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 £
|
Accelerated filer £
|
Non-accelerated filer R
|
Smaller reporting company £
|
PART I—FINANCIAL INFORMATION
|
|
4
|
|
|
|
4 | |
|
|
5 | |
|
|
6 | |
|
|
7 | |
|
|
8 | |
|
|
9 | |
|
|
22 | |
|
|
46 | |
|
|
49 | |
|
|
PART II—OTHER INFORMATION
|
|
|
|
50 | |
|
|
50 | |
|
|
50 | |
|
|
50 | |
|
|
50 | |
|
|
50 | |
|
|
51 | |
|
|
SIGNATURES
|
|
|
|
52 |
·
|
Targa Resources Partners LP’s (the “Partnership”) 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 financial instruments to hedge commodity and interest rate risks;
|
·
|
the level of creditworthiness of counterparties to transactions;
|
·
|
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”) 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 oil and natural gas drilling around the Partnership’s assets and its success in connecting natural gas supplies to its gathering and processing systems and NGL supplies to its logistics and marketing facilities;
|
·
|
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” of this Quarterly Report, our Annual Report on Form 10-K for the year ended December 31, 2010 (“Annual Report”) and, our reports and registration statements filed from time to time with the Securities and Exchange Commission.
|
Bbl
|
Barrels (equal to 42 gallons)
|
Btu
|
British thermal units, a measure of heating value
|
BBtu
|
Billion British thermal units
|
/d
|
Per day
|
gal
|
Gallons
|
LPG
|
Liquefied petroleum gas
|
MBbl
|
Thousand barrels
|
MMBtu
|
Million British thermal units
|
MMcf
|
Million cubic feet
|
NGL(s)
|
Natural gas liquid(s)
|
NYMEX
|
New York Mercantile 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
|
TARGA RESOURCES CORP.
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
|
|
||||||
|
June 30,
|
December 31,
|
||||||
|
2011
|
2010
|
||||||
|
(Unaudited)
|
|||||||
|
(In millions)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
|
|
||||||
Cash and cash equivalents
|
$ | 154.7 | $ | 188.4 | ||||
Trade receivables, net of allowances of $7.9 million
|
495.8 | 466.6 | ||||||
Inventory
|
69.9 | 50.4 | ||||||
Deferred income taxes
|
13.8 | 3.6 | ||||||
Assets from risk management activities
|
22.5 | 25.2 | ||||||
Other current assets
|
22.7 | 16.3 | ||||||
Total current assets
|
779.4 | 750.5 | ||||||
Property, plant and equipment, at cost
|
3,498.3 | 3,331.4 | ||||||
Accumulated depreciation
|
(910.9 | ) | (822.4 | ) | ||||
Property, plant and equipment, net
|
2,587.4 | 2,509.0 | ||||||
Long-term assets from risk management activities
|
13.2 | 18.9 | ||||||
Other long-term assets
|
121.3 | 115.4 | ||||||
Total assets
|
$ | 3,501.3 | $ | 3,393.8 | ||||
|
||||||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 326.4 | $ | 254.2 | ||||
Accrued liabilities
|
319.4 | 335.8 | ||||||
Liabilities from risk management activities
|
56.9 | 34.2 | ||||||
Total current liabilities
|
702.7 | 624.2 | ||||||
Long-term debt
|
1,265.8 | 1,534.7 | ||||||
Long-term liabilities from risk management activities
|
44.5 | 32.8 | ||||||
Deferred income taxes
|
119.9 | 111.6 | ||||||
Other long-term liabilities
|
64.4 | 54.4 | ||||||
|
||||||||
Commitments and contingencies (see Note 12)
|
||||||||
|
||||||||
Owners' equity:
|
||||||||
Targa Resources Corp. stockholders' equity:
|
||||||||
Common stock ($0.001 par value, 300.0 million shares authorized, 42.4 million and 42.3 million shares issued and outstanding as of June 30, 2011 and December 31, 2010)
|
- | - | ||||||
Preferred stock ($0.001 par value, 100.0 million shares authorized, no shares issued and outstanding as of June 30, 2011 and December 31, 2010)
|
- | - | ||||||
Additional paid-in capital
|
257.2 | 244.5 | ||||||
Accumulated deficit
|
(83.5 | ) | (100.8 | ) | ||||
Accumulated other comprehensive income (loss)
|
(4.2 | ) | 0.6 | |||||
Total Targa Resources Corp. stockholders' equity
|
169.5 | 144.3 | ||||||
Noncontrolling interests in subsidiaries
|
1,134.5 | 891.8 | ||||||
Total owners' equity
|
1,304.0 | 1,036.1 | ||||||
Total liabilities and owners' equity
|
$ | 3,501.3 | $ | 3,393.8 | ||||
|
||||||||
See notes to consolidated financial statements
|
TARGA RESOURCES CORP.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
|
|
|
||||||||||||||
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
(In millions, except per share amounts)
|
|||||||||||||||
Revenues
|
$ | 1,727.7 | $ | 1,240.1 | $ | 3,345.8 | $ | 2,723.7 | ||||||||
Costs and expenses:
|
||||||||||||||||
Product purchases
|
1,477.2 | 1,057.9 | 2,877.8 | 2,355.6 | ||||||||||||
Operating expenses
|
71.6 | 61.9 | 137.6 | 124.2 | ||||||||||||
Depreciation and amortization expenses
|
45.3 | 43.9 | 88.7 | 86.7 | ||||||||||||
General and administrative expenses
|
35.1 | 28.0 | 69.7 | 54.0 | ||||||||||||
|
1,629.2 | 1,191.7 | 3,173.8 | 2,620.5 | ||||||||||||
Income from operations
|
98.5 | 48.4 | 172.0 | 103.2 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest expense, net
|
(28.0 | ) | (26.4 | ) | (56.5 | ) | (53.9 | ) | ||||||||
Equity in earnings of unconsolidated investment
|
1.3 | 2.4 | 3.0 | 2.7 | ||||||||||||
Gain (loss) on debt repurchases (see Note 5)
|
- | - | - | (17.4 | ) | |||||||||||
Gain (loss) on early debt extinguishment, net (see Note 5)
|
- | (10.2 | ) | - | 18.7 | |||||||||||
Gain (loss) on mark-to-market derivative instruments
|
(3.2 | ) | - | (3.2 | ) | (0.3 | ) | |||||||||
Other income (expense), net
|
- | 0.1 | (0.1 | ) | 0.2 | |||||||||||
Income before income taxes
|
68.6 | 14.3 | 115.2 | 53.2 | ||||||||||||
Income tax benefit (expense):
|
||||||||||||||||
Current
|
(4.6 | ) | (0.9 | ) | (10.1 | ) | (1.7 | ) | ||||||||
Deferred
|
(0.7 | ) | (6.0 | ) | (1.0 | ) | (8.2 | ) | ||||||||
|
(5.3 | ) | (6.9 | ) | (11.1 | ) | (9.9 | ) | ||||||||
Net income
|
63.3 | 7.4 | 104.1 | 43.3 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
52.8 | 19.0 | 86.8 | 33.0 | ||||||||||||
Net income (loss) attributable to Targa Resources Corp.
|
10.5 | (11.6 | ) | 17.3 | 10.3 | |||||||||||
Dividends on Series B preferred stock
|
- | (2.4 | ) | - | (7.0 | ) | ||||||||||
Dividends on common equivalents
|
- | (177.8 | ) | - | (177.8 | ) | ||||||||||
Net income (loss) available to common shareholders
|
$ | 10.5 | $ | (191.8 | ) | $ | 17.3 | $ | (174.5 | ) | ||||||
|
||||||||||||||||
Net income (loss) available per common share - basic
|
$ | 0.26 | $ | (48.10 | ) | $ | 0.42 | $ | (21.36 | ) | ||||||
Net income (loss) available per common share - diluted
|
$ | 0.25 | $ | (48.10 | ) | $ | 0.42 | $ | (21.36 | ) | ||||||
Weighted average shares outstanding - basic
|
41.0 | 4.0 | 41.0 | 8.2 | ||||||||||||
Weighted average shares outstanding - diluted
|
41.4 | 4.0 | 41.3 | 8.2 | ||||||||||||
|
||||||||||||||||
See notes to consolidated financial statements
|
TARGA RESOURCES CORP.
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||||||
|
|
|
||||||||||||||
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
(In millions)
|
|||||||||||||||
Net income (loss) attributable to Targa Resources Corp.
|
$ | 10.5 | $ | (11.6 | ) | $ | 17.3 | $ | 10.3 | |||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||
Change in fair value
|
0.3 | 9.7 | (9.0 | ) | 45.2 | |||||||||||
Settlements reclassified to revenues
|
- | (2.8 | ) | 0.1 | (0.1 | ) | ||||||||||
Interest rate swaps:
|
||||||||||||||||
Change in fair value
|
(0.4 | ) | (0.1 | ) | (0.1 | ) | (1.9 | ) | ||||||||
Settlements reclassified to interest expense, net
|
0.4 | 0.6 | 0.8 | 1.1 | ||||||||||||
Related income taxes
|
(0.1 | ) | (3.9 | ) | 3.3 | (18.1 | ) | |||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
0.2 | 3.5 | (4.9 | ) | 26.2 | |||||||||||
Comprehensive income (loss) attributable to Targa Resources Corp.
|
10.7 | (8.1 | ) | 12.4 | 36.5 | |||||||||||
|
||||||||||||||||
Net income attributable to noncontrolling interests
|
52.8 | 19.0 | 86.8 | 33.0 | ||||||||||||
Other comprehensive income (loss) attributable to noncontrolling interests
|
||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||
Change in fair value
|
4.1 | 22.6 | (47.9 | ) | 45.0 | |||||||||||
Settlements reclassified to revenues
|
9.7 | (2.7 | ) | 13.6 | (0.6 | ) | ||||||||||
Interest rate swaps:
|
||||||||||||||||
Change in fair value
|
(1.8 | ) | (10.0 | ) | (1.8 | ) | (14.9 | ) | ||||||||
Settlements reclassified to interest expense, net
|
1.8 | 2.8 | 3.8 | 3.9 | ||||||||||||
Other comprehensive income (loss) attributable to noncontrolling interests
|
13.8 | 12.7 | (32.3 | ) | 33.4 | |||||||||||
Comprehensive income (loss) attributable to noncontrolling interests
|
66.6 | 31.7 | 54.5 | 66.4 | ||||||||||||
|
||||||||||||||||
Total comprehensive income (loss)
|
$ | 77.3 | $ | 23.6 | $ | 66.9 | $ | 102.9 | ||||||||
|
||||||||||||||||
See notes to consolidated financial statements
|
TARGA RESOURCES CORP.
|
|||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF CHANGES IN OWNERS' EQUITY
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
Accumulated
|
|
|
||||||||||||||||||||
|
|
|
Additional
|
|
Other
|
Non
|
|
||||||||||||||||||||
|
Common Stock
|
Paid in
|
Accumulated
|
Comprehensive
|
Controlling
|
|
|||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit
|
Income (Loss)
|
Interests
|
Total
|
||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||
|
(In millions, except shares in thousands)
|
||||||||||||||||||||||||||
Balance, December 31, 2010
|
42,292 | $ | - | $ | 244.5 | $ | (100.8 | ) | $ | 0.6 | $ | 891.8 | $ | 1,036.1 | |||||||||||||
Compensation on equity grants
|
58 | - | 7.7 | - | - | - | 7.7 | ||||||||||||||||||||
Sale of limited partner interests in the Partnership
|
- | - | - | - | - | 298.0 | 298.0 | ||||||||||||||||||||
Impact of equity transactions of the Partnership
|
- | - | 19.1 | - | - | (19.1 | ) | - | |||||||||||||||||||
Dividends
|
- | - | (14.1 | ) | - | - | - | (14.1 | ) | ||||||||||||||||||
Distributions to noncontrolling interests
|
- | - | - | - | - | (92.3 | ) | (92.3 | ) | ||||||||||||||||||
Contributions from noncontrolling interests
|
- | - | - | - | - | 1.6 | 1.6 | ||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | (4.8 | ) | (32.3 | ) | (37.1 | ) | |||||||||||||||||
Net income
|
- | - | - | 17.3 | - | 86.8 | 104.1 | ||||||||||||||||||||
Balance, June 30, 2011
|
42,350 | $ | - | $ | 257.2 | $ | (83.5 | ) | $ | (4.2 | ) | $ | 1,134.5 | $ | 1,304.0 | ||||||||||||
|
|||||||||||||||||||||||||||
See notes to consolidated financial statements
|
TARGA RESOURCES CORP.
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
|
|
|
||||||
|
Six Months Ended June 30,
|
|||||||
|
2011
|
2010
|
||||||
|
(Unaudited)
|
|||||||
Cash flows from operating activities
|
(In millions)
|
|||||||
Net income
|
$ | 104.1 | $ | 43.3 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Amortization in interest expense
|
5.9 | 4.7 | ||||||
Paid-in-kind interest expense
|
- | 6.0 | ||||||
Compensation on equity grants
|
7.7 | 0.4 | ||||||
Depreciation and amortization expense
|
88.7 | 86.7 | ||||||
Accretion of asset retirement obligations
|
1.8 | 1.6 | ||||||
Deferred income tax expense
|
1.0 | 8.2 | ||||||
Equity in earnings (losses) of unconsolidated investment, net of distributions
|
- | (0.6 | ) | |||||
Risk management activities
|
1.2 | 14.4 | ||||||
(Gain) loss on debt repurchases
|
- | 17.4 | ||||||
(Gain) loss on early debt extinguishment
|
- | (18.7 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Receivables and other assets
|
(33.2 | ) | 34.2 | |||||
Inventory
|
(17.4 | ) | (10.4 | ) | ||||
Accounts payable and other liabilities
|
61.7 | (37.8 | ) | |||||
Net cash provided by (used in) operating activities
|
221.5 | 149.4 | ||||||
Cash flows from investing activities
|
||||||||
Outlays for property, plant and equipment
|
(138.2 | ) | (46.9 | ) | ||||
Business acquisition
|
(29.0 | ) | - | |||||
Investment in unconsolidated affiliate
|
(6.0 | ) | - | |||||
Unconsolidated affiliate distributions in excess of accumulated earnings
|
0.6 | - | ||||||
Proceeds from sales of assets
|
- | 0.2 | ||||||
Other
|
- | 1.9 | ||||||
Net cash provided by (used in) investing activities
|
(172.6 | ) | (44.8 | ) | ||||
Cash flows from financing activities
|
||||||||
Loan Facilities of the Partnership:
|
||||||||
Borrowings
|
611.0 | 635.8 | ||||||
Repayments
|
(1,178.3 | ) | (385.2 | ) | ||||
Proceeds from issuance of senior notes
|
325.0 | - | ||||||
Cash paid on note exchange
|
(27.7 | ) | - | |||||
Loan Facilities- Non-Partnership:
|
||||||||
Borrowings
|
- | 495.0 | ||||||
Repayments
|
- | (713.9 | ) | |||||
Contributions from noncontrolling interests
|
1.6 | - | ||||||
Distributions to noncontrolling interests
|
(92.3 | ) | (65.3 | ) | ||||
Proceeds from sale of Partnership interests
|
- | 224.7 | ||||||
Partnership equity transactions
|
298.0 | 139.7 | ||||||
Repurchases of common stock
|
- | (0.1 | ) | |||||
Stock options exercised
|
- | 0.9 | ||||||
Dividends to common and common equivalent shareholders
|
(13.7 | ) | (200.0 | ) | ||||
Dividends to preferred shareholders
|
- | (219.9 | ) | |||||
Costs incurred in connection with financing arrangements
|
(6.2 | ) | (19.3 | ) | ||||
Net cash provided by (used in) financing activities
|
(82.6 | ) | (107.6 | ) | ||||
Net change in cash and cash equivalents
|
(33.7 | ) | (3.0 | ) | ||||
Cash and cash equivalents, beginning of period
|
188.4 | 252.4 | ||||||
Cash and cash equivalents, end of period
|
$ | 154.7 | $ | 249.4 | ||||
|
||||||||
See notes to consolidated financial statements
|
·
|
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
|
·
|
11,645,659 common units of the Partnership, representing a 13.7% limited partnership interest.
|
|
June 30, 2011
|
December 31, 2010
|
|
|||||||||||||||||||
|
Targa
|
|
Targa
|
|
|
Targa
|
Estimated
|
|||||||||||||||
|
Resources
|
TRC
|
Resources
|
Targa
|
TRC
|
Resources
|
Useful
|
|||||||||||||||
|
Partners
|
Non-
|
Corp.
|
Resources
|
Non-
|
Corp.
|
Lives
|
|||||||||||||||
|
LP
|
Partnership
|
Consolidated
|
Partners LP
|
Partnership
|
Consolidated
|
(In Years)
|
|||||||||||||||
Natural gas gathering systems
|
$ | 1,678.0 | $ | - | $ | 1,678.0 | $ | 1,630.9 | $ | - | $ | 1,630.9 |
5 to 20
|
|||||||||
Processing and fractionation facilities
|
1,037.6 | 6.6 | 1,044.2 | 961.9 | 6.6 | 968.5 |
5 to 25
|
|||||||||||||||
Terminaling and storage facilities (1)
|
272.2 | - | 272.2 | 244.7 | - | 244.7 |
5 to 25
|
|||||||||||||||
Transportation assets
|
277.2 | - | 277.2 | 275.6 | - | 275.6 |
10 to 25
|
|||||||||||||||
Other property, plant and equipment
|
50.9 | 22.7 | 73.6 | 46.8 | 22.6 | 69.4 |
3 to 25
|
|||||||||||||||
Land
|
53.2 | - | 53.2 | 51.2 | - | 51.2 | - | |||||||||||||||
Construction in progress
|
96.1 | 3.8 | 99.9 | 88.4 | 2.7 | 91.1 | - | |||||||||||||||
|
$ | 3,465.2 | $ | 33.1 | $ | 3,498.3 | $ | 3,299.5 | $ | 31.9 | $ | 3,331.4 |
(1)
|
Includes the March 2011 acquisition of a refined petroleum products and crude oil storage facility, for which the Partnership paid $29.0 million.
|
|
June 30,
|
December 31,
|
||||||
|
2011
|
2010
|
||||||
Long-term debt:
|
|
|
||||||
Non-Partnership obligations:
|
|
|
||||||
TRC Holdco loan facility, variable rate, due February 2015
|
$ | 89.3 | $ | 89.3 | ||||
TRI Senior secured revolving credit facility, variable rate, due July 2014 (1)
|
- | - | ||||||
Obligations of the Partnership: (2)
|
||||||||
Senior secured revolving credit facility, variable rate, due July 2015 (3)
|
198.0 | 765.3 | ||||||
Senior unsecured notes, 8¼% fixed rate, due July 2016
|
209.1 | 209.1 | ||||||
Senior unsecured notes, 11¼% fixed rate, due July 2017
|
72.7 | 231.3 | ||||||
Unamortized discounts
|
(3.1 | ) | (10.3 | ) | ||||
Senior unsecured notes, 7⅞% fixed rate, due October 2018
|
250.0 | 250.0 | ||||||
Senior unsecured notes, 6⅞% fixed rate, due February 2021
|
483.6 | - | ||||||
Unamortized discounts
|
(33.8 | ) | - | |||||
Total long-term debt
|
$ | 1,265.8 | $ | 1,534.7 | ||||
Irrevocable standby letters of credit:
|
||||||||
Letters of credit outstanding under TRI's Senior secured credit facility (1)
|
$ | - | $ | - | ||||
Letters of credit outstanding under the Partnership's Senior secured revolving credit facility (3)
|
86.3 | 101.3 | ||||||
|
$ | 86.3 | $ | 101.3 |
(1)
|
As of June 30, 2011, the entire amount of TRI’s $75.0 million credit facility was available for letters of credit and includes a limited borrowing capacity for borrowings on same-day notice referred to as swing line loans. Our available capacity under this facility was $75.0 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 June 30, 2011, availability under the Partnership’s $1.1 billion senior secured revolving credit facility was $815.7 million.
|
|
|
Range of Interest
|
|
Weighted Average
|
|
|
Rates Paid
|
|
Interest Rate Paid
|
Holdco loan facility of Targa
|
3.2% - 3.3%
|
|
3.3%
|
|
Senior secured term loan facility of TRI, due 2014
|
N/A
|
|
N/A
|
|
Senior secured revolving credit facility of the Partnership
|
2.4% - 5.8%
|
|
2.9%
|
1)
|
at least 65% of the aggregate principal amount of the 6⅞% Notes (excluding 6⅞% Notes held by the Partnership) remains outstanding immediately after the occurrence of such redemption; and
|
2)
|
the redemption occurs within 90 days of the date of the closing of such equity offering.
|
Year
|
Percentage
|
|
2016
|
103.44%
|
|
2017
|
102.29%
|
|
2018
|
101.15%
|
|
2019 and thereafter
|
100.00%
|
|
|
Distributions (1)
|
|
|
|||||||||||||||||
|
For the Three
|
Limited Partners
|
General Partner
|
|
Distributions to Targa Resources
|
Distributions per limited
|
|||||||||||||||
Date Paid
|
Months Ended
|
Common
|
Incentive
|
2% |
Total
|
Corp.
|
partner unit
|
||||||||||||||
|
|
(In millions, except per unit amounts)
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||
May 13, 2011
|
March 31, 2011
|
$ | 47.3 | $ | 6.8 | $ | 1.1 | $ | 55.2 | $ | 14.4 | $ | 0.5575 | ||||||||
February 14, 2011
|
December 31, 2010
|
46.4 | 6.0 | 1.1 | 53.5 | 13.5 | 0.5475 | ||||||||||||||
August 13, 2010
|
June 30, 2010
|
35.9 | 3.5 | 0.8 | 40.2 | 10.4 | 0.5275 | ||||||||||||||
May 14, 2010
|
March 31, 2010
|
35.2 | 2.8 | 0.8 | 38.8 | 9.6 | 0.5175 | ||||||||||||||
February 12, 2010
|
December 31, 2009
|
35.2 | 2.8 | 0.8 | 38.8 | 14.0 | 0.5175 |
(1)
|
On July 11, 2011, the Partnership announced a cash distribution of $0.57 per common unit on its outstanding common units for the three months ended June 30, 2011, to be paid on August 12, 2011. The distribution to be paid is $41.7 million to the Partnership’s third-party limited partners, and $6.6 million, $7.8 million and $1.2 million to Targa for its ownership of common units, incentive distribution rights and its 2% general partner interest in the Partnership.
|
Date Paid
|
For the Three Months Ended
|
Total Dividend Declared
|
Amount of Dividend Paid
|
Accrued Dividends (1)
|
Dividend Declared per Share of Common Stock (2)
|
|
||||||||||
(In millions, except per share amounts)
|
|
|||||||||||||||
May 13, 2011
|
March 31, 2011
|
$ | 11.5 | $ | 11.2 | $ | 0.3 | $ | 0.2725 |
|
||||||
February 14, 2011
|
December 31, 2010
|
2.6 | 2.5 | 0.1 | 0.0616 | (3) |
(1)
|
Represents accrued dividends on the 2011 Long Term Incentive Plan, to be paid August 2014.
|
(2)
|
On July 11, 2011, we announced a quarterly dividend of $0.29 per share of our common stock on our outstanding common stock for the three months ended June 30, 2011, to be paid on August 16, 2011.
|
(3)
|
Represents a prorated dividend for the portion of the fourth quarter of 2010 that the Company was public.
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||
Net income
|
$ | 63.3 | $ | 7.4 | $ | 104.1 | $ | 43.3 | |||||
Less: Net income attributable to noncontrolling interest
|
52.8 | 19.0 | 86.8 | 33.0 | |||||||||
Net income attributable to Targa Resources Corp.
|
10.5 | (11.6 | ) | 17.3 | 10.3 | ||||||||
Dividends on Series B preferred stock
|
- | (2.4 | ) | - | (7.0 | ) | |||||||
Distributions to common equivalents
|
- | (177.8 | ) | - | (177.8 | ) | |||||||
Net income attributable to common shareholders
|
$ | 10.5 | $ | (191.8 | ) | $ | 17.3 | $ | (174.5 | ) | |||
|
|||||||||||||
Weighted average shares outstanding - basic
|
41.0 | 4.0 | 41.0 | 8.2 | |||||||||
|
|||||||||||||
Net income (loss) available per common share - basic
|
$ | 0.26 | $ | (48.10 | ) | $ | 0.42 | $ | (21.36 | ) | |||
|
|||||||||||||
Weighted average shares outstanding
|
41.0 | 4.0 | 41.0 | 8.2 | |||||||||
Dilutive effect of unvested stock awards
|
0.4 | - | 0.3 | - | |||||||||
Weighted average shares outstanding - diluted
|
41.4 | 4.0 | 41.3 | 8.2 | |||||||||
|
|||||||||||||
Net income (loss) available per common share - diluted
|
$ | 0.25 | $ | (48.10 | ) | $ | 0.42 | $ | (21.36 | ) |
Commodity
|
|
Instrument
|
|
Unit
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
Natural Gas
|
|
Swaps
|
|
MMBtu/d
|
|
38,470
|
|
31,790
|
|
17,089
|
|
-
|
NGL
|
|
Swaps
|
|
Bbl/d
|
|
10,118
|
|
9,361
|
|
4,150
|
|
-
|
NGL
|
|
Floors
|
|
Bbl/d
|
|
253
|
|
294
|
|
-
|
|
-
|
Condensate
|
|
Swaps
|
|
Bbl/d
|
|
1,730
|
|
1,660
|
|
1,795
|
|
700
|
Period
|
Fixed Rate
|
Notional Amount
|
Fair Value
|
|||||||||
Remainder of 2011
|
3.52% | $ | 300 | $ | (5.0 | ) | ||||||
2012
|
3.40% | 300 | (7.1 | ) | ||||||||
2013
|
3.39% | 300 | (6.3 | ) | ||||||||
1/1/2014 - 4/24/2014
|
3.39% | 300 | (1.9 | ) | ||||||||
|
$ | (20.3 | ) |
|
Derivative Assets
|
Derivative Liabilities
|
|||||||||||||||||
Balance | Fair Value as of |
Balance
|
Fair Value as of
|
||||||||||||||||
Sheet |
June 30,
|
December 31,
|
Sheet
|
June 30,
|
December 31,
|
||||||||||||||
Location |
2011
|
2010
|
Location
|
2011
|
2010
|
||||||||||||||
Designated as hedging instruments
|
|
|
|
|
|
||||||||||||||
Commodity contracts
|
Current assets | $ | 22.1 | $ | 24.8 |
Current liabilities
|
$ | 48.4 | $ | 25.5 | |||||||||
Long-term assets | 12.8 | 18.9 |
Long-term liabilities
|
32.0 | 20.5 | ||||||||||||||
Interest rate contracts
|
Current assets | - | - |
Current liabilities
|
4.8 | 7.8 | |||||||||||||
Long-term assets | - | - |
Long-term liabilities
|
7.5 | 12.3 | ||||||||||||||
Total designated as hedging instruments
|
$ | 34.9 | $ | 43.7 |
|
$ | 92.7 | $ | 66.1 | ||||||||||
|
|
||||||||||||||||||
Not designated as hedging instruments
|
|
||||||||||||||||||
Commodity contracts
|
Current assets | $ | 0.4 | $ | 0.4 |
Current liabilities
|
$ | 0.7 | $ | 0.9 | |||||||||
Long-term assets | 0.4 | - |
Long-term liabilities
|
- | - | ||||||||||||||
Interest rate contracts
|
Current assets | - | - |
Current liabilities
|
3.0 | - | |||||||||||||
Long-term assets | - | - |
Long-term liabilities
|
5.0 | - | ||||||||||||||
Total not designated as hedging instruments
|
$ | 0.8 | $ | 0.4 |
|
$ | 8.7 | $ | 0.9 | ||||||||||
Total derivatives
|
$ | 35.7 | $ | 44.1 |
|
$ | 101.4 | $ | 67.0 |
|
Gain (Loss)
|
||||||||||||
|
Recognized in OCI on
|
||||||||||||
Derivatives in
|
Derivatives (Effective Portion)
|
||||||||||||
Cash Flow Hedging
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||
Relationships
|
2011
|
2010
|
2011
|
2010
|
|||||||||
Interest rate contracts
|
$ | (2.2 | ) | $ | (10.1 | ) | $ | (1.9 | ) | $ | (16.8 | ) | |
Commodity contracts
|
4.4 | 32.3 | (56.9 | ) | 90.2 | ||||||||
|
$ | 2.2 | $ | 22.2 | $ | (58.8 | ) | $ | 73.4 | ||||
|
|||||||||||||
|
Gain (Loss)
|
||||||||||||
|
Reclassified from OCI into
|
||||||||||||
|
Income (Effective Portion)
|
||||||||||||
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||
Location of Loss
|
2011 | 2010 | 2011 | 2010 | |||||||||
Interest expense, net
|
$ | (2.2 | ) | $ | (3.4 | ) | $ | (4.6 | ) | $ | (5.0 | ) | |
Revenues
|
(9.7 | ) | 5.5 | (13.7 | ) | 0.7 | |||||||
|
$ | (11.9 | ) | $ | 2.1 | $ | (18.3 | ) | $ | (4.3 | ) |
|
June 30,
|
December 31,
|
||||||
|
2011
|
2010
|
||||||
Unrealized gain (loss) on commodity hedges, before tax
|
$ | (4.4 | ) | $ | 4.5 | |||
Unrealized gain (loss) on commodity hedges, net of tax
|
(2.6 | ) | 2.7 | |||||
Unrealized gain (loss) on interest rate swaps, before tax
|
(2.7 | ) | (3.4 | ) | ||||
Unrealized gain (loss) on interest rate swaps, net of tax
|
(1.6 | ) | (2.1 | ) |
•
|
Level 1 – observable inputs such as quoted prices in active markets;
|
•
|
Level 2 – inputs other than quoted prices in active markets that are either directly or indirectly observable; and
|
•
|
Level 3 – unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
|
|
June 30, 2011
|
||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Assets from commodity derivative contracts
|
$ | 35.7 | $ | - | $ | 35.7 | $ | - | |||||
Total assets
|
$ | 35.7 | $ | - | $ | 35.7 | $ | - | |||||
Liabilities from commodity derivative contracts
|
$ | 81.1 | $ | - | $ | 80.2 | $ | 0.9 | |||||
Liabilities from interest rate derivatives
|
20.3 | - | 20.3 | - | |||||||||
Total liabilities
|
$ | 101.4 | $ | - | $ | 100.5 | $ | 0.9 | |||||
|
|||||||||||||
|
December 31, 2010
|
||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Assets from commodity derivative contracts
|
$ | 44.1 | $ | - | $ | 43.9 | $ | 0.2 | |||||
Total assets
|
$ | 44.1 | $ | - | $ | 43.9 | $ | 0.2 | |||||
Liabilities from commodity derivative contracts
|
$ | 46.9 | $ | - | $ | 35.1 | $ | 11.8 | |||||
Liabilities from interest rate derivatives
|
20.1 | - | 20.1 | - | |||||||||
Total liabilities
|
$ | 67.0 | $ | - | $ | 55.2 | $ | 11.8 |
|
Commodity Derivative Contracts
|
||
Balance, December 31, 2010
|
$ | (11.6 | ) |
Unrealized losses included in OCI
|
(0.4 | ) | |
Settlements included in Net Income
|
3.7 | ||
Transfers out of Level 3
|
7.4 | ||
Balance, June 30, 2011
|
$ | (0.9 | ) |
|
June 30, 2011
|
December 31, 2010
|
|||||||||||
|
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||
|
Amount
|
Value
|
Amount
|
Value
|
|||||||||
Holdco loan facility (1)
|
$ | 89.3 | $ | 87.5 | $ | 89.3 | $ | 86.8 | |||||
Senior unsecured notes of the Partnership, 8¼% fixed rate
|
209.1 | 223.9 | 209.1 | 219.4 | |||||||||
Senior unsecured notes of the Partnership, 11¼% fixed rate
|
69.6 | 84.8 | 221.0 | 253.2 | |||||||||
Senior unsecured notes of the Partnership, 7⅞% fixed rate
|
250.0 | 261.7 | 250.0 | 259.7 | |||||||||
Senior unsecured notes of the Partnership, 6⅞% fixed rate
|
449.8 | 473.9 | N/A | N/A |
(1)
|
The Holdco Loan is not widely held, and we are not able to obtain an indicative quote from external sources. The December 31, 2010 fair value was based on the November 2010 repurchases. The June 30, 2011 fair value is based on management’s consideration of changes in settlement value given the trades that took place in November 2010.
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||
|
June 30,
|
June 30,
|
||||||||||||
|
2011
|
2010
|
2011
|
2010
|
||||||||||
Interest paid
|
$ | 17.6 | $ | 10.2 | $ | 46.8 | $ | 48.0 | ||||||
Taxes paid
|
5.2 | 4.0 | 34.1 | 4.1 | ||||||||||
Non-cash adjustment to line-fill
|
- | 0.5 | (2.1 | ) | 0.5 |
|
Three Months Ended June 30, 2011
|
||||||||||||||||||||||||
|
Partnership
|
|
|
||||||||||||||||||||||
|
Field
|
Coastal
|
|
|
|
|
|
|
|||||||||||||||||
|
Gathering
|
Gathering
|
|
Marketing
|
|
Corporate
|
|
|
|||||||||||||||||
|
and
|
and
|
Logistics
|
and
|
|
and
|
TRC Non-
|
|
|||||||||||||||||
|
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Partnership
|
Consolidated
|
|||||||||||||||||
Revenues
|
$ | 58.2 | $ | 94.3 | $ | 33.1 | $ | 1,552.9 | $ | (13.2 | ) | $ | 0.1 | $ | 2.3 | $ | 1,727.7 | ||||||||
Intersegment revenues
|
367.2 | 244.9 | 24.7 | 171.9 | - | (808.7 | ) | - | - | ||||||||||||||||
Revenues
|
$ | 425.4 | $ | 339.2 | $ | 57.8 | $ | 1,724.8 | $ | (13.2 | ) | $ | (808.6 | ) | $ | 2.3 | $ | 1,727.7 | |||||||
Operating margin
|
$ | 80.2 | $ | 45.7 | $ | 33.4 | $ | 30.5 | $ | (13.2 | ) | $ | - | $ | 2.3 | $ | 178.9 | ||||||||
Other financial information:
|
|||||||||||||||||||||||||
Total assets
|
$ | 1,650.4 | $ | 430.5 | $ | 546.9 | $ | 573.1 | $ | 35.7 | $ | 91.8 | $ | 172.9 | $ | 3,501.3 | |||||||||
Capital expenditures
|
$ | 40.0 | $ | 4.2 | $ | 42.5 | $ | 0.8 | $ | - | $ | 0.5 | $ | 0.7 | $ | 88.7 |
|
Three Months Ended June 30, 2010
|
||||||||||||||||||||||||
|
Partnership
|
|
|
||||||||||||||||||||||
|
Field
|
Coastal
|
|
|
|
|
|
|
|||||||||||||||||
|
Gathering
|
Gathering
|
|
Marketing
|
|
Corporate
|
|
|
|||||||||||||||||
|
and
|
and
|
Logistics
|
and
|
|
and
|
TRC Non-
|
|
|||||||||||||||||
|
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Partnership
|
Consolidated
|
|||||||||||||||||
Revenues
|
$ | 57.5 | $ | 103.2 | $ | 19.9 | $ | 1,054.4 | $ | 2.7 | $ | (0.1 | ) | $ | 2.5 | $ | 1,240.1 | ||||||||
Intersegment revenues
|
247.8 | 199.0 | 20.9 | 128.1 | - | (595.8 | ) | - | - | ||||||||||||||||
Revenues
|
$ | 305.3 | $ | 302.2 | $ | 40.8 | $ | 1,182.5 | $ | 2.7 | $ | (595.9 | ) | $ | 2.5 | $ | 1,240.1 | ||||||||
Operating margin
|
$ | 59.4 | $ | 23.7 | $ | 18.0 | $ | 14.1 | $ | 2.7 | $ | (0.1 | ) | $ | 2.5 | $ | 120.3 | ||||||||
Other financial information:
|
|||||||||||||||||||||||||
Total assets
|
$ | 1,653.2 | $ | 462.5 | $ | 422.1 | $ | 392.9 | $ | 70.0 | $ | 64.1 | $ | 256.6 | $ | 3,321.4 | |||||||||
Capital expenditures
|
$ | 14.8 | $ | 1.4 | $ | 10.6 | $ | 0.7 | $ | - | $ | - | $ | 0.5 | $ | 28.0 |
|
Six Months Ended June 30, 2011
|
||||||||||||||||||||||||
|
Partnership
|
|
|
||||||||||||||||||||||
|
Field
|
Coastal
|
|