Targa Resources Corp. — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income attributable to Targa Resources Corp. was $658 million for the third quarter of 2026, an 18% increase from $478 million in the same period of 2025.
• Adjusted EBITDA was $1,504 million for the third quarter of 2026, representing an 18% year-over-year increase from $1,275 million in Q3 2025.
• Total revenues were $5,598.6 million for the quarter, a 35% increase from $4,151.2 million in Q3 2025.
• Sales of commodities were $4,722.9 million (up 36% from $3,469.9 million), driven by higher NGL, natural gas, and condensate prices and volumes.
• Fees from midstream services were $875.7 million, a 29% increase from $681.3 million.
• Adjusted cash flow from operations was $1,276.8 million, up 18% from $1,082.8 million.
• Adjusted free cash flow was $33.6 million, a decrease of 81% from $172.8 million.
• Total consolidated debt was $19.8 billion as of September 30, 2026.
• Total consolidated liquidity was approximately $2.9 billion, including $2.6 billion available under the TRGP Revolver.
• For the nine months ended September 30, 2026, net income attributable to common shareholders was $1,902.4 million, up 45% from $1,307.5 million.
• Nine-month adjusted EBITDA was $4,510.1 million, a 25% increase from $3,616.3 million.

Guidance and Future Outlook

• Full-year 2026 adjusted EBITDA is now expected to be at least $6.0 billion.
• Net growth capital expenditures for 2026 are estimated at approximately $5.0 billion.
• Net maintenance capital expenditures for 2026 remain unchanged at approximately $250 million.
• Management intends to recommend an annual common dividend of $6.00 per share for 2027, a 20% increase from 2026.
• A quarterly cash dividend of $1.50 per share (annualized $6.00) is expected to be recommended for the first quarter of 2027.
• The Yeti and Yeti II plants are now expected to begin operations in the second and third quarters of 2027, respectively, earlier than previously expected.
• New processing plants in the Permian Midland and two in the Permian Delaware are expected to be needed in 2028 or early 2029.
• Train 14, a new 150 thousand barrels per day NGL fractionator in Mont Belvieu, is expected to begin operations in the first quarter of 2029.

Business Segments and Product Lines

• Gathering and Processing (G&P):
  • Operating margin was $813.6 million, up 28% from $637.6 million.
  • Adjusted operating margin was $1,069.9 million, up 22% from $873.7 million.
  • Total Permian plant natural gas inlet volumes reached 7,536.6 MMcf/d, a 14% increase year-over-year.
  • Permian Delaware inlet volumes were 4,063.8 MMcf/d, a 20% increase.
  • NGL production totaled 1,234.7 MBbl/d, a 13% increase.
  • Crude oil gathered was 152.9 MBbl/d, a 39% increase.
  • Record Permian inlet volumes were driven by new plant additions (Bull Moose II, Falcon II, East Pembrook, East Driver) and asset acquisitions.
• Logistics and Transportation (L&T):
  • Operating margin was $771.0 million, up 9% from $710.2 million.
  • Adjusted operating margin was $888.1 million, up 10% from $808.8 million.
  • NGL pipeline transportation volumes were 1,171.7 MBbl/d, a 15% increase.
  • Fractionation volumes were 1,261.5 MBbl/d, an 11% increase.
  • Export volumes were 447.9 MBbl/d, a 10% increase.
  • Record NGL transportation and fractionation volumes were offset by lower marketing and LPG export margins.
• New Projects and Agreements:
  • Announced 20-year, fee-based integrated midstream agreements with ExxonMobil subsidiaries for natural gas gathering, processing, and downstream services in the Permian Basin.
  • Announced three new natural gas processing plants in the Permian Delaware: Wrangler, Ranger, and Ranger II.
  • Commenced operations of Train 12 fractionator and Bull Run Extension intra-basin residue pipeline ahead of schedule.
  • Copperhead plant in the Permian Delaware is currently in start-up, ahead of schedule.
  • Ordering long-lead items for an additional processing plant in the Permian Midland and two in the Permian Delaware.
  • Moving forward with Train 14 NGL fractionation train in Mont Belvieu, TX.

Market and Competitive Landscape

• Targa Resources is a Fortune 500 company and a member of the S&P 500.
• The company operates in the Permian Basin, Eagle Ford Shale, Barnett Shale, Anadarko, Ardmore, Arkoma Basins, Williston Basin, and Louisiana Gulf Coast.
• Infrastructure needs are driven by increasing production and customer requirements.
• The company connects natural gas and NGLs to domestic and international markets with growing demand for cleaner fuels and feedstocks.

Risks and Challenges

• Forward-looking statements are subject to uncertainties including weather, political, economic, and market conditions.
• Risks include a decline in the price and market demand for natural gas, NGLs, and crude oil.
• Potential delays in the timing and success of capital project completions and business development efforts.
• Uncertainties regarding the realization of benefits from long-term commercial agreements and expected volume growth.
• Commodity price volatility due to global conflicts and changes in laws, regulations, taxes, tariffs, and international trade.

Management Commentary and Tone

• Management highlighted record Permian inlet, NGL transportation, and fractionation volumes.
• The tone reflects confidence in operating performance, citing strength through the first three quarters of the year.
• Management noted that sequential adjusted EBITDA decreased 6% compared to Q2 2026 due to lower marketing and LPG export margins, despite record volumes.
• Management expects to continue providing meaningful annual increases to the common dividend beyond 2027.

Other Key Points

• Declared a quarterly cash dividend of $1.25 per common share for Q3 2026, a 25% increase over Q3 2025.
• Total cash dividends of approximately $268 million will be paid on November 17, 2026.
• Repurchased 180,768 shares of common stock in Q3 2026 for a total net cost of $52 million.
• $1,187 million remained under the share repurchase program as of September 30, 2026.
• Conference call scheduled for November 5, 2026, at 11:00 a.m. Eastern time.
• Updated investor presentations and earnings supplements are available on the company website.