Targa(TRGP)2025-02-20 17:53Financial Data and Key Metrics Changes - Targa Resources reported a record adjusted EBITDA of 1.122 billion, reflecting a 5% increase from the third quarter, attributed to higher Permian volumes [36][37] - The company expects 2025 adjusted EBITDA to be between 4.85 billion, representing a 15% increase over 2024 [39] Business Line Data and Key Metrics Changes - Permian GMP volumes grew by 14% year-over-year in 2024, with an incremental 709 million cubic feet per day moving through the system [11] - NGL pipeline transportation volumes averaged a record during the fourth quarter, with fractionation volumes also reaching a record of 1.1 million barrels per day [21] - The logistics and transportation segment is expected to benefit from full-year contributions of the Daytona NGL pipeline and trains nine and ten [40] Market Data and Key Metrics Changes - The company anticipates continued volume growth in the Permian Basin, which will drive operating margins across its businesses [40] - The outlook for NGL supply growth remains robust, supported by downstream system expansions to handle growth from the Permian systems [22] Company Strategy and Development Direction - Targa Resources announced three new projects aimed at expanding NGL capacity, including the Delaware Express pipeline and new fractionators [9][10] - The company is focused on maintaining a strong balance sheet while investing in organic growth opportunities and returning capital to shareholders [34][15] - Targa's strategy includes opportunistic share repurchases and significant dividend increases, with a 33% increase in the annualized 2025 common dividend per share expected [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, highlighting strong commercial success and increased infrastructure investments [7][12] - The company expects to see significant volume growth in 2026, driven by the addition of four new Permian plants [12][14] - Management acknowledged weather-related challenges in Q1 but remains optimistic about the overall growth outlook for 2025 and beyond [52] Other Important Information - Targa completed the purchase of BP's 12% interest in Cedar Bayou Fractionators for approximately 1.8 billion, enhancing its financial flexibility [26][27] Q&A Session Summary Question: Forward outlook and EBITDA trajectory - Management indicated a strong growth outlook for 2025, with expectations for more back-half growth and significant contributions from commercial deals [50][52] Question: Badlands buy-in clarification - Management confirmed the decision was opportunistic, driven by a strong balance sheet and the potential for $80 million in annual cash savings [62] Question: Capital allocation priorities - Management emphasized an all-of-the-above approach, balancing organic growth investments with opportunistic share repurchases and dividend increases [66][70] Question: Commercial success across footprint - Management noted good commercial success in both the Midland and Delaware basins, with significant activity and acreage positions available [76][78] Question: Expected returns on new projects - Management affirmed that the previously guided five and a half times build multiple remains a reasonable starting point for modeling [104] Question: North Texas Mountain Valley NGL pipeline timing - Management discussed the need for new capital and the ongoing evaluation of additional long-haul pipe projects to support growth [128][131]