Targa Resources Corp.

Targa Resources Corp. is a leading provider of midstream services and one of the largest independent infrastructure companies in North America, owning, operating, acquiring, and developing a diversified portfolio of complementary domestic infrastructure assets. The company is engaged primarily in gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas; transporting, storing, fractionating, treating, and purchasing and selling NGLs and NGL products, including services to LPG exporters; and gathering, storing, terminaling, and purchasing and selling crude oil. The company operates in two primary segments: Gathering and Processing, and Logistics and Transportation.

Targa faces strong competition in acquiring new natural gas or crude oil supplies, with competitors including other natural gas gatherers and processors such as major interstate and intrastate pipeline companies, master limited partnerships, and oil and gas producers. The company also competes for NGL supplies for its NGL pipeline system and for mixed NGLs supplies at its fractionation facilities, with competitors including other midstream providers with NGL transportation capabilities and other fractionators in the Mont Belvieu region. Targa believes its ability to offer integrated services provides an advantage in competing for new supplies, and that the significant investment made to construct and acquire assets in key strategic positions makes it well-positioned to remain a leading provider of integrated services in the midstream sector.

Targa generates revenue through fee-based arrangements predominantly, charging a fee per unit of throughput across its Gathering and Processing and Logistics and Transportation businesses. Some commercial agreements in the natural gas gathering and processing business are percent-of-proceeds arrangements that expose the company to commodity price risk, though certain of these have commodity price protection features. The company provides services to a diverse mix of customers across its areas of operation, and its contract mix, along with its commodity hedging program, serves to mitigate the impact of commodity price movements on cash flow.

The Gathering and Processing segment consists of gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas and gathering, storing, terminaling and purchasing and selling crude oil. Its assets are located in the Permian Basin of West Texas and Southeast New Mexico; the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma Basins in Oklahoma and South Central Kansas; the Williston Basin in North Dakota; and the onshore and near offshore regions of the Louisiana Gulf Coast. The segment's operations consist of Permian Midland, Permian Delaware, Central, Coastal, and Badlands, with aggregate natural gas gathering pipelines of approximately 31,600 miles and 54 owned and operated processing plants with a total processing capacity of 11,129.0 MMcf/d ¹ and plant natural gas inlet throughput volume of 8,016.2 MMcf/d ² and NGL production of 1,043.1 MBbl/d ³ for the year ended December 31, 2025.

The Logistics and Transportation segment includes the activities and assets necessary to transport and convert mixed NGLs into NGL products, and also includes other assets and value-added services such as transporting, storing, fractionating, terminaling, and marketing of NGLs and NGL products, including services to LPG exporters and certain natural gas supply and marketing activities. The segment includes 2,600 miles of company-owned pipelines to transport mixed NGLs and specification products, and its fractionation facilities have an aggregate capacity of 1,138.0 MBbl/d ⁴ with throughput of 1,057.6 MBbl/d ⁵ for 2025. The segment also owns 35 storage wells with a gross NGL storage capacity of approximately 81 MMBbl ⁶ and operates seven non-owned wells, and its export facilities have an effective export capacity of approximately 14.0 MMBbl per month ⁷.

In March 2025, Targa completed the acquisition of Blackstone's 45% interest in Targa Badlands LLC for aggregate consideration of $1.8 billion in cash ⁸. In April 2025, the company declared an increase to its quarterly common dividend to $1.00 per common share ⁹, or $4.00 per common share annualized ¹⁰. During the year ended December 31, 2025, the company repurchased 3,765,272 shares ¹¹ of its common stock at a weighted average per share price of $170.45 ¹² for a total net cost of $641.8 million ¹³. In February 2025, the company entered into a new $3.5 billion ¹⁴ TRGP senior revolving credit facility maturing on February 18, 2030 ¹⁵. In February 2025, the company completed an underwritten public offering of $1.0 billion ¹⁶ aggregate principal amount of 5.550% Senior Unsecured Notes due 2035 and $1.0 billion ¹⁷ aggregate principal amount of 6.125% Senior Unsecured Notes due 2055, resulting in net proceeds of approximately $2.0 billion ¹⁸. In June 2025, the company completed an underwritten public offering of $750.0 million ¹⁹ aggregate principal amount of 4.900% Senior Unsecured Notes due 2030 and $750.0 million ²⁰ aggregate principal amount of 5.650% Senior Unsecured Notes due 2036, resulting in net proceeds of approximately $1.5 billion ²¹. In November 2025, the company completed an underwritten public offering of $750.0 million ²² aggregate principal amount of 4.350% Senior Unsecured Notes due 2029 and $1.0 billion ²³ aggregate principal amount of 5.400% Senior Unsecured Notes due 2036, resulting in net proceeds of approximately $1.7 billion ²⁴. On January 6, 2026, the company completed the acquisition of Stakeholder Midstream, LLC for $1.25 billion in cash ²⁵.

For the fiscal year ended December 31, 2025, Targa reported total revenues of $16,650.0 million ²⁶ compared to $15,726.5 million ²⁷ in the prior year. Net income attributable to Targa Resources Corp. was $1,476.9 million ²⁸ compared to $1,340.2 million ²⁹ in 2024. Diluted net income per common share was $6.79 ³⁰ compared to $5.88 ³¹ in the prior year. Net cash provided by operating activities was $3,851.8 million ³² compared to $3,476.8 million ³³ in 2024.

Targa is executing a significant organic growth program across its Permian Basin operations. The company is constructing multiple new 275 MMcf/d cryogenic natural gas processing plants including the East Pembrook plant expected to begin operations in the second quarter of 2026, the Falcon II plant expected in the first quarter of 2026, the East Driver plant expected in the third quarter of 2026, the Copperhead plant expected in the first quarter of 2027, the Yeti plant expected in the third quarter of 2027, and the Yeti II plant expected in the fourth quarter of 2027. In February 2026, the company announced it is ordering long-lead items for its next potential natural gas processing plants across the Permian Basin. The company is also constructing new 150 MBbl/d fractionation trains including Train 11 expected in the second quarter of 2026, Train 12 expected in the first quarter of 2027, and Train 13 expected in the first quarter of 2028. Additionally, the company reactivated GCF's 135 MBbl/d ³⁴ fractionation facility which commenced operations in the first quarter of 2025.

Targa is pursuing multiple pipeline and infrastructure expansion projects. The Delaware Express intra-Delaware Basin expansion of its NGL pipeline system is expected to begin operations in the second quarter of 2026. The Speedway NGL Pipeline, consisting of approximately 500 miles ³⁵ of 30-inch diameter pipeline with an initial capacity of approximately 500 MBbl/d ³⁶, expandable to 1,000 MBbl/d ³⁷, is expected to begin operations in the third quarter of 2027. The GPMT LPG Export Expansion will increase effective export capacity up to 19 MMBbl per month ³⁸ and is expected to be completed in the third quarter of 2027. The Bull Run Extension, a 43-mile ³⁹ extension of the Bull Run intrastate natural gas pipeline, is expected to begin operations in the first quarter of 2027. Buffalo Run, a new 35-mile ⁴⁰ intrastate natural gas pipeline and a 55-mile ⁴¹ conversion of an existing pipeline, is expected to be fully complete in early 2028. The Forza Pipeline, a new 36-mile ⁴² interstate natural gas pipeline, is expected to begin operations in the middle of 2028 pending regulatory approvals. The Blackcomb pipeline, designed to transport up to 2.5 Bcf/d ⁴³ of natural gas through approximately 365 miles ⁴⁴ of 42-inch pipeline, is expected to be in service in the fourth quarter of 2026. The Traverse pipeline, designed to transport up to 2.5 Bcf/d ⁴⁵ of natural gas through approximately 160 miles ⁴⁶ of pipeline, is expected to be in service in 2027.The filing does not contain specific operational outlook details regarding supply chain posture, manufacturing capacity, technology infrastructure investments, or headcount strategy with specific figures.

Capital allocation priorities are centered on growth investments, dividends, and share repurchases. The company declared an increase to its quarterly common dividend to $1.00 per common share ⁴⁷, or $4.00 per common share annualized ⁴⁸, effective for the first quarter of 2025. As of December 31, 2025, there was $1,373.6 million ⁴⁹ remaining under the Share Repurchase Programs, which include the 2024 Share Repurchase Program of $1.0 billion ⁵⁰ and the 2025 Share Repurchase Program of $1.0 billion ⁵¹. The company's maintenance capital expenditures have averaged approximately $234 million per year ⁵² over the last three years.

The filing identifies several headwinds including the impact of seasonality and weather, severe weather conditions and other natural disasters, the frequency, severity and impact of which could be increased by the effects of climate change. General economic conditions and economic conditions impacting primary markets, including the impact of proposed tariffs, inflation and increases in interest rates and associated changes in monetary policy are also noted as headwinds. The company faces risks related to the level of domestic crude oil and natural gas production and consumption, actions taken by major foreign oil and gas producing nations, and the extent and nature of governmental regulation and taxation.

The filing identifies execution risks including that the construction of additions or modifications to existing systems and the construction of new midstream assets involve numerous regulatory, environmental, political and legal uncertainties beyond the company's control and may require the expenditure of significant amounts of capital. Projects may not be completed on schedule, at the budgeted cost, or at all. The company may construct pipelines or facilities to capture anticipated future growth in production in a region in which such growth does not materialize, and new pipelines or facilities may receive lower volumes than anticipated and may not be able to attract enough throughput to achieve expected investment return.

The company's cash flow is significantly affected by supply and demand for natural gas, NGL products and crude oil and by commodity prices, with decreases in commodity prices and/or activity levels potentially adversely affecting results of operations and financial condition. The company has substantial indebtedness of $13,025.0 million ⁵³ as of December 31, 2025, which increases the possibility that it may be unable to generate cash sufficient to pay principal and interest. As of December 31, 2025, the company has outstanding net derivative positions containing credit-risk related contingent features that are in a net liability position of $104.1 million ⁵⁴. The company's operations are subject to numerous environmental laws and regulations, and it faces risks related to evolving regulations for methane and other GHG emissions from the oil and gas sector that could result in increased operating costs and reduce demand for products and services. The company also faces risks related to the natural decline in production in its operating regions, as its long-term success depends on its ability to obtain new sources of supplies of natural gas, NGLs and crude oil, which depends on factors beyond its control.

Management's message emphasizes the company's position as a leading provider of midstream services with a comprehensive package of services, strategically located and leading infrastructure positions, high quality and efficient assets, financial flexibility, an experienced and long-term focused management team, and attractive cash flow characteristics with a large diverse business mix with favorable contracts and increasing fee-based business. Key strategic priorities emphasized for the period ahead include executing a significant organic growth program across the Permian Basin with multiple new processing plants, fractionation trains, and pipeline expansions; pursuing strategic acquisitions such as the Stakeholder Midstream acquisition for $1.25 billion in cash ⁵⁵; and returning capital to shareholders through dividends increased to $1.00 per common share quarterly ⁵⁶ and share repurchases with $1,373.6 million ⁵⁷ remaining under the Share Repurchase Programs as of December 31, 2025.