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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
FORM 10-Q
 
(Mark One)
ýQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
or 
¨

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 classTrading Symbol(s)Name of each exchange on which registered
7.95% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred UnitsDCP PRCNew 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 filerýAccelerated 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 July 28, 2023, there were 208,677,458 common units representing limited partnership interests outstanding.
1


 DCP MIDSTREAM, LP
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023
TABLE OF CONTENTS
 
Item Page
PART I. FINANCIAL INFORMATION
1.Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022
Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2023
Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2022
Notes to the Condensed Consolidated Financial Statements
2.Management's Discussion and Analysis of Financial Condition and Results of Operations
3.Quantitative and Qualitative Disclosures about Market Risk
4.Controls and Procedures
PART II. OTHER INFORMATION
1.Legal Proceedings
1ARisk Factors
5.Other Information
6.Exhibits
Signatures
i


GLOSSARY OF TERMS
The following is a list of terms used in the industry and throughout this report:
 
ASUaccounting standards update
Bblbarrel
Bbls/dbarrels per day
BtuBritish thermal unit, a measurement of energy
Credit AgreementCredit Agreement governing our Credit Facility
Credit Facility
Our $1.4 billion unsecured revolving credit facility, maturing March 18, 2027
DCP ReceivablesDCP Receivables LLC
Fractionationthe process by which natural gas liquids are separated
    into individual components
GAAPgenerally accepted accounting principles in the United States of America
Intercompany Credit AgreementIntercompany Credit Agreement with Phillips 66
MBblsthousand barrels
MBbls/dthousand barrels per day
MMBtumillion Btus
MMBtu/dmillion Btus per day
MMcfmillion cubic feet
MMcf/dmillion cubic feet per day
NGLsnatural gas liquids
SECU.S. Securities and Exchange Commission
Securitization Facility$350 million Accounts Receivable Securitization
    Facility, maturing August 12, 2024
SOFRSecured Overnight Financing Rate
TBtu/dtrillion Btus per day
Throughputthe volume of product transported or passing through a
    pipeline or other facility
 

ii


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” and can be identified 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 current 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 these 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 our Annual Report on Form 10-K for the year ended December 31, 2022, including the following risks and uncertainties:
conflicts of interest may exist between our individual Series C preferred 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;
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;
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 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;
industry changes, including consolidations, alternative energy sources, technological advances, infrastructure constraints and changes in competition;
iii


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 to execute our business strategy;
the success of our ongoing integration with Phillips 66;
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 our 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.
iv


PART I
Item 1. Financial Statements
1



DCP MIDSTREAM, LP
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

June 30, 2023December 31, 2022
ASSETS(millions)
Current assets:
Cash and cash equivalents$5 $1 
Accounts receivable:
Trade, net of allowance for credit losses of $3 and $2 million, respectively
438 995 
Affiliates425 360 
Other2 3 
Inventories41 83 
Unrealized gains on derivative instruments60 140 
Collateral cash deposits3 93 
Other28 27 
Total current assets1,002 1,702 
Property, plant and equipment, net7,733 7,763 
Intangible assets, net32 34 
Investments in unconsolidated affiliates3,416 3,475 
Unrealized gains on derivative instruments17 26 
Operating lease assets109 112 
Other long-term assets183 222 
Total assets$12,492 $13,334 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable:
Trade$517 $1,199 
Affiliates253 255 
Other
30 29 
Current debt7 506 
Unrealized losses on derivative instruments36 148 
Accrued interest71 78 
Accrued taxes51 58 
Accrued wages and benefits32 72 
Capital spending accrual8 22 
Other139 137 
Total current liabilities1,144 2,504 
Long-term debt4,901 4,357 
Long-term debt - related party100  
Unrealized losses on derivative instruments13 35 
Deferred income taxes33 33 
Operating lease liabilities97 95 
Other long-term liabilities221 274 
Total liabilities6,509 7,298 
Commitments and contingent liabilities (see note 13)
Equity:
Series B preferred limited partners (0 and 6,450,000 preferred units authorized, issued and outstanding, respectively)
 156 
Series C preferred limited partners (4,400,000 preferred units authorized, issued and outstanding, respectively)
106 106 
Limited partners (208,677,458 and 208,396,558 common units authorized, issued and outstanding, respectively)
5,859 5,755 
Accumulated other comprehensive loss(6)(6)
Total partners’ equity5,959 6,011 
Noncontrolling interests24 25 
Total equity5,983 6,036 
Total liabilities and equity$12,492 $13,334 

See accompanying notes to condensed consolidated financial statements.
2


DCP MIDSTREAM, LP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)


 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
 (millions, except per unit amounts)
Operating revenues:
Sales of natural gas, NGLs and condensate$762 $2,880 $2,505 $5,208 
Sales of natural gas, NGLs and condensate to affiliates911 1,219 1,644 2,346 
Transportation, processing and other148 184 311 339 
Trading and marketing gains (losses), net20 (14)107 (249)
Total operating revenues1,841 4,269 4,567 7,644 
Operating costs and expenses:
Purchases and related costs1,112 3,269 2,964 5,988 
Purchases and related costs from affiliates12 100 109 199 
Transportation and related costs from affiliates288 275 567 532 
Operating and maintenance expense229 189 426 341 
Depreciation and amortization expense91 90 181 180 
General and administrative expense68 65 148 120 
Asset impairments 1  1 
Other income, net (8) (8)
Loss (gain) on sale of assets, net3  3 (7)
Restructuring costs16  26  
Total operating costs and expenses1,819 3,981 4,424 7,346 
Operating income22 288 143 298 
Earnings from unconsolidated affiliates148 168 308 311 
Interest expense, net(75)(70)(143)(141)
Income before income taxes95 386 308 468 
Income tax expense (2)(1)(3)
Net income95 384 307 465 
Net income attributable to noncontrolling interests(1)(1)(2)(2)
Net income attributable to partners94 383 305 463 
Series A preferred limited partners' interest in net income
 (9) (18)
Series B preferred limited partners' interest in net income(3)(3)(6)(6)
Series C preferred limited partners' interest in net income(2)(3)(4)(5)
Redemption of Series B preferred limited partners' units(5) (5) 
Net income allocable to limited partners$84 $368 $290 $434 
Net income per limited partner unit — basic and diluted$0.40 $1.77 $1.39 $2.08 
Weighted-average limited partner units outstanding — basic208.7 208.4 208.6 208.4 
Weighted-average limited partner units outstanding — diluted208.7 208.5 208.6 208.6 
See accompanying notes to condensed consolidated financial statements.

3


DCP MIDSTREAM, LP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)


 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
 (millions)
Net income$95 $384 $307 $465 
Other comprehensive income:
Total other comprehensive income    
Total comprehensive income95 384 307 465 
Total comprehensive income attributable to noncontrolling interests(1)(1)(2)(2)
Total comprehensive income attributable to partners$94 $383 $305 $463 
See accompanying notes to condensed consolidated financial statements.

4


DCP MIDSTREAM, LP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

 Six Months Ended June 30,
 20232022
 (millions)
OPERATING ACTIVITIES:
Net income$307 $465 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense181 180 
Earnings from unconsolidated affiliates(308)(311)
Distributions from unconsolidated affiliates360 369 
Net unrealized (gains) losses on derivative instruments(47)75 
Asset impairments 1 
Loss (gain) on sale of assets, net3 (7)
Other, net39 14 
Change in operating assets and liabilities, which (used) provided cash:
Accounts receivable492 (624)
Inventories20 (31)
Accounts payable(693)606 
Other assets and liabilities15 (163)
Net cash provided by operating activities369 574 
INVESTING ACTIVITIES:
Capital expenditures(163)(60)
Acquisition (16)
Investments in unconsolidated affiliates(1)(1)
Distribution from unconsolidated affiliate9  
Proceeds from sale of assets4 16 
Net cash used in investing activities(151)(61)
FINANCING ACTIVITIES:
Proceeds from debt2,576 2,690 
Payments of debt(2,441)(2,998)
Distributions to preferred limited partners(10)(29)
Distributions to limited partners and general partner(179)(163)
Distributions to noncontrolling interests(3)(2)
Redemption of preferred shares(161) 
Debt issuance costs (4)
Net cash used in financing activities(218)(506)
Net change in cash, cash equivalents and restricted cash 7 
Cash, cash equivalents and restricted cash, beginning of period5 1 
Cash, cash equivalents and restricted cash, end of period$5 $8 

See accompanying notes to condensed consolidated financial statements.
5


DCP MIDSTREAM, LP
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)


 
 Partner's Equity  
 Series B Preferred Limited PartnersSeries C Preferred Limited PartnersLimited 
Partners
Accumulated 
Other
Comprehensive
Loss
Noncontrolling
Interests
Total
Equity
 (millions)
Balance, January 1, 2023$156 $106 $5,755 $(6)$25 $6,036 
Net income3 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 $6,148 
Net income3 2 89  1 95 
Redemption of Series B preferred limited partners' units(156)— (5)— — (161)
Distributions to unitholders(3)(2)(89)  (94)
Distributions to noncontrolling interests    (1)(1)
Equity based compensation  (4)  (4)
Balance, June 30, 2023$ $106 $5,859 $(6)$24 $5,983 
See accompanying notes to condensed consolidated financial statements.
























6



DCP MIDSTREAM, LP
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited)

 Partner's Equity  
 Series A Preferred Limited PartnersSeries B Preferred Limited PartnersSeries C Preferred Limited PartnersLimited 
Partners
Accumulated 
Other
Comprehensive
Loss
Noncontrolling
Interests
Total
Equity
 (millions)
Balance, January 1, 2022$489 $156 $106 $5,106 $(6)$25 $5,876 
Net income9 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 income9 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 
See accompanying notes to condensed consolidated financial statements.

7

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2023 and 2022
(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 15 "Business Segments" in the Notes to the Condensed Consolidated Financial Statements in Item 1. "Financial Statements".
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. Phillips 66 has the authority to conduct, direct and manage the activities of DCP Midstream, LLC associated with the Partnership and our general partner, and, therefore, effectively controls our business and affairs.
On January 5, 2023, the Partnership, GP LP, the General Partner, Phillips 66, Phillips 66 Project Development Inc., a Delaware corporation and indirect wholly owned subsidiary of Phillips 66 (“PDI”), and Dynamo Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of PDI (“Merger Sub”), entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub merged with and into the Partnership, with the Partnership surviving as a Delaware limited partnership (the “Merger”). The Merger was completed on June 15, 2023 in accordance with the terms of the Merger Agreement.
Under the terms of the Merger Agreement, 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 Effective Time (other than the Sponsor Owned Units, as defined below) (each, a “Public Common Unit”) was converted into the right to receive $41.75 per Public Common Unit in cash, without any interest thereon (the “Merger Consideration”). The Common Units owned by DCP Midstream, LLC and the General Partner (collectively, the “Sponsor Owned Units”) were unaffected by the Merger and remained outstanding immediately following the Merger as Common Units of the Partnership. Following the Merger, the Common Units were delisted from the New York Stock Exchange (“NYSE”) and a Form 15 has been filed to deregister the Common Units under the Securities Exchange Act of 1934, as amended.
As a result of the Merger, Phillips 66’s economic interest in the Partnership increased from 43.3% to approximately 86.8%. Enbridge's economic interest in the Partnership was unchanged, and remains at approximately 13.2%.
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. All intercompany balances and transactions have been eliminated in consolidation.

2. 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 June 30, 2023
Logistics and MarketingGathering and ProcessingEliminationsTotal
(millions)
Sales of natural gas$418 $343 $(321)$440 
Sales of NGLs and condensate (a)1,106 778 (651)1,233 
Transportation, processing and other18 130 — 148 
Trading and marketing gains (losses), net (b)19 1  20 
     Total operating revenues$1,561 $1,252 $(972)$1,841 
8

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2023 and 2022


Six Months Ended June 30, 2023
Logistics and MarketingGathering and ProcessingEliminationsTotal
(millions)
Sales of natural gas$1,220 $1,023 $(990)$1,253 
Sales of NGLs and condensate (a)2,634 1,676 (1,414)2,896 
Transportation, processing and other37 274  311 
Trading and marketing gains, net (b)62 45  107 
     Total operating revenues$3,953 $3,018 $(2,404)$4,567 
(a)    Includes $444 million and $923 million for the three and six months ended June 30, 2023, respectively, of revenues from physical sales contracts and buy-sell exchange transactions in our Logistics and Marketing segment. For the three and six months ended June 30, 2023, these revenues are net of $868 million and $1,593 million, respectively, of buy-sell purchases related to buy-sell revenues of $954 million and $1,751 million, respectively, which are not within the scope of Topic 606.
(b)   Not within the scope of Topic 606.

Three Months Ended June 30, 2022
Logistics and MarketingGathering and ProcessingEliminationsTotal
(millions)
Sales of natural gas$1,436 $1,238 $(1,169)$1,505 
Sales of NGLs and condensate (a)2,333 1,579 (1,318)2,594 
Transportation, processing and other18 166  184 
Trading and marketing gains (losses), net (b)2 (16) (14)
     Total operating revenues$3,789 $2,967 $(2,487)$4,269 

Six Months Ended June 30, 2022
Logistics and MarketingGathering and ProcessingEliminationsTotal
(millions)
Sales of natural gas$2,499 $2,120 $(1,990)$2,629 
Sales of NGLs and condensate (a)4,455 2,861 (2,391)4,925 
Transportation, processing and other37 302  339 
Trading and marketing losses, net (b)(39)(210) (249)
     Total operating revenues$6,952 $5,073 $(4,381)$7,644 
(a)    Includes $708 million and $1,384 million for the three and six months ended June 30, 2022, respectively, of revenues from physical sales contracts and buy-sell exchange transactions in our Logistics and Marketing segment. For the three and six months ended June 30, 2022, these revenues are net of $1,005 million and $1,761 million, respectively, of buy-sell purchases related to buy-sell revenues of $1,089 million and $1,940 million, respectively, which are not within the scope of Topic 606.
(b)   Not within the scope of Topic 606.

The revenue expected to be recognized in the future related to performance obligations that are not satisfied is approximately $349 million as of June 30, 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 June 30, 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.





9

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2023 and 2022

3. Agreements and Transactions with Affiliates
Phillips 66 Intercompany Credit Agreement
We entered into an Intercompany Credit Agreement with Phillips 66 on June 15, 2023. For more information regarding the terms and conditions of the Intercompany Credit Agreement, see Note 8 "Debt" in the Notes to the Condensed Consolidated Financial Statements in Item 1. "Financial Statements".
DCP Midstream, LLC
Services Agreement and Other General and Administrative Charges
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 June 30,Six Months Ended June 30,
2023202220232022
(millions)
Employee related costs charged by DCP Midstream, LLC
Operating and maintenance expense$46 $42 $89 $82 
General and administrative expense$29 $42 $87 $75 
Restructuring costs$16 $ $26 $ 



















10

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2023 and 2022

Summary of Transactions with Affiliates
The following table summarizes our transactions with affiliates:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
(millions)
Phillips 66 (including its affiliates):
Sales of natural gas, NGLs and condensate to affiliates$896 $1,197 1197$1,600 $2,292 
Purchases and related costs from affiliates$2 $65 $77 $127 
Transportation and related costs from affiliates$46 $47 $87 $90 
Operating and maintenance and general administrative expenses$6 $4 $10 $7 
Enbridge (including its affiliates):
Sales of natural gas, NGLs and condensate to affiliates$1 $(2)$2 $(2)
Purchases and related costs from affiliates$ $ $ $13 
Transportation and related costs from affiliates$1 $1 $1 $1 
Operating and maintenance and general administrative expenses$1 $ $1 $ 
Unconsolidated affiliates:
Sales of natural gas, NGLs and condensate to affiliates$14 $24 $42 $56 
Transportation, processing, and other to affiliates$4 $3 $8 $7 
Purchases and related costs from affiliates$10 $35 $32 $59 
Transportation and related costs from affiliates$241 $227 $479 $441 

 We had balances with affiliates as follows:
June 30, 2023December 31, 2022
 (millions)
Phillips 66 (including its affiliates):
Accounts receivable$398 $343 
Other assets$7 $1 
Accounts payable$163 $167 
Accrued wages and benefits$32 $ 
Other liabilities$28 $ 
Long-term debt$100 $ 
Enbridge (including its affiliates):
Accounts receivable$ $1 
Accounts payable$ $1 
Unconsolidated affiliates:
Accounts receivable$27 $16 
Accounts payable$90 $87 

4. Inventories
Inventories were as follows:
June 30, 2023December 31, 2022
 (millions)
Natural gas$20 $47 
NGLs21 36 
Total inventories$41 $83 

11

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2023 and 2022

We recognize the lower of cost or net realizable value adjustments when the carrying value of our inventories exceeds their net realizable value. These non-cash charges are a component of purchases and related costs in the condensed consolidated statements of operations. We recognized zero and $22 million lower of cost or net realizable value adjustments for the three and six months ended June 30, 2023, respectively. We recognized no lower of cost or net realizable value adjustments for the three and six months ended June 30, 2022.

5. Property, Plant and Equipment
A summary of property, plant and equipment by classification is as follows:
Depreciable
Life
June 30, 2023December 31, 2022
  (millions)
Gathering and transmission systems
20 — 50 Years
$7,955 $7,865 
Processing, storage and terminal facilities
35 — 60 Years
5,175 5,138 
Other
330 Years
545 563 
Finance lease assets
535 Years
32 32 
Construction work in progress196 183 
Property, plant and equipment13,903 13,781 
Accumulated depreciation(6,170)(6,018)
Property, plant and equipment, net$7,733 $7,763 
Construction projects with capitalized interest were immaterial during the six months ended June 30, 2023 and 2022.
Depreciation expense was $90 million and $88 million for the three months ended June 30, 2023 and 2022, respectively, and $179 million and $177 million for the six months ended June 30, 2023 and 2022, respectively.

6. Investments in Unconsolidated Affiliates
The following table summarizes our investments in unconsolidated affiliates:
  Carrying Value as of
 Percentage
Ownership
June 30, 2023December 31, 2022
  (millions)
DCP Sand Hills Pipeline, LLC66.67%$1,637 $1,653 
DCP Southern Hills Pipeline, LLC66.67%705 713 
Gulf Coast Express LLC25.00%392 408 
Front Range Pipeline LLC33.33%187 191 
Texas Express Pipeline LLC10.00%88 91 
Mont Belvieu 1 Fractionator20.00%9 7 
Discovery Producer Services LLC40.00%208 219 
Cheyenne Connector, LLC50.00%141 143 
Mont Belvieu Enterprise Fractionator12.50%28 28 
OtherVarious21 22 
Total investments in unconsolidated affiliates$3,416 $3,475 

12

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 2023 and 2022

Earnings from investments in unconsolidated affiliates were as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
 (millions)
DCP Sand Hills Pipeline, LLC$78 $104 $165 $175 
DCP Southern Hills Pipeline, LLC27 21 52 45 
Gulf Coast Express LLC18 16 35 32 
Front Range Pipeline LLC11 11 22 21 
Texas Express Pipeline LLC5 5 10 10 
Mont Belvieu 1 Fractionator4 3 8 7 
Discovery Producer Services LLC1 3 7 9 
Cheyenne Connector, LLC3 3 6 7 
Mont Belvieu Enterprise Fractionator1 2 2 4 
Other  1 1 
Total earnings from unconsolidated affiliates$148 $168 $308 $311 
The following tables summarize the combined financial information of our investments in unconsolidated affiliates:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
 (millions)(millions)
Statements of operations:
Operating revenue$541 $626 $1,136 $1,189 
Operating expenses$214 $246 $436 $463 
Net income$328 $380 $707 $724 

7. Fair Value Measurement
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.
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.
13

DCP MIDSTREAM, LP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three and Six Months Ended June 30, 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 with a longer time horizon, for which 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.
The following table presents the financial instruments carried at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, by condensed consolidated balance sheet caption and by valuation hierarchy, as described above:

 June 30, 2023December 31, 2022
 Level 1Level 2Level 3Total
Carrying
Value
Level 1Level 2Level 3Total
Carrying
Value
 (millions)
Current assets:
Commodity derivatives$1 $49 $10 $60 $2 $121 $17 $140 
Short-term investments (a)$ $ $ $ $ $1 $ $1 
Long-term assets:
Commodity derivatives$ $16 $1 $17 $ $23 $3 $26 
Investments in marketable securities (a)$ $ $ $