Stock Program Award

10.4

Letter of Agreement between Phillips 66 and Donald A. Baldridge

10.5

Letter of ~~Limited Partnership~~Agreement between Phillips 66 and Bill L. Johnson

10.6

Letter of ~~DCP Midstream Partners, LP dated April 11, 2008~~Agreement between Phillips 66 and George R. Green

10.7

2022 Omnibus Stock and Performance Incentive Plan of Phillips 66 (attached as ~~Exhibit 4.1~~Appendix A to ~~DCP Midstream Partners, LP’s Current Report~~Phillips 66’s Definitive Proxy Statement on ~~Form 8-K~~Schedule 14A (File No. ~~001-32678) filed~~001-35349) Filed with the SEC on ~~April 14, 2008).~~March 31, 2022)

~~3.5~~22

~~Amendment No. 2 to Second Amended and Restated Agreement~~List of Limited Partnership of DCP Midstream Partners, LP dated April 1, 2009 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on April 7, 2009).Guaranteed Securities

~~3.6~~31.1

Amendment No. 3 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated January 1, 2017 (attached as Exhibit 3.1 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 6, 2017).

~~3.7~~

Amendment No. 4 to Second Amended and Restated Agreement of Limited Partnership of DCP Midstream Partners, LP dated January 11, 2017 (attached as Exhibit 3.2 to DCP Midstream Partners, LP’s Current Report on Form 8-K (File No. 001-32678) filed with the SEC on January 17, 2017).

~~10.1~~

Services and Employee Secondment Agreement, dated January 1, 2017, by and betweeen DCP Services, LLC and DCP Midstream Partners, LP (attached as Exhibit 10.1 to DCP Midstream Partners, LP's current report on Form 8-K (File No. 001 32678) filed with the SEC on January 6, 2017).

~~12.1~~

~~Computation of Ratio of Earnings to Fixed Charges.~~

~~31.1~~

Certification of Interim Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Interim Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Interim Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Interim Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

Financial statements from the Quarterly Report on Form 10-Q of DCP Midstream, LP for the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2023, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, (v) the Condensed Consolidated Statements of Changes in Equity, and (vi) the Notes to the Condensed Consolidated Financial Statements.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Such exhibit has heretofore been filed with the SEC as part of the filing indicated and is incorporated herein by reference.

+ Denotes management contract or compensatory plan or arrangement.

# Pursuant to Item 601(b)~~(2)~~(10)(iv) of Regulation S-K, the Partnership agrees to furnish supplementally aan unredacted copy of ~~any omitted~~

~~schedule~~this exhibit to the Securities and Exchange Commission upon ~~request~~.request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DCP Midstream, LP

By:

DCP Midstream GP, LP

its General Partner

By:

DCP Midstream GP, LLC

its General Partner

Date: ~~November 7, 2017~~May 4, 2023

By:

/s/ ~~Wouter T. van Kempen~~Donald A. Baldridge

Name:

~~Wouter T. van Kempen~~Donald A. Baldridge

Title:

~~President and~~Interim Chief Executive Officer

(Principal Executive Officer)

Date: ~~November 7, 2017~~May 4, 2023

By:

/s/ ~~Sean P. O'Brien~~Scott R. Delmoro

Name:

~~Sean P. O'Brien~~Scott R. Delmoro

Title:

~~Group Vice President and~~Interim Chief Financial Officer

(Principal Financial Officer)



	September 30, 2017			December 31, 2016
	(Millions)
ASSETS
Current assets:
Cash and cash equivalents	$	312		$	1
Accounts receivable:
Trade, net of allowance for doubtful accounts of $7 and $4 million, respectively	690			652
Affiliates	138			134
Other	18			6
Inventories	62			72
Unrealized gains on derivative instruments	32			42
Collateral cash deposits	42			71
Other	17			16
Total current assets	1,311			994
Property, plant and equipment, net	8,926			9,069
Goodwill	231			236
Intangible assets, net	109			137
Investments in unconsolidated affiliates	3,002			2,969
Unrealized gains on derivative instruments	4			5
Other long-term assets	188			201
Total assets	$	13,771		$	13,611
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable:
Trade	$	845		$	677
Affiliates	57			48
Other	17			10
Current maturities of long-term debt	500			500
Unrealized losses on derivative instruments	42			91
Accrued interest	69			72
Accrued taxes	88			49
Accrued wages and benefits	43			72
Capital spending accrual	17			20
Other	106			84
Total current liabilities	1,784			1,623
Long-term debt	4,711			4,907
Unrealized losses on derivative instruments	10			1
Deferred income taxes	30			28
Other long-term liabilities	193			199
Total liabilities	6,728			6,758
Commitments and contingent liabilities
Equity:
Predecessor equity	—			4,220
Limited partners (143,309,828 and 114,749,848 common units issued and outstanding, respectively)	6,870			2,591
General partner	155			18
Accumulated other comprehensive loss	(9		)	(8		)
Total partners’ equity	7,016			6,821
Noncontrolling interests	27			32
Total equity	7,043			6,853
Total liabilities and equity	$	13,771		$	13,611



	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
	(Millions)
Net (loss) income	$	(20	)	$	89	$	170		$	133
Other comprehensive income:
Reclassification of cash flow hedge losses into earnings	—			—		1			—
Total other comprehensive income	—			—		1			—
Total comprehensive (loss) income	(20		)	89		171			133
Total comprehensive income attributable to noncontrolling interests	—			—		(1		)	(1		)
Total comprehensive (loss) income attributable to partners	$	(20	)	$	89	$	170		$	132



				Partners’ Equity
	Predecessor Equity			Limited Partners			General Partner			Accumulated Other Comprehensive (Loss) Income			Noncontrolling Interests			Total Equity
	(Millions)
Balance, January 1, 2017	$	4,220		$	2,591		$	18		$	(8	)	$	32		$	6,853
Net income	—			47			122			—			1			170
Other comprehensive income	—			—			—			1			—			1
Net change in parent advances	—			418			—			—			—			418
Acquisition of the DCP Midstream Business	(4,220		)	—			—			—			—			(4,220		)
Deficit purchase price under carrying value of the Transaction	—			3,094			—			(2		)	—			3,092
Issuance of 28,552,480 common units and 2,550,644 general partner units to DCP Midstream, LLC and affiliates	—			1,033			92			—			—			1,125
Distributions to limited partners and general partner	—			(313		)	(77		)	—			—			(390		)
Distributions to noncontrolling interests	—			—			—			—			(6		)	(6		)
Balance, September 30, 2017	$	—		$	6,870		$	155		$	(9	)	$	27		$	7,043



	September 30, 2017
	(Millions)
	Gathering and Processing			Logistics and Marketing		Total
Balance, January 1, 2017	$	164		$	72	$	236
Dispositions	(5		)	—		(5		)
Balance, September 30, 2017	$	159		$	72	$	231



	Net Carrying Value		Fair Value Measurements Using						Asset Impairments
	Net Carrying Value		Level 1		Level 2		Level 3		Asset Impairments
	(millions)
Three and Nine Months Ended September 30, 2017
Property, plant and equipment	$	14	$	—	$	—	$	14	$	26
Intangible assets	11		—		—		11		21
Investment in unconsolidated affiliates	1		—		—		1		1
Total non-recurring assets at fair value	$	26	$	—	$	—	$	26	$	48



	September 30, 2017												December 31, 2016
	Level 1			Level 2			Level 3			Total Carrying Value			Level 1			Level 2			Level 3			Total Carrying Value
	(Millions)
Current assets:
Commodity derivatives (a)	$	9		$	21		$	2		$	32		$	5		$	28		$	9		$	42
Short-term investments (b)	$	310		$	—		$	—		$	310		$	—		$	—		$	—		$	—
Long-term assets:
Commodity derivatives (c)	$	1		$	2		$	1		$	4		$	—		$	—		$	5		$	5
Current liabilities:
Commodity derivatives (d)	$	(6	)	$	(28	)	$	(8	)	$	(42	)	$	(11	)	$	(57	)	$	(23	)	$	(91	)
Long-term liabilities:
Commodity derivatives (e)	$	(2	)	$	(6	)	$	(2	)	$	(10	)	$	(1	)	$	—		$	—		$	(1	)



	Debt Maturities
	(Millions)
2018	$	—
2019	775
2020	600
2021	500
2022	350
Thereafter	2,500
Total long-term debt	$	4,725



	Interest Rate Cash Flow Hedges			Commodity Cash Flow Hedges			Foreign Currency Cash Flow Hedges (a)		Total
	(Millions)
Net deferred (losses) gains in AOCI (beginning balance)	$	(4	)	$	(6	)	$	1	$	(9	)
Net deferred (losses) gains in AOCI (ending balance)	$	(4	)	$	(6	)	$	1	$	(9	)
Deferred losses in AOCI expected to be reclassified into earnings over the next 12 months	$	(1	)	$	—		$	—	$	(1	)



	September 30,		December 31,
	2017		2016
	(Millions)
Segment long-term assets:
Gathering and Processing	$	8,884	$	9,053
Logistics and Marketing	3,293		3,278
Other (a)	283		286
Total long-term assets	12,460		12,617
Current assets	1,311		994
Total assets	$	13,771	$	13,611



	Condensed Consolidating Balance Sheet
	September 30, 2017
	Parent Guarantor		Subsidiary Issuer			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
	(Millions)
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	310		$	2		$	—		$	312
Accounts receivable, net	—		—			846			—			846
Inventories	—		—			62			—			62
Other	—		—			91			—			91
Total current assets	—		310			1,001			—			1,311
Property, plant and equipment, net	—		—			8,926			—			8,926
Goodwill and intangible assets, net	—		—			340			—			340
Advances receivable — consolidated subsidiaries	2,563		2,031			—			(4,594		)	—
Investments in consolidated subsidiaries	4,453		7,392			—			(11,845		)	—
Investments in unconsolidated affiliates	—		—			3,002			—			3,002
Other long-term assets	—		—			192			—			192
Total assets	$	7,016	$	9,733		$	13,461		$	(16,439	)	$	13,771
LIABILITIES AND EQUITY
Accounts payable and other current liabilities	$	—	$	69		$	1,215		$	—		$	1,284
Current maturities of long-term debt	—		500			—			—			500
Advances payable — consolidated subsidiaries	—		—			4,594			(4,594		)	—
Long-term debt	—		4,711			—			—			4,711
Other long-term liabilities	—		—			233			—			233
Total liabilities	—		5,280			6,042			(4,594		)	6,728
Commitments and contingent liabilities
Equity:
Partners’ equity:
Net equity	7,016		4,457			7,397			(11,845		)	7,025
Accumulated other comprehensive loss	—		(4		)	(5		)	—			(9		)
Total partners’ equity	7,016		4,453			7,392			(11,845		)	7,016
Noncontrolling interests	—		—			27			—			27
Total equity	7,016		4,453			7,419			(11,845		)	7,043
Total liabilities and equity	$	7,016	$	9,733		$	13,461		$	(16,439	)	$	13,771



	Condensed Consolidating Statement of Operations
	Three Months Ended September 30, 2016
	Parent Guarantor		Subsidiary Issuer			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
	(Millions)
Operating revenues:
Sales of natural gas, NGLs and condensate	$	—	$	—		$	1,646		$	—		$	1,646
Transportation, processing and other	—		—			162			—			162
Trading and marketing gains, net	—		—			15			—			15
Total operating revenues	—		—			1,823			—			1,823
Operating costs and expenses:
Purchases of natural gas and NGLs	—		—			1,437			—			1,437
Operating and maintenance expense	—		—			161			—			161
Depreciation and amortization expense	—		—			94			—			94
General and administrative expense	—		—			64			—			64
Gain on sale of assets, net	—		—			(41		)	—			(41		)
Restructuring costs	—		—			2			—			2
Other expense, net	—		—			14			—			14
Total operating costs and expenses	—		—			1,731			—			1,731
Operating income	—		—			92			—			92
Interest expense, net	—		(77		)	—			—			(77		)
Income from consolidated subsidiaries	89		166			—			(255		)	—
Earnings from unconsolidated affiliates	—		—			75			—			75
Income before income taxes	89		89			167			(255		)	90
Income tax expense	—		—			(1		)	—			(1		)
Net income	89		89			166			(255		)	89
Net income attributable to noncontrolling interests	—		—			—			—			—
Net income attributable to partners	$	89	$	89		$	166		$	(255	)	$	89



	Condensed Consolidating Statement of Operations
	Nine Months Ended September 30, 2016
	Parent Guarantor		Subsidiary Issuer			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
	(Millions)
Operating revenues:
Sales of natural gas, NGLs and condensate	$	—	$	—		$	4,431		$	—		$	4,431
Transportation, processing and other	—		—			469			—			469
Trading and marketing gains, net	—		—			10			—			10
Total operating revenues	—		—			4,910			—			4,910
Operating costs and expenses:
Purchases of natural gas and NGLs	—		—			3,866			—			3,866
Operating and maintenance expense	—		—			506			—			506
Depreciation and amortization expense	—		—			284			—			284
General and administrative expense	—		—			187			—			187
Gain on sale of assets, net	—		—			(35		)	—			(35		)
Restructuring costs	—		—			10			—			10
Other income, net	—		—			(68		)	—			(68		)
Total operating costs and expenses	—		—			4,750			—			4,750
Operating income	—		—			160			—			160
Interest expense, net	—		(235		)	—			—			(235		)
Income from consolidated subsidiaries	132		367			—			(499		)	—
Earnings from unconsolidated affiliates	—		—			214			—			214
Income before income taxes	132		132			374			(499		)	139
Income tax expense	—		—			(6		)	—			(6		)
Net income	132		132			368			(499		)	133
Net income attributable to noncontrolling interests	—		—			(1		)	—			(1		)
Net income attributable to partners	$	132	$	132		$	367		$	(499	)	$	132



	Nine Months Ended September 30, 2017						Nine Months Ended September 30, 2016
	Maintenance Capital Expenditures		Expansion Capital Expenditures		Total Consolidated Capital Expenditures		Maintenance Capital Expenditures		Expansion Capital Expenditures			Total Consolidated Capital Expenditures
	(Millions)
Our portion	$	64	$	191	$	255	$	61	$	53		$	114
Noncontrolling interest portion and reimbursable projects (a)	1		2		3		1		(2		)	(1		)
Total	$	65	$	193	$	258	$	62	$	51		$	113



	Payments Due by Period
	Total		Less than 1 year		1-3 years		3-5 years		Thereafter
	(Millions)
Debt (a)	$	8,354	$	780	$	1,832	$	1,205	$	4,537
Operating lease obligations	179		43		66		40		30
Purchase obligations (b)	2,782		750		758		659		615
Other long-term liabilities (c)	141		—		16		15		110
Total	$	11,456	$	1,573	$	2,672	$	1,919	$	5,292



	Per Unit Increase		Unit of Measurement	Estimated Mark-to- Market Impact (Decrease in Net Income Attributable to Partners)
				(Millions)
Natural gas prices	$	0.10	MMBtu	$	2
Crude oil prices	$	1.00	Barrel	$	1
NGL prices	$	0.01	Gallon	$	3