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 R
|
Accelerated filer £
|
Non-accelerated filer £
|
Smaller reporting company £
|
4
|
||
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
7
|
|
|
|
|
|
8
|
|
|
|
|
|
9
|
|
|
|
|
|
10
|
|
|
|
|
28
|
||
|
|
|
55
|
||
|
|
|
58
|
||
|
|
|
PART II—OTHER INFORMATION
|
||
|
|
|
59
|
||
|
|
|
59
|
||
|
|
|
59
|
||
|
|
|
59
|
||
|
|
|
59
|
||
|
|
|
59
|
||
|
|
|
60
|
||
|
|
|
SIGNATURES
|
||
|
|
|
62
|
· | 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 of 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.” of this Quarterly Report, our Annual Report on Form 10-K for the year ended December 31, 2012 (“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)
|
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
|
|
September 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
(Unaudited)
|
|||||||
|
(In millions)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
83.7
|
$
|
76.3
|
||||
Trade receivables, net of allowances of $0.9 million and $0.9 million
|
498.5
|
514.9
|
||||||
Inventories
|
201.7
|
99.4
|
||||||
Assets from risk management activities
|
10.9
|
29.3
|
||||||
Other current assets
|
14.2
|
13.4
|
||||||
Total current assets
|
809.0
|
733.3
|
||||||
Property, plant and equipment
|
5,454.0
|
4,708.0
|
||||||
Accumulated depreciation
|
(1,344.6
|
)
|
(1,170.0
|
)
|
||||
Property, plant and equipment, net
|
4,109.4
|
3,538.0
|
||||||
Other intangible assets, net
|
660.3
|
680.8
|
||||||
Long-term assets from risk management activities
|
3.9
|
5.1
|
||||||
Investment in unconsolidated affiliate
|
51.2
|
53.1
|
||||||
Other long-term assets
|
91.5
|
94.7
|
||||||
Total assets
|
$
|
5,725.3
|
$
|
5,105.0
|
||||
|
||||||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
679.6
|
$
|
679.0
|
||||
Deferred income taxes
|
2.0
|
0.2
|
||||||
Liabilities from risk management activities
|
5.5
|
7.4
|
||||||
Total current liabilities
|
687.1
|
686.6
|
||||||
Long-term debt
|
2,867.9
|
2,475.3
|
||||||
Long-term liabilities from risk management activities
|
1.6
|
4.8
|
||||||
Deferred income taxes
|
136.1
|
131.2
|
||||||
Other long-term liabilities
|
58.0
|
53.7
|
||||||
|
||||||||
Commitments and contingencies (see Note 14)
|
||||||||
|
||||||||
Owners' equity:
|
||||||||
Targa Resources Corp. stockholders' equity:
|
||||||||
Common stock ($0.001 par value, 300,000,000 shares authorized, 42,529,218 shares issued and 42,331,487 shares outstanding as of September 30, 2013, and 42,492,233shares issued and 42,294,502 shares outstanding as of December 31, 2012)
|
-
|
-
|
||||||
Preferred stock ($0.001 par value, 100,000,000 shares authorized, no shares issued and outstanding as of September 30, 2013 and December 31, 2012)
|
-
|
-
|
||||||
Additional paid-in capital
|
147.6
|
184.4
|
||||||
Retained earnings (accumulated deficit)
|
12.6
|
(32.0
|
)
|
|||||
Accumulated other comprehensive income
|
0.3
|
1.2
|
||||||
Treasury stock, at cost (197,731 shares as of September 30, 2013 and as of December 31, 2012)
|
(9.5
|
)
|
(9.5
|
)
|
||||
Total Targa Resources Corp. stockholders' equity
|
151.0
|
144.1
|
||||||
Noncontrolling interests in subsidiaries
|
1,823.6
|
1,609.3
|
||||||
Total owners' equity
|
1,974.6
|
1,753.4
|
||||||
Total liabilities and owners' equity
|
$
|
5,725.3
|
$
|
5,105.0
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
||||||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
(In millions, except per share amounts)
|
|||||||||||||||
Revenues
|
$
|
1,556.8
|
$
|
1,393.5
|
$
|
4,396.2
|
$
|
4,358.4
|
||||||||
Costs and expenses:
|
||||||||||||||||
Product purchases
|
1,259.8
|
1,153.0
|
3,573.8
|
3,611.8
|
||||||||||||
Operating expenses
|
97.6
|
78.3
|
279.8
|
227.2
|
||||||||||||
Depreciation and amortization expenses
|
69.0
|
48.6
|
198.7
|
144.3
|
||||||||||||
General and administrative expenses
|
37.7
|
35.7
|
112.5
|
106.5
|
||||||||||||
Other operating expense
|
4.2
|
18.9
|
8.3
|
18.8
|
||||||||||||
Income from operations
|
88.5
|
59.0
|
223.1
|
249.8
|
||||||||||||
Other income (expense):
|
||||||||||||||||
Interest expense, net
|
(33.4
|
)
|
(30.0
|
)
|
(97.9
|
)
|
(91.0
|
)
|
||||||||
Equity earnings (loss)
|
5.6
|
(2.2
|
)
|
10.1
|
(0.3
|
)
|
||||||||||
Loss on debt redemption
|
(7.4
|
)
|
-
|
(14.7
|
)
|
-
|
||||||||||
Other
|
9.1
|
(1.8
|
)
|
15.3
|
(2.1
|
)
|
||||||||||
Income before income taxes
|
62.4
|
25.0
|
135.9
|
156.4
|
||||||||||||
Income tax expense:
|
||||||||||||||||
Current
|
(6.6
|
)
|
(4.3
|
)
|
(23.3
|
)
|
(20.3
|
)
|
||||||||
Deferred
|
(6.4
|
)
|
(1.7
|
)
|
(7.0
|
)
|
(4.4
|
)
|
||||||||
|
(13.0
|
)
|
(6.0
|
)
|
(30.3
|
)
|
(24.7
|
)
|
||||||||
Net income
|
49.4
|
19.0
|
105.6
|
131.7
|
||||||||||||
Less: Net income attributable to noncontrolling interests
|
33.1
|
10.3
|
61.0
|
104.8
|
||||||||||||
Net income available to common shareholders
|
$
|
16.3
|
$
|
8.7
|
$
|
44.6
|
$
|
26.9
|
||||||||
|
||||||||||||||||
Net income available per common share - basic
|
$
|
0.39
|
$
|
0.21
|
$
|
1.07
|
$
|
0.66
|
||||||||
Net income available per common share - diluted
|
$
|
0.39
|
$
|
0.21
|
$
|
1.06
|
$
|
0.64
|
||||||||
Weighted average shares outstanding - basic
|
41.6
|
41.0
|
41.6
|
41.0
|
||||||||||||
Weighted average shares outstanding - diluted
|
42.1
|
41.9
|
42.1
|
41.8
|
|
Three Months Ended September 30,
|
|||||||||||||||||||||||
|
2013
|
2012
|
||||||||||||||||||||||
|
Pre-
Tax
|
Related Income Tax
|
After
Tax
|
Pre-
Tax
|
Related
Income Tax
|
After
Tax
|
||||||||||||||||||
|
||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Net income attributable to Targa Resources Corp.
|
$
|
16.3
|
$
|
8.7
|
||||||||||||||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
||||||||||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||||||||||
Change in fair value
|
$
|
(1.6
|
)
|
$
|
0.6
|
(1.0
|
)
|
$
|
(3.7
|
)
|
$
|
2.0
|
(1.7
|
)
|
||||||||||
Settlements reclassified to revenues
|
(0.6
|
)
|
0.2
|
(0.4
|
)
|
(3.0
|
)
|
1.6
|
(1.4
|
)
|
||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Settlements reclassified to interest expense, net
|
0.2
|
(0.1
|
)
|
0.1
|
0.3
|
(1.0
|
)
|
(0.7
|
)
|
|||||||||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
$
|
(2.0
|
)
|
$
|
0.7
|
(1.3
|
)
|
$
|
(6.4
|
)
|
$
|
2.6
|
(3.8
|
)
|
||||||||||
Comprehensive income (loss) attributable to Targa Resources Corp.
|
$
|
15.0
|
$
|
4.9
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Net income attributable to noncontrolling interests
|
$
|
33.1
|
$
|
10.3
|
||||||||||||||||||||
Other comprehensive income (loss) attributable to noncontrolling interests
|
||||||||||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||||||||||
Change in fair value
|
$
|
(9.7
|
)
|
$
|
-
|
(9.7
|
)
|
$
|
(18.9
|
)
|
$
|
(0.2
|
)
|
(19.1
|
)
|
|||||||||
Settlements reclassified to revenues
|
(3.9
|
)
|
-
|
(3.9
|
)
|
(12.4
|
)
|
(0.1
|
)
|
(12.5
|
)
|
|||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Settlements reclassified to interest expense, net
|
1.3
|
-
|
1.3
|
1.6
|
-
|
1.6
|
||||||||||||||||||
Other comprehensive income (loss) attributable to noncontrolling interests
|
$
|
(12.3
|
)
|
$
|
-
|
(12.3
|
)
|
$
|
(29.7
|
)
|
$
|
(0.3
|
)
|
(30.0
|
)
|
|||||||||
Comprehensive income (loss) attributable to noncontrolling interests
|
$
|
20.8
|
$
|
(19.7
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||
Total comprehensive income (loss)
|
$
|
35.8
|
$
|
(14.8
|
)
|
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
|
2013
|
2012
|
||||||||||||||||||||||
|
Pre-
Tax
|
Related
Income Tax
|
After
Tax
|
Pre-
Tax
|
Related
Income Tax
|
After
Tax
|
||||||||||||||||||
|
||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Net income attributable to Targa Resources Corp.
|
$
|
44.6
|
$
|
26.9
|
||||||||||||||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
||||||||||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||||||||||
Change in fair value
|
$
|
0.3
|
$
|
(0.1
|
)
|
0.2
|
$
|
11.5
|
$
|
(2.5
|
)
|
9.0
|
||||||||||||
Settlements reclassified to revenues
|
(2.3
|
)
|
0.9
|
(1.4
|
)
|
(6.6
|
)
|
1.4
|
(5.2
|
)
|
||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Settlements reclassified to interest expense, net
|
0.6
|
(0.3
|
)
|
0.3
|
1.0
|
(1.3
|
)
|
(0.3
|
)
|
|||||||||||||||
Other comprehensive income (loss) attributable to Targa Resources Corp.
|
$
|
(1.4
|
)
|
$
|
0.5
|
(0.9
|
)
|
$
|
5.9
|
$
|
(2.4
|
)
|
3.5
|
|||||||||||
Comprehensive income attributable to Targa Resources Corp.
|
$
|
43.7
|
$
|
30.4
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Net income attributable to noncontrolling interests
|
$
|
61.0
|
$
|
104.8
|
||||||||||||||||||||
Other comprehensive income (loss) attributable to noncontrolling interests
|
||||||||||||||||||||||||
Commodity hedging contracts:
|
||||||||||||||||||||||||
Change in fair value
|
$
|
2.1
|
$
|
-
|
2.1
|
$
|
59.4
|
$
|
-
|
59.4
|
||||||||||||||
Settlements reclassified to revenues
|
(14.7
|
)
|
-
|
(14.7
|
)
|
(25.1
|
)
|
-
|
(25.1
|
)
|
||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Settlements reclassified to interest expense, net
|
4.1
|
-
|
4.1
|
5.1
|
-
|
5.1
|
||||||||||||||||||
Other comprehensive income (loss) attributable to noncontrolling interests
|
$
|
(8.5
|
)
|
$
|
-
|
(8.5
|
)
|
$
|
39.4
|
$
|
-
|
39.4
|
||||||||||||
Comprehensive income attributable to noncontrolling interests
|
$
|
52.5
|
$
|
144.2
|
||||||||||||||||||||
|
||||||||||||||||||||||||
Total comprehensive income
|
$
|
96.2
|
$
|
174.6
|
|
Retained
|
Accumulated
|
||||||||||||||||||||||||||||||||||
|
Additional
|
Earnings
|
Other
|
|||||||||||||||||||||||||||||||||
|
Common Stock
|
Paid in
|
(Accumulated
|
Comprehensive
|
Treasury Shares
|
Noncontrolling
|
||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit)
|
Income (Loss)
|
Shares
|
Amount
|
Interests
|
Total
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||||||||||||||
|
(In millions, except shares in thousands)
|
|||||||||||||||||||||||||||||||||||
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
|
36
|
-
|
5.6
|
-
|
-
|
-
|
-
|
4.4
|
10.0
|
|||||||||||||||||||||||||||
Accrual of distribution equivalent rights
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1.1
|
)
|
(1.1
|
)
|
|||||||||||||||||||||||||
Sale of Partnership limited partner interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
377.4
|
377.4
|
|||||||||||||||||||||||||||
Receivables from unit offerings
|
-
|
-
|
(3.3
|
)
|
-
|
-
|
-
|
-
|
-
|
(3.3
|
)
|
|||||||||||||||||||||||||
Impact of Partnership equity transactions
|
-
|
-
|
23.8
|
-
|
-
|
-
|
-
|
(23.8
|
)
|
-
|
||||||||||||||||||||||||||
Dividends
|
-
|
-
|
(62.9
|
)
|
-
|
-
|
-
|
-
|
-
|
(62.9
|
)
|
|||||||||||||||||||||||||
Distributions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(195.1
|
)
|
(195.1
|
)
|
|||||||||||||||||||||||||
Other comprehensive income (loss)
|
-
|
-
|
-
|
-
|
(0.9
|
)
|
-
|
-
|
(8.5
|
)
|
(9.4
|
)
|
||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
44.6
|
-
|
-
|
-
|
61.0
|
105.6
|
|||||||||||||||||||||||||||
Balance, September 30, 2013
|
42,331
|
$
|
-
|
$
|
147.6
|
$
|
12.6
|
$
|
0.3
|
198
|
$
|
(9.5
|
)
|
$
|
1,823.6
|
$
|
1,974.6
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, December 31, 2011
|
42,398
|
$
|
-
|
$
|
229.5
|
$
|
(70.1
|
)
|
$
|
(1.3
|
)
|
-
|
$
|
-
|
$
|
1,172.6
|
$
|
1,330.7
|
||||||||||||||||||
Compensation on equity grants
|
94
|
-
|
10.5
|
-
|
-
|
-
|
-
|
2.5
|
13.0
|
|||||||||||||||||||||||||||
Accrual of distribution equivalent rights
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.4
|
)
|
(0.4
|
)
|
|||||||||||||||||||||||||
Sale of Partnership limited partner interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
115.2
|
115.2
|
|||||||||||||||||||||||||||
Impact of Partnership equity transactions
|
-
|
-
|
(20.3
|
)
|
-
|
-
|
-
|
-
|
20.3
|
-
|
||||||||||||||||||||||||||
Dividends
|
-
|
-
|
(46.5
|
)
|
-
|
-
|
-
|
-
|
-
|
(46.5
|
)
|
|||||||||||||||||||||||||
Distributions
|
-
|
-
|
(1.2
|
)
|
-
|
-
|
-
|
-
|
(158.1
|
)
|
(159.3
|
)
|
||||||||||||||||||||||||
Other comprehensive income (loss)
|
-
|
-
|
-
|
-
|
3.5
|
-
|
-
|
39.4
|
42.9
|
|||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
26.9
|
-
|
-
|
-
|
104.8
|
131.7
|
|||||||||||||||||||||||||||
Balance, September 30, 2012
|
42,492
|
$
|
-
|
$
|
172.0
|
$
|
(43.2
|
)
|
$
|
2.2
|
-
|
$
|
-
|
$
|
1,296.3
|
$
|
1,427.3
|
|
Nine Months Ended September 30,
|
|||||||
|
2013
|
2012
|
||||||
|
(Unaudited)
|
|||||||
Cash flows from operating activities
|
(In millions)
|
|||||||
Net income
|
$
|
105.6
|
$
|
131.7
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Amortization in interest expense
|
12.1
|
14.7
|
||||||
Compensation on equity grants
|
10.0
|
13.0
|
||||||
Depreciation and amortization expense
|
198.7
|
144.3
|
||||||
Accretion of asset retirement obligations
|
3.0
|
3.0
|
||||||
Deferred income tax expense
|
7.0
|
4.4
|
||||||
Equity (earnings) loss, net of distributions
|
-
|
0.3
|
||||||
Risk management activities
|
-
|
1.7
|
||||||
Loss (gain) on sale or disposition of assets
|
3.1
|
15.5
|
||||||
Loss on debt redemption
|
14.7
|
-
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Receivables and other assets
|
19.7
|
162.9
|
||||||
Commodity Inventories
|
(110.3
|
)
|
4.9
|
|||||
Accounts payable and other liabilities
|
(5.5
|
)
|
(206.2
|
)
|
||||
Net cash provided by operating activities
|
258.1
|
290.2
|
||||||
Cash flows from investing activities
|
||||||||
Outlays for property, plant and equipment
|
(708.2
|
)
|
(365.1
|
)
|
||||
Business acquisition, net of cash acquired
|
-
|
(25.8
|
)
|
|||||
Purchase of materials and supplies
|
(35.3
|
)
|
-
|
|||||
Investment in unconsolidated affiliate
|
-
|
(16.8
|
)
|
|||||
Return of capital from unconsolidated affiliate
|
1.9
|
2.3
|
||||||
Other, net
|
4.0
|
1.6
|
||||||
Net cash used in investing activities
|
(737.6
|
)
|
(403.8
|
)
|
||||
Cash flows from financing activities
|
||||||||
Partnership loan facilities:
|
||||||||
Borrowings
|
1,743.0
|
1,120.0
|
||||||
Repayments
|
(1,521.2
|
)
|
(938.0
|
)
|
||||
Partnership accounts receivable securitization facility:
|
||||||||
Borrowings
|
261.6
|
-
|
||||||
Repayments
|
(93.6
|
)
|
-
|
|||||
Non-Partnership loan facilities:
|
||||||||
Borrowings
|
36.0
|
-
|
||||||
Repayments
|
(48.0
|
)
|
-
|
|||||
Costs incurred in connection with financing arrangements
|
(13.6
|
)
|
(10.0
|
)
|
||||
Distributions
|
(195.1
|
)
|
(159.3
|
)
|
||||
Equity offering of the Partnership units
|
379.6
|
120.7
|
||||||
Dividends to common shareholders
|
(61.8
|
)
|
(44.9
|
)
|
||||
Net cash provided by financing activities
|
486.9
|
88.5
|
||||||
Net change in cash and cash equivalents
|
7.4
|
(25.1
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
76.3
|
145.8
|
||||||
Cash and cash equivalents, end of period
|
$
|
83.7
|
$
|
120.7
|
· | 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 a 11.9% limited partnership interest. |
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
|
Year Ended December 31, 2012
|
September 30, 2012
|
September 30, 2012
|
|||||||||||||
|
As reported in
10-K
|
Pro forma
|
Pro forma
|
Pro forma
|
||||||||||||
|
(In millions, except per share amounts)
|
|||||||||||||||
Revenues
|
$
|
5,885.7
|
$
|
5,909.9
|
$
|
1,401.3
|
$
|
4,374.0
|
||||||||
Net income
|
159.3
|
129.5
|
12.1
|
105.9
|
||||||||||||
Less: Net income attributable to noncontrolling interests
|
121.2
|
83.5
|
1.4
|
72.4
|
||||||||||||
Net income attributable to Targa Resources Corp.
|
$
|
38.1
|
$
|
46.0
|
$
|
10.7
|
$
|
33.5
|
||||||||
|
||||||||||||||||
Net income per common share - Basic
|
$
|
0.93
|
$
|
1.12
|
$
|
0.26
|
$
|
0.82
|
||||||||
Net income per common share - Diluted
|
$
|
0.91
|
$
|
1.10
|
$
|
0.26
|
$
|
0.80
|
· | depreciation expense associated with the fair value adjustments to property, plant and equipment using the straight-line method over a useful life of 15-20 years. The pro forma information included in our 2012 Form 10-K utilized a 30 year useful life; |
· | amortization expense associated with the fair value adjustments to definite-lived intangibles in a manner that follows the expected pattern of services provided to customers, over a useful life of 20 years. The pro forma information included in our 2012 Form 10-K utilized a straight-line method over a 30 year life; and |
· | adjustment to pro forma revenues to report purchases and sales on a net, rather than gross, basis for certain Badlands natural gas processing agreements in which we are in substance an agent rather than a principal. |
|
September 30, 2013
|
December 31, 2012
|
||||||
Commodities
|
$
|
163.3
|
$
|
82.3
|
||||
Materials and supplies
|
38.4
|
17.1
|
||||||
|
$
|
201.7
|
$
|
99.4
|
|
September 30, 2013
|
December 31, 2012
|
||||||||||||||||||||||||||
|
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
|
$
|
2,119.7
|
$
|
-
|
$
|
2,119.7
|
$
|
1,975.3
|
$
|
-
|
$
|
1,975.3
|
5 to 20
|
|||||||||||||||
Processing and fractionation facilities
|
1,528.4
|
6.6
|
1,535.0
|
1,251.6
|
6.6
|
1,258.2
|
5 to 25
|
|||||||||||||||||||||
Terminaling and storage facilities
|
691.5
|
-
|
691.5
|
462.0
|
-
|
462.0
|
5 to 25
|
|||||||||||||||||||||
Transportation assets
|
292.6
|
-
|
292.6
|
292.5
|
-
|
292.5
|
10 to 25
|
|||||||||||||||||||||
Other property, plant and equipment
|
109.2
|
0.2
|
109.4
|
84.6
|
0.2
|
84.8
|
3 to 25
|
|||||||||||||||||||||
Land
|
88.7
|
-
|
88.7
|
87.1
|
-
|
87.1
|
- | |||||||||||||||||||||
Construction in progress
|
617.1
|
-
|
617.1
|
548.1
|
-
|
548.1
|
- | |||||||||||||||||||||
Property, plant and equipment
|
$
|
5,447.2
|
$
|
6.8
|
$
|
5,454.0
|
$
|
4,701.2
|
$
|
6.8
|
$
|
4,708.0
|
||||||||||||||||
Accumulated depreciation
|
(1,342.4
|
)
|
(2.2
|
)
|
(1,344.6
|
)
|
(1,168.0
|
)
|
(2.0
|
)
|
(1,170.0
|
)
|
||||||||||||||||
Property, plant and equipment, net
|
$
|
4,104.8
|
$
|
4.6
|
$
|
4,109.4
|
$
|
3,533.2
|
$
|
4.8
|
$
|
3,538.0
|
||||||||||||||||
|
||||||||||||||||||||||||||||
Intangible assets
|
$
|
681.8
|
$
|
-
|
$
|
681.8
|
$
|
681.9
|
$
|
-
|
$
|
681.9
|
20 | |||||||||||||||
Accumulated amortization
|
(21.5
|
)
|
-
|
(21.5
|
)
|
(1.1
|
)
|
-
|
(1.1
|
)
|
||||||||||||||||||
Intangible assets, net
|
$
|
660.3
|
$
|
-
|
$
|
660.3
|
$
|
680.8
|
$
|
-
|
$
|
680.8
|
|
September 30, 2013
|
December 31, 2012
|
||||||
Commodities
|
$
|
451.0
|
$
|
416.8
|
||||
Other goods and services
|
135.0
|
154.4
|
||||||
Interest
|
42.3
|
39.5
|
||||||
Compensation and benefits
|
32.5
|
40.7
|
||||||
Other
|
18.8
|
27.6
|
||||||
|
$
|
679.6
|
$
|
679.0
|
|
September 30, 2013
|
December 31, 2012
|
||||||
Long-term debt:
|
||||||||
Non-Partnership obligations:
|
||||||||
TRC Senior secured revolving credit facility, variable rate, due October 2017 (1)
|
$
|
70.0
|
$
|
82.0
|
||||
Obligations of the Partnership: (2)
|
||||||||
Senior secured revolving credit facility, variable rate, due October 2017 (3)
|
400.0
|
620.0
|
||||||
Senior unsecured notes, 11¼% fixed rate, due July 2017 (4)
|
-
|
72.7
|
||||||
Unamortized discount
|
-
|
(2.5
|
)
|
|||||
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
|
(28.7
|
)
|
(30.5
|
)
|
||||
Senior unsecured notes, 6⅜% fixed rate, due August 2022
|
300.0
|
400.0
|
||||||
Senior unsecured notes, 5¼% fixed rate, due May 2023
|
600.0
|
600.0
|
||||||
Senior unsecured notes, 4¼% fixed rate, due November 2023
|
625.0
|
-
|
||||||
Accounts receivable securitization facility, due January 2014 (5)
|
168.0
|
-
|
||||||
Total long-term debt
|
$
|
2,867.9
|
$
|
2,475.3
|
||||
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)
|
50.0
|
45.3
|
||||||
|
$
|
50.0
|
$
|
45.3
|
(1) | As of September 30, 2013, availability under TRC’s $150 million senior secured revolving credit facility was $80.0 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 September 30, 2013, availability under the Partnership’s $1.2 billion senior secured revolving credit facility was $750.0 million. |
(4) | The outstanding balance of the 11¼% Notes was redeemed on July 15, 2013. See “Senior Notes Repayments and Redemptions” below. |
(5) | 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 borrowing with availability under the Partnership’s Revolver (“the TRP Revolver”). |
|
Range of Interest
Rates Incurred
|
|
Weighted Average
Interest Rate Incurred
|
TRC senior secured revolving credit facility
|
2.9% - 3.0%
|
|
2.9%
|
Partnership's senior secured revolving credit facility
|
1.9% - 4.5%
|
|
2.3%
|
Partnership's accounts receivable securitization facility
|
0.9%
|
|
0.9%
|
1) | at least 65% of the aggregate principal amount of the 4¼% Notes (excluding the 4¼% Notes held by the Partnership) remains outstanding immediately after the occurrence of such redemption; and |
2) | the redemption occurs within 180 days of the date of the closing of such equity offering. |
Year
|
Redemption Price
|
2018
|
102.125%
|
2019
|
101.417%
|
2020
|
100.708%
|
2021 and thereafter
|
100.000%
|
|
|
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)
|
|||||||||||||||||||||||||
September 30, 2013
|
November 14, 2013
|
$
|
79.4
|
$
|
26.9
|
$
|
2.2
|
$
|
108.5
|
$
|
38.6
|
$
|
0.7325
|
||||||||||||
June 30, 2013
|
August 14, 2013
|
75.8
|
24.6
|
2.0
|
102.4
|
35.9
|
0.7150
|
||||||||||||||||||
March 31, 2013
|
May 15, 2013
|
71.7
|
22.1
|
1.9
|
95.7
|
33.0
|
0.6975
|
||||||||||||||||||
December 31, 2012
|
February 14, 2013
|
69.0
|
20.1
|
1.8
|
90.9
|
30.7
|
0.6800
|
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)
|
|||||||||||||||||
September 30, 2013
|
November 15, 2013
|
$
|
24.1
|
$
|
23.7
|
$
|
0.4
|
$
|
0.57000
|
||||||||
June 30, 2013
|
August 15, 2013
|
22.5
|
22.1
|
0.4
|
0.53250
|
||||||||||||
March 31, 2013
|
May 16, 2013
|
21.0
|
20.6
|
0.4
|
0.49500
|
||||||||||||
December 31, 2012
|
February 15, 2013
|
19.4
|
19.0
|
0.4
|
0.45750
|
(1) | Represents accrued dividends on restricted stock and restricted stock units that are payable upon vesting. |
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Net income
|
$
|
49.4
|
$
|
19.0
|
$
|
105.6
|
$
|
131.7
|
||||||||
Less: Net income attributable to noncontrolling interests
|
33.1
|
10.3
|
61.0
|
104.8
|
||||||||||||
Net income attributable to common shareholders
|
$
|
16.3
|
$
|
8.7
|
$
|
44.6
|
$
|
26.9
|
||||||||
|
||||||||||||||||
Weighted average shares outstanding - basic
|
41.6
|
41.0
|
41.6
|
41.0
|
||||||||||||
|
||||||||||||||||
Net income available per common share - basic
|
$
|
0.39
|
$
|
0.21
|
$
|
1.07
|
$
|
0.66
|
||||||||
|
||||||||||||||||
Weighted average shares outstanding
|
41.6
|
41.0
|
41.6
|
41.0
|
||||||||||||
Dilutive effect of unvested stock awards
|
0.5
|
0.9
|
0.5
|
0.8
|
||||||||||||
Weighted average shares outstanding - diluted
|
42.1
|
41.9
|
42.1
|
41.8
|
||||||||||||
|
||||||||||||||||
Net income available per common share - diluted
|
$
|
0.39
|
$
|
0.21
|
$
|
1.06
|
$
|
0.64
|
Commodity
|
|
Instrument
|
|
Unit
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
Natural Gas
|
|
Swaps
|
|
MMBtu/d
|
|
41,090
|
|
33,050
|
|
19,551
|
|
10,000
|
NGL
|
|
Swaps
|
|
Bbl/d
|
|
5,650
|
|
1,000
|
|
-
|
|
-
|
Condensate
|
|
Swaps
|
|
Bbl/d
|
|
2,045
|
|
1,450
|
|
-
|
|
-
|
|
Fair Value as of September 30, 2013
|
Fair Value as of December 31, 2012
|
|||||||||||||||
Balance Sheet
Location
|
Derivative
Assets |
Derivative
Liabilities |
Derivative
Assets |
Derivative
Liabilities |
|||||||||||||
Derivatives designated as hedging instruments
|
|
||||||||||||||||
Commodity contracts
|
Current
|
$
|
10.8
|
$
|
5.4
|
$
|
29.2
|
$
|
7.2
|
||||||||
Long-term
|
3.9
|
1.6
|
5.1
|
4.8
|
|||||||||||||
Total derivatives designated as hedging instruments
|
$
|
14.7
|
$
|
7.0
|
$
|
34.3
|
$
|
12.0
|
|||||||||
|
|||||||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||
Commodity contracts
|
Current
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
0.2
|
||||||||
Total derivatives not designated as hedging instruments
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
0.2
|
|||||||||
|
|||||||||||||||||
Total current position
|
$
|
10.9
|
$
|
5.5
|
$
|
29.3
|
$
|
7.4
|
|||||||||
Total long-term position
|
3.9
|
1.6
|
5.1
|
4.8
|
|||||||||||||
Total derivatives
|
$
|
14.8
|
$
|
7.1
|
$
|
34.4
|
$
|
12.2
|
|
Gross Presentation
|
Pro forma Net Presentation
|
||||||||||||||
|
Asset
|
Liability
|
Asset
|
Liability
|
||||||||||||
September 30, 2013
|
Position
|
Position
|
Position
|
Position
|
||||||||||||
Current position
|
||||||||||||||||
Counterparties with offsetting position
|
$
|
10.3
|
$
|
3.8
|
$
|
6.5
|
$
|
-
|
||||||||
Counterparties without offsetting position - assets
|
0.6
|
-
|
0.6
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
1.7
|
-
|
1.7
|
||||||||||||
|
10.9
|
5.5
|
7.1
|
1.7
|
||||||||||||
Long-term position
|
||||||||||||||||
Counterparties with offsetting position
|
2.8
|
1.1
|
1.7
|
-
|
||||||||||||
Counterparties without offsetting position - assets
|
1.1
|
-
|
1.1
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
0.5
|
-
|
0.5
|
||||||||||||
|
3.9
|
1.6
|
2.8
|
0.5
|
||||||||||||
Total derivatives
|
||||||||||||||||
Counterparties with offsetting position
|
13.1
|
4.9
|
8.2
|
-
|
||||||||||||
Counterparties without offsetting position - assets
|
1.7
|
-
|
1.7
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
2.2
|
-
|
2.2
|
||||||||||||
|
$
|
14.8
|
$
|
7.1
|
$
|
9.9
|
$
|
2.2
|
||||||||
|
||||||||||||||||
December 31, 2012
|
||||||||||||||||
Current position
|
||||||||||||||||
Counterparties with offsetting position
|
$
|
23.8
|
$
|
7.4
|
$
|
16.4
|
$
|
-
|
||||||||
Counterparties without offsetting position - assets
|
5.5
|
-
|
5.5
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
-
|
-
|
-
|
||||||||||||
|
29.3
|
7.4
|
21.9
|
-
|
||||||||||||
Long-term position
|
||||||||||||||||
Counterparties with offsetting position
|
4.4
|
2.8
|
1.6
|
-
|
||||||||||||
Counterparties without offsetting position - assets
|
0.7
|
-
|
0.7
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
2.0
|
-
|
2.0
|
||||||||||||
|
5.1
|
4.8
|
2.3
|
2.0
|
||||||||||||
Total derivatives
|
||||||||||||||||
Counterparties with offsetting position
|
28.2
|
10.2
|
18.0
|
-
|
||||||||||||
Counterparties without offsetting position - assets
|
6.2
|
-
|
6.2
|
-
|
||||||||||||
Counterparties without offsetting position - liabilities
|
-
|
2.0
|
-
|
2.0
|
||||||||||||
|
$
|
34.4
|
$
|
12.2
|
$
|
24.2
|
$
|
2.0
|
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
||||||||||||||||
Derivatives in Cash Flow |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
Hedging Relationships
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Commodity contracts
|
$
|
(11.3
|
)
|
$
|
(22.6
|
)
|
$
|
2.4
|
$
|
70.9
|
||||||
|
$
|
(11.3
|
)
|
$
|
(22.6
|
)
|
$
|
2.4
|
$
|
70.9
|
Gain (Loss) Reclassified from OCI into Income (Effective Portion)
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
Location of Gain (Loss) |
2013
|
2012
|
2013
|
2012
|
||||||||||||
Interest expense, net
|
$
|
(1.5
|
)
|
$
|
(1.9
|
)
|
$
|
(4.7
|
)
|
$
|
(6.1
|
)
|
||||
Revenues
|
4.5
|
15.4
|
17.0
|
31.7
|
||||||||||||
|
$
|
3.0
|
$
|
13.5
|
$
|
12.3
|
$
|
25.6
|
|
September 30, 2013
|
December 31, 2012
|
||||||
Commodity hedges, before tax
|
$
|
1.1
|
$
|
3.2
|
||||
Commodity hedges, after tax
|
0.6
|
1.9
|
||||||
Interest rate hedges, before tax
|
(0.5
|
)
|
(1.2
|
)
|
||||
Interest rate hedges, after tax
|
(0.3
|
)
|
(0.7
|
)
|
• | senior secured revolving credit facilities and the Partnership’s Securitization Facility are based on carrying value which approximates fair value as its interest rate is based on prevailing market rates; |
• | 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. |
|
September 30, 2013
|
|||||||||||||||||||
|
Carrying
Value
|
Fair Value
|
||||||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
Financial Instruments Recorded on Our Consolidated Balance Sheet at Fair Value:
|
||||||||||||||||||||
Assets from commodity derivative contracts
|
$
|
14.8
|
$
|
14.8
|
$
|
-
|
$
|
13.6
|
$
|
1.2
|
||||||||||
Liabilities from commodity derivative contracts
|
7.1
|
7.1
|
-
|
6.7
|
0.4
|
|||||||||||||||
Badlands contingent consideration liability
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Financial Instruments Recorded on Our Consolidated Balance Sheet at Carrying Value:
|
||||||||||||||||||||
Cash and cash equivalents
|
83.7
|
83.7
|
-
|
-
|
-
|
|||||||||||||||
TRC Senior secured revolving credit facility
|
70.0
|
70.0
|
-
|
70.0
|
-
|
|||||||||||||||
Partnership's Senior secured revolving credit facility
|
400.0
|
400.0
|
-
|
400.0
|
-
|
|||||||||||||||
Partnership's Senior unsecured notes
|
2,229.9
|
2,261.0
|
-
|