Delaware
|
|
20-3701075
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
1000 Louisiana St, Suite 4300, Houston, Texas
|
|
77002
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer þ
|
Accelerated filer o
|
Non-accelerated filer o
|
Smaller reporting company o
|
4
|
||
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
7
|
|
|
|
|
|
8
|
|
|
|
|
|
9
|
|
|
|
|
24
|
||
|
|
|
48
|
||
|
|
|
48
|
||
|
|
|
PART II—OTHER INFORMATION
|
||
|
|
|
48
|
||
|
|
|
48
|
||
|
|
|
48
|
||
|
|
|
48
|
||
|
|
|
48
|
||
|
|
|
48
|
||
|
|
|
49
|
||
|
|
|
SIGNATURES
|
||
|
|
|
51
|
· | the Partnership’s and our ability to access the debt and equity markets, which will depend on general market conditions and the credit ratings for our debt obligations; |
· | the amount of collateral required to be posted from time to time in the Partnership’s transactions; |
· | the Partnership’s success in risk management activities, including the use of derivative instruments to hedge commodity risks; |
· | the level of creditworthiness of counterparties to various transactions with the Partnership; |
· | changes in laws and regulations, particularly with regard to taxes, safety and protection of the environment; |
· | the timing and extent of changes in natural gas, natural gas liquids (“NGL”), crude oil and other commodity prices, interest rates and demand for the Partnership’s services; |
· | weather and other natural phenomena; |
· | industry changes, including the impact of consolidations and changes in competition; |
· | the Partnership’s ability to obtain necessary licenses, permits and other approvals; |
· | the level and success of crude oil and natural gas drilling around the Partnership’s assets, its success in connecting natural gas supplies to its gathering and processing systems, oil supplies to its gathering systems and NGL supplies to its logistics and marketing facilities and the Partnership’s success in connecting its facilities to transportation and markets; |
· | the Partnership’s and our ability to grow through acquisitions or internal growth projects and the successful integration and future performance of such assets; |
· | general economic, market and business conditions; and |
· | the risks described elsewhere in “Part II – Other Information, Item 1A. Risk Factors.” in this Quarterly Report, our Annual Report on Form 10-K for the year ended December 31, 2013 (“Annual Report”) and our reports and registration statements filed from time to time with the United States Securities and Exchange Commission (“SEC”). |
Bbl
|
Barrels (equal to 42 U.S. gallons)
|
Bcf
|
Billion cubic feet
|
Btu
|
British thermal units, a measure of heating value
|
BBtu
|
Billion British thermal units
|
/d
|
Per day
|
/hr
|
Per hour
|
gal
|
U.S. gallons
|
GPM
|
Liquid volume equivalent expressed as gallons per 1000 cu. ft. of natural gas
|
LPG
|
Liquefied petroleum gas
|
MBbl
|
Thousand barrels
|
MMBbl
|
Million barrels
|
MMBtu
|
Million British thermal units
|
MMcf
|
Million cubic feet
|
NGL(s)
|
Natural gas liquid(s)
|
NYMEX
|
New York Mercantile Exchange
|
GAAP
|
Accounting principles generally accepted in the United States of America
|
LIBOR
|
London Interbank Offer Rate
|
NYSE
|
New York Stock Exchange
|
Price Index Definitions
|
|
IF-NGPL MC
|
Inside FERC Gas Market Report, Natural Gas Pipeline, Mid-Continent
|
IF-PB
|
Inside FERC Gas Market Report, Permian Basin
|
IF-WAHA
|
Inside FERC Gas Market Report, West Texas WAHA
|
NY-WTI
|
NYMEX, West Texas Intermediate Crude Oil
|
OPIS-MB
|
Oil Price Information Service, Mont Belvieu, Texas
|
|
March 31,
|
December 31,
|
||||||
|
2014
|
2013
|
||||||
|
(Unaudited)
|
|||||||
|
(In millions)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
94.9
|
$
|
66.7
|
||||
Trade receivables, net of allowances of $1.1 million and $1.1 million
|
610.4
|
658.8
|
||||||
Inventories
|
88.5
|
150.7
|
||||||
Deferred income taxes
|
4.3
|
0.1
|
||||||
Assets from risk management activities
|
1.6
|
2.0
|
||||||
Other current assets
|
10.2
|
18.9
|
||||||
Total current assets
|
809.9
|
897.2
|
||||||
Property, plant and equipment
|
5,936.9
|
5,758.4
|
||||||
Accumulated depreciation
|
(1,472.6
|
)
|
(1,408.5
|
)
|
||||
Property, plant and equipment, net
|
4,464.3
|
4,349.9
|
||||||
Intangible assets, net
|
638.1
|
653.4
|
||||||
Long-term assets from risk management activities
|
2.9
|
3.1
|
||||||
Investment in unconsolidated affiliate
|
53.7
|
55.9
|
||||||
Other long-term assets
|
86.3
|
89.1
|
||||||
Total assets
|
$
|
6,055.2
|
$
|
6,048.6
|
||||
|
||||||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
745.5
|
$
|
761.8
|
||||
Deferred income taxes
|
-
|
0.6
|
||||||
Liabilities from risk management activities
|
12.9
|
8.0
|
||||||
Total current liabilities
|
758.4
|
770.4
|
||||||
Long-term debt
|
2,891.7
|
2,989.3
|
||||||
Long-term liabilities from risk management activities
|
1.2
|
1.4
|
||||||
Deferred income taxes
|
138.8
|
135.5
|
||||||
Other long-term liabilities
|
66.1
|
60.7
|
||||||
|
||||||||
Commitments and contingencies (see Note 16)
|
||||||||
|
||||||||
Owners' equity:
|
||||||||
Targa Resources Corp. stockholders' equity:
|
||||||||
Common stock ($0.001 par value, 300,000,000 shares authorized, 42,533,883 shares issued and 42,158,848 shares outstanding as of March 31, 2014, and 42,529,068 shares issued and 42,162,178 shares outstanding as of December 31, 2013)
|
-
|
-
|
||||||
Preferred stock ($0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding as of March 31, 2014 and December 31, 2013)
|
-
|
-
|
||||||
Additional paid-in capital
|
149.2
|
151.6
|
||||||
Retained earnings
|
19.6
|
20.5
|
||||||
Accumulated other comprehensive loss
|
(0.8
|
)
|
(0.5
|
)
|
||||
Treasury stock, at cost (375,035 shares as of March 31, 2014 and 366,890 as of December 31, 2013)
|
(23.6
|
)
|
(22.8
|
)
|
||||
Total Targa Resources Corp. stockholders' equity
|
144.4
|
148.8
|
||||||
Noncontrolling interests in subsidiaries
|
2,054.6
|
1,942.5
|
||||||
Total owners' equity
|
2,199.0
|
2,091.3
|
||||||
Total liabilities and owners' equity
|
$
|
6,055.2
|
$
|
6,048.6
|
|
Three Months Ended March 31,
|
|||||||
|
2014
|
2013
|
||||||
|
||||||||
|
(Unaudited)
|
|||||||
|
(In millions, except per share amounts)
|
|||||||
|
||||||||
Revenues
|
$
|
2,352.9
|
$
|
1,397.8
|
||||
Costs and expenses:
|
||||||||
Product purchases
|
1,973.3
|
1,137.5
|
||||||
Operating expenses
|
104.3
|
86.1
|
||||||
Depreciation and amortization expenses
|
79.6
|
64.0
|
||||||
General and administrative expenses
|
38.0
|
36.3
|
||||||
Other operating income
|
(0.7
|
)
|
-
|
|||||
Income from operations
|
158.4
|
73.9
|
||||||
Other income (expense):
|
||||||||
Interest expense, net
|
(33.9
|
)
|
(32.1
|
)
|
||||
Equity earnings
|
4.9
|
1.6
|
||||||
Other
|
-
|
(0.2
|
)
|
|||||
Income before income taxes
|
129.4
|
43.2
|
||||||
Income tax (expense) benefit:
|
||||||||
Current
|
(23.9
|
)
|
(9.2
|
)
|
||||
Deferred
|
1.4
|
(0.2
|
)
|
|||||
|
(22.5
|
)
|
(9.4
|
)
|
||||
Net income
|
106.9
|
33.8
|
||||||
Less: Net income attributable to noncontrolling interests
|
87.3
|
20.4
|
||||||
Net income available to common shareholders
|
$
|
19.6
|
$
|
13.4
|
||||
|
||||||||
Net income available per common share - basic
|
$
|
0.47
|
$
|
0.32
|
||||
Net income available per common share - diluted
|
$
|
0.47
|
$
|
0.32
|
||||
Weighted average shares outstanding - basic
|
42.0
|
41.6
|
||||||
Weighted average shares outstanding - diluted
|
42.1
|
42.0
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||
|
2014
|
2013
|
||||||||||||||||||||||
|
Pre-Tax
|
Related
Income
Tax
|
After Tax
|
Pre-Tax
|
Related
Income
Tax
|
After Tax
|
||||||||||||||||||
|
||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Net income attributable to Targa Resources Corp.
|
$
|
19.6
|
$
|
13.4
|
||||||||||||||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
||||||||||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||||||||||
Change in fair value
|
$
|
(1.5
|
)
|
$
|
0.6
|
(0.9
|
)
|
$
|
(1.2
|
)
|
$
|
0.5
|
(0.7
|
)
|
||||||||||
Settlements reclassified to revenues
|
0.8
|
(0.3
|
)
|
0.5
|
(0.9
|
)
|
0.4
|
(0.5
|
)
|
|||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Settlements reclassified to interest expense, net
|
0.2
|
(0.1
|
)
|
0.1
|
0.2
|
(0.1
|
)
|
0.1
|
||||||||||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
$
|
(0.5
|
)
|
$
|
0.2
|
(0.3
|
)
|
$
|
(1.9
|
)
|
$
|
0.8
|
(1.1
|
)
|
||||||||||
Comprehensive income attributable to Targa Resources Corp.
|
$
|
19.3
|
$
|
12.3
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Net income attributable to noncontrolling interests
|
$
|
87.3
|
$
|
20.4
|
||||||||||||||||||||
Other comprehensive loss attributable to noncontrolling interests
|
||||||||||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||||||||||
Change in fair value
|
$
|
(10.3
|
)
|
$
|
-
|
(10.3
|
)
|
$
|
(6.4
|
)
|
$
|
-
|
(6.4
|
)
|
||||||||||
Settlements reclassified to revenues
|
5.5
|
-
|
5.5
|
(5.7
|
)
|
-
|
(5.7
|
)
|
||||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Settlements reclassified to interest expense, net
|
1.1
|
-
|
1.1
|
1.5
|
-
|
1.5
|
||||||||||||||||||
Other comprehensive loss attributable to noncontrolling interests
|
$
|
(3.7
|
)
|
$
|
-
|
(3.7
|
)
|
$
|
(10.6
|
)
|
$
|
-
|
(10.6
|
)
|
||||||||||
Comprehensive income attributable to noncontrolling interests
|
83.6
|
9.8
|
||||||||||||||||||||||
|
||||||||||||||||||||||||
Total comprehensive income
|
$
|
102.9
|
$
|
22.1
|
|
Common Stock
|
Additional
Paid in |
Retained
Earnings |
Accumulated
Other |
Treasury Shares
|
Noncontrolling
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit)
|
Income (Loss)
|
Shares
|
Amount
|
Interests
|
Total
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||||||||||||||
|
(In millions, except shares in thousands)
|
|||||||||||||||||||||||||||||||||||
Balance, December 31, 2013
|
42,162
|
$
|
-
|
$
|
151.6
|
$
|
20.5
|
$
|
(0.5
|
)
|
367
|
$
|
(22.8
|
)
|
$
|
1,942.5
|
$
|
2,091.3
|
||||||||||||||||||
Compensation on equity grants
|
5
|
-
|
1.6
|
-
|
-
|
-
|
-
|
2.6
|
4.2
|
|||||||||||||||||||||||||||
Accrual of distribution equivalent rights
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.6
|
)
|
(0.6
|
)
|
|||||||||||||||||||||||||
Repurchase of common stock
|
(8
|
)
|
-
|
-
|
-
|
-
|
8
|
(0.8
|
)
|
-
|
(0.8
|
)
|
||||||||||||||||||||||||
Sale of Partnership limited partner interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
115.3
|
115.3
|
|||||||||||||||||||||||||||
Receivables from unit offerings
|
-
|
-
|
(5.9
|
)
|
-
|
-
|
-
|
-
|
-
|
(5.9
|
)
|
|||||||||||||||||||||||||
Impact of Partnership equity transactions
|
-
|
-
|
7.1
|
-
|
-
|
-
|
-
|
(7.1
|
)
|
-
|
||||||||||||||||||||||||||
Dividends
|
-
|
-
|
(5.2
|
)
|
(20.5
|
)
|
-
|
-
|
-
|
-
|
(25.7
|
)
|
||||||||||||||||||||||||
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(81.7
|
)
|
(81.7
|
)
|
|||||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(0.3
|
)
|
-
|
-
|
(3.7
|
)
|
(4.0
|
)
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
19.6
|
-
|
-
|
-
|
87.3
|
106.9
|
|||||||||||||||||||||||||||
Balance, March 31, 2014
|
42,159
|
$
|
-
|
$
|
149.2
|
$
|
19.6
|
$
|
(0.8
|
)
|
375
|
$
|
(23.6
|
)
|
$
|
2,054.6
|
$
|
2,199.0
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, December 31, 2012
|
42,295
|
$
|
-
|
$
|
184.4
|
$
|
(32.0
|
)
|
$
|
1.2
|
198
|
$
|
(9.5
|
)
|
$
|
1,609.3
|
$
|
1,753.4
|
||||||||||||||||||
Compensation on equity grants
|
35
|
-
|
2.1
|
-
|
-
|
-
|
-
|
1.7
|
3.8
|
|||||||||||||||||||||||||||
Accrual of distribution equivalent rights
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.3
|
)
|
(0.3
|
)
|
|||||||||||||||||||||||||
Sale of Partnership limited partner interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
105.3
|
105.3
|
|||||||||||||||||||||||||||
Impact of Partnership equity transactions
|
-
|
-
|
6.3
|
-
|
-
|
-
|
-
|
(6.3
|
)
|
-
|
||||||||||||||||||||||||||
Dividends
|
-
|
-
|
(19.4
|
)
|
-
|
-
|
-
|
-
|
-
|
(19.4
|
)
|
|||||||||||||||||||||||||
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(61.7
|
)
|
(61.7
|
)
|
|||||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(1.1
|
)
|
-
|
-
|
(10.6
|
)
|
(11.7
|
)
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
13.4
|
-
|
-
|
-
|
20.4
|
33.8
|
|||||||||||||||||||||||||||
Balance, March 31, 2013
|
42,330
|
$
|
-
|
$
|
173.4
|
$
|
(18.6
|
)
|
$
|
0.1
|
198
|
$
|
(9.5
|
)
|
$
|
1,657.8
|
$
|
1,803.2
|
|
Three Months Ended March 31,
|
|||||||
|
2014
|
2013
|
||||||
|
||||||||
|
(Unaudited)
|
|||||||
Cash flows from operating activities
|
(In millions)
|
|||||||
Net income
|
$
|
106.9
|
$
|
33.8
|
||||
Amortization in interest expense
|
3.6
|
4.1
|
||||||
Compensation on equity grants
|
4.2
|
3.8
|
||||||
Depreciation and amortization expense
|
79.6
|
64.0
|
||||||
Accretion of asset retirement obligations
|
1.2
|
1.1
|
||||||
Deferred income tax expense
|
(1.4
|
)
|
0.2
|
|||||
Equity earnings, net of distributions
|
-
|
(1.6
|
)
|
|||||
Risk management activities
|
(0.3
|
)
|
(0.2
|
)
|
||||
Gain on sale or disposition of assets
|
(0.8
|
)
|
(0.1
|
)
|
||||
Changes in operating assets and liabilities:
|
||||||||
Receivables and other assets
|
57.3
|
95.1
|
||||||
Inventory
|
60.6
|
33.7
|
||||||
Accounts payable and other liabilities
|
7.8
|
(41.0
|
)
|
|||||
Net cash provided by operating activities
|
318.7
|
192.9
|
||||||
Cash flows from investing activities
|
||||||||
Outlays for property, plant and equipment
|
(197.7
|
)
|
(221.8
|
)
|
||||
Purchase of materials and supplies
|
0.1
|
-
|
||||||
Return of capital from unconsolidated affiliate
|
2.2
|
-
|
||||||
Other, net
|
1.7
|
(4.6
|
) | |||||
Net cash used in investing activities
|
(193.7
|
)
|
(226.4
|
)
|
||||
Cash flows from financing activities
|
||||||||
Partnership loan facilities:
|
||||||||
Proceeds
|
460.0
|
325.0
|
||||||
Repayments
|
(500.0
|
)
|
(380.0
|
)
|
||||
Partnership accounts receivable securitization facility:
|
||||||||
Borrowings
|
29.5
|
171.4
|
||||||
Repayments
|
(75.7
|
)
|
(60.0
|
)
|
||||
Non-Partnership loan facilities:
|
||||||||
Proceeds
|
4.0
|
5.0
|
||||||
Repayments
|
(16.0
|
)
|
(15.0
|
)
|
||||
Costs incurred in connection with financing arrangements
|
(1.2
|
)
|
(3.2
|
)
|
||||
Distributions to owners
|
(81.7
|
)
|
(61.7
|
)
|
||||
Proceeds from sale of common units of the Partnership
|
110.6
|
107.4
|
||||||
Dividends to common and common equivalent shareholders
|
(25.5
|
)
|
(19.0
|
)
|
||||
Repurchase of common stock
|
(0.8
|
)
|
-
|
|||||
Net cash provided by (used in) financing activities
|
(96.8
|
)
|
69.9
|
|||||
Net change in cash and cash equivalents
|
28.2
|
36.4
|
||||||
Cash and cash equivalents, beginning of period
|
66.7
|
76.3
|
||||||
Cash and cash equivalents, end of period
|
$
|
94.9
|
$
|
112.7
|
|
Three Months Ended March 31, 2013
|
|||||||||||
Revised line items Consolidated Statement of Cash Flows
|
As Reported
|
Reclassification
|
Revised
|
|||||||||
|
||||||||||||
Cash Flows from operating activities
|
||||||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts payable and other liabilities
|
$
|
(59.9
|
)
|
$
|
18.9
|
$
|
(41.0
|
)
|
||||
Net cash provided by operating activities
|
174.0
|
18.9
|
192.9
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Changes in investing assets and liabilities:
|
||||||||||||
Outlays for property, plant and equipment
|
(202.9
|
)
|
(18.9
|
)
|
(221.8
|
)
|
||||||
Net cash used in investing activities
|
(207.5
|
)
|
(18.9
|
)
|
(226.4
|
)
|
· | a 2% general partner interest, which we hold through our 100% ownership interest in the general partner of the Partnership; |
· | all Incentive Distribution Rights (“IDRs”); and |
· | 12,945,659 common units of the Partnership, representing an 11.4% limited partnership interest. |
|
March 31, 2014
|
December 31, 2013
|
||||||
Commodities
|
$
|
74.7
|
$
|
136.4
|
||||
Materials and supplies
|
13.8
|
14.3
|
||||||
|
$
|
88.5
|
$
|
150.7
|
|
March 31, 2014
|
December 31, 2013
|
||||||||||||||||||||||||
|
Targa
Resources
Partners LP
|
TRC Non-
Partnership
|
Targa
Resources
Corp.
Consolidated
|
Targa
Resources
Partners LP
|
TRC Non-
Partnership
|
Targa
Resources
Corp.
Consolidated
|
Estimated
Useful Lives
(In Years)
|
|||||||||||||||||||
Gathering systems
|
$
|
2,293.6
|
$
|
-
|
$
|
2,293.6
|
$
|
2,230.1
|
$
|
-
|
$
|
2,230.1
|
5 to 20
|
|||||||||||||
Processing and fractionation facilities
|
1,600.7
|
6.6
|
1,607.3
|
1,598.0
|
6.6
|
1,604.6
|
5 to 25
|
|||||||||||||||||||
Terminaling and storage facilities
|
735.4
|
-
|
735.4
|
715.2
|
-
|
715.2
|
5 to 25
|
|||||||||||||||||||
Transportation assets
|
334.7
|
-
|
334.7
|
294.7
|
-
|
294.7
|
10 to 25
|
|||||||||||||||||||
Other property, plant and equipment
|
124.8
|
0.2
|
125.0
|
121.3
|
0.2
|
121.5
|
3 to 25
|
|||||||||||||||||||
Land
|
89.7
|
-
|
89.7
|
89.5
|
-
|
89.5
|
-
|
|||||||||||||||||||
Construction in progress
|
751.2
|
-
|
751.2
|
702.8
|
-
|
702.8
|
-
|
|||||||||||||||||||
Property, plant and equipment
|
5,930.1
|
6.8
|
5,936.9
|
5,751.6
|
6.8
|
5,758.4
|
||||||||||||||||||||
Accumulated depreciation
|
(1,470.3
|
)
|
(2.3
|
)
|
(1,472.6
|
)
|
(1,406.2
|
)
|
(2.3
|
)
|
(1,408.5
|
)
|
||||||||||||||
Property, plant and equipment, net
|
$
|
4,459.8
|
$
|
4.5
|
$
|
4,464.3
|
$
|
4,345.4
|
$
|
4.5
|
$
|
4,349.9
|
||||||||||||||
|
||||||||||||||||||||||||||
Intangible assets
|
$
|
681.8
|
$
|
-
|
$
|
681.8
|
$
|
681.8
|
$
|
-
|
$
|
681.8
|
20
|
|||||||||||||
Accumulated amortization
|
(43.7
|
)
|
-
|
(43.7
|
)
|
(28.4
|
)
|
-
|
(28.4
|
)
|
||||||||||||||||
Intangible assets, net
|
$
|
638.1
|
$
|
-
|
$
|
638.1
|
$
|
653.4
|
$
|
-
|
$
|
653.4
|
|
Three Months Ended
|
|||
|
March 31, 2014
|
|||
Beginning of period
|
$
|
50.9
|
||
Change in cash flow estimate
|
2.1
|
|||
Accretion expense
|
1.2
|
|||
End of period
|
$
|
54.2
|
|
Three Months Ended
|
|||
|
March 31, 2014
|
|||
Beginning of period
|
$
|
55.9
|
||
Equity earnings
|
4.9
|
|||
Cash distributions (1)
|
(7.1
|
)
|
||
End of period
|
$
|
53.7
|
(1) | Includes distributions in excess of cumulative earnings of $2.2 million that are considered a return of capital and disclosed in cash flows from investing activities in the Consolidated Statements of Cash Flows. |
|
March 31, 2014
|
December 31, 2013
|
||||||
Commodities
|
$
|
528.1
|
$
|
520.8
|
||||
Other goods and services
|
109.7
|
146.8
|
||||||
Interest
|
42.4
|
35.9
|
||||||
Compensation and benefits
|
23.5
|
40.3
|
||||||
Income and other taxes
|
32.8
|
10.2
|
||||||
Other
|
9.0
|
7.8
|
||||||
|
$
|
745.5
|
$
|
761.8
|
|
March 31, 2014
|
December 31, 2013
|
||||||
Long-term debt:
|
||||||||
Non-Partnership obligations:
|
||||||||
TRC Senior secured revolving credit facility, variable rate, due October 2017 (1)
|
$
|
72.0
|
$
|
84.0
|
||||
Obligations of the Partnership: (2)
|
||||||||
Senior secured revolving credit facility, variable rate, due October 2017 (3)
|
355.0
|
395.0
|
||||||
Senior unsecured notes, 7⅞% fixed rate, due October 2018
|
250.0
|
250.0
|
||||||
Senior unsecured notes, 6⅞% fixed rate, due February 2021
|
483.6
|
483.6
|
||||||
Unamortized discount
|
(27.4
|
)
|
(28.0
|
)
|
||||
Senior unsecured notes, 6⅜% fixed rate, due August 2022
|
300.0
|
300.0
|
||||||
Senior unsecured notes, 5¼% fixed rate, due May 2023
|
600.0
|
600.0
|
||||||
Senior unsecured notes, 4¼% fixed rate, due November 2023
|
625.0
|
625.0
|
||||||
Accounts receivable securitization facility, due December 2014 (4)
|
233.5
|
279.7
|
||||||
Total long-term debt
|
$
|
2,891.7
|
$
|
2,989.3
|
||||
Irrevocable standby letters of credit:
|
||||||||
Letters of credit outstanding under TRC Senior secured credit facility (1)
|
$
|
-
|
$
|
-
|
||||
Letters of credit outstanding under the Partnership senior secured revolving credit facility (3)
|
97.2
|
86.8
|
||||||
|
$
|
97.2
|
$
|
86.8
|
(1) | As of March 31, 2014, availability under TRC’s $150 million senior secured revolving credit facility was $78.0 million. |
(2) | While we consolidate the debt of the Partnership in our financial statements, we do not have the obligation to make interest payments or debt payments with respect to the debt of the Partnership. |
(3) | As of March 31, 2014, availability under the Partnership’s $1.2 billion senior secured revolving credit facility was $747.8 million. |
(4) | All amounts outstanding under the Partnership’s Securitization Facility are reflected as long-term debt in our balance sheet because the Partnership has the ability and intent to fund the Securitization Facility’s borrowings on a long-term basis. |
|
Range of Interest
Rates Incurred
|
|
Weighted Average
Interest Rate Incurred
|
TRC senior secured revolving credit facility
|
2.9%
|
|
2.9%
|
Partnership's senior secured revolving credit facility
|
2.2% - 4.5%
|
|
2.3%
|
Partnership's accounts receivable securitization facility
|
0.9%
|
|
0.9%
|
|
|
Distributions
|
||||||||||||||||||||||||
Three Months
Ended
|
Date Paid or to
be Paid
|
Limited
Partners
|
General Partner
|
Distributions
to Targa
Resources
Corp.
|
Distributions
per limited
partner unit
|
|||||||||||||||||||||
Common
|
Incentive
|
2%
|
Total
|
|||||||||||||||||||||||
(In millions, except per unit amounts)
|
||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
March 31, 2014
|
May 15, 2014
|
$
|
87.2
|
$
|
31.7
|
$
|
2.4
|
$
|
121.3
|
$
|
44.0
|
$
|
0.7625
|
|||||||||||||
December 31, 2013
|
February 14, 2014
|
84.0
|
29.5
|
2.3
|
115.8
|
41.5
|
0.7475
|
Three Months
Ended
|
Date Paid or To
Be Paid
|
Total
Dividend
Declared
|
Amount of
Dividend
Paid
|
Accrued
Dividends (1)
|
Dividend
Declared per
Share of
Common Stock
|
|||||||||||||
|
|
|||||||||||||||||
(In millions, except per share amounts)
|
||||||||||||||||||
|
|
|||||||||||||||||
March 31, 2014
|
May 16, 2014
|
$
|
27.4
|
$
|
27.2
|
$
|
0.2
|
$
|
0.64750
|
|||||||||
December 31, 2013
|
February 18, 2014
|
25.6
|
25.5
|
0.1
|
0.60750
|
(1) | Represents accrued dividends on restricted stock and restricted stock units that are payable upon vesting. |
|
Three Months Ended March 31,
|
|||||||
|
2014
|
2013
|
||||||
Net income
|
$
|
106.9
|
$
|
33.8
|
||||
Less: Net income attributable to noncontrolling interests
|
87.3
|
20.4
|
||||||
Net income attributable to common shareholders
|
$
|
19.6
|
$
|
13.4
|
||||
|
||||||||
Weighted average shares outstanding - basic
|
42.0
|
41.6
|
||||||
|
||||||||
Net income available per common share - basic
|
$
|
0.47
|
$
|
0.32
|
||||
|
||||||||
Weighted average shares outstanding
|
42.0
|
41.6
|
||||||
Dilutive effect of unvested stock awards
|
0.1
|
0.4
|
||||||
Weighted average shares outstanding - diluted
|
42.1
|
42.0
|
||||||
|
||||||||
Net income available per common share - diluted
|
$
|
0.47
|
$
|
0.32
|
Commodity
|
Instrument
|
Unit
|
2014
|
2015
|
2016
|
|||||||||||
Natural Gas
|
Swaps
|
MMBtu/d
|
54,050
|
40,551
|
25,500
|
|||||||||||
NGL
|
Swaps
|
Bbl/d
|
1,125
|
-
|
-
|
|||||||||||
Condensate
|
Swaps
|
Bbl/d
|
2,450
|
-
|
-
|
|
Fair Value as of March 31, 2014
|
Fair Value as of December 31, 2013
|
||||||||||||||||
|
Balance Sheet
|
Derivative
|
Derivative
|
Derivative
|
Derivative
|
|||||||||||||
|
Location
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|||||||||||||
Derivatives designated as hedging instruments
|
||||||||||||||||||
Commodity contracts
|
Current
|
$
|
1.6
|
$
|
(12.8
|
)
|
$
|
2.0
|
$
|
(7.7
|
)
|
|||||||
|
Long-term
|
2.9
|
(1.2
|
)
|
3.1
|
(1.4
|
)
|
|||||||||||
Total derivatives designated as hedging instruments
|
$
|
4.5
|
$
|
(14.0
|
)
|
$
|
5.1
|
$
|
(9.1
|
)
|
||||||||
|
|
|||||||||||||||||
Derivatives not designated as hedging instruments
|
||||||||||||||||||
Commodity contracts
|
Current
|
$
|
-
|
$
|
(0.1
|
)
|
$
|
-
|
$
|
(0.3
|
)
|
|||||||
Total derivatives not designated as hedging instruments
|
$
|
-
|
$
|
(0.1
|
)
|
$
|
-
|
$
|
(0.3
|
)
|
||||||||
|
|
|||||||||||||||||
Total current position
|
|
$
|
1.6
|
$
|
(12.9
|
)
|
$
|
2.0
|
$
|
(8.0
|
)
|
|||||||
Total long-term position
|
|
2.9
|
(1.2
|
)
|
3.1
|
(1.4
|
)
|
|||||||||||
Total derivatives
|
|
$
|
4.5
|
$
|
(14.1
|
)
|
$
|
5.1
|
$
|
(9.4
|
)
|
|
Gross Presentation
|
Pro forma Net Presentation
|
||||||||||||||
|
Asset
|
Liability
|
Asset
|
Liability
|
||||||||||||
March 31, 2014
|
Position
|
Position
|
Position
|
Position
|
||||||||||||
Current position
|
||||||||||||||||
Counterparties with offsetting position
|
$
|
1.6
|
$
|
(3.4
|
)
|
$
|
-
|
$
|
(1.8
|
)
|
||||||
Counterparties without offsetting position - assets
|
-
|
-
|
-
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
(9.5
|
)
|
-
|
(9.5
|
)
|
||||||||||
|
1.6
|
(12.9
|
)
|
-
|
(11.3
|
)
|
||||||||||
Long-term position
|
||||||||||||||||
Counterparties with offsetting position
|
1.0
|
(0.3
|
)
|
0.7
|
-
|
|||||||||||
Counterparties without offsetting position - assets
|
1.9
|
-
|
1.9
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
(0.9
|
)
|
-
|
(0.9
|
)
|
||||||||||
|
2.9
|
(1.2
|
)
|
2.6
|
(0.9
|
)
|
||||||||||
Total derivatives
|
||||||||||||||||
Counterparties with offsetting position
|
2.6
|
(3.7
|
)
|
0.7
|
(1.8
|
)
|
||||||||||
Counterparties without offsetting position - assets
|
1.9
|
-
|
1.9
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
(10.4
|
)
|
-
|
(10.4
|
)
|
||||||||||
|
$
|
4.5
|
$
|
(14.1
|
)
|
$
|
2.6
|
$
|
(12.2
|
)
|
||||||
|
||||||||||||||||
December 31, 2013
|
||||||||||||||||
Current position
|
||||||||||||||||
Counterparties with offsetting position
|
$
|
1.9
|
$
|
(4.4
|
)
|
$
|
-
|
$
|
(2.5
|
)
|
||||||
Counterparties without offsetting position - assets
|
0.1
|
-
|
0.1
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
(3.6
|
)
|
-
|
(3.6
|
)
|
||||||||||
|
2.0
|
(8.0
|
)
|
0.1
|
(6.1
|
)
|
||||||||||
Long-term position
|
||||||||||||||||
Counterparties with offsetting position
|
0.7
|
(1.2
|
)
|
-
|
(0.5
|
)
|
||||||||||
Counterparties without offsetting position - assets
|
2.4
|
-
|
2.4
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
(0.2
|
)
|
-
|
(0.2
|
)
|
||||||||||
|
3.1
|
(1.4
|
)
|
2.4
|
(0.7
|
)
|
||||||||||
Total derivatives
|
||||||||||||||||
Counterparties with offsetting position
|
2.6
|
(5.6
|
)
|
-
|
(3.0
|
)
|
||||||||||
Counterparties without offsetting position - assets
|
2.5
|
-
|
2.5
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
(3.8
|
)
|
-
|
(3.8
|
)
|
||||||||||
|
$
|
5.1
|
$
|
(9.4
|
)
|
$
|
2.5
|
$
|
(6.8
|
)
|
|
Gain (Loss) Recognized in OCI on Derivatives
(Effective Portion)
|
|||||||
Derivatives in Cash Flow
|
Three Months Ended March 31,
|
|||||||
Hedging Relationships
|
2014
|
2013
|
||||||
Commodity contracts
|
$
|
(11.9
|
)
|
$
|
(7.6
|
)
|
||
|
||||||||
Gain (Loss) Reclassified from OCI into Income
(Effective Portion)
|
||||||||
Three Months Ended March 31,
|
||||||||
Location of Gain (Loss)
|
2014
|
2013
|
||||||
Interest expense, net
|
$
|
(1.3
|
)
|
$
|
(1.7
|
)
|
||
Revenues
|
(6.3
|
)
|
6.6
|
|||||
|
$
|
(7.6
|
)
|
$
|
4.9
|
|
March 31, 2014
|
December 31, 2013
|
||||||
Commodity hedges, before tax
|
$
|
(1.2
|
)
|
$
|
(0.5
|
)
|
||
Commodity hedges, after tax
|
(0.8
|
)
|
(0.3
|
)
|
||||
Interest rate hedges, before tax
|
(0.1
|
)
|
(0.3
|
)
|
||||
Interest rate hedges, after tax
|
(0.1
|
)
|
(0.2
|
)
|
• | Senior secured revolving credit facilities and the Partnership’s Accounts Receivable Securitization Facility are based on carrying value, which approximates fair value as their interest rates are based on prevailing market rates; and |
• | Senior unsecured notes are based on quoted market prices derived from trades of the debt. |
• | Level 1 – observable inputs such as quoted prices in active markets; |
• | Level 2 – inputs other than quoted prices in active markets that we can directly or indirectly observe to the extent that the markets are liquid for the relevant settlement periods; and |
• | Level 3 – unobservable inputs in which little or no market data exists, therefore we must develop our own assumptions. |
|
March 31, 2014
|
|||||||||||||||||||
Fair Value
|
||||||||||||||||||||
|
Carrying
Value
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||||
Financial Instruments Recorded on Our Consolidated Balance Sheets at Fair Value:
|
||||||||||||||||||||
Assets from commodity derivative contracts (1)
|
$
|
3.9
|
$
|
3.9
|
$
|
-
|
$
|
2.6
|
$
|
1.3
|
||||||||||
Liabilities from commodity derivative contracts (1)
|
13.5
|
13.5
|
-
|
12.0
|
1.5
|
|||||||||||||||
Badlands contingent consideration liability
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Financial Instruments Recorded on Our Consolidated Balance Sheets at Carrying Value:
|
||||||||||||||||||||
Cash and cash equivalents
|
94.9
|
94.9
|
-
|
-
|
-
|
|||||||||||||||
TRC Senior secured revolving credit facility
|
72.0
|
72.0
|
-
|
72.0
|
-
|
|||||||||||||||
Partnership's Senior secured revolving credit facility
|
355.0
|
355.0
|
-
|
355.0
|
-
|
|||||||||||||||
Partnership's Senior unsecured notes
|
2,231.2
|
2,284.0
|
-
|
2,284.0
|
-
|
|||||||||||||||
Partnership's accounts receivable securitization facility
|
233.5
|
233.5
|
-
|
233.5
|
-
|
(1) | The fair value of the derivative contracts in this table is presented on a different basis than the balance sheet presentation as disclosed in Note 13. The above fair values reflect the total value of each derivative contract taken as a whole, whereas the balance sheet presentation is based on the individual maturity dates of estimated future settlements. As such, an individual contract could have both an asset and liability position when segregated into its current and long-term portions for balance sheet classification purposes. |
|
Commodity
Derivative
Contracts Asset/
(Liability)
|
|||
Balance, December 31, 2013
|
$
|
0.7
|
||
Settlements included in Revenue
|
(0.9
|
)
|
||
Balance, March 31, 2014
|
$
|
(0.2
|
)
|
|
Three Months Ended March 31,
|
|||||||
|
2014
|
2013
|
||||||
Cash:
|
||||||||
Interest paid, net of capitalized interest (1)
|
$
|
23.7
|
$
|
32.1
|
||||
Income taxes paid, net of refunds
|
0.1
|
0.3
|
||||||
Non-cash:
|
||||||||
Deadstock inventory transferred to property, plant and equipment
|
1.1
|
4.5
|
||||||
Accrued dividends on unvested equity awards
|
0.2
|
0.4
|
||||||
Change in receivables from unit offerings
|
5.9
|
-
|
||||||
Change in capital accruals
|
22.7
|
14.9
|
||||||
Transfers from materials and supplies inventory to property, plant and equipment
|
0.4
|
-
|
||||||
Change in ARO cash flow estimate
|
2.1
|
0.2
|
(1) | Interest capitalized on major projects was $6.9 million and $6.1 million for the three months ended March 31, 2014 and 2013. |
|
Three Months Ended March 31, 2014
|
|||||||||||||||||||||||||||||||
|
Partnership
|
|||||||||||||||||||||||||||||||
|
Field
Gathering
and
Processing
|
Coastal
Gathering
and
Processing
|
Logistics
Assets
|
Marketing
and
Distribution
|
Other
|
Corporate
and
Eliminations
|
TRC Non-
Partnership
|
Consolidated
|
||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||
Sales of commodities
|
$
|
45.8
|
$
|
100.5
|
$
|
21.0
|
$
|
1,983.7
|
$
|
(6.1
|
)
|
$
|
(0.1
|
)
|
$
|
-
|
$
|
2,144.8
|
||||||||||||||
Fees from midstream services
|
40.8
|
7.7
|
68.1
|
91.3
|
-
|
0.2
|
-
|
208.1
|
||||||||||||||||||||||||
|
86.6
|
108.2
|
89.1
|
2,075.0
|
(6.1
|
)
|
0.1
|
-
|
2,352.9
|
|||||||||||||||||||||||
Intersegment revenues
|
||||||||||||||||||||||||||||||||
Sales of commodities
|
400.4
|
177.0
|
0.6
|
130.4
|
-
|
(708.4
|
)
|
-
|
-
|
|||||||||||||||||||||||
Fees from midstream services
|
1.1
|
-
|
66.2
|
7.9
|
-
|
(75.2
|
)
|
-
|
-
|
|||||||||||||||||||||||
|
401.5
|
177.0
|
66.8
|
138.3
|
-
|
(783.6
|
)
|
-
|
-
|
|||||||||||||||||||||||
Revenues
|
$
|
488.1
|
$
|
285.2
|
$
|
155.9
|
$
|
2,213.3
|
$
|
(6.1
|
)
|
$
|
(783.5
|
)
|
$
|
-
|
$
|
2,352.9
|
||||||||||||||
Operating margin
|
$
|
94.1
|
$
|
26.1
|
$
|
96.6
|
$
|
64.6
|
$
|
(6.1
|
)
|
$
|
-
|
$
|
-
|
$
|
275.3
|
|||||||||||||||
Other financial information:
|
||||||||||||||||||||||||||||||||
Total assets
|
$
|
3,275.1
|
$
|
385.1
|
$
|
1,568.7
|
$
|
614.1
|
$
|
4.5
|
$
|
128.8
|
$
|
78.9
|
$
|
6,055.2
|
||||||||||||||||
Capital expenditures
|
$
|
98.9
|
$
|
4.3
|
$
|
68.6
|
$
|
3.1
|
$
|
-
|
$
|
0.5
|
$
|
-
|
$
|
175.4
|
|
Three Months Ended March 31, 2013
|
|||||||||||||||||||||||||||||||
|
Partnership
|
|||||||||||||||||||||||||||||||
|
Field
Gathering
and
Processing
|
Coastal
Gathering
and
Processing
|
Logistics
Assets
|
Marketing
and
Distribution
|
Other
|
Corporate
and
Eliminations
|
TRC Non-
Partnership
|
Consolidated
|
||||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||||||
Sales of commodities
|
$
|
38.1
|
$
|
69.6
|
$
|
32.9
|
$
|
1,136.5
|
$
|
6.6
|
$
|
-
|
$
|
-
|
$
|
1,283.7
|
||||||||||||||||
Fees from midstream services
|
20.2
|
8.8
|
47.1
|
38.0
|
-
|
-
|
-
|
114.1
|
||||||||||||||||||||||||
|
58.3
|
78.4
|
80.0
|
1,174.5
|
6.6
|
-
|
-
|
1,397.8
|
||||||||||||||||||||||||
Intersegment revenues
|
||||||||||||||||||||||||||||||||
Sales of commodities
|
273.0
|
151.9
|
0.9
|
110.5
|
-
|
(536.3
|
)
|
-
|
-
|
|||||||||||||||||||||||
Fees from midstream services
|
0.9
|
-
|
36.6
|
6.4
|
-
|
(43.9
|
)
|
-
|
-
|
|||||||||||||||||||||||
|
273.9
|
151.9
|
37.5
|