DCP Midstream, LP [DCP] Filings

10-Q 1 dpm-20220930.htm 10-Q dpm-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(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, 2022


¨			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.)

6900 E. Layton Ave, Suite 900 Denver, Colorado						80237
(Address of principal executive offices)						(Zip Code)

(303) 595-3331

(Registrant’s telephone number, including area 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. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). 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,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Emerging growth company

Non-accelerated filer

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 October 28, 2022, there were 208,396,558 common units representing limited partnership interests outstanding.

DCP MIDSTREAM, LP

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS



Item		Page
	PART I. FINANCIAL INFORMATION
1	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	2
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	3
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2022	6
	Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2021	7
	Notes to the Condensed Consolidated Financial Statements	8
2	Management's Discussion and Analysis of Financial Condition and Results of Operations	28
3	Quantitative and Qualitative Disclosures about Market Risk	49
4	Controls and Procedures	52
	PART II. OTHER INFORMATION
1	Legal Proceedings	52
1A	Risk Factors	52

6	Exhibits	53
	Signatures	54

GLOSSARY OF TERMS

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


ASC						accounting standards codification
ASU						accounting standards update
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
Credit Agreement						Credit Agreement governing our Credit Facility
Credit Facility						Our $1.4 billion unsecured revolving credit facility, maturing March 18, 2027
Fractionation						the process by which natural gas liquids are separated into individual components
GAAP						generally accepted accounting principles in the United States of America



MBbls						thousand barrels
MBbls/d						thousand barrels per day
MMBtu						million Btus
MMBtu/d						million Btus per day
MMcf						million cubic feet
MMcf/d						million cubic feet per day
NGLs						natural gas liquids


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 Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, and in our Annual Report on Form 10-K for the year ended December 31, 2021, including the following risks and uncertainties:

•the outcome of the non-binding, preliminary proposal made by Phillips 66 to acquire all of our issued and outstanding common units not already owned by DCP Midstream, LLC or its subsidiaries;

•the disruption to 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;

•new, additions to, and changes in, laws and regulations, particularly with regard to taxes, safety, regulatory and protection of the 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 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;

•volatility in the price of our common units and preferred units;

•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;

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

•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 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.

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)


	September 30, 2022		December 31, 2021
ASSETS	(millions)
Current assets:
Cash and cash equivalents	$	93	$	1


Accounts receivable:
Trade, net of allowance for credit losses of $1 and $2 million, respectively	1,298		1,029
Affiliates	445		389
Other	4		7
Inventories	45		77
Unrealized gains on derivative instruments	130		86

Collateral cash deposits	219		128
Other	26		32
Total current assets	2,260		1,749
Property, plant and equipment, net	7,736		7,701

Intangible assets, net	35		39
Investments in unconsolidated affiliates	3,496		3,578
Unrealized gains on derivative instruments	35		10
Operating lease assets	103		104
Other long-term assets	217		199
Total assets	$	13,882	$	13,380
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable:
Trade	$	1,351	$	977
Affiliates	307		205
Other	17		16

Current debt	506		355
Unrealized losses on derivative instruments	224		145
Accrued interest	65		79
Accrued taxes	72		51
Accrued wages and benefits	66		60
Capital spending accrual	9		7

Other	124		115
Total current liabilities	2,741		2,010
Long-term debt	4,317		5,078
Unrealized losses on derivative instruments	49		30
Deferred income taxes	34		34
Operating lease liabilities	90		93
Other long-term liabilities	265		259
Total liabilities	7,496		7,504
Commitments and contingent liabilities (see note 15)
Equity:
Series A preferred limited partners (500,000 preferred units authorized, issued and outstanding, respectively)	499		489
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 (208,396,558 and 208,373,672 common units authorized, issued and outstanding, respectively)	5,606		5,106
Accumulated other comprehensive loss	(6)		(6)
Total partners’ equity	6,361		5,851
Noncontrolling interests	25		25
Total equity	6,386		5,876
Total liabilities and equity	$	13,882	$	13,380

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(millions, except per unit amounts)
Operating revenues:
Sales of natural gas, NGLs and condensate	$	3,153	$	1,935	$	8,361	$	5,395
Sales of natural gas, NGLs and condensate to affiliates	982		921		3,328		2,143
Transportation, processing and other	184		144		523		387
Trading and marketing losses, net	—		(173)		(249)		(695)

Total operating revenues	4,319		2,827		11,963		7,230
Operating costs and expenses:
Purchases and related costs	3,344		2,181		9,332		5,484
Purchases and related costs from affiliates	56		81		255		183
Transportation and related costs from affiliates	297		249		829		720
Operating and maintenance expense	193		168		534		482
Depreciation and amortization expense	90		89		270		273
General and administrative expense	90		63		210		158

Asset impairments	—		—		1		20
Other expenses (income), net	3		2		(5)		(4)
(Gain) loss on sale of assets, net	(1)		—		(8)		1

Total operating costs and expenses	4,072		2,833		11,418		7,317
Operating income (loss)	247		(6)		545		(87)

Earnings from unconsolidated affiliates	153		134		464		393
Interest expense, net	(69)		(73)		(210)		(227)
Income before income taxes	331		55		799		79
Income tax expense	(1)		—		(4)		—
Net income	330		55		795		79
Net income attributable to noncontrolling interests	(2)		(1)		(4)		(3)
Net income attributable to partners	328		54		791		76

Series A preferred limited partners' interest in net income	(10)		(9)		(28)		(28)
Series B preferred limited partners' interest in net income	(4)		(4)		(10)		(10)
Series C preferred limited partners' interest in net income	(2)		(3)		(7)		(7)

Net income allocable to limited partners	$	312	$	38	$	746	$	31
Net income per limited partner unit — basic and diluted	$	1.50	$	0.18	$	3.58	$	0.15

Weighted-average limited partner units outstanding — basic	208.4		208.4		208.4		208.4
Weighted-average limited partner units outstanding — diluted	208.5		208.7		208.5		208.6

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(millions)
Net income	$	330	$	55	$	795	$	79
Other comprehensive income:


Total other comprehensive income	—		1		—		1
Total comprehensive income	330		56		795		80
Total comprehensive income attributable to noncontrolling interests	(2)		(1)		(4)		(3)
Total comprehensive income attributable to partners	$	328	$	55	$	791	$	77

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine Months Ended September 30,
	2022		2021
	(millions)
OPERATING ACTIVITIES:
Net income	$	795	$	79
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	270		273
Earnings from unconsolidated affiliates	(464)		(393)
Distributions from unconsolidated affiliates	547		462
Net unrealized (gains) losses on derivative instruments	(2)		296

Asset impairments	1		20
Gain on sale of assets, net	(8)		—

Other, net	25		13
Change in operating assets and liabilities, which (used) provided cash:
Accounts receivable	(302)		(726)
Inventories	24		(20)
Accounts payable	446		576



Other assets and liabilities	(57)		(325)
Net cash provided by operating activities	1,275		255
INVESTING ACTIVITIES:
Capital expenditures	(128)		(69)
Acquisition	(161)		—

Investments in unconsolidated affiliates	(2)		(4)

Proceeds from sale of assets	18		—

Net cash used in investing activities	(273)		(73)
FINANCING ACTIVITIES:
Proceeds from debt	3,192		3,380
Payments of debt	(3,807)		(3,332)






Distributions to preferred limited partners	(35)		(35)

Distributions to limited partners and general partner	(252)		(244)
Distributions to noncontrolling interests	(4)		(4)
Debt issuance costs	(4)		—



Net cash used in financing activities	(910)		(235)
Net change in cash, cash equivalents and restricted cash	92		(53)
Cash, cash equivalents and restricted cash, beginning of period	1		56
Cash, cash equivalents and restricted cash, end of period	$	93	$	3

Reconciliation of cash, cash equivalents, and restricted cash:	September 30, 2022		September 30, 2021
Cash and cash equivalents	93		$	3
Restricted cash included in other current assets	—		—

Total cash, cash equivalents, and restricted cash	$	93	$	3

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited)


	Partners' 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
Net income		9		3		3		368		—		1		384

Distributions to unitholders		(18)		(3)		(3)		(82)		—		—		(106)
Distributions to noncontrolling interests		—		—		—		—		—		(1)		(1)
Equity based compensation		—		—		—		2		—		—		2
Balance, June 30, 2022		$	489	$	156	$	106	$	5,380	$	(6)	$	25	$	6,150
Net income		10		4		2		312		—		2		330

Distributions to unitholders		—		(4)		(2)		(89)		—		—		(95)
Distributions to noncontrolling interests		—		—		—		—		—		(2)		(2)
Equity based compensation		—		—		—		3		—		—		3
Balance, September 30, 2022		$	499	$	156	$	106	$	5,606	$	(6)	$	25	$	6,386

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited)


	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, 2021	$	489	$	156	$	106	$	5,090	$	(7)	$	27	$	5,861
Net income	9		3		2		39		—		1		54
Distributions to unitholders	—		(3)		(2)		(81)		—		—		(86)
Distributions to noncontrolling interests	—		—		—		—		—		(1)		(1)
Equity based compensation	—		—		—		4		—		—		4
Balance, March 31, 2021	$	498	$	156	$	106	$	5,052	$	(7)	$	27	$	5,832
Net income (loss)	10		3		2		(46)		—		1		(30)


Distributions to unitholders	(18)		(3)		(2)		(82)		—		—		(105)
Distributions to noncontrolling interests	—		—		—		—		—		(1)		(1)
Equity based compensation	—		—		—		1		—		—		1
Balance, June 30, 2021	$	490	$	156	$	106	$	4,925	$	(7)	$	27	$	5,697
Net income	9		4		3		38		—		1		55
Other comprehensive income	—		—		—		—		1		—		1
Distributions to unitholders	—		(4)		(3)		(81)		—		—		(88)
Distributions to noncontrolling interests	—		—		—		—		—		(2)		(2)
Equity based compensation	—		—		—		3		—		—		3
Balance, September 30, 2021	$	499	$	156	$	106	$	4,885	$	(6)	$	26	$	5,666

See accompanying notes to condensed consolidated financial statements.

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Nine Months Ended September 30, 2022 and 2021

(unaudited)

1. Description of Business and Basis of Presentation

DCP Midstream, LP, with its consolidated subsidiaries, or “us,” “we,” “our” or the “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 segments. For additional information regarding these segments, see Note 16 - Business Segments.

Our operations and activities are managed by our general partner, DCP Midstream GP, LP (the “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 “Merger Agreement”) 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 merger, 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 merger, Phillips 66 and Enbridge, through their respective subsidiaries, jointly governed DCP Midstream, LLC and its subsidiaries.

As of September 30, 2022, DCP Midstream, LLC, together with the General Partner, owned approximately 57% of the Partnership’s common units representing limited partner interests.

Common Unit Acquisition Proposal

On August 17, 2022, the Board of Directors of our General Partner (the “Board”) received a non-binding proposal from Phillips 66 to acquire all of the Partnership’s issued and outstanding publicly-held common units not already owned by DCP Midstream, LLC or its subsidiaries at a value of $34.75 per each issued and outstanding publicly-held common unit (the “Proposal”). The Board appointed the conflicts committee to review, evaluate and negotiate the Proposal. The proposed transaction is subject to a number of contingencies, including approval by the conflicts committee and the Board, the negotiation of a definitive agreement concerning the transaction, and the satisfaction of conditions to the consummation of a transaction set forth in any such definitive agreement. There can be no assurance that such definitive agreement will be executed or that any transaction will be consummated on the terms described above or at all.

Interim Financial Statements

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 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 these estimates, which may be significantly impacted by various factors, including those outside of our control, such as the impact of a sustained deterioration in commodity prices and volumes, which would negatively impact our results of operations, financial condition and cash flows. All intercompany balances and

DCP MIDSTREAM, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Nine Months Ended September 30, 2022 and 2021

(unaudited)

transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the SEC. Accordingly, these condensed consolidated financial statements reflect all adjustments, consisting 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 we believe that the disclosures made are adequate to make the information presented not misleading. Results of operations for the nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These unaudited condensed consolidated financial statements and other information included in this Quarterly Report on Form 10-Q should be read in conjunction with the 2021 audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

2. Update to Significant Accounting Policies

Business Combinations - We account for business combinations by recognizing assets and liabilities of an acquired business at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. The results of businesses acquired in business combinations are included in our consolidated financial statements from the date of the acquisition.

We perform valuations of assets acquired and liabilities assumed and allocate the purchase price to the respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies.

Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations.

3. Recent Accounting Pronouncements

FASB ASU, 2021-08 Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers - In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606 "Revenue from Contractors with Customers" ("Topic 606") to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. This ASU is effective for interim and annual periods beginning after December 15, 2022, with the option to early adopt for financial statements that have not been issued. However, an entity that elects to early adopt must apply the amendments to all business combinations that occurred during the fiscal year that includes the interim period. We early adopted this ASU on August 1, 2022 and it did not have a material impact on our consolidated financial statements.

4. Revenue Recognition

We disaggregate our revenue from contracts with customers by type of contract for each of our reportable segments, as we believe it best depicts the nature, timing and uncertainty of our revenue and cash flows. The following tables set forth our revenue by those categories:


	Three Months Ended September 30, 2022
	Logistics and Marketing		Gathering and Processing		Eliminations		Total
	(millions)
Sales of natural gas	$	1,731	$	1,474	$	(1,389)	$	1,816
Sales of NGLs and condensate (a)	2,098		1,402		(1,181)		2,319
Transportation, processing and other	19		165		—		184
Trading and marketing gains (losses), net (b)	(19)		19		—		—
Total operating revenues	$	3,829	$	3,060

DCP Midstream, LP [DCP] Filings
DCP Midstream, LP [DCP-PB] Filings
DCP Midstream, LP [DCP-PC] Filings
10-Q	[2022-11-03]
10-Q	[2022-08-03]
10-Q	[2022-05-05]
10-K	[2022-02-18]
10-Q	[2021-11-03]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-02-19]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-21]
10-Q	[2019-11-07]
10-Q	[2019-08-07]
10-Q	[2019-05-07]
10-K	[2019-02-25]
10-Q	[2018-11-06]
10-Q	[2018-08-08]
10-Q	[2018-05-08]
10-K	[2018-02-26]
10-Q	[2017-11-08]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-02-15]
10-Q	[2016-11-03]
10-Q	[2016-08-04]
10-Q	[2016-05-05]
10-K	[2016-02-25]
10-Q	[2015-11-05]
10-Q	[2015-08-06]
10-Q	[2015-05-07]
10-K	[2015-02-25]
10-Q	[2014-11-06]
10-Q	[2014-08-06]
10-Q	[2014-05-07]
10-K	[2014-02-26]
10-Q	[2013-11-06]
10-Q	[2013-08-06]
10-Q	[2013-05-07]
10-K	[2013-02-27]
10-Q	[2012-11-07]
10-Q	[2012-08-08]
10-Q	[2012-05-10]
10-K	[2012-02-29]

DCP Midstream, LP [DCP] Filings

DCP Midstream, LP [DCP-PB] Filings

DCP Midstream, LP [DCP-PC] Filings