Summary
Targa Resources Corp. (TRC), in its 2012 10-K filing, primarily acts as a holding company whose main source of revenue is its ownership interests in Targa Resources Partners LP (the Partnership). The Partnership is a significant midstream energy company engaged in gathering, processing, logistics, and marketing of natural gas and natural gas liquids (NGLs). TRC holds a 2% general partner interest, all incentive distribution rights (IDRs), and a 12.7% limited partnership interest in the Partnership. The Partnership experienced strong growth in 2012, driven by acquisitions and organic growth projects, notably the acquisition of Badlands in the Williston Basin. The company's operations are divided into Gathering and Processing, and Logistics and Marketing, serving diverse basins and end-markets. The filing highlights the Partnership's strategically located asset base, leading fractionation position, comprehensive midstream services, efficient operations, and a diverse business mix with an increasing percentage of fee-based revenue as key competitive strengths. The company's financial performance is directly tied to the cash distributions received from the Partnership. While the Partnership reported strong operational results, TRC, as the parent, navigates the complexities of consolidated financial reporting, non-controlling interests, and its own corporate-level debt and expenses. Investors should monitor the Partnership's ability to generate distributable cash flow and its capacity to fund growth projects and service debt, as these factors directly impact TRC's ability to pay dividends to its shareholders.
Financial Highlights
50 data points| Gross Profit | $1.01B |
| Operating Income | $336.30M |
| Interest Expense | $120.80M |
| Net Income | $38.10M |
| EPS (Basic) | $0.93 |
| EPS (Diluted) | $0.91 |
| Shares Outstanding (Basic) | 41.00M |
| Shares Outstanding (Diluted) | 41.80M |
Key Highlights
- 1Targa Resources Corp. (TRC) operates as a holding company with its primary revenue stream derived from its interests in Targa Resources Partners LP (NGLS), a midstream energy company.
- 2The Partnership made significant acquisitions in 2012, including the $975.8 million acquisition of Badlands operations in the Williston Basin, enhancing its footprint in key growth areas.
- 3Targa Resources Partners LP continues to execute on its organic growth strategy, with approximately $1.3 billion in announced growth capital expenditures planned through 2014 across various fractionation and processing plant expansions and new projects.
- 4The Partnership has a diversified asset base across two divisions: Gathering and Processing (Field and Coastal segments) and Logistics and Marketing (Logistics Assets and Marketing and Distribution segments).
- 5The company's financial health and ability to pay dividends are directly linked to the cash distributions received from the Partnership.
- 6TRC's significant ownership of the Partnership's Incentive Distribution Rights (IDRs) means a substantial portion of its cash flow is tied to the Partnership's increasing distribution levels.
- 7The filing indicates a strong focus on growth drivers such as shale plays, producer activity in liquids-rich natural gas areas, and international export opportunities for NGLs.