UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from _____ to _____ Commission File Number: 001-34991 TARGA RESOURCES CORP. (Exact name of registrant as specified in its charter) Delaware 20-3701075 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 811 Louisiana St, Suite 2100, Houston, Texas 77002 (Address of principal executive offices) (Zip Code) FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) ...

Financial Data and Key Metrics Changes - Targa Resources reported record adjusted EBITDA of $2.05 billion for 2021, a 25% increase over 2020, with Q4 adjusted EBITDA at $571 million, up 13% sequentially [9][26] - The company achieved approximately $1.13 billion in adjusted free cash flow, leading to a year-end leverage ratio of 3.2 times [27][28] - Targa reduced debt by about $1.2 billion year-over-year [9] Business Line Data and Key Metrics Changes - Gathering and Processing volumes in the Permian reached record levels, with average inlet volumes increasing 12% over 2020 [13] - Logistics and Transportation segment saw NGL transportation volumes increase to a record 433,000 barrels per day in Q4 [19] - Fractionation volumes at Mont Belvieu averaged 612,000 barrels per day, impacted by an unplanned outage [20] Market Data and Key Metrics Changes - The company expects full-year 2022 adjusted EBITDA to be between $2.3 billion and $2.5 billion, reflecting a significant increase over 2021 [11][31] - The outlook for LPG export business remains robust, with a 19% sequential increase in volumes loaded during Q4 [22] Company Strategy and Development Direction - Targa is focused on simplifying its capital structure and enhancing shareholder returns through increased dividends and share repurchases [12][30] - The company plans to invest in organic growth opportunities, including new processing plants in the Permian [32] - Targa aims to maintain a strong balance sheet while exploring bolt-on acquisitions to enhance its footprint [75][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational and financial execution, highlighting strong activity levels in the Permian and expectations for continued volume growth [7][24] - The company anticipates higher commodity prices and continued growth across operations as key drivers for EBITDA growth in 2022 [31] Other Important Information - Targa repurchased approximately $40 million of common shares in Q4 and has $369 million remaining under its share repurchase program [29] - The company has a strong liquidity position with over $3.2 billion available at year-end [29] Q&A Session Summary Question: Capital allocation and preferred shares repurchase - Management indicated that proceeds from the GCX sale would likely be used to accelerate the repurchase of preferred shares in Q2, while maintaining flexibility for common share repurchases [38] Question: Growth CapEx allocation - Approximately $150 million of capital is allocated for the Midway plant, with significant spending on Legacy I and II plants as well [40] Question: Grand Prix utilization and expansion - Management noted strong operating leverage and plans to add pumps to the Grand Prix pipeline as production grows [44] Question: LPG export expansion rationale - The expansion project is low-cost and aims to meet growing international demand for cleaner feedstocks [46] Question: Natural gas egress from the Permian - Management acknowledged the need for additional infrastructure and expressed interest in participating in future pipeline projects [54] Question: 2022 EBITDA guidance drivers - Key drivers include commodity prices, Permian volumes, and strong export markets, with potential upside from managing costs effectively [58] Question: Contracting environment and customer preferences - Management noted that most growth is under long-term contracts, with a mix of fee-based and POP contracts in the Permian [66] Question: Hedging strategy and position - Targa is well-hedged, with over 75% of its volumes hedged for 2022, and plans to maintain similar hedging strategies for future years [68] Question: M&A opportunities and valuation trends - Management remains open to bolt-on acquisitions but maintains a high hurdle for any potential deals [88]

Targa Resources Corp. Fourth Quarter 2021 Earnings and 2022 Guidance Supplement February 24, 2022 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 anti ...

Part I [Business](index=5&type=section&id=Item%201.%20Business.) Targa Resources operates as a major midstream company through its Gathering & Processing and Logistics & Transportation segments - Targa operates through two primary segments: (i) **Gathering and Processing**, which handles raw natural gas and crude oil from wellheads, and (ii) **Logistics and Transportation**, which converts mixed NGLs into marketable products and manages their transport, storage, and export[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The company is actively expanding its natural gas processing capacity in the Permian Basin with several new plants scheduled to come online between 2021 and 2023 to meet growing producer demand[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - Recent strategic capital allocation includes increasing the common stock dividend, repurchasing interests in development company joint ventures (DevCo JVs) for approximately **$925 million**, and agreeing to sell its 25% equity interest in the Gulf Coast Express Pipeline (GCX) for approximately **$857 million**[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) Gathering and Processing Segment Key Statistics (2021) | Metric | Value | | :--- | :--- | | Natural Gas Pipelines | ~28,400 miles | | Owned/Operated Processing Plants | 42 | | Average Natural Gas Processed | 4,470.3 MMcf/d | | Average NGLs Produced | 550.4 MBbl/d | | Average Crude Oil Purchased/Gathered | 175.9 MBbl/d | [Business Operations and Segments](index=10&type=section&id=Our%20Business%20Operations) The company's operations are divided into two main segments with assets strategically located in major US production basins - The Gathering and Processing segment's assets are strategically located in key production basins such as the **Permian (Midland and Delaware)**, Eagle Ford (SouthTX), Barnett Shale (North Texas), Anadarko Basins (Central Oklahoma), and Williston Basin (Badlands)[55](index=55&type=chunk) - The Logistics and Transportation (Downstream) segment's key assets include the **Grand Prix NGL pipeline**, eight fractionation trains at Mont Belvieu with a total capacity of **843.0 MBbl/d**, and the Galena Park Marine Terminal with an effective export capacity of approximately **12.5 MMBbl per month**[77](index=77&type=chunk)[84](index=84&type=chunk)[92](index=92&type=chunk) Gathering & Processing Segment - 2021 Throughput & Production | Region | Natural Gas Inlet (MMcf/d) | NGL Production (MBbl/d) | | :--- | :--- | :--- | | Permian Midland | 1,928.4 | 277.9 | | Permian Delaware | 839.8 | 114.1 | | SouthTX | 177.7 | 22.2 | | North Texas | 178.9 | 20.1 | | SouthOK | 405.9 | 49.5 | | WestOK | 212.6 | 16.5 | | Coastal | 587.2 | 33.9 | | Badlands | 139.8 | 16.2 | | **Total** | **4,470.3** | **550.4** | [Regulation and Environmental Matters](index=21&type=section&id=Regulation%20and%20Environmental%20Matters) Operations are subject to extensive federal, state, and local regulations, including environmental, health, and safety laws - Natural gas gathering operations are generally exempt from FERC jurisdiction but are subject to state-level statutes, while interstate NGL pipelines like Grand Prix are regulated by **FERC as common carriers**[124](index=124&type=chunk)[125](index=125&type=chunk)[128](index=128&type=chunk) - Operations are subject to stringent environmental laws (e.g., Clean Air Act, Clean Water Act) and occupational health and safety regulations (e.g., OSHA), which can result in **significant compliance costs** and penalties[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Pipelines are regulated by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which mandates integrity management programs with an estimated average annual cost of **$5.8 million** from 2022-2024[154](index=154&type=chunk) [Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors.) The company faces significant risks from commodity price volatility, operational hazards, competition, and regulatory changes - The company's cash flow is **highly sensitive to volatile commodity prices** (natural gas, NGLs, crude oil), which are influenced by supply/demand, economic conditions, and geopolitical factors beyond its control[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - A reduction in demand for NGL products from petrochemical, refinery, or export markets, or a significant oversupply, could **adversely affect the volumes** Targa handles and the fees it charges[172](index=172&type=chunk)[173](index=173&type=chunk) - The company faces substantial financial risk due to its **significant level of indebtedness**, which could impair its ability to obtain additional financing and limit operational flexibility[254](index=254&type=chunk)[256](index=256&type=chunk) - Regulatory risks are significant, including potential legislation related to **climate change and GHG emissions**, which could increase operating costs and reduce demand for fossil fuels[264](index=264&type=chunk)[265](index=265&type=chunk)[288](index=288&type=chunk) [Unresolved Staff Comments](index=52&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) The company reports no unresolved staff comments from the SEC - There are **no unresolved staff comments**[293](index=293&type=chunk) [Properties](index=52&type=section&id=Item%202.%20Properties.) The company's principal executive offices are located in Houston, Texas - The company's principal executive offices are located at **811 Louisiana Street, Suite 2100, Houston, Texas 77002**[294](index=294&type=chunk) [Legal Proceedings](index=52&type=section&id=Item%203.%20Legal%20Proceedings.) The company is appealing a court decision that awarded Vitol Americas Corp damages related to a terminated agreement - Vitol Americas Corp filed a lawsuit against a Targa subsidiary seeking recovery of **$129.0 million** in payments and other damages related to a terminated splitter agreement[295](index=295&type=chunk) - In October 2020, a district court awarded Vitol **$129.0 million plus interest and an additional $10.5 million** in damages; Targa has filed an appeal, which is currently pending[296](index=296&type=chunk) [Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - **Not applicable**[298](index=298&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=53&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Targa's common stock trades on the NYSE, and the company executed share repurchases in Q4 2021 under an existing program - The company's common stock is listed on the New York Stock Exchange (NYSE) under the trading symbol **"TRGP"**[301](index=301&type=chunk) - As of December 31, 2021, approximately **$369 million remained available** under the company's $500 million common share repurchase program[33](index=33&type=chunk)[307](index=307&type=chunk) Q4 2021 Share Repurchases | Period | Shares Purchased | Average Price per Share | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | Oct 2021 | 1,706 | $51.46 | $87,800 | | Nov 2021 | 353,224 | $54.24 | $19.2 Million | | Dec 2021 | 405,250 | $51.58 | $20.9 Million | | **Total Q4 2021** | **760,180** | **-** | **~$40.2 Million** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=55&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Financial performance improved significantly in 2021 due to higher commodity prices and increased volumes in the Permian Basin - The increase in 2021 revenue was primarily driven by higher NGL, natural gas, and condensate prices, which contributed **$8.45 billion** to the increase in commodity sales[345](index=345&type=chunk) - In 2021, the company recognized a non-cash pre-tax impairment loss of **$452.3 million** on assets in the South Texas region, compared to a **$2.44 billion** impairment in 2020[349](index=349&type=chunk) - Net cash from operating activities increased by **$558.4 million to $2.3 billion** in 2021, primarily due to higher commodity prices and collections from customers[391](index=391&type=chunk)[393](index=393&type=chunk) Consolidated Financial Performance (2021 vs. 2020) | Metric (in millions) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $16,949.8 | $8,260.3 | 105% | | Income (loss) from operations | $864.8 | $(1,303.7) | 166% | | Net income (loss) attributable to TRC | $71.2 | $(1,553.9) | 105% | | Adjusted EBITDA | $2,052.0 | $1,636.6 | 25% | | Distributable Cash Flow | $1,541.4 | $1,172.8 | 31% | [Segment Results](index=62&type=section&id=Results%20of%20Operations%E2%80%94By%20Reportable%20Segment) Both segments saw increased adjusted operating margins in 2021, driven by higher commodity prices and increased throughput volumes - The Gathering and Processing segment's performance was boosted by higher realized commodity prices and increased natural gas inlet volumes in the Permian region, which **grew by 12% year-over-year**[362](index=362&type=chunk) - The Logistics and Transportation segment's growth was primarily due to **higher pipeline transportation and fractionation volumes**, reflecting increased supply from the Permian basin[367](index=367&type=chunk) Adjusted Operating Margin by Segment (2021 vs. 2020) | Segment (in millions) | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | Gathering and Processing | $1,801.5 | $1,447.6 | 24% | | Logistics and Transportation | $1,537.3 | $1,402.0 | 10% | [Liquidity and Capital Resources](index=65&type=section&id=Our%20Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through a new credit facility and manages capital expenditures while servicing its debt obligations - In February 2022, the company entered into a new **$2.75 billion revolving credit facility** (New TRC Revolver) maturing in 2027, enhancing its financial flexibility[385](index=385&type=chunk) - The company projects net growth capital expenditures for 2022 to be between **$700 million and $800 million**, with maintenance capital expenditures estimated at approximately **$150 million**[402](index=402&type=chunk) Capital Expenditures (2021 vs. 2020) | Type (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Growth | $421.9 | $617.3 | | Maintenance | $138.6 | $109.5 | | **Gross Capital Expenditures** | **$560.5** | **$726.8** | Contractual Obligations Summary (as of Dec 31, 2021) | Obligation Type (in millions) | Total | Within 12 Months | | :--- | :--- | :--- | | Long-term debt obligations | $6,465.7 | $0.0 | | Interest on debt obligations | $2,457.4 | $359.3 | | Purchase obligations | $1,477.0 | $645.0 | | **Total** | **$10,829.1** | **$1,047.0** | [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company manages commodity price, interest rate, and counterparty risks, primarily through derivative hedging instruments - The company uses derivative instruments, including swaps and futures, to **hedge a portion of its commodity price risk** for natural gas, NGLs, and condensate equity volumes through 2025[419](index=419&type=chunk)[421](index=421&type=chunk) - The company is exposed to interest rate risk from variable rate borrowings; a hypothetical **100 basis point change** in interest rates would impact annual interest expense by **$1.5 million**[430](index=430&type=chunk) Fair Value of Derivative Instruments (as of Dec 31, 2021) | Commodity | Fair Value (in millions) | | :--- | :--- | | Natural gas | $(82.5) | | NGLs | $(187.4) | | Crude oil | $(46.8) | | **Total** | **$(316.7)** | [Financial Statements and Supplementary Data](index=73&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section contains the company's consolidated financial statements and the independent auditor's report - The company's Consolidated Financial Statements and the report of the independent registered public accounting firm **begin on page F-1**[435](index=435&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that as of December 31, 2021, the company's **disclosure controls and procedures were effective**[437](index=437&type=chunk) - Management's report concluded that **internal control over financial reporting was effective** as of December 31, 2021, and there were no material changes in the fourth quarter[438](index=438&type=chunk)[439](index=439&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) Information regarding directors, officers, and governance is incorporated by reference from the 2022 proxy statement - Information for this item is **incorporated by reference** from the registrant's definitive proxy statement for the 2022 Annual Meeting of Stockholders[443](index=443&type=chunk) [Executive Compensation](index=74&type=section&id=Item%2011.%20Executive%20Compensation.) Information regarding executive compensation is incorporated by reference from the 2022 proxy statement - Information for this item is **incorporated by reference** from the registrant's definitive proxy statement for the 2022 Annual Meeting of Stockholders[444](index=444&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=74&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) Information regarding security ownership is incorporated by reference from the 2022 proxy statement - Information for this item is **incorporated by reference** from the registrant's definitive proxy statement for the 2022 Annual Meeting of Stockholders[445](index=445&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=74&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) Information regarding related transactions and director independence is incorporated by reference from the 2022 proxy statement - Information for this item is **incorporated by reference** from the registrant's definitive proxy statement for the 2022 Annual Meeting of Stockholders[446](index=446&type=chunk) [Principal Accounting Fees and Services](index=74&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services.) Information regarding accounting fees and services is incorporated by reference from the 2022 proxy statement - Information for this item is **incorporated by reference** from the registrant's definitive proxy statement for the 2022 Annual Meeting of Stockholders[447](index=447&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=75&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules.) This section lists the financial statements and exhibits filed with the report, with schedules omitted as inapplicable - The company's **Consolidated Financial Statements** are included under Part II, Item 8 of the Annual Report[450](index=450&type=chunk) - All financial statement schedules have been **omitted** because they are not applicable, not required, or the information is included elsewhere in the financial statements or notes[451](index=451&type=chunk) [Form 10-K Summary](index=83&type=section&id=Item%2016.%20Form%2010-K%20Summary.) No Form 10-K summary is provided - **None**[460](index=460&type=chunk) Financial Statements [Consolidated Financial Statements](index=89&type=section&id=Consolidated%20Financial%20Statements) The company reported a significant turnaround to a net income of $71.2 million in 2021 from a net loss in 2020 Consolidated Balance Sheet Highlights (as of Dec 31) | Account (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total Current Assets | $1,769.8 | $1,460.3 | | Property, Plant and Equipment, net | $11,667.7 | $12,173.6 | | **Total Assets** | **$15,208.2** | **$15,875.7** | | Total Current Liabilities | $2,298.5 | $1,779.4 | | Long-term Debt | $6,434.4 | $7,387.1 | | **Total Liabilities** | **$9,179.8** | **$9,671.1** | | **Total Owners' Equity** | **$5,178.7** | **$5,903.2** | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Account (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Total Revenues | $16,949.8 | $8,260.3 | | Income (loss) from operations | $864.8 | $(1,303.7) | | Net income (loss) attributable to TRC | $71.2 | $(1,553.9) | | Net income (loss) per common share - diluted | $(0.07) | $(7.26) | Consolidated Cash Flow Highlights (Year Ended Dec 31) | Account (in millions) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,302.9 | $1,744.5 | | Net cash used in investing activities | $(473.2) | $(738.1) | | Net cash used in financing activities | $(1,914.0) | $(1,094.7) | [Notes to Consolidated Financial Statements](index=95&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, a $452.3 million impairment charge, and significant transactions and financing activities - In Q4 2021, the company recorded a non-cash pre-tax impairment charge of **$452.3 million** for certain gas processing facilities and gathering systems in its Central operations[574](index=574&type=chunk) - In January 2022, Targa repurchased its interests in the DevCo JVs for **~$925 million** and subsequently agreed to sell its 25% equity interest in GCX for **~$857 million**[559](index=559&type=chunk)[560](index=560&type=chunk) - As of December 31, 2021, total debt obligations were **$6.6 billion**; in February 2022, the company replaced its existing credit facilities with a new **$2.75 billion revolving credit facility**[598](index=598&type=chunk)[603](index=603&type=chunk) - The company's derivative contracts for commodity hedging had a total net liability fair value of **$316.7 million** as of December 31, 2021, compared to a net liability of **$51.2 million** at the end of 2020[429](index=429&type=chunk)[680](index=680&type=chunk)

Targa Resources Corp. Wells Fargo Midstream Utility & Renewables Symposium December 8, 2021 Forward Looking Statements and Corporate Structure 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 ...

Financial Data and Key Metrics Changes - Targa Resources reported a quarterly adjusted EBITDA of $506 million, representing a 10% sequential increase due to higher commodity prices and increased volumes across its integrated systems [20] - Year-to-date 2021, Targa generated adjusted free cash flow of $893 million, significantly reducing leverage throughout the year [21] - The company expects to end 2021 with a consolidated leverage ratio around 3.25 times, down from 3.5 times previously [23] Business Line Data and Key Metrics Changes - In the Permian region, third quarter system inlet volumes increased by 7% sequentially, with expectations to exceed the previously disclosed growth range of 5% to 10% for 2021 [14] - The Logistics and Transportation segment saw Grand Prix volumes increase to a record 417,000 barrels per day, with a 6% sequential increase in throughput volumes [16] - LPG Export Services averaged 9 million barrels per month in the third quarter, with lower sequential volumes attributed to maintenance at the Galena Park export facility [17] Market Data and Key Metrics Changes - The company noted a stronger outlook across its Permian Basin footprint, driving incremental volumes through its NGL downstream business [15] - The overall global LPG market was weaker, impacting export volumes, but Targa expects improved performance in the fourth quarter due to stabilized prices [18][80] Company Strategy and Development Direction - Targa is focused on fully integrating its NGL business and moving to a G&P contract structure that protects downside while allowing participation in strong commodity prices [8] - The company plans to recommend a $1.40 per common share annual dividend, equating to approximately 30% of its 2021 free cash flow, with expectations for modest annual increases going forward [11][25] - Targa aims to simplify its capital structure and return more capital to shareholders in 2022, while continuing to invest in high-return growth opportunities [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding the top end of the adjusted EBITDA guidance for 2021, driven by attractive organic growth opportunities [10] - The company is optimistic about continued growth in the Permian region, with robust activity levels expected to persist into the next year [14] - Management acknowledged the challenges posed by inflation but indicated that contracts include escalators to benefit from inflationary pressures [52] Other Important Information - Targa has been proactive in sustainability efforts, recently entering agreements to source renewable electricity for its G&P infrastructure [28] - The company is in discussions with rating agencies to achieve an investment-grade rating, with Moody's recently upgrading Targa to Ba1 [26] Q&A Session Summary Question: Outlook for producer activity in 2022 - Management noted that larger E&Ps are sticking to their plans, while smaller and private producers are showing increased activity [37] Question: Capital allocation priorities - The focus has shifted from debt repayment to returning capital to shareholders, with the dividend increase being the first step [41] Question: Activity levels in the Delaware Basin - Management indicated steady growth from both large public and smaller private producers in both the Midland and Delaware sides of the basin [50] Question: Inflation impact on contracts - Targa has escalators in its contracts, which should benefit the company in an inflationary environment [52] Question: Discussions with rating agencies - Management is optimistic about achieving investment-grade status and is in good dialogue with the agencies [61] Question: Future CapEx and inflation considerations - The increase in 2022 CapEx is primarily due to increased activity rather than inflation, although some cost pressures are expected [77] Question: Dividend increase metrics - The dividend set at $1.40 represents about 30% of 2021 free cash flow, but future increases will depend on performance and outlook [86] Question: M&A strategy in midstream - Targa will continue to evaluate M&A opportunities but maintains a high hurdle for acquisitions, focusing on organic growth [116] Question: ESG initiatives and renewable energy - Targa is exploring additional renewable energy projects and carbon capture opportunities as part of its ESG strategy [118]

Targa Resources Corp. Third Quarter 2021 Earnings Supplement November 4, 2021 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 ...

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Presents Targa Resources Corp.'s unaudited consolidated financial statements for Q3 and nine months ended September 30, 2021, reflecting increased revenues and profitability [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Details the company's financial position as of September 30, 2021, showing total assets of **$15.97 billion** and total liabilities of **$9.82 billion** Consolidated Balance Sheet Highlights (in millions) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $1,993.3 | $1,460.3 | | **Total Assets** | **$15,972.7** | **$15,875.7** | | **Total Current Liabilities** | $2,868.3 | $1,779.4 | | **Total Liabilities** | $9,823.1 | $9,671.1 | | **Total Owners' Equity** | $5,399.9 | $5,903.2 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Reports Q3 2021 total revenues of **$4.46 billion** and net income of **$160.4 million**, significantly improving from a prior-year loss Key Operational Results (in millions, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $4,459.7 | $2,115.1 | $11,508.2 | $5,687.5 | | **Income from Operations** | $366.5 | $295.5 | $956.4 | $(1,568.9) | | **Net Income (Loss) Attributable to Common Shareholders** | $160.4 | $36.9 | $319.3 | $(1,684.0) | | **Net Income (Loss) per Common Share - Diluted** | $0.66 | $0.16 | $1.38 | $(7.22) | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Shows net cash from operations at **$1.80 billion** for the nine months ended September 30, 2021, an increase from **$1.10 billion** in 2020 Consolidated Cash Flow Summary (Nine Months Ended Sep 30, in millions) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $1,798.8 | $1,095.7 | | **Net Cash Used in Investing Activities** | $(299.6) | $(654.0) | | **Net Cash Provided by (Used in) Financing Activities** | $(1,513.4) | $(497.8) | | **Net Change in Cash and Cash Equivalents** | $(14.2) | $(56.1) | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations for financial statements, covering accounting policies, debt, derivatives, segment information, and legal contingencies - As of September 30, 2021, total debt obligations stood at **$6.79 billion**, a decrease from **$7.76 billion** at year-end 2020. The company actively managed its debt profile, issuing **$1.0 billion** in new notes and redeeming several series of existing notes during 2021[55](index=55&type=chunk)[60](index=60&type=chunk)[62](index=62&type=chunk) - The company operates in two primary segments: Gathering and Processing, and Logistics and Transportation. For the nine months ended September 30, 2021, the Gathering and Processing segment generated an operating margin of **$938.2 million**, while the Logistics and Transportation segment generated **$920.5 million**[112](index=112&type=chunk)[121](index=121&type=chunk) - The company has estimated minimum revenue of **$3.19 billion** related to unsatisfied performance obligations from long-term contracts with remaining terms of 1 to 18 years[104](index=104&type=chunk)[105](index=105&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operational results, highlighting strong performance from higher commodity prices and volumes, capital allocation, and liquidity [Recent Developments and Outlook](index=29&type=section&id=Recent%20Developments%20and%20Outlook) Details Targa's Permian Midland processing capacity expansion, updated capital allocation strategy, and debt management activities - The Heim Plant (**200 MMcf/d**) began operations in Q3 2021, and construction of the new Legacy Plant (**250 MMcf/d**) in the Midland Basin is underway, with operations expected in Q4 2022[134](index=134&type=chunk)[135](index=135&type=chunk) - The company announced a new capital allocation strategy, intending to recommend a dividend increase to **$0.35 per common share** for Q4 2021, repurchase JV interests for **~$925 million**, and potentially redeem Series A Preferred Stock[137](index=137&type=chunk) - In 2021, the company actively managed its debt by issuing **$1.0 billion** of 4% Senior Notes due 2032 and redeeming several other series of notes, including the 5⅛% Notes due 2025 and 4¼% Notes due 2023[138](index=138&type=chunk)[140](index=140&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Consolidated results show significant year-over-year improvement, with Q3 2021 net income up **163%** and Adjusted EBITDA increasing **21%** Consolidated Financial Highlights (in millions) | Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $4,459.7 | $2,115.1 | 111% | | **Net Income Attributable to TRC** | $182.2 | $69.3 | 163% | | **Adjusted EBITDA** | $505.9 | $419.1 | 21% | Segment Operating Margin (in millions) | Segment | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | **Gathering and Processing** | $361.4 | $261.0 | 38% | | **Logistics and Transportation** | $280.7 | $280.4 | 0% | - The Gathering and Processing segment's performance was driven by higher realized commodity prices and a **15% increase** in Total Permian natural gas inlet volumes year-over-year[190](index=190&type=chunk)[196](index=196&type=chunk) - The Logistics and Transportation segment saw a **38% increase** in pipeline throughput and a **12% increase** in fractionation volumes, driven by higher supply from the Permian[200](index=200&type=chunk)[202](index=202&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Reviews Targa's liquidity of **$3.13 billion** as of October 29, 2021, and outlines capital expenditure estimates for 2021 Consolidated Liquidity as of October 29, 2021 (in millions) | Source | Amount | | :--- | :--- | | Cash on hand | $307.1 | | Availability under Revolvers | $2,870.0 | | **Total Liquidity** | **$3,128.3** | - Net cash from operating activities increased by **$703.1 million** to **$1.8 billion** for the first nine months of 2021 compared to the same period in 2020, primarily due to higher collections from customers[227](index=227&type=chunk)[229](index=229&type=chunk) - The company estimates 2021 net growth capital expenditures of **$350 million to $450 million** and net maintenance capital expenditures of approximately **$120 million**[239](index=239&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details the company's exposure to market risks, including commodity prices, interest rates, and counterparty credit, and its hedging strategies - The company hedges a portion of its expected natural gas, NGL, and condensate equity volumes through 2025 to reduce cash flow variability[244](index=244&type=chunk)[246](index=246&type=chunk) Sensitivity of Derivative Fair Value to 10% Price Change (as of Sep 30, 2021, in millions) | Commodity | Fair Value | Result of 10% Price Decrease | Result of 10% Price Increase | | :--- | :--- | :--- | :--- | | **Total** | **$(527.4)** | **$(378.3)** | **$(676.5)** | - A hypothetical **100 basis point** change in interest rates would impact annual interest expense by **$3.4 million** based on September 30, 2021 variable-rate debt balances[254](index=254&type=chunk) [Controls and Procedures](index=48&type=section&id=Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[259](index=259&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[260](index=260&type=chunk) [PART II—OTHER INFORMATION](index=49&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=49&type=section&id=Legal%20Proceedings) Details a significant legal proceeding with Vitol Americas Corp., where a court awarded Vitol **$129.0 million** plus interest and **$10.5 million** in damages, which Targa has appealed - Vitol Americas Corp. filed a lawsuit against a former Targa subsidiary, Targa Channelview LLC, seeking recovery of **$129.0 million** in payments related to a terminated Splitter Agreement[263](index=263&type=chunk) - On October 15, 2020, a district court awarded Vitol **$129.0 million** (plus interest) and an additional **$10.5 million** in damages. The company has filed an appeal, which is currently pending[264](index=264&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) Supplements annual risk factors by highlighting the adverse impact of severe weather events and potential climate changes on operations and financial results - The company's operations are subject to disruption from severe weather, such as the February 2021 winter storms, which can adversely affect operations and the financial condition of counterparties[267](index=267&type=chunk) - Potential climate changes may increase the frequency and severity of storms, floods, and other climatic events, which could have a material adverse effect on the company's business[267](index=267&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered equity sales and details share repurchases, with **$408.5 million** remaining under the **$500 million** repurchase program as of September 30, 2021 - There were no unregistered sales of equity securities during the period[269](index=269&type=chunk) - As of September 30, 2021, approximately **$408.5 million** remained available for repurchase under the company's **$500 million** authorized share repurchase program[270](index=270&type=chunk)[271](index=271&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=50&type=section&id=Other%20Items%20(Items%203,%204,%205,%206)) Covers items with no substantive disclosures, including defaults, mine safety, and other information, and lists exhibits filed with the quarterly report - There were no defaults upon senior securities during the period[272](index=272&type=chunk) - Item 6 lists the exhibits filed with the Form 10-Q, including certifications and supplemental indentures[275](index=275&type=chunk)[277](index=277&type=chunk)

Targa Resources Corp. Second Quarter 2021 Earnings Supplement August 5, 2021 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 o ...

Targa Resources Corp. (NYSE:TRGP) Q2 2021 Earnings Conference Call August 5, 2021 11:00 AM ET Company Participants Sanjay Lad - Vice President of Finance & Investor Relations Matt Meloy - Chief Executive Officer Jen Kneale - Chief Financial Officer Pat McDonie - President, Gathering & Processing Scott Pryor - President Logistics & Transportation Conference Call Participants Shneur Gershuni - UBS John Mackay - Goldman Sachs Michael Blum - Wells Fargo Jeremy Tonet - JPMorgan Tristan Richardson - Truist Securi ...