DCP Midstream’s distributions
DCP Midstream Partners (DPM) is expected to keep its distributions flat for all of 2017, even after the simplification transaction. The partnership has declared a flat distribution of $0.78 per unit, or $3.12 per unit annualized, for the past several quarters.
This could be attributed to DPM’s low coverage ratio. In a related investor presentation, DPM noted that its sponsors, including Phillips 66 (PSX) and Spectra Energy (SE), plan to provide “$100 million IDR giveback annually through 2019, if necessary, to maintain at least a minimum 1.0x distribution coverage.”