Targa Resources Corp. press release

Targa Resources Corp. Reports Record First Quarter 2026 Financial Results and Increases Financial Outlook for 2026

2026-05-07

NYSE - New York Stock Exchange · Natural Gas · Natural Gas Liquids · Oil · United States · Corporate Finance

HOUSTON, May 07, 2026 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) (“TRGP,” the “Company” or “Targa”) today reported first quarter 2026 results.

First quarter 2026 net income attributable to Targa Resources Corp. was $480 million compared to $271 million for the first quarter of 2025. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items (“adjusted EBITDA”)(1)of $1,403 million for the first quarter of 2026 compared to $1,179 million for the first quarter of 2025.

Highlights

Record adjusted EBITDA for the first quarter of $1.4 billion, an increase of 19% year-over-year Record Permian inlet volumes during the first quarter Record fractionation volumes during the first quarter Increasing full year 2026 adjusted EBITDA estimate to $5.7 billion to $5.9 billion In February 2026, completed our new Falcon II processing plant in Permian Delaware In late March 2026, completed our new East Pembrook processing plant in Permian Midland In April 2026, completed our new Train 11 fractionator in Mont Belvieu, TX In May 2026, starting up operation of our Delaware Express NGL Pipeline expansion Announced today two new processing plants in Permian Delaware (“Roadrunner III” and “Copperhead II”) Continue to estimate 2026 net growth capital expenditures of approximately $4.5 billion

On April 16, 2026, the Company declared a quarterly cash dividend of $1.25 per common share, or $5.00 per common share on an annualized basis, for the first quarter of 2026. This dividend represents a 25 percent increase over the common dividend declared with respect to the first quarter of 2025. Total cash dividends of approximately $268 million will be paid on May 15, 2026 on all outstanding shares of common stock to holders of record as of the close of business on April 30, 2026.

During the first quarter of 2026, Targa repurchased 227,801 shares of its common stock at a weighted average per share price of $241.43 for a total net cost of $55 million. As of March 31, 2026, there was $1,319 million remaining under the Company’s share repurchase programs.

First Quarter 2026 - Sequential Quarter over Quarter Commentary

Targa reported record first quarter adjusted EBITDA of $1,403 million, representing a 5 percent increase compared to the fourth quarter of 2025. The sequential increase was driven by record Permian volumes in our Gathering and Processing (“G&P”) segment, primarily from the acquisition of certain assets in the Permian Basin, as well as higher marketing margin and record NGL fractionation volumes in our Logistics and Transportation (“L&T”) segment.

In our G&P segment, higher sequential adjusted operating margin was driven by higher Permian inlet volumes attributable to the acquisition of certain assets in the Permian Basin, the completion of our Falcon II plant, and continued strong producer activity, partially offset by severe winter weather and price-related producer curtailments which impacted our Permian volumes during the first quarter.

In our L&T segment, lower sequential first quarter adjusted operating margin was attributable to lower NGL transportation volumes and lower LPG export volumes, partially offset by higher marketing margin. NGL transportation and fractionation volumes were affected by the impacts of severe winter weather and price-related producer curtailments on our G&P systems. LPG export volumes were reduced by an unplanned outage at a portion of our export facility late in the first quarter, which was resolved early in the second quarter. Marketing margin increased due to greater optimization opportunities.

Capitalization, Financing and Liquidity

The Company’s total consolidated debt as of March 31, 2026 was $19,132 million, net of $132 million of debt issuance costs and $39 million of unamortized discount, with $17,900 million of outstanding senior unsecured notes, $457 million outstanding under the Commercial Paper Program, $600 million outstanding under the Securitization Facility, and $347 million of finance lease liabilities.

Total consolidated liquidity as of March 31, 2026 was approximately $3.1 billion, including $3.0 billion available under the TRGP Revolver and $100 million of cash.

Financing Update

In March 2026, Targa completed an underwritten public offering of $750 million of 4.350% Notes due 2031 and $750 million of 6.050% Notes due 2056. The Company used the net proceeds from the debt issuance for general corporate purposes, including to reduce borrowings under the Commercial Paper Program.

Growth Projects Update

In our G&P segment, we commenced operations of our new Falcon II plant in the Permian Delaware in February 2026 and our new East Pembrook plant in the Permian Midland in late March 2026. Construction continues on our East Driver plant in Permian Midland, and our Copperhead, Yeti I and Yeti II plants in Permian Delaware, and our G&P projects remain on track.

In May 2026, in response to increasing production and to meet the infrastructure needs of our customers, we announced the construction of a new 265 million cubic feet per day (“MMcf/d”) natural gas processing plant, Roadrunner III, and a new 275 MMcf/d natural gas processing plant, Copperhead II. Both plants will be located in the Permian Delaware and are expected to begin operations in the first quarter of 2028. In February 2026, we announced orders of long-lead items for Roadrunner III and Copperhead II.

In our L&T segment, we commenced operations of our Train 11 fractionator in Mont Belvieu in early April 2026 and are currently starting up operation of our Delaware Express NGL Pipeline expansion. Construction continues on our Train 12 and Train 13 fractionators in Mont Belvieu, our Speedway NGL Pipeline, our GPMT LPG Export Expansion, and our Bull Run, Buffalo Run and Forza intra-basin residue gas pipeline projects. Our L&T projects remain on track.

2026 Outlook

Targa now estimates full year 2026 adjusted EBITDA to be between $5.7 billion and $5.9 billion, a 17 percent increase year-over-year, based on the midpoint of the range. The increase in our full year financial outlook is driven by our strong outlook for marketing and optimization opportunities, LPG export operations, and continued strength of volume growth across Targa’s integrated assets. Second quarter 2026 Permian inlet volumes are currently trending significantly higher relative to the first quarter, and our estimated full year average 2026 inlet volumes remain consistent with our expectations despite the impacts of price-related producer curtailments. We continue to estimate net growth capital expenditures to be approximately $4.5 billion which includes capital spending for announced infrastructure projects underway including our new Roadrunner III and Copperhead II processing plants in the Permian announced today. Our estimate for 2026 net maintenance capital expenditures remains unchanged at approximately $250 million.

An earnings supplement presentation and updated investor presentation are available under Events and Presentations in the Investors section of our website at www.targaresources.com/investors/events.

Conference Call

We will host a conference call for the investment community at 11:00 a.m. Eastern time (10:00 a.m. Central time) on May 7, 2026 to discuss first quarter results. The conference call can be accessed via webcast under Events and Presentations in the Investors section of our website at www.targaresources.com/investors/events, or by going directly tohttps://edge.media-server.com/mmc/p/r9w9ai8y/. A webcast replay will be available at the link above approximately two hours after the conclusion of the event.

| (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 Operations

| | Three Months Ended March 31, | | | | | | | | | | | | | | | | 2026 | | | 2025 | | | 2026 vs. 2025 | | | | | | | | | | (In millions) | | | | | | | | | | | | | | | Revenues: | | | | | | | | | | | | | | | | Sales of commodities | $ | 3,344.6 | | | $ | 3,884.4 | | | $ | (539.8 | ) | | (14 | %) | | Fees from midstream services | | 750.1 | | | | 677.1 | | | | 73.0 | | | 11 | % | | Total revenues | | 4,094.7 | | | | 4,561.5 | | | | (466.8 | ) | | (10 | %) | | Product purchases and fuel | | 2,394.5 | | | | 3,257.8 | | | | (863.3 | ) | | (26 | %) | | Operating expenses | | 333.7 | | | | 303.6 | | | | 30.1 | | | 10 | % | | Depreciation and amortization expense | | 426.0 | | | | 367.6 | | | | 58.4 | | | 16 | % | | General and administrative expense | | 107.8 | | | | 94.5 | | | | 13.3 | | | 14 | % | | Other operating (income) expense | | (14.2 | ) | | | (5.3 | ) | | | (8.9 | ) | | 168 | % | | Income (loss) from operations | | 846.9 | | | | 543.3 | | | | 303.6 | | | 56 | % | | Interest expense, net | | (227.6 | ) | | | (197.1 | ) | | | (30.5 | ) | | 15 | % | | Equity earnings (loss) | | 8.6 | | | | 5.5 | | | | 3.1 | | | 56 | % | | Other, net | | (16.6 | ) | | | 0.3 | | | | (16.9 | ) | NM | | | | Income tax (expense) benefit | | (123.9 | ) | | | (72.2 | ) | | | (51.7 | ) | | 72 | % | | Net income (loss) | | 487.4 | | | | 279.8 | | | | 207.6 | | | 74 | % | | Less: Net income (loss) attributable to noncontrolling interests | | 7.8 | | | | 9.3 | | | | (1.5 | ) | | (16 | %) | | Net income (loss) attributable to Targa Resources Corp. | | 479.6 | | | | 270.5 | | | | 209.1 | | | 77 | % | | Premium on repurchase of noncontrolling interests, net of tax | | — | | | | 70.5 | | | | (70.5 | ) | | (100 | %) | | Net income (loss) attributable to common shareholders | $ | 479.6 | | | $ | 200.0 | | | $ | 279.6 | | | 140 | % | | Financial data: | | | | | | | | | | | | | | | | Adjusted EBITDA (1) | $ | 1,402.7 | | | $ | 1,178.5 | | | $ | 224.2 | | | 19 | % | | Adjusted cash flow from operations (1) | | 1,179.9 | | | | 970.0 | | | | 209.9 | | | 22 | % | | Adjusted free cash flow (1) | | 227.9 | | | | 328.2 | | | | (100.3 | ) | | (31 | %) |

| (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, 2026 Compared to Three Months Ended March 31, 2025

The decrease in commodity sales reflected lower NGL, natural gas and condensate prices ($1,064.2 million), partially offset by higher NGL, natural gas and condensate volumes ($476.9 million) and the favorable impact of hedges ($47.5 million).

The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, partially offset by lower export volumes.

The decrease in product purchases and fuel reflected lower NGL and natural gas prices, partially offset by higher NGL and natural gas volumes.

The increase in operating expenses was primarily due to higher labor and maintenance costs due to increased activity and system expansions, and the acquisition of certain assets in the Permian Basin.

See “—Results of Operations—By Reportable Segment” for additional information on a segment basis.

The increase in depreciation and amortization expense was primarily due to the acquisition of certain assets in the Permian Basin and the impact of system expansions on the Company’s asset base.

The increase in general and administrative expense was primarily due to higher compensation and benefits.

The increase in interest expense, net, was primarily due to higher borrowings, partially offset by an increase in capitalized interest.

The decrease in other, net, was primarily due to the premium paid on the redemption of all of the Partnership’s 6.875% Notes due 2029.

The increase in income tax (expense) benefit was primarily due to the increase in pre-tax book income.

The premium on repurchase of noncontrolling interests, net of tax was due to the Badlands Transaction in the first quarter of 2025.

Review of Segment Performance

The 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, | | | | | | | | | | | | | | | | | | | | 2026 | | | 2025 | | | 2026 vs. 2025 | | | | | | | | | | | | | | (In millions, except operating statistics and price amounts) | | | | | | | | | | | | | | | | | | | Operating margin | $ | | 703.5 | | | $ | | 602.2 | | | $ | | 101.3 | | | | 17 | % | | Operating expenses | | | 233.6 | | | | | 208.2 | | | | | 25.4 | | | | 12 | % | | Adjusted operating margin | $ | | 937.1 | | | $ | | 810.4 | | | $ | | 126.7 | | | | 16 | % | | Operating statistics (1): | | | | | | | | | | | | | | | | | | | | Plant natural gas inlet, MMcf/d (2) (3) | | | | | | | | | | | | | | | | | | | | Permian Midland (4) | | | 3,153.9 | | | | | 2,985.6 | | | | | 168.3 | | | | 6 | % | | Permian Delaware | | | 3,576.1 | | | | | 3,020.3 | | | | | 555.8 | | | | 18 | % | | Total Permian | | | 6,730.0 | | | | | 6,005.9 | | | | | 724.1 | | | | 12 | % | | | | | | | | | | | | | | | | | | | | | | Central (5) | | | 1,027.3 | | | | | 984.7 | | | | | 42.6 | | | | 4 | % | | | | | | | | | | | | | | | | | | | | | | Badlands (5) (6) | | | 127.0 | | | | | 136.9 | | | | | (9.9 | ) | | | (7 | %) | | | | | | | | | | | | | | | | | | | | | | Coastal | | | 547.1 | | | | | 398.8 | | | | | 148.3 | | | | 37 | % | | | | | | | | | | | | | | | | | | | | | | Total | | | 8,431.4 | | | | | 7,526.3 | | | | | 905.1 | | | | 12 | % | | NGL production, MBbl/d (3) | | | | | | | | | | | | | | | | | | | | Permian Midland (4) | | | 464.7 | | | | | 429.5 | | | | | 35.2 | | | | 8 | % | | Permian Delaware | | | 469.6 | | | | | 366.4 | | | | | 103.2 | | | | 28 | % | | Total Permian | | | 934.3 | | | | | 795.9 | | | | | 138.4 | | | | 17 | % | | | | | | | | | | | | | | | | | | | | | | Central (5) | | | 102.1 | | | | | 98.1 | | | | | 4.0 | | | | 4 | % | | | | | | | | | | | | | | | | | | | | | | Badlands (5) | | | 16.2 | | | | | 16.4 | | | | | (0.2 | ) | | | (1 | %) | | | | | | | | | | | | | | | | | | | | | | Coastal | | | 37.8 | | | | | 32.7 | | | | | 5.1 | | | | 16 | % | | | | | | | | | | | | | | | | | | | | | | Total | | | 1,090.4 | | | | | 943.1 | | | | | 147.3 | | | | 16 | % | | Crude oil gathered, MBbl/d | | | 135.1 | | | | | 136.1 | | | | | (1.0 | ) | | | (1 | %) | | Natural gas sales, BBtu/d (3) | | | 3,040.3 | | | | | 2,592.8 | | | | | 447.5 | | | | 17 | % | | NGL sales, MBbl/d (3) | | | 625.9 | | | | | 570.2 | | | | | 55.7 | | | | 10 | % | | Condensate sales, MBbl/d | | | 21.8 | | | | | 18.1 | | | | | 3.7 | | | | 20 | % | | Average realized prices (7): | | | | | | | | | | | | | | | | | | | | Natural gas, $/MMBtu | | | 0.57 | | | | | 2.24 | | | | | (1.67 | ) | | | (75 | %) | | NGL, $/gal | | | 0.39 | | | | | 0.50 | | | | | (0.11 | ) | | | (22 | %) | | Condensate, $/Bbl | | | 65.51 | | | | | 72.32 | | | | | (6.81 | ) | | | (9 | %) |

| _ | | | (1) | 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. | | (2) | 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. | | (3) | Plant natural gas inlet volumes and gross NGL production volumes include producer take-in-kind volumes, while natural gas sales and NGL sales exclude producer take-in-kind volumes. | | (4) | Permian Midland includes operations in WestTX, of which the Company owns a 72.8% undivided interest, and other plants that are owned 100% by the Company. Operating results for the WestTX undivided interest assets are presented on a pro-rata net basis in the Company’s reported financials. | | (5) | Operations include facilities that are not wholly owned by the Company. | | (6) | Badlands natural gas inlet represents the total wellhead volume and includes the Targa volumes processed at the Little Missouri 4 plant. | | (7) | Average realized prices, net of fees, include the effect of realized commodity hedge gain/loss attributable to the Company’s equity volumes. The price is calculated using total commodity sales plus the hedge gain/loss as the numerator and total sales volume as the denominator, net of fees. |

The following table presents the realized commodity hedge gain (loss) attributable to the Company’s equity volumes that are included in the adjusted operating margin of the Gathering and Processing segment:

| | | Three Months Ended March 31, 2026 | | | Three Months Ended March 31, 2025 | | | | | | | | | | | | | | | | | | | | | | | (In millions, except volumetric data and price amounts) | | | | | | | | | | | | | | | | | | | | | | | | | | Volume Settled | | | Price Spread (1) | | | Gain (Loss) | | | Volume Settled | | | Price Spread (1) | | | Gain (Loss) | | | | | | | | | Natural gas (BBtu) | | | 8.4 | | | $ | 2.02 | | | $ | 17.0 | | | | 7.7 | | | $ | 0.96 | | | $ | 7.4 | | | NGL (MMgal) | | | 67.7 | | | | 0.01 | | | | 0.9 | | | | 97.5 | | | | (0.07 | ) | | | (6.6 | ) | | Crude oil (MBbl) | | | 0.7 | | | | (4.14 | ) | | | (2.9 | ) | | | 0.7 | | | | 1.00 | | | | 0.7 | | | | | | | | | | | $ | 15.0 | | | | | | | | | $ | 1.5 | | | | | |

| (1) | The price spread is the differential between the contracted derivative instrument pricing and the price of the corresponding settled commodity transaction. |

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The increase in adjusted operating margin was predominantly due to higher natural gas inlet volumes in the Permian which drove higher fee-based margin, partially offset by lower commodity prices. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Pembrook II plant during the third quarter of 2025, the Bull Moose II plant during the fourth quarter of 2025, the Falcon II plant during the first quarter of 2026, continued strong producer activity and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.

The increase in operating expenses was primarily due to higher volumes, multiple plant additions and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.