811 Louisiana, Suite 2100
Houston, TX 77002
713.584.1000
Targa Resources Corp. Reports Record First Quarter 2025 Financial Results
HOUSTON - May 1, 2025 - Targa Resources Corp. (NYSE: TRGP) ("TRGP," the "Company" or "Targa") today reported first quarter 2025 results.
First quarter 2025 net income attributable to Targa Resources Corp. was $270.5 million compared to $275.2 million for the first quarter of 2024. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items ("adjusted EBITDA")(1)of $1,178.5 million for the first quarter of 2025 compared to $966.2 million for the first quarter of 2024.
HighlightsRecord first quarter 2025 adjusted EBITDA of $1.2 billion, a 22% increase year over year
Repurchased $214 million of common shares through April 2025
Declared an annual common dividend of $4.00 per share for 2025, a 33% increase year over year
Continue to estimate full year 2025 adjusted EBITDA between $4.65 billion and $4.85 billion
Continue to estimate 2025 net growth capital expenditures of $2.6 billion to $2.8 billion
On April 10, 2025, the Company declared an increase to its quarterly cash dividend to $1.00 per common share, or $4.00 per common share on an annualized basis, for the first quarter of 2025. This dividend represents a 33 percent increase over the common dividend declared with respect to the first quarter of 2024. Total cash dividends of approximately $217 million will be paid on May 15, 2025 on all outstanding shares of common stock to holders of record as of the close of business on April 30, 2025.
During the first quarter of 2025, Targa repurchased 651,163 shares of its common stock at a weighted average per share price of $191.86 for a total net cost of $124.9 million. As of March 31, 2025, there was $890.5 million remaining under the Company's share repurchase program. Subsequent to quarter end, Targa repurchased 532,210 shares of its common stock at a weighted average per share price of
$167.28 for a total net cost of $89.0 million.
First Quarter 2025 - Sequential Quarter over Quarter CommentaryTarga reported first quarter adjusted EBITDA of $1,178.5 million, representing a 5 percent increase compared to the fourth quarter of 2024. The sequential increase in adjusted EBITDA was attributable to contribution from the Badlands transaction and higher marketing margin. Volumes across Targa's Gathering and Processing ("G&P") and Logistics and Transportation ("L&T") systems were negatively impacted by winter weather events which reduced system volumes during the first quarter. In the G&P segment, sequential adjusted operating margin was approximately flat as modestly lower Permian natural gas inlet volumes due to winter weather events were partially offset by higher fees. In the L&T segment, adjusted operating margin was also sequentially flat as higher marketing margin offset lower NGL pipeline transportation volumes, which were negatively impacted by winter weather events. Fractionation volumes were lower in the first quarter due to a major planned turnaround at Targa's Cedar Bayou Fractionation facilities in Mont Belvieu, TX. Higher sequential marketing margin was attributable to increased optimization opportunities. Subsequent to quarter end, Targa's Permian volumes and associated L&T system volumes have meaningfully increased from first quarter levels.
Capitalization, Financing and LiquidityThe Company's total consolidated debt as of March 31, 2025 was $16,208.7 million, net of $106.7 million of debt issuance costs and
$35.2 million of unamortized discount, with $14,534.4 million of outstanding senior unsecured notes, $920.0 million outstanding under the Commercial Paper Program, $600.0 million outstanding under the Securitization Facility, and $296.2 million of finance lease liabilities.
In February 2025, Targa completed an underwritten public offering of 5.550% Notes due 2035 and 6.125% Notes due 2055, resulting in net proceeds of approximately $2.0 billion. Targa used the net proceeds from the issuance to fund the repurchase of all of the outstanding preferred equity in Targa Badlands LLC (the "Badlands Transaction") and for general corporate purposes, including to repay borrowings under the Commercial Paper Program.
Total consolidated liquidity as of March 31, 2025 was approximately $2.7 billion, including $2.6 billion available under the TRGP Revolver, and $151.4 million of cash.
Growth Projects UpdateIn Targa's G&P segment, construction continues on its 275 MMcf/d Pembrook II, East Pembrook, and East Driver plants in Permian Midland and its 275 MMcf/d Bull Moose II and Falcon II plants in Permian Delaware. In Targa's L&T segment, construction continues on its Delaware Express pipeline expansion, its 150 MBbl/d Train 11 and Train 12 fractionators in Mont Belvieu, and its GPMT LPG Export Expansion. The Company now expects its Pembrook II plant to begin operations in the third quarter of 2025 and remains ontrack to complete its other announced expansions as previously disclosed.
2025 OutlookTarga continues to estimate full year 2025 adjusted EBITDA to be between $4.65 billion and $4.85 billion supported by forecasted growth across its Permian G&P footprint, which is expected to drive record Permian, NGL pipeline transportation, fractionation, and LPG export volumes in 2025 relative to records set in 2024. While the growth is weighted to the second half of 2025, current and expected producer activity levels continue to support an outlook of meaningfully increasing volumes across the rest of 2025 and 2026.
Targa's estimate for 2025 net growth capital expenditures remains unchanged in a range of $2.6 billion to $2.8 billion, and its estimate for 2025 net maintenance capital expenditures also remains unchanged at approximately $250 million.
Conference CallThe Company will host a conference call for the investment community at 11:00 a.m. Eastern time (10:00 a.m. Central time) on May 1, 2025 to discuss its first quarter results. The conference call can be accessed via webcast under Events and Presentations in the Investors section of the Company's website at https://www.targaresources.com/investors/events, or by going directly to https://edge.media-server.com/mmc/p/waa5bt3q. A webcast replay will be available at the link above approximately two hours after the conclusion of the event.
An earnings supplement presentation and updated investor presentation are available under Events and Presentations in the Investors section of the Company's website at https://www.targaresources.com/investors/events.
(1) Adjusted EBITDA and adjusted operating margin (segment) are non-GAAP financial measures and are discussed under "Non-GAAP Financial Measures."
Targa Resources Corp. - Consolidated Financial Results of OperationsRevenues:
Three Months Ended March 31,2025 2024 2025 vs. 2024
(In millions)
Sales of commodities | $ | 3,884.4 | $ | 3,942.4 | $ (58.0) | (1 %) |
Fees from midstream services | 677.1 | 620.0 | 57.1 | 9% | ||
Total revenues | 4,561.5 | 4,562.4 | (0.9) | - | ||
Product purchases and fuel | 3,257.8 | 3,218.0 | 39.8 | 1% | ||
Operating expenses | 303.6 | 278.0 | 25.6 | 9% | ||
Depreciation and amortization expense | 367.6 | 340.5 | 27.1 | 8% | ||
General and administrative expense | 94.5 | 86.5 | 8.0 | 9% | ||
Other operating (income) expense | (5.3) | - | (5.3) | (100%) | ||
Income (loss) from operations | 543.3 | 639.4 | (96.1) | (15%) | ||
Interest expense, net | (197.1) | (228.6) | 31.5 | 14% | ||
Equity earnings (loss) | 5.5 | 2.8 | 2.7 | 96% | ||
Other, net | 0.3 | 1.7 | (1.4) | NM | ||
Income tax (expense) benefit | (72.2) | (82.7) | 10.5 | 13% | ||
Net income (loss) | 279.8 | 332.6 | (52.8) | (16%) | ||
Less: Net income (loss) attributable to noncontrolling interests | 9.3 | 57.4 | (48.1) | (84%) | ||
Net income (loss) attributable to Targa Resources Corp. | 270.5 | 275.2 | (4.7) | (2 %) | ||
Premium on repurchase of noncontrolling interests, net of tax | 70.5 | - | 70.5 | 100% | ||
Net income (loss) attributable to common shareholders | $ 200.0 | $ 275.2 | $ (75.2) | (27%) | ||
Financial data: | ||||||
Adjusted EBITDA (1) | $ 1,178.5 | $ 966.2 | $ 212.3 | 22% | ||
Adjusted cash flow from operations (1) | 970.0 | 738.4 | 231.6 | 31% | ||
Adjusted free cash flow (1) | 328.2 | 2.8 | 325.4 | NM | ||
(1) Adjusted EBITDA, adjusted cash flow from operations and adjusted free cash flow are non-GAAP financial measures and are discussed under "Non-GAAP Financial Measures."
NM Due to a low denominator, the noted percentage change is disproportionately high and as a result, considered not meaningful.
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
Commodity sales are relatively flat reflecting lower NGL, natural gas and condensate volumes ($217.9 million), the unfavorable impact of hedges ($256.1 million) and lower condensate prices ($15.2 million), offset by higher natural gas and NGL prices ($431.2 million).
The increase in fees from midstream services is primarily due to higher gas gathering and processing fees, and higher export volumes, partially offset by lower transportation and fractionation fees.
Product purchases and fuel are relatively flat reflecting higher natural gas and NGL prices, offset by lower NGL and natural gas volumes. The increase in operating expenses is primarily due to higher labor, taxes and maintenance costs, partially offset by lower rental costs. See "-Review of Segment Performance" for additional information on a segment basis.
The increase in depreciation and amortization expense is primarily due to the impact of system expansions on the Company's asset base.
The decrease in interest expense, net is due to recognition of cumulative interest on a legal ruling associated with the Splitter Agreement in 2024, partially offset by higher borrowings in 2025.
The decrease in income tax expense is primarily due to a decrease in pre-tax book income.
The decrease in net income attributable to noncontrolling interests is primarily due to the Badlands Transaction in 2025 and the acquisition of the remaining membership interest in Cedar Bayou Fractionators, L.P. in 2024.
The premium on repurchase of noncontrolling interests, net of tax is due to the Badlands Transaction in 2025.
Review of Segment PerformanceThe following discussion of segment performance includes inter-segment activities. The Company views segment operating margin and adjusted operating margin as important performance measures of the core profitability of its operations. These measures are key components of internal financial reporting and are reviewed for consistency and trend analysis. For a discussion of adjusted operating margin, see "Non-GAAP Financial Measures ― Adjusted Operating Margin." Segment operating financial results and operating statistics include the effects of intersegment transactions. These intersegment transactions have been eliminated from the consolidated presentation.
The Company operates in two primary segments: (i) Gathering and Processing; and (ii) Logistics and Transportation.
Gathering and Processing Segment
The Gathering and Processing segment includes assets used in the gathering and/or purchase and sale of natural gas produced from oil and gas wells, removing impurities and processing this raw natural gas into merchantable natural gas by extracting NGLs; and assets used for the gathering and terminaling and/or purchase and sale of crude oil. The Gathering and Processing segment's assets are located in the Permian Basin of West Texas and Southeast New Mexico (including the Midland, Central and Delaware Basins); the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma Basins in Oklahoma (including the SCOOP and STACK) and South Central Kansas; the Williston Basin in North Dakota (including the Bakken and Three Forks plays); and the onshore and near offshore regions of the Louisiana Gulf Coast.
The following table provides summary data regarding results of operations of this segment for the periods indicated:
Three Months Ended March 31,
2025 2024 2025 vs. 2024
(In millions, except operating statistics and price amounts)
Operating margin | $ | 602.2 | $ | 556.4 | $ 45.8 | 8% |
Operating expenses | 208.2 | 188.1 | 20.1 | 11% | ||
Adjusted operating margin | $ 810.4 | $ 744.5 | $ 65.9 | 9% | ||
Operating statistics (1): | ||||||
Plant natural gas inlet, MMcf/d (2) (3) | ||||||
Permian Midland (4) | 2,985.6 | 2,746.1 | 239.5 | 9% | ||
Permian Delaware | 3,020.3 | 2,648.9 | 371.4 | 14% | ||
Total Permian | 6,005.9 | 5,395.0 | 610.9 | 11% | ||
SouthTX | 295.1 | 304.9 | (9.8 ) | (3 %) | ||
North Texas | 171.5 | 184.5 | (13.0 ) | (7 %) | ||
SouthOK (5) | 318.0 | 357.2 | (39.2 ) | (11%) | ||
WestOK | 200.1 | 210.1 | (10.0 ) | (5 %) | ||
Total Central | 984.7 | 1,056.7 | (72.0 ) | (7 %) | ||
Badlands (5) (6) | 136.9 | 127.1 | 9.8 | 8% | ||
Total Field | 7,127.5 | 6,578.8 | 548.7 | 8% | ||
Coastal | 398.8 | 524.7 | (125.9 ) | (24%) | ||
Total | 7,526.3 | 7,103.5 | 422.8 | 6% | ||
NGL production, MBbl/d (3) | ||||||
Permian Midland (4) | 429.5 | 392.8 | 36.7 | 9% | ||
Permian Delaware | 366.4 | 307.0 | 59.4 | 19% | ||
Total Permian | 795.9 | 699.8 | 96.1 | 14% | ||
SouthTX | 28.8 | 28.9 | (0.1 ) | - | ||
North Texas | 21.0 | 21.9 | (0.9 ) | (4 %) | ||
SouthOK (5) | 33.1 | 28.1 | 5.0 | 18% | ||
WestOK | 15.2 | 11.7 | 3.5 | 30% | ||
Total Central | 98.1 | 90.6 | 7.5 | 8% | ||
Badlands (5) | 16.4 | 14.6 | 1.8 | 12% | ||
Total Field | 910.4 | 805.0 | 105.4 | 13% | ||
Coastal | 32.7 | 39.1 | (6.4 ) | (16%) | ||
Total | 943.1 | 844.1 | 99.0 | 12% | ||
Crude oil, Badlands, MBbl/d | 107.1 | 94.4 | 12.7 | 13% | ||
Crude oil, Permian, MBbl/d | 29.0 | 27.6 | 1.4 | 5% | ||
Natural gas sales, BBtu/d (3) | 2,592.8 | 2,650.5 | (57.7 ) | (2 %) | ||
NGL sales, MBbl/d (3) | 570.2 | 498.8 | 71.4 | 14% | ||
Condensate sales, MBbl/d | 18.1 | 19.1 | (1.0 ) | (5 %) | ||
Average realized prices (7): | ||||||
Natural gas, $/MMBtu | 2.24 | 1.50 | 0.74 | 49% | ||
NGL, $/gal | 0.50 | 0.48 | 0.02 | 4% | ||
Condensate, $/Bbl | 72.32 | 77.22 | (4.90 ) | (6 %) | ||
Segment operating statistics include the effect of intersegment amounts, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the period and the denominator is the number of calendar days during the period.
Plant natural gas inlet represents the Company's undivided interest in the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant, other than Badlands during 2024.
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Disclaimer
Targa Resources Corp. published this content on May 01, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 01, 2025 at 10:24 UTC.
