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Targa Resources Partners LP And Targa Resources Corp. Report Fourth Quarter And Full Year 2010 Financial Results

Stocks in this article: NGLS TRGP

Targa Resources Corp. - Capitalization, Liquidity and Financing Update

Total funded debt of the Company as of December 31, 2010, excluding debt of the Partnership, was $89.3 million. The Company also has access to the full amount of a $75 million senior secured revolving credit facility due 2014.

The Company's cash balance, excluding cash held at the Partnership and the Partnership's subsidiaries, was approximately $112 million as of December 31, 2010.

On December 6, 2010 the Company priced its initial public offering of 18,831,250 shares of its common stock at $22.00 per share, including 2,456,250 shares from the exercise in full of the underwriters over-allotment option. As of December 31, 2010 there were 42,292,348 common shares outstanding.

Conference Call

Targa Resources Partners and Targa Resources Corp. will host a conference call for investors and analysts at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) on February 24, 2011 to discuss fourth quarter and full year 2010 financial results. The conference call can be accessed via Webcast through the Events and Presentations section of the Partnership's website at www.targaresources.com , by going directly to http://ir.targaresources.com/events.cfm?company=LP or by dialing 877-881-2598. The pass code for the dial-in is 43705187. Please dial in ten minutes prior to the scheduled start time. A replay will be available approximately two hours following completion of the Webcast through the Investor's section of the Partnership's website. Telephone replay access numbers are 800-642-1687 or 706-645-9291 with pass code 43705187 and will remain available, along with the Webcast, until March 10, 2011.

Targa Resources Partners - Consolidated Financial Results of Operation

With the closing of the acquisitions of the Downstream Business in 2009, the Permian assets, Coastal Straddles, Versado and VESCO in 2010, and in accordance with the accounting treatment for entities under common control, the results of operations of the Partnership include the historical results of the Downstream Business, Permian assets, Coastal Straddles, Versado and VESCO for all periods presented.

  Three Months Ended Year Ended
  December 31, December 31,
   2010   2009   2010   2009 
  (In millions, except per unit data)
Revenues (1)  $ 1,521.9  $ 1,383.2  $ 5,460.2  $ 4,503.8
Product purchases   1,300.3  1,168.3  4,688.0  3,792.9
Gross margin   221.6  214.9  772.2  710.9
Operating expenses  69.3  52.3  259.5  234.4
Operating margin  152.3  162.6  512.7  476.5
Depreciation and amortization expense  47.9  41.7  176.2  166.7
General and administrative expense  42.4  36.6  122.4  118.5
Other  (3.3)  0.2  (3.3)  (3.6)
Income from operations  65.3  84.1  217.4  194.9
Other income (expense):        
Interest expense, net  (25.0)  (33.5)  (110.8)  (159.8)
Equity in earnings of unconsolidated investment  1.6  1.8  5.4  5.0
Gain (loss) on debt repurchases  --   (1.5)  --   (1.5)
Gain (loss) on mark-to-market derivative instruments  --   (18.8)  26.0  (30.9)
Other  0.8  1.0  --   0.7
Income tax expense  (0.1)  (0.3)  (4.0)  (1.2)
Net income   42.6  32.8  134.0  7.2
Less: Net income attributable to noncontrolling interest  6.7  7.4  24.9  19.3
Net income attributable to Targa Resources Partners LP  $ 35.9  $ 25.4  $ 109.1  $ (12.1)
         
Net income (loss) attributable to predecessor operations  $ --   $ (10.6)  $ 25.8  $ (66.7)
Net income attributable to general partner  6.1  3.7  18.1  10.4
Net income attributable to limited partners  29.8  32.3  65.2  44.2
Net income attributable to Targa Resources Partners LP  $ 35.9  $ 25.4  $ 109.1  $ (12.1)
         
Basic and diluted net income per limited partner unit  $ 0.39  $ 0.52  $ 0.92  $ 0.86
         
Financial data:        
Adjusted EBITDA (2)  $ 115.8  $ 123.0  $ 396.1  $ 400.6
Distributable cash flow (3)  76.0  96.4  276.0  312.2
         
(1) Includes business interruption insurance revenues of $7.3 million and $13.3 million for the three months and year ended December 31, 2009 recognized in periods prior to the conveyances of assets to the Partnership from the Company. These conveyances were accounted for under common control accounting. There were no business interruption proceeds received by the Partnership in 2010, as these amounts were retained by the Company under the terms of the applicable purchase and sale agreements.
(2) Adjusted EBITDA is net income before interest, income taxes, depreciation and amortization and non-cash gain or loss related to derivative instruments. 
(3) Distributable cash flow is net income attributable to Targa Resources Partners plus depreciation and amortization, deferred taxes and amortization of debt issue costs included in interest expense, adjusted for losses/(gains) on mark-to-market derivative contracts and debt repurchases, less maintenance capital expenditures.  

Targa Resources Partners - Review of Consolidated Fourth Quarter Results

Three Months Ended December 31, 2010 Compared to Three Months Ended December 31, 2009

Revenue increased $138.7 million due to higher commodity prices ($101.2 million) and higher natural gas and NGL sales volumes ($51.0 million) offset by lower condensate sales volumes ($8.1 million) and lower fee-based and other revenues ($5.4 million). 

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