Fourth Quarter 2025 Results & 2026 Guidance February 25, 2026 Forward looking statements This presentation includes certain statements that may constitute "forward-looking statements" for purposes of the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts, outlooks, guidance or other characterizations of future events or circumstances, including any underlying assumptions. The words "anticipate," "believe," "continue," "could," ...

Financial Data and Key Metrics Changes - The company reported approximately $136 million in quarterly adjusted EBITDA, an increase from $107 million in the same period last year [3][10] - Full-year EBITDA midpoint guidance has been raised to the upper end of the range, now expected between $500 million and $520 million [3][12] - Distributable cash flow, as adjusted, totaled $74 million, with a coverage ratio of approximately 1.24 times [10] Business Line Data and Key Metrics Changes - Adjusted EBITDA for the gathering and processing segment was $83 million, up from $55 million in the third quarter of 2024, primarily due to the acquisition of H2O and Gravity [10] - Wholesale marketing and terminaling adjusted EBITDA decreased to $21 million from $25 million in the prior year [10] - Storage and transportation adjusted EBITDA remained stable at $19 million compared to the third quarter of 2024 [11] Market Data and Key Metrics Changes - Crude gathering operations had a record third quarter, with strong performance continuing into the fourth quarter [4][8] - The company is seeing solid operations in both crude and water gathering segments, enhancing its competitive position in the Midland and Delaware Basins [4][8] Company Strategy and Development Direction - The company aims to become a strong, independent, full-suite midstream service provider, focusing on prudent management of leverage and coverage while seizing growth opportunities [4][5] - The successful commissioning of the Libby 2 plant and ongoing efforts in acid gas injection and sour gas handling are key initiatives to improve operational capacity [3][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the earnings trajectory and the ability to capture full value from recent investments, including optimizing synergies from acquisitions [9][12] - The company is well-positioned to meet market demands for sour gas and water treatment, indicating a strong growth runway in the Delaware Basin [18][32] Other Important Information - The Board of Directors approved a 51st consecutive increase in the quarterly distribution to $1.12 per unit, reflecting the company's financial prudence and strong performance [4][5] - Capital expenditures for the third quarter were approximately $50 million, with $44 million allocated to growth projects, including the Libby 2 gas processing plant [11] Q&A Session Summary Question: Expansion on producers' increasing activity on acreage ahead of Libby 2 - Management noted that while drilling activity has not materially changed, there are increasing synergies between different streams being managed [16][17] Question: CapEx trends for 2026 and flexibility for debt repayment or unit buybacks - Management indicated that planning for next year is ongoing, with further guidance expected in the next earnings call [20] Question: Performance of equity investments and sustainability of current run rate - Strong performance in the Wink to Webster joint venture was highlighted, with expectations for a good run rate going forward [28] Question: Water landscape and competition - Management acknowledged a favorable position in the market due to timely acquisitions and noted challenges in permitting new facilities in the Delaware Basin [30] Question: Timing for Libby 3 expansion and AGI disposal capabilities - Management confirmed that market demand for sour capabilities is strong, and detailed plans will be shared after the planning session [32][34]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported a just-equity bid of $243 million, distributable cash flow of $158 million, and free cash flow of $51 million [14] - Adjusted EBITDA for the midstream logistics segment was $151 million, down 13% year-over-year, primarily due to lower commodity prices and higher operating expenses [15] - The updated full-year adjusted EBITDA guidance range is now $965 million to $1.005 billion, reflecting a decline from previous expectations due to commodity price volatility [16][21] Business Line Data and Key Metrics Changes - The midstream logistics segment faced challenges from lower commodity prices and increased costs, while the pipeline transportation segment generated an adjusted EBITDA of $95 million [15] - The startup of the King's Landing facility is expected to enhance processing capacity, with over 100 million cubic feet per day being consistently flowed [5][6] Market Data and Key Metrics Changes - Waha natural gas pricing has declined by over 50% since February, significantly impacting the company's earnings and operational decisions [17] - The Delaware Basin rig count has decreased by nearly 20% since the beginning of the year, indicating a cautious stance from producers [20] Company Strategy and Development Direction - The company is focused on executing a multi-year organic investment strategy, including projects like King's Landing and the ECCC pipeline, to enhance market access and deliver value [13][10] - A new agreement with Competitive Power Ventures to connect to a 1,350-megawatt energy center demonstrates the company's ability to unlock value through strategic partnerships [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in the past quarters and emphasized the need for improved forecasting and cost management [12] - Despite current headwinds, management remains confident in the long-term strategy and the potential for value creation through organic growth initiatives [21] Other Important Information - The company has secured a five-year European LNG pricing agreement, which will enhance its service offerings and provide customers with diversified pricing exposure [10] - The company is actively pursuing opportunities in the data center market, leveraging its infrastructure to connect gas supply to power generation sources [77] Q&A Session Summary Question: Impact of producer delays on future development - Management indicated that delays are primarily within the current quarter and are not significantly pushing development into 2026, with most benefits expected in 2026 [26][29] Question: Development expectations in the Yazo formation - Management noted that the northwest shelf is seeing good geology and continued activity, with robust EMP M&A activity indicating potential future development [32][34] Question: Hedging strategy for commodity exposure - The company is relatively well-hedged for 2025 and aims to maintain 40-80% of equity volumes hedged on a rolling 12-month basis for 2026 [45] Question: Timing for King's Landing 2 announcement - Management stated that planning for King's Landing 2 is contingent on the development activity and gas packages coming online, with a potential 24-month timeline for the project [46][48] Question: Managing Waha exposure until 2028 - The company is actively managing existing capacity and has secured additional capacity to the Gulf Coast to mitigate exposure [72] Question: Update on in-basin power project - Management confirmed ongoing discussions with upstream customers regarding the power project, which is seen as important for managing controllable costs [73]

Financial Performance - The company reported $243 million in Adjusted EBITDA for the third quarter of 2025[8] - Free Cash Flow for the quarter was $51 million[8] - Capital Expenditures totaled $154 million[8] - The Leverage Ratio stood at 39x, but pro forma for the EPIC Crude Sale, it would be 37x[8] - $176 million of Class A common stock was repurchased year-to-date, with $100 million repurchased in 3Q25[10] Segment Performance - Midstream Logistics Adjusted EBITDA was $151 million, a 13% year-over-year decrease[13] - Pipeline Transportation Adjusted EBITDA was $95 million, a 1% year-over-year decrease[15] - Midstream Logistics contributed 61% and Pipeline Transportation 39% to the 3Q25 Adjusted EBITDA[16] Guidance and Assumptions - The company revised its FY 2025 Adjusted EBITDA Guidance to a range of $965 million to $1005 billion[10] - FY 2025 Capital Guidance was tightened to a range of $485 million to $515 million[10] - Fixed Fee contributes 85% and Commodity contributes 15% to the 2025E Gross Profit Sources[23]

Core Insights - Targa Resources Corp. reported a net income of $478.4 million for Q3 2025, a 23% increase from $387.4 million in Q3 2024, and an adjusted EBITDA of $1,274.8 million, up 19% year-over-year [2][10][22]. Financial Performance - The total revenues for Q3 2025 were $4,151.2 million, an 8% increase from $3,851.8 million in Q3 2024 [23]. - The increase in commodity sales was driven by higher natural gas prices ($322.3 million) and increased NGL volumes ($213.8 million), partially offset by lower NGL prices [23][24]. - Operating expenses rose due to higher maintenance, taxes, and labor costs associated with system expansions [24][29]. Dividend and Share Repurchase - The company declared a quarterly cash dividend of $1.00 per common share for Q3 2025, totaling approximately $215 million to be paid on November 17, 2025 [4]. - Targa repurchased 932,023 shares at an average price of $166.95, totaling $155.6 million, with $1,410.6 million remaining under its share repurchase programs as of September 30, 2025 [5][18]. Segment Performance - The Gathering and Processing (G&P) segment reported an operating margin of $637.6 million for Q3 2025, a 9% increase from $584.3 million in Q3 2024 [36]. - The Logistics and Transportation (L&T) segment saw record NGL pipeline transportation and fractionation volumes, contributing to the overall increase in adjusted operating margin [6][10]. Growth Projects - Targa commenced operations at the new 275 MMcf/d Bull Moose II plant in the Permian Delaware in October 2025 [11]. - The company announced plans for several new projects, including the Speedway NGL Pipeline and the Yeti plant, expected to enhance its infrastructure and capacity in the Permian Basin [14][12]. Capitalization and Liquidity - As of September 30, 2025, Targa's total consolidated debt was $17,431.3 million, with total liquidity of approximately $2.3 billion [7][8]. - The company estimates its full-year adjusted EBITDA for 2025 to be at the top end of the $4.65 billion to $4.85 billion range [16].

Capital Allocation and Returns - Since IPO, the company has returned $61 billion of capital to equity investors via LP distributions and common unit buybacks[9] - Distributions for 3Q 2025 were $0.545 per unit, a 3.8% increase over 3Q 2024[9] - Buybacks in 3Q 2025 totaled $80 million, representing 2.5 million common units[9] - For the 9 months ended September 30, 2025, buybacks amounted to $250 million, representing 8 million common units[9] - Adjusted CFFO Payout Ratio was 58% TTM for 3Q 2025[9] Capital Expenditures and Financial Health - Growth Capital Expenditures are projected to be approximately $4.5 billion in 2025 and between $2.2 billion and $2.5 billion in 2026[9] - Sustaining Capital Expenditures are estimated at approximately $525 million in 2025[9] - The Leverage Ratio was 3.3x as of September 30, 2025[9] - Liquidity stood at $3.6 billion as of September 30, 2025, comprising available credit capacity and unrestricted cash[9] Operational Performance and Growth - The company has $5.1 billion of major capital projects under construction[24] - Natural Gas Processing Plant Inlet Volume has a 10% CAGR[20] - Equivalent Pipeline Transportation Volume has a 8% CAGR[21] - NGL Fractionation Volume has a 8% CAGR[21] - For the 9 months ended 2025, the gross operating margin was $7.3 billion[27]

Core Insights - Energy Transfer LP (ET) is enhancing its competitive edge through strategic expansion of natural gas processing capacity, positioning itself to capitalize on rising hydrocarbon volumes [1][4] Company Overview - Energy Transfer operates gathering pipelines, processing plants, and treating and conditioning facilities with a total processing capacity of approximately 12.9 billion cubic feet per day (Bcf/d), including nearly 4.9 Bcf/d in the Permian Basin [2] Expansion Plans - The company plans to add 50 million cubic feet per day (MMcf/d) of capacity at four different Permian Basin processing plants, resulting in an incremental 200 MMcf/d of processing capacity [3] - The Mustang Draw project will provide an additional 275 MMcf/d of processing capacity in the Midland Basin, expected to be operational in the first half of 2026 [3] Market Positioning - By expanding processing facilities in key production regions, Energy Transfer can manage greater throughput of natural gas and natural gas liquids (NGL), solidifying its role as a vital link between producers and end markets [4] - The company's scale and strategically positioned assets enable it to capture enduring growth opportunities in a competitive landscape [4] Financial Outlook - Energy Transfer's processing expansion is expected to drive near-term growth and strengthen long-term prospects, enhancing cash distributions and positioning the firm to meet increasing energy demand [5] - The Zacks Consensus Estimate indicates year-over-year earnings growth of 8.59% for 2025 and 10.91% for 2026 [8] Industry Context - Other leading midstream firms, such as Enterprise Products Partners (EPD) and Plains All American Pipeline (PAA), are also expanding processing capacity to capture growing hydrocarbon volumes and secure long-term contracts [7] - The expansion of processing facilities supports fee-based income, attracts long-term agreements, and enhances profitability in response to increasing energy demand [6] Stock Performance - Energy Transfer's units have gained 8.4% over the past year, outperforming the Zacks Oil and Gas - Production Pipeline - MLB industry, which declined by 0.7% [11] - The current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) for Energy Transfer is 9.31X, compared to the industry average of 10.65X, indicating that the firm is undervalued relative to its peers [13]

Capital Allocation and Returns - Enterprise returned $59 billion to equity investors since IPO via LP distributions and common unit buybacks[8] - Distributions were $0.545 per unit for 2Q 2025, a 3.8% increase over 2Q 2024[8] - Buybacks in 2Q 2025 totaled $110 million for 3.6 million common units[8] - For the trailing 12 months ended 2Q 2025, buybacks were $309 million for 10 million common units[8] - Adjusted CFFO Payout Ratio was 57% for the trailing 12 months ended 2Q 2025[8] Capital Expenditures and Liquidity - Growth Capital Expenditures are projected to be in the range of $40 billion to $45 billion in 2025 and $20 billion to $25 billion in 2026[8] - Sustaining Capital Expenditures are estimated to be approximately $525 million in 2025[8] - The Leverage Ratio was 31x for the trailing 12 months ended 2Q 2025, with a target ratio of 30x (+/- 025x)[8] - Liquidity stood at $51 billion as of June 30, 2025, comprising available credit capacity and unrestricted cash[8] Operational Performance and Growth - Natural Gas Processing Plant Inlet Volume reached a record 77 Bcf/d[20] - Equivalent Pipeline Transportation Volume reached a record 134 MMBPD[21] - Total Marine Terminal Volumes reached a record 21 MMBPD[22] Gross Operating Margin (GOM) Analysis (2Q 2025 vs 2Q 2024) - Total GOM increased from $2412 million in 2Q 2024 to $2477 million in 2Q 2025[39] - NGL Segment GOM decreased by $28 million[39] - Crude Oil Segment GOM decreased by $14 million[39] - Natural Gas Segment GOM increased by $124 million[39] - Petrochemicals & Refined Products Segment GOM decreased by $38 million[39]

Capital Allocation and Returns - Since IPO, the company has returned $58 billion of capital to equity investors via LP distributions and common unit buybacks[9] - Distributions for 1Q 2025 were $0.535/unit, a 3.9% increase over 1Q 2024[9] - Buybacks in 1Q 2025 totaled $60 million, representing 1.8 million common units[9] - For the trailing 12 months ended 1Q 2025, buybacks amounted to $239 million, representing 8 million common units[9] - The Adjusted CFFO Payout Ratio was 56% for the trailing 12 months ended 1Q 2025[9] Capital Expenditures and Liquidity - Growth Capital Expenditures are projected to range from $40 billion to $45 billion in 2025 and $20 billion to $25 billion in 2026[9] - Sustaining Capital Expenditures are estimated at approximately $525 million in 2025[9] - The Leverage Ratio was 31x for the trailing 12 months ended 1Q 2025, with a target ratio of 30x (+/– 025x)[9] - As of March 31, 2025, liquidity stood at $36 billion, comprising available credit capacity and unrestricted cash[9] Operational Performance and Growth Projects - Natural Gas Processing Plant Inlet Volume reached 77 Bcf/d in 1Q 2025, reflecting a 9% CAGR[20] - Equivalent Pipeline Transportation Volume reached 132 MMBPD in 1Q 2025, reflecting an 8% CAGR[21] - The company has $76 billion of major capital projects under construction, with $6 billion of these projects slated to come online in 2025[24, 27] Gross Operating Margin (GOM) Analysis - Total GOM for 1Q 2025 was $2431 million[41] - NGL Segment GOM for 1Q 2025 was $1418 million, an increase of $78 million compared to 1Q 2024[41, 44] - Crude Oil Segment GOM for 1Q 2025 was $374 million, a decrease of $37 million compared to 1Q 2024[41, 47]