Business Context and Reporting Period
This Form 8-K was filed by Targa Resources Corp. on June 11, 2019, reporting events occurring on June 7, 2019. The filing concerns Targa Resources Partners LP, a subsidiary of the registrant, and details amendments to its existing credit facilities.
Key Financial Metrics
The filing does not provide specific values for revenue, profit, cash flow, margins, or total debt levels. The document focuses exclusively on the terms of a credit agreement amendment rather than reporting period financial performance.
Material Changes
On June 7, 2019, Targa Resources Partners LP entered into the First Amendment to its Fourth Amended and Restated Credit Agreement. The material changes include:
- EBITDA Adjustment Cap Increase: The maximum percentage of Consolidated EBITDA attributable to Material Project EBITDA Adjustments was increased from 20% to 30%. This change applies solely to fiscal periods from June 30, 2019, through June 30, 2020, after which the cap reverts to 20%.
- EBITDA Calculation Modification: The definition of Consolidated EBITDA was amended to include certain cash distributions received from Unrestricted Subsidiaries (or non-Subsidiary entities) after the end of a period but on or before the date Consolidated EBITDA is calculated for that period.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or specific risk factors beyond the standard disclosure regarding lender relationships. It notes that certain lenders or their affiliates have provided investment banking and financial advisory services to the Partnership and may continue to do so. Additionally, the Partnership has entered into derivative financial transactions with affiliates of Bank of America, N.A., and other lenders.
Investor Verification Checklist
- Verify the full text of the First Amendment to the Fourth Amended and Restated Credit Agreement (Exhibit 10.1) to understand the precise definitions of "Material Project EBITDA Adjustments" and "Unrestricted Subsidiaries."
- Confirm the impact of the temporary 30% EBITDA adjustment cap on the company's leverage ratios and covenant compliance for the 2019-2020 fiscal periods.
- Review the subsidiary's (Targa Resources Partners LP) separate 8-K filing (File No. 001-33303) referenced in the exhibits for additional context.