Investments in Unconsolidated Affiliates

12 Months Ended

Dec. 31, 2020

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Affiliates

Note 7 – Investments in Unconsolidated Affiliates

Our investments in unconsolidated affiliates consist of the following:

Gathering and Processing Segment

•

two operated joint ventures in South Texas: a 75% interest in T2 LaSalle Gathering Company L.L.C. (“T2 LaSalle”) and a 50% interest in T2 Eagle Ford Gathering Company L.L.C. (“T2 Eagle Ford”), (together the “T2 Joint Ventures”); and

•

a 50% operated ownership interest in Little Missouri 4.

Logistics and Transportation Segment

•

a 25% non-operated ownership interest in GCX;

•

a 38.8% non-operated ownership interest in Gulf Coast Fractionators LP (“GCF”); and

•

a 50% operated ownership interest in Cayenne.

The terms of these joint venture agreements do not afford us the degree of control required for consolidating them in our consolidated financial statements, but do afford us the significant influence required to employ the equity method of accounting.

See Note 4 – Joint Ventures and Divestitures for further discussion of GCX and Little Missouri 4.

The following table shows the activity related to our investments in unconsolidated affiliates:

	Balance at December 31, 2017		Equity Earnings (Loss)			Cash Distributions (1)			Acquisition (Disposition)			Contributions (2)		Balance at December 31, 2018
GCX (3)	$	—	$	0.8		$	—		$	—		$	210.8	$	211.6
Little Missouri 4		—		—			(8.0	)		—			75.3		67.3
T2 Eagle Ford		109.2		(10.2	)		—			—			—		99.0
T2 LaSalle		54.1		(4.9	)		—			—			0.1		49.3
GCF		45.8		16.8			(22.3	)		—			—		40.3
Cayenne		8.6		6.4			(4.0	)		—			5.6		16.6
T2 EF Cogen		3.9		(1.8	)		—			(2.1	)		—		—
Agua Blanca		—		0.2			—			3.5			2.7		6.4
Total	$	221.6	$	7.3		$	(34.3	)	$	1.4		$	294.5	$	490.5

	Balance at December 31, 2018		Equity Earnings (Loss)			Cash Distributions			Disposition			Contributions		Balance at December 31, 2019
GCX (3)	$	211.6	$	27.7		$	(25.3	)	$	—		$	233.5	$	447.5
Little Missouri 4		67.3		3.4			—			—			33.0		103.7
T2 Eagle Ford		99.0		(9.4	)		—			—			—		89.6
T2 LaSalle		49.3		(4.5	)		—			—			—		44.8
GCF		40.3		16.1			(19.2	)		—			—		37.2
Cayenne		16.6		7.2			(8.2	)		—			0.3		15.9
Agua Blanca		6.4		(1.5	)		(0.4	)		(4.5	)		—		—
Total	$	490.5	$	39.0		$	(53.1	)	$	(4.5	)	$	266.8	$	738.7

	Balance at December 31, 2019		Equity Earnings (Loss)			Cash Distributions			Disposition			Contributions		Balance at December 31, 2020
GCX (3)	$	447.5	$	66.3		$	(81.3	)	$	—		$	2.7	$	435.2
Little Missouri 4		103.7		10.8			(9.8	)		—			—		104.7
T2 Eagle Ford (4)		89.6		(8.9	)		(0.9	)		—			—		79.8
T2 LaSalle (4)		44.8		(4.8	)		(0.4	)		—			—		39.6
GCF (5)		37.2		2.9			(1.6	)		—			—		38.5
Cayenne		15.9		6.3			(6.0	)		—			—		16.2
Total	$	738.7	$	72.6		$	(100.0	)	$	—		$	2.7	$	714.0

(1)	Includes an $8.0 million distribution from Little Missouri 4 as a reimbursement of pre-formation expenditures.

(2)	Includes a $16.0 million initial contribution of property, plant and equipment to Little Missouri 4.

(3)	As discussed in Note 4 –Joint Ventures and Divestitures, our 25% interest in GCX is owned by GCX DevCo JV, of which we own a 20% interest. GCX DevCo JV is accounted for on a consolidated basis in our consolidated financial statements.

(4)

The carrying values of the T2 Joint Ventures include the effects of the Atlas Merger purchase accounting, which determined fair values for the joint ventures as of the date of acquisition. As of December 31, 2020, $21.6 million of unamortized excess fair value over the T2 LaSalle and T2 Eagle Ford capital accounts remained. These basis differences, which are attributable to the underlying depreciable tangible gathering assets, are being amortized on a straight-line basis as components of equity earnings over the estimated 20-year useful lives of the underlying assets.

(5)	Targa will assume operatorship of GCF in the first half of 2021.

Effective December 31, 2018: (i) we conveyed our 50% ownership interest in T2 EF Cogen to our joint venture partner and received a distribution of certain assets from the joint venture; and, (ii) we were named as operator of the T2 Joint Ventures. On April 1, 2019, we assumed the operatorship of the T2 Joint Ventures.

During 2019, we closed on the sale of an equity-method investment for $73.8 million, of which $3.5 million contingent consideration was received in January 2020. As a result of the sale, we recognized a gain of $69.3 million reported in Gain (loss) from sale of equity-method investment.