Group 1 - Targa Resources (NYSE: TRGP) has experienced a moderate performance over the past year, with a stock price increase of 12% [1] - The stock has not recovered from its "Liberation Day losses," despite overall market recovery [1] Group 2 - The article reflects a contrarian investment approach based on macro views and stock-specific turnaround stories [1]

Core Insights - Targa Resources Corp. (TRGP) has outperformed its industry with a 12.9% stock gain over the past year, while the broader Oil-Energy sector declined by 1.9% [1][4] - The company is a leading player in the midstream energy sector, providing essential services across the natural gas and natural gas liquids (NGL) value chain [5] Performance Comparison - Other midstream companies like CrossAmerica Partners (CAPL) increased by only 1.8%, while Western Midstream Partners (WES) and Sunoco (SUN) saw declines of 1.2% and 1.7%, respectively [4] - TRGP's strong performance has attracted investor interest and discussions about its future potential [4] Growth Drivers - Targa Resources is positioned to benefit from growing global demand for NGLs and LPG exports, with its Galena Park terminal operating near full capacity [7] - The company plans to expand its LPG export capacity to approximately 19 million barrels per month by Q3 2027, capitalizing on long-term international demand growth [8] - Approximately 90% of TRGP's revenues come from fee-based contracts, providing stability against commodity price fluctuations [9] Capital Allocation and Tax Benefits - Targa Resources employs a disciplined capital allocation strategy, targeting a return of 40-50% of adjusted cash flow to shareholders through dividends and buybacks [10] - Recent tax legislation allows TRGP to defer cash tax payments beyond 2027, enhancing liquidity for growth projects [11] Market Position - Targa Resources is the largest gas processor in the Permian Basin, with a 17% CAGR in Permian volumes over the past five years, outpacing basin-wide production growth [12] Challenges and Risks - The midstream sector faces potential overcapacity in NGL infrastructure, which could impact utilization rates and margins [13] - Execution risks in expansion projects could hinder growth if delays or cost overruns occur [14] - Competitive pressures in the Permian Basin may affect Targa Resources' market share and profitability [15] - Macroeconomic uncertainties and exposure to commodity price volatility could add further challenges to the company's outlook [16][17]

Core Insights - Targa Resources Corp. (TRGP) reported second-quarter 2025 earnings of $2.87 per share, exceeding the Zacks Consensus Estimate of $1.91 and improving from $1.33 in the same quarter last year, driven by strong volumes across its systems [1] - Total quarterly revenues reached $4.3 billion, a 19.6% increase from $3.6 billion in the prior-year quarter, primarily due to a 23% rise in commodity sales and a 5% increase in midstream service fees, although it fell short of the Zacks Consensus Estimate of $4.9 billion [2] - Adjusted EBITDA for the quarter was $1.2 billion, up from $984.3 million year-over-year [2] Dividend and Share Buyback - Targa declared a quarterly cash dividend of $1 per common share, totaling approximately $217 million, payable on August 15 to shareholders of record as of July 31 [3] - The company repurchased 651,163 common shares for about $124.9 million at an average price of $191.86 per share, with $890.5 million remaining under the authorized buyback plan as of March 31, 2025 [3] Operational Highlights - The company achieved all-time-high transportation volumes for Permian and NGL, and announced a 43-mile expansion of the Bull Run natural gas pipeline to enhance connectivity between the Permian Delaware system and WAHA [4] - The Gathering and Processing segment reported an operating margin of $588 million, a 3% increase from $573 million year-over-year, although it missed the consensus estimate of $619 million [5] - Logistics and Transportation segment's operating margin was $632 million, reflecting a 15% year-over-year increase that matched the consensus estimate [6] Volume and Margin Performance - Gathering and Processing volumes increased by 11% year-over-year to an average of 6,278 MMcf/d, surpassing the consensus mark of 6,135 MMcf/d [5][10] - Fractionation volumes rose 7% to 969 thousand barrels per day, although it fell short of the consensus estimate of 1,106 thousand barrels per day [8] - NGL pipeline transportation volumes increased by 23% year-over-year, while export volumes rose by 7% [8] Financial Overview - Product costs amounted to $2.4 billion, a 10.9% increase from the previous year, while operating expenses rose to $323.6 million, up 11% from $290.7 million [11] - The company invested $885.1 million in growth capital programs, compared to $798.7 million in the prior year [11] - As of June 30, 2025, Targa had cash and cash equivalents of $113.1 million and long-term debt of $16.1 billion, with a debt-to-capitalization ratio of approximately 85.6% [11] 2025 Guidance - Targa expects full-year adjusted EBITDA for 2025 to be in the range of $4.65-$4.85 billion, supported by growth in its Permian Gathering and Processing footprint [12] - The company anticipates total net growth capital expenditures for 2025 to be around $3 billion, reflecting earlier-than-expected project completions and new expansions [13] - The Gathering and Processing segment is set to see the Pembrook II plant come online ahead of schedule in August 2025, with several other projects progressing as planned [14][15]

Core Insights - Targa Resources, Inc. reported $4.26 billion in revenue for Q2 2025, a year-over-year increase of 19.6%, with an EPS of $2.87 compared to $1.33 a year ago, indicating strong earnings growth despite missing revenue estimates by 12.19% [1] - The company delivered an EPS surprise of +50.26%, exceeding the consensus EPS estimate of $1.91 [1] Financial Performance - Targa Resources' stock has returned -4.5% over the past month, contrasting with the Zacks S&P 500 composite's +1.2% change, and currently holds a Zacks Rank 3 (Hold) [3] - Key metrics for Targa Resources include: - NGL sales per day: 606.4 million barrels, exceeding the average estimate of 591.25 million barrels [4] - Gross NGL production (Coastal): 31.6 million barrels, slightly below the estimate of 32.03 million barrels [4] - Condensate sales per day: 20.1 million barrels, above the estimate of 19.31 million barrels [4] - Logistics and Marketing NGL sales: 1151.1 million barrels, surpassing the estimate of 1093.79 million barrels [4] - Export volumes: 423.1 million barrels, below the estimate of 443.45 million barrels [4] - Fractionation volumes: 969.1 million barrels, below the estimate of 1106.38 million barrels [4] - Total Plant natural gas inlet volumes: 7894 million cubic feet, above the estimate of 7645.53 million cubic feet [4] - Total Gross NGL production: 1025.2 million barrels, exceeding the estimate of 990.94 million barrels [4] - Average realized prices for Condensate: $63.79, above the estimate of $62.47 [4] - Average realized prices for Natural gas: $1.01, below the estimate of $1.75 [4] - Average realized prices for NGL: $0.41, slightly below the estimate of $0.45 [4] - Plant natural gas inlet volumes (Badlands): 130.9 million cubic feet, below the estimate of 141.6 million cubic feet [4]

[PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Targa Resources Corp.'s unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), cash flows, and changes in owners' equity, along with detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024) This section provides a comparative overview of Targa Resources Corp.'s financial position at June 30, 2025, and December 31, 2024 | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | Change (Millions USD) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | **ASSETS** | | | | | | Total current assets | 2,207.2 | 2,296.3 | (89.1) | (3.9%) | | Property, plant and equipment, net | 19,020.3 | 18,062.7 | 957.6 | 5.3% | | Total assets | 23,512.8 | 22,734.1 | 778.7 | 3.4% | | **LIABILITIES & OWNERS' EQUITY** | | | | | | Total current liabilities | 3,176.7 | 3,172.6 | 4.1 | 0.1% | | Long-term debt | 16,082.3 | 13,786.9 | 2,295.4 | 16.6% | | Total owners' equity | 2,711.4 | 4,418.2 | (1,706.8) | (38.6%) | | Total liabilities and owners' equity | 23,512.8 | 22,734.1 | 778.7 | 3.4% | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section details Targa Resources Corp.'s revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 | Metric | 3 Months Ended June 30, 2025 (Millions USD) | 3 Months Ended June 30, 2024 (Millions USD) | Change (Millions USD) | % Change | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Total revenues | 4,260.1 | 3,562.0 | 698.1 | 19.6% | | Income (loss) from operations | 1,033.6 | 627.2 | 406.4 | 64.8% | | Net income (loss) attributable to Targa Resources Corp. | 629.1 | 298.5 | 330.6 | 110.8% | | Net income (loss) per common share - basic | 2.88 | 1.34 | 1.54 | 114.9% | | Net income (loss) per common share - diluted | 2.87 | 1.33 | 1.54 | 115.8% | | Metric | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | Change (Millions USD) | % Change | | :--------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Total revenues | 8,821.6 | 8,124.4 | 697.2 | 8.6% | | Income (loss) from operations | 1,576.9 | 1,266.7 | 310.2 | 24.5% | | Net income (loss) attributable to Targa Resources Corp. | 899.6 | 573.7 | 325.9 | 56.8% | | Net income (loss) per common share - basic | 3.79 | 2.56 | 1.23 | 48.0% | | Net income (loss) per common share - diluted | 3.78 | 2.55 | 1.23 | 48.2% | [Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section presents Targa Resources Corp.'s comprehensive income (loss) for the three and six months ended June 30, 2025, and 2024, including other comprehensive income (loss) components | Metric | 3 Months Ended June 30, 2025 (Millions USD) | 3 Months Ended June 30, 2024 (Millions USD) | Change (Millions USD) | % Change | | :---------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Net income (loss) | 637.2 | 358.9 | 278.3 | 77.5% | | Other comprehensive income (loss) | 37.1 | (22.5) | 59.6 | NM | | Comprehensive income (loss) attributable to Targa Resources Corp. | 666.2 | 276.0 | 390.2 | 141.4% | | Metric | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | Change (Millions USD) | % Change | | :---------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Net income (loss) | 917.0 | 691.6 | 225.4 | 32.6% | | Other comprehensive income (loss) | 15.7 | (74.2) | 89.9 | NM | | Comprehensive income (loss) attributable to Targa Resources Corp. | 915.3 | 499.5 | 415.8 | 83.2% | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section outlines Targa Resources Corp.'s cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 | Metric | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | Change (Millions USD) | % Change | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Net cash provided by (used in) operating activities | 1,812.7 | 1,780.9 | 31.8 | 1.8% | | Net cash provided by (used in) investing activities | (1,770.1) | (1,427.7) | (342.4) | 24.0% | | Net cash provided by (used in) financing activities | (86.8) | (328.5) | 241.7 | (73.6%) | | Net change in cash and cash equivalents | (44.2) | 24.7 | (68.9) | NM | | Cash and cash equivalents, end of period | 113.1 | 166.4 | (53.3) | (32.0%) | [Consolidated Statements of Changes in Owners' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Owners'%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) This section details the changes in Targa Resources Corp.'s owners' equity, including stockholders' equity and noncontrolling interests, for the periods presented | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | Change (Millions USD) | % Change | | :--------------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Targa Resources Corp. stockholders' equity | 2,588.1 | 2,592.4 | (4.3) | (0.2%) | | Noncontrolling interests | 123.3 | 1,825.8 | (1,702.5) | (93.2%) | | Total owners' equity | 2,711.4 | 4,418.2 | (1,706.8) | (38.6%) | - The significant decrease in noncontrolling interests and total owners' equity is primarily due to the repurchase of noncontrolling interests, net of tax, amounting to **$1,779.7 million** for the six months ended June 30, 2025[29](index=29&type=chunk) [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of Targa Resources Corp.'s accounting policies, significant transactions, and financial statement line items [Note 1 — Organization and Operations](index=11&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20Operations) This note describes Targa Resources Corp.'s corporate structure, its role as a midstream services provider, and its diversified asset portfolio - Targa Resources Corp. (TRGP) is a publicly traded Delaware corporation, a leading provider of midstream services, and one of North America's largest independent infrastructure companies, owning, operating, acquiring, and developing a diversified portfolio of complementary domestic infrastructure assets[33](index=33&type=chunk) - The Company's primary operations include gathering, compressing, treating, processing, transporting, and purchasing/selling natural gas; transporting, storing, fractionating, treating, and purchasing/selling NGLs and NGL products; and gathering, storing, terminaling, and purchasing/selling crude oil[35](index=35&type=chunk)[37](index=37&type=chunk) [Note 2 — Basis of Presentation](index=11&type=section&id=Note%202%20%E2%80%94%20Basis%20of%20Presentation) This note clarifies the preparation of the unaudited consolidated financial statements in accordance with Form 10-Q instructions and GAAP - The unaudited consolidated financial statements are prepared in accordance with Form 10-Q instructions and GAAP, reflecting normal recurring adjustments, and should be read with the Annual Report, noting interim results are not indicative of full-year performance[36](index=36&type=chunk) [Note 3 — Significant Accounting Policies](index=12&type=section&id=Note%203%20%E2%80%94%20Significant%20Accounting%20Policies) This note outlines any significant accounting policy updates and the company's evaluation of new FASB Accounting Standards Updates - No significant updates to accounting policies occurred during the six months ended June 30, 2025, other than evaluating new FASB ASUs[38](index=38&type=chunk) - The company is evaluating ASU 2023-09 (Improvements to Income Tax Disclosures), effective for fiscal years beginning after December 15, 2024, which will require disaggregation of income taxes paid and specific categories in rate reconciliation, with the impact limited to disclosure[39](index=39&type=chunk)[40](index=40&type=chunk) - The company is evaluating ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for fiscal years beginning after December 15, 2026, requiring tabular disclosure of specific expense categories and total selling expenses, with the impact limited to disclosure[41](index=41&type=chunk)[42](index=42&type=chunk) [Note 4 — Joint Ventures and Acquisitions](index=13&type=section&id=Note%204%20%E2%80%94%20Joint%20Ventures%20and%20Acquisitions) This note details Targa's recent joint venture activities and acquisitions, including the Badlands Transaction - On March 5, 2025, Targa acquired Blackstone's **45% interest** in Targa Badlands LLC for **$1.8 billion cash**, gaining **100% ownership** effective January 1, 2025, resulting in a **$70.5 million premium** on repurchase of noncontrolling interests, reducing net income attributable to common shareholders[43](index=43&type=chunk) [Note 5 — Property, Plant and Equipment and Intangible Assets](index=13&type=section&id=Note%205%20%E2%80%94%20Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) This note provides a breakdown of property, plant and equipment, and intangible assets, along with associated depreciation and amortization expenses | Asset Category | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | Change (Millions USD) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Property, plant and equipment, net | 19,020.3 | 18,062.7 | 957.6 | 5.3% | | Intangible assets, net | 1,814.4 | 1,977.4 | (163.0) | (8.2%) | - Depreciation expense for the three and six months ended June 30, 2025, was **$292.2 million** and **$578.3 million**, respectively, up from $255.3 million and $502.5 million in the prior year periods[44](index=44&type=chunk) - Amortization expense for intangible assets was **$81.5 million** and **$163.0 million** for the three and six months ended June 30, 2025, respectively, down from $93.3 million and $186.6 million in the prior year periods, with estimated annual amortization projected to decrease from **$326.0 million** in 2025 to **$214.1 million** in 2029[46](index=46&type=chunk) [Note 6 – Investments in Unconsolidated Affiliates](index=14&type=section&id=Note%206%20%E2%80%93%20Investments%20in%20Unconsolidated%20Affiliates) This note outlines Targa's equity method investments in unconsolidated affiliates and their financial contributions - Targa holds equity method investments in several unconsolidated affiliates, including a **50% operated interest** in Little Missouri 4 (Gathering and Processing segment) and interests in Gulf Coast Fractionators (**38.8%**), Cayenne Pipeline, LLC (**50%**), and Blackcomb (**17.5%**) in the Logistics and Transportation segment[48](index=48&type=chunk)[51](index=51&type=chunk) Affiliate Investment Balances | Affiliate | Balance at Dec 31, 2024 (Millions USD) | Equity Earnings (Loss) (Millions USD) | Cash Distributions (Millions USD) | Contributions (Millions USD) | Balance at June 30, 2025 (Millions USD) | | :---------------- | :----------------------------------- | :------------------------------------ | :-------------------------------- | :--------------------------- | :---------------------------------- | | Little Missouri 4 | 84.3 | 7.6 | (9.7) | 5.1 | 87.3 | | GCF | 66.4 | 0.2 | — | 0.9 | 67.5 | | Cayenne | 12.3 | 3.0 | (1.4) | — | 13.9 | | Blackcomb | 30.3 | (0.2) | — | 69.8 | 99.9 | | Total | 193.3 | 10.6 | (11.1) | 75.8 | 268.6 | [Note 7 — Debt Obligations](index=15&type=section&id=Note%207%20%E2%80%94%20Debt%20Obligations) This note provides details on Targa's current and long-term debt, including recent financing activities and credit facilities | Debt Category | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | Change (Millions USD) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Current debt obligations | 768.2 | 387.7 | 380.5 | 98.1% | | Long-term debt | 16,082.3 | 13,786.9 | 2,295.4 | 16.6% | | Total debt obligations | 16,850.5 | 14,174.6 | 2,675.9 | 18.9% | - In February 2025, Targa entered into a new **$3.5 billion** TRGP senior revolving credit facility (TRGP Revolver) maturing in February 2030, replacing the previous facility, with **no borrowings outstanding** as of June 30, 2025, and approximately **$2.8 billion** of available liquidity from the TRGP Revolver and Commercial Paper Program[55](index=55&type=chunk)[60](index=60&type=chunk) - In February 2025, Targa completed a public offering of **$2.0 billion** in Senior Unsecured Notes (5.550% due 2035 and 6.125% due 2055), with net proceeds used to fund the Badlands Transaction and repay Commercial Paper Program borrowings[56](index=56&type=chunk)[61](index=61&type=chunk) - In June 2025, Targa completed a public offering of **$1.5 billion** in Senior Unsecured Notes (4.900% due 2030 and 5.650% due 2036), with net proceeds initially used to reduce Securitization Facility and Commercial Paper Program borrowings, and in July 2025, to redeem the Partnership's 6.500% Senior Unsecured Notes due 2027[54](index=54&type=chunk)[62](index=62&type=chunk) - A conditional notice of redemption for the **6.500% Notes due 2027** was issued in June 2025, reclassifying them to Current debt obligations, with the redemption completed in July 2025, resulting in a **$1.9 million** debt extinguishment loss[54](index=54&type=chunk)[63](index=63&type=chunk) - In July 2025, the Partnership amended its **$600.0 million** accounts receivable securitization facility, extending its termination date to August 31, 2026[54](index=54&type=chunk)[64](index=64&type=chunk) [Note 8 — Common Stock and Related Matters](index=18&type=section&id=Note%208%20%E2%80%94%20Common%20Stock%20and%20Related%20Matters) This note covers Targa's share repurchase programs and common stock dividend declarations - Targa exhausted its **$1.0 billion 2023 Share Repurchase Program** in Q1 2025, has a **$1.0 billion 2024 Share Repurchase Program** (with **$566.2 million remaining** as of June 30, 2025), and approved a new **$1.0 billion 2025 Share Repurchase Program** in August 2025[65](index=65&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) Common Stock Repurchases | Period | Shares Repurchased | Weighted Average Price per Share (USD) | Total Net Cost (Millions USD) | | :--------------------------------- | :----------------- | :------------------------------------- | :---------------------------- | | 3 Months Ended June 30, 2025 | 1,955,099 | 165.86 | 324.3 | | 6 Months Ended June 30, 2025 | 2,606,262 | 172.35 | 449.2 | | 3 Months Ended June 30, 2024 | 2,985,816 | 118.91 | 355.1 | | 6 Months Ended June 30, 2024 | 4,172,260 | 114.75 | 478.8 | - In April 2025, Targa increased its common dividend to **$1.00 per common share**, or **$4.00 per common share annualized**, effective for Q1 2025[69](index=69&type=chunk) Common Dividends Declared and Paid | Three Months Ended | Date Paid or To Be Paid | Total Common Dividends Declared (Millions USD) | Common Dividends Paid or To Be Paid (Millions USD) | Dividends on Share-Based Awards (Millions USD) | Dividends Declared per Share of Common Stock (USD) | | :----------------- | :---------------------- | :--------------------------------------------- | :------------------------------------------------- | :--------------------------------------------- | :------------------------------------------------- | | June 30, 2025 | August 15, 2025 | 217.1 | 215.2 | 1.9 | 1.00000 | | March 31, 2025 | May 15, 2025 | 219.0 | 216.9 | 2.1 | 1.00000 | | December 31, 2024 | February 14, 2025 | 165.2 | 163.6 | 1.6 | 0.75000 | [Note 9 — Earnings per Common Share](index=19&type=section&id=Note%209%20%E2%80%94%20Earnings%20per%20Common%20Share) This note explains Targa's earnings per share calculation method and provides basic and diluted EPS figures - Targa calculates earnings per share using the two-class method, allocating earnings to common stock and participating securities (RSUs and certain retention awards) based on dividends and undistributed earnings[71](index=71&type=chunk)[72](index=72&type=chunk) Earnings per Common Share | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income (loss) attributable to common shareholders (Millions USD) | 629.1 | 298.5 | 829.1 | 573.7 | | Net income (loss) per common share - basic (USD) | 2.88 | 1.34 | 3.79 | 2.56 | | Net income (loss) per common share - diluted (USD) | 2.87 | 1.33 | 3.78 | 2.55 | | Weighted average shares outstanding - basic (Millions) | 216.6 | 221.0 | 217.2 | 221.9 | | Weighted average shares outstanding - diluted (Millions) | 217.3 | 221.9 | 218.0 | 222.9 | - Unvested restricted stock awards (**1.1 million shares** for 3 months ended June 30, 2025, and **1.1 million shares** for 6 months ended June 30, 2025) were excluded from diluted EPS calculation as their inclusion would have been anti-dilutive[73](index=73&type=chunk) [Note 10 — Derivative Instruments and Hedging Activities](index=19&type=section&id=Note%2010%20%E2%80%94%20Derivative%20Instruments%20and%20Hedging%20Activities) This note describes Targa's use of derivative instruments to manage commodity price risk and their impact on financial statements - Targa uses derivative instruments (swaps, futures, options) to manage commodity price risk and reduce cash flow volatility from natural gas, NGL, and condensate equity volumes, future commodity purchases/sales, and natural gas transportation basis risk, with hedges primarily designated as cash flow hedges[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) Commodity Derivative Contracts | Commodity | Instrument | Unit | 2025 | 2026 | 2027 | 2028 | | :---------- | :--------- | :--------- | :----- | :----- | :----- | :----- | | Natural Gas | Swaps | MMBtu/d | 81,584 | 81,604 | 44,508 | 11,047 | | Natural Gas | Basis Swaps | MMBtu/d | 568,668 | 368,459 | 288,329 | 100,000 | | NGL | Swaps | Bbl/d | 44,183 | 31,685 | 15,863 | 3,944 | | NGL | Futures | Bbl/d | 35,793 | 4,726 | — | — | | Condensate | Swaps | Bbl/d | 8,023 | 8,249 | 2,381 | 592 | Fair Value of Derivative Instruments | Derivative Type | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Total derivatives designated as hedging instruments (Assets) | 83.4 | 71.6 | | Total derivatives designated as hedging instruments (Liabilities) | (34.7) | (40.7) | | Total derivatives not designated as hedging instruments (Assets) | 21.1 | 15.5 | | Total derivatives not designated as hedging instruments (Liabilities) | (192.6) | (218.6) | | Total derivatives (Net Liability) | (122.8) | (172.2) | - Derivative contracts are subject to netting arrangements, reducing maximum loss due to counterparty credit risk by **$18.7 million** as of June 30, 2025, with the estimated fair value of derivatives being a net liability of **$122.8 million** as of June 30, 2025, reflecting a decrease from **$172.2 million** at December 31, 2024, primarily due to favorable movements in natural gas forward basis curves[78](index=78&type=chunk)[81](index=81&type=chunk)[247](index=247&type=chunk) Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) | Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) | 3 Months Ended June 30, 2025 (Millions USD) | 3 Months Ended June 30, 2024 (Millions USD) | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | | :------------------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Commodity contracts | 75.8 | 3.0 | 42.0 | (67.2) | Gain (Loss) Reclassified from OCI into Income (Effective Portion) | Gain (Loss) Reclassified from OCI into Income (Effective Portion) | 3 Months Ended June 30, 2025 (Millions USD) | 3 Months Ended June 30, 2024 (Millions USD) | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | | :-------------------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Revenues | 27.7 | 32.2 | 21.6 | 29.0 | Gain (Loss) Recognized in Income on Derivatives (Not Designated as Hedges) | Gain (Loss) Recognized in Income on Derivatives (Not Designated as Hedges) | 3 Months Ended June 30, 2025 (Millions USD) | 3 Months Ended June 30, 2024 (Millions USD) | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | | :----------------------------------------------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Revenue | 206.2 | (88.8) | (79.0) | (120.7) | - As of June 30, 2025, Targa expects to reclassify **$49.5 million** of commodity hedge related net deferred gains from Accumulated OCI into earnings before income taxes over the next twelve months, with the maximum hedging period extending through 2028[83](index=83&type=chunk) [Note 11 — Fair Value Measurements](index=23&type=section&id=Note%2011%20%E2%80%94%20Fair%20Value%20Measurements) This note discusses the fair value of Targa's financial instruments, including derivatives and debt, and their classification within the fair value hierarchy - Derivative financial instruments are reported at fair value using present value methods or standard option valuation models, sensitive to changes in forward pricing for natural gas, NGLs, and crude oil, where a hypothetical **10% increase** in commodity prices would result in a net liability of **$298.5 million**, while a **10% decrease** would result in a net asset of **$52.8 million**[87](index=87&type=chunk)[88](index=88&type=chunk)[246](index=246&type=chunk) - Other financial instruments like cash, receivables, and payables approximate fair value due to their short-term nature, while debt fair values are based on carrying value for variable-rate debt and quoted market prices for senior unsecured notes[89](index=89&type=chunk)[91](index=91&type=chunk) Fair Value of Financial Instruments | Financial Instrument Category | June 30, 2025 Fair Value (Millions USD) | Level 1 (Millions USD) | Level 2 (Millions USD) | Level 3 (Millions USD) | | :---------------------------------------------------- | :-------------------------------------- | :--------------------- | :--------------------- | :--------------------- | | Assets from commodity derivative contracts | 103.6 | — | 103.6 | — | | Liabilities from commodity derivative contracts | 226.4 | — | 225.3 | 1.1 | | TRGP Revolver and Commercial Paper Program | 667.0 | — | 667.0 | — | | TRGP Senior unsecured notes | 11,004.7 | — | 11,004.7 | — | | Partnership's Senior unsecured notes | 4,986.5 | — | 4,986.5 | — | - Certain swaps are classified as Level 3 due to unobservable market prices or implied volatilities for a substantial portion of their term, valued using discounted cash flow based on extrapolated commodity forward curves, with the net Level 3 liability being **$1.1 million** as of June 30, 2025[92](index=92&type=chunk)[93](index=93&type=chunk) [Note 12 — Contingencies](index=25&type=section&id=Note%2012%20%E2%80%94%20Contingencies) This note details Targa's involvement in various legal, administrative, and regulatory proceedings, including environmental matters and breach of contract cases - Targa is involved in various legal, administrative, and regulatory proceedings, including environmental matters with agencies like the EPA and NMED[94](index=94&type=chunk) - New Mexico Environment Department (NMED) issued a proposed Administrative Compliance Order (ACO) in December 2024 for alleged air permit violations at the Red Hills gas processing facility, including a proposed civil penalty of **$47.8 million** and required capital improvements of **$140 million** (substantially completed by Dec 31, 2024), which Targa is contesting[95](index=95&type=chunk)[96](index=96&type=chunk) - A lawsuit related to the February 2021 winter storm resulted in a **$6.9 million judgment** against Targa, which is under appeal by both parties, while other similar breach of contract cases were settled for approximately **$12.7 million**[97](index=97&type=chunk) - In April 2024, Targa received an EPA Notice of Violation (NOV) and subpoena regarding alleged Clean Air Act violations at Targa Badlands LLC compressor stations, leading to a Plea Agreement in December 2024 for a single CAA violation with a maximum fine of **$500,000**, and a Consent Agreement and Final Order with the EPA in July 2025 requiring an administrative penalty of approximately **$3.2 million**[98](index=98&type=chunk)[99](index=99&type=chunk) [Note 13 — Revenue](index=27&type=section&id=Note%2013%20%E2%80%94%20Revenue) This note provides information on Targa's revenue recognition, including estimated minimum revenue from unsatisfied performance obligations and deferred revenue Fixed Consideration to be Recognized | Period | Fixed Consideration to be Recognized (Millions USD) | | :--------------- | :---------------------------------------- | | 2025 | 198.6 | | 2026 | 405.5 | | 2027 and after | 2,137.4 | - The estimated minimum revenue from unsatisfied performance obligations, primarily from contracts with minimum volume commitments, totals **$2,741.5 million** as of June 30, 2025, with remaining terms ranging from 1 to 14 years[100](index=100&type=chunk)[101](index=101&type=chunk) - Deferred revenue was **$125.7 million** as of June 30, 2025, up from **$119.9 million** at December 31, 2024, representing consideration received for which revenue recognition conditions have not yet been met[102](index=102&type=chunk) [Note 14 — Income Taxes](index=27&type=section&id=Note%2014%20%E2%80%94%20Income%20Taxes) This note discusses Targa's effective tax rate, deferred tax assets, ongoing IRS examinations, and the impact of recent tax legislation - Targa's effective tax rate for the three and six months ended June 30, 2025, is higher than the U.S. corporate statutory rate of **21%** due to state income taxes, partially offset by excess tax-deductible stock compensation, while the prior year was lower due to income allocated to noncontrolling interests not taxable to the Company[104](index=104&type=chunk) - The valuation allowance for deferred tax assets remained at **$5.9 million** as of June 30, 2025, and December 31, 2024[105](index=105&type=chunk) - IRS examinations are ongoing for 2019, 2020, and 2022 taxable years for certain subsidiaries, but no material audit adjustments to taxable income are expected, with the 2019 returns having a statute extension to December 2025[106](index=106&type=chunk)[145](index=145&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed in July 2025, indefinitely extends **100% first-year depreciation** and includes favorable modifications to business interest expense limitations, which Targa is assessing, expecting a benefit to cash flows from operating activities without a material impact on results of operations[107](index=107&type=chunk) - Targa does not anticipate paying Corporate Alternative Minimum Tax (CAMT) at least through 2026, based on interpretations of the IRA, CAMT guidance, OBBBA impact, and operational assumptions, noting any future CAMT liability would accelerate tax obligations, reducing cash available for distribution but providing an offsetting credit[108](index=108&type=chunk)[109](index=109&type=chunk)[147](index=147&type=chunk) [Note 15 — Supplemental Cash Flow Information](index=29&type=section&id=Note%2015%20%E2%80%94%20Supplemental%20Cash%20Flow%20Information) This note provides additional details on cash flow items, including interest paid, income taxes paid, and the impact of accruals on capital expenditures Supplemental Cash Flow Items | Cash Flow Item | 6 Months Ended June 30, 2025 (Millions USD) | 6 Months Ended June 30, 2024 (Millions USD) | Change (Millions USD) | % Change | | :------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------- | | Interest paid, net of capitalized interest | 363.4 | 379.0 | (15.6) | (4.1%) | | Income taxes paid, net of refunds | 21.1 | 9.5 | 11.6 | 122.1% | | Impact of net accruals on capital expenditures | (187.4) | 160.7 | (348.1) | NM | | Changes in accrued distributions to noncontrolling interests | (13.5) | (0.6) | (12.9) | NM | - Interest capitalized on major projects was **$32.4 million** and **$33.8 million** for the six months ended June 30, 2025 and 2024, respectively[110](index=110&type=chunk) [Note 16 — Segment Information](index=29&type=section&id=Note%2016%20%E2%80%94%20Segment%20Information) This note provides financial and operational information disaggregated by Targa's two primary reportable segments: Gathering and Processing, and Logistics and Transportation - Targa operates in two primary segments: (i) Gathering and Processing and (ii) Logistics and Transportation (Downstream Business), with the 'Other' category including unrealized mark-to-market gains/losses from derivative contracts not designated as cash flow hedges[111](index=111&type=chunk)[114](index=114&type=chunk) - The Gathering and Processing segment includes assets for natural gas gathering, processing, and crude oil gathering/terminaling across key basins like Permian, Eagle Ford, Barnett, Anadarko, Williston, and Louisiana Gulf Coast[112](index=112&type=chunk) - The Logistics and Transportation segment focuses on converting mixed NGLs into products, including transportation, storage, fractionation, terminaling, and marketing of NGLs and NGL products, with facilities predominantly in Mont Belvieu, Galena Park, Texas, and Lake Charles, Louisiana[113](index=113&type=chunk) Segment Operating Margin | Segment Operating Margin (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gathering and Processing | 587.6 | 572.6 | 1,189.8 | 1,128.9 | | Logistics and Transportation | 632.4 | 547.7 | 1,279.1 | 1,079.8 | | Other | 280.5 | (46.6) | 31.7 | (68.7) | Revenue Disaggregation | Revenue Disaggregation (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | **Sales of commodities:** | | | | | | Natural gas | 458.2 | 158.6 | 1,140.1 | 653.3 | | NGL | 2,832.9 | 2,719.6 | 6,209.7 | 6,065.3 | | Condensate and crude oil | 111.3 | 145.1 | 228.3 | 282.4 | | Derivative activities - Hedge | 27.7 | 32.2 | 21.6 | 29.0 | | Derivative activities - Non-hedge | 206.2 | (88.8) | (79.0) | (120.7) | | **Fees from midstream services:** | | | | | | Gathering and processing | 403.7 | 385.7 | 872.7 | 791.5 | | NGL transportation, fractionation and services | 83.2 | 75.2 | 160.0 | 148.7 | | Storage, terminaling and export | 120.9 | 114.5 | 252.7 | 240.3 | | Other | 16.0 | 19.9 | 15.5 | 34.6 | | **Total Revenues** | **4,260.1** | **3,562.0** | **8,821.6** | **8,124.4** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Targa's financial condition, operations, and liquidity, covering business overview, recent developments, capital allocation, financing, tax matters, and segment performance [Overview](index=33&type=section&id=Overview) This section provides a high-level summary of Targa Resources Corp.'s business as a leading North American midstream services provider - Targa Resources Corp. (TRGP) is a leading North American midstream services provider, operating a diversified portfolio of domestic infrastructure assets, with core businesses including natural gas gathering, processing, and transportation; NGL transportation, storage, fractionation, and marketing; and crude oil gathering, storage, and terminaling[120](index=120&type=chunk)[121](index=121&type=chunk)[126](index=126&type=chunk) - The company operates in two primary segments: Gathering and Processing (Permian Basin, Eagle Ford, Barnett, Anadarko, Williston, Louisiana Gulf Coast) and Logistics and Transportation (Mont Belvieu, Galena Park, Lake Charles, Texas)[122](index=122&type=chunk)[123](index=123&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) This section highlights Targa's recent operational expansions, including new processing plants, fractionation trains, pipeline projects, and joint ventures [Permian Basin Processing Expansions](index=33&type=section&id=Permian%20Basin%20Processing%20Expansions) This subsection details Targa's ongoing and planned natural gas processing plant expansions in the Permian Basin - Targa has several new **275 MMcf/d** cryogenic natural gas processing plants in the Permian Basin: Bull Moose (Permian Delaware) commenced operations in Q1 2025; Pembrook II (Permian Midland) expected Q3 2025; Bull Moose II (Permian Delaware) expected Q4 2025; East Pembrook (Permian Midland) expected Q2 2026; Falcon II (Permian Delaware) expected Q2 2026; East Driver (Permian Midland) expected Q3 2026, with the company also ordering long-lead items for future plants[127](index=127&type=chunk)[136](index=136&type=chunk) [Fractionation Expansions](index=35&type=section&id=Fractionation%20Expansions) This subsection describes Targa's initiatives to expand its NGL fractionation capacity in Mont Belvieu, Texas - Gulf Coast Fractionators (GCF) **135 MBbl/d** facility reactivated in Q1 2025, and Targa plans to construct new **150 MBbl/d** fractionation trains in Mont Belvieu, Texas: Train 11 expected Q2 2026, and Train 12 expected Q1 2027[136](index=136&type=chunk) [NGL Pipeline Expansion](index=35&type=section&id=NGL%20Pipeline%20Expansion) This subsection outlines the planned expansion of Targa's Grand Prix NGL pipeline system in the Delaware Basin - An intra-Delaware Basin expansion of the Grand Prix pipeline system is expected to begin operations in Q2 2026[129](index=129&type=chunk) [LPG Export Expansion](index=35&type=section&id=LPG%20Export%20Expansion) This subsection details Targa's plans to increase LPG export capabilities at its Galena Park Marine Terminal - Targa is expanding LPG export capabilities at its Galena Park Marine Terminal, including a new pipeline and additional refrigeration, to increase effective export capacity up to **19 MMBbl per month**, with completion expected in Q3 2027[130](index=130&type=chunk) [Natural Gas Pipeline Extension](index=35&type=section&id=Natural%20Gas%20Pipeline%20Extension) This subsection describes the planned extension of the Bull Run intrastate natural gas pipeline to enhance Permian Delaware system connectivity - A **43-mile** extension of the Bull Run intrastate natural gas pipeline (Bull Run Extension) is planned to enhance connectivity of the Permian Delaware system to the WAHA hub, expected to begin operations in Q1 2027[131](index=131&type=chunk) [Joint Ventures](index=35&type=section&id=Joint%20Ventures) This subsection provides updates on Targa's joint venture activities, including the Blackcomb pipeline and the acquisition of Targa Badlands LLC - Targa entered the Blackcomb Joint Venture (**17.5% ownership**) in July 2024 to construct and operate the Blackcomb pipeline (**2.5 Bcf/d, 365 miles** from Permian to Agua Dulce), expected in service H2 2026, and the joint venture also decided to construct the Traverse pipeline (**2.5 Bcf/d, 160 miles** between Agua Dulce and Katy), expected in service 2027[132](index=132&type=chunk)[133](index=133&type=chunk) - On March 5, 2025, Targa acquired Blackstone's **45% interest** in Targa Badlands LLC for **$1.8 billion**, resulting in **100% ownership** effective January 1, 2025[134](index=134&type=chunk) [Capital Allocation](index=37&type=section&id=Capital%20Allocation) This section discusses Targa's strategies for allocating capital, including common dividends and share repurchase programs - In April 2025, Targa increased its quarterly common dividend to **$1.00 per share** (**$4.00 annualized**), effective for Q1 2025[137](index=137&type=chunk) - Targa exhausted its **$1.0 billion 2023 Share Repurchase Program** in Q1 2025, has a **$1.0 billion 2024 Share Repurchase Program** (with **$566.2 million remaining** as of June 30, 2025), and approved a new **$1.0 billion 2025 Share Repurchase Program** for **$1.0 billion** in August 2025[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - For the six months ended June 30, 2025, Targa repurchased **2,606,262 shares** of common stock for a total net cost of **$449.2 million** at a weighted average price of **$172.35 per share**[139](index=139&type=chunk) [Financing Activities](index=37&type=section&id=Financing%20Activities) This section provides an overview of Targa's recent financing activities, including new credit facilities and senior unsecured note offerings - In February 2025, Targa established a new **$3.5 billion** TRGP senior revolving credit facility (TRGP Revolver) maturing in February 2030, replacing the previous facility[140](index=140&type=chunk) - In February 2025, Targa issued **$2.0 billion** in Senior Unsecured Notes (5.550% due 2035 and 6.125% due 2055) to fund the Badlands Transaction and repay Commercial Paper Program borrowings[141](index=141&type=chunk) - In June 2025, Targa issued **$1.5 billion** in Senior Unsecured Notes (4.900% due 2030 and 5.650% due 2036) to fund the redemption of the Partnership's 6.500% Senior Unsecured Notes due 2027 (completed in July 2025) and repay Commercial Paper Program borrowings[142](index=142&type=chunk) - In July 2025, the Partnership amended its **$600.0 million** accounts receivable securitization facility, extending its termination date to August 31, 2026[143](index=143&type=chunk) [Corporation Tax Matters](index=37&type=section&id=Corporation%20Tax%20Matters) This section discusses Targa's ongoing IRS examinations and its outlook on the Corporate Alternative Minimum Tax (CAMT) - IRS examinations are ongoing for 2019, 2020, and 2022 taxable years of certain subsidiaries, with no expected material changes to taxable income, and the 2019 returns have a statute extension to December 2025[144](index=144&type=chunk)[145](index=145&type=chunk) - Targa does not anticipate paying Corporate Alternative Minimum Tax (CAMT) at least through 2026, based on interpretations of the IRA, CAMT guidance, OBBBA impact, and operational assumptions, noting any future CAMT liability would accelerate tax obligations, reducing cash available for distribution but providing an offsetting credit[147](index=147&type=chunk) [How We Evaluate Our Operations](index=39&type=section&id=How%20We%20Evaluate%20Our%20Operations) This section explains the financial and operational metrics Targa's management uses to assess performance and profitability - Targa's profitability is driven by the difference between revenues (fee-based and commodity sales) and costs (commodity purchases, operating, G&A), influenced by contract mix, commodity prices, hedging, and throughput volumes, with fee-based contracts increasing due to capital expenditures and acquisitions[149](index=149&type=chunk)[150](index=150&type=chunk) - Management uses financial measures (adjusted EBITDA, adjusted cash flow from operations, adjusted free cash flow, adjusted operating margin) and operational measurements (throughput volumes, facility efficiencies, fuel consumption, operating expenses, capital expenditures) to analyze performance[151](index=151&type=chunk)[152](index=152&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - Adjusted operating margin for segments is defined as revenues less product purchases and fuel, reflecting volumes, commodity prices, contract mix, and hedging, helping assess financial performance, operating performance, and return on capital[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Adjusted EBITDA is Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other specified adjustments, used to measure asset cash generation for debt service and dividends[164](index=164&type=chunk) - Adjusted cash flow from operations is adjusted EBITDA less cash interest and cash taxes, while adjusted free cash flow is adjusted cash flow from operations less maintenance and growth capital expenditures (net of noncontrolling interest contributions and including unconsolidated affiliate contributions), both measuring cash earnings for corporate purposes like dividends or debt retirement[165](index=165&type=chunk) Non-GAAP Financial Measures | Non-GAAP Financial Measure (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Adjusted EBITDA | 1,163.0 | 984.3 | 2,341.5 | 1,950.8 | | Adjusted Cash Flow from Operations | 934.4 | 808.5 | 1,904.4 | 1,547.2 | | Adjusted Free Cash Flow | (9.6) | (43.0) | 318.6 | (40.0) | [Consolidated Results of Operations](index=45&type=section&id=Consolidated%20Results%20of%20Operations) This section provides a comprehensive analysis of Targa's consolidated revenues, expenses, and net income for the three and six months ended June 30, 2025, and 2024 Consolidated Financial Performance | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Sales of commodities | 3,636.3 | 2,966.7 | 669.6 | 22.6% | | Fees from midstream services | 623.8 | 595.3 | 28.5 | 4.8% | | Total revenues | 4,260.1 | 3,562.0 | 698.1 | 19.6% | | Product purchases and fuel | 2,436.0 | 2,197.4 | 238.6 | 10.9% | | Operating expenses | 323.6 | 290.7 | 32.9 | 11.3% | | Depreciation and amortization expense | 373.7 | 348.6 | 25.1 | 7.2% | | General and administrative expense | 95.0 | 98.3 | (3.3) | (3.4%) | | Income (loss) from operations | 1,033.6 | 627.2 | 406.4 | 64.8% | | Interest expense, net | (218.4) | (176.0) | (42.4) | 24.1% | | Income tax (expense) benefit | (184.1) | (94.3) | (89.8) | 95.2% | | Net income (loss) attributable to Targa Resources Corp. | 629.1 | 298.5 | 330.6 | 110.8% | | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :--------------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Sales of commodities | 7,520.7 | 6,909.3 | 611.4 | 8.8% | | Fees from midstream services | 1,300.9 | 1,215.1 | 85.8 | 7.1% | | Total revenues | 8,821.6 | 8,124.4 | 697.2 | 8.6% | | Product purchases and fuel | 5,693.8 | 5,415.4 | 278.4 | 5.1% | | Operating expenses | 627.2 | 568.7 | 58.5 | 10.3% | | Depreciation and amortization expense | 741.3 | 689.1 | 52.2 | 7.6% | | General and administrative expense | 189.5 | 184.8 | 4.7 | 2.5% | | Income (loss) from operations | 1,576.9 | 1,266.7 | 310.2 | 24.5% | | Interest expense, net | (415.5) | (404.6) | (10.9) | 2.7% | | Income tax (expense) benefit | (256.3) | (177.1) | (79.2) | 44.7% | | Net income (loss) attributable to Targa Resources Corp. | 899.6 | 573.7 | 325.9 | 56.8% | - For the three months ended June 30, 2025, commodity sales increased by **$669.6 million (23%)** due to higher NGL volumes, higher natural gas prices, and favorable hedge impacts, partially offset by lower NGL and condensate prices, while midstream service fees increased by **$28.5 million (5%)** due to higher gas gathering/processing and export volumes, despite lower transportation/fractionation fees from a planned turnaround[172](index=172&type=chunk)[173](index=173&type=chunk) - For the six months ended June 30, 2025, commodity sales increased by **$611.4 million (9%)** due to higher natural gas prices, NGL volumes, and favorable hedge impacts, partially offset by lower condensate prices and natural gas/condensate volumes, while midstream service fees increased by **$85.8 million (7%)** due to higher gas gathering/processing and export volumes, despite lower transportation/fractionation fees from a planned turnaround[179](index=179&type=chunk)[180](index=180&type=chunk) - Net income attributable to noncontrolling interests decreased significantly (**87%** for 3 months, **85%** for 6 months) primarily due to the Badlands Transaction in Q1 2025 and the CBF Acquisition in Q4 2024[178](index=178&type=chunk)[184](index=184&type=chunk) - A **$70.5 million premium** on repurchase of noncontrolling interests, net of tax, was recorded for the six months ended June 30, 2025, due to the Badlands Transaction[185](index=185&type=chunk) [Results of Operations—By Reportable Segment](index=47&type=section&id=Results%20of%20Operations%E2%80%94By%20Reportable%20Segment) This section provides a detailed analysis of the financial and operating performance of Targa's Gathering and Processing, Logistics and Transportation, and Other segments [Gathering and Processing Segment](index=47&type=section&id=Gathering%20and%20Processing%20Segment) This subsection analyzes the financial and operating performance of Targa's Gathering and Processing segment, including operating margin, expenses, and throughput volumes Gathering and Processing Segment Financial Performance | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Operating margin | 587.6 | 572.6 | 15.0 | 2.6% | | Operating expenses | 219.4 | 205.7 | 13.7 | 6.7% | | Adjusted operating margin | 807.0 | 778.3 | 28.7 | 3.7% | | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Operating margin | 1,189.8 | 1,128.9 | 60.9 | 5.4% | | Operating expenses | 427.6 | 393.7 | 33.9 | 8.6% | | Adjusted operating margin | 1,617.4 | 1,522.6 | 94.8 | 6.2% | - Adjusted operating margin increased primarily due to higher natural gas inlet volumes in the Permian Basin (up **11%** for 3 months, **11%** for 6 months), driven by new plant additions (Roadrunner II, Greenwood II, Bull Moose) and strong producer activity, partially offset by lower volumes in other areas[187](index=187&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - Operating expenses increased due to higher volumes and multiple plant additions in the Permian[194](index=194&type=chunk)[196](index=196&type=chunk) Gathering and Processing Operating Statistics | Operating Statistics (MMcf/d) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (MMcf/d) | % Change | | :---------------------------- | :--------------------------- | :--------------------------- | :-------------- | :------- | | Total Permian Plant natural gas inlet | 6,278.0 | 5,671.5 | 606.5 | 10.7% | | Total Field Plant natural gas inlet | 7,495.2 | 6,923.2 | 572.0 | 8.3% | | Total Plant natural gas inlet | 7,894.0 | 7,390.2 | 503.8 | 6.8% | | Operating Statistics (MMcf/d) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (MMcf/d) | % Change | | :---------------------------- | :--------------------------- | :--------------------------- | :-------------- | :------- | | Total Permian Plant natural gas inlet | 6,142.8 | 5,533.3 | 609.5 | 11.0% | | Total Field Plant natural gas inlet | 7,312.5 | 6,751.0 | 561.5 | 8.3% | | Total Plant natural gas inlet | 7,711.3 | 7,246.8 | 464.5 | 6.4% | NGL Production | NGL Production (MBbl/d) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (MBbl/d) | % Change | | :---------------------- | :--------------------------- | :--------------------------- | :-------------- | :------- | | Total Permian | 856.8 | 788.6 | 68.2 | 8.6% | | Total Field | 993.6 | 931.3 | 62.3 | 6.7% | | Total | 1,025.2 | 965.7 | 59.5 | 6.2% | | NGL Production (MBbl/d) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (MBbl/d) | % Change | | :---------------------- | :--------------------------- | :--------------------------- | :-------------- | :------- | | Total Permian | 826.7 | 744.1 | 82.6 | 11.1% | | Total Field | 952.3 | 868.1 | 84.2 | 9.7% | | Total | 984.5 | 904.8 | 79.7 | 8.8% | [Logistics and Transportation Segment](index=49&type=section&id=Logistics%20and%20Transportation%20Segment) This subsection analyzes the financial and operating performance of Targa's Logistics and Transportation segment, including operating margin, expenses, and NGL volumes Logistics and Transportation Segment Financial Performance | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Operating margin | 632.4 | 547.7 | 84.7 | 15.5% | | Operating expenses | 105.4 | 85.4 | 20.0 | 23.4% | | Adjusted operating margin | 737.8 | 633.1 | 104.7 | 16.5% | | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Operating margin | 1,279.1 | 1,079.8 | 199.3 | 18.5% | | Operating expenses | 200.9 | 175.4 | 25.5 | 14.5% | | Adjusted operating margin | 1,480.0 | 1,255.2 | 224.8 | 17.9% | - Adjusted operating margin increased due to higher pipeline transportation and fractionation margin, and higher LPG export margin, driven by increased supply from Permian Gathering and Processing systems, full operation of Train 9 (Q2 2024), Daytona NGL Pipeline (Q3 2024), and Train 10 (Q4 2024), despite a planned turnaround at Mont Belvieu facilities[198](index=198&type=chunk)[199](index=199&type=chunk)[201](index=201&type=chunk) - Operating expenses increased due to system expansions and the planned turnaround[200](index=200&type=chunk)[202](index=202&type=chunk) Logistics and Transportation Operating Statistics | Operating Statistics (MBbl/d) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (MBbl/d) | % Change | | :---------------------------- | :--------------------------- | :--------------------------- | :-------------- | :------- | | NGL pipeline transportation volumes | 961.2 | 783.5 | 177.7 | 22.7% | | Fractionation volumes | 969.1 | 902.2 | 66.9 | 7.4% | | Export volumes | 423.1 | 394.1 | 29.0 | 7.4% | | NGL sales | 1,151.1 | 1,018.4 | 132.7 | 13.0% | | Operating Statistics (MBbl/d) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (MBbl/d) | % Change | | :---------------------------- | :--------------------------- | :--------------------------- | :-------------- | :------- | | NGL pipeline transportation volumes | 902.7 | 750.6 | 152.1 | 20.3% | | Fractionation volumes | 974.5 | 849.7 | 124.8 | 14.7% | | Export volumes | 435.3 | 416.6 | 18.7 | 4.5% | | NGL sales | 1,168.6 | 1,123.0 | 45.6 | 4.1% | [Other Segment](index=50&type=section&id=Other%20Segment) This subsection discusses the financial performance of the 'Other' segment, primarily reflecting mark-to-market gains/losses from derivative activities Other Segment Financial Performance | Metric (Millions USD) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Millions USD) | | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Operating margin | 280.5 | (46.6) | 327.1 | | Adjusted operating margin | 280.5 | (46.6) | 327.1 | | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Operating margin | 31.7 | (68.7) | 100.4 | | Adjusted operating margin | 31.7 | (68.7) | 100.4 | - The 'Other' segment primarily reflects mark-to-market gains/losses from commodity derivative activities not designated as cash flow hedges, with the significant increase in operating margin for both periods due to favorable movements in these derivative contracts[203](index=203&type=chunk) [Our Liquidity and Capital Resources](index=50&type=section&id=Our%20Liquidity%20and%20Capital%20Resources) This section discusses Targa's liquidity sources, capital resources, and strategies for managing short-term and long-term financing needs - Targa's main liquidity sources are internally generated cash flows, borrowings under the TRGP Revolver, Commercial Paper Program, Securitization Facility, and access to debt/equity capital markets, which are believed sufficient to meet anticipated cash requirements for the next twelve months[204](index=204&type=chunk)[205](index=205&type=chunk) [Short-term Liquidity](index=50&type=section&id=Short-term%20Liquidity) This subsection provides an overview of Targa's short-term liquidity position, including cash on hand and available credit facilities Total Liquidity | Metric (Millions USD) | As of July 31, 2025 | | :---------------------------------------------------- | :------------------ | | Cash on hand | 190.2 | | Total availability under the Securitization Facility | 600.0 | | Total availability under the TRGP Revolver and Commercial Paper Program | 3,500.0 | | Outstanding borrowings under the Securitization Facility | (600.0) | | Outstanding borrowings under the TRGP Revolver and Commercial Paper Program | (1,035.0) | | Outstanding letters of credit under the TRGP Revolver | (26.7) | | **Total liquidity** | **2,628.5** | - As of July 31, 2025, Targa had **$2.6 billion** in total liquidity, with potential capital resources including an option to increase TRGP Revolver commitments by **$500.0 million**[206](index=206&type=chunk)[207](index=207&type=chunk) - As of June 30, 2025, Targa had **$9.4 million** in letters of credit outstanding under the TRGP Revolver to satisfy counterparty credit requirements[208](index=208&type=chunk) [Working Capital](index=52&type=section&id=Working%20Capital) This subsection analyzes changes in Targa's working capital and the factors influencing these changes - Working capital decreased by **$93.2 million** as of June 30, 2025, compared to December 31, 2024, primarily due to the reclassification of **$705.2 million** of 6.500% Notes due 2027 to Current debt obligations, partially offset by lower Securitization Facility outstanding balance, higher NGL inventory, and lower payables/accrued liabilities[210](index=210&type=chunk)[52](index=52&type=chunk) [Long-term Financing](index=52&type=section&id=Long-term%20Financing) This subsection discusses Targa's long-term financing strategies, including debt offerings and credit facility amendments - Targa's long-term financing includes potential funds from long-term debt, common/preferred stock issuance, or joint ventures, with a new **$3.5 billion** TRGP Revolver established in February 2025, and public offerings of Senior Unsecured Notes totaling **$3.5 billion** completed in February and June 2025, used for the Badlands Transaction, debt redemption, and general corporate purposes[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - In July 2025, the Partnership amended the Securitization Facility, extending its termination date to August 31, 2026[215](index=215&type=chunk) - Targa may redeem, purchase, or exchange outstanding debt in the future, depending on market conditions and liquidity requirements, with current debt balances not adversely affecting operations or growth[216](index=216&type=chunk)[217](index=217&type=chunk) [Compliance with Debt Covenants](index=54&type=section&id=Compliance%20with%20Debt%20Covenants) This subsection confirms Targa's adherence to all covenants in its various debt agreements - As of June 30, 2025, Targa and the Partnership were in compliance with all covenants in their various debt agreements[218](index=218&type=chunk) [Cash Flow Analysis](index=54&type=section&id=Cash%20Flow%20Analysis) This section provides a detailed analysis of Targa's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025, and 2024 [Cash Flows from Operating Activities](index=54&type=section&id=Cash%20Flows%20from%20Operating%20Activities) This subsection analyzes the factors contributing to changes in net cash provided by operating activities Net Cash Provided by Operating Activities | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :---------------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Net cash provided by operating activities | 1,812.7 | 1,780.9 | 31.8 | 1.8% | - The increase in net cash provided by operating activities was primarily due to higher collections from customers (increased revenues), offset by higher payments for product purchases, fuel, operating expenses, and lower hedge settlements, with a nonrecurring payment related to the Splitter Agreement in 2024 also impacting the comparison[221](index=221&type=chunk)[222](index=222&type=chunk) [Cash Flows from Investing Activities](index=54&type=section&id=Cash%20Flows%20from%20Investing%20Activities) This subsection analyzes the factors contributing to changes in net cash used in investing activities Net Cash Used in Investing Activities | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :---------------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Net cash used in investing activities | (1,770.1) | (1,427.7) | (342.4) | 24.0% | - The increase in net cash used in investing activities was due to higher outlays for major growth capital projects in 2025, particularly for construction in the Permian region and Mont Belvieu, Texas, and increased contributions to unconsolidated affiliates[225](index=225&type=chunk) [Cash Flows from Financing Activities](index=54&type=section&id=Cash%20Flows%20from%20Financing%20Activities) This subsection analyzes the factors contributing to changes in net cash provided by (used in) financing activities Net Cash Provided by (Used in) Financing Activities | Metric (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :---------------------------------------- | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Net cash provided by (used in) financing activities | (86.8) | (328.5) | 241.7 | (73.6%) | - The decrease in net cash used in financing activities was driven by higher proceeds from debt financings in 2025 (senior unsecured notes issuance) and lower distributions to noncontrolling interests (due to Badlands Transaction and CBF Acquisition), partially offset by higher repurchases of noncontrolling interests (Badlands Transaction) and increased dividends paid, noting that in 2024, the company fully repaid a **$1.5 billion** term loan facility[226](index=226&type=chunk) [Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries](index=54&type=section&id=Summarized%20Combined%20Financial%20Information%20for%20Guarantee%20of%20Securities%20of%20Subsidiaries) This section provides summarized combined financial information for the Obligated Group, which guarantees Targa's senior unsecured notes - The Obligated Group (subsidiaries guaranteeing TRGP Revolver) also fully and unconditionally guarantees TRGP's senior unsecured notes, with supplemental summarized combined financial information provided in lieu of separate financial statements, with intercompany items eliminated and investments in non-guarantor subsidiaries excluded[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) Obligated Group Financial Information | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total assets | 213.1 | 226.9 | | Total liabilities | 5,320.7 | 5,383.7 | | Total owners' equity (deficit) | (5,107.6) | (5,156.8) | | Metric (Millions USD) | 6 Months Ended June 30, 2025 | Year Ended December 31, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Operating income (loss) | (166.3) | (328.0) | | Net income (loss) | (298.7) | (583.0) | [Common Stock Dividends](index=55&type=section&id=Common%20Stock%20Dividends) This section discusses Targa's common stock dividend policy and recent dividend increases - Targa increased its common dividend to **$1.00 per share** (**$4.00 annualized**) effective Q1 2025, with future dividends dependent on financial condition, results, cash flow, capital expenditures, business prospects, and debt covenants[231](index=231&type=chunk) [Capital Expenditures](index=56&type=section&id=Capital%20Expenditures) This section provides a summary of Targa's growth and maintenance capital expenditures and cash outlays for capital projects Capital Expenditure Summary | Capital Expenditure Category (Millions USD) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Millions USD) | % Change | | :------------------------------------------ | :--------------------------- | :--------------------------- | :-------------------- | :------- | | Growth | 1,403.8 | 1,470.2 | (66.4) | (4.5%) | | Main

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA for the second quarter of $1,163 million, an 18% increase year-over-year, primarily driven by higher Permian volumes and margin contributions from the Badlands assets [18][19][21] - The full-year 2025 adjusted EBITDA is estimated to be in the range of $4,650 million to $4,850 million [19] Business Line Data and Key Metrics Changes - In the Permian, natural gas inlet volumes averaged a record 6,300 million cubic feet per day in the second quarter, an 11% increase year-over-year [12] - NGL pipeline transportation volumes averaged a record 961,000 barrels per day, while fractionation volumes averaged 969,000 barrels per day during the second quarter [15][16] - The fractionation volumes were impacted by a planned turnaround, but are now exceeding 1,000,000 barrels per day post-turnaround [16] Market Data and Key Metrics Changes - The company noted that while the Permian rig count has softened, the number of rigs on its system remains largely unchanged, indicating stability in its operations [7] - The demand for natural gas and NGLs is expected to continue increasing, supported by strong customer performance across the value chain [10] Company Strategy and Development Direction - The company is focused on increasing adjusted EBITDA, common dividends per share, and reducing share count while maintaining a strong investment-grade balance sheet [10][21] - The company plans to invest in integrated growth opportunities and return increasing capital to shareholders over the long term [10][21] - The company is preparing for growth in 2027 and beyond by ordering long lead items for additional Permian plants [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong growth on the Permian system for the remainder of 2025 and into 2026, supported by ongoing discussions with producers [7][9] - The company highlighted its differentiated growth profile, outperforming crude and gas production growth rates over the past five years [8][9] Other Important Information - The company repurchased $324 million in common shares during the second quarter and authorized a new $1 billion share repurchase program [21][22] - The company expects net growth capital spending for 2025 to be approximately $3 billion, with maintenance capital spending of $250 million [20] Q&A Session Summary Question: Thoughts on outperforming the basin - Management noted that the combination of having the largest footprint and being over some of the best rock in the Midland and Delaware Basins contributes to their ability to outperform [25][26] Question: Outlook on NGL margins - Management indicated that they have a growing supply from their gas processing footprint and are well-positioned due to long-term contracts, despite concerns about overbuild and margin pressures [28][30] Question: Competition in the Northern Delaware - Management acknowledged increased competition but emphasized their established capabilities and long-term contracts that provide a competitive advantage [37][42] Question: Capital expenditures for 2026 - Management stated that they will assess producer budgeting cycles to inform their 2026 capital budget, but they expect to continue capital-efficient spending aligned with growth opportunities [46] Question: Confidence in future volume growth - Management expressed confidence based on observed volume ramp-up and the expected contributions from new processing plants coming online [54][56] Question: Expectations for Bull Run extension - Management described the Bull Run extension as a natural extension of their capabilities, supported by existing volumes and expected growth [60][61] Question: Balancing buybacks with other capital uses - Management emphasized an opportunistic approach to share repurchases while maintaining flexibility to invest in organic growth projects [62][64] Question: Performance of Badlands assets - Management confirmed that the Badlands transaction has met expectations, with overall volumes remaining flat but potential for future increases [69][70] Question: Approach to LPG export docks and competition - Management reiterated their strong position due to long-term contracts and the ability to meet growing global demand, despite new entrants in the market [81][83]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA for Q2 2025 of $1,163 million, an 18% increase year-over-year, primarily driven by higher Permian volumes and margin improvements across segments [19][20] - Full-year 2025 adjusted EBITDA is estimated to be in the range of $4,650 million to $4,850 million [20] - The company had $3,500 million of available liquidity at the end of Q2 2025, with a pro forma consolidated leverage ratio of 3.6 times, within the long-term target range of three to four times [20][21] Business Line Data and Key Metrics Changes - Natural gas inlet volumes in the Permian averaged a record 6,300 million cubic feet per day in Q2 2025, an 11% increase year-over-year [12] - NGL pipeline transportation volumes averaged a record 961,000 barrels per day, while fractionation volumes averaged 969,000 barrels per day during the same period [15] - The company experienced a planned turnaround at its fractionation complex, which reduced capacity for two-thirds of Q2, but volumes have since increased to over 1,000,000 barrels per day post-turnaround [15][16] Market Data and Key Metrics Changes - The Permian gas production growth has outpaced crude production, with associated gas growth averaging 13% per year over the past five years, while crude production has averaged 8% [8][9] - The company’s year-over-year volume growth averaged 17%, outperforming both associated gas and crude production [9] - The company is well-positioned for growth due to its footprint across high-quality rock in the Permian Basin and strong relationships with world-class producers [9][10] Company Strategy and Development Direction - The company aims to increase adjusted EBITDA and return capital to shareholders through share repurchases and dividends, while maintaining a strong investment-grade balance sheet [10][22] - The company is focused on integrated growth opportunities, with a capital spending plan of approximately $3,000 million for 2025 [21] - The company is preparing for future growth by ordering long lead items for additional Permian plants and enhancing connectivity through pipeline extensions [14][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong growth in volumes for the remainder of 2025 and into 2026, despite some macroeconomic volatility [6][10] - The company noted that ongoing discussions with producers indicate robust growth potential, supported by a strong demand for natural gas and NGLs [10][9] - Management highlighted the resilience of the business model amid commodity price volatility and global trade concerns [18] Other Important Information - The company announced a retirement of a key executive, Scott Pryor, effective March 1, 2026, with Ben Branstetter set to succeed him [4][5] - The company repurchased $324 million in common shares during Q2 2025, continuing its strategy of opportunistic share repurchases [20][22] - A new $1,000 million common share repurchase program was authorized, bringing total available repurchase capacity to approximately $1,600 million [22] Q&A Session Summary Question: Ability to outperform peers in the basin - Management highlighted the largest footprint and strong relationships with active producers as key factors for continued outperformance [26][27] Question: Outlook for NGL margins - Management noted growing supply and long-term contracts as supportive of margins, despite concerns about overbuilding [29][30] Question: Competition in the Northern Delaware - Management acknowledged increased competition but emphasized Targa's established capabilities and strategic positioning in sour gas treatment [38][39] Question: Capital expenditures for future projects - Management indicated that capital expenditures would be informed by producer budgeting cycles and ongoing project efficiencies [47][48] Question: Performance of Badlands assets post-acquisition - Management confirmed that the Badlands assets are performing as expected, with potential for increased production in the future [71][72] Question: LPG export docks performance - Management clarified that while dock loadings were strong, sequential volume fluctuations were due to market dynamics and contract structures [80][84] Question: Impact of new pipeline capacity on pricing - Management expressed optimism about new egress pipelines unlocking the basin and potentially improving pricing dynamics [90][92] Question: Use of third-party NGL transport - Management indicated that utilizing third-party transport allows for capital efficiency and diversification of transport options [93][94] Question: Capital costs for processing plants - Management acknowledged rising costs but emphasized effective cost management strategies to maintain competitive returns [100]

Financial Performance - Adjusted EBITDA increased by 18% from Q2 2024 to Q2 2025[6] - Adjusted EBITDA decreased by 1% from Q1 2025 to Q2 2025[12] - G&P segment operating margin increased by $15 million from Q2 2024[8] - L&T segment operating margin increased by $85 million from Q2 2024[9] - G&P segment operating margin decreased by $15 million from Q1 2025[14] - L&T segment operating margin decreased by $14 million from Q1 2025[14] - Net income attributable to Targa Resources Corp was $6291 million for the three months ended June 30, 2025[41] - Adjusted EBITDA was $11630 million for the three months ended June 30, 2025[41] Operational Performance - Permian inlet volumes increased from 969 MBbl/d in Q1 2025 to 980 MBbl/d in Q2 2025[17] - NGL Production increased from 6006 MBbl/d in Q1 2025 to 6278 MBbl/d in Q2 2025[17] Outlook - FY25 Adjusted EBITDA is estimated to be in the range of $465 billion to $485 billion[27] - Net Growth Capex is estimated to be approximately $3 billion[28] - Net Maintenance Capex is estimated to be approximately $250 million[28]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Targa Resources Corp. reported strong Q2 2025 financial results, including significant net income and adjusted EBITDA growth, record volumes, and accelerated growth projects [Second Quarter 2025 Financial Overview](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Overview) Targa Resources Corp. reported strong financial results for Q2 2025, with significant year-over-year increases in net income and adjusted EBITDA, driven by record Permian and NGL transportation volumes Q2 2025 Financial Performance (YoY) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | Change (%) | | :-------------------------------- | :------------------ | :------------------ | :---------------- | :--------- | | Net Income Attributable to TRGP | $629.1 | $298.5 | $330.6 | 111% | | Adjusted EBITDA | $1,163.0 | $984.3 | $178.7 | 18% | [Key Highlights](index=1&type=section&id=Key%20Highlights) Key highlights for Q2 2025 include a declared quarterly dividend, significant share repurchases, record Permian and NGL transportation volumes, and accelerated completion timelines for several growth projects, alongside a new share repurchase program - Declared a quarterly cash dividend of **$1.00 per common share** (**$4.00 annualized**) for Q2 2025, totaling approximately **$215 million**[5](index=5&type=chunk) - Repurchased **1.96 million shares** for **$324.3 million** in Q2 2025, with **$566.2 million** remaining under the existing **$1.0 billion** program. A new **$1.0 billion** share repurchase program was approved in August 2025[6](index=6&type=chunk)[10](index=10&type=chunk) - Achieved record Permian and NGL transportation volumes during Q2 2025[10](index=10&type=chunk) - Expect early completion of the Pembrook II plant in Permian Midland (August 2025), Bull Moose II plant in Permian Delaware (Q4 2025), Delaware Express Pipeline (Q2 2026), and Train 11 fractionator (Q2 2026)[10](index=10&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) - Announced a **43-mile** extension of the Bull Run natural gas pipeline to enhance connectivity from Permian Delaware to WAHA, expected to begin operations in Q1 2027[10](index=10&type=chunk)[17](index=17&type=chunk) [Sequential Quarter Over Quarter Commentary](index=1&type=section&id=Sequential%20Quarter%20Over%20Quarter%20Commentary) Adjusted EBITDA for Q2 2025 remained relatively flat compared to Q1 2025, despite a planned turnaround at Mont Belvieu fractionation facilities. This was supported by record Permian and NGL transportation volumes, offsetting lower marketing margin, commodity prices, and higher operating expenses - Q2 2025 adjusted EBITDA of **$1,163.0 million** was relatively flat sequentially, despite a planned turnaround at Mont Belvieu fractionation facilities[7](index=7&type=chunk) - G&P segment adjusted operating margin was flat due to strong Permian natural gas inlet volumes and higher recoveries, offset by significantly lower commodity prices[8](index=8&type=chunk) - L&T segment adjusted operating margin was sequentially flat, as record NGL pipeline transportation volumes were offset by lower marketing margin and reduced fractionation volumes due to the planned turnaround[9](index=9&type=chunk) [Capitalization, Financing and Liquidity](index=2&type=section&id=Capitalization%2C%20Financing%20and%20Liquidity) Targa's total consolidated debt was $16.85 billion as of June 30, 2025, supported by strong liquidity of approximately $3.5 billion [Debt and Financing Activities](index=2&type=section&id=Debt%20and%20Financing%20Activities) As of June 30, 2025, Targa's total consolidated debt was $16.85 billion. The company completed a $1.5 billion public offering of notes in June 2025, using proceeds to redeem existing notes and for general corporate purposes Consolidated Debt as of June 30, 2025 | Debt Type | Amount (Millions) | | :------------------------ | :---------------- | | Total Consolidated Debt | $16,850.5 | | Senior Unsecured Notes | $16,034.4 | | Commercial Paper Program | $667.0 | | Finance Lease Liabilities | $304.5 | - Completed an underwritten public offering of **4.900% Notes due 2030** and **5.650% Notes due 2036** in June 2025, generating approximately **$1.5 billion** in net proceeds[12](index=12&type=chunk) - Net proceeds from the debt issuance were used to redeem **6.500% Notes due 2027** and for general corporate purposes, including repayment of Commercial Paper Program borrowings[12](index=12&type=chunk) [Liquidity Position](index=2&type=section&id=Liquidity%20Position) Targa maintained strong liquidity, with approximately $3.5 billion available as of June 30, 2025, and extended its Securitization Facility maturity to August 31, 2026 Consolidated Liquidity as of June 30, 2025 | Source | Amount (Millions) | | :------------------------- | :---------------- | | Total Consolidated Liquidity | ~$3,500.0 | | TRGP Revolver | $2,800.0 | | Securitization Facility | $600.0 | | Cash | $113.1 | - Extended the maturity of its Securitization Facility to August 31, 2026, in July 2025[14](index=14&type=chunk) [Growth Projects Update](index=2&type=section&id=Growth%20Projects%20Update) Targa is accelerating completion timelines for several G&P and L&T projects, including new plants and pipeline extensions, with operations expected from Q4 2025 to Q1 2027 [Gathering and Processing (G&P) Segment Projects](index=2&type=section&id=Gathering%20and%20Processing%20%28G%26P%29%20Segment%20Projects) Targa anticipates early completion of its Pembrook II plant in Permian Midland by August 2025 and the Bull Moose II plant in Permian Delaware by Q4 2025. Construction continues on other Permian plants, and the company is acquiring long-lead items for future expansions - Pembrook II plant (**275 MMcf/d**) in Permian Midland expected to be completed early in August 2025[15](index=15&type=chunk) - Bull Moose II plant (**275 MMcf/d**) in Permian Delaware expected to begin operations in Q4 2025, earlier than previously anticipated[15](index=15&type=chunk) - Construction continues on East Pembrook and East Driver plants in Permian Midland, and Falcon II plant in Permian Delaware[15](index=15&type=chunk) - Acquiring long-lead items for next gas processing expansions in the Permian to accommodate future growth[15](index=15&type=chunk) [Logistics and Transportation (L&T) Segment Projects](index=2&type=section&id=Logistics%20and%20Transportation%20%28L%26T%29%20Segment%20Projects) The Delaware Express Pipeline expansion and Train 11 fractionator are now expected to begin operations earlier, in Q2 2026. Construction also continues on Train 12 fractionator and GPMT LPG Export Expansion - Delaware Express Pipeline expansion and Train 11 fractionator (**150 MBbl/d**) in Mont Belvieu expected to begin operations in Q2 2026, earlier than previously anticipated[16](index=16&type=chunk) - Construction continues on Train 12 fractionator in Mont Belvieu and GPMT LPG Export Expansion[16](index=16&type=chunk) [New Pipeline Extensions](index=2&type=section&id=New%20Pipeline%20Extensions) Targa announced a 43-mile extension of its Bull Run intrastate natural gas pipeline in the Permian Delaware, aiming to enhance connectivity to WAHA, with operations expected to commence in Q1 2027 - Announced a **43-mile** extension of the Bull Run intrastate natural gas pipeline in Permian Delaware to expand connectivity to WAHA[17](index=17&type=chunk) - The Bull Run Extension is expected to begin operations in Q1 2027[17](index=17&type=chunk) [2025 Outlook](index=2&type=section&id=2025%20Outlook) Targa maintains its 2025 adjusted EBITDA guidance of $4.65 billion to $4.85 billion, with increased growth capital expenditures of $3.0 billion [Adjusted EBITDA Guidance](index=2&type=section&id=Adjusted%20EBITDA%20Guidance) Targa maintains its full-year 2025 adjusted EBITDA estimate between $4.65 billion and $4.85 billion, anticipating record Permian, NGL pipeline transportation, fractionation, and LPG export volumes - Full year 2025 adjusted EBITDA is estimated to be between **$4.65 billion** and **$4.85 billion**[18](index=18&type=chunk) - Forecasted growth across Permian G&P footprint is expected to drive record Permian, NGL pipeline transportation, fractionation, and LPG export volumes in 2025[18](index=18&type=chunk) [Capital Expenditures](index=2&type=section&id=Capital%20Expenditures) Due to accelerated project completions and new expansions, Targa's estimated net growth capital expenditures for 2025 have increased to approximately $3.0 billion, while maintenance capital expenditures remain unchanged at $250 million - Estimated total net growth capital expenditures for 2025 are approximately **$3.0 billion**, an increase due to accelerated projects and new expansions[19](index=19&type=chunk) - Estimated 2025 net maintenance capital expenditures remain unchanged at approximately **$250 million**[19](index=19&type=chunk) [Consolidated Financial Results of Operations](index=4&type=section&id=Consolidated%20Financial%20Results%20of%20Operations) Targa reported strong financial performance for Q2 and H1 2025, with significant increases in total revenues, net income, and Adjusted EBITDA year-over-year [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=4&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs.%202024) For Q2 2025, Targa experienced a 20% increase in total revenues, driven by higher commodity sales from increased NGL volumes, natural gas prices, and favorable hedges. Net income attributable to Targa Resources Corp. surged by 111%, and Adjusted EBITDA increased by 18% year-over-year Consolidated Financial Results (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | Change (%) | | :---------------------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Total Revenues | $4,260.1 | $3,562.0 | $698.1 | 20% | | Income from Operations | $1,033.6 | $627.2 | $406.4 | 65% | | Net Income Attributable to TRGP | $629.1 | $298.5 | $330.6 | 111% | | Adjusted EBITDA | $1,163.0 | $984.3 | $178.7 | 18% | | Adjusted Cash Flow from Operations | $934.4 | $808.5 | $125.9 | 16% | | Adjusted Free Cash Flow | $(9.6) | $(43.0) | $33.4 | 78% | - Increase in commodity sales was due to higher NGL volumes (**$304.2 million**), higher natural gas prices (**$296.4 million**), and favorable hedges (**$290.5 million**), partially offset by lower NGL and condensate prices (**$217.3 million**)[24](index=24&type=chunk) - Increase in fees from midstream services primarily from higher gas gathering and processing fees and export volumes, partially offset by lower transportation and fractionation fees due to a planned turnaround[25](index=25&type=chunk) - Operating expenses increased due to higher labor and maintenance costs, and taxes associated with system expansions and the Mont Belvieu turnaround[26](index=26&type=chunk) [Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024](index=6&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs.%202024) For the first half of 2025, total revenues increased by 9%, and net income attributable to Targa Resources Corp. grew by 57%. Adjusted EBITDA saw a 20% increase, driven by similar factors as the quarterly performance, including higher natural gas prices and NGL volumes Consolidated Financial Results (H1 2025 vs. H1 2024) | Metric | H1 2025 (Millions) | H1 2024 (Millions) | Change (Millions) | Change (%) | | :---------------------------------------- | :----------------- | :----------------- | :---------------- | :--------- | | Total Revenues | $8,821.6 | $8,124.4 | $697.2 | 9% | | Income from Operations | $1,576.9 | $1,266.7 | $310.2 | 24% | | Net Income Attributable to TRGP | $899.6 | $573.7 | $325.9 | 57% | | Adjusted EBITDA | $2,341.5 | $1,950.8 | $390.7 | 20% | | Adjusted Cash Flow from Operations | $1,904.4 | $1,547.2 | $357.2 | 23% | | Adjusted Free Cash Flow | $318.6 | $(40.0) | $358.6 | NM | - Increase in commodity sales reflected higher natural gas prices (**$503.7 million**), higher NGL volumes (**$133.8 million**), and favorable hedges (**$34.4 million**), partially offset by lower condensate prices and natural gas/condensate volumes[30](index=30&type=chunk) - Increase in fees from midstream services was primarily due to higher gas gathering and processing fees and export volumes, partially offset by lower transportation and fractionation fees due to a planned turnaround[31](index=31&type=chunk) - Operating expenses increased due to higher labor and maintenance costs, and taxes associated with system expansions and the Mont Belvieu turnaround[32](index=32&type=chunk) [Review of Segment Performance](index=6&type=section&id=Review%20of%20Segment%20Performance) Both G&P and L&T segments demonstrated strong adjusted operating margin growth in Q2 and H1 2025, driven by increased volumes and new infrastructure, while the 'Other' segment saw significant gains from derivative activities [Gathering and Processing Segment](index=7&type=section&id=Gathering%20and%20Processing%20Segment) The G&P segment saw a 4% increase in adjusted operating margin for Q2 2025 and a 6% increase for H1 2025, primarily driven by higher natural gas inlet volumes in the Permian Basin due to new plant additions and strong producer activity, despite lower volumes in other areas Gathering and Processing Segment Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | H1 2025 (Millions) | H1 2024 (Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :--------- | :----------------- | :----------------- | :--------- | | Operating Margin | $587.6 | $572.6 | 3% | $1,189.8 | $1,128.9 | 5% | | Adjusted Operating Margin | $807.0 | $778.3 | 4% | $1,617.4 | $1,522.6 | 6% | | Total Plant Natural Gas Inlet (MMcf/d) | 7,894.0 | 7,390.2 | 7% | 7,711.3 | 7,246.8 | 6% | | Total NGL Production (MBbl/d) | 1,025.2 | 965.7 | 6% | 984.5 | 904.8 | 9% | - Permian natural gas inlet volumes increased by **11%** in Q2 2025 and H1 2025, driven by the addition of Roadrunner II (Q2 2024), Greenwood II (Q4 2024), and Bull Moose (Q1 2025) plants, and continued strong producer activity[39](index=39&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - Operating expenses increased primarily due to higher volumes and multiple plant additions in the Permian[42](index=42&type=chunk)[44](index=44&type=chunk) [Logistics and Transportation Segment](index=8&type=section&id=Logistics%20and%20Transportation%20Segment) The L&T segment reported a 17% increase in adjusted operating margin for Q2 2025 and an 18% increase for H1 2025. This growth was fueled by higher pipeline transportation and fractionation volumes, primarily from Permian G&P systems, and increased LPG export margin, despite a planned turnaround at Mont Belvieu Logistics and Transportation Segment Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | H1 2025 (Millions) | H1 2024 (Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :--------- | :----------------- | :----------------- | :--------- | | Operating Margin | $632.4 | $547.7 | 15% | $1,279.1 | $1,079.8 | 18% |\ | Adjusted Operating Margin | $737.8 | $633.1 | 17% | $1,480.0 | $1,255.2 | 18% | | NGL Pipeline Transportation Volumes (MBbl/d) | 961.2 | 783.5 | 23% | 902.7 | 750.6 | 20% | | Fractionation Volumes (MBbl/d) | 969.1 | 902.2 | 7% | 974.5 | 849.7 | 15% | | Export Volumes (MBbl/d) | 423.1 | 394.1 | 7% | 435.3 | 416.6 | 4% | - Increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin, and higher LPG export margin[48](index=48&type=chunk)[50](index=50&type=chunk) - Pipeline transportation and fractionation volumes benefited from higher supply from Permian G&P systems and full operation of Train 9 (Q2 2024), Daytona NGL Pipeline (Q3 2024), and Train 10 (Q4 2024)[48](index=48&type=chunk)[50](index=50&type=chunk) - Operating expenses increased predominantly due to a planned turnaround and system expansions[49](index=49&type=chunk)[51](index=51&type=chunk) [Other Segment](index=9&type=section&id=Other%20Segment) The 'Other' segment primarily reflects commodity derivative activity, including mark-to-market gains/losses on derivative contracts not designated as cash flow hedges. For Q2 2025, this segment reported an operating margin and adjusted operating margin of $280.5 million, a significant increase from a negative $46.6 million in Q2 2024 Other Segment Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | H1 2025 (Millions) | H1 2024 (Millions) | Change (Millions) | | :-------------------------- | :----------------- | :----------------- | :---------------- | :----------------- | :----------------- | :---------------- | | Operating Margin | $280.5 | $(46.6) | $327.1 | $31.7 | $(68.7) | $100.4 | | Adjusted Operating Margin | $280.5 | $(46.6) | $327.1 | $31.7 | $(68.7) | $100.4 | - The 'Other' segment contains results from commodity derivative activity mark-to-market gains/losses related to derivative contracts not designated as cash flow hedges[52](index=52&type=chunk) [Company Overview](index=10&type=section&id=Company%20Overview) Targa Resources Corp. is a leading independent North American midstream services provider, operating diversified infrastructure for natural gas, NGLs, and crude oil - Targa Resources Corp. is a leading provider of midstream services and one of the largest independent infrastructure companies in North America[53](index=53&type=chunk) - The company's operations include gathering, compressing, treating, processing, transporting, purchasing, and selling natural gas; transporting, storing, fractionating, treating, purchasing, and selling NGLs and NGL products (including services to LPG exporters); and gathering, storing, terminaling, purchasing, and selling crude oil[53](index=53&type=chunk) - Targa is a FORTUNE 500 company and is included in the S&P 500[54](index=54&type=chunk) [Non-GAAP Financial Measures](index=10&type=section&id=Non-GAAP%20Financial%20Measures) Targa utilizes non-GAAP financial measures like Adjusted EBITDA and Adjusted Free Cash Flow to assess performance, providing detailed reconciliations to GAAP measures [Introduction and Limitations](index=10&type=section&id=Introduction%20and%20Limitations) Targa uses non-GAAP financial measures like adjusted EBITDA, adjusted cash flow from operations, adjusted free cash flow, and adjusted operating margin to analyze performance. These measures are supplemental and should not replace GAAP measures, as they have limitations and may not be comparable to similarly titled measures used by other companies - Non-GAAP measures used include adjusted EBITDA, adjusted cash flow from operations, adjusted free cash flow, and adjusted operating margin (segment)[56](index=56&type=chunk) - These measures are supplemental and should not be considered an alternative to GAAP measures, having important limitations as analytical tools[57](index=57&type=chunk) - Management reviews comparable GAAP measures and understands the differences to incorporate insights into decision-making[57](index=57&type=chunk) [Adjusted Operating Margin](index=10&type=section&id=Adjusted%20Operating%20Margin) Adjusted operating margin is defined as revenues less product purchases and fuel, reflecting the core profitability of operations. It is influenced by volumes, commodity prices, contract mix, and hedging programs, and is used by management and external users to assess financial performance and capital returns - Adjusted operating margin for segments is defined as revenues less product purchases and fuel, impacted by volumes, commodity prices, contract mix, and commodity hedging[58](index=58&type=chunk) - For G&P, it includes service fees for natural gas and crude oil gathering/processing, and revenues from commodity sales less settlements, fuel, transport, and equity volume hedge settlements[61](index=61&type=chunk) - For L&T, it includes service fees, system product gains/losses, and NGL/natural gas sales less purchases, fuel, third-party transportation, and net inventory change[61](index=61&type=chunk) [Adjusted EBITDA](index=12&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA is defined as Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other items adjusted for core operating performance. It is used by management and external users to measure the ability of assets to generate cash for interest costs, indebtedness, and dividends - Adjusted EBITDA is Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other adjustments consistent with core operating performance[62](index=62&type=chunk) - Used to measure the ability of assets to generate cash sufficient to pay interest costs, support indebtedness, and pay dividends[62](index=62&type=chunk) [Adjusted Cash Flow from Operations and Adjusted Free Cash Flow](index=12&type=section&id=Adjusted%20Cash%20Flow%20from%20Operations%20and%20Adjusted%20Free%20Cash%20Flow) Adjusted cash flow from operations is adjusted EBITDA less cash interest expense and cash tax. Adjusted free cash flow further subtracts maintenance and growth capital expenditures (net of contributions). These measures assess the company's ability to generate cash earnings for corporate purposes like dividends, debt retirement, or other financing arrangements - Adjusted cash flow from operations is adjusted EBITDA less cash interest expense on debt obligations and cash tax (expense) benefit[63](index=63&type=chunk) - Adjusted free cash flow is adjusted cash flow from operations less net maintenance and growth capital expenditures (including contributions to unconsolidated affiliates)[63](index=63&type=chunk) - These measures assess the company's ability to generate cash earnings (after servicing debt and funding capital expenditures) for corporate purposes such as dividends, debt retirement, or redemption of other financing arrangements[63](index=63&type=chunk) [Reconciliation Tables](index=12&type=section&id=Reconciliation%20Tables) The report provides detailed reconciliations of non-GAAP financial measures (Adjusted EBITDA, Adjusted Cash Flow from Operations, Adjusted Free Cash Flow) to their most directly comparable GAAP measures for both the three and six months ended June 30, 2025 and 2024, as well as an estimated reconciliation for full-year 2025 Reconciliation of Net Income to Adjusted EBITDA, Adjusted Cash Flow from Operations, and Adjusted Free Cash Flow (Q2 & H1 2025 vs. 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | H1 2025 (Millions) | H1 2024 (Millions) | | :---------------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Net income (loss) attributable to TRGP | $629.1 | $298.5 | $899.6 | $573.7 | | Interest (income) expense, net | $218.4 | $176.0 | $415.5 | $404.6 | | Income tax expense (benefit) | $184.1 | $94.3 | $256.3 | $177.1 | | Depreciation and amortization expense | $373.7 | $348.6 | $741.3 | $689.1 | | Risk management activities | $(280.5) | $46.6 | $(31.7) | $68.8 | | **Adjusted EBITDA** | **$1,163.0** | **$984.3** | **$2,341.5** | **$1,950.8** | | Interest expense on debt obligations | $(214.3) | $(172.4) | $(407.5) | $(397.3) | | Cash taxes | $(14.3) | $(3.4) | $(29.6) | $(6.3) | | **Adjusted Cash Flow from Operations** | **$934.4** | **$808.5** | **$1,904.4** | **$1,547.2** | | Maintenance capital expenditures, net | $(58.9) | $(52.8) | $(106.2) | $(102.7) | | Growth capital expenditures, net | $(885.1) | $(798.7) | $(1,479.6) | $(1,484.5) | | **Adjusted Free Cash Flow** | **$(9.6)** | **$(43.0)** | **$318.6** | **$(40.0)** | Reconciliation of Estimated Net Income to Estimated Adjusted EBITDA (2025E) | Metric | 2025E (Millions) | | :---------------------------------------- | :--------------- | | Net income attributable to Targa Resources Corp. | $1,830.0 | | Interest expense, net | $865.0 | | Income tax expense | $485.0 | | Depreciation and amortization expense | $1,510.0 | | Equity earnings | $(22.0) | | Distributions from unconsolidated affiliates | $26.0 | | Compensation on equity grants | $70.0 | | Risk management and other | $(17.0) | | Noncontrolling interests adjustments | $3.0 | | **Estimated Adjusted EBITDA** | **$4,750.0** | [Additional Information](index=13&type=section&id=Additional%20Information) This section outlines Targa's Regulation FD compliance and provides disclaimers regarding forward-looking statements, emphasizing inherent uncertainties and risks [Regulation FD Disclosures](index=13&type=section&id=Regulation%20FD%20Disclosures) Targa complies with Regulation FD by using press releases, SEC filings, public conference calls, and its website to disclose material information, encouraging investors to monitor these channels - Targa uses press releases, SEC filings, public conference calls, or its website (www.targaresources.com) to comply with Regulation FD disclosure obligations[67](index=67&type=chunk) - The company routinely posts important and potentially material information on its website[67](index=67&type=chunk) [Forward-Looking Statements](index=13&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements regarding future activities, financial performance, capital spending, and dividends, which are subject to various uncertainties, factors, and risks, including commodity price volatility, weather, political, economic, and market conditions. Targa does not undertake to update or revise these statements - Statements in the release regarding future activities, events, or developments, including projected financial performance, capital spending, and future dividends, are forward-looking statements[68](index=68&type=chunk) - These statements rely on assumptions and are subject to uncertainties, factors, and risks, such as actions by hydrocarbon-producing countries, weather, political, economic, and market conditions, commodity price volatility, and changes in laws and regulations[68](index=68&type=chunk) - Targa does not undertake an obligation to update or revise any forward-looking statement[68](index=68&type=chunk)

Core Viewpoint - Targa Resources Corp. reported strong financial results for the second quarter of 2025, with significant increases in net income and adjusted EBITDA compared to the same period in 2024, driven by record transportation volumes and strategic share repurchase programs [2][10][17]. Financial Performance - Net income attributable to Targa Resources Corp. for Q2 2025 was $629.1 million, a 111% increase from $298.5 million in Q2 2024 [2][23]. - Adjusted EBITDA for Q2 2025 was $1,163.0 million, representing an 18% increase year-over-year from $984.3 million in Q2 2024 [2][10]. - Total revenues for Q2 2025 reached $4,260.1 million, a 20% increase from $3,562.0 million in Q2 2024 [21]. Dividend and Share Repurchase - The company declared a quarterly cash dividend of $1.00 per common share for Q2 2025, totaling approximately $215 million to be paid on August 15, 2025 [4]. - Targa repurchased 1.96 million shares at a total cost of $324.3 million during Q2 2025, with $566.2 million remaining under the existing share repurchase program [5][10]. Segment Performance - In the Gathering and Processing segment, adjusted operating margin was approximately flat, driven by strong growth in Permian natural gas inlet volumes, despite lower commodity prices [7][43]. - The Logistics and Transportation segment saw a sequentially flat adjusted operating margin, with record NGL pipeline transportation volumes offset by lower marketing margins [8][50]. Capitalization and Liquidity - Total consolidated debt as of June 30, 2025, was $16,850.5 million, with total consolidated liquidity of approximately $3.5 billion [11][13]. - The company completed a public offering resulting in net proceeds of approximately $1.5 billion, which were used to redeem existing notes and for general corporate purposes [12]. Growth Projects - Targa expects early completion of several projects, including the Pembrook II plant and the Bull Moose II plant, which are anticipated to enhance operational capacity [10][14]. - A 43-mile extension of the Bull Run natural gas pipeline was announced to improve connectivity from Targa's Permian Delaware system to WAHA, expected to begin operations in Q1 2027 [16]. 2025 Outlook - The company estimates full-year 2025 adjusted EBITDA to be between $4.65 billion and $4.85 billion, supported by growth across its Permian G&P footprint [17][18]. - Net growth capital expenditures for 2025 are estimated at approximately $3.0 billion, reflecting the acceleration of several projects [18].