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Targa Resources Partners LP And Targa Resources Corp. Report Second Quarter 2013 Financial Results

Stocks in this article: NGLSTRGP

On July 16, 2013, TRC declared a quarterly dividend of $0.5325 per share of its common stock for the three months ended June 30, 2013, or $2.13 per share on an annualized basis, representing increases of approximately 8% over the previous quarter's dividend and 35% over the dividend for the second quarter of 2012. Total cash dividends of approximately $22.1 million will be paid August 15, 2013 on all outstanding common shares to holders of record as of the close of business on July 29, 2013.

The Company's distributable cash flow for the second quarter 2013 was $29.5 million compared to $22.5 million in total declared dividends for the quarter (see the section of this release entitled "Targa Resources Corp. - Non-GAAP Financial Measures" for a discussion of distributable cash flow and reconciliations of this measure to its most directly comparable financial measure calculated and presented in accordance with GAAP).

Targa Resources Corp. - Capitalization, Liquidity and Financing Update

Total funded debt of the Company as of June 30, 2013, excluding debt of the Partnership, was $78 million in borrowings outstanding under its $150.0 million senior secured revolving credit facility due 2017. This resulted in $72.0 million in available revolver capacity as of June 30, 2013.

The Company's cash balance, excluding cash held by the Partnership and its subsidiaries, was $10.2 million as of June 30, 2013, resulting in total liquidity of $82.2 million.

Conference Call

Targa Resources Partners and Targa Resources Corp. will host a joint conference call for investors and analysts at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on August 1, 2013 to discuss second quarter 2013 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 17364562. 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 and the Company's website. An updated investor presentation will be available in the Events and Presentations section of the Partnership's website following the completion of the conference call.

Targa Resources Partners – Consolidated Financial Results of Operations
         
  Three Months Ended June 30, Six Months Ended June 30,
  2013 2012 2013  2012
  (In millions except per unit data)
Revenues   $1,441.6  $1,318.4  $2,839.5 $2,963.9
Product purchases  1,176.4  1,074.6  2,313.9  2,458.7
Gross margin (1)  265.2  243.8  525.6  505.2
Operating expenses  96.1  77.2  182.1  148.8
Operating margin (2)  169.1  166.6  343.5  356.4
Depreciation and amortization expenses  65.7  47.6  129.6  94.3
General and administrative expenses  36.1  33.5  70.3  66.4
Other operating expense  4.1  --   4.2  (0.1)
Income from operations  63.2  85.5  139.4  195.8
Interest expense, net  (31.6)  (29.4)  (63.0)  (58.8)
Equity earnings  2.9  (0.2)  4.5  1.9
Loss on debt redemption and early debt extinguishment  (7.4)  --   (7.4)  -- 
Other   6.5  (0.4)  6.3  (0.5)
Income tax expense   (0.9)  (0.8)  (1.8)  (1.8)
Net income   32.7  54.7  78.0  136.6
Less: Net income attributable to noncontrolling interests  6.4  7.9  12.8  19.6
Net income attributable to Targa Resources Partners LP  $26.3  $46.8  $65.2  $117.0
         
Net income attributable to general partner  25.1  15.4  47.9  29.5
Net income attributable to limited partners   1.2  31.4  17.3  87.5
Net income attributable to Targa Resources Partners LP  $26.3  $46.8  $65.2  $117.0
         
Basic net income per limited partner unit  $0.01  $0.35  $0.17  $0.99
Diluted net income per limited partner unit  0.01  0.35  0.17  0.99
         
Financial data:        
Adjusted EBITDA (3)  $126.5  $122.9  $258.8  $268.3
Distributable cash flow (4)  79.0  84.5  164.7  190.2
Capital expenditures  235.7  140.4  442.6  238.4
         
Operating data:        
Crude oil gathered, MBbl/d  38.3  --   34.9  -- 
Plant natural gas inlet, MMcf/d (5)(6)  2,072.2  2,083.0  2,075.6  2,157.8
Gross NGL production, MBbl/d  131.2  124.0  132.3  128.1
Export volumes, MBbl/d  41.2  28.0  43.0  25.1
Natural gas sales, BBtu/d (6)  953.1  930.3  901.7  895.4
NGL sales, MBbl/d  282.7  270.3  282.0  274.7
Condensate sales, MBbl/d  4.0  3.7  3.7  3.4
__________        
(1)  Gross margin is a non-GAAP financial measure and is discussed under "Targa Resources Partners - Non-GAAP Financial Measures."
(2)  Operating margin is a non-GAAP financial measure and is discussed under "Targa Resources Partners - Non-GAAP Financial Measures."
(3)  Adjusted EBITDA is net income before: interest, income taxes, depreciation and amortization, gains or losses on debt repurchases and debt redemptions, early debt extinguishments and asset disposals, non-cash risk management activities related to derivative instruments, and changes in the fair value of the Badlands acquisition contingent consideration. This is a non-GAAP financial measure and is discussed under "Targa Resources Partners - 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 redemptions, early debt extinguishments and asset disposals, less maintenance capital expenditures (net of any reimbursements of project costs), and changes in the fair value of the Badlands acquisition contingent consideration. This is a non-GAAP financial measure and is discussed under "Targa Resources Partners - 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.

Targa Resources Partners – Review of Consolidated Second Quarter Results

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

The increase in revenues reflected higher realized prices on natural gas and condensate ($148.8 million), higher commodity sales volumes ($50.7 million) and higher fee-based and other revenues ($19.8 million). Partially offsetting these favorable factors was lower realized prices on NGLs ($96.1 million).

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