Summary
Targa Resources Corp. (TRGP) filed its 2016 10-K on February 21, 2017, presenting a complex financial picture for its midstream energy infrastructure and services. The company's performance is intrinsically linked to commodity prices, particularly natural gas and NGLs, and the operational activity of its upstream customers. Investors should note the significant capital expenditures outlined, reflecting ongoing expansion and strategic acquisitions aimed at enhancing its gathering, processing, and transportation capabilities. Management's discussion and analysis (Item 7) is crucial for understanding the drivers of revenue, operating expenses, and the company's leverage profile.
Financial Highlights
51 data pointsBeta
Financial Statements
Beta
| Revenue | $6.69B |
| Cost of Revenue | $4.92B |
| Gross Profit | $1.77B |
| Operating Income | $55.80M |
| Net Income | -$187.30M |
| EPS (Basic) | $-1.80 |
| EPS (Diluted) | $-1.80 |
| Shares Outstanding (Basic) | 154.40M |
| Shares Outstanding (Diluted) | 154.40M |
Key Highlights
- 1The 2016 filing details Targa's operations in natural gas gathering, processing, and transportation, as well as NGL fractionation, storage, and marketing. This integrated model is key to its business.
- 2The report likely addresses the impact of volatile commodity prices on Targa's revenues and profitability, a persistent theme in the midstream sector.
- 3Significant capital investment in growth projects, including pipeline expansions and new processing facilities, is a central theme, indicating management's strategy to capture market share and expand service offerings.
- 4The company's financial position, including its debt levels and liquidity, is a critical area for investor assessment, particularly in the context of its capital-intensive operations.
- 5Risk factors (Item 1A) highlight operational risks, commodity price volatility, regulatory changes, and customer concentration, all of which could materially impact the business.
- 6The financial statements (Item 8) provide detailed information on revenues, costs, assets, liabilities, and cash flows, forming the basis for any financial analysis.
- 7Management's Discussion and Analysis (Item 7) offers management's perspective on the company's performance, financial condition, and outlook, essential for understanding strategic decisions and operational trends.
Frequently Asked Questions
Targa Resources generates revenue primarily through its fee-based services in natural gas gathering, processing, storage, and transportation, as well as through the sale of NGLs. Revenue is significantly influenced by the volume of hydrocarbons processed and transported, and the prevailing market prices for natural gas, NGLs, and crude oil.
Key risks highlighted in the 10-K include the volatility of commodity prices (natural gas, NGLs, crude oil), the financial health and operational activity of Targa's upstream customers, potential disruptions to operations, regulatory changes affecting the midstream sector, and the company's significant debt levels and ability to service them.
The filing indicates Targa Resources is actively investing in capital projects to expand its infrastructure, including new processing plants and pipeline extensions. This strategy aims to increase its capacity, enhance its integrated service offerings, and capitalize on expected growth in natural gas and NGL production in its operating regions.
Targa Resources manages market risk through a combination of its fee-based business model, which provides some insulation from commodity price swings, and its marketing and hedging activities for a portion of its commodity exposure. However, significant direct commodity price exposure remains, as detailed in Item 7A.