Targa Resources Corp. Reports Record Fourth Quarter and Full Year 2025 Financial Results and Provides Outlook for Record 2026

2026-02-19

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

HOUSTON, Feb. 19, 2026 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) (“TRGP,” the “Company” or “Targa”) today reported fourth quarter and full year 2025 results.

Fourth quarter 2025 net income attributable to Targa Resources Corp. was $545 million compared to $351 million for the fourth quarter of 2024. For the full year 2025, net income attributable to Targa Resources Corp. was $1,923 million compared to $1,312 million for 2024. The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items (“adjusted EBITDA”)(1)of $1,341 million for the fourth quarter of 2025 compared to $1,122 million for the fourth quarter of 2024. For the full year 2025, the Company reported adjusted EBITDA of $4,957 million compared to $4,142 million for 2024.

Highlights

Record full year 2025 adjusted EBITDA of $4.96 billion, a 20% increase over 2024 Record full year 2025 Permian, NGL transportation, fractionation, and LPG export volumes Full year 2025 common share repurchases of $642 million Record fourth quarter 2025 adjusted EBITDA of $1.3 billion Record fourth quarter 2025 Permian, NGL transportation, and fractionation volumes In October 2025, completed our new Bull Moose II plant in Permian Delaware In December 2025, completed two small bolt-on transactions in the Permian Basin In January 2026, completed the previously announced acquisition of Stakeholder Midstream, LLC (“Stakeholder”) Announced today a new plant in Permian Delaware (“Yeti II”) Announced today ordering long-lead items for two additional processing plants in the Permian Announced today a new fractionator in Mont Belvieu, TX (“Train 13”) Estimates full year 2026 adjusted EBITDA between $5.4 billion and $5.6 billion, an 11% increase over 2025(2) Estimates 2026 net growth capital expenditures of approximately $4.5 billion Expect to recommend to Targa’s Board of Directors an annual common dividend per share of $5.00 in 2026, a 25% increase to 2025

“We have a lot of positive momentum in our business, underpinned by the strength of our position in the Permian. The completion of our key large downstream capital projects in the second half of 2027 will provide us with meaningful operating leverage and drive Targa’s next transformation, which is an outlook for growing and durable free cash flow supported by our growing fee-based adjusted EBITDA and strong investment grade balance sheet,” said Matt Meloy, Targa’s Chief Executive Officer.

On January 15, 2026, the Company declared a quarterly cash dividend of $1.00 per common share, or $4.00 per common share on an annualized basis, for the fourth quarter of 2025. Total cash dividends of approximately $215 million were paid on February 13, 2026 on all outstanding shares of common stock to holders of record as of the close of business on January 30, 2026. We intend to recommend an annual common dividend of $5.00 per share for 2026 beginning with the first quarter payment in May of 2026.

During the fourth quarter of 2025, Targa repurchased 226,987 shares of its common stock at a weighted average per share price of $163.01 for a total net cost of $37 million. For the year ended December 31, 2025, Targa repurchased 3,765,272 shares of its common stock at a weighted average price of $170.45 for a total net cost of $642 million. As of December 31, 2025, there was $1,374 million remaining under our Share Repurchase Programs.

Fourth Quarter 2025 - Sequential Quarter over Quarter Commentary

Targa reported record fourth quarter adjusted EBITDA of $1,341 million, representing a 5 percent increase compared to the third quarter of 2025. The sequential increase in adjusted EBITDA was attributable to higher volumes across our Gathering and Processing (“G&P”) and Logistics and Transportation (“L&T”) systems. In our G&P segment, lower sequential adjusted operating margin was attributable to lower commodity prices partially offset by record Permian natural gas inlet volumes and the in-service of our Bull Moose II plant in Permian Delaware in the fourth quarter. Our fourth quarter Permian volumes were impacted by temporary volume curtailments by certain producer customers in response to periods of negative Waha natural gas prices in the fourth quarter. In our L&T segment, higher marketing margin, record NGL pipeline transportation and fractionation volumes, and higher LPG export volumes drove the sequential increase in segment adjusted operating margin. Marketing margin increased due to greater optimization opportunities. Increased NGL pipeline transportation and fractionation volumes were predominantly attributable to higher supply volumes from our Permian G&P systems. LPG export volumes benefited from strong seasonal loadings.

Capitalization, Financing and Liquidity

The Company’s total consolidated debt as of December 31, 2025 was $17,433 million, net of $123 million of debt issuance costs and $38 million of unamortized discount, with $17,079 million of outstanding senior unsecured notes, $161 million outstanding under the Commercial Paper Program, and $354 million of finance lease liabilities.

Total consolidated liquidity as of December 31, 2025 was approximately $4.1 billion, including $3.3 billion available under the TRGP Revolver, $600 million available under the Securitization Facility, and $166 million of cash.

Financing Update

In November 2025, Targa completed an underwritten public offering of $750 million of 4.350% Notes due 2029 and $1.0 billion of 5.400% Notes due 2036. The Company used a portion of the net proceeds from the debt issuance to redeem all of Targa Resources Partners LP’s 6.875% Senior Unsecured Notes due 2029 on January 15, 2026, and the remaining net proceeds for general corporate purposes, including to repay borrowings under the Commercial Paper Program.

Acquisitions

In December 2025, Targa completed two small bolt-on transactions of sour gathering and compression assets in the Delaware Basin for aggregate cash consideration of $213 million. These bolt-on transactions add approximately 300,000 dedicated acres and over 2 million acres in areas of mutual interest, driving new integrated volumes, extending our reach with new and existing customers and adding incremental commercial opportunities.

On January 6, 2026, Targa completed the previously announced acquisition of Stakeholder for $1.25 billion in cash with an effective date of January 1, 2026. These assets are now fully integrated into Targa’s Delaware Basin system.

Growth Projects Update

In our G&P segment, we commenced operations of our new Bull Moose II plant in the Permian Delaware in October 2025 and expect to bring online our Falcon II plant in the Permian Delaware ahead of schedule, now in the first quarter of 2026. Construction continues on our East Pembrook and East Driver plants in Permian Midland, and our Copperhead and Yeti I plants in Permian Delaware.

In February 2026, in response to increasing production and to meet the infrastructure needs of our customers, we announced the construction of a new 275 million cubic feet per day (“MMcf/d”) natural gas processing plant in the Permian Delaware, Yeti II, which is expected to begin operations in the fourth quarter of 2027. We also announced that we are ordering long-lead items associated with two additional Permian natural gas processing plants.

In our L&T segment, construction continues on our Delaware Express Pipeline expansion, our Train 11 and Train 12 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.

In February 2026, in response to increasing production and to meet the infrastructure needs of our customers, we announced a new 150 thousand barrels per day (“MBbl/d”) fractionator, Train 13, in Mont Belvieu, TX. Train 13 is expected to commence operations in the first quarter of 2028.

2026 Outlook and Capital Return Expectations

For 2026, Targa estimates full year adjusted EBITDA to be between $5.4 billion and $5.6 billion, with the midpoint of the range representing an 11 percent increase over full year 2025 adjusted EBITDA. We expect to continue to benefit from meaningful growth across our Permian G&P footprint, which is expected to drive record Permian, NGL pipeline transportation, fractionation, and LPG export volumes in 2026 relative to the records set in 2025.

Our 2026 operational and financial expectations assume Waha natural gas prices average $1.00 per million British Thermal Units (“MMbtu”), natural gas liquids (“NGL”) composite barrel prices average $0.60 per gallon, and crude oil prices average $63.00 per barrel.

The company estimates net growth capital expenditures to be approximately $4.5 billion which includes capital spending for our announced infrastructure projects underway including six new Permian plants, three fractionators in Mont Belvieu, our Speedway NGL Pipeline, our GPMT LPG Export Expansion, our intra-basin residue gas projects in the Permian, and spending on long-lead items for two additional processing plants in the Permian. Spending also includes gathering and compression related to strong commercial success and growing volumes. Net maintenance capital expenditures for 2026 are estimated to be approximately $250 million.

For the first quarter of 2026, we intend to recommend to our Board of Directors an increase to our quarterly common dividend to $1.25 per common share or $5.00 per common share annualized. The recommended 25 percent increase in common dividend per share, if approved, would be effective for the first quarter of 2026 and payable in May 2026. Going forward, we expect to be in position to continue to meaningfully increase the capital returned to shareholders through increasing common dividends per share and opportunistic repurchases of our common stock.

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 February 19, 2026 to discuss our fourth 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 to https://edge.media-server.com/mmc/p/ktbyx3ix. 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.” | | (2) | | Year over year increase based on midpoint of estimated 2026 adjusted EBITDA range of $5.4 billion to $5.6 billion. | | | | |

Targa Resources Corp. – Consolidated Financial Results of Operations

| | Three Months Ended December 31, | | | | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | 2025 | | | 2024 | | | 2025 vs. 2024 | | | 2025 | | | 2024 | | | 2025 vs. 2024 | | | | | | | | | | | | | | | | | (In millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales of commodities | $ | 3,412.9 | | | $ | 3,765.5 | | | $ | (352.6 | ) | | | (9 | %) | | $ | 14,403.5 | | | $ | 13,891.8 | | | $ | 511.7 | | | 4 | % | | Fees from midstream services | | 642.6 | | | | 639.7 | | | | 2.9 | | | | — | | | | 2,624.8 | | | | 2,489.7 | | | | 135.1 | | | 5 | % | | Total revenues | | 4,055.5 | | | | 4,405.2 | | | | (349.7 | ) | | | (8 | %) | | | 17,028.3 | | | | 16,381.5 | | | | 646.8 | | | 4 | % | | Product purchases and fuel | | 2,307.6 | | | | 2,922.6 | | | | (615.0 | ) | | | (21 | %) | | | 10,507.8 | | | | 10,703.0 | | | | (195.2 | ) | | (2 | %) | | Operating expenses | | 337.6 | | | | 305.8 | | | | 31.8 | | | | 10 | % | | | 1,298.3 | | | | 1,175.6 | | | | 122.7 | | | 10 | % | | Depreciation and amortization expense | | 390.5 | | | | 378.5 | | | | 12.0 | | | | 3 | % | | | 1,515.3 | | | | 1,423.0 | | | | 92.3 | | | 6 | % | | General and administrative expense | | 111.7 | | | | 97.5 | | | | 14.2 | | | | 15 | % | | | 406.0 | | | | 384.9 | | | | 21.1 | | | 5 | % | | Other operating (income) expense | | (9.3 | ) | | | 0.2 | | | | (9.5 | ) | | NM | | | | (30.3 | ) | | | (0.4 | ) | | | (29.9 | ) | NM | | | | | Income (loss) from operations | | 917.4 | | | | 700.6 | | | | 216.8 | | | | 31 | % | | | 3,331.2 | | | | 2,695.4 | | | | 635.8 | | | 24 | % | | Interest expense, net | | (216.0 | ) | | | (177.7 | ) | | | (38.3 | ) | | | 22 | % | | | (852.8 | ) | | | (767.2 | ) | | | (85.6 | ) | | 11 | % | | Equity earnings (loss) | | (5.2 | ) | | | 1.5 | | | | (6.7 | ) | | NM | | | | 11.8 | | | | 9.4 | | | | 2.4 | | | 26 | % | | | Other, net | | (4.0 | ) | | | 0.1 | | | | (4.1 | ) | | NM | | | | (3.8 | ) | | | 0.4 | | | | (4.2 | ) | NM | | | | | Income tax (expense) benefit | | (139.1 | ) | | | (110.5 | ) | | | (28.6 | ) | | | 26 | % | | | (529.7 | ) | | | (384.5 | ) | | | (145.2 | ) | | 38 | % | | Net income (loss) | | 553.1 | | | | 414.0 | | | | 139.1 | | | | 34 | % | | | 1,956.7 | | | | 1,553.5 | | | | 403.2 | | | 26 | % | | Less: Net income (loss) attributable to noncontrolling interests | | 8.1 | | | | 63.0 | | | | (54.9 | ) | | | (87 | %) | | | 33.7 | | | | 241.5 | | | | (207.8 | ) | | (86 | %) | | Net income (loss) attributable to Targa Resources Corp. | | 545.0 | | | | 351.0 | | | | 194.0 | | | | 55 | % | | | 1,923.0 | | | | 1,312.0 | | | | 611.0 | | | 47 | % | | Premium on repurchase of noncontrolling interests, net of tax | | — | | | | 32.9 | | | | (32.9 | ) | | | (100 | %) | | | 70.5 | | | | 32.9 | | | | 37.6 | | | 114 | % | | Net income (loss) attributable to common shareholders | $ | 545.0 | | | $ | 318.1 | | | $ | 226.9 | | | | 71 | % | | $ | 1,852.5 | | | $ | 1,279.1 | | | $ | 573.4 | | | 45 | % | | Financial data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Adjusted EBITDA (1) | $ | 1,341.1 | | | $ | 1,122.2 | | | $ | 218.9 | | | | 20 | % | | $ | 4,957.4 | | | $ | 4,142.3 | | | $ | 815.1 | | | 20 | % | | Adjusted cash flow from operations (1) | | 1,121.7 | | | | 940.9 | | | | 180.8 | | | | 19 | % | | | 4,108.9 | | | | 3,372.4 | | | | 736.5 | | | 22 | % | | Adjusted free cash flow (1) | | 47.6 | | | | 56.2 | | | | (8.6 | ) | | | (15 | %) | | | 539.0 | | | | 140.1 | | | | 398.9 | | | 285 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (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 December 31, 2025 Compared to Three Months Ended December 31, 2024

The decrease in commodity sales reflected lower NGL and natural gas prices ($580.1 million), partially offset by higher NGL and natural gas volumes ($166.3 million), and the favorable impact of hedges ($67.2 million).

Fees from midstream services were relatively flat.

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 costs and taxes as a result of system expansions.

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 impact of system expansions on our 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 in 2025.

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

The decrease in net income attributable to noncontrolling interests was primarily due to the Badlands Transaction (the “Badlands Transaction”) in the first quarter of 2025 and the acquisition of the remaining membership interest in Cedar Bayou Fractionators, L.P. (the “CBF Acquisition”) in the fourth quarter of 2024.

The premium on repurchase of noncontrolling interests, net of tax was due to the CBF Acquisition in 2024.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

The increase in commodity sales reflected higher natural gas prices ($766.2 million), higher NGL and natural gas volumes ($518.7 million) and the favorable impact of hedges ($85.0 million), partially offset by lower NGL and condensate prices ($860.2 million).

The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, and higher export volumes, partially offset by lower transportation and fractionation fees. Lower transportation and fractionation fees were due to a planned turnaround at a portion of our facilities in Mont Belvieu, Texas.

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

The increase in operating expenses was primarily due to higher labor, taxes and maintenance costs as a result of system expansions.

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 impact of system expansions on our asset base.

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

The increase in other operating (income) expense was primarily due to recognition of Section 45Q tax credits earned through our carbon capture and sequestration activities.

The increase in interest expense, net, was primarily due to higher borrowings in 2025, partially offset by the recognition of cumulative interest on a 2024 legal ruling.

The increase in income tax (expense) benefit was primarily due to the increase in pre-tax book income and a decrease in income allocated to noncontrolling interest that is not taxable to the Company.

The decrease in net income attributable to noncontrolling interests was primarily due to the Badlands Transaction in the first quarter of 2025 and the CBF Acquisition in the fourth quarter of 2024.

The premium on repurchase of noncontrolling interests, net of tax was due to the Badlands Transaction in 2025 and the CBF Acquisition in 2024.

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.