10-KPeriod: FY2015

Targa Resources Corp. Annual Report, Year Ended Dec 31, 2015

Filed February 29, 2016For Securities:TRGP

Summary

Targa Resources Corp. (TRGP) reported its 2015 annual results, highlighting the significant completion of the Atlas mergers and the "buy-in" transaction of Targa Resources Partners LP (TRP). These strategic moves aimed to simplify the corporate structure and reduce the cost of capital, positioning the company for long-term success amidst volatile commodity prices. The company's primary business objective is to increase cash available for dividends to stockholders by supporting the Partnership's growth, which operates as a leading midstream energy provider. The Partnership's operations encompass gathering, processing, and selling natural gas and NGLs, as well as gathering, storing, and terminaling crude oil and refined petroleum products across various basins in the United States. The financial results for 2015 were impacted by significantly lower commodity prices, leading to a net loss attributable to common shareholders. However, the company emphasized its operational execution, exceeding volume targets and achieving distribution growth. Key developments included the expansion of logistics assets, such as the Cedar Bayou Fractionator Train 5 and the Channelview Splitter project, and advancements in field gathering and processing segments. Despite the challenging commodity price environment, Targa Resources Corp. focused on operational efficiency, cost management, and maintaining financial flexibility to navigate market conditions and support its dividend policy.

Financial Highlights

51 data points
Beta

Net Income

$58.30M

EPS (Diluted)

$1.09

Total Assets

$13.21B

Cash & Equivalents

$140.20M

Free Cash Flow

$217.50M

Financial Statements
Beta
Gross Profit$1.82B
Operating Income$159.30M
Net Income$58.30M
EPS (Basic)$1.09
EPS (Diluted)$1.09
Shares Outstanding (Basic)53.50M
Shares Outstanding (Diluted)53.60M

Key Highlights

  • 1Completed the "buy-in" transaction for Targa Resources Partners LP, acquiring all outstanding common units and simplifying the corporate structure.
  • 2Navigated a challenging commodity price environment, with lower oil, NGL, and natural gas prices impacting revenue.
  • 3Achieved operational execution with volumes exceeding targets and dividend/distribution growth aligned with guidance.
  • 4Invested approximately $680 million in growth capital expenditures for announced expansion projects, with projects on track for completion.
  • 5Continued development and growth of operations in the Bakken Shale, despite challenging market conditions.
  • 6Successfully closed the Atlas mergers and integrated operations, demonstrating effective coordination and talent retention.
  • 7Maintained a focus on safety and environmental/regulatory compliance, earning industry safety recognitions.

Frequently Asked Questions

In 2015, Targa Resources Corp. completed the Atlas mergers, acquiring Atlas Energy, L.P. and Atlas Pipeline Partners, L.P., which expanded its midstream operations. Additionally, the company completed the "buy-in" transaction for Targa Resources Partners LP, acquiring all outstanding common units to simplify its corporate structure.

The decline in commodity prices, particularly for crude oil and natural gas, significantly impacted Targa Resources Corp.'s 2015 performance. While revenue from commodity sales decreased, the company's product purchases also saw a commensurate reduction. The company's fee-based business and hedging activities helped to mitigate some of the negative impact on its financial results.

Targa Resources Corp.'s primary business objective is to increase its cash available for dividends to its stockholders. This is achieved by assisting Targa Resources Partners LP in executing its business strategy, which includes facilitating growth through financial support and potentially acquiring assets for development.

The Partnership's growth is driven by producer activity in its operating basins and demand for its downstream services. Key drivers include the strategic location of its assets, expansion of fractionation and NGL infrastructure, providing a comprehensive suite of midstream services, operating high-quality and efficient assets, a diverse business mix with favorable contracts, and a strong financial position managed by an experienced team.