8-K

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (date of earliest event reported): March 23, 2020

DCP MIDSTREAM, LP

(Exact name of registrant as specified in its charter)

Delaware	001-32678	03-0567133
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

370 17th Street, Suite 2500

Denver, Colorado 80202

(Address of principal executive offices) (Zip Code)

(303) 595-3331

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth 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. ¨

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 partner 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

Item 7.01 Regulation FD Disclosure.

On March 23, 2020, DCP Midstream, LP issued the press release, which is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

In accordance with General Instruction B.2. of Current Report on Form 8-K, this press release is deemed to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such press release be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated March 23, 2020
101	Cover Page formatted as Inline XBRL
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURE

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 hereunto duly authorized.

Date: March 23, 2020	DCP MIDSTREAM, LP
	By: DCP MIDSTREAM GP, LP
	its general partner
	By: DCP MIDSTREAM GP, LLC
	its general partner
	By: /s/ Sean P. O’Brien
	Sean P. O’Brien
	Group Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

DCP MIDSTREAM ANNOUNCES DISTRIBUTION, CAPITAL, AND COST REDUCTIONS

DENVER, March 23, 2020 (GLOBE NEWSWIRE) – Today, in response to extraordinary and volatile market conditions, DCP Midstream, LP (NYSE: DCP) announced the following decisive actions.

First, the board of directors of its general partner approved a plan to reduce quarterly distributions to its common unitholders to $0.39 per unit or $1.56 annually, beginning with the first quarter 2020 distribution, payable in May 2020. This 50% distribution reduction results in $325 million of cash that will be fully utilized to reduce leverage and strengthen the balance sheet.

Second, DCP will reduce its 2020 growth capital program by 75%, to approximately $150 million for the year, down from a guidance midpoint of $600 million. This remaining capital spend is required for necessary and strategic projects that are already underway. The $450 million growth capital reduction includes the strategic decision to defer a 30% ownership option in Phillips 66’s Sweeny Frac 2 and 3 projects, which was projected to be exercised at the end of 2020. Although DCP does not expect to exercise the option in 2020, Phillips 66 and DCP are considering an option in later years that would be mutually beneficial for both companies. Additional growth capital reductions have been made on a basin-specific basis. Looking to 2021, DCP has provided a growth capital range of $50 million to $150 million and the company anticipates targeting the low end of the range.

Third, through targeted cost and sustaining capital reductions, DCP expects to minimize the negative impact of the commodity price environment by approximately $80 to $100 million in 2020. To achieve this goal, DCP plans to lower costs by at least $50 million enterprise-wide, reduce sustaining capital by $30 million, and further drive DCP 2.0 innovation efforts by up to $20 million to improve cash flows.

DCP remains focused on the health and safety of its people, customers, vendors, and communities as the company’s top priority during the COVID-19 outbreak. DCP has implemented pandemic response and business continuity plans to prevent illness and provide reliable and safe operations, while maintaining regular communication with customers.

“In response to current unprecedented market conditions, DCP has taken aggressive action to optimize over $850 million in cash flows to improve our leverage and liquidity, and position the company for long-term success.” said Wouter van Kempen, chairman, president, and CEO of DCP Midstream. “The decision to reduce our distribution was not taken lightly, but with a focus on long-term value creation, we believe it is in the best interest of our unitholders, employees, and the company. Our business remains strong, with no disruptions in operations, and these decisive actions will enable DCP to maintain and strengthen our balance sheet and continue to serve our customers well.”

With these actions, DCP anticipates liquidity of $700 million to $1 billion at the end of 2020. DCP currently maintains more than $500 million of liquidity, having recently extended and strengthened its credit facility with decreased fees through 2024. The company’s next bond maturity is n

ot due until September 2021 and there are no foreseeable needs to access the equity or debt markets. Additionally, for 2020, DCP previously announced that 31% of the 2020 equity length is hedged at attractive pricing, and 24% of the 2021 open position is now protected through DCP’s targeted hedging program.

DCP’s customer base is well-diversified and within the company’s top 20 customers, who represent 55% of revenue, approximately 75% of the companies are investment grade, mostly A rated. Additionally,

where producers are delivering into DCP’s gathering and processing systems, DCP is generally in a net payable position where it holds the commodities or cash thereby limiting counterparty exposure. DCP also maintains contract structures with adequate assurance provisions to minimize credit exposure.

DCP expects to provide an update to its 2020 guidance during its first quarter earnings call in May.

ABOUT DCP MIDSTREAM, LP

DCP Midstream, LP (NYSE: DCP) is a Fortune 500 midstream master limited partnership headquartered in Denver, Colorado, with a diversified portfolio of gathering, processing, logistics and marketing assets. DCP is one of the largest natural gas liquids producers and marketers and one of the largest natural gas processors in the U.S. The owner of DCP’s general partner is a joint venture between Enbridge and Phillips 66. For more information, visit the DCP Midstream, LP website atwww.dcpmidstream.com.

FORWARD-LOOKING STATEMENTS

This document may contain or incorporate by reference forward-looking statements regarding DCP Midstream, LP (the “Partnership” or “DCP”) and its affiliates, including projections, estimates, forecasts, plans and objectives. Although management believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond our control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Partnership’s actual results may vary materially from what management anticipated, estimated, forecasted, projected or expected.

The key risk factors that may have a direct bearing on the Partnership’s results of operations and financial condition are described in detail in the Partnership’s periodic reports most recently filed with the Securities and Exchange Commission, including its most recent Forms 10-Q and 10-K. Investors are encouraged to consider closely the disclosures and risk factors contained in the Partnership’s annual and quarterly reports filed from time to time with the Securities and Exchange Commission. The Partnership undertakes 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. Information contained in this document speaks only as of the date hereof, is unaudited, and is subject to change.

Investor and Media Relations

Sarah Sandberg

303-605-1626

scsandberg@dcpmidstream.com

XML

Document and Entity Information	Mar. 23, 2020
Cover page.
Document Type	8-K
Entity Registrant Name	DCP MIDSTREAM, LP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-32678
Entity Tax Identification Number	03-0567133
Document Period End Date	Mar. 23, 2020
Entity Address, Address Line One	370 17th Street
Entity Address, Address Line Two	Suite 2500
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80202
City Area Code	(303)
Local Phone Number	595-3331
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Amendment Flag	false
Entity Central Index Key	0001338065
Entity Emerging Growth Company	false
Limited Partner [Member]
Security Exchange Name	NYSE
Title of 12(b) Security	Common units representing limited partner interests
Trading Symbol	DCP
Series B Preferred Limited Partners [Member]
Security Exchange Name	NYSE
Title of 12(b) Security	7.875% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Trading Symbol	DCP PRB
Series C Preferred Limited Partners [Member]
Security Exchange Name	NYSE
Title of 12(b) Security	7.95% Series C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units
Trading Symbol	DCP PRC