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]