Targa(US:TRGP)2025-08-07 17:02PART I—FINANCIAL INFORMATION Item 1. Financial Statements 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 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 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) 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 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 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, 202529 Notes to Consolidated Financial Statements This section provides detailed explanations of Targa Resources Corp.'s accounting policies, significant transactions, and financial statement line items Note 1 — Organization and Operations 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 assets33 - 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 oil3537 Note 2 — Basis of Presentation 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 performance36 Note 3 — Significant Accounting Policies 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 ASUs38 - 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 disclosure3940 - 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 disclosure4142 Note 4 — Joint Ventures and Acquisitions 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 shareholders43 Note 5 — Property, Plant and Equipment and Intangible Assets 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 periods44 - 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 202946 Note 6 – Investments in Unconsolidated Affiliates 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 segment4851 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 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 Program5560 - 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 borrowings5661 - 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 20275462 - 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 loss5463 - In July 2025, the Partnership amended its $600.0 million accounts receivable securitization facility, extending its termination date to August 31, 20265464 Note 8 — Common Stock and Related Matters 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 2025656668 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 202569 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 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 earnings7172 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-dilutive73 Note 10 — Derivative Instruments and Hedging Activities 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 hedges747576 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 curves7881247 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 202883 Note 11 — Fair Value Measurements 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 million8788246 - 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 notes8991 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, 20259293 Note 12 — Contingencies 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 NMED94 - 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 contesting9596 - 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 million97 - 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 million9899 Note 13 — Revenue 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 years100101 - 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 met102 Note 14 — Income Taxes 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 Company104 - The valuation allowance for deferred tax assets remained at $5.9 million as of June 30, 2025, and December 31, 2024105 - 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 2025106145 - 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 operations107 - 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 credit108109147 Note 15 — Supplemental Cash Flow Information 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, respectively110 Note 16 — Segment Information 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 hedges111114 - 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 Coast112 - 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, Louisiana113 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 This section analyzes Targa's financial condition, operations, and liquidity, covering business overview, recent developments, capital allocation, financing, tax matters, and segment performance 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 terminaling120121126 - 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)122123 Recent Developments This section highlights Targa's recent operational expansions, including new processing plants, fractionation trains, pipeline projects, and joint ventures Permian Basin Processing Expansions 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 plants127136 Fractionation Expansions 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 2027136 NGL Pipeline Expansion 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 2026129 LPG Export Expansion 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 2027130 Natural Gas Pipeline Extension 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 2027131 Joint Ventures 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 2027132133 - 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, 2025134 Capital Allocation 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 2025137 - 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 2025137138139 - 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 share139 Financing Activities 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 facility140 - 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 borrowings141 - 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 borrowings142 - In July 2025, the Partnership amended its $600.0 million accounts receivable securitization facility, extending its termination date to August 31, 2026143 Corporation Tax Matters 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 2025144145 - 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 credit147 How We Evaluate Our Operations 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 acquisitions149150 - 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 performance151152156157159 - 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 capital160161162 - 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 dividends164 - 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 retirement165 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 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 turnaround172173 - 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 turnaround179180 - 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 2024178184 - 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 Transaction185 Results of Operations—By Reportable Segment 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 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 areas187193195 - Operating expenses increased due to higher volumes and multiple plant additions in the Permian194196 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 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 facilities198199201 - Operating expenses increased due to system expansions and the planned turnaround200202 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 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 contracts203 Our Liquidity and Capital Resources 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 months204205 Short-term Liquidity 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 million206207 - As of June 30, 2025, Targa had $9.4 million in letters of credit outstanding under the TRGP Revolver to satisfy counterparty credit requirements208 Working Capital 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 liabilities21052 Long-term Financing 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 purposes211212213214 - In July 2025, the Partnership amended the Securitization Facility, extending its termination date to August 31, 2026215 - 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 growth216217 Compliance with Debt Covenants 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 agreements218 Cash Flow Analysis 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 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 comparison221222 Cash Flows from Investing Activities 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 affiliates225 Cash Flows from Financing Activities 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 facility226 Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries 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 excluded227228229 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 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 covenants231 Capital Expenditures 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