Delaware
|
65-1295427
|
|
(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 £
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PART I—FINANCIAL INFORMATION
|
||
PART II—OTHER INFORMATION
|
||
SIGNATURES
|
||
·
|
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 our transactions;
|
·
|
our success in risk management activities, including the use of derivative instruments to hedge commodity 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 our services;
|
·
|
weather and other natural phenomena;
|
·
|
industry changes, including the impact of consolidations and changes in competition;
|
·
|
our ability to obtain necessary licenses, permits and other approvals;
|
·
|
the level and success of oil and natural gas drilling around our assets, our success in connecting natural gas supplies to our gathering and processing systems and NGL supplies to our logistics and marketing facilities and our success in connecting our facilities to transportation and markets;
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·
|
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
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·
|
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, 2011 (“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 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
|
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
|
TARGA RESOURCES PARTNERS LP
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
September 30,
|
December 31,
|
||||||
|
2012
|
2011
|
||||||
|
(Unaudited)
|
|||||||
|
(In millions)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
|
|
||||||
Cash and cash equivalents
|
$ | 88.9 | $ | 55.6 | ||||
Trade receivables, net of allowances of $1.8 million and $2.2 million
|
415.9 | 575.9 | ||||||
Inventory
|
84.3 | 92.1 | ||||||
Assets from risk management activities
|
33.7 | 41.0 | ||||||
Other current assets
|
1.1 | 2.7 | ||||||
Total current assets
|
623.9 | 767.3 | ||||||
Property, plant and equipment
|
4,162.0 | 3,786.9 | ||||||
Accumulated depreciation
|
(1,112.1 | ) | (980.8 | ) | ||||
Property, plant and equipment, net
|
3,049.9 | 2,806.1 | ||||||
Long-term assets from risk management activities
|
11.1 | 10.9 | ||||||
Investment in unconsolidated affiliate
|
51.0 | 36.8 | ||||||
Other long-term assets
|
35.0 | 36.9 | ||||||
Total assets
|
$ | 3,770.9 | $ | 3,658.0 | ||||
|
||||||||
LIABILITIES AND OWNERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$ | 472.1 | $ | 647.8 | ||||
Accounts payable to Targa Resources Corp.
|
47.6 | 60.0 | ||||||
Liabilities from risk management activities
|
6.0 | 41.1 | ||||||
Total current liabilities
|
525.7 | 748.9 | ||||||
Long-term debt
|
1,661.7 | 1,477.7 | ||||||
Long-term liabilities from risk management activities
|
7.2 | 15.8 | ||||||
Deferred income taxes
|
10.7 | 9.5 | ||||||
Other long-term liabilities
|
46.7 | 44.4 | ||||||
|
||||||||
Commitments and contingencies (see Note 10)
|
||||||||
|
||||||||
Owners' equity:
|
||||||||
Common unitholders (89,170,989 and 84,756,009 units issued and outstanding as of September 30, 2012 and December 31, 2011)
|
1,316.5 | 1,221.2 | ||||||
General partner (1,819,817 and 1,729,715 units issued and outstanding as of September 30, 2012 and December 31, 2011)
|
34.5 | 27.2 | ||||||
Accumulated other comprehensive income (loss)
|
20.9 | (25.6 | ) | |||||
|
1,371.9 | 1,222.8 | ||||||
Noncontrolling interests in subsidiaries
|
147.0 | 138.9 | ||||||
Total owners' equity
|
1,518.9 | 1,361.7 | ||||||
Total liabilities and owners' equity
|
$ | 3,770.9 | $ | 3,658.0 | ||||
|
||||||||
See notes to consolidated financial statements.
|
TARGA RESOURCES PARTNERS LP
|
||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
|
|
|
|
|
||||||||||||
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
|
(Unaudited)
|
|||||||||||||||
|
(In millions, except per unit amounts)
|
|||||||||||||||
Revenues
|
$ | 1,392.9 | $ | 1,712.7 | $ | 4,356.8 | $ | 5,053.8 | ||||||||
Costs and expenses:
|
||||||||||||||||
Product purchases
|
1,153.0 | 1,485.5 | 3,611.7 | 4,364.5 | ||||||||||||
Operating expenses
|
78.3 | 76.5 | 227.1 | 214.1 | ||||||||||||
Depreciation and amortization expenses
|
47.9 | 45.0 | 142.1 | 132.2 | ||||||||||||
General and administrative expenses
|
33.5 | 33.7 | 100.0 | 98.6 | ||||||||||||
Other operating (income) expense (See Note 11)
|
18.9 | (0.3 | ) | 18.8 | (0.4 | ) | ||||||||||
Income from operations
|
61.3 | 72.3 | 257.1 | 244.8 | ||||||||||||
Other income (expense):
|
||||||||||||||||
Interest expense, net
|
(29.0 | ) | (25.7 | ) | (87.8 | ) | (80.4 | ) | ||||||||
Equity earnings (loss)
|
(2.2 | ) | 2.2 | (0.3 | ) | 5.2 | ||||||||||
Loss on mark-to-market derivative instruments
|
- | (1.8 | ) | - | (5.0 | ) | ||||||||||
Other
|
(1.1 | ) | (0.6 | ) | (1.6 | ) | (0.8 | ) | ||||||||
Income before income taxes
|
29.0 | 46.4 | 167.4 | 163.8 | ||||||||||||
Income tax expense:
|
||||||||||||||||
Current
|
(0.5 | ) | (2.4 | ) | (1.5 | ) | (4.6 | ) | ||||||||
Deferred
|
(0.4 | ) | 0.9 | (1.2 | ) | (0.6 | ) | |||||||||
|
(0.9 | ) | (1.5 | ) | (2.7 | ) | (5.2 | ) | ||||||||
Net income
|
28.1 | 44.9 | 164.7 | 158.6 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
3.9 | 9.0 | 23.5 | 29.6 | ||||||||||||
Net income attributable to Targa Resources Partners LP
|
$ | 24.2 | $ | 35.9 | $ | 141.2 | $ | 129.0 | ||||||||
|
||||||||||||||||
Net income attributable to general partner
|
16.7 | 9.5 | 46.2 | 26.0 | ||||||||||||
Net income attributable to limited partners
|
7.5 | 26.4 | 95.0 | 103.0 | ||||||||||||
Net income attributable to Targa Resources Partners LP
|
$ | 24.2 | $ | 35.9 | $ | 141.2 | $ | 129.0 | ||||||||
|
||||||||||||||||
Net income per limited partner unit - basic and diluted
|
$ | 0.08 | $ | 0.31 | $ | 1.07 | $ | 1.23 | ||||||||
Weighted average limited partner units outstanding - basic
|
89.2 | 84.8 | 88.8 | 83.9 | ||||||||||||
Weighted average limited partner units outstanding - diluted
|
89.3 | 84.8 | 88.9 | 83.9 | ||||||||||||
|
||||||||||||||||
See notes to consolidated financial statements.
|
TARGA RESOURCES PARTNERS LP
|
||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
|
Three Months Ended September 30,
|
|||||||||||||||||||||||
|
2012
|
2011
|
||||||||||||||||||||||
|
Pre-Tax
|
Related Income Tax
|
After Tax
|
Pre-Tax
|
Related Income Tax
|
After Tax
|
||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Net income
|
|
|
$ | 28.1 |
|
|
$ | 44.9 | ||||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
||||||||||||||||||||
Commodity hedging contracts:
|
|
|
|
|
||||||||||||||||||||
Change in fair value
|
$ | (22.5 | ) | $ | 0.2 | (22.3 | ) | $ | 47.0 | $ | - | 47.0 | ||||||||||||
Settlements reclassified to revenues
|
(14.8 | ) | 0.2 | (14.6 | ) | 10.3 | - | 10.3 | ||||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Change in fair value
|
- | - | - | (2.3 | ) | - | (2.3 | ) | ||||||||||||||||
Settlements reclassified to interest expense, net
|
1.9 | - | 1.9 | 1.0 | - | 1.0 | ||||||||||||||||||
Other comprehensive income (loss)
|
$ | (35.4 | ) | $ | 0.4 | (35.0 | ) | $ | 56.0 | $ | - | 56.0 | ||||||||||||
Comprehensive income (loss)
|
(6.9 | ) | 100.9 | |||||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests
|
3.9 | 9.0 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to Targa Resources Partners LP
|
$ | (10.8 | ) | $ | 91.9 |
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||
|
2012
|
2011
|
||||||||||||||||||||||
|
Pre-Tax
|
Related Income Tax
|
After Tax
|
Pre-Tax
|
Related Income Tax
|
After Tax
|
||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||||
Net income
|
|
|
$ | 164.7 |
|
|
$ | 158.6 | ||||||||||||||||
Other comprehensive income (loss):
|
|
|
|
|
||||||||||||||||||||
Commodity hedging contracts:
|
|
|
|
|
||||||||||||||||||||
Change in fair value
|
$ | 70.4 | $ | - | 70.4 | $ | (9.7 | ) | $ | - | (9.7 | ) | ||||||||||||
Settlements reclassified to revenues
|
(30.0 | ) | - | (30.0 | ) | 26.7 | - | 26.7 | ||||||||||||||||
Interest rate swaps:
|
||||||||||||||||||||||||
Change in fair value
|
- | - | - | (4.3 | ) | - | (4.3 | ) | ||||||||||||||||
Settlements reclassified to interest expense, net
|
6.1 | - | 6.1 | 5.7 | - | 5.7 | ||||||||||||||||||
Other comprehensive income
|
$ | 46.5 | $ | - | 46.5 | $ | 18.4 | $ | - | 18.4 | ||||||||||||||
Comprehensive income
|
211.2 | 177.0 | ||||||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests
|
23.5 | 29.6 | ||||||||||||||||||||||
Comprehensive income attributable to Targa Resources Partners LP
|
$ | 187.7 | $ | 147.4 | ||||||||||||||||||||
|
||||||||||||||||||||||||
See notes to consolidated financial statements.
|
TARGA RESOURCES PARTNERS LP
|
||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS' EQUITY
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
|
|
|
Accumulated
|
|
|
|||||||||||||||||||||
|
Limited
|
General
|
Other
|
|
|
|||||||||||||||||||||||
|
Partner
|
Partner
|
Comprehensive
|
Noncontrolling
|
|
|||||||||||||||||||||||
|
Units
|
Amount
|
Units
|
Amount
|
Income (Loss)
|
Interests
|
Total
|
|||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||||||
|
(In millions, except units in thousands)
|
|||||||||||||||||||||||||||
Balance, December 31, 2011
|
84,756 | $ | 1,221.2 | 1,730 | $ | 27.2 | $ | (25.6 | ) | $ | 138.9 | $ | 1,361.7 | |||||||||||||||
Compensation on equity grants
|
10 | 2.2 | - | - | - | - | 2.2 | |||||||||||||||||||||
Proceeds from equity offerings
|
4,405 | 164.9 | 90 | 3.4 | - | - | 168.3 | |||||||||||||||||||||
Contributions from Targa Resources Corp.
|
- | 0.8 | - | 0.1 | - | - | 0.9 | |||||||||||||||||||||
Distributions to noncontrolling interests
|
- | (1.1 | ) | - | - | - | (18.6 | ) | (19.7 | ) | ||||||||||||||||||
Contributions from noncontrolling interests
|
- | - | - | - | - | 3.2 | 3.2 | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | 46.5 | - | 46.5 | |||||||||||||||||||||
Net income
|
- | 95.0 | - | 46.2 | - | 23.5 | 164.7 | |||||||||||||||||||||
Distributions to unitholders
|
- | (166.5 | ) | - | (42.4 | ) | - | - | (208.9 | ) | ||||||||||||||||||
Balance, September 30, 2012
|
89,171 | $ | 1,316.5 | 1,820 | $ | 34.5 | $ | 20.9 | $ | 147.0 | $ | 1,518.9 | ||||||||||||||||
|
||||||||||||||||||||||||||||
Balance, December 31, 2010
|
75,545 | $ | 935.3 | 1,542 | $ | 15.1 | $ | (30.6 | ) | $ | 129.3 | $ | 1,049.1 | |||||||||||||||
Compensation on equity grants
|
11 | 1.2 | - | - | - | - | 1.2 | |||||||||||||||||||||
Proceeds from equity offerings
|
9,200 | 298.0 | 188 | 6.3 | - | - | 304.3 | |||||||||||||||||||||
Contributions from Targa Resources Corp.
|
- | 7.9 | - | 1.2 | - | - | 9.1 | |||||||||||||||||||||
Distributions to noncontrolling interests
|
- | - | - | - | - | (19.8 | ) | (19.8 | ) | |||||||||||||||||||
Contributions from noncontrolling interests
|
- | - | - | - | - | - | - | |||||||||||||||||||||
Other comprehensive income
|
- | - | - | - | 18.4 | - | 18.4 | |||||||||||||||||||||
Net income
|
- | 103.0 | - | 26.0 | - | 29.6 | 158.6 | |||||||||||||||||||||
Distributions to unitholders
|
- | (142.0 | ) | - | (23.9 | ) | - | - | (165.9 | ) | ||||||||||||||||||
Balance, September 30, 2011
|
84,756 | $ | 1,203.4 | 1,730 | $ | 24.7 | $ | (12.2 | ) | $ | 139.1 | $ | 1,355.0 | |||||||||||||||
|
||||||||||||||||||||||||||||
See notes to consolidated financial statements.
|
TARGA RESOURCES PARTNERS LP
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
|
|
|
||||||
|
Nine Months Ended September 30,
|
|||||||
|
2012
|
2011
|
||||||
|
(Unaudited)
|
|||||||
|
(In millions)
|
|||||||
Cash flows from operating activities
|
|
|
||||||
Net income
|
$ | 164.7 | $ | 158.6 | ||||
Adjustments to reconcile net income to net cash
|
||||||||
provided by operating activities:
|
||||||||
Amortization in interest expense
|
13.6 | 6.7 | ||||||
Compensation on equity grants
|
2.6 | 1.2 | ||||||
Depreciation and amortization expense
|
142.1 | 132.2 | ||||||
Accretion of asset retirement obligations
|
2.9 | 2.7 | ||||||
Deferred income tax expense
|
1.2 | 0.6 | ||||||
Equity (earnings) losses, net of distributions
|
0.3 | (1.4 | ) | |||||
Risk management activities
|
3.8 | (15.1 | ) | |||||
Loss (gain) on sale or disposal of assets
|
15.5 | (0.4 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
Receivables and other assets
|
161.2 | (82.9 | ) | |||||
Inventory
|
4.9 | (86.9 | ) | |||||
Accounts payable and other liabilities
|
(197.3 | ) | 76.0 | |||||
Net cash provided by operating activities
|
315.5 | 191.3 | ||||||
Cash flows from investing activities
|
||||||||
Outlays for property, plant and equipment
|
(364.8 | ) | (211.4 | ) | ||||
Business acquisitions
|
(25.8 | ) | (164.2 | ) | ||||
Investment in unconsolidated affiliate
|
(16.8 | ) | (11.9 | ) | ||||
Return of capital from unconsolidated affiliate
|
2.3 | - | ||||||
Other, net
|
1.6 | 0.3 | ||||||
Net cash used in investing activities
|
(403.5 | ) | (387.2 | ) | ||||
Cash flows from financing activities
|
||||||||
Proceeds from borrowings under credit facility
|
720.0 | 1,426.0 | ||||||
Repayments of credit facility
|
(938.0 | ) | (1,656.3 | ) | ||||
Proceeds from issuance of senior notes
|
400.0 | 325.0 | ||||||
Cash paid on note exchange
|
- | (27.7 | ) | |||||
Proceeds from equity offerings
|
168.3 | 304.3 | ||||||
Distributions to unitholders
|
(208.9 | ) | (165.9 | ) | ||||
Costs incurred in connection with financing arrangements
|
(4.5 | ) | (6.2 | ) | ||||
Contributions from parent
|
0.9 | 9.1 | ||||||
Contributions from noncontrolling interests
|
3.2 | - | ||||||
Distributions to noncontrolling interests
|
(19.7 | ) | (19.8 | ) | ||||
Net cash provided by financing activities
|
121.3 | 188.5 | ||||||
Net change in cash and cash equivalents
|
33.3 | (7.4 | ) | |||||
Cash and cash equivalents, beginning of period
|
55.6 | 76.3 | ||||||
Cash and cash equivalents, end of period
|
$ | 88.9 | $ | 68.9 | ||||
|
||||||||
See notes to consolidated financial statements.
|
|
|
|
Estimated useful lives
|
|||||||||
|
September 30, 2012
|
December 31, 2011
|
(In years)
|
|||||||||
Natural gas gathering systems
|
$ | 1,801.9 | $ | 1,740.6 |
5 to 20
|
|||||||
Processing and fractionation facilities
|
1,111.3 | 1,062.7 |
5 to 25
|
|||||||||
Terminaling and storage facilities
|
402.4 | 380.7 |
5 to 25
|
|||||||||
Transportation assets
|
292.2 | 281.2 |
10 to 25
|
|||||||||
Other property, plant and equipment
|
57.9 | 54.9 |
3 to 25
|
|||||||||
Land
|
73.3 | 71.2 | - | |||||||||
Construction in progress
|
423.0 | 195.6 | - | |||||||||
$ | 4,162.0 | $ | 3,786.9 |
September 30, 2012
|
December 31, 2011
|
|||||||
Commodities
|
$ | 336.2 | $ | 515.3 | ||||
Other goods and services
|
91.2 | 86.3 | ||||||
Interest
|
26.4 | 32.3 | ||||||
Other
|
18.3 | 13.9 | ||||||
$ | 472.1 | $ | 647.8 |
|
September 30, 2012
|
December 31, 2011
|
||||||
Senior secured revolving credit facility, variable rate, due July 2015 (1)(2)
|
$ | 280.0 | $ | 498.0 | ||||
Senior unsecured notes, 8¼% fixed rate, due July 2016 (1)
|
209.1 | 209.1 | ||||||
Senior unsecured notes, 11¼% fixed rate, due July 2017
|
72.7 | 72.7 | ||||||
Unamortized discount
|
(2.6 | ) | (2.9 | ) | ||||
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
|
(31.1 | ) | (32.8 | ) | ||||
Senior unsecured notes, 6⅜% fixed rate, due August 2022
|
400.0 | - | ||||||
|
$ | 1,661.7 | $ | 1,477.7 | ||||
|
||||||||
Letters of credit issued
|
$ | 47.4 | $ | 92.5 |
(1)
|
See Subsequent Events section of this note.
|
(2)
|
As of September 30, 2012, availability under our $1.1 billion senior secured revolving credit facility was $772.6 million.
|
Range of Interest Rates Incurred
|
Weighted Average Interest Rate Incurred
|
||
Senior secured revolving credit facility
|
2.4% - 4.5%
|
2.6%
|
1)
|
at least 65% of the aggregate principal amount of the 6⅜% Notes (excluding the 6⅜% Notes held by us) 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
|
2017
|
103.188%
|
2018
|
102.125%
|
2019
|
101.063%
|
2020 and thereafter
|
100.000%
|
Distributions
|
||||||||||||||||||
Three Months Ended
|
General Partner
|
Distributions per limited partner unit
|
||||||||||||||||
Date Paid or to be Paid |
Limited Partners Common
|
Incentive
|
2% |
Total
|
||||||||||||||
(In millions, except per unit amounts)
|
||||||||||||||||||
September 30, 2012
|
November 14, 2012
|
$ | 59.1 | $ | 16.1 | $ | 1.5 | $ | 76.7 | $ | 0.6625 | |||||||
June 30, 2012
|
August 14, 2012 | 57.3 | 14.4 | 1.5 | 73.2 | 0.6425 | ||||||||||||
March 31, 2012
|
May 15, 2012 | 55.5 | 12.7 | 1.4 | 69.6 | 0.6225 | ||||||||||||
December 31, 2011
|
February 14, 2012 | 53.7 | 11.0 | 1.3 | 66.0 | 0.6025 |
Commodity
|
|
Instrument
|
|
Unit
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
Natural Gas
|
|
Swaps
|
|
MMBtu/d
|
|
31,790
|
|
26,089
|
|
18,000
|
|
4,500
|
NGL
|
Swaps
|
Bbl/d
|
9,361
|
5,650
|
1,000
|
-
|
||||||
NGL
|
Puts (propane)
|
Bbl/d
|
294
|
-
|
-
|
-
|
||||||
NGL
|
Calls (ethane) (1)
|
Bbl/d
|
2,000
|
-
|
-
|
-
|
||||||
Condensate
|
Swaps
|
Bbl/d
|
1,660
|
1,795
|
700
|
-
|
(1)
|
Utilized in connection with 2,000 Bbl/d of 2012 ethane swaps providing a floor on ethane with upside.
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||
|
|
|
|
Fair Value as of
|
|
|
Fair Value as of
|
||||||||||
|
|
|
Balance Sheet
|
September 30,
|
|
December 31,
|
|
Balance Sheet
|
September 30,
|
|
December 31,
|
||||||
|
|
|
Location
|
2012
|
|
2011
|
|
Location
|
2012
|
|
2011
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commodity contracts
|
Current assets
|
$
|
33.4
|
|
$
|
40.3
|
|
Current liabilities
|
$
|
5.9
|
|
$
|
40.6
|
|||
|
|
|
Long-term assets |
11.0
|
|
|
10.9
|
|
Long-term liabilities |
|
7.2
|
|
|
15.8
|
|||
Total derivatives designated as hedging instruments
|
$
|
44.4
|
|
$
|
51.2
|
|
|
$
|
13.1
|
|
$
|
56.4
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Commodity contracts
|
Current assets
|
$
|
0.3
|
|
$
|
0.7
|
|
Current liabilities |
$
|
0.1
|
|
$
|
0.5
|
|||
|
|
|
Long-term assets
|
|
0.1
|
|
|
-
|
|
Long-term liabilities
|
|
-
|
|
|
-
|
||
Total derivatives not designated as hedging instruments
|
$
|
0.4
|
|
$
|
0.7
|
|
|
$
|
0.1
|
|
$
|
0.5
|
|||||
Total derivatives
|
|
|
$
|
44.8
|
|
$
|
51.9
|
|
|
$
|
13.2
|
|
$
|
56.9
|
Derivatives in
|
Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
|
|||||||||||||||
Cash Flow Hedging
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
Relationships
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Interest rate contracts
|
$ | - | $ | (2.3 | ) | $ | - | $ | (4.3 | ) | ||||||
Commodity contracts
|
(22.5 | ) | 47.0 | 70.4 | (9.7 | ) | ||||||||||
$ | (22.5 | ) | $ | 44.7 | $ | 70.4 | $ | (14.0 | ) |
Gain (Loss) Reclassified from OCI into Income (Effective Portion)
|
||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
Location of Gain (Loss)
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Interest expense, net
|
$ | (1.9 | ) | $ | (1.0 | ) | $ | (6.1 | ) | $ | (5.7 | ) | ||||
Revenues
|
14.8 | (10.3 | ) | 30.0 | (26.7 | ) | ||||||||||
$ | 12.9 | $ | (11.3 | ) | $ | 23.9 | $ | (32.4 | ) |
Gain (Loss) Recognized in Income on Derivatives
|
|||||||||||||||||
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||||
Derivatives Not Designated as Hedging Instruments | Location of Gain Recognized on Income on Derivatives |
2012
|
2011
|
2012
|
2011
|
||||||||||||
Commodity contracts
|
Revenue
|
$ | (0.1 | ) | $ | 0.4 | $ | 0.9 | $ | 1.4 | |||||||
Interest Rate Swaps
|
Other income (expense)
|
- | (1.8 | ) | - | (5.0 | ) |
September 30, 2012
|
December 31, 2011
|
|||||||
Commodity hedges
|
$ | 31.0 | $ | (9.4 | ) | |||
Interest rate hedges
|
(10.3 | ) | (16.4 | ) |
·
|
senior secured revolving credit facility is 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, 2012
|
||||||||||||||||||||
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
|
$ | 44.8 | $ | 44.8 | $ | - | $ | 44.7 | $ | 0.1 | ||||||||||
Liabilities from commodity derivative contracts
|
13.2 | 13.2 | - | 12.4 | 0.8 | |||||||||||||||
Financial Instruments Recorded on Our Consolidated Balance Sheet at Carrying Value:
|
||||||||||||||||||||
Cash and cash equivalents
|
88.9 | 88.9 | ||||||||||||||||||
Senior secured revolving credit facility
|
280.0 | 280.0 | - | 280.0 | - | |||||||||||||||
Senior unsecured notes
|
1,381.7 | 1,526.6 | - | 1,526.6 | - |
December 31, 2011
|
||||||||||||||||||||
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
|
$ | 51.9 | $ | 51.9 | $ | - | $ | 51.9 | $ | - | ||||||||||
Liabilities from commodity derivative contracts
|
56.9 | 56.9 | - | 56.9 | - | |||||||||||||||
Financial Instruments Recorded on Our Consolidated Balance Sheet at Carrying Value:
|
||||||||||||||||||||
Cash and cash equivalents
|
55.6 | 55.6 | ||||||||||||||||||
Senior secured revolving credit facility
|
498.0 | 498.0 | - | 498.0 | - | |||||||||||||||
Senior unsecured notes
|
979.7 | 1,057.3 | - | 1,057.3 | - |
Commodity Derivative Contracts
|
||||
Balance, December 31, 2011
|
$ | - | ||
Loss (gain) included in Revenue
|
(0.1 | ) | ||
Unrealized losses included in OCI
|
0.8 | |||
Balance, September 30, 2012
|
$ | 0.7 |
Three Months Ended September 30, 2012
|
||||||||||||||||||||||||||||
Field
|
Coastal
|
|||||||||||||||||||||||||||
Gathering
|
Gathering
|
Marketing
|
Corporate
|
|||||||||||||||||||||||||
and
|
and
|
Logistics
|
and
|
and
|
||||||||||||||||||||||||
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Total
|
||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
$ | 42.2 | $ | 60.5 | $ | 52.9 | $ | 1,136.4 | $ | 14.0 | $ | - | $ | 1,306.0 | ||||||||||||||
Fees from midstream services
|
8.5 | 7.4 | 43.6 | 27.4 | - | - | 86.9 | |||||||||||||||||||||
50.7 | 67.9 | 96.5 | 1,163.8 | 14.0 | - | 1,392.9 | ||||||||||||||||||||||
Intersegment revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
274.8 | 150.5 | 0.5 | 151.5 | - | (577.3 | ) | - | ||||||||||||||||||||
Fees from midstream services
|
0.3 | - | 27.6 | 7.2 | - | (35.1 | ) | - | ||||||||||||||||||||
275.1 | 150.5 | 28.1 | 158.7 | - | (612.4 | ) | - | |||||||||||||||||||||
Revenues
|
$ | 325.8 | $ | 218.4 | $ | 124.6 | $ | 1,322.5 | $ | 14.0 | $ | (612.4 | ) | $ | 1,392.9 | |||||||||||||
Operating margin
|
$ | 53.8 | $ | 18.0 | $ | 50.4 | $ | 25.4 | $ | 14.0 | $ | - | $ | 161.6 | ||||||||||||||
Other financial information:
|
||||||||||||||||||||||||||||
Total assets (1)
|
$ | 1,717.3 | $ | 421.8 | $ | 977.5 | $ | 491.7 | $ | 44.8 | $ | 117.8 | $ | 3,770.9 | ||||||||||||||
Capital expenditures
|
$ | 66.7 | $ | 28.2 | $ | 64.0 | $ | 0.9 | $ | - | $ | 1.7 | $ | 161.5 |
(1)
|
We recorded a $15.4 million loss in Other Operating (Income) Expense due to a write-off of our investment in the Yscloskey joint venture interest processing plant in Southern Louisiana included in the Coastal Gathering and Processing segment. Following Hurricane Isaac, the joint venture owners elected not to restart the plant.
|
Three Months Ended September 30, 2011
|
||||||||||||||||||||||||||||
Field
|
Coastal
|
|||||||||||||||||||||||||||
Gathering
|
Gathering
|
Marketing
|
Corporate
|
|||||||||||||||||||||||||
and
|
and
|
Logistics
|
and
|
and
|
||||||||||||||||||||||||
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Total
|
||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
$ | 47.9 | $ | 75.2 | $ | - | $ | 1,530.3 | $ | (10.8 | ) | $ | 0.1 | $ | 1,642.7 | |||||||||||||
Fees from midstream services
|
6.8 | 3.9 | 35.8 | 23.5 | - | - | 70.0 | |||||||||||||||||||||
54.7 | 79.1 | 35.8 | 1,553.8 | (10.8 | ) | 0.1 | 1,712.7 | |||||||||||||||||||||
Intersegment revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
385.4 | 242.9 | 0.1 | 186.0 | - | (814.4 | ) | - | ||||||||||||||||||||
Fees from midstream services
|
0.2 | - | 21.6 | 8.8 | - | (30.6 | ) | - | ||||||||||||||||||||
385.6 | 242.9 | 21.7 | 194.8 | - | (845.0 | ) | - | |||||||||||||||||||||
Revenues
|
$ | 440.3 | $ | 322.0 | $ | 57.5 | $ | 1,748.6 | $ | (10.8 | ) | $ | (844.9 | ) | $ | 1,712.7 | ||||||||||||
Operating margin
|
$ | 71.8 | $ | 39.8 | $ | 30.1 | $ | 19.7 | $ | (10.8 | ) | $ | 0.1 | $ | 150.7 | |||||||||||||
Other financial information:
|
||||||||||||||||||||||||||||
Total assets
|
$ | 1,647.3 | $ | 425.2 | $ | 713.2 | $ | 702.3 | $ | 56.0 | $ | 78.0 | $ | 3,622.0 | ||||||||||||||
Capital expenditures
|
$ | 40.2 | $ | 4.2 | $ | 165.0 | $ | 0.6 | $ | - | $ | 0.8 | $ | 210.8 |
Nine Months Ended September 30, 2012
|
||||||||||||||||||||||||||||
Field
|
Coastal
|
|||||||||||||||||||||||||||
Gathering
|
Gathering
|
Marketing
|
Corporate
|
|||||||||||||||||||||||||
and
|
and
|
Logistics
|
and
|
and
|
||||||||||||||||||||||||
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Total
|
||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
$ | 134.2 | $ | 172.0 | $ | 152.9 | $ | 3,622.2 | $ | 28.1 | $ | - | $ | 4,109.4 | ||||||||||||||
Fees from midstream services
|
27.3 | 15.9 | 125.6 | 78.5 | - | 0.1 | 247.4 | |||||||||||||||||||||
161.5 | 187.9 | 278.5 | 3,700.7 | 28.1 | 0.1 | 4,356.8 | ||||||||||||||||||||||
Intersegment revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
851.9 | 532.7 | 0.6 | 398.3 | - | (1,783.5 | ) | - | ||||||||||||||||||||
Fees from midstream services
|
0.9 | 0.1 | 76.2 | 23.5 | - | (100.7 | ) | - | ||||||||||||||||||||
852.8 | 532.8 | 76.8 | 421.8 | - | (1,884.2 | ) | - | |||||||||||||||||||||
Revenues
|
$ | 1,014.3 | $ | 720.7 | $ | 355.3 | $ | 4,122.5 | $ | 28.1 | $ | (1,884.1 | ) | $ | 4,356.8 | |||||||||||||
Operating margin
|
$ | 180.6 | $ | 92.3 | $ | 139.2 | $ | 77.8 | $ | 28.1 | $ | - | $ | 518.0 | ||||||||||||||
Other financial information:
|
||||||||||||||||||||||||||||
Total assets (1)
|
$ | 1,717.3 | $ | 421.8 | $ | 977.5 | $ | 491.7 | $ | 44.8 | $ | 117.8 | $ | 3,770.9 | ||||||||||||||
Capital expenditures
|
$ | 139.6 | $ | 32.8 | $ | 213.8 | $ | 10.4 | $ | - | $ | 3.2 | $ | 399.8 |
(1)
|
We recorded a $15.4 million loss in Other Operating (Income) Expense during the three months ended September 30, 2012 due to a write-off of our investment in the Yscloskey joint venture interest processing plant in Southern Louisiana included in our Coastal Gathering and Processing segment. Following Hurricane Isaac, the joint venture owners elected not to restart the plant.
|
Nine Months Ended September 30, 2011
|
||||||||||||||||||||||||||||
Field
|
Coastal
|
|||||||||||||||||||||||||||
Gathering
|
Gathering
|
Marketing
|
Corporate
|
|||||||||||||||||||||||||
and
|
and
|
Logistics
|
and
|
and
|
||||||||||||||||||||||||
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Total
|
||||||||||||||||||||||
Revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
$ | 145.3 | $ | 243.9 | $ | 0.1 | $ | 4,505.5 | $ | (28.4 | ) | $ | - | $ | 4,866.4 | |||||||||||||
Fees from midstream services
|
19.6 | 13.4 | 92.1 | 62.1 | - | 0.2 | 187.4 | |||||||||||||||||||||
164.9 | 257.3 | 92.2 | 4,567.6 | (28.4 | ) | 0.2 | 5,053.8 | |||||||||||||||||||||
Intersegment revenues
|
||||||||||||||||||||||||||||
Sales of commodities
|
1,051.8 | 704.9 | 0.4 | 465.9 | - | (2,223.0 | ) | - | ||||||||||||||||||||
Fees from midstream services
|
0.7 | 0.4 | 64.4 | 25.7 | - | (91.2 | ) | - | ||||||||||||||||||||
1,052.5 | 705.3 | 64.8 | 491.6 | - | (2,314.2 | ) | - | |||||||||||||||||||||
Revenues
|
$ | 1,217.4 | $ | 962.6 | $ | 157.0 | $ | 5,059.2 | $ | (28.4 | ) | $ | (2,314.0 | ) | $ | 5,053.8 | ||||||||||||
Operating margin
|
$ | 213.0 | $ | 121.8 | $ | 85.9 | $ | 82.8 | $ | (28.4 | ) | $ | 0.1 | $ | 475.2 | |||||||||||||
Other financial information:
|
||||||||||||||||||||||||||||
Total assets
|
$ | 1,647.3 | $ | 425.2 | $ | 713.2 | $ | 702.3 | $ | 56.0 | $ | 78.0 | $ | 3,622.0 | ||||||||||||||
Capital expenditures
|
$ | 112.0 | $ | 9.8 | $ | 252.6 | $ | 1.5 | $ | - | $ | 1.4 | $ | 377.3 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Sales of commodities
|
||||||||||||||||
Natural gas sales
|
$ | 252.1 | $ | 304.6 | $ | 642.7 | $ | 846.2 | ||||||||
NGL sales
|
957.4 | 1,323.4 | 3,198.4 | 3,969.1 | ||||||||||||
Condensate sales
|
29.0 | 25.7 | 87.0 | 80.3 | ||||||||||||
Petroleum products
|
52.7 | - | 152.5 | - | ||||||||||||
Derivative activities
|
14.8 | (11.0 | ) | 28.8 | (29.2 | ) | ||||||||||
1,306.0 | 1,642.7 | 4,109.4 | 4,866.4 | |||||||||||||
Fees from midstream services
|
||||||||||||||||
Fractionating and treating fees
|
28.6 | 25.7 | 84.0 | 60.1 | ||||||||||||
Storage, terminaling, transportation and export fees
|
41.6 | 27.9 | 107.4 | 77.3 | ||||||||||||
Gas processing fees
|
11.8 | 8.3 | 30.1 | 23.1 | ||||||||||||
Other
|
4.9 | 8.1 | 25.9 | 26.9 | ||||||||||||
86.9 | 70.0 | 247.4 | 187.4 | |||||||||||||
Total revenues
|
$ | 1,392.9 | $ | 1,712.7 | $ | 4,356.8 | $ | 5,053.8 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Reconciliation of operating margin to net income:
|
||||||||||||||||
Operating margin
|
$ | 161.6 | $ | 150.7 | $ | 518.0 | $ | 475.2 | ||||||||
Depreciation and amortization expense
|
(47.9 | ) | (45.0 | ) | (142.1 | ) | (132.2 | ) | ||||||||
General and administrative expense
|
(33.5 | ) | (33.7 | ) | (100.0 | ) | (98.6 | ) | ||||||||
Interest expense, net
|
(29.0 | ) | (25.7 | ) | (87.8 | ) | (80.4 | ) | ||||||||
Income tax expense
|
(0.9 | ) | (1.5 | ) | (2.7 | ) | (5.2 | ) | ||||||||
Other, net
|
(22.2 | ) | 0.1 | (20.7 | ) | (0.2 | ) | |||||||||
Net income
|
$ | 28.1 | $ | 44.9 | $ | 164.7 | $ | 158.6 |
·
|
the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
|
·
|
our operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to financing or capital structure; and
|
·
|
the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Reconciliation of gross margin and operating margin to net income:
|
(In millions)
|
|||||||||||||||
Gross margin
|
$ | 239.9 | $ | 227.2 | $ | 745.1 | $ | 689.3 | ||||||||
Operating expenses
|
(78.3 | ) | (76.5 | ) | (227.1 | ) | (214.1 | ) | ||||||||
Operating margin
|
161.6 | 150.7 | 518.0 | 475.2 | ||||||||||||
Depreciation and amortization expenses
|
(47.9 | ) | (45.0 | ) | (142.1 | ) | (132.2 | ) | ||||||||
General and administrative expenses
|
(33.5 | ) | (33.7 | ) | (100.0 | ) | (98.6 | ) | ||||||||
Interest expense, net
|
(29.0 | ) | (25.7 | ) | (87.8 | ) | (80.4 | ) | ||||||||
Income tax expense
|
(0.9 | ) | (1.5 | ) | (2.7 | ) | (5.2 | ) | ||||||||
Gain (loss) on sale or disposal of assets
|
(18.9 | ) | 0.3 | (18.8 | ) | 0.4 | ||||||||||
Other, net
|
(3.3 | ) | (0.2 | ) | (1.9 | ) | (0.6 | ) | ||||||||
Net income
|
$ | 28.1 | $ | 44.9 | $ | 164.7 | $ | 158.6 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In millions)
|
||||||||||||||||
Reconciliation of net cash provided by operating activities to Adjusted EBITDA:
|
||||||||||||||||
Net cash provided by operating activities
|
$ | 90.5 | $ | (61.3 | ) | $ | 315.5 | $ | 191.3 | |||||||
Net income attributable to noncontrolling interests
|
(3.9 | ) | (9.0 | ) | (23.5 | ) | (29.6 | ) | ||||||||
Interest expense, net (1)
|
24.5 | 24.7 | 74.2 | 73.7 | ||||||||||||
Current income tax expense
|
0.5 | 2.4 | 1.5 | 4.6 | ||||||||||||
Other (2)
|
(5.3 | ) | 18.8 | (14.5 | ) | 10.8 | ||||||||||
Changes in operating assets and liabilities which used (provided) cash:
|
||||||||||||||||
Accounts receivable and other assets
|
42.6 | 105.4 | (166.1 | ) | 169.8 | |||||||||||
Accounts payable and other liabilities
|
(32.7 | ) | 26.3 | 197.3 | (76.0 | ) | ||||||||||
Adjusted EBITDA
|
$ | 116.2 | $ | 107.3 | $ | 384.4 | $ | 344.6 |
(1)
|
Net of amortization of debt issuance costs, discount and premium included in interest expense of $4.5 million and $13.6 million for the three and nine months ended September 30, 2012, and $1.0 million and $6.7 million for the three and nine months ended September 30, 2011.
|
(2)
|
Includes equity earnings (loss) from unconsolidated investments – net of distributions, accretion expense associated with asset retirement obligations, amortization of stock based compensation and loss on sale or disposal of assets.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In millions)
|
||||||||||||||||
Reconciliation of net income attributable to Targa Resources Partners LP to Adjusted EBITDA:
|
||||||||||||||||
Net income attributable to Targa Resources Partners LP
|
$ | 24.2 | $ | 35.9 | $ | 141.2 | $ | 129.0 | ||||||||
Add:
|
||||||||||||||||
Interest expense, net
|
29.0 | 25.7 | 87.8 | 80.4 | ||||||||||||
Income tax expense
|
0.9 | 1.5 | 2.7 | 5.2 | ||||||||||||
Depreciation and amortization expenses
|
47.9 | 45.0 | 142.1 | 132.2 | ||||||||||||
Loss on sale or disposal of assets
|
15.6 | - | 15.5 | - | ||||||||||||
Risk management activities
|
1.6 | 2.0 | 3.8 | 6.0 | ||||||||||||
Noncontrolling interests adjustment (1)
|
(3.0 | ) | (2.8 | ) | (8.7 | ) | (8.2 | ) | ||||||||
Adjusted EBITDA
|
$ | 116.2 | $ | 107.3 | $ | 384.4 | $ | 344.6 |
(1)
|
Noncontrolling interest portion of depreciation and amortization expenses.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
(In millions)
|
||||||||||||||||
Reconciliation of net income attributable to Targa Resources Partners LP to distributable cash flow:
|
||||||||||||||||
Net income attributable to Targa Resources Partners LP
|
$ | 24.2 | $ | 35.9 | $ | 141.2 | $ | 129.0 | ||||||||
Depreciation and amortization expenses
|
47.9 | 45.0 | 142.1 | 132.2 | ||||||||||||
Deferred income tax expense
|
0.4 | (0.9 | ) | 1.2 | 0.6 | |||||||||||
Amortization in interest expense
|
4.5 | 2.5 | 13.6 | 8.1 | ||||||||||||
Loss on sale or disposal of assets
|
15.6 | - | 15.5 | - | ||||||||||||
Risk management activities
|
1.6 | 2.0 | 3.8 | 6.0 | ||||||||||||
Maintenance capital expenditures
|
(16.2 | ) | (24.7 | ) | (48.0 | ) | (57.2 | ) | ||||||||
Other (1)
|
(0.8 | ) | 5.6 | (1.8 | ) | 10.8 | ||||||||||
Targa Resources Partners LP distributable cash flow
|
$ | 77.2 | $ | 65.4 | $ | 267.6 | $ | 229.5 |
(1)
|
Includes reimbursements of certain environmental maintenance capital expenditures by Targa and the noncontrolling interest portion of maintenance capital expenditures, depreciation and amortization expenses.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||||||||||||||||
Revenues
|
$ | 1,392.9 | $ | 1,712.7 | $ | (319.8 | ) | (19% | ) | $ | 4,356.8 | $ | 5,053.8 | $ | (697.0 | ) | (14% | ) | ||||||||||||||
Product purchases
|
1,153.0 | 1,485.5 | (332.5 | ) | (22% | ) | 3,611.7 | 4,364.5 | (752.8 | ) | (17% | ) | ||||||||||||||||||||
Gross margin (1)
|
239.9 | 227.2 | 12.7 | 6% | 745.1 | 689.3 | 55.8 | 8% | ||||||||||||||||||||||||
Operating expenses
|
78.3 | 76.5 | 1.8 | 2% | 227.1 | 214.1 | 13.0 | 6% | ||||||||||||||||||||||||
Operating margin (2)
|
161.6 | 150.7 | 10.9 | 7% | 518.0 | 475.2 | 42.8 | 9% | ||||||||||||||||||||||||
Depreciation and amortization expenses
|
47.9 | 45.0 | 2.9 | 6% | 142.1 | 132.2 | 9.9 | 7% | ||||||||||||||||||||||||
General and
administrative expenses
|
33.5 | 33.7 | (0.2 | ) | (1% | ) | 100.0 | 98.6 | 1.4 | 1% | ||||||||||||||||||||||
Other operating (income) expense
|
18.9 | (0.3 | ) | 19.2 |
nm
|
18.8 | (0.4 | ) | 19.2 |
nm
|
||||||||||||||||||||||
Income from operations
|
61.3 | 72.3 | (11.0 | ) | (15% | ) | 257.1 | 244.8 | 12.3 | 5% | ||||||||||||||||||||||
Interest expense, net
|
(29.0 | ) | (25.7 | ) | (3.3 | ) | 13% | (87.8 | ) | (80.4 | ) | (7.4 | ) | 9% | ||||||||||||||||||
Equity earnings (loss)
|
(2.2 | ) | 2.2 | (4.4 | ) | (200% | ) | (0.3 | ) | 5.2 | (5.5 | ) | (106% | ) | ||||||||||||||||||
Loss on mark-to-market derivative instruments
|
- | (1.8 | ) | 1.8 | 100% | - | (5.0 | ) | 5.0 | 100% | ||||||||||||||||||||||
Other
|
(1.1 | ) | (0.6 | ) | (0.5 | ) | (83% | ) | (1.6 | ) | (0.8 | ) | (0.8 | ) | (100% | ) | ||||||||||||||||
Income tax expense
|
(0.9 | ) | (1.5 | ) | 0.6 | 40% | (2.7 | ) | (5.2 | ) | 2.5 | 48% | ||||||||||||||||||||
Net income
|
28.1 | 44.9 | (16.8 | ) | (37% | ) | 164.7 | 158.6 | 6.1 | 4% | ||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests
|
3.9 | 9.0 | (5.1 | ) | (57% | ) | 23.5 | 29.6 | (6.1 | ) | (21% | ) | ||||||||||||||||||||
Net income attributable to Targa Resources Partners LP
|
$ | 24.2 | $ | 35.9 | $ | (11.7 | ) | (33% | ) | $ | 141.2 | $ | 129.0 | $ | 12.2 | 9% | ||||||||||||||||
Financial and operating data:
|
||||||||||||||||||||||||||||||||
Financial data:
|
||||||||||||||||||||||||||||||||
Adjusted EBITDA (3)
|
$ | 116.2 | $ | 107.3 | $ | 8.9 | 8% | $ | 384.4 | $ | 344.6 | $ | 39.8 | 12% | ||||||||||||||||||
Distributable cash flow (4)
|
77.2 | 65.4 | 11.8 | 18% | 267.6 | 229.5 | 38.1 | 17% | ||||||||||||||||||||||||
Operating data:
|
||||||||||||||||||||||||||||||||
Plant natural gas inlet, MMcf/d (5)(6)
|
1,968.6 | 2,087.0 | (118.4 | ) | (6% | ) | 2,094.3 | 2,152.8 | (58.5 | ) | (3% | ) | ||||||||||||||||||||
Gross NGL production, MBbl/d
|
123.4 | 121.4 | 2.0 | 2% | 126.6 | 122.2 | 4.4 | 4% | ||||||||||||||||||||||||
Natural gas sales, BBtu/d (6)
|
981.8 | 799.7 | 182.1 | 23% | 924.4 | 746.6 | 177.8 | 24% | ||||||||||||||||||||||||
NGL sales, MBbl/d
|
282.0 | 258.9 | 23.1 | 9% | 277.1 | 265.1 | 12.0 | 5% | ||||||||||||||||||||||||
Condensate sales, MBbl/d
|
3.6 | 3.2 | 0.4 | 13% | 3.5 | 3.2 | 0.3 | 9% |
(1)
|
Gross margin is a non-GAAP financial measure and is discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – How We Evaluate Our Operations” and “Non-GAAP Financial Measures.”
|
(2)
|
Operating margin is a non-GAAP financial measure and is discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – How We Evaluate Our Operations” and “Non-GAAP Financial Measures.”
|
(3)
|
Adjusted EBITDA is net income before: interest, income taxes, depreciation and amortization, gains or losses on debt repurchases and asset disposals, and non-cash risk management activities related to derivative instruments. This is a non-GAAP financial measure and is discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – How We Evaluate Our Operations” and “Non-GAAP Financial Measures.”
|
(4)
|
Distributable cash flow is income attributable to Targa Resources Partners LP plus depreciation and amortization, deferred taxes and amortization of debt issue costs included in interest expense, adjusted for non-cash losses (gains) on mark-to-market derivative contracts, debt repurchases and asset disposals, less maintenance capital expenditures (net of any reimbursements of project costs). This is a non-GAAP financial measure and is discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – How We Evaluate Our Operations” and “Non-GAAP Financial Measures.”
|
(5)
|
Plant natural gas inlet represents the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant.
|
(6)
|
Plant natural gas inlet volumes include producer take-in-kind volumes, while natural gas sales exclude producer take-in-kind volumes.
|
Field
|
Coastal
|
||||||||||||||||||||
Gathering
|
Gathering
|
Marketing
|
Corporate
|
||||||||||||||||||
and
|
and
|
Logistics
|
and
|
and
|
|||||||||||||||||
Processing
|
Processing
|
Assets
|
Distribution
|
Other
|
Eliminations
|
Total
|
|||||||||||||||
Three Months Ended:
|
(In millions)
|
||||||||||||||||||||
September 30, 2012
|
$ | 53.8 | $ | 18.0 | $ | 50.4 | $ | 25.4 | $ | 14.0 | $ | - | $ | 161.6 | |||||||
September 30, 2011
|
71.8 | 39.8 | 30.1 | 19.7 | (10.8 | ) | 0.1 | 150.7 | |||||||||||||
Nine Months Ended:
|
|||||||||||||||||||||
September 30, 2012
|
180.6 | 92.3 | 139.2 | 77.8 | 28.1 | - | 518.0 | ||||||||||||||
September 30, 2011
|
213.0 | 121.8 | 85.9 | 82.8 | (28.4 | ) | 0.1 | 475.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||||||||||||||
Gross margin
|
$ | 84.0 | $ | 102.4 | $ | (18.4 | ) | (18% | ) | $ | 271.2 | $ | 299.3 | $ | (28.1 | ) | (9% | ) | ||||||||||||||
Operating expenses
|
30.2 | 30.6 | (0.4 | ) | (1% | ) | 90.6 | 86.3 | 4.3 | 5% | ||||||||||||||||||||||
Operating margin
|
$ | 53.8 | $ | 71.8 | $ | (18.0 | ) | (25% | ) | $ | 180.6 | $ | 213.0 | $ | (32.4 | ) | (15% | ) | ||||||||||||||
Operating statistics (1):
|
||||||||||||||||||||||||||||||||
Plant natural gas inlet, MMcf/d (2),(3)
|
||||||||||||||||||||||||||||||||
Sand Hills
|
154.6 | 139.6 | 15.0 | 11% | 143.7 | 131.6 | 12.1 | 9% | ||||||||||||||||||||||||
SAOU
|
126.0 | 114.3 | 11.7 | 10% | 121.1 | 110.0 | 11.1 | 10% | ||||||||||||||||||||||||
North Texas System
|
246.5 | 210.7 | 35.8 | 17% | 237.9 | 197.4 | 40.5 | 21% | ||||||||||||||||||||||||
Versado
|
159.2 | 163.6 | (4.4 | ) | (3% | ) | 166.3 | 165.4 | 0.9 | 1% | ||||||||||||||||||||||
686.3 | 628.2 | 58.1 | 9% | 669.0 | 604.4 | 64.6 | 11% | |||||||||||||||||||||||||
Gross NGL production, MBbl/d
|
||||||||||||||||||||||||||||||||
Sand Hills
|
17.8 | 16.6 | 1.2 | 7% | 16.8 | 15.5 | 1.3 | 8% | ||||||||||||||||||||||||
SAOU
|
19.5 | 17.8 | 1.7 | 10% | 18.8 | 17.1 | 1.7 | 10% | ||||||||||||||||||||||||
North Texas System
|
26.6 | 22.9 | 3.7 | 16% | 26.1 | 22.2 | 3.9 | 18% | ||||||||||||||||||||||||
Versado
|
19.0 | 17.8 | 1.2 | 7% | 19.3 | 18.3 | 1.0 | 5% | ||||||||||||||||||||||||
82.9 | 75.1 | 7.8 | 10% | 81.0 | 73.1 | 7.9 | 11% | |||||||||||||||||||||||||
Natural gas sales, BBtu/d (3)
|
333.5 | 295.8 | 37.7 | 13% | 319.9 | 281.2 | 38.7 | 14% | ||||||||||||||||||||||||
NGL sales, MBbl/d
|
68.7 | 60.2 | 8.5 | 14% | 67.1 | 58.9 | 8.2 | 14% | ||||||||||||||||||||||||
Condensate sales, MBbl/d
|
3.4 | 3.0 | 0.4 | 13% | 3.3 | 2.9 | 0.4 | 14% | ||||||||||||||||||||||||
Average realized prices (4):
|
||||||||||||||||||||||||||||||||
Natural gas, $/MMBtu
|
2.59 | 4.03 | (1.44 | ) | (36% | ) | 2.40 | 3.96 | (1.57 | ) | (40% | ) | ||||||||||||||||||||
NGL, $/gal
|
0.79 | 1.29 | (0.50 | ) | (39% | ) | 0.90 | 1.22 | (0.31 | ) | (26% | ) | ||||||||||||||||||||
Condensate, $/Bbl
|
86.82 | 85.99 | 0.83 | 1% | 90.40 | 91.99 | (1.59 | ) | (2% | ) |
(1)
|
Segment operating statistics include the effect of intersegment sales, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the quarter and the denominator is the number of calendar days during the quarter.
|
(2)
|
Plant natural gas inlet represents the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant.
|
(3)
|
Plant natural gas inlet volumes include producer take-in-kind volumes, while natural gas sales exclude producer take-in-kind volumes.
|
(4)
|
Average realized prices exclude the impact of hedging activities presented in Other.
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||||||||||||||
Gross margin
|
$ | 31.7 | $ | 52.9 | $ | (21.2 | ) | (40% | ) | $ | 127.2 | $ | 156.6 | $ | (29.4 | ) | (19% | ) | ||||||||||||||
Operating expenses (1)
|
13.7 | 13.1 | 0.6 | 5% | 34.9 | 34.8 | 0.1 |
%
|
||||||||||||||||||||||||
Operating margin
|
$ | 18.0 | $ | 39.8 | $ | (21.8 | ) | (55% | ) | $ | 92.3 | $ | 121.8 | $ | (29.5 | ) | (24% | ) | ||||||||||||||
Operating statistics (2):
|
||||||||||||||||||||||||||||||||
Plant natural gas inlet, MMcf/d (3),(4)
|
||||||||||||||||||||||||||||||||
LOU (5)
|
324.5 | 170.7 | 153.8 | 90% | 245.0 | 169.5 | 75.5 | 45% | ||||||||||||||||||||||||
Coastal Straddles
|
607.7 | 828.4 | (220.7 | ) | (27% | ) | 735.5 | 897.8 | (162.3 | ) | (18% | ) | ||||||||||||||||||||
VESCO
|
350.0 | 459.7 | (109.7 | ) | (24% | ) | 444.8 | 481.0 | (36.2 | ) | (8% | ) | ||||||||||||||||||||
1,282.2 | 1,458.8 | (176.6 | ) | (12% | ) | 1,425.3 | 1,548.3 | (123.0 | ) | (8% | ) | |||||||||||||||||||||
Gross NGL production, MBbl/d
|
||||||||||||||||||||||||||||||||
LOU
|
8.9 | 7.7 | 1.2 | 16% | 8.4 | 7.1 | 1.3 | 18% | ||||||||||||||||||||||||
Coastal Straddles
|
14.8 | 16.4 | (1.6 | ) | (10% | ) | 16.0 | 17.2 | (1.2 | ) | (7% | ) | ||||||||||||||||||||
VESCO
|
16.9 | 22.2 | (5.3 | ) | (24% | ) | 21.1 | 24.8 | (3.7 | ) | (15% | ) | ||||||||||||||||||||
40.6 | 46.3 | (5.7 | ) | (12% | ) | 45.5 | 49.1 | (3.6 | ) | (7% | ) | |||||||||||||||||||||
Natural gas sales, BBtu/d (4)
|
317.2 | 256.6 | 60.6 | 24% | 304.8 | 261.0 | 43.8 | 17% | ||||||||||||||||||||||||
NGL sales, MBbl/d
|
38.4 | 41.6 | (3.2 | ) | (8% | ) | 42.1 | 43.0 | (0.9 | ) | (2% | ) | ||||||||||||||||||||
Condensate sales, MBbl/d
|
0.2 | 0.2 | - | - | 0.2 | 0.3 | (0.1 | ) | (33% | ) | ||||||||||||||||||||||
Average realized prices (6):
|
||||||||||||||||||||||||||||||||
Natural gas, $/MMBtu
|
2.87 | 4.21 | (1.33 | ) | (32% | ) | 2.59 | 4.24 | (1.65 | ) | (39% | ) | ||||||||||||||||||||
NGL, $/gal
|
0.85 | 1.35 | (0.50 | ) | (37% | ) | 0.99 | 1.30 | (0.30 | ) | (23% | ) | ||||||||||||||||||||
Condensate, $/Bbl
|
96.07 | 107.72 | (11.65 | ) | (11% | ) | 107.17 | 102.38 | 4.79 | 5% |
(1)
|
Costs associated with the clean-up and repair of Coastal Straddle plants resulting from the impact of Hurricane Isaac are reported as Other Operating Expenses and thus are not reflected in operating margin at the Coastal Gathering and Processing Segment level.
|
(2)
|
Segment operating statistics include the effect of intersegment sales, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the quarter and the denominator is the number of calendar days during the quarter.
|
(3)
|
Plant natural gas inlet represents the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant.
|
(4)
|
Plant natural gas inlet volumes include producer take-in-kind volumes, while natural gas sales exclude producer take-in-kind volumes.
|
(5)
|
Includes operations from the Big Lake processing plant acquired July 2012.
|
(6)
|
Average realized prices exclude the impact of hedging activities presented in Other.
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||||||||||||||
Gross margin
|
$ | 74.5 | $ | 57.5 | $ | 17.0 | 30% | $ | 208.0 | $ | 157.0 | $ | 51.0 | 32% | ||||||||||||||||||
Operating expenses
|
24.1 | 27.4 | (3.3 | ) | (12% | ) | 68.8 | 71.1 | (2.3 | ) | (3% | ) | ||||||||||||||||||||
Operating margin
|
$ | 50.4 | $ | 30.1 | $ | 20.3 | 67% | $ | 139.2 | $ | 85.9 | $ | 53.3 | 62% | ||||||||||||||||||
Operating statistics (1):
|
||||||||||||||||||||||||||||||||
Fractionation volumes, MBbl/d
|
293.3 | 290.4 | 2.9 | 1% | 299.4 | 260.1 | 39.3 | 15% | ||||||||||||||||||||||||
Treating volumes, MBbl/d (2)
|
24.8 | 23.3 | 1.5 | 6% | 23.7 | 20.5 | 3.2 | 16% |
(1)
|
Segment operating statistics include the effect of intersegment sales, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the quarter and the denominator is the number of calendar days during the quarter.
|
(2)
|
Includes the volumes related to the natural gasoline hydrotreater at the Mt. Belvieu facility.
|
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||||||||||||||||
($ in millions)
|
||||||||||||||||||||||||||||||||
Gross margin
|
$ | 35.4 | $ | 30.1 | $ | 5.3 | 18% | $ | 106.2 | $ | 116.0 | $ | (9.8 | ) | (8% | ) | ||||||||||||||||
Operating expenses
|
10.0 | 10.4 | (0.4 | ) | (4% | ) | 28.4 | 33.2 | (4.8 | ) | (14% | ) | ||||||||||||||||||||
Operating margin
|
$ | 25.4 | $ | 19.7 | $ | 5.7 | 29% | $ | 77.8 | $ | 82.8 | $ | (5.0 | ) | (6% | ) | ||||||||||||||||
Operating statistics (1):
|
||||||||||||||||||||||||||||||||
Natural gas sales, BBtu/d
|
1,182.2 | 962.1 | 220.1 | 23% | 1,100.9 | 829.1 | 271.8 | 33% | ||||||||||||||||||||||||
NGL sales, MBbl/d
|
289.4 | 264.5 | 24.9 | 9% | 282.2 | 267.3 | 14.9 | 6% | ||||||||||||||||||||||||
Average realized prices:
|
||||||||||||||||||||||||||||||||
Natural gas, $/MMBtu
|
2.80 | 4.10 | (1.30 | ) | (32% | ) | 2.54 | 4.15 | (1.61 | ) | (39% | ) | ||||||||||||||||||||
NGL realized price, $/gal
|
0.88 | 1.32 | (0.44 | ) | (33% | ) | 1.00 | 1.32 | (0.32 | ) | (24% | ) |
(1)
|
Segment operating statistics include the effect of intersegment sales, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the quarter and the denominator is the number of calendar days during the quarter.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||||||||
(In millions)
|
||||||||||||||||||||||||
Gross margin
|
$ | 14.0 | $ | (10.8 | ) | $ | 24.8 | $ | 28.1 | $ | (28.4 | ) | $ | 56.5 | ||||||||||
Operating margin
|
$ | 14.0 | $ | (10.8 | ) | $ | 24.8 | $ | 28.1 | $ | (28.4 | ) | $ | 56.5 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||||
2012
|
2011
|
2012 vs. 2011
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||||||
(In millions)
|
||||||||||||||||||
Natural gas
|
$ | 8.0 | $ | 6.4 | $ | 1.6 | $ | 26.9 | $ | 14.2 | $ | 12.7 | ||||||
NGL
|
6.0 | (15.8 | ) | 21.8 | 3.5 | (38.0 | ) | 41.5 | ||||||||||
Crude oil
|
- | (1.4 | ) | 1.4 | (2.3 | ) | (4.6 | ) | 2.3 | |||||||||
$ | 14.0 | $ | (10.8 | ) | $ | 24.8 | $ | 28.1 | $ | (28.4 | ) | $ | 56.5 |
|
September 30, 2012
|
|||
|
(In millions)
|
|||
Cash on hand
|
$ | 88.9 | ||
Total availability under the Partnership's credit facility
|
1,200.0 | |||
Less: Outstanding borrowings under the Partnership's credit facility
|
(280.0 | ) | ||
Less: Outstanding letters of credit outstanding under the Partnership's credit facility
|
(47.4 | ) | ||
Total liquidity
|
$ | 961.5 |
|
Nine Months Ended September 30,
|
|
|
|||||||||
|
2012
|
2011
|
2012 vs. 2011
|
|||||||||
|
(In millions)
|
|||||||||||
Net cash provided by (used in):
|
|
|
|
|
||||||||
Operating activities
|
$ | 315.5 | $ | 191.3 | $ | 124.2 | 65% | |||||
Investing activities
|
(403.5 | ) | (387.2 | ) | (16.3 | ) | 4% | |||||
Financing activities
|
121.3 | 188.5 | (67.2 | ) | (36% | ) |
Nine Months Ended September 30,
|
||||||||||||
2012
|
2011
|
2012 vs. 2011
|
||||||||||
Cash flows from operating activities: |
(in millions)
|
|||||||||||
Cash received from customers
|
$ | 4,502.0 | $ | 5,005.9 | $ | (503.9 | ) | |||||
Cash received from (paid to) derivative counterparties
|
32.7 | (47.7 | ) | 80.4 | ||||||||
Cash outlays for:
|
||||||||||||
Product purchases
|
(3,808.2 | ) | (4,379.5 | ) | 571.3 | |||||||
Operating expenses
|
(218.8 | ) | (211.3 | ) | (7.5 | ) | ||||||
General and administrative expenses
|
(110.5 | ) | (97.3 | ) | (13.2 | ) | ||||||
Cash distributions from equity investment
|
- | 3.7 | (3.7 | ) | ||||||||
Interest paid, net of amounts capitalized (1)
|
(80.4 | ) | (79.5 | ) | (0.9 | ) | ||||||
Income taxes paid
|
(2.1 | ) | (2.3 | ) | 0.2 | |||||||
Other cash payments
|
0.8 | (0.7 | ) | 1.5 | ||||||||
Net cash provided by operating activities
|
$ | 315.5 | $ | 191.3 | $ | 124.2 |
(1)
|
Net of capitalized interest paid of $8.5 million and $2.1 million included in investing activities for the nine months ended September 30, 2012 and 2011.
|
·
|
On January 23, 2012, we completed a public offering of 4,000,000 common units at a price of $38.30 per common unit. As part of this offering, a wholly-owned subsidiary of Targa purchased 1,300,000 common units. See Note 7, “Partnership Unit and Related Matters.”
|
·
|
On January 31, 2012 we privately placed $400.0 million of 6⅜% Notes. See Note 6, “Debt Obligations.”
|
Distributions
|
||||||||||||||||||
Three Months Ended
|
General Partner
|
Distributions per limited partner unit
|
||||||||||||||||
Date Paid or to be Paid |
Limited Partners Common
|
Incentive
|
2% |
Total
|
||||||||||||||
(In millions, except per unit amounts)
|
||||||||||||||||||
September 30, 2012
|
November 14, 2012
|
$ | 59.1 | $ | 16.1 | $ | 1.5 | $ | 76.7 | $ | 0.6625 | |||||||
June 30, 2012
|
August 14, 2012 | 57.3 | 14.4 | 1.5 | 73.2 | 0.6425 | ||||||||||||
March 31, 2012
|
May 15, 2012 | 55.5 | 12.7 | 1.4 | 69.6 | 0.6225 | ||||||||||||
December 31, 2011
|
February 14, 2012 | 53.7 | 11.0 | 1.3 | 66.0 | 0.6025 |
Nine Months Ended September 30,
|
||||||
2012
|
2011
|
|||||
(In millions)
|
||||||
Gross additions to property, plant and equipment
|
$ | 399.8 | $ | 242.1 | ||
Change in accruals
|
(9.2 | ) | (1.7 | ) | ||
Cash expenditures
|
$ | 390.6 | $ | 240.4 |
Nine Months Ended September 30,
|
||||||
2012
|
2011
|
|||||
Capital expenditures:
|
(In millions)
|
|||||
Business acquisitions
|
$ | 25.8 | $ | 164.2 | ||
Expansion
|
326.0 | 155.9 | ||||
Maintenance
|
48.0 | 57.2 | ||||
$ | 399.8 | $ | 377.3 |
Natural Gas
|
||||||||||||||||||||||||||
Instrument
|
Price
|
MMBtu per day
|
||||||||||||||||||||||||
Type
|
Index
|
$/MMBtu
|
2012
|
2013
|
2014
|
2015
|
Fair Value
|
|||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||||
Swap
|
IF-WAHA
|
6.61 | 14,850 | - | - | - | $ | 4.7 | ||||||||||||||||||
Swap
|
IF-WAHA
|
4.68 | - | 10,730 | - | - | 3.6 | |||||||||||||||||||
Swap
|
IF-WAHA
|
3.53 | - | - | 7,000 | - | (1.4 | ) | ||||||||||||||||||
Swap
|
IF-WAHA
|
3.53 | - | - | - | 1,750 | (0.5 | ) | ||||||||||||||||||
Total Swaps
|
14,850 | 10,730 | 7,000 | 1,750 | ||||||||||||||||||||||
Swap
|
IF-PB
|
4.98 | 10,200 | - | - | - | 1.7 | |||||||||||||||||||
Swap
|
IF-PB
|
4.69 | - | 10,084 | - | - | 3.6 | |||||||||||||||||||
Swap
|
IF-PB
|
3.49 | - | - | 6,000 | - | (1.2 | ) | ||||||||||||||||||
Swap
|
IF-PB
|
3.49 | - | - | - | 1,500 | (0.4 | ) | ||||||||||||||||||
Total Swaps
|
10,200 | 10,084 | 6,000 | 1,500 | ||||||||||||||||||||||
Swap
|
IF-NGPL MC
|
6.03 | 6,740 | - | - | - | 1.8 | |||||||||||||||||||
Swap
|
IF-NGPL MC
|
4.17 | - | 5,275 | - | - | 0.9 | |||||||||||||||||||
Swap
|
IF-NGPL MC
|
3.45 | - | - | 5,000 | - | (1.0 | ) | ||||||||||||||||||
Swap
|
IF-NGPL MC
|
3.46 | - | - | - | 1,250 | (0.3 | ) | ||||||||||||||||||
Total Swaps
|
6,740 | 5,275 | 5,000 | 1,250 | ||||||||||||||||||||||
Total Sales
|
31,790 | 26,089 | 18,000 | 4,500 | ||||||||||||||||||||||
Natural Gas Basis Swaps
|
||||||||||||||||||||||||||
Basis Swaps
|
Various Indexes, Maturities Through October 2013
|
0.3 | ||||||||||||||||||||||||
$ | 11.8 |
NGL
|
||||||||||||||||||||||
Instrument
|
Price
|
Barrels per day
|
||||||||||||||||||||
Type
|
Index
|
$/Gal
|
2012
|
2013
|
2014
|
Fair Value
|
||||||||||||||||
(in millions)
|
||||||||||||||||||||||
Swap
|
OPIS-MB
|
0.95 | 9,361 | - | - | $ | 5.2 | |||||||||||||||
Swap
|
OPIS-MB
|
1.05 | - | 5,650 | - | 11.0 | ||||||||||||||||
Swap
|
OPIS-MB
|
1.21 | - | - | 1,000 | 3.9 | ||||||||||||||||
Total Swaps
|
9,361 | 5,650 | 1,000 | |||||||||||||||||||
Put (propane)
|
OPIS-MB
|
1.43 | 294 | - | - | 0.6 | ||||||||||||||||
Total Sales
|
9,655 | 5,650 | 1,000 | |||||||||||||||||||
Call (ethane) (1)
|
OPIS-MB
|
0.59 | 2,000 | - | ||||||||||||||||||
$ | 20.7 | |||||||||||||||||||||
Condensate | ||||||||||||||||||
Instrument
|
Price
|
Barrels per day
|
||||||||||||||||
Type
|
Index
|
$/Bbl
|
2012
|
2013
|
2014
|
Fair Value
|
||||||||||||
(in millions)
|
||||||||||||||||||
Swap
|
NY-WTI
|
91.37
|
1,660
|
-
|
-
|
$
|
(0.2)
|
|||||||||||
Swap
|
NY-WTI
|
93.34
|
-
|
1,795
|
-
|
(0.3)
|
||||||||||||
Swap
|
NY-WTI
|
90.03
|
-
|
-
|
700
|
(0.4)
|
||||||||||||
Total Sales
|
1,660
|
1,795
|
700
|
|||||||||||||||
$
|
(0.9)
|
(1)
|
Utilized in connection with 2,000 Bbl/d of 2012 ethane swaps providing a floor on ethane with upside.
|
3.1
|
Certificate of Limited Partnership of Targa Resources Partners LP (incorporated by reference to Exhibit 3.2 to Targa Resources Partners LP’s Registration Statement on Form S-1 filed November 16, 2006 (File No. 333-138747)).
|
3.2
|
Certificate of Formation of Targa Resources GP LLC (incorporated by reference to Exhibit 3.3 to Targa Resources Partners LP’s Registration Statement on Form S-1/A filed January 19, 2007 (File No. 333-138747)).
|
3.3
|
Agreement of Limited Partnership of Targa Resources Partners LP (incorporated by reference to Exhibit 3.3 to Targa Resources Partners LP’s Annual Report on Form 10-K filed April 2, 2007 (File No. 001-33303)).
|
3.4
|
First Amended and Restated Agreement of Limited Partnership of Targa Resources Partners LP (incorporated by reference to Exhibit 3.1 to Targa Resources Partners LP’s Current Report on Form 8- K filed February 16, 2007 (File No. 001-33303)).
|
3.5
|
Amendment No. 1, dated May 13, 2008, to the First Amended and Restated Agreement of Limited Partnership of Targa Resources Partners LP (incorporated by reference to Exhibit 3.5 to Targa Resources Partners LP’s Quarterly Report on Form 10-Q filed May 14, 2008 (File No. 001-33303)).
|
3.6
|
Amendment No. 2, dated May 25, 2012, to the First Amended and Restated Agreement of Limited Partnership of Targa Resources Partners LP (incorporated by reference to Exhibit 3.1 to Targa Resources Partners LP’s Current Report on Form 8-K filed May 25, 2012 (File No. 001-33303)).
|
3.7
|
Limited Liability Company Agreement of Targa Resources GP LLC (incorporated by reference to Exhibit 3.4 to Targa Resources Partners LP’s Registration Statement on Form S-1/A filed January 19, 2007 (File No. 333-138747)).
|
4.1
|
Indenture dated as of October 25, 2012 among Targa Resources Partners LP, Targa Resources Partners Finance Corporation and the Guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Targa Resources Partners LP’s Current Report on Form 8-K filed October 25, 2012 (File No. 001-33303)).
|
4.2
|
Registration Rights Agreement dated as of October 25, 2012 among Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., Wells Fargo Securities, LLC, Barclays Capital Inc. and RBS Securities Inc., as representatives of the several initial purchasers (incorporated by reference to Exhibit 4.2 to Targa Resources Partners LP’s Current Report on Form 8-K filed October 25, 2012 (File No. 001-33303)).
|
10.1
|
Second Amended and Restated Credit Agreement, dated October 3, 2012, by and among Targa Resources Partners LP, Bank of America, N.A. and the other parties signatory thereto (incorporated by reference to Exhibit 10.1 to Targa Resources Partners LP’s Current Report on Form 8-K filed October 9, 2012 (File No. 001-33303)).
|
10.2
|
Purchase Agreement dated as of October 22, 2012 among Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the Guarantors named therein and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc., Wells Fargo Securities, LLC, Barclays Capital Inc. and RBS Securities Inc., as representatives of the several initial purchasers (incorporated by reference to Exhibit 10.1 to Targa Resources Partners LP’s Current Report on Form 8-K filed October 25, 2012 (File No. 001-33303)).
|
|
31.1*
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2*
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1**
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2**
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS**
|
XBRL Instance Document
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith
|
**
|
Furnished herewith
|
)S'ANH^1J
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified |
9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
Dec. 31, 2011
|
Sep. 30, 2012
Commodity Derivatives Contract [Member]
|
Sep. 30, 2012
Fair Value, Inputs, Level 1 [Member]
|
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
|
Sep. 30, 2012
Fair Value, Inputs, Level 2 [Member]
|
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
|
Sep. 30, 2012
Fair Value, Inputs, Level 3 [Member]
|
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
|
Sep. 30, 2012
Estimate of Fair Value, Fair Value Disclosure [Member]
|
Dec. 31, 2011
Estimate of Fair Value, Fair Value Disclosure [Member]
|
Sep. 30, 2012
Carrying (Reported) Amount, Fair Value Disclosure [Member]
|
Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure [Member]
|
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||||||||||||
Cash and cash equivalents | $ 88.9 | $ 55.6 | $ 88.9 | $ 55.6 | |||||||||
Assets from commodity derivative contracts | 0 | 0 | 44.7 | 51.9 | 0.1 | 0 | 44.8 | 51.9 | 44.8 | 51.9 | |||
Liability from commodity derivative contracts | 13.2 | 56.9 | 0 | 0 | 12.4 | 56.9 | 0.8 | 0 | 13.2 | 56.9 | 13.2 | 56.9 | |
Partnership's senior secured revolving credit facility | 0 | 0 | 280.0 | 498.0 | 0 | 0 | 280.0 | 498.0 | 280.0 | 498.0 | |||
Partnership's senior unsecured notes | 0 | 0 | 1,526.6 | 1,057.3 | 0 | 0 | 1,526.6 | 1,057.3 | 1,381.7 | 979.7 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||
Derivatives financial instruments, fair value, net | 31.6 | ||||||||||||
Derivative fair value commodity price increases 10 percent, net asset | 1.9 | ||||||||||||
Derivative fair value commodity price decreases 10 percent, net asset | 61.3 | ||||||||||||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||||||||||||
Balance, Dec 31, 2011 | 0 | ||||||||||||
Loss (gain) included in revenue | (0.1) | ||||||||||||
Unrealized losses included in OCI | 0.8 | ||||||||||||
Balance, Sep 30, 2012 | $ 0.7 |
Fair Value Measurements (Tables)
|
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of assets and liabilities measured on a recurring basis | The following table shows a breakdown by fair value hierarchy category for (1) financial instruments measurements included in our consolidated balance sheet at fair value and (2) supplemental fair value disclosures for other financial instruments.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of changes in fair value of financial instruments classified as level 3 | The following table sets forth a reconciliation of the changes in the fair value of our financial instruments classified as Level 3 in the fair value hierarchy:
|
Basis of Presentation
|
9 Months Ended |
---|---|
Sep. 30, 2012
|
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Basis of Presentation [Abstract] | |
Basis of Presentation | Note 2 — Basis of Presentation We have prepared these unaudited consolidated financial statements in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. While we derived the year-end balance sheet data from audited financial statements, this interim report does not include all disclosures required by GAAP for annual periods. These unaudited consolidated financial statements and other information included in this Quarterly Report should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report. The unaudited consolidated financial statements for the three and nine months ended September 30, 2012 and 2011 include all adjustments which we believe are necessary for a fair presentation of the results for interim periods. All significant intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior periods have been reclassified to conform to the current year presentation. Our financial results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2012. |