DCP Midstream Partners Reports Fourth Quarter and Year End 2007 Results

- Strategic acquisitions and strong operating results drive 33% distribution
increase to unitholders in 2007

DENVER, Feb. 20 /PRNewswire-FirstCall/ -- DCP Midstream Partners, LP
(NYSE: DPM), or the Partnership, today reported financial results for the
three and twelve months ended December 31, 2007.
CEO PERSPECTIVE
"We're very pleased with the value we provided to our unitholders in 2007,
growing our quarterly distribution to $0.57 per unit for the fourth quarter of
this year as compared to $0.43 for the fourth quarter of 2006 -- a 33%
increase," said Mark Borer, president and CEO. "Our strong operating
performance across all segments provided a strong 1.6 times coverage on our
total distribution for the quarter. We remained busy in the fourth quarter,
optimizing our approximately $625 million of acquisitions in 2007, including
work on the permanent expansion to double our processing capacity to 120 MMcfd
at our 70 percent-owned Collbran system. We believe our expanded operating
footprint provides a solid base for continued growth."
FINANCIAL HIGHLIGHTS
On July 1, 2007, we elected to discontinue the use of hedge accounting for
our non-trading commodity derivative instruments, in favor of mark-to-market
accounting treatment. These non-trading commodity derivative instruments
mitigate a portion of the Partnership's exposure to commodity price volatility
to help ensure stable distributable cash flows in support of our quarterly
distributions. Mark-to-market accounting rules require companies to record
currently in earnings the difference between their contracted derivative
settlement prices and the forward prices of the underlying commodities. With
the increase in the price of crude oil in the third and fourth quarters of
2007, we recorded a sizable non-cash loss of $81.1 million, year-to-date.
While our earnings will continue to fluctuate as a result of the volatility in
the commodity markets, our non-trading derivative contracts yield us fixed
prices and help to stabilize distributable cash flows.
FOURTH QUARTER HIGHLIGHTS
Financial results for the fourth quarter of 2007, with comparisons to
results for the fourth quarter of 2006, include the following:
-- Net loss of $39.9 million, or a loss of $1.69 per limited partner unit
in the fourth quarter of 2007, as compared to net income of $15.6
million, or income of $0.55 per limited partner unit in the fourth
quarter of 2006; and
-- Distributable cash flow, a non-generally accepted accounting principles
("non-GAAP") financial measure, of $25.1 million in the fourth quarter
of 2007, as compared to $19.2 million in the fourth quarter of 2006.

YEAR-TO-DATE HIGHLIGHTS
Financial results for the year ended December 31, 2007, with comparisons
to results for the same period of 2006, include the following:
-- Net loss of $15.8 million, or a loss of $1.05 per limited partner unit
for the year ended December 31, 2007, as compared to net income of
$61.9 million, or income of $1.90 per limited partner unit for the year
ended December 31, 2006; and
-- Distributable cash flow, a non-GAAP financial measure, of $86.7 million
for the year ended December 31, 2007, as compared to $69.5 million for
the year ended December 31, 2006.

Reported net income for the three months and year ended December 31, 2007
includes $61.2 million and $81.1 million, respectively, of non-cash losses
associated with the mark-to-market accounting treatment of non-trading
commodity derivative instruments, as compared to non-cash gains of
$0.3 million and $0.1 million for the three months and year ended
December 31, 2006, respectively.
EBITDA decreased $44.1 million to a loss of $23.5 million for the three
months ended December 31, 2007, from earnings of $20.6 million for the same
period of 2006. EBITDA decreased $50.7 million to $29.2 million for the year
ended December 31, 2007, from $79.9 million for the same period of 2006.
Strong operating results across all segments, including our recent
acquisitions, were offset by non-cash mark-to-market derivative losses and
higher operating and maintenance. Operating and maintenance expense increased
by $4.7 million to $11.1 million, and by $8.4 million to
$32.1 million, respectively, for the three months and year ended
December 31, 2007, as compared to the same periods in 2006, primarily as a
result of recent acquisitions.
EBITDA, which is a non-GAAP financial measure, is explained in greater
detail under "Non-GAAP Financial Information" below and is reconciled from net
(loss) income and net cash (used in) provided by operating activities, its
most comparable GAAP financial measures, in "Reconciliation of Non-GAAP
Measures" below.
Depreciation and amortization expense increased by $5.4 million to $8.6
million, and by $11.6 million to $24.4 million, respectively, for the three
months and year ended December 31, 2007, as compared to the same periods in
2006, primarily as a result of recent acquisitions.
Net interest expense increased by $5.9 million to $7.7 million, and by
$15.3 million to $20.5 million, respectively, for the three months and year
ended December 31, 2007, as compared to the same periods in 2006, primarily as
a result of increased debt balances associated with recent acquisitions.
In November 2006 the Partnership completed the acquisition of Gas Supply
Resources, or GSR, from DCP Midstream, LLC, or DCP Midstream, the owner of our
general partner. In July 2007 the Partnership completed the acquisition of
equity interests in DCP East Texas Holdings, LLC, or East Texas, and Discovery
Producer Services LLC, or Discovery, from DCP Midstream. The results of
operations and distributable cash flow presented herein include the historical
results of GSR, East Texas, and Discovery for all periods presented. Earnings
for periods prior to these acquisitions are allocated to predecessor
operations to derive net loss or income attributable to limited partners.
DISTRIBUTABLE CASH FLOW
The Partnership's distributable cash flow of $25.1 million for the three
months ended December 31, 2007, was 1.6 times the amount required to cover its
current distribution to both the general and limited partners. The 31%
increase in distributable cash flow for the quarter ended December 31, 2007,
as compared to the quarter ended December 31, 2006, is due to the growth of
the Partnership through acquisitions and the Partnership's strong financial
performance. Non-cash gains or losses associated with the mark-to-market
accounting treatment of our non-trading commodity derivative instruments do
not affect our distributable cash flow.
Distributable cash flow, which is a non-GAAP financial measure, is
explained in greater detail under "Non-GAAP Financial Information" below and
is reconciled from net cash (used in) provided by operating activities, its
most comparable GAAP financial measure, in "Reconciliation of Non-GAAP
Measures" below.
CASH DISTRIBUTION
As previously announced, on January 24, 2008, the board of directors of
the Partnership's general partner declared a $0.02 increase in the quarterly
distribution to $0.57 per limited partner unit, equating to a prospective
annual distribution of $2.28 per limited partner unit.
OPERATING RESULTS BY BUSINESS SEGMENT
Natural Gas Services -- Segment gross margin decreased $50.5 million to a
loss of $31.1 million for the three months ended December 31, 2007, from
income of $19.4 million for the same period of 2006. Margin increases from
the Ivan, Lindsay and Momentum acquisitions and higher condensate volumes were
more than offset by non-cash derivative mark-to-market losses of
$59.8 million. Segment gross margin decreased $59.1 million to $16.2 million
for the year ended December 31, 2007, from $75.3 million for the same period
of 2006. Year to date increases from the acquisitions and higher condensate
volumes were more than offset by non-cash derivative mark-to-market losses of
$78.3 million.
Equity earnings representing our 25% interest in East Texas and 40%
interest in Discovery increased $11.1 million to $16.1 million for the three
months ended December 31, 2007, from $5.0 million for the same period of 2006.
Equity earnings increased $9.8 million to $38.7 million for the year ended
December 31, 2007, from $28.9 million for the same period of 2006. These
increases are primarily attributable to higher NGL volumes and prices at
Discovery and higher NGL prices at East Texas, partially offset by decreased
throughput volumes.
Wholesale Propane Logistics -- Segment gross margin increased $2.1 million
to $9.0 million for the three months ended December 31, 2007, from
$6.9 million for the same period of 2006. Segment gross margin increased
$9.5 million to $25.5 million for the year ended December 31, 2007, from
$16.0 million for the same period of 2006. These increases were primarily a
result of higher per unit margins as a result of changes in contract mix and
the ability to capture lower priced supply sources, decreased non-cash
inventory adjustments recognized in 2007, and higher sales volumes primarily
due to the completion of the Midland terminal, partially offset by a decrease
related to non-trading derivative activity.
NGL Logistics -- Segment gross margin increased $0.3 million and
$0.8 million for the three months and year ended December 31, 2007 as compared
to the prior period, primarily due to increased volumes.
Equity earnings from our 45% interest in the Black Lake pipeline decreased
$0.6 million for the three months ended December 31, 2007, primarily due to
increased project costs, and equity earnings increased $0.3 million for the
year ended December 31, 2007, primarily due to increased throughput volumes,
which were partially offset by increased project costs.
Segment gross margin, which is a non-GAAP financial measure, is explained
in greater detail under "Non-GAAP Financial Information" below and is
reconciled from segment net (loss) income, its most comparable GAAP financial
measure, in "Reconciliation of Non-GAAP Measures" below.
EARNINGS CALL
DCP Midstream Partners will hold a conference call to discuss fourth
quarter results on Thursday, February 21, 2008, at 11 a.m. ET. The dial-in
number for the call is 800-860-2422 in the United States or 412-858-4600
outside the United States. A live Webcast of the call can be accessed on the
investor information page of DCP Midstream Partners' Web site at
www.dcppartners.com. The call will be available for replay for seven
days by dialing 877-344-7529, in the United States or 412-317-0088 outside the
United States. The passcode is 415112. A replay and transcript of the
broadcast will also be available on the Partnership's Web site.
NON-GAAP FINANCIAL INFORMATION
This press release and the accompanying financial schedules include the
non-GAAP financial measures of distributable cash flow, EBITDA, gross margin,
and segment gross margin. The accompanying schedules provide reconciliations
of these non-GAAP financial measures to their most directly comparable
financial measures calculated and presented in accordance with accounting
principles generally accepted in the United States of America ("GAAP"). Our
non-GAAP financial measures should not be considered an alternative to, or
more meaningful than, net income, operating income, cash flows from operating
activities or any other measure of liquidity or financial performance
presented in accordance with GAAP as measures of operating performance,
liquidity or ability to service debt obligations and make cash distributions
to unitholders. Our gross margin, segment gross margin, EBITDA and
distributable cash flow may not be comparable to a similarly titled measure of
another company because other entities may not calculate these measures in the
same manner.
We define distributable cash flow as net cash provided by or used in
operating activities, less maintenance capital expenditures, net of
reimbursable projects, plus or minus adjustments for non-cash mark-to-market
of derivative instruments, net changes in operating assets and liabilities,
and other adjustments to reconcile net cash provided by or used in operating
activities. In 2006, we also adjusted distributable cash flow for a
post-closing reimbursement from DCP Midstream, LLC for maintenance capital
expenditures. Maintenance capital expenditures are capital expenditures made
where we add on to or improve capital assets owned, or acquire or construct
new capital assets, if such expenditures are made to maintain, including over
the long term, our operating capacity or revenues. 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.
Distributable cash flow is used as a supplemental liquidity 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.
We define EBITDA as net (loss) income less interest income, plus interest
expense, income tax expense and depreciation and amortization expense. EBITDA
is used as a supplemental liquidity measure by our management and by external
users of our financial statements, such as investors, commercial banks,
research analysts and others, to assess 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
capital expenditures.
EBITDA is also 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; and
-- viability of acquisitions and capital expenditure projects and the
overall rates of return on alternative investment opportunities.

We define gross margin as total operating revenues less purchases of
natural gas, propane and NGLs, and we define segment gross margin for each
segment as total operating revenues for that segment less commodity purchases
for that segment. Our gross margin equals the sum of our segment gross
margins. Gross margin is included as a supplemental disclosure because it is a
primary performance measure used by management, as it represents the results
of product sales and purchases, a key component of our operations.
DCP Midstream Partners, LP (NYSE: DPM) is a midstream master limited
partnership that gathers, processes, transports and markets natural gas and
natural gas liquids and is a leading wholesale distributor of propane. DCP
Midstream Partners, LP is managed by its general partner, DCP Midstream GP,
LLC, which is wholly owned by DCP Midstream, LLC, a joint venture between
Spectra Energy and ConocoPhillips. For more information, visit the DCP
Midstream Partners, LP Web site at www.dcppartners.com.
This press release may contain or incorporate by reference forward-looking
statements as defined under the federal securities laws regarding DCP
Midstream Partners, LP, 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, projected or expected. Among the key risk
factors that may have a direct bearing on the Partnership's results of
operations and financial condition are:
-- the level and success of natural gas drilling around our assets and our
ability to connect supplies to our gathering and processing systems in
light of competition;
-- our ability to grow through acquisitions or organic growth projects,
and the successful integration and future performance of such assets;
-- our ability to access the debt and equity markets;
-- fluctuations in oil, natural gas, propane and other NGL prices;
-- our ability to purchase propane from our principal suppliers for our
wholesale propane logistics business; and
-- the credit worthiness of counterparties to our transactions.

Investors are encouraged to closely consider 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. Information contained in this press release is unaudited, and is
subject to change.

DCP MIDSTREAM PARTNERS, LP
FINANCIAL RESULTS
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
($ in millions, except per unit data)

Sales of natural gas, propane,
NGLs and condensate $321.5 $200.0 $925.8 $767.9
Transportation and processing
services 11.4 7.4 35.1 27.8
(Losses) gains from non-trading
derivative activity (66.5) 0.1 (87.6) 0.1
Total operating revenues 266.4 207.5 873.3 795.8
Purchases of natural gas, propane
and NGLs 287.3 180.3 826.7 700.4
Gross margin (20.9) 27.2 46.6 95.4
Operating and maintenance expense (11.1) (6.4) (32.1) (23.7)
General and administrative expense (7.0) (5.4) (24.1) (21.0)
Earnings from equity method
investments 15.7 5.2 39.3 29.2
Non-controlling interest in income (0.2) - (0.5) -
EBITDA (23.5) 20.6 29.2 79.9
Depreciation and amortization
expense (8.6) (3.2) (24.4) (12.8)
Interest income 1.6 1.6 5.3 6.3
Interest expense (9.3) (3.4) (25.8) (11.5)
Income tax expense (0.1) - (0.1) -
Net (loss) income $(39.9) $15.6 $(15.8) $61.9
Less:
Net income attributable to
predecessor operations - (4.3) (3.6) (26.6)
General partner interest in net
income (0.7) (0.2) (2.2) (0.7)

Net (loss) income allocable to
limited partners $(40.6) $11.1 $(21.6) $34.6

Net (loss) income per limited
partner unit-basic and diluted $(1.69) $0.55 $(1.05) $1.90

Weighted-average limited partner
units outstanding-basic
and diluted 24.0 17.6 20.5 17.5

DCP MIDSTREAM PARTNERS, LP
SEGMENT FINANCIAL AND OPERATING DATA
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
($ in millions)
Natural Gas Services Segment:
Financial data:
Segment gross margin $(31.1) $19.4 $16.2 $75.3
Earnings from equity method
investments $16.1 $5.0 $38.7 $28.9
Operating data:
Natural gas throughput (MMcf/d) 820 682 756 666
NGL gross production (Bbls/d) 25,237 20,063 22,122 19,485

Wholesale Propane Logistics
Segment:
Financial data:
Segment gross margin $9.0 $6.9 $25.5 $16.0
Operating data:
Propane sales volume (Bbls/d) 26,575 22,989 22,798 21,259

NGL Logistics Segment:
Financial data:
Segment gross margin $1.2 $0.9 $4.9 $4.1
(Losses) earnings from equity
method investments $(0.4) $0.2 $0.6 $0.3
Operating data:
NGL pipelines throughput
(Bbls/d) 29,172 26,583 28,961 25,040

DCP MIDSTREAM PARTNERS, LP
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
($ in millions)
Reconciliation of net cash (used
in) provided by operating
activities to distributable cash
flow:
Net cash (used in) provided by
operating activities $(0.7) $54.6 $65.4 $94.8
Maintenance capital expenditures,
net of reimbursable projects (0.9) (0.5) (2.6) (2.9)
Non-cash derivative mark-to-market 61.2 (0.3) 81.1 (0.1)
Post closing reimbursement from
DCP Midstream, LLC for maintenance
capital expenditures - - - 1.1
Net changes in operating assets
and liabilities (33.8) (35.2) (56.9) (25.8)
Other, net (0.7) 0.6 (0.3) 2.4
Distributable cash flow $25.1 $19.2 $86.7 $69.5

Reconciliation of net (loss)
income to EBITDA:
Net (loss) income $(39.9) $15.6 $(15.8) $61.9
Interest income (1.6) (1.6) (5.3) (6.3)
Interest expense 9.3 3.4 25.8 11.5
Depreciation and amortization
expense 8.6 3.2 24.4 12.8
Income tax expense 0.1 - 0.1 -
EBITDA $(23.5) $20.6 $29.2 $79.9

Reconciliation of net cash (used
in) provided by operating
activities to EBITDA:
Net cash (used in) provided by
operating activities $(0.7) $54.6 $65.4 $94.8
Interest income (1.6) (1.6) (5.3) (6.3)
Interest expense 9.3 3.4 25.8 11.5
Earnings from equity method
investments, net of distributions 3.9 (1.2) 0.4 3.3
Income tax expense 0.1 - 0.1 -
Net changes in operating assets
and liabilities (33.8) (35.2) (56.9) (25.8)
Other, net (0.7) 0.6 (0.3) 2.4
EBITDA $(23.5) $20.6 $29.2 $79.9

DCP MIDSTREAM PARTNERS, LP
RECONCILIATION OF NON-GAAP MEASURES - Continued
(Unaudited)

Three Months Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
($ in millions)
Reconciliation of segment net
(loss) income to segment
gross margin:

Natural Gas Services
Segment:
Segment net (loss) income $(31.3) $18.1 $11.6 $79.6
Depreciation and
amortization expense 7.8 2.9 21.9 11.1
Operating and maintenance
expense 8.3 3.4 20.9 13.5
Non-controlling interest
in income 0.2 - 0.5 -
Earnings from equity
method investments (16.1) (5.0) (38.7) (28.9)
Segment gross margin $(31.1) $19.4 $16.2 $75.3

Wholesale Propane Logistics
Segment:
Segment net income $6.0 $4.6 $14.0 $6.6
Depreciation and
amortization expense 0.4 0.1 1.1 0.8
Operating and maintenance
expense 2.6 2.2 10.4 8.6
Segment gross margin $9.0 $6.9 $25.5 $16.0

NGL Logistics Segment:
Segment net income $0.2 $0.1 $3.3 $1.9
Depreciation and
amortization expense 0.4 0.2 1.4 0.9
Operating and maintenance
expense 0.2 0.8 0.8 1.6
Losses (earnings) from
equity method investments 0.4 (0.2) (0.6) (0.3)
Segment gross margin $1.2 $0.9 $4.9 $4.1

SOURCE DCP Midstream Partners, LP

Media and Investor Relations, Karen L. Taylor of DCP Midstream Partners, LP,
+1-303-633-2913, 24-Hour, +1-303-809-9160