Texas-based midstream natural gas company Targa Resources Partners has reported fourth quarter 2008 net income of $23.7 million, or $0.48 per diluted limited partner unit as compared to net income of $22.7 million, or $0.42 per diluted limited partner unit for the fourth quarter of 2007.
Targa reported EBITDA and non-cash income or loss related to derivative instruments (adjusted EBITDA) of $65.8 million for the fourth quarter of 2008 compared to adjusted EBITDA of $53.1 million for the fourth quarter of 2007.
For the full year 2008, Targa reported net income of $91.5 million, or $1.83 per diluted limited partner unit as compared to net income of $40.3 million, or $0.81 per diluted limited partner unit for 2007. Targa reported adjusted EBITDA of $228.9 million for 2008 compared to adjusted EBITDA of $185.8 million for 2007. The full year and fourth quarter 2008 results include a $13.1 million debt extinguishment gain in connection with the repurchase of a portion of Targa’s senior unsecured notes.
Distributable cash flow for the fourth quarter of 2008 of $34.7 million excludes this debt extinguishment gain and corresponds to distribution coverage of 1.3 times for the 47.1 million total units outstanding on December 31, 2008. Distributable cash flow for the year ended December 31, 2008 increased 23% to $152.9 million from $124.7 million in the same period a year ago.
Rene Joyce, CEO of Targa, said: "Our fourth quarter results reflect the underlying strength of our assets and hedge program. Despite the continued declines in commodity prices and processing margins, our coverage remained solid in the fourth quarter.
“We believe that our healthy coverage ratio, strong liquidity and hedge program currently allow us to fund our operations primarily from internal cash flow as we continue to assess the durations and ultimate impacts of the decline in commodity prices and the disruption in the capital markets. We will continue to execute with a focus on cost control and discipline regarding capital expenditures while we monitor developments in our markets and areas of operation."
On January 23, 2009, Targa announced a cash distribution of 51.75 cents per common and subordinated unit, or $2.07 per unit on an annualized basis, for the fourth quarter of 2008. This cash distribution was paid February 13, 2009 on all outstanding common and subordinated units to holders of record as of the close of business on February 4, 2009. The distribution was equal to the previous quarter's distribution and reflects an increase of approximately 30% over the distribution for the fourth quarter of 2007.
