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Executives

Jonni Anwar – Director of Investor Relations

Mark A. Borer – President, Chief Executive Officer and Director

Rose M. Robeson – Chief Financial Officer and Senior Vice President

Analysts

Gabriel Moreen – Bank of America/Merrill Lynch

Elvira Scotto – RBC Capital Markets

Brett Reilly – Credit Suisse

Michael Blum – Wells Fargo Securities, Llc

Stanley Ross Payne – Wells Fargo Securities, Llc

Becca Followill – U.S. Capital Advisors LLC

Bernard Colson – Global Hunter

DCP Midstream Partners, LP (DPM) Q2 2012 Earnings Conference Call August 8, 2012 9:00 AM ET

Operator

Good morning and welcome to the DCP Midstream Partners Second Quarter 2012 Earnings Call and Webcast. All participants will be in listen-only-mode. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Mr. Jonni Anwar of Investor Relations. Please go ahead.

Jonni Anwar

Thank you, Denise. Good morning and welcome to the DCP Midstream Partners second quarter 2012 earnings release conference call. As always, we want to thank you for your interest in the Partnership. Today, you will hear from Mark Borer, President and CEO; and Rose Robeson, Senior Vice President and CFO. This call is being webcast and the slides used for today's call are available on our website at www.dcppartners.com.

As a reminder, our discussions today may contain forward-looking statements. Actual results may differ due to certain risk factors that affect our business. Please review the second slide in the deck that describes our use of forward-looking statements and lists some of the risk factors that may affect actual results. For a complete listing of those risk factors, please review our most recent Form 10-Ks and Form 10-Qs, as filed with the SEC.

During our discussion, we'll use various non-GAAP measures, which are reconciled to the nearest GAAP measures in schedules provided on our website. We ask that you review that information as well.

Also with the closing in March 2012, the acquisition of the remaining two-thirds interest in DCP Southeast Texas Holdings GP or Southeast Texas from DCP Midstream LLC and in accordance with accounting treatment for entities under current control, our results include the historical results of Southeast Texas for all periods presented. For comparison purposes, we have also included our 2011 historical results as reported in 2011 prior to the transaction, which will be the emphasis of our discussion today.

And now, I will turn it over to Mark Borer. Mark?

Mark A. Borer

Thanks, Jonni. Good morning everyone and thanks for joining us today for a discussion of our second quarter results. As you saw in our press release last evening, we reported second quarter results which were in line with our 2012 DCF guidance, excluding a non-cash lower cost or market inventory adjustment in our wholesale propane business.

We raised our distribution again this quarter, representing a 1.5% sequential quarterly increase, in line with our forecast of 6% to 8% distribution growth in 2012. This distribution increase reflects our confidence in the future cash flows from our visible growth despite the recent weakness in the NGL market. Our distribution coverage ratio for the trailing 12 months is approximately 1.0 times adjusted for the timing of the actual distributions paid. Although this coverage is a little lower than our target range of 1.1 to 1.2, this ratio includes the non-cash lower cost or market inventory adjustment and reflects the financing lead time impact of ongoing organic growth projects, such as Eagle Plant and Keathley Canyon.

We continue to execute on our growth objectives with an eye toward increasing our asset and business diversity as well as our fee-based margins. To this end, we completed a previously announced dropdown by our general partner of the interest in the Mont Belvieu fractionators as well as a smaller but strategic acquisition of the Crossroads system in East Texas from Penn Virginia, which I'll discuss a little later.

Both transactions are predominantly fee-based and immediately accretive. We are well-positioned to continue to grow distributable cash flow based on our previously announced organic growth projects as well as our targeted dropdown of Sand Hills and Southern Hills in the 2013 and 2014 timeframe. In summary, we had a solid quarter and we continue to execute on our growth strategy with emphasis on co-investing with our general partners.

Let me now turn to Slide 4 to provide a brief operational and key growth project updates. Our Natural Gas Services segment generates margin from a mix of fee and commodity-based businesses with our commodity positions substantially hedged. Despite recent weakness in NGL prices, we have continued to see strong drilling in the liquids-rich areas.

As a reminder, our dry gas exposure is relatively limited and while we are in dry gas basin, we generally have contract structure that mitigates volume exposure such as the substantial ship-or-pay commitments in the Piceance Basin.

This segment continues to experience substantial growth with our late first quarter dropdown of the remaining two-third interest in our Southeast Texas business, the ongoing construction of our Eagle Ford processing plants targeted to go in service later this year and our July Crossroads system acquisition in East Texas. And finally our Keathley Canyon organic growth project at Discovery is well underway with the target in-service date in mid-2014.

Our NGL Logistics segment provides broad exposure to the NGL value chain with assets that are well-positioned in strong growing markets such as the Eagle Ford and DJ Basin. We are pleased with the significant growth and scale and scope of this predominately fee-based business over a short period of time including our recently announced 10% interest in Texas Express and the July $200 million dropdown of the Mont Belvieu fractionators.

We expect this segment to have significant growth in the next couple of years with the targeted top down of the Southern Hills and Sand Hills pipelines. Also propane had a challenging quarter, while the second and third quarters generally provide breakeven quarters, this quarter that was also impacted by the lingering impacts of a near record warm winter. Historically, this segment has had relatively stable performance and we continue to have a favorable competitive position in this business.

Turning to Slide 5, let me provide some additional details on the Mont Belvieu fractionator drop-down. The interest acquired include a 20% ownership interest in the Mont Belvieu 1 fractionator which is operated by ONEOK Partners, and we also acquired a 12.5% interest in the Enterprise fractionator also located at Mont Belvieu, which is operated by Enterprise Product Partners.

In the aggregate, these interests represent approximately 55,000 to 60,000 barrels per day of fractionation capacity. This immediately attractive drop-down provides us with fee-based margins and additional diversification of our business portfolio by expanding our NGL Logistics segment.

Slide 6 provides a summary of our acquisition of the Crossroads System in Penn, Virginia. This system located in the Southeastern portion of the Harrison County in East Texas, includes a modern 80 million cubic feet per day cryogenic processing plant and related gathering and pipeline facilities. The proximity of this bolt-on acquisition to our East Texas footprint provides for a seamless and straightforward integration with our existing East Texas business.

The crossroad system is underpinned by a predominantly fee-based margins. Anadarko and Indigo Minerals have recently announced they are ramping liquids-rich drilling activity behind our East Texas footprint and this acquisition will enhance our ability to serve these customers and other producers in the area.

Let me now give an update on our co-investment activity with DCP Midstream LLC or as I’ll refer to as LLC. Slide 7 shows our updated co-investment activity in our various forms of co-investment. Co-investment has continued at a nice pace. As you can see this quarter with the addition of the Mont Belvieu fractionators the cumulative amount of co-investments now stands at almost $1 billion over the last year-and-a-half. As we have done in the past, this timeline is based on when the investments were announced.

Turning to Slide 8, I'd like to spend a few minutes on our capital forecast and distribution growth outlook. Our capital commitment outlook for 2012 currently stands at approximately $900 million including $685 million of co-investments with our general partner, $150 million of organic growth and the $63 million Crossroads acquisition. Of the $685 million in co-investments we have completed approximately $525 million year-to-date including the Southeast Texas dropdown, Texas Express acquisition and Mont Belvieu fractionators dropdown. With this growth in capital outlook, our targeted distribution growth remains intact as 6% to 8% in 2012 and 6% to 10% in 2013 and '14.

Now, let me turn it over to Rose to review the numbers.

Rose M. Robeson

Thanks, Mark and I would also like to thank everyone for joining our call today. Before I review the results, I wanted to mention as a reminder under common control accounting treatment, our 2011 results reflect Southeast Texas as if we own the assets for the 2011 periods. However, my discussion today will compare our results to the 2011 as reported numbers, which better reflects the trends and results achieved over time. So let's take a look at the quarter.

For the second quarter of 2012, our adjusted EBITDA was $35.1 million compared to adjusted EBITDA as reported for second quarter of 2011 of $45 million. As Mark mentioned earlier, our second quarter of 2012 adjusted EBITDA includes a $14.5 million non-cash LCM adjustment in our wholesale propane segment. Excluding the LCM adjustment, second quarter results reflect growth in our Natural Gas Services segment from the dropdown of the remaining amount of our East Texas and Southeast Texas assets.

On a sequential quarter basis, in addition to the items previously discussed, our results in the second quarter of 2012 reflect the normal seasonality of our wholesale propane business. Our distributable cash flow for the second quarter was approximately $22 million, including the $14.5 million LCM adjustment as compared to $39 million in the second quarter of 2011.

Excluding the LCM adjustment, our DCF would have been $36.5 million, which is consistent with our 2012 forecast and reflective of our normal seasonality of our business. As Mark indicated earlier, our distribution coverage ratio for the trailing 12-month is approximately 1.0 times adjusted for the timing of the actual distributions paid.

So now let's take a look at our earnings by business segment. Starting on Slide 10 with Natural Gas Services, our adjusted EBITDA for the second quarter increased to $53 million from approximately $40 million in the second quarter of 2011 reflecting growth related to the East Texas and Southeast Texas dropdown. Partially offsetting this growth was continued weakness in commodity prices. As a reminder for 2012, we are approximately 70% hedged on an overall basis and about 60% of our NGL hedges are direct product hedges. Our natural gas throughput and NGL production were both higher in 2012 primarily associated with growth from East Texas and Southeast Texas.

Turning to Slide 11, our NGL Logistics' adjusted EBITDA was up slightly over second quarter of 2011. Higher EBITDA reflects growth and increased throughput on our pipeline, partially offset by operating expense timing. On a sequential quarter basis, our volume on the Wattenberg pipeline was negatively impacted by third party fractionation outages in the Mid-continent. Comparing year-over-year, volumes are higher from last year due to the Wattenberg expansion project completed in May 2011 and higher volumes coming out of the Eagle Ford area on our Seabreeze pipeline.

Slide 12 shows our results from our Wholesale Propane segment. Due to the decline in propane prices in the second quarter in accordance with GAAP accounting treatment, we wrote down our propane inventory to markets. As a reminder, we have had LCM adjustments in the past; however, our propane inventory is hedged and/or sold under fixed pricing arrangements. So, as in the past, we expect to recover this write-down when the inventory is sold over next winter heating season.

This business has significant seasonality with the majority of its earnings coming during the first and fourth quarters and breakeven to slightly positive quarters in the second and third quarter. So in addition to our normal seasonality in the business margins were down approximately another $5 million in the second quarter of 2012 due to the lingering impact of one of the warmest winters on record.

Turning to Slide 13, we remain in a very strong position to continue to execute on our growth plans and provide a very effective source of funding growth for the DCP Midstream Enterprise. We have a competitive cost to capital and with our investment grade ratings and demonstrated access to the capital markets we are well positioned to fund our growth. We raised approximately $175 million in equity in early July through a private placement in support of our ongoing growth.

Our leverage ratio at the end of the second quarter was 3.4 times well within our targeted range of three to four times. And lastly, we continue to have significant liquidity and ongoing support from our banking partners to execute on our growth plans.

So now let me review our DCF forecast. Although our business is substantially fee-based or commodity hedged, we do provide our forecasts in the context of the commodity pricing environment. If you take into account the commodity prices year-to-date and the forward curve for the balance of 2012 the table would indicate DCF between approximately $165 million and $180 million.

As a reminder, our 2012 forecast did include the impact of the Southeast Texas dropdown which was closed on March 30. Our original forecast did not include the fractionator dropdown or the Crossroads acquisition closed in early July. While we are maintaining our $165 million to $180 million DCF forecast range at 2012 price levels. These transactions are mitigating the impact on DCF from weak NGL prices and lower results in our wholesale propane segment.

As introduced in our year-end earnings call, we are targeting distribution growth of 6% to 8% in 2012. Embedded in our 2012 forecast at the 6% growth rate is the $0.01 increase we made this quarter and last quarter and the assumption that we would continue to increase the distribution an additional $0.01 every quarter at a minimum. So our second quarter distribution is in line with our forecast.

So now, let me turn it back to Mark for some concluding remarks.

Mark A. Borer

Thanks Rose. Turning to Slide 15, as we outlined this morning, we are on track to deliver on our 2012 business plan and three-year outlook commitment. We're successfully executing our growth strategy. Our investment grade ratings and cost of capital positions us well to support the execution of the DCP Enterprise strategy to utilize the Partnership as a key growth funding vehicle.

The large scale visible growth opportunities currently on our pipeline put us well on our way to becoming a large scale diversified midstream MLP. Given the sources of growth opportunities at both the Partnership and LLC, our growth strategy for the Partnership continues to be multi-faceted. However, with the significant level of growth opportunities currently in LLC's footprint, we would expect relatively more emphasis on co-investment over the next few years. Our co-investment commitments to-date and our identified co-investment opportunities total approximately $3 billion.

Our target continues to be top quartile total shareholder return, which is underpinned by our visible growth opportunities and strong distribution growth outlook. And lastly, having a strong sponsorship from DCP Midstream LLC, Spectra Energy and Phillips 66 provides us with a competitive advantage. We are excited about the future and look forward to delivering on our attractive value proposition for our unitholders.

That is the conclusion of our prepared remarks, and as I turn it back over to Denise, the operator, for your questions, I just want to express my appreciation for your interest in the Partnership and joining the call today. Thank you.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) Our first question will come from Gabe Moreen of Bank of America/Merrill Lynch.

Gabriel Moreen – Bank of America/Merrill Lynch

Hi, good morning everyone. Two questions on Wholesale Propane if I could. One, I don't know if you would be willing to share just how much of that $14.5 million inventory charge, how much of that in your 2012 guidance, how much of that's going to reverse?

Rose M. Robeson

Yes. On the LCM adjustment of $14.5 million, we anticipate the majority of that will reverse in 2012. We may have a little spillover into 2013, but we are anticipating the vast majority will reverse in 2012.

Gabriel Moreen – Bank of America/Merrill Lynch

Okay, great. Thanks Rose. And then, bigger picture question on Wholesale Propane with Northeast propane prices now selling at a discount to Belvieu. Two part question, one, I was wondering whether there's an opportunity for margin expansion given I guess cheaper propane in the backyard of your assets, and conversely, given the changing dynamics around NGL supply in the Northeast, I was wondering if you're at all concerned about some of your marine propane terminals being hurt if they don't import as much propane from abroad, as they were prior to the Marcellus taken off for example?

Mark A. Borer

Sure. Gabe, good morning, this is Mark. I mean one of the things as we look at our propane business is that we think that we have very good supply optimization capabilities. So in an environment where we have, I'll call it shifting cost of supplies, shifting basis so to speak that, we feel that bringing in whether it would be Midcontinent supplies, Canadian supplies, railing, supplies from the Marcellus is becoming a key part of the portfolio.

So, yes, all of those dynamics are entering into things. We did have a very good contracting year for the rail terminals on both the sales and supply side of equation. We will come into the winter with our import terminals being pretty full and substantially committed for sale. The international supplies right now are trading higher than domestic supplies, so we have that flexibility to really shift our supply portfolio around and we will do that. So, you're right on in with respect to some shifting of supplies and taking advantage of that with our capabilities. Thank you.

Gabriel Moreen – Bank of America/Merrill Lynch

Great, thanks everyone.

Operator

Our next question will come from Elvira Scotto of RBC Capital Markets. Please go ahead.

Elvira Scotto – RBC Capital Markets

Hi, good morning. So just to clarify on the 2012 DCF forecast that includes the $14.5 million LCM adjustment in this second quarter, but then it also assumes the reversal in the fourth quarter?

Rose M. Robeson

Yes, Elvira, that is correct

Elvira Scotto – RBC Capital Markets

Okay, great. My other question is given the recent Crossroads acquisition and the drop-down of the fractionators, why would you say what percent of your margin is fee-based now as you've added these two, all the fractionators are fee-based and then I think Crossroads I think you had mentioned was primarily fee-based?

Mark A. Borer

Elvira, this is Mark. We haven't recalculated it for the full year, but it's definitely trending up with these acquisitions. We'll restate that as really part of our 2013 outlook, but I would imagine that's moving up several percentage points. I think we were right at 59% or 60% for the year and so that would move that up slightly.

Elvira Scotto – RBC Capital Markets

Okay, great. Thanks. And then just in terms of hedging, how are you thinking about converting some of the crude hedges to more direct hedges the rest of this year and then into next year?

Mark A. Borer

Elvira, as you may know, we have for our NGLs currently that are hedged we have about 60% of those in direct product hedges, and so, we've been pretty active on that front for 2012 and we will continue to be opportunistic on putting on additional direct product hedges. No present plans to do so, but that's something that we will do from time to time.

Elvira Scotto – RBC Capital Markets

Great, thanks. That’s all I had.

Mark A. Borer

Thank you.

Operator

The next question will come from Brett Reilly of Credit Suisse. Please go ahead.

Brett Reilly – Credit Suisse

Good morning guys.

Mark A. Borer

Good morning.

Brett Reilly – Credit Suisse

Just to follow-up on a few of the Elvira's questions. I guess, going back to the hedge portfolio, could you provide maybe a little bit of color in terms of where those NGL hedges are prices for 2013 and 2014 that you have on the books right now?

Mark A. Borer

We have in our 10-Q, our most recent 10-Q and then obviously we'll be filing another 10-Q shortly. We actually have the detail by year and the product price ranges for those. We did put on those hedges in a pretty attractive timeframe. Some of them came along with dropdowns from Midstream. So we have hedges at some decent levels relative to those product hedges, but they're specifically detailed out in the Q.

Brett Reilly – Credit Suisse

Got it. And just to clarify, the numbers that you show on Slide 23, that crude hedge price, it does not include kind of the blended price if you include the NGLs as part of the liquid hedge?

Mark A. Borer

That's correct, that is just a crude oil price marker and does not include the NGL hedge price ranges.

Brett Reilly – Credit Suisse

Okay. At this point in time any guidance round where you do see that the fee-based margin kind of moving to in 2013, 2014, I know you guys have a 2015 number out there, but how quickly do you think you could get to a little bit more fee-based income here?

Rose M. Robeson

Yeah, I think what we've stated in the last couple of quarters with the anticipated dropdown at Sand Hills, Southern Hills that fee-based currently stands at around 60%, that's the 2011 number and that would move as high as 80% with the Sand Hills and the Southern Hills acquisitions.

Brett Reilly – Credit Suisse

Got it. And then, on those pipelines, Sand Hills at least the Eagle Ford portion of it starting up a little bit later this year, would you consider buying an interest in that pipeline at some point or are you looking to do each of the pipelines in whole at one specific time?

Mark A. Borer

We'll look at obviously structuring those consistent with our access to capital markets and such. We are getting quite a bit larger as we go through this. So we think the size of transactions can trend up for us, but we'll work with our general partner really kind of structure the size. We have not landed on the exact timing and size yet at this point.

Brett Reilly – Credit Suisse

Got it. Thanks. That’s all from me to you guys.

Mark A. Borer

Thank you.

Operator

The next question will come from Michael Blum of Wells Fargo. Please go ahead.

Michael Blum – Wells Fargo Securities, Llc

Well, thanks, good morning.

Mark A. Borer

Good morning.

Michael Blum – Wells Fargo Securities, Llc

I guess first question on the recent acquisition announcement. What sort of EBITDA multiples should we think about in terms of what you paid for those?

Mark A. Borer

We did not disclose a specific EBITDA multiple for the transactions. We did indicate that there both transactions were consistent with other dropdown transactions that we've done in the past. That's typically as you know Michael, it's been in the 7 to 9 range as a guide. So, it's indicative of that and the way we look at the multiple is one, what would the multiple on cash flows be based upon our first year of operations. So, it's not a trailing sort of multiple. It's one really looking at what would the multiple be in our first years of operation.

Michael Blum – Wells Fargo Securities, Llc

Okay. And then, given the amount of capital you spent this year within your different buckets, does that preclude you from doing another dropdown this year, or is it possible that you could see another one?

Mark A. Borer

It's possible that we would see another dropdown as we indicated in the prepared script on the slides, we've committed $525 million this year out of our targeted $685 million of co-investment and it's our expectation that we would meet or exceed our capital forecast for the year.

Michael Blum – Wells Fargo Securities, Llc

Okay. And then, maybe a slightly longer-term question, but given the drop in commodity for NGL prices in particular and the resulting impact on the results that at DCP Midstream, LLC. If this sort of environment persists could that shift the mix between the funding burden that the MLP will take on versus the sponsor and perhaps shift more of that burden to the MLPs?

Mark A. Borer

Well I think that's, I mean, we've added solid cash flows at Midstream over time. They do fluctuate some with commodity prices obviously given that they don't hedge, but obviously, the pipelines and such are providing an increased fee-based component. If the pricing environment persisted there is potential obviously for less capital would be deployed.

We don't, it's possible that may happen although the activity in the LLC's footprint continues to very active. They have got a number of plans under development and their systems are running at very full capacity and the producers would like to obviously bring on more production in the liquids rich areas. So we would expect that we would continue to fund capital with them and that would be obviously predicated upon the nature and size of the opportunities that the enterprise is executing.

Michael Blum – Wells Fargo Securities, Llc

Okay, great. Thanks Mark.

Mark A. Borer

Thank you, Michael.

Operator

The next question will come from Ross Payne of Wells Fargo. Please go ahead.

Stanley Ross Payne – Wells Fargo Securities, Llc

How are you doing guys?

Mark A. Borer

Good. Good morning.

Stanley Ross Payne – Wells Fargo Securities, Llc

Good morning. First question is perhaps for Rose, on the leverage metric. How is that defined for your credit facilities, does that give some kind of pro forma treatment?

Rose M. Robeson

On the leverage metric for the credit facility?

Stanley Ross Payne – Wells Fargo Securities, Llc

Yes.

Rose M. Robeson

Yeah Ross, so it's basically debt-to-EBITDA, but on the EBITDA side of the equation we do get some credits for some of the projects that we have in process.

Stanley Ross Payne – Wells Fargo Securities, Llc

Okay, great. That's what I was curious about. And then second of all, I know it's outlined in some of your, I mean in your most recent Q, it will be outlined again in the second quarter Q, but about what percentage of your NGLs are hedged either dirty hedges or direct hedges for 2013 as a percentage?

Rose M. Robeson

Yeah, Ross, overall we're about 70% hedged on our commodity exposure and then of the NGL condensate exposure, 60% of those are direct product hedges versus proxy crude hedges.

Stanley Ross Payne – Wells Fargo Securities, Llc

I meant to ask you what it is for 2013, is that consistent with what we have for 2012 or not?

Rose M. Robeson

Yeah, for 2012, we actually have a chart in the slides on Page 23 for 2013. You can see overall we're about 64% hedged and the direct product hedges are roughly, what are they, Jonni, about?

Jonni Anwar

Probably about 40%.

Rose M. Robeson

40%, about 40%.

Stanley Ross Payne – Wells Fargo Securities, Llc

Okay, great. Okay. That’s it from me. Thanks so much.

Rose M. Robeson

Thanks Ross.

Operator

(Operator Instructions) Our next question will come from Becca Followill of U.S. Capital Advisors. Please go ahead.

Becca Followill – U.S. Capital Advisors LLC

Good morning, guys. Back on the propane business, the lower cost of market charge that you took for the quarter was much bigger than you've had historically. So, can you just walk through what happened there, and then in order to get that back across the year, do you need to see a rebound in propane prices or is that at risk getting that back, or is that a sure thing?

Mark A. Borer

Becca, good morning, this is Mark. On the latter part of your question, the inventory is hedged or it's all fixed price later this year into early next year. We think the bulk of it will move out during the fourth quarter. So it's very secure in that regard, and really at the end of the day, it was the lingering impact from a record warm winter, and we decided to roll some of the inventory to this coming winter. Clearly, and the environment particularly later in the winter, we had a very solid first quarter, but later in the winter, we moved less products overall, and so with the higher inventory, we decided to roll some of that to later this year and have that secured under both derivative hedges, financial instruments as well as forward fixed price sales.

Becca Followill – U.S. Capital Advisors LLC

Great, thank you. That was the only question.

Mark A. Borer

Thank you.

Operator

Our next question will come from Bernie Colson of Global Hunter. Please go ahead.

Bernard Colson – Global Hunter

Good morning.

Mark A. Borer

Good morning.

Bernard Colson – Global Hunter

I was looking at that Slide 7 on the initial investment, and so you've got $240 million on Southeast Texas, about $200 million on the Mont Belvieu fracs, so that's $440 million, and then your guidance for the year, I think it was $600 million for co-investments and the Texas Express is that included in the co-investment as well?

Mark A. Borer

Bernie, the way to look at it would be the Southeast Texas $240 million, the Mont Belvieu fracs for $200 million and Texas Express $85 million. That totals up to $525 million and then on the subsequent slide, relative to co-investment, we've guided $685 million for the year, so that leaves approximately $160 million or more that we are forecasting for the balance of the year. And then that's also, in the context of about $900 million of total spend, if you include projects in our footprints as well as third-party acquisitions.

Bernard Colson – Global Hunter

Okay. The $1 billion number in 2013 and 2014, I mean, if you decide to accelerate some of that co-investment somewhat and increase the $685 million in 2012, does that necessarily reduce that bucket in 2013 or 2014 or do you think you can increase the budget for 2012 and the keep 2013 and 2014 kind of constant?

Mark A. Borer

Growth could be a little bit lumpy as we've said many times in the past, but we would expect in the aggregate to meet or exceed those numbers. So if we're a little higher in 2012, that doesn't necessarily mean we bring down 2013, but having said that, there can be some timing differences.

Bernard Colson – Global Hunter

Okay. Thank you very much.

Mark A. Borer

Good day.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Mark Borer, President and CEO for his closing remarks.

Mark A. Borer

Thanks, Denise. And just want to thank everybody again today for your interest in the Partnership. And if you have any follow-up questions over the coming days, please feel free to contact Jonni or Rose and we can make ourselves available to a visit. Thank you, and have a good day.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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