Targa Resources Corp. Reports Record First Quarter 2025 Financial Results

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Targa Resources delivered record Q1 EBITDA up 22% YoY to $1.2B despite weather challenges, increased dividends 33%, and maintained strong 2025 guidance.

Targa Resources posted record first quarter adjusted EBITDA of $1,178.5 million, representing a 22% increase year-over-year despite temporary operational headwinds from winter weather events. This performance demonstrates remarkable operational resilience and growth momentum in the company's core business segments.

The company's strategic focus on the Permian Basin is yielding significant results, with natural gas inlet volumes increasing 11% year-over-year to 6,005.9 MMcf/d. This volume growth in America's most productive basin stands in contrast to declines in legacy areas, with Central region volumes down 7% and Coastal volumes down 24%, reflecting Targa's deliberate capital allocation toward higher-return opportunities.

Shareholder returns have been substantially enhanced, with the quarterly dividend increasing 33% to $1.00 per share ($4.00 annualized). The company also repurchased $214 million of common shares through April 2025, including $124.9 million during Q1 at an average price of $191.86 per share, with $890.5 million remaining in the repurchase authorization.

Targa's financial flexibility has dramatically improved, with adjusted free cash flow reaching $328.2 million in Q1 2025 compared to just $2.8 million in Q1 2024. This surge provides substantial capacity to fund both growth projects and shareholder returns simultaneously.

Despite winter weather impacts and a major planned turnaround at Cedar Bayou Fractionation facilities, management maintained full-year 2025 adjusted EBITDA guidance of $4.65-4.85 billion. This confidence appears warranted as Permian volumes have already meaningfully increased since quarter-end, suggesting accelerating performance in upcoming quarters.

The company continues executing its growth strategy with five natural gas processing plants under construction in the Permian, alongside fractionation and export capacity expansions. These projects position Targa to capture increasing volumes throughout 2025 and 2026, with capital expenditure guidance maintained at $2.6-2.8 billion for 2025.

From a balance sheet perspective, Targa maintains healthy liquidity of approximately $2.7 billion following a notes offering in February that generated $2.0 billion in proceeds. The company used these funds partly for the Badlands Transaction, which simplified Targa's corporate structure by eliminating preferred equity obligations.

05/01/2025 - 06:00 AM

HOUSTON, May 01, 2025 (GLOBE NEWSWIRE) -- 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.

Highlights

Record 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 Commentary

Targa 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 Liquidity

The 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 Update

In 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 on-track to complete its other announced expansions as previously disclosed.

2025 Outlook

Targa 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 Call

The 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 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 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 Operations

	Three Months Ended March 31,
	2025			2024			2025 vs. 2024
	(In millions)
Revenues:
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 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,
	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	%)

^{(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, other than Badlands during 2024.}
^{(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, 2025								Three Months Ended March 31, 2024
	(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)		7.7	$	0.96		$	7.4			14.4	$	1.27		$	18.3
NGL (MMgal)		97.5		(0.07	)		(6.6	)		134.1		0.01			1.7
Crude oil (MBbl)		0.7		1.00			0.7			0.4		(7.25	)		(2.9	)
						$	1.5							$	17.1

^{(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, 2025 Compared to Three Months Ended March 31, 2024

The increase in adjusted operating margin was predominantly due to higher natural gas inlet volumes in the Permian. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Roadrunner II plant during the second quarter of 2024, the Greenwood II plant during the fourth quarter of 2024, the Bull Moose plant during the first quarter of 2025, and continued strong producer activity despite severe winter weather events which impacted volumes during the first quarter of 2025.

The increase in operating expenses was primarily due to higher volumes and multiple plant additions in the Permian.

Logistics and Transportation Segment

The Logistics and Transportation segment includes the activities and assets necessary to convert mixed NGLs into NGL products and also includes other assets and value-added services such as transporting, storing, fractionating, terminaling, and marketing of NGLs and NGL products, including services to LPG exporters and certain natural gas supply and marketing activities in support of the Company’s other businesses. The Logistics and Transportation segment also includes Grand Prix NGL Pipeline, which connects the Company’s gathering and processing positions in the Permian Basin, Southern Oklahoma and North Texas with the Company’s Downstream facilities in Mont Belvieu, Texas. The Company’s Downstream facilities are located predominantly in Mont Belvieu and Galena Park, Texas, and in Lake Charles, Louisiana.

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)
Operating margin	$	646.7	$	532.1	$	114.6		22	%
Operating expenses		95.5		90.0		5.5		6	%
Adjusted operating margin	$	742.2	$	622.1	$	120.1		19	%
Operating statistics MBbl/d (1):
NGL pipeline transportation volumes		843.5		717.8		125.7		18	%
Fractionation volumes		979.9		797.2		182.7		23	%
Export volumes		447.7		439.0		8.7		2	%
NGL sales		1,186.4		1,227.6		(41.2	)	(3	%)

(1) Segment operating statistics include 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.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin and higher marketing margin. Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from the Company’s Permian Gathering and Processing systems, the addition of Train 9 during the second quarter of 2024, the in-service of the Daytona NGL Pipeline during the third quarter of 2024, and the addition of Train 10 during the fourth quarter of 2024. Marketing margin increased due to greater optimization opportunities.

The increase in operating expenses was predominantly due to system expansions.

Other

	Three Months Ended March 31,
	2025			2024			2025 vs. 2024
	(In millions)
Operating margin	$	(248.8	)	$	(22.1	)	$	(226.7	)
Adjusted operating margin	$	(248.8	)	$	(22.1	)	$	(226.7	)

Other contains the results of commodity derivative activity mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges. The Company has entered into derivative instruments to hedge the commodity price associated with a portion of the Company’s future commodity purchases and sales and natural gas transportation basis risk within the Company’s Logistics and Transportation segment.

About Targa Resources Corp.

Targa Resources Corp. is a leading provider of midstream services and is one of the largest independent infrastructure companies in North America. The Company owns, operates, acquires and develops a diversified portfolio of complementary domestic infrastructure assets and its operations are critical to the efficient, safe and reliable delivery of energy across the United States and increasingly to the world. The Company’s assets connect natural gas and NGLs to domestic and international markets with growing demand for cleaner fuels and feedstocks. The Company is primarily engaged in the business of: gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing and selling NGLs and NGL products, including services to LPG exporters; and gathering, storing, terminaling, and purchasing and selling crude oil.

Targa is a FORTUNE 500 company and is included in the S&P 500.

For more information, please visit the Company’s website at www.targaresources.com.

Non-GAAP Financial Measures

This press release includes the Company’s non-GAAP financial measures: adjusted EBITDA, adjusted cash flow from operations, adjusted free cash flow and adjusted operating margin (segment). The following tables provide reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures.

The Company utilizes non-GAAP measures to analyze the Company’s performance. Adjusted EBITDA, adjusted cash flow from operations, adjusted free cash flow and adjusted operating margin (segment) are non-GAAP measures. The GAAP measures most directly comparable to these non-GAAP measures are income (loss) from operations, Net income (loss) attributable to Targa Resources Corp. and segment operating margin. These non-GAAP measures should not be considered as an alternative to GAAP measures and have important limitations as analytical tools. Investors should not consider these measures in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Additionally, because the Company’s non-GAAP measures exclude some, but not all, items that affect income and segment operating margin, and are defined differently by different companies within the Company’s industry, the Company’s definitions may not be comparable with similarly titled measures of other companies, thereby diminishing their utility. Management compensates for the limitations of the Company’s non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these insights into the Company’s decision-making processes.

Adjusted Operating Margin

The Company defines adjusted operating margin for the Company’s segments as revenues less product purchases and fuel. It is impacted by volumes and commodity prices as well as by the Company’s contract mix and commodity hedging program.

Gathering and Processing adjusted operating margin consists primarily of:

service fees related to natural gas and crude oil gathering, treating and processing; and
revenues from the sale of natural gas, condensate, crude oil and NGLs less producer settlements, fuel and transport and the Company’s equity volume hedge settlements.

Logistics and Transportation adjusted operating margin consists primarily of:

service fees (including the pass-through of energy costs included in certain fee rates);
system product gains and losses; and
NGL and natural gas sales, less NGL and natural gas purchases, fuel, third-party transportation costs and the net inventory change.

The adjusted operating margin impacts of mark-to-market hedge unrealized changes in fair value are reported in Other.

Adjusted operating margin for the Company’s segments provides useful information to investors because it is used as a supplemental financial measure by management and by external users of the Company’s financial statements, including investors and commercial banks, to assess:

the financial performance of the Company’s assets without regard to financing methods, capital structure or historical cost basis;
the Company’s operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to financing or capital structure; and
the viability of capital expenditure projects and acquisitions and the overall rates of return on alternative investment opportunities.

Management reviews adjusted operating margin and operating margin for the Company’s segments monthly as a core internal management process. The Company believes that investors benefit from having access to the same financial measures that management uses in evaluating the Company’s operating results. The reconciliation of the Company’s adjusted operating margin to the most directly comparable GAAP measure is presented under “Review of Segment Performance.”

Adjusted EBITDA

The Company defines adjusted EBITDA as Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other items that the Company believes should be adjusted consistent with the Company’s core operating performance. The adjusting items are detailed in the adjusted EBITDA reconciliation table and its footnotes. Adjusted EBITDA is used as a supplemental financial measure by the Company and by external users of the Company’s financial statements such as investors, commercial banks and others to measure the ability of the Company’s assets to generate cash sufficient to pay interest costs, support the Company’s indebtedness and pay dividends to the Company’s investors.

Adjusted Cash Flow from Operations and Adjusted Free Cash Flow

The Company defines adjusted cash flow from operations as adjusted EBITDA less cash interest expense on debt obligations and cash tax (expense) benefit. The Company defines adjusted free cash flow as adjusted cash flow from operations less maintenance capital expenditures (net of any reimbursements of project costs) and growth capital expenditures, net of contributions from noncontrolling interests and including contributions to investments in unconsolidated affiliates. Adjusted cash flow from operations and adjusted free cash flow are performance measures used by the Company and by external users of the Company’s financial statements, such as investors, commercial banks and research analysts, to assess the Company’s ability to generate cash earnings (after servicing the Company’s debt and funding capital expenditures) to be used for corporate purposes, such as payment of dividends, retirement of debt or redemption of other financing arrangements.

The following table reconciles the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the periods indicated:

	Three Months Ended March 31,
	2025			2024
	(In millions)
Reconciliation of Net income (loss) attributable to Targa Resources Corp. to Adjusted EBITDA, Adjusted Cash Flow from Operations and Adjusted Free Cash Flow
Net income (loss) attributable to Targa Resources Corp.	$	270.5		$	275.2
Interest (income) expense, net		197.1			228.6
Income tax expense (benefit)		72.2			82.7
Depreciation and amortization expense		367.6			340.5
(Gain) loss on sale or disposition of assets		(0.5	)		(1.1	)
Write-down of assets		2.0			1.0
(Gain) loss from financing activities		0.6			—
Equity (earnings) loss		(5.5	)		(2.8	)
Distributions from unconsolidated affiliates		4.9			6.3
Compensation on equity grants		17.6			14.6
Risk management activities		248.8			22.0
Noncontrolling interests adjustments (1)		3.2			(0.8	)
Adjusted EBITDA	$	1,178.5		$	966.2
Interest expense on debt obligations (2)		(193.2	)		(224.9	)
Cash taxes		(15.3	)		(2.9	)
Adjusted Cash Flow from Operations	$	970.0		$	738.4
Maintenance capital expenditures, net (3)		(47.3	)		(49.8	)
Growth capital expenditures, net (3)		(594.5	)		(685.8	)
Adjusted Free Cash Flow	$	328.2		$	2.8

^{(1)    Represents adjustments related to the Company’s subsidiaries with noncontrolling interests, including depreciation and amortization expense as well as earnings for certain plants within Targa’s WestTX joint venture not subject to noncontrolling interest accounting.}
^{(2)    Excludes amortization of interest expense. The three months ended March 31, 2024 includes $54.9 million of interest expense on a 2024 legal ruling associated with an agreement, dated December 27, 2015, for crude oil and condensate between Targa Channelview LLC, then a subsidiary of the Company, and Noble Americas Corp.}
^{(3)    Represents capital expenditures, net of contributions from noncontrolling interests and includes contributions to investments in unconsolidated affiliates.}

The following table presents a reconciliation of estimated net income of the Company to estimated adjusted EBITDA for 2025:

	2025E
	(In millions)
Reconciliation of Estimated Net Income Attributable to Targa Resources Corp. to
Estimated Adjusted EBITDA
Net income attributable to Targa Resources Corp.	$	1,555.0
Interest expense, net		860.0
Income tax expense		485.0
Depreciation and amortization expense		1,525.0
Equity earnings		(20.0	)
Distributions from unconsolidated affiliates		25.0
Compensation on equity grants		70.0
Risk management and other		250.0
Estimated Adjusted EBITDA	$	4,750.0

Regulation FD Disclosures

The Company uses any of the following to comply with its disclosure obligations under Regulation FD: press releases, SEC filings, public conference calls, or our website. The Company routinely posts important information on its website at www.targaresources.com, including information that may be deemed to be material. The Company encourages investors and others interested in the company to monitor these distribution channels for material disclosures.

Forward-Looking Statements

Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, are forward-looking statements, including statements regarding our projected financial performance, capital spending and payment of future dividends. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Company’s control, which could cause results to differ materially from those expected by management of the Company. Such risks and uncertainties include, but are not limited to, actions taken by other countries with significant hydrocarbon production, weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, the timing and success of our completion of capital projects and business development efforts, the expected growth of volumes on our systems, the impact of significant public health crises, commodity price volatility due to ongoing or new global conflicts, the impact of disruptions in the bank and capital markets, including those resulting from lack of access to liquidity for banking and financial services firms, changes in laws and regulations, particularly with regard to taxes, tariffs and international trade, and other uncertainties. These and other applicable uncertainties, factors and risks are described more fully in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The Company does not undertake an obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Targa Investor Relations
InvestorRelations@targaresources.com
(713) 584-1133

FAQ

What was Targa Resources (TRGP) Q1 2025 earnings?

Targa reported Q1 2025 net income of $270.5 million and record adjusted EBITDA of $1.2 billion, representing a 22% increase year-over-year.

How much did TRGP increase its dividend in 2025?

Targa increased its annual dividend by 33% to $4.00 per share ($1.00 quarterly) for 2025 compared to 2024.

What is Targa's EBITDA guidance for 2025?

Targa maintains its full-year 2025 adjusted EBITDA guidance between $4.65 billion and $4.85 billion.

How much debt does Targa Resources have in 2025?

As of March 31, 2025, Targa's total consolidated debt was $16.2 billion, with $2.7 billion in total liquidity available.

What growth projects is TRGP currently developing?

Targa is constructing multiple 275 MMcf/d processing plants in Permian, Delaware Express pipeline expansion, two 150 MBbl/d fractionators, and LPG Export Expansion.

Targa Resources Corp. Reports Record First Quarter 2025 Financial Results

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Targa Resources Corp. Reports Record First Quarter 2025 Financial Results

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What was Targa Resources (TRGP) Q1 2025 earnings?

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