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What changed in Targa Resources's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Targa Resources's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+488 added−554 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in Targa Resources's 2025 10-K

488 paragraphs added · 554 removed · 393 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

191 edited+59 added−88 removed175 unchanged
Biggest changeCONSOLIDATED STATEMENTS OF CHANGES IN OWN ERS’ EQUITY AND SERIES A PREFERRED STOCK Retained Accumulated Additional Earnings Other Treasury Total Series A Common Stock Paid in (Accumulated Comprehensive Shares Noncontrolling Owners’ Preferred Shares Amount Capital Deficit) Income (Loss) Shares Amount Interests Equity Stock (In millions, except shares in thousands) Balance, December 31, 2021 228,221 $ 0.2 $ 4,268.9 $ ( 1,822.3 ) $ ( 230.9 ) 7,884 $ ( 204.1 ) $ 3,166.9 $ 5,178.7 $ 749.7 Compensation on equity grants — — 57.5 — — — — — 57.5 — Dividend equivalent rights — — ( 7.1 ) — — — — — ( 7.1 ) — Shares issued under compensation program 1,834 — — — — — — — — — Shares tendered for tax withholding obligations ( 601 ) — — — — 601 ( 35.8 ) — ( 35.8 ) — Repurchases of common stock ( 3,412 ) — — — — 3,412 ( 224.8 ) — ( 224.8 ) — Series A Preferred Stock dividends Dividends - $ 47.50 per share — — — ( 30.0 ) — — — — ( 30.0 ) — Dividends in excess of retained earnings — — ( 30.0 ) 30.0 — — — — — — Deemed dividends - redemption of Series A Preferred Stock — — ( 215.5 ) — — — — — ( 215.5 ) — Common stock dividends Dividends - $ 1.40 per share — — — ( 318.3 ) — — — — ( 318.3 ) — Dividends in excess of retained earnings — — ( 318.3 ) 318.3 — — — — — — Redemption of Series A Preferred Stock — — — — — — — — — ( 749.7 ) Distributions to noncontrolling interests — — — — — — — ( 354.5 ) ( 354.5 ) — Contributions from noncontrolling interests — — — — — — — 26.1 26.1 — Repurchase of noncontrolling interests, net of tax — — ( 53.2 ) — — — — ( 857.9 ) ( 911.1 ) — Other comprehensive income (loss) — — — — 285.6 — — — 285.6 — Net income (loss) — — — 1,195.5 — — — 335.9 1,531.4 — Balance, December 31, 2022 226,042 0.2 3,702.3 ( 626.8 ) 54.7 11,897 ( 464.7 ) 2,316.5 4,982.2 — Compensation on equity grants — — 62.4 — — — — — 62.4 — Dividend equivalent rights — — ( 2.3 ) ( 1.6 ) — — — — ( 3.9 ) — Shares issued under compensation program 2,156 — — — — — — — — — Shares tendered for tax withholding obligations ( 716 ) — — — — 716 ( 55.8 ) — ( 55.8 ) — Repurchases of common stock ( 4,871 ) — — — — 4,871 ( 373.7 ) — ( 373.7 ) — Excise tax on repurchases of common stock — — — — — — ( 2.7 ) — ( 2.7 ) — Common stock dividends Dividends - $ 1.85 per share — — — ( 419.0 ) — — — — ( 419.0 ) — Dividends in excess of retained earnings — — ( 193.5 ) 193.5 — — — — — — Distributions to noncontrolling interests — — — — — — — ( 230.0 ) ( 230.0 ) — Contributions from noncontrolling interests — — — — — — — 9.7 9.7 — Repurchase of noncontrolling interests, net of tax — — ( 510.1 ) — — — — ( 459.3 ) ( 969.4 ) — Other comprehensive income (loss) — — — — 30.9 — — — 30.9 — Net income (loss) — — — 1,345.9 — — — 233.4 1,579.3 — Balance, December 31, 2023 222,611 $ 0.2 $ 3,058.8 $ 492.0 $ 85.6 17,484 $ ( 896.9 ) $ 1,870.3 $ 4,610.0 $ — See notes to consolidated financial statements.
Biggest changeCONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY Retained Accumulated Additional Earnings Other Treasury Total Common Stock Paid in (Accumulated Comprehensive Shares Noncontrolling Owners’ Shares Amount Capital Deficit) Income (Loss) Shares Amount Interests Equity (In millions, except shares in thousands) Balance, December 31, 2024 217,764 $ 0.2 $ 3,089.1 $ 1,190.0 $ 27.5 24,000 $ ( 1,714.4 ) $ 1,825.8 $ 4,418.2 Compensation on equity grants — — 69.5 — — — — — 69.5 Dividend equivalent rights — — — ( 3.5 ) — — — — ( 3.5 ) Shares issued under compensation program 1,006 — — — — — — — — Shares tendered for tax withholding obligations ( 343 ) — — — — 343 ( 67.3 ) — ( 67.3 ) Repurchases of common stock ( 3,765 ) — — — — 3,765 ( 641.8 ) — ( 641.8 ) Excise tax on repurchases of common stock — — — — — — ( 5.1 ) — ( 5.1 ) Common stock dividends Dividends - $ 3.75 per share — — — ( 815.1 ) — — — — ( 815.1 ) Distributions to noncontrolling interests — — — — — — — ( 20.0 ) ( 20.0 ) Repurchase of noncontrolling interests, net of tax — — ( 70.5 ) — — — — ( 1,709.2 ) ( 1,779.7 ) Other comprehensive income (loss) — — — — 86.3 — — — 86.3 Net income (loss) — — — 1,923.0 — — — 33.7 1,956.7 Balance, December 31, 2025 214,662 $ 0.2 $ 3,088.1 $ 2,294.4 $ 113.8 28,108 $ ( 2,428.6 ) $ 130.3 $ 3,198.2 See notes to consolidated financial statements.
Amounts available under the Commercial Paper Program may be issued, repaid and re-issued from time to time, with the maximum aggregate face or principal amount outstanding at any one time not to exceed $ 3.5 billion, subject to documentation requirements of the Commercial Paper Program.
Amounts available under the Commercial Paper Program may be issued, repaid and re-issued from time to time, with the maximum aggregate face or principal amount outstanding at any one time not to exceed $ 3.5 billion, subject to documentation requirements of the Commercial Paper Program.
We used the net proceeds from the issuance to repay borrowings under the Commercial Paper Program, a portion of which were incurred to repay the remaining balance under the Term Loan Facility, and for general corporate purposes.
We used a portion of the net proceeds from the issuance to repay borrowings under the Commercial Paper Program, a portion of which were incurred to repay the remaining balance under the Term Loan Facility, and for general corporate purposes.
We hedge a portion of our condensate equity volumes using crude oil hedges that are based on the NYMEX futures contracts for West Texas Intermediate light, sweet crude, which approximates the prices received for condensate.
We hedge a portion of our condensate equity volumes using crude oil hedges that are based on NYMEX futures contracts for West Texas Intermediate light, sweet crude, which approximates the prices received for condensate.
This exposes us to a market differential risk if the NYMEX futures do not move in exact parity with the sales price of our underlying condensate equity volumes. We also enter into derivative instruments to help manage other short-term commodity-related business risks and take advantage of market opportunities.
This exposes us to a market differential risk if NYMEX futures do not move in exact parity with the sales price of our underlying condensate equity volumes. We also enter into derivative instruments to help manage other short-term commodity-related business risks and take advantage of market opportunities.
The NOV and subpoena stem from inspections the EPA conducted at the compressor stations on June 15, 2023, as well as related records reviews. In October 2024, we began negotiations with the U.S.
The EPA NOV and subpoena stem from inspections the EPA conducted at the compressor stations on June 15, 2023, as well as related records reviews. In October 2024, we began negotiations with the U.S.
The revolving credit facility bears interest at the Company’s option at: (a) the Base Rate (as such term is defined in the New TRGP Revolver), which is the highest of Bank of America’s prime rate, the federal funds rate plus 0.5 % and the Term SOFR (as such term is defined in the New TRGP Revolver) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.0 % to 0.625 %, dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt is outstanding at such time, then the corporate, issuer or similar rating with respect to the Company that has been most recently announced) (the “Debt Rating”), or (b) Term SOFR (which is subject to a floor of 0.0 % and includes, for Term SOFR loans, a SOFR adjustment of plus 0.10 %) plus an applicable margin ranging from 1.00 % to 1.625 %, dependent on the Company’s Debt Rating.
The revolving credit facility bears interest at the Company’s option at: (a) the Base Rate (as such term is defined in the TRGP Revolver), which is the highest of Bank of America’s prime rate, the federal funds rate plus 0.5 % and the Term SOFR (as such term is defined in the TRGP Revolver) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.0 % to 0.625 %, dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt is outstanding at such time, then the corporate, issuer or similar rating with respect to the Company that has been most recently announced) (the “Debt Rating”), or (b) Term SOFR (which is subject to a floor of 0.0 % and includes, for Term SOFR loans, a SOFR adjustment of plus 0.10 %) plus an applicable margin ranging from 1.00 % to 1.625 %, dependent on the Company’s Debt Rating.
We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded.
We have not identified any uncertain tax positions. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material adverse effect on our financial condition, results of operations or cash flow. Therefore, no reserves for uncertain income tax positions have been recorded.
The revolving credit facility bore interest at the Company’s option at: (a) the Base Rate (as such term is defined in the Existing TRGP Revolver), which is the highest of Bank of America’s prime rate, the federal funds rate plus 0.5 % and the Term SOFR (as such term is defined in the Existing TRGP Revolver) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.125 % to 0.75 %, dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt was outstanding at such time, then the corporate, issuer or similar rating with respect to the Company that had been most recently announced) (the “Debt Rating”), or (b) Term SOFR (which included, for Term SOFR loans, a SOFR adjustment of plus 0.10 %) plus an applicable margin ranging from 1.125 % to 1.75 %, dependent on the Company’s Debt Rating.
The revolving credit facility bore interest at the Company’s option at: (a) the Base Rate (as such term is defined in the Previous TRGP Revolver), which is the highest of Bank of America’s prime rate, the federal funds rate plus 0.5 % and the Term SOFR (as such term is defined in the Previous TRGP Revolver) rate plus 1.0 % (subject in each case to a floor of 0.0 %), plus an applicable margin ranging from 0.125 % to 0.75 %, dependent on the Company’s non-credit-enhanced senior unsecured long-term debt ratings (or, if no such debt was outstanding at such time, then the corporate, issuer or similar rating with respect to the Company that had been most recently announced) (the “Debt Rating”), or (b) Term SOFR (which included, for Term SOFR loans, a SOFR adjustment of plus 0.10 %) plus an applicable margin ranging from 1.125 % to 1.75 %, dependent on the Company’s Debt Rating.
We maintain a minimum available borrowing capacity under the New TRGP Revolver equal to the aggregate amount outstanding under the Commercial Paper Program to support our issued commercial paper notes. The Commercial Paper Program is guaranteed by each subsidiary that guarantees the New TRGP Revolver. The commercial paper notes are presented in Long-term debt on our Consolidated Balance Sheets.
We maintain a minimum available borrowing capacity under the TRGP Revolver equal to the aggregate amount outstanding under the Commercial Paper Program to support our issued commercial paper notes. The Commercial Paper Program is guaranteed by each subsidiary that guarantees the TRGP Revolver. The commercial paper notes are presented in Long-term debt on our Consolidated Balance Sheets.
Earnings are allocated to common stock and participating securities based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings to the extent that each security participates in earnings. Diluted EPS includes any dilutive effect of preferred stock, unvested restricted stock, restricted stock units and performance share units.
Earnings are allocated to common stock and participating securities based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings to the extent that each security participates in earnings. Diluted EPS includes any dilutive effect of unvested restricted stock, restricted stock units and performance share units.
The New TRGP Revolver provides for a revolving credit facility in an initial aggregate principal amount up to $ 3.5 billion (with an option to increase such maximum aggregate principal amount by up to $ 500.0 million in the future, subject to the terms of the New TRGP Revolver) and a swing line sub-facility of up to $ 150.0 million.
The TRGP Revolver provides for a revolving credit facility in an initial aggregate principal amount up to $ 3.5 billion (with an option to increase such maximum aggregate principal amount by up to $ 500.0 million in the future, subject to the terms of the TRGP Revolver) and a swing line sub-facility of up to $ 150.0 million.
The New TRGP Revolver shall also be guaranteed by each existing and future direct and indirect wholly-owned subsidiary of the Company that is an obligor on or otherwise guarantees the obligations in respect of the existing notes indebtedness of Targa Resources Partners LP.
The TRGP Revolver shall also be guaranteed by each existing and future direct and indirect wholly-owned subsidiary of the Company that is an obligor on or otherwise guarantees the obligations in respect of the existing notes indebtedness of Targa Resources Partners LP.
In addition, the New TRGP Revolver contains various covenants that may limit, among other things, the Company’s ability to grant liens, merge or consolidate, and engage in transactions with affiliates and the ability of the Company’s non-guarantor subsidiaries to incur indebtedness.
In addition, the TRGP Revolver contains various covenants that may limit, among other things, the Company’s ability to grant liens, merge or consolidate, and engage in transactions with affiliates and the ability of the Company’s non-guarantor subsidiaries to incur indebtedness.
The TRGP Notes are unconditionally guaranteed by certain of our subsidiaries that guarantee the New TRGP Revolver. Each guarantee ranks equally in right of payment with all of such guarantor’s existing and future unsecured senior debt and other unsecured guarantees of senior debt.
The TRGP Notes are unconditionally guaranteed by certain of our subsidiaries that guarantee the TRGP Revolver. Each guarantee ranks equally in right of payment with all of such guarantor’s existing and future unsecured senior debt and other unsecured guarantees of senior debt.
We confirm, on a quarterly basis, that there is sufficient liquidity under the New TRGP Revolver to refinance outstanding borrowings of the Commercial Paper Program and such liquidity is not overcommitted for other anticipated uses.
We confirm, on a quarterly basis, that there is sufficient liquidity under the TRGP Revolver to refinance outstanding borrowings of the Commercial Paper Program and such liquidity is not overcommitted for other anticipated uses.
The New TRGP Revolver restricts the Company’s ability to make dividends to stockholders if an event of default (as defined in the New TRGP Revolver) exists or would result from such distribution.
The TRGP Revolver restricts the Company’s ability to make dividends to stockholders if an event of default (as defined in the TRGP Revolver) exists or would result from such distribution.
The New TRGP Revolver also contains various customary events of default, the occurrence of which could result in a termination of the lenders’ commitments and the acceleration of all of our obligations thereunder.
The TRGP Revolver also contains various customary events of default, the occurrence of which could result in a termination of the lenders’ commitments and the acceleration of all of our obligations thereunder.
Receivables are considered past due if full payment is not received by the contractual due date. Our evaluation procedures also include performing account reconciliations, dispute resolution and payment confirmation. As the financial condition of any counterparty changes, circumstances develop or additional information becomes available, adjustments to our allowance may be required.
Receivables are considered past due if full payment is not received by the contractual due date. Our evaluation procedures also include performing account reconciliations, dispute resolution and payment confirmation. F- 12 As the financial condition of any counterparty changes, circumstances develop or additional information becomes available, adjustments to our allowance may be required.
We estimate the allowance for credit losses through various procedures, including extensive review of our trade receivable balances by counterparty, assessing economic events and conditions, our historical experience with counterparties, the counterparty’s financial condition and the amount and age of past due accounts. F- 12 We continuously evaluate our ability to collect amounts owed to us.
We estimate the allowance for credit losses through various procedures, including extensive review of our trade receivable balances by counterparty, assessing economic events and conditions, our historical experience with counterparties, the counterparty’s financial condition and the amount and age of past due accounts. We continuously evaluate our ability to collect amounts owed to us.
We determine if an arrangement is or contains a lease at inception. Leases with an initial term of twelve months or less are considered short-term leases, which are excluded from the balance sheet. Right-of-use assets and lease liabilities are recognized at the F- 18 commencement date based on the present value of future lease payments over the lease term.
We determine if an arrangement is or contains a lease at inception. Leases with an initial term of twelve months or less are considered short-term leases, which are excluded from the balance sheet. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of future lease payments over the lease term.
For our 2024, 2023 and 2022 annual evaluations, we performed a qualitative assessment, which indicated that it is not more likely than not that the fair values of the Permian Midland and Permian Delaware reporting units were less than their carrying amounts, and therefore, a quantitative goodwill impairment test was not necessary.
For our 2025, 2024 and 2023 annual evaluations, we performed a qualitative assessment, which indicated that it is not more likely than not that the fair values of the Permian Midland and Permian Delaware reporting units were less than their carrying amounts, and therefore, a quantitative goodwill impairment test was not necessary.
We are evaluating the effect of the amendments on our notes to consolidated financial statements and expect to disclose the required information for fiscal years beginning in the Annual Report on Form 10-K for the year ended December 31, 2027 and for interim periods beginning in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2028.
We are evaluating the effect of the amendments on our notes to consolidated financial statements and expect to disclose the required information for fiscal years beginning in the annual report on Form 10-K for the year ending December 31, 2027 and for interim periods beginning in the quarterly report on Form 10-Q for the quarter ending March 31, 2028.
We may redeem the TRGP Notes, in whole or in part, at any time prior to the applicable par call date at a redemption price equal to the principal amount plus an applicable make-whole premium, plus accrued and unpaid interest, to the redemption date, as specified in the indenture of each series.
F- 27 We may redeem the TRGP Notes, in whole or in part, at any time prior to the applicable par call date at a redemption price equal to the principal amount plus an applicable make-whole premium, plus accrued and unpaid interest, to the redemption date, as specified in the indenture of each series.
We maintain a margin deposit with the brokers in an amount sufficient to cover the fair value of our open futures positions. The margin deposit is considered collateral, which is located within Other current assets on our Consolidated Balance Sheets and is not offset against the fair value of our derivative instruments.
We maintain a margin deposit with the brokers in an amount sufficient to cover the fair value of our open futures positions. The margin deposit is considered collateral, which is included within Other current assets on our Consolidated Balance Sheets and is not offset against the fair value of our derivative instruments.
The obligations under the New TRGP Revolver are guaranteed by Targa Resources GP LLC, Targa Energy GP LLC, Targa Resources LLC, Targa Resources Partners LP, Targa Energy LP, Targa GP Inc., Targa LP Inc., and Targa Resources Finance Corporation.
The obligations under the TRGP Revolver are guaranteed by Targa Resources GP LLC, Targa Energy GP LLC, Targa Resources LLC, Targa Resources Partners LP, Targa Energy LP, Targa GP Inc., Targa LP Inc., and Targa Resources Finance Corporation.
The 5.500 % Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Ninth Supplemental Indenture, dated as of August 9, 2024, among us, each subsidiary guarantor and U.S. Bank Trust Company, National Association, as trustee.
The 5.500 % Notes due 2035 were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Ninth Supplemental Indenture, dated as of August 9, 2024, among us, each subsidiary guarantor and U.S. Bank Trust Company, National Association, as trustee.
For the PSUs granted in 2022, 2023 and 2024, the TSR performance factor is determined by the Compensation Committee based on relative TSR over a cumulative three-year performance period. The Compensation Committee determines a guideline performance percentage for the performance period and the percentage may then be decreased or increased by the Compensation Committee at its discretion.
For the PSUs granted in 2023, 2024 and 2025, the TSR performance factor is determined by the Compensation Committee based on relative TSR over a cumulative three-year performance period. The Compensation Committee determines a guideline performance percentage for the performance period and the percentage may then be decreased or increased by the Compensation Committee at its discretion.
Note 2 — Basis of Presentation These accompanying financial statements and related notes present our consolidated financial position as of December 31, 2024 and 2023, and the results of operations, comprehensive income (loss), cash flows, and changes in owners’ equity for the years ended December 31, 2024, 2023 and 2022 .
Note 2 — Basis of Presentation These accompanying financial statements and related notes present our consolidated financial position as of December 31, 2025 and 2024, and the results of operations, comprehensive income (loss), cash flows, and changes in owners’ equity for the years ended December 31, 2025, 2024 and 2023 .
F- 26 The Company is required to pay a commitment fee equal to an applicable rate ranging from 0.10 % to 0.275 % (dependent on the Company’s Debt Rating), in each case times the actual daily unused portion of the revolving credit facility.
The Company is required to pay a commitment fee equal to an applicable rate ranging from 0.10 % to 0.275 % (dependent on the Company’s Debt Rating), in each case times the actual daily unused portion of the revolving credit facility.
In August 2024, we completed an underwritten public offering of $ 1.0 billion aggregate principal amount of our 5.500 % Senior Unsecured Notes due 2035 (the “ 5.500 % Notes”), resulting in net proceeds of approximately $ 990.1 million.
In August 2024, we completed an underwritten public offering of $ 1.0 billion aggregate principal amount of our 5.500 % Senior Unsecured Notes due 2035 (the “ 5.500 % Notes due 2035”), resulting in net proceeds of approximately $ 990.1 million.
The most noteworthy differences are: • the inclusion of the TRGP senior revolving credit facility and term loan facility; • the inclusion of the TRGP senior unsecured notes; • the inclusion of the TRGP commercial paper notes; and • the impacts of TRGP’s treatment as a corporation for U.S. federal income tax purposes.
The most noteworthy differences are: • the inclusion of the TRGP senior revolving credit facility; • the inclusion of the TRGP senior unsecured notes; • the inclusion of the TRGP commercial paper notes; and • the impacts of TRGP’s treatment as a corporation for U.S. federal income tax purposes.
F- 17 Our customers are typically billed on a monthly basis, or earlier, if final delivery and sale of commodities is made prior to month-end, and payment is typically due within 10 to 30 days .
Our customers are typically billed on a monthly basis, or earlier, if final delivery and sale of commodities is made prior to month-end, and payment is typically due within 10 to 30 days .
We used a portion of the net proceeds from the issuance to fund the Grand Prix Transaction and the remaining proceeds for general corporate purposes, including to reduce borrowings under the Existing TRGP Revolver and the Commercial Paper Program.
We used a portion of the net proceeds from the issuance to fund the Grand Prix Transaction and the remaining proceeds for general corporate purposes, including to reduce borrowings under the Previous TRGP Revolver and the Commercial Paper Program.
If our credit rating was to be downgraded one notch below investment grade by both Moody’s and S&P, as defined in our ISDAs, we estimate that as of December 31, 2024 , we would no t be required to post collateral to any counterparties and that no counterparty could request immediate, full settlement per the terms of our ISDAs.
If our credit rating was to be downgraded one notch below investment grade by both Moody’s and S&P, as defined in our ISDAs, we estimate that as of December 31, 2025 , we would no t be required to post collateral to any counterparty and that no counterparty could request immediate, full settlement per the terms of our ISDAs.
We determined the supplemental fair value disclosures for our current and long-term debt as follows: • the Existing TRGP Revolver, commercial paper notes, Securitization Facility and Term Loan Facility are based on carrying value, which approximates fair value as their interest rates are based on prevailing market rates; and • the TRGP senior unsecured notes and the Partnership’s senior unsecured notes are based on quoted market prices derived from trades of the debt.
We determined the supplemental fair value disclosures for our current and long-term debt as follows: • the TRGP Revolver, Commercial Paper Program and Securitization Facility are based on carrying value, which approximates fair value as their interest rates are based on prevailing market rates; and • the TRGP senior unsecured notes and the Partnership’s senior unsecured notes are based on quoted market prices derived from trades of the debt.
Partnership’s Senior Unsecured Notes All issues of the Partnership’s senior unsecured notes are pari passu with the Partnership’s existing and future senior indebtedness. They are senior in right of payment to any of the Partnership’s future subordinated indebtedness and are unconditionally guaranteed by the Partnership’s restricted subsidiaries.
Partnership’s Senior Unsecured Notes All series of the Partnership’s senior unsecured notes are pari passu with the Partnership’s existing and future senior indebtedness. They are senior in right of payment to any of the Partnership’s future subordinated indebtedness and are unconditionally guaranteed by the Partnership’s restricted subsidiaries.
The fair value measurements utilized for the evaluation of goodwill for impairment are based on inputs that are not observable in the market and therefore represent Level 3 inputs, as defined in Note 14 – Fair Value Measurements. These inputs require significant judgments and estimates at the time a fair value assessment is required.
The fair value measurements utilized for the evaluation of goodwill for impairment are based on inputs that are not observable in the market and therefore represent Level 3 inputs, as defined in “Note 14 – Fair Value Measurements”. These inputs require significant judgments and estimates at the time a fair value assessment is required.
The New TRGP Revolver requires the Company to maintain a Consolidated Leverage Ratio (as such term is defined in the New TRGP Revolver), determined as of the last day of each quarter for the four-fiscal quarter period ending on the date of determination, of no more than 5.50 to 1.00 .
F- 26 The TRGP Revolver requires the Company to maintain a Consolidated Leverage Ratio (as such term is defined in the TRGP Revolver), determined as of the last day of each quarter for the four-fiscal quarter period ending on the date of determination, of no more than 5.50 to 1.00 .
As of December 31, 2024, our investments in unconsolidated affiliates include the following: Gathering and Processing Segment • 50 % ownership interest in Little Missouri 4 LLC (“Little Missouri 4”).
As of December 31, 2025, our investments in unconsolidated affiliates include the following: Gathering and Processing Segment • 50 % ownership interest in Little Missouri 4 LLC (“Little Missouri 4”).
EPS is net income (loss) attributable to common shareholders less earnings allocated to participating securities divided by the sum of the weighted-average number of common shares outstanding.
F- 18 EPS is net income (loss) attributable to common shareholders less earnings allocated to participating securities divided by the sum of the weighted-average number of common shares outstanding.
TRGP’s Senior Unsecured Notes All issues of our senior unsecured notes (the “TRGP Notes”) rank pari passu with our existing and future senior indebtedness, including debt issued under the New TRGP Revolver and the Commercial Paper Program, and rank senior in right of payment to any of our future subordinated indebtedness.
TRGP’s Senior Unsecured Notes All series of our senior unsecured notes (the “TRGP Notes”) rank pari passu with our existing and future senior indebtedness, including debt issued under the TRGP Revolver and the Commercial Paper Program, and rank senior in right of payment to any of our future subordinated indebtedness.
The 5.500 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The 5.500 % Notes due 2035 are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The fair values of our derivative instruments are sensitive to changes in forward pricing on natural gas, NGLs and crude oil.
F- 36 The fair values of our derivative instruments are sensitive to changes in forward pricing on natural gas, NGLs and crude oil.
In January 2023, we completed an underwritten public offering of (i) $ 900.0 million aggregate principal amount of our 6.125 % Senior Unsecured Notes due 2033 (the “ 6.125 % Notes”) and (ii) $ 850.0 million aggregate principal amount of our 6.500 % Senior Unsecured Notes due 2053 (the “January 2023 6.500 % Notes”), resulting in net proceeds of approximately $ 1.7 billion.
Senior Unsecured Notes Issuances In January 2023, we completed an underwritten public offering of (i) $ 900.0 million aggregate principal amount of our 6.125 % Senior Unsecured Notes due 2033 (the “ 6.125 % Notes due 2033”) and (ii) $ 850.0 million aggregate principal amount of our 6.500 % Senior Unsecured Notes due 2053 (the “ 6.500 % Notes due 2053”) (collectively, the “January 2023 Senior Unsecured Notes”), resulting in net proceeds of approximately $ 1.7 billion.
We have finance leases primarily associated with our substations, compressors, tractors and vehicles. Our leases have remaining lease terms of 1 to 8 years, some of which include options to extend the lease term for up to 20 years.
We have finance leases primarily associated with our compressors, vehicles, generators, substations and tractors. Our leases have remaining lease terms of 1 to 10 years, some of which include options to extend the lease term for up to 20 years.
Existing TRGP Credit Agreement In February 2022, the Company entered into the Existing TRGP Revolver with Bank of America, N.A., as the Administrative Agent, Collateral Agent and Swing Line Lender, the Letter of Credit issuers party thereto and the lenders party thereto.
Previous TRGP Revolver In February 2022, the Company entered into the Previous TRGP Revolver with Bank of America, N.A., as the Administrative Agent, Collateral Agent and Swing Line Lender, the Letter of Credit issuers party thereto and the lenders party thereto.
We are subject to tax in the U.S. and various state jurisdictions, and we are subject to periodic audits and reviews by taxing authorities.
F- 41 We are subject to tax in the U.S. and various state jurisdictions, and we are subject to periodic audits and reviews by taxing authorities.
F- 38 Fair Value of Other Financial Instruments Due to their cash or near-cash nature, the carrying value of other financial instruments included in working capital (i.e., cash and cash equivalents, accounts receivable, accounts payable) approximates their fair value. Long-term debt is primarily the other financial instrument for which carrying value could vary significantly from fair value.
Fair Value of Other Financial Instruments Due to their cash or near-cash nature, the carrying value of other financial instruments included in working capital (i.e., cash and cash equivalents, accounts receivable, accounts payable) approximates their fair value. Debt is primarily the other financial instrument for which carrying value could vary significantly from fair value.
The 6.125 % Notes and the January 2023 6.500% Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Fifth Supplemental Indenture, dated as of January 9, 2023, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee.
The January 2023 Senior Unsecured Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Fifth Supplemental Indenture, dated as of January 9, 2023, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee.
The 2023 6.150 % Notes and the November 2023 6.500 % Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Seventh Supplemental Indenture, dated as of November 9, 2023, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee.
The November 2023 Senior Unsecured Notes were issued pursuant to the Indenture, dated as of April 6, 2022, as supplemented by that certain Seventh Supplemental Indenture, dated as of November 9, 2023, among us, such subsidiary guarantors and U.S. Bank Trust Company, National Association, as trustee.
The 6.125 % Notes and the January 2023 6.500 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The January 2023 Senior Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The 2023 6.150 % Notes and the November 2023 6.500 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The November 2023 Senior Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The amount of the redemption price in excess of the carrying amount, net of tax was $ 53.2 million, which was accounted for as a premium on repurchase of noncontrolling interests, and resulted in a reduction to Net income (loss) attributable to common shareholders.
The amount of the redemption price in excess of the carrying amount, net of tax, was $ 70.5 million, which was accounted for as a premium on repurchase of noncontrolling interests, and resulted in a reduction to Net income (loss) attributable to common shareholders.
The valuation of the acquired assets and liabilities was prepared using fair value methods and assumptions, including projections of future production volumes, commodity prices, and other cash flows, market-participant assumptions (e.g., discount rate and exit multiple), expectations regarding customer contracts and relationships, tangible asset replacement costs, and other management estimates.
The valuation of the acquired assets and liabilities was prepared using fair value methods and assumptions, including projections of future production volumes, commodity prices, and other cash flows, market-participant assumptions (e.g., discount rate and exit multiple), tangible asset replacement costs, and other management estimates.
In April 2024, we received an administrative NOV from the EPA and a request for the production of documents from the United States Attorney’s Office for North Dakota relating to alleged violations of the Clean Air Act (“CAA”), at certain Targa Badlands LLC compressor stations.
In April 2024, we received an administrative Notice of Violation (the “EPA NOV”) from the EPA and a request for the production of documents from the United States Attorney’s Office for North Dakota relating to alleged violations of the Clean Air Act (“CAA”), at certain Targa Badlands LLC compressor stations.
Dividends Preferred and common dividends declared are recorded as a reduction of retained earnings to the extent that retained earnings was available at the close of the prior quarter, with any excess recorded as a reduction of additional paid-in capital.
Dividends Common dividends declared are recorded as a reduction of retained earnings to the extent that retained earnings were available at the close of the prior quarter, with any excess recorded as a reduction of additional paid-in capital.
As described in Note 3 – Significant Accounting Policies, we evaluate goodwill for impairment at least annually on November 30, or more frequently if we believe necessary based on events or changes in circumstances.
As described in “Note 3 – Significant Accounting Policies”, we evaluate goodwill for impairment at least annually on November 30, or more frequently if we believe necessary based on events or changes in circumstances.
The Logistics and Transportation segment also includes Grand Prix, which connects our gathering and processing positions in the Permian Basin, Southern Oklahoma and North Texas with our Downstream facilities in Mont Belvieu, Texas. Our Downstream facilities are located predominantly in Mont Belvieu and Galena Park, Texas, and in Lake Charles, Louisiana.
The Logistics and Transportation segment also includes our NGL pipeline system, which connects our gathering and processing positions in the Permian Basin, Southern Oklahoma and North Texas with our Downstream facilities in Mont Belvieu, Texas. Our Downstream facilities are located predominantly in Mont Belvieu and Galena Park, Texas, and in Lake Charles, Louisiana.
The Blackcomb pipeline is designed to transport up to 2.5 Bcf/d of natural gas through approximately 365 miles of 42-inch pipeline from the Permian Basin in West Texas to the Agua Dulce area in South Texas, and is expected to be in service in the second half of 2026, pending the receipt of customary regulatory and other approvals.
The Blackcomb pipeline is designed to transport up to 2.5 Bcf/d of natural gas through approximately 365 miles of 42-inch pipeline from the Permian Basin in West Texas to the Agua Dulce area in South Texas, pending the receipt of customary regulatory and other approvals.
On July 24, 2023, we received a Notice of Violation (“NOV”) from the New Mexico Environment Department (“NMED”), Air Quality Bureau, relating to alleged air permit violations at the Red Hills gas processing facility.
F- 39 On July 24, 2023, we received a Notice of Violation (the “New Mexico NOV”) from the New Mexico Environment Department (the “NMED”), Air Quality Bureau, relating to alleged air permit violations at the Red Hills gas processing facility.
If forward pricing on natural gas, NGLs and crude oil were to increase by 10%, the result would be a fair value reflecting a net liability of $ 323.6 million. If forward pricing on natural gas, NGLs and crude oil were to decrease by 10%, the result would be a fair value reflecting a net liability of $ 20.8 million.
If forward pricing on natural gas, NGLs and crude oil were to increase by 10%, the result would be a fair value reflecting a net liability of $ 235.6 million. If forward pricing on natural gas, NGLs and crude oil were to decrease by 10%, the result would be a fair value reflecting a net asset of $ 101.8 million.
As of December 31, 2024, we have outstanding net derivative positions that contain credit-risk related contingent features that are in a net liability position of $ 138.2 million. We have not been required to post any collateral related to these positions due to our credit rating.
As of December 31, 2025, we have outstanding net derivative positions that contain credit-risk related contingent features that are in a net liability position of $ 104.1 million. We have not been required to post any collateral related to these positions due to our credit rating.
The derivatives at December 31, 2024, represent a net liability position of $ 172.2 million, and reflects the present value, adjusted for counterparty credit risk, of the amount we expect to receive or pay in the future on our derivative instruments.
The derivatives at December 31, 2025 represent a net liability position of $ 66.9 million and reflects the present value, adjusted for counterparty credit risk, of the amount we expect to receive or pay in the future on our derivative instruments.
In November 2023, we completed an underwritten public offering of (i) $ 1.0 billion aggregate principal amount of our 6.150 % Senior Unsecured Notes due 2029 (the “2023 6.150 % Notes”) and (ii) $ 1.0 billion aggregate principal amount of our 6.500 % Senior Unsecured Notes due 2034 (the “November 2023 6.500 % Notes”), resulting in net proceeds of approximately $ 2.0 billion.
F- 28 In November 2023, we completed an underwritten public offering of (i) $ 1.0 billion aggregate principal amount of our 6.150 % Senior Unsecured Notes due 2029 (the “ 6.150 % Notes due 2029”) and (ii) $ 1.0 billion aggregate principal amount of our 6.500 % Senior Unsecured Notes due 2034 (the “ 6.500 % Notes due 2034”) (collectively, the “November 2023 Senior Unsecured Notes”), resulting in net proceeds of approximately $ 2.0 billion.
As of December 31, 2024, we have $ 89.0 million of unrecognized compensation expense associated with share-based awards and an approximate remaining weighted average vesting period of 2.2 years related to our various compensation plans. The fair values of share-based awards vested in 2024, 2023 and 2022 were $ 87.2 million, $ 96.8 million and $ 93.0 million, respectively.
As of December 31, 2025, we have $ 105.2 million of unrecognized compensation expense associated with share-based awards and an approximate remaining weighted average vesting period of 2.3 years related to our various compensation plans. The fair values of share-based awards vested in 2025, 2024 and 2023 were $ 83.8 million, $ 87.2 million and $ 96.8 million, respectively.
December 31, 2024 December 31, 2023 Permian Midland $ 23.2 $ 23.2 Permian Delaware 22.0 22.0 Goodwill $ 45.2 $ 45.2 F- 23 The future cash flows and resulting fair values of these reporting units are sensitive to changes in crude oil, natural gas and NGL prices.
December 31, 2025 December 31, 2024 Permian Delaware $ 89.1 $ 22.0 Permian Midland 23.2 23.2 Goodwill $ 112.3 $ 45.2 The future cash flows and resulting fair values of these reporting units are sensitive to changes in crude oil, natural gas and NGL prices.
The 4.200 % Notes and the 4.950 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The February 2025 Senior Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
These contracts are comprised primarily of gathering and processing, fractionation, export, terminaling and storage agreements, with remaining contract terms ranging from 1 to 15 years. 2025 2026 2027 and after Fixed consideration to be recognized as of December 31, 2024 $ 442.1 $ 411.7 $ 2,045.5 Based on the optional exemptions that we elected to apply, the amounts presented in the table above exclude remaining performance obligations for (i) variable consideration for which the allocation exception is met and (ii) contracts with an original expected duration of one year or less.
These contracts are comprised primarily of gathering and processing, fractionation, export, terminaling and storage agreements, with remaining contract terms ranging from 1 to 15 years. 2026 2027 2028 and after Fixed consideration to be recognized as of December 31, 2025 $ 371.6 $ 397.0 $ 1,773.8 Based on the optional exemptions that we elected to apply, the amounts presented in the table above exclude remaining performance obligations for (i) variable consideration for which the allocation exception is met and (ii) contracts with an original expected duration of one year or less.
All Targa contributions are made 100 % in cash. We made contributions to the 401(k) plan totaling $ 35.1 million, $ 32.3 million and $ 26.6 million during the years ended December 31, 2024, 2023 and 2022 , respectively.
All Targa contributions are made 100 % in cash. We made contributions to the 401(k) plan totaling $ 39.8 million, $ 35.1 million and $ 32.3 million during the years ended December 31, 2025, 2024 and 2023 , respectively.
As of December 31, 2024, Internal Revenue Service (“IRS”) examinations are currently in process for the 2019, 2020 and 2022 taxable years of certain wholly-owned and consolidated subsidiaries that are treated as partnerships for U.S. federal income tax purposes. We F- 42 are responding to information requests from the IRS with respect to these audits.
As of December 31, 2025, examinations by the Internal Revenue Service (“IRS”) are currently in process for the 2022 taxable year of certain wholly-owned and consolidated subsidiaries that are treated as partnerships for U.S. federal income tax purposes. We are responding to information requests from the IRS with respect to these audits.
The weighted-average discount rates for operating leases and finance leases are 5.1 % and 5.0 % , respectively.
The weighted-average discount rates for operating leases and finance leases are 5.0 % and 4.9 % , respectively.
F- 43 Note 20 — S upplemental Cash Flow Information Year Ended December 31, 2024 2023 2022 Cash: Interest paid, net of capitalized interest (1) $ 712.7 $ 618.6 $ 401.3 Income taxes paid, net of refunds 16.7 8.5 1.6 Non-cash investing activities: Change in deadstock commodity inventory $ 3.7 $ ( 13.7 ) $ ( 3.8 ) Impact of net accruals on capital expenditures 221.7 58.2 60.1 Change in ARO liability and property, plant and equipment, net due to revised cash flow estimate and additions 64.1 4.9 0.8 Non-cash financing activities: Changes in accrued distributions to noncontrolling interests $ ( 3.6 ) $ 8.9 $ ( 26.1 ) Reduction of owner's equity related to accrued dividends on unvested equity awards under share compensation arrangements 3.8 3.9 7.1 Non-cash distributions to noncontrolling interests (2) — — 64.2 Lease liabilities arising from recognition of right-of-use assets: Operating lease $ 66.8 $ 53.1 $ 9.7 Finance lease (3) 59.8 104.8 220.7 (1) Interest capitalized on major projects was $ 74.8 million, $ 41.1 million and $ 16.3 million for the years ended December 31, 2024, 2023 and 2022 .
Note 20 — S upplemental Cash Flow Information Year Ended December 31, 2025 2024 2023 Cash: Interest paid, net of capitalized interest (1) $ 793.3 $ 712.7 $ 618.6 Non-cash investing activities: Change in deadstock commodity inventory $ ( 5.5 ) $ 3.7 $ ( 13.7 ) Impact of net accruals on capital expenditures 108.4 221.7 58.2 Change in ARO liability and property, plant and equipment, net due to revised cash flow estimate and additions 4.0 64.1 4.9 Contingent consideration 0.3 — — Non-cash financing activities: Changes in accrued distributions to noncontrolling interests $ ( 13.5 ) $ ( 3.6 ) $ 8.9 Reduction of owner's equity related to accrued dividends on unvested equity awards under share compensation arrangements 3.5 3.8 3.9 Changes in lease liabilities from recognition (derecognition) of right-of-use assets: Operating lease $ 15.3 $ 66.8 $ 53.1 Finance lease 127.3 59.8 104.8 (1) Interest capitalized on major projects was $ 77.3 million, $ 74.8 million and $ 41.1 million for the years ended December 31, 2025, 2024 and 2023 .
The 5.200 % Notes and the 6.250 % Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the New TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
The June 2025 Senior Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions.
We have cooperated with the NMED in identifying and correcting legacy environmental issues since our acquisition of Lucid, and we expect to continue to engage with the NMED to resolve this matter.
We have cooperated with the NMED in identifying and correcting legacy environmental issues since our acquisition of Lucid, and we expect to continue to engage with the NMED to resolve this matter and certain additional matters identified during our negotiations with the NMED.
We used a portion of the net proceeds to repay $ 1.0 billion in borrowings under the Term Loan Facility and the remaining net proceeds for general corporate purposes, including to repay borrowings under the Commercial Paper Program.
We used a portion of the net proceeds to repay $ 1.0 billion in borrowings under the $ 1.5 billion unsecured term loan facility due July 2025 (the “Term Loan Facility”) and the remaining net proceeds for general corporate purposes, including to repay borrowings under the Commercial Paper Program.
Debt Obligations Partnership’s Accounts Receivable Securitization Facility The Securitization Facility provides up to $ 600.0 million of borrowing capacity at SOFR rates plus a margin. In August 2024, the Partnership amended the Securitization Facility to, among other things, extend the termination date of the Securitization Facility to August 29, 2025 .
Debt Obligations Partnership’s Accounts Receivable Securitization Facility The Securitization Facility provides up to $ 600.0 million of borrowing capacity at SOFR rates plus a margin. On July 28, 2025, the Partnership amended the Securitization Facility to, among other things, extend the termination date of the Securitization Facility to August 31, 2026 .
Location of Gain (Loss) Gain (Loss) Recognized in Income on Derivatives Derivatives Not Designated Recognized in Income on Year Ended December 31, as Hedging Instruments Derivatives 2024 2023 2022 Commodity contracts Revenue $ ( 313.2 ) $ 287.7 $ ( 381.7 ) See Note 14 – Fair Value Measurements and Note 22 – Segment Information for additional disclosures related to derivative instruments and hedging activities.
Location of Gain (Loss) Gain (Loss) Recognized in Income on Derivatives Derivatives Not Designated Recognized in Income on Year Ended December 31, as Hedging Instruments Derivatives 2025 2024 2023 Commodity contracts Revenue $ ( 251.2 ) $ ( 313.2 ) $ 287.7 See “Note 14 – Fair Value Measurements” and “Note 22 – Segment Information” for additional disclosures related to derivative instruments and hedging activities.
The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs, as defined in Note 14 – Fair Value Measurements. These inputs require judgments and estimates at the time of a fair value assessment is required.
The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs, as defined in “Note 14 – Fair Value Measurements”. These inputs require judgments and estimates at the time of valuation.
In July 2024, our Board of Directors approved a new share repurchase program (the “2024 Share Repurchase Program” and, together with the 2023 Share Repurchase Program, the “Share Repurchase Programs”) for the repurchase of up to $ 1.0 billion of our outstanding common stock.
In addition, in August 2025, our Board of Directors approved a new share repurchase program (the “2025 Share Repurchase Program” and, together with the 2024 Share Repurchase Program, the “Share Repurchase Programs”) for the repurchase of up to $ 1.0 billion of our outstanding common stock.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

101 edited+18 added−55 removed220 unchanged
Biggest changeAny decrease in supplies of natural gas, NGLs or crude oil could adversely affect our business and operating results. • Our industry is highly competitive and increased competitive pressure could adversely affect our business and operating results. • We operate in areas of high industry activity, which may affect our ability to hire, train or retain qualified personnel needed to manage and operate our business. • If third-party pipelines and other facilities interconnected to our natural gas and crude oil gathering systems, terminals and processing facilities or to our NGL pipelines, fractionators and storage facilities become partially or fully unavailable to transport natural gas, NGLs and crude oil, our revenues could be adversely affected. • We typically do not obtain independent evaluations of natural gas or crude oil reserves dedicated to our gathering pipeline systems; therefore, volumes on our systems in the future could be less than we anticipate. • We do not own most of the land on which our pipelines, terminals and compression facilities are located, which could disrupt our operations. • If we lose any of our named executive officers, our business may be adversely affected. • Weather events may damage our pipelines and other facilities, limit our ability or increase the costs to operate our business and adversely impact our customers on whom we rely on for throughput as well as third party vendors from whom we receive goods, which developments could cause us to incur significant costs and adversely affect our business, results of operations and financial condition. • Our business involves many hazards and operational risks, some of which may not be insured or fully covered by insurance.
Biggest changeAny decrease in supplies of natural gas, NGLs or crude oil could adversely affect our business and operating results. • Our industry is highly competitive and increased competitive pressure could adversely affect our business and operating results. • Our business is highly competitive, which may affect our ability to hire, train or retain officers and employees needed to manage and operate our business. • If third-party pipelines and other facilities interconnected to our natural gas and crude oil gathering systems, terminals and processing facilities or to our NGL pipelines, fractionators and storage facilities become partially or fully unavailable to transport natural gas, NGLs and crude oil, our revenues could be adversely affected. • We do not own most of the land on which our pipelines, terminals and compression facilities are located, which could disrupt our operations. • Weather events may damage our assets, limit our ability or increase the costs to operate our business and adversely impact our customers on whom we rely on for throughput as well as third party vendors from whom we receive goods, which developments could cause us to incur significant costs and adversely affect our business, results of operations and financial condition. • Our business involves many hazards and operational risks, some of which may not be insured or fully covered by insurance.
A reduction in demand for NGL products, whether because of general or industry-specific economic conditions, government 28 regulations, global competition, reduced demand by consumers for products made with NGL products (for example, reduced petrochemical demand observed due to lower activity in the automobile and construction industries), reduced demand for propane or butane exports whether for price or other reasons, increased competition from petroleum-based feedstocks due to pricing differences, mild winter weather for some NGL applications or other reasons, could result in a decline in the volume of NGL products we handle or reduce the fees we charge for our services.
A reduction in demand for NGL products, whether because of general or industry-specific economic conditions, government regulations, global competition, reduced demand by consumers for products made with NGL products (for example, reduced petrochemical demand observed due to lower activity in the automobile and construction industries), reduced demand for propane or butane exports whether for price or other reasons, increased competition from petroleum-based feedstocks due to pricing differences, mild winter weather for some NGL applications or other reasons, could result in a decline in the volume of NGL products we handle or reduce the fees we charge for our services.
Any growth project or acquisition involves potential risks, including, among other things: • operating a significantly larger combined organization and adding new or expanded operations; • difficulties in the assimilation of the assets and operations of the growth projects or acquired businesses, especially if the assets developed or acquired are in a new business segment and/or geographic area; • the risk that crude oil and natural gas reserves expected to support the acquired assets may not be of the anticipated magnitude or may not be developed as anticipated; • the failure to realize expected volumes, revenues, profitability or growth; • the failure to realize any expected synergies and cost savings; • coordinating geographically disparate organizations, systems and facilities; • the assumption of environmental and other unknown liabilities; • limitations on rights to indemnity from the seller in an acquisition or the contractors and suppliers in growth projects; • the failure to attain or maintain compliance with environmental and other governmental regulations; 35 • inaccurate assumptions about the overall costs of equity or debt or the tightening of capital markets and access to new capital; • the diversion of management’s and employees’ attention from other business concerns; • challenges associated with joint venture relationships and minority investments, including dependence on joint venture partners, controlling shareholders or management who may have business interests, strategies or goals that are inconsistent with ours; and • customer or key employee losses at the acquired businesses or to a competitor.
Any growth project or acquisition involves potential risks, including, among other things: • operating a significantly larger combined organization and adding new or expanded operations; • difficulties in the assimilation of the assets and operations of the growth projects or acquired businesses, especially if the assets developed or acquired are in a new business segment and/or geographic area; • the risk that crude oil and natural gas reserves expected to support the acquired assets may not be of the anticipated magnitude or may not be developed as anticipated; • the failure to realize expected volumes, revenues, profitability or growth or any expected synergies and cost savings; • coordinating geographically disparate organizations, systems and facilities; • the assumption of environmental and other unknown liabilities; • limitations on rights to indemnity from the seller in an acquisition or the contractors and suppliers in growth projects; 36 • the failure to attain or maintain compliance with environmental and other governmental regulations; • inaccurate assumptions about the overall costs of equity or debt or the tightening of capital markets and access to new capital; • the diversion of management’s and employees’ attention from other business concerns; • challenges associated with joint venture relationships and minority investments, including dependence on joint venture partners, controlling shareholders or management who may have business interests, strategies or goals that are inconsistent with ours; and • customer or key employee losses at the acquired businesses or to a competitor.
Our insurance coverages may not be sufficient to cover all the losses we may experience as a result of a cyber incident. The widespread outbreak of illnesses or any other public health crises that impacts operations and/or the global demand for energy commodities may have material adverse effects on our business, financial position, results of operations and/or cash flows.
Our insurance coverages may not be sufficient to cover all the losses we may experience as a result of a cyber incident. 35 The widespread outbreak of illnesses or any other public health crises that impacts operations and/or the global demand for energy commodities may have material adverse effects on our business, financial position, results of operations and/or cash flows.
If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing 41 or delaying business activities, investments or capital expenditures, acquisitions, selling assets, restructuring or refinancing debt, or seeking additional equity capital, and such results may adversely affect our ability to make cash dividends.
If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing or delaying business activities, investments or capital expenditures, acquisitions, selling assets, restructuring or refinancing debt, or seeking additional equity capital, and such results may adversely affect our ability to make cash dividends.
Additionally, in April 2024, the BLM finalized a rule that would limit flaring from well sites on federal lands, as well as require an operator to submit a waste minimization plan or a self-certification statement committing the operator to capturing 100% of the gas produced from a well and pay royalties on lost gas as part of the permit application process.
In April 2024, the BLM finalized a rule that would limit flaring from well sites on federal lands, as well as require an operator to submit a waste minimization plan or a self-certification statement committing the operator to capturing 100% of the gas produced from a well and pay royalties on lost gas as part of the permit application process.
Additionally, there is uncertainty about the trade policies of the new Presidential administration, particularly when pertaining to treaties, tariffs and other limitations on international trade. We may experience increases in operating costs as a result of such policies. Higher oil and natural gas prices may cause the costs of materials and services to continue to rise.
Additionally, there is uncertainty about the trade policies of the new Presidential administration, particularly when pertaining to treaties, tariffs and other limitations on international trade. We may experience increases in operating costs as a result of such policies. 38 Higher oil and natural gas prices may cause the costs of materials and services to continue to rise.
Quantitative and Qualitative Disclosures About Market Risk.” A reduction in demand for NGL products by the petrochemical, refinery or other industries or by the fuel or export markets, or a significant increase in NGL product supply relative to this demand, could materially adversely affect our business, results of operations and financial condition.
Quantitative and Qualitative Disclosures About Market Risk.” 29 A reduction in demand for NGL products by the petrochemical, refinery or other industries or by the fuel or export markets, or a significant increase in NGL product supply relative to this demand, could materially adversely affect our business, results of operations and financial condition.
If a significant accident or event occurs for which we are not fully insured, if we fail to recover all anticipated insurance proceeds for significant accidents or events for which we are insured, or if we fail to rebuild facilities damaged by such accidents or events, our operations and financial results could be adversely affected. • Unexpected volume changes due to production variability or to gathering, plant or pipeline system disruptions may increase our exposure to commodity price movements. • Portions of our pipeline systems may require increased expenditures for maintenance and repair owing to the age of some of our systems, which expenditures or resulting loss of revenue due to pipeline age or condition could have a material adverse effect on our business and results of operations. • Terrorist attacks and the threat of terrorist attacks have resulted in increased costs to our business.
If a significant accident or event occurs for which we are not fully insured, if we fail to recover all anticipated insurance proceeds for significant accidents or events for which we are insured, or if we fail to rebuild facilities damaged by such accidents or events, our operations and financial results could be adversely affected. • Unexpected volume changes due to production variability or to gathering, plant or pipeline system disruptions may increase our exposure to commodity price movements. • Portions of our pipeline systems may require increased expenditures for maintenance and repair owing to the age of some of our systems, which expenditures or resulting loss of revenue due to pipeline age or condition which could have an adverse effect on our business and results of operations. • Terrorist attacks and the threat of terrorist attacks have resulted in increased costs to our business.
Attention to climate change, for example, may result in demand 44 shifts for our or our customers’ hydrocarbon products and additional governmental investigations and private litigation against us or those customers. As part of our ongoing effort to enhance our sustainability practices, our Board of Directors has established a Sustainability Committee.
Attention to climate change, for example, may result in demand shifts for our or our customers’ hydrocarbon products and additional governmental investigations and private litigation against us or those customers. As part of our ongoing effort to enhance our sustainability practices, our Board of Directors has established a Sustainability Committee.
The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For 40 example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions.
The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions.
Many of our customers and suppliers may be subject to similar expectations and challenges, which may augment or create additional risks, including risks that may not be known to us. 45 We could incur significant costs in complying with more stringent occupational safety and health requirements.
Many of our customers and suppliers may be subject to similar expectations and challenges, which may augment or create additional risks, including risks that may not be known to us. We could incur significant costs in complying with more stringent occupational safety and health requirements.
Additionally, the federal Tenth Circuit Court of Appeals has held that tribal 30 ownership of even a very small fractional interest in an allotted land, that is, tribal land owned or at one time owned by an individual Indian landowner, bars condemnation of any interest in the allotment.
Additionally, the federal Tenth Circuit Court of Appeals has held that tribal ownership of even a very small fractional interest in an allotted land, that is, tribal land owned or at one time owned by an individual Indian landowner, bars condemnation of any interest in the allotment.
Finally, the percentage of our expected equity commodity volumes that are hedged decreases substantially over time. • If we fail to balance our purchases and sales of the commodities we handle, our exposure to commodity price risk will increase. • The amounts we pay in dividends may vary from anticipated amounts and circumstances may arise that lead to conflicts between using funds to pay anticipated dividends or to invest in our business. • Our future tax liability may be greater than expected if our NOL carryforwards are limited, we do not generate expected deductions, tax authorities successfully challenge certain of our tax positions or from changes in tax laws. • Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes may adversely affect our financial condition, results of operations and cash flows. • Derivatives legislation and its implementing regulations could have a material adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.
Finally, the percentage of our expected equity commodity volumes that are hedged decreases substantially over time. • If we fail to balance our purchases and sales of the commodities we handle, our exposure to commodity price risk will increase. • The amounts we pay in dividends may vary from anticipated amounts and circumstances may arise that lead to conflicts between using funds to pay anticipated dividends or for other uses in our business. • Our future tax liability may be greater than expected if our NOL carryforwards are limited, we do not generate expected deductions, tax authorities successfully challenge certain of our tax positions or from changes in tax laws. • Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes may adversely affect our financial condition, results of operations and cash flows. • Derivatives legislation and its implementing regulations could have a material adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.
In addition, we may not achieve the expected results of any acquisitions and any adverse conditions or developments related to such acquisitions may have a negative impact on our operations and financial condition. • We may be unable to cause our joint ventures to take or not to take certain actions unless some or all of our joint venture participants agree. 26 Risks Related to our Financial Condition • If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
In addition, we may not achieve the expected results of any acquisitions and any adverse conditions or developments related to such acquisitions may have a negative impact on our operations and financial condition. • We may be unable to cause our joint ventures to take or not to take certain actions unless some or all of our joint venture participants agree. 27 Risks Related to our Financial Condition • If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
We have not experienced a material impediment to, and do not expect these regulations to materially impede, our hedging activity at this time. 39 The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing and the associated rules also will require us, in connection with covered derivative activities, to comply with clearing and trade-execution requirements or take steps to qualify for an exemption to such requirements.
We have not experienced a material impediment to, and do not expect these regulations to materially impede, our hedging activity at this time. 40 The CFTC has designated certain interest rate swaps and credit default swaps for mandatory clearing and the associated rules also will require us, in connection with covered derivative activities, to comply with clearing and trade-execution requirements or take steps to qualify for an exemption to such requirements.
Risks Related to Regulatory Matters • Our and our customers’ operations are subject to a number of risks arising out of the threat of climate change, including the potential for increasingly stringent regulations for methane and other GHG emissions from the oil and gas sector, that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, reduce demand for the products and services we provide, and reduce our or our customers’ ability to access capital. • Stakeholder and market attention to sustainability matters and disclosure obligations may impact our business. • We could incur significant costs in complying with more stringent occupational safety and health requirements. • State laws and regulations limiting hydraulic fracturing activities could result in restrictions, delays or cancellations in drilling and completing new oil and natural gas wells by our customers, which could adversely impact our revenues by decreasing the volumes of natural gas, NGLs or crude oil through our facilities and reducing the utilization of our assets. • Our operations are subject to environmental laws and regulations and a failure to comply or an accidental release into the environment may cause us to incur significant costs and liabilities. • A change in the jurisdictional characterization of some of our assets by federal, state, tribal or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may (i) cause our revenues to decline and operating expenses to increase or (ii) delay or increase the cost of expansion projects. • Should we fail to comply with all applicable FERC-administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines. • We are subject to cybersecurity and data privacy laws and regulations, and we may become subject to litigation and directives relating to our processing of personal information. 27 Risks Related to our Results of Operations Our cash flow is affected by supply and demand for natural gas, NGL products and crude oil and by natural gas, NGL, crude oil and condensate prices, and decreases in commodity prices and/or activity levels could adversely affect our results of operations and financial condition.
Risks Related to Regulatory Matters • Our and our customers’ operations are subject to a number of risks related to the potential threat of climate change, including evolving regulations for methane and other GHG emissions from the oil and gas sector, that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, reduce demand for the products and services we provide, and reduce our or our customers’ ability to access capital. • Stakeholder and market attention to sustainability matters may impact the disclosure obligations of our business. • We could incur significant costs in complying with more stringent occupational safety and health requirements. • State laws and regulations limiting hydraulic fracturing activities could result in restrictions, delays or cancellations in drilling and completing new oil and natural gas wells by our customers, which could adversely impact our revenues by decreasing the volumes of natural gas, NGLs or crude oil through our facilities and reducing the utilization of our assets. • Our operations are subject to environmental laws and regulations and a failure to comply or an accidental release into the environment may cause us to incur significant costs and liabilities. • A change in the jurisdictional characterization of some of our assets by federal, state, tribal or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may (i) cause our revenues to decline and operating expenses to increase or (ii) delay or increase the cost of expansion projects. • Should we fail to comply with all applicable FERC-administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines. • We are subject to cybersecurity and data privacy laws and regulations, and we may become subject to litigation and directives relating to our processing of personal information. 28 Risks Related to our Results of Operations Our cash flow is affected by supply and demand for natural gas, NGL products and crude oil and by natural gas, NGL, crude oil and condensate prices, and decreases in commodity prices and/or activity levels could adversely affect our results of operations and financial condition.
Stakeholder and market attention to sustainability matters and disclosure obligations may impact our business. Companies across industries face scrutiny from a variety of stakeholders related to their sustainability practices.
Stakeholder and market attention to sustainability matters may impact the disclosure obligations of our business. Companies across industries face scrutiny from a variety of stakeholders related to their sustainability practices.
Among other things, these regulations require operators of covered pipelines to: • perform ongoing assessments of pipeline integrity; • identify and characterize applicable threats to pipeline segments that could impact an HCA, MCA or Class 3 or 4 area; • maintain processes for data collection, integration and analysis; • repair and remediate pipelines as necessary; and 33 • implement preventive and mitigating actions.
Among other things, these regulations require operators of covered pipelines to: • perform ongoing assessments of pipeline integrity; • identify and characterize applicable threats to pipeline segments that could impact an HCA, MCA or Class 3 or 4 area; • maintain processes for data collection, integration and analysis; 34 • repair and remediate pipelines as necessary; and • implement preventive and mitigating actions.
Any failure by us, or a company we acquire, to comply with such laws and regulations could result in reputational harm, loss of goodwill, penalties, liabilities, remediation costs, or mandated changes in our business practices. Each has the potential to materially impact our financial condition. 49 Item 1B. Unresolve d Staff Comments None.
Any failure by us, or a company we acquire, to comply with such laws and regulations could result in reputational harm, loss of goodwill, penalties, liabilities, remediation costs, or mandated changes in our business practices. Each has the potential to materially impact our financial condition. 48 Item 1B. Unresolve d Staff Comments None.
Any future downgrades in our credit ratings could negatively impact our cost of raising capital, and a downgrade could also adversely affect our ability to effectively execute aspects of our strategy and to access capital in the public markets. Our International Swaps and Derivatives Association agreements (“ISDAs”) contain credit-risk related contingent features.
Any future downgrades in our credit ratings could negatively impact our cost and terms of raising capital, and a downgrade could also adversely affect our ability to effectively execute aspects of our strategy and to access capital in the public markets. 42 Our International Swaps and Derivatives Association agreements (“ISDAs”) contain credit-risk related contingent features.
If our credit rating was to be downgraded one notch below investment grade by both Moody’s and S&P, as defined in our ISDAs, we estimate that as of December 31, 2024, we would not be required to post collateral to any counterparties per the terms of our ISDAs.
If our credit rating was to be downgraded one notch below investment grade by both Moody’s and S&P, as defined in our ISDAs, we estimate that as of December 31, 2025, we would not be required to post collateral to any counterparties per the terms of our ISDAs.
The New TRGP Revolver provides an available commitment of $3.5 billion, with a requirement to maintain a minimum available borrowing capacity equal to the aggregate amount outstanding under our Commercial Paper Program, and allows us to request increases in commitments up to an additional $500.0 million.
The TRGP Revolver provides an available commitment of $3.5 billion, with a requirement to maintain a minimum available borrowing capacity equal to the aggregate amount outstanding under the Commercial Paper Program, and allows us to request increases in commitments up to an additional $500.0 million.
As of December 31, 2024, certain of our and the Partnership’s debt were at variable interest rates. As a result of the variable interest rates on our debt, our results of operations could be adversely affected by increases in interest rates, due to associated Federal Reserve policies or otherwise. See “Item 7A.
As of December 31, 2025, certain of our and the Partnership’s debt were at variable interest rates. As a result of the variable interest rates on our debt, our results of operations could be adversely affected by increases in interest rates, due to associated Federal Reserve policies or otherwise. See “Item 7A.
In addition, potential changes in accounting standards might cause us to revise our financial results and disclosure in the future. • We are exposed to credit risks of our customers, and any material nonpayment or nonperformance by our key customers could adversely affect our cash flow and results of operations. • Inflationary issues and associated changes in monetary policy have resulted in and may result in additional increases to the cost of our goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise. • Changes in future business conditions could have a negative impact on the demand for our services and could cause recorded long-lived assets to become further impaired, and our financial condition and results of operations could suffer if there is a negative impact on the demand for our services and an additional impairment of long-lived assets. • Our hedging activities may not be effective in reducing the variability of our cash flows and may, in certain circumstances, increase the variability of our cash flows.
In addition, potential changes in accounting standards might cause us to revise our financial results and disclosure in the future. • We are exposed to credit risks of our customers, and any material nonpayment or nonperformance by our key customers could adversely affect our cash flow and results of operations. • Inflation and changes in monetary policy may result in increases to the cost of our goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise. • Changes in future business conditions could have a negative impact on the demand for our services and could cause recorded long-lived assets to become further impaired, and our financial condition and results of operations could suffer if there is a negative impact on the demand for our services and an additional impairment of long-lived assets. • Our hedging activities may not be effective in reducing the variability of our cash flows and may, in certain circumstances, increase the variability of our cash flows.
These damages could result in leakage, migration, releases or spills from our operations to surface or subsurface soils, surface water, groundwater or to the Gulf of Mexico and could result in liability, remedial obligations or otherwise have a negative impact on continued operations.
These damages could result in leakage, migration, releases or spills from our operations to surface or subsurface soils, surface water, groundwater or to the Gulf of America and could result in liability, remedial obligations or otherwise have a negative impact on continued operations.
We published our 2023 Sustainability Report, which provides updates on our performance related to certain sustainability topics and sets certain sustainability goals, such as reductions in methane intensity in line with the ONE Future goals. While we may elect to seek out various additional voluntary sustainability targets now or in the future, such targets are often aspirational.
We published our 2024 Sustainability Report, which provides updates on our performance related to certain sustainability topics and certain sustainability goals, such as reductions in methane intensity in line with the ONE Future goals. While we may elect to seek out various additional voluntary sustainability targets now or in the future, such targets are often aspirational.
We attempt to balance sales with volumes supplied from processing operations, but unexpected volume variations due to production variability or to gathering, plant or pipeline system disruptions may expose us to volume imbalances, which, in conjunction with movements in commodity prices, could materially impact our income from operations and cash flow. 32 Portions of our pipeline systems may require increased expenditures for maintenance and repair owing to the age of some of our systems, which expenditures or resulting loss of revenue due to pipeline age or condition could have a material adverse effect on our business and results of operations.
We attempt to balance sales with volumes supplied from processing operations, but unexpected volume variations due to production variability or to gathering, plant or pipeline system disruptions may expose us to volume imbalances, which, in conjunction with movements in commodity prices, could materially impact our income from operations and cash flow. 33 Portions of our pipeline systems may require increased expenditures for maintenance and repair owing to the age of some of our systems, which expenditures or resulting loss of revenue due to pipeline age or condition which could have an adverse effect on our business and results of operations.
For further discussion, please see Weather events may damage our pipelines and other facilities, limit our ability or increase the costs to operate our business and adversely impact our customers on whom we rely on for throughput as well as third party vendors from whom we receive goods, which developments could cause us to incur significant costs and adversely affect our business, results of operations and financial condition .
For further discussion, please see Weather events may damage our assets, limit our ability or increase the costs to operate our business and adversely impact our customers on whom we rely on for throughput as well as third party vendors from whom we receive goods, which developments could cause us to incur significant costs and adversely affect our business, results of operations and financial condition .
Our long-term unsecured debt is currently rated by Fitch, Moody’s and S&P. As of December 31, 2024, Targa’s senior unsecured debt was rated “BBB” by Fitch, “Baa2” by Moody’s and “BBB” by S&P.
Our long-term unsecured debt is currently rated by Fitch, Moody’s and S&P. As of December 31, 2025, Targa’s senior unsecured debt was rated “BBB” by Fitch, “Baa2” by Moody’s and “BBB” by S&P.
Public statements with respect to sustainability matters, such as emissions reduction goals, other environmental targets, or other commitments addressing certain social issues, such as diversity initiatives, are becoming increasingly subject to heightened scrutiny from public and governmental authorities related to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential sustainability benefits.
Certain public statements with respect to sustainability matters, such as emissions reduction goals, other environmental targets, or other commitments addressing certain social issues are becoming increasingly subject to heightened scrutiny from public and governmental authorities, as well as other parties, related to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential sustainability benefits.
Weather events may damage our pipelines and other facilities, limit our ability or increase the costs to operate our business and adversely impact our customers on whom we rely on for throughput as well as third party vendors from whom we receive goods, which developments could cause us to incur significant costs and adversely affect our business, results of operations and financial condition.
Weather events may damage our assets, limit our ability or increase the costs to operate our business and adversely impact our customers on whom we rely on for throughput as well as third party vendors from whom we receive goods, which developments could cause us to incur significant costs and adversely affect our business, results of operations and financial condition.
Department of the Treasury and the IRS are expected to release regulations and additional interpretive guidance relating to such legislation, and any significant variance from our current interpretation could result in a change in our analysis of the application of the CAMT to us.
In the future, the U.S. Department of the Treasury and the IRS are expected to release regulations and additional interpretive guidance relating to such legislation, and any significant variance from our current interpretation could result in a change in our analysis of the application of the CAMT to us.
If our purchases and sales are not balanced, we will face increased exposure to commodity price risks and could have increased volatility in our operating income. The amounts we pay in dividends may vary from anticipated amounts and circumstances may arise that lead to conflicts between using funds to pay anticipated dividends or to invest in our business.
If our purchases and sales are not balanced, we will face increased exposure to commodity price risks and could have increased volatility in our operating income. The amounts we pay in dividends may vary from anticipated amounts and circumstances may arise that lead to conflicts between using funds to pay anticipated dividends or for other uses in our business.
The operating and financial restrictions and covenants in these debt agreements and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities. 42 Risks Related to Regulatory Matters Our and our customers’ operations are subject to a number of risks arising out of the threat of climate change, including the potential for increasingly stringent regulations for methane and other GHG emissions from the oil and gas sector, that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, reduce demand for the products and services we provide, and reduce our or our customers’ ability to access capital.
The operating and financial restrictions and covenants in these debt agreements and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities. 43 Risks Related to Regulatory Matters Our and our customers’ operations are subject to a number of risks related to the potential threat of climate change, including evolving regulations for methane and other GHG emissions from the oil and gas sector, that could result in increased operating costs, limit the areas in which oil and natural gas production may occur, reduce demand for the products and services we provide, and reduce our or our customers’ ability to access capital.
In addition, FERC has civil penalty authority under the ICA to impose penalties for violations under the ICA up to a maximum amount that is adjusted annually for inflation, which for 2025 was up to approximately $16,590 per violation per day, and failure to comply with the ICA and regulations implementing the ICA could subject us to civil penalty liability.
In addition, FERC has civil penalty authority under the ICA to impose penalties for violations under the ICA up to a maximum amount that is adjusted annually for inflation, which for 2026 was up to approximately $16,590 (which amount may be updated for inflation in 2026) per violation per day, and failure to comply with the ICA and regulations implementing the ICA could subject us to civil penalty liability.
If we are unable to develop accretive growth projects or make accretive acquisitions because we are unable to (i) develop growth projects economically or identify attractive acquisition candidates and negotiate acceptable acquisition agreements, (ii) obtain financing for these projects or acquisitions on economically acceptable terms, or (iii) compete successfully for growth projects or acquisitions, then our future growth and ability to return increasing capital to our shareholders may be limited.
If we are unable to develop accretive growth projects or make accretive acquisitions because we are unable to (i) develop growth projects economically or identify attractive acquisition candidates and negotiate acceptable acquisition agreements, (ii) obtain financing for these projects or acquisitions on economically acceptable terms, or (iii) compete successfully for growth projects or acquisitions, then our future growth may be limited.
Under the EP Act of 2005, FERC has civil penalty authority under the NGA and NGPA to impose penalties for violations of the NGA or NGPA up to a maximum amount that is adjusted annually for inflation, which for 2025 equals approximately $1.6 million per violation per day, as well as authority to order disgorgement of profits associated with any violation.
Under the EP Act of 2005, FERC has civil penalty authority under the NGA and NGPA to impose penalties for violations of the NGA or NGPA up to a maximum amount that is adjusted annually for inflation, which for 2026 equals approximately $1.6 million (which amount may be updated for inflation in 2026) per violation per day, as well as authority to order disgorgement of profits associated with any violation.
While our systems other than the Driver Residue Pipeline, TPL SouthTex Transmission Company LP, TPL SouthTex Pipeline Company LLC, Midland-Permian Pipeline LLC, Delaware-Permian Pipeline LLC, and Targa SouthTex Mustang Transmission Ltd., have not been regulated by FERC under the NGA or NGPA, FERC has adopted regulations that may subject certain of our otherwise non-FERC jurisdictional facilities to FERC annual reporting and daily scheduled flow and capacity posting requirements.
While our systems other than the Driver Residue Pipeline, TPL SouthTex Transmission Company LP, TPL SouthTex Pipeline Company LLC, Buffalo Run Pipeline LLC, Bull Run Pipeline LLC, Targa SouthTex Mustang Transmission Ltd., and Forza Pipeline LLC have not been regulated by FERC under the NGA or NGPA, FERC has adopted regulations that may subject certain of our otherwise non-FERC jurisdictional facilities to FERC annual reporting and daily scheduled flow and capacity posting requirements.
For example, the SEC has recently taken enforcement action against companies for ESG-related misconduct, including alleged greenwashing. Certain non-governmental organizations and other private actors have also filed lawsuits under various securities and consumer protection laws alleging that certain sustainability statements, goals, or standards were misleading, false, or otherwise deceptive.
For example, the SEC has taken enforcement action against companies for sustainability-related misconduct, including alleged greenwashing. Regulators, such as the SEC and various state agencies, as well as non-governmental organizations and other private actors have also filed lawsuits under various securities and consumer protection laws alleging that certain sustainability statements, goals, or standards were misleading, false, or otherwise deceptive.
With the exception of the Driver Residue Pipeline, TPL SouthTex Transmission Company LP, Midland-Permian Pipeline LLC, Delaware-Permian Pipeline LLC, and Targa SouthTex Mustang Transmission Ltd., which are each subject to FERC regulation under the NGPA or limited FERC regulation under the NGA, our natural gas pipeline operations are generally exempt from FERC regulation, but FERC regulation still affects our non-FERC jurisdictional businesses and the markets for products derived from these businesses, including certain FERC reporting and posting requirements in a given year.
With the exception of the Driver Residue Pipeline, TPL SouthTex Transmission Company LP, Buffalo Run Pipeline LLC, Bull Run Pipeline LLC, and Targa SouthTex Mustang Transmission Ltd., which are each subject to FERC regulation under the NGPA or limited FERC regulation under the NGA, and Forza Pipeline LLC which will be subject to FERC jurisdiction under the NGA, our natural gas pipeline operations are generally exempt from FERC regulation, but FERC regulation still affects our non-FERC jurisdictional businesses and the markets for products derived from these businesses, including certain FERC reporting and posting requirements in a given year.
The risk of incurring environmental costs and liabilities in connection with our operations is significant due to our handling of natural gas, NGLs, crude oil and other petroleum products, because of air emissions and product-related discharges arising out of our operations, and as a result of historical industry operations and waste disposal practices.
Business—Regulation of Operations, Environmental and Occupational Health and Safety Matters.” 46 The risk of incurring environmental costs and liabilities in connection with our operations is significant due to our handling of natural gas, NGLs, crude oil and other petroleum products, because of air emissions and product-related discharges arising out of our operations, and as a result of historical industry operations and waste disposal practices.
The classification of some of our gathering facilities, transportation pipelines, and purchase and sale transactions as FERC-jurisdictional or non-jurisdictional may be subject to change based on future determinations by FERC, the courts or Congress, in which case, our operating costs could increase and we could be subject to enforcement actions under the EP Act of 2005.
Such a change in the jurisdictional status of transportation on these pipelines could adversely affect our results of operations. 47 The classification of some of our gathering facilities, transportation pipelines, and purchase and sale transactions as FERC-jurisdictional or non-jurisdictional may be subject to change based on future determinations by FERC, the courts or Congress, in which case, our operating costs could increase and we could be subject to enforcement actions under the EP Act of 2005.
In response to President Biden’s executive order calling on the EPA to revisit federal regulations regarding methane, the EPA finalized more stringent methane rules for new, modified, and reconstructed facilities, known as OOOOb, as well as standards for existing sources known as OOOOc, in December 2023. Fines and penalties for violations of these rules can be substantial.
In response to President Biden’s executive order calling on the EPA to revisit federal regulations regarding methane, the EPA finalized more stringent methane rules for new, modified, and reconstructed facilities, known as OOOOb, as well as standards for existing sources known as OOOOc, in December 2023.
In addition, any acquisitions we complete are subject to substantial risks that could adversely affect our financial condition and results of operations and reduce our ability to pay dividends to stockholders.
In addition, any acquisitions we complete are subject to substantial risks that could adversely affect our financial condition and results of operations.
As of December 31, 2024, we have outstanding net derivative positions that contain credit-risk related contingent features that are in a net liability position of $138.2 million. Our derivative positions are unsecured.
As of December 31, 2025, we have outstanding net derivative positions that contain credit-risk related contingent features that are in a net liability position of $104.1 million. Our derivative positions are unsecured.
Institutional investors who provide financing to fossil fuel energy companies have been attentive to sustainability lending, requesting additional action relating to the management of GHG emissions, and some of them may elect not to provide funding for fossil fuel energy companies.
Institutional investors who provide financing to fossil fuel energy companies have been attentive to sustainability lending, requesting additional action relating to the management of GHG emissions, and some of them may elect not to provide funding for fossil fuel energy companies, although this trend has waned in recent times.
The implementation of the final rule, results of the litigation and any further expansion of the scope of the Clean Water Act’s jurisdiction in areas where we or our customers conduct operations, could lead to delays, restrictions or cessation of the development of projects, result in longer permitting timelines, or increased compliance expenditures or mitigation costs for our and our oil and natural gas customers’ operations, which may reduce the rate of production of natural gas or crude oil from operators with whom we have a business relationship and, in turn, have a material adverse effect on our business, results of operations and cash flows.
To the extent any judicial ruling or administrative rulemaking or other action further changes the scope of the Clean Water Act’s jurisdiction in areas where we or our customers conduct operations, we could face increased delays, restrictions or cessation of the development of projects, longer permitting timelines, or increased compliance expenditures or mitigation costs for our and our oil and natural gas customers’ operations, which may reduce the rate of production of natural gas or crude oil from operators with whom we have a business relationship and, in turn, have a material adverse effect on our business, results of operations and cash flows.
A reduction in divestitures of energy assets by industry participants or a decrease in opportunities for industry expansion could limit our opportunities for future growth projects or acquisitions and could adversely affect our operations and cash flows available to pay cash dividends to our stockholders.
A reduction in divestitures of energy assets by industry participants or a decrease in opportunities for industry expansion could limit our opportunities for future growth projects or acquisitions and could adversely affect our operations.
These enhancements require a significant commitment of resources, 36 personnel and the development and maintenance of formalized internal reporting procedures to ensure the reliability of our financial reporting.
We continue to enhance our internal controls and financial reporting capabilities. These enhancements require a significant commitment of resources, personnel and the development and maintenance of formalized internal reporting procedures to ensure the reliability of our financial reporting.
While implementing rules on certain of these laws are outstanding, both the California laws and the SEC rule, to the extent implemented, may result in increased legal, accounting and financial compliance costs for us and our suppliers and customers to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors.
To the extent implemented, laws such as these or similar laws may result in increased legal, accounting and financial compliance costs for us and our suppliers and customers to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors.
Any loss of rights with respect to our real property, through our inability to renew rights of way contracts or leases, or otherwise, could cause us to cease operations on the affected land, increase costs related to continuing operations elsewhere and reduce our revenue. If we lose any of our named executive officers, our business may be adversely affected.
Any loss of rights with respect to our real property, through our inability to renew rights of way contracts or leases, or otherwise, could cause us to cease operations on the affected land, increase costs related to continuing operations elsewhere and reduce our revenue.
A breach of any of these covenants could result in an event of default under our debt agreements. Upon the occurrence of such an event of default, all amounts outstanding under the applicable debt agreements could be declared to be immediately due and payable and all applicable commitments to extend further credit could be terminated.
Upon the occurrence of such an event of default, all amounts outstanding under the applicable debt agreements could be declared to be immediately due and payable and all applicable commitments to extend further credit could be terminated.
Delaware law prohibits us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who beneficially owns more than 15% of our stock cannot acquire us for a period of three years from the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction by our board of directors.
Delaware law prohibits us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who beneficially owns more than 15% of our stock cannot acquire us for a period of three years from the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction by our board of directors. 41 We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.
As a result, we may incur significant costs to repair, preserve or make more efficient our pipeline infrastructure and other facilities. Such costs could adversely affect our business, financial condition, results of operations and cash flows. Moreover, we could incur significant costs to weatherize or upgrade weatherization of our facility equipment in anticipation of future weather events.
Moreover, we could incur significant costs to weatherize or upgrade weatherization of our facility equipment in anticipation of future weather events. As a result, we may incur significant costs to repair, preserve or make more efficient our pipeline infrastructure and other facilities.
In addition, we have no control over producers or their drilling, completion or production decisions, which are affected by, among other things, prevailing and projected energy prices, demand for hydrocarbons, the level of reserves, geological considerations, governmental regulations, the availability of drilling rigs, other production and development costs and the availability and cost of capital. 29 Fluctuations in energy prices can greatly affect production rates and investments by third parties in the development of new oil and natural gas reserves.
In addition, we have no control over producers or their drilling, completion or production decisions, which are affected by, among other things, prevailing and projected energy prices, demand for hydrocarbons, the level of reserves, geological considerations, governmental regulations, the availability of drilling rigs, other production and development costs and the availability and cost of capital.
Increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods, rising sea levels and other extreme weather events, as well as chronic shifts in temperature and precipitation patterns.
We may also face increased litigation risks related to disclosures made pursuant to these requirements. Increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods, rising sea levels and other extreme weather events, as well as chronic shifts in temperature and precipitation patterns.
Additionally, in August 2022, the IRA was signed into law, which appropriates significant federal funding for renewable energy initiatives and amends the CAA to impose a first-time fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories.
In August 2022, the IRA was signed into law, which amended the CAA to impose a first-time fee on the emission of excess methane above statutory methane emissions thresholds from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production and gathering and boosting source categories.
Other administrations may issue executive orders that are more favorable to the development and consumption of hydrocarbons. Regulations may be focused on addressing climate change and may impact the costs to produce, or demand for, oil and gas.
The use of executive orders in the United States to advance political objectives of Presidential administrations increases regulatory uncertainty for us. Other administrations may issue executive orders that are more favorable to the development and consumption of hydrocarbons. Regulations may be focused on addressing climate change and may impact the costs to produce, or demand for, oil and gas.
We face risks related to major public health crises that are outside of our control and could significantly disrupt our operations and demand for our services, which could adversely affect our financial condition. 34 Risks Related to our Capital Projects and Future Growth Our expansion or modification of existing assets or the construction of new assets may not result in revenue increases and are subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our results of operations and financial condition.
Risks Related to our Capital Projects and Future Growth Our expansion or modification of existing assets or the construction of new assets may not result in revenue increases and are subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our results of operations and financial condition.
We operate in areas of high industry activity, which may affect our ability to hire, train or retain qualified personnel needed to manage and operate our business. We operate in areas in which industry activity has increased rapidly.
Our business is highly competitive, which may affect our ability to hire, train or retain officers and employees needed to manage and operate our business. We operate in areas in which industry activity has increased rapidly.
For example, an accidental release from one of our facilities could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury, natural resource and property damages and fines or penalties for related violations of environmental laws or regulations. 46 Moreover, stricter laws, regulations or enforcement policies could significantly increase our operational or compliance costs and the cost of any remediation that may become necessary.
For example, an accidental release from one of our facilities could subject us to substantial liabilities arising from environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury, natural resource and property damages and fines or penalties for related violations of environmental laws or regulations.
The agreements governing our outstanding indebtedness contain, and any future indebtedness we incur will likely contain, a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our ability to engage in acts that may be in our best long-term interests, such as: • incur or guarantee additional indebtedness or issue additional preferred stock; • pay dividends on our equity securities or to our equity holders or redeem, repurchase or retire our equity securities or subordinated indebtedness; • make investments and certain acquisitions; • sell or transfer assets, including equity securities of our subsidiaries; • engage in affiliate transactions; • consolidate or merge; • incur liens; • prepay, redeem and repurchase certain debt, subject to certain exceptions; • enter into sale and lease-back transactions or take-or-pay contracts; and • change business activities conducted by us.
The agreements governing our outstanding indebtedness contain, and any future indebtedness we incur will likely contain, a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our ability to engage in acts that may be in our best long-term interests, such as: • incur or guarantee additional indebtedness; • pay dividends on our equity securities or to our equity holders or redeem, repurchase or retire our equity securities or subordinated indebtedness during an event of default; • sell or transfer substantially all of our assets or certain accounts receivables of Targa Receivables LLC; • engage in affiliate transactions; • consolidate or merge; • incur liens; and • change business activities conducted by us.
We cannot predict our future cash tax payments and tax liabilities given the recent change in Presidential administrations. Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes may adversely affect our financial condition, results of operations and cash flows.
Changes in tax laws or the interpretation thereof or the imposition of new or increased taxes may adversely affect our financial condition, results of operations and cash flows.
We may also issue additional shares of common stock or convertible securities. As of December 31, 2024, we had 217,763,821 outstanding shares of common stock.
We may also issue additional shares of common stock or convertible securities. As of December 31, 2025, we had 214,662,156 outstanding shares of common stock.
Any material reduction in the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration, development, production, transportation, and processing activities, which could impact our and our suppliers’ and customers’ businesses and operations.
Any material reduction in the capital available to the fossil fuel industry could make it more difficult to secure funding for exploration, development, production, transportation, and processing activities, which could impact our and our suppliers’ and customers’ businesses and operations. In October 2023, the State of California adopted several laws that require disclosure of various climate risks, targets, and metrics.
If any of these third-party facilities become partially or fully unavailable, or if the quality specifications for their facilities change so as to restrict our ability to utilize them, our revenues could be adversely affected.
If any of these third-party facilities become partially or fully unavailable, or if the quality specifications for their facilities change so as to restrict our ability to utilize them, our revenues could be adversely affected. We do not own most of the land on which our pipelines, terminals and compression facilities are located, which could disrupt our operations.
We cannot predict any future trends in the rate of inflation and U.S. international trade policies, or any resultant changes in monetary policy, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher prices and revenues, and/or higher interest rates would negatively impact our business, financial condition and results of operations. 37 Changes in future business conditions could have a negative impact on the demand for our services and could cause recorded long-lived assets to become further impaired, and our financial condition and results of operations could suffer if there is a negative impact on the demand for our services and an additional impairment of long-lived assets .
We cannot predict any future trends in the rate of inflation and U.S. international trade policies, or any resultant changes in monetary policy, and a significant increase in inflation, to the extent we are unable to recover higher costs through higher prices and revenues, and/or higher interest rates would negatively impact our business, financial condition and results of operations.
We may be unable to obtain or renew such rights of way to connect new natural gas and crude oil supplies to our existing gathering lines or capitalize on other attractive expansion opportunities. Additionally, it may become more expensive for us to obtain new rights of way or to renew existing rights of way.
In addition, the construction of additions to our existing gathering and transportation assets may require us to obtain new rights of way prior to constructing new pipelines. We may be unable to obtain or renew such rights of way to connect new natural gas and crude oil supplies to our existing gathering lines or capitalize on other attractive expansion opportunities.
The jurisdictions in which we operate (including the United States) have laws governing how we must respond to a cyber incident that results in the unauthorized access, disclosure, or loss of personal information. Additionally, laws and regulations governing data privacy and unauthorized disclosure of personal information and imposing certain cybersecurity-related requirements pose increasingly complex compliance challenges.
We are subject to cybersecurity and data privacy laws and regulations, and we may become subject to litigation and directives relating to our processing of personal information. The jurisdictions in which we operate (including the United States) have laws governing how we must respond to a cyber incident that results in the unauthorized access, disclosure, or loss of personal information.
Effective internal controls are necessary for us to provide timely and reliable financial reports and effectively prevent fraud. If we cannot provide timely and reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We continue to enhance our internal controls and financial reporting capabilities.
In addition, potential changes in accounting standards might cause us to revise our financial results and disclosure in the future. Effective internal controls are necessary for us to provide timely and reliable financial reports and effectively prevent fraud. If we cannot provide timely and reliable financial reports or prevent fraud, our reputation and operating results would be harmed.
Additionally, as events present themselves or become reasonably foreseeable, our board of directors, which determines our business strategy and our dividends, may decide to address those matters by utilizing capital that may otherwise be used for our dividend.
Many of these matters are affected by factors beyond our control and therefore, the actual amount of cash that is available for dividends to our stockholders may vary from anticipated amounts. 39 Additionally, as events present themselves or become reasonably foreseeable, our board of directors, which determines our business strategy and our dividends, may decide to address those matters by utilizing capital that may otherwise be used for our dividend.
If we fail to, or are perceived to fail to, comply with or advance certain sustainability initiatives (including the timeline and manner in which we complete such initiatives), we may be subject to various adverse impacts, including reputational damage and potential stakeholder engagement and/or litigation, even if such initiatives are currently voluntary.
If we fail to, or are perceived to fail to, comply with or advance certain sustainability initiatives (including the timeline and manner in which we complete such initiatives), we may be subject to various adverse impacts, including reputational damage and potential stakeholder engagement and/or litigation, even if such initiatives are currently voluntary. 45 In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings and proxy voting recommendation processes for evaluating companies on their approach to sustainability matters.
If the cost of renewing or obtaining new rights of way increases, our cash flows could be adversely affected.
Additionally, it may become more expensive for us to obtain new rights of way or to renew existing rights of way. If the cost of renewing or obtaining new rights of way increases, our cash flows could be adversely affected.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to sustainability matters. Additionally, we and other companies in our industry publish sustainability reports that are made available to investors. Such ratings and reports are used by some investors to inform their investment and voting decisions.
Additionally, we and other companies in our industry publish sustainability reports that are made available to investors. Such ratings, proxy advisory services, and reports are used by some investors to inform their investment and voting decisions.
Moreover, our competitors may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer.
Moreover, our competitors may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer. In addition, there is substantial competition for experienced supervisory and managerial personnel in the midstream industry.
Any reduced demand or increased supply for ethane, propane, normal butane, isobutane or natural gasoline in the markets we access for any of the reasons stated above could adversely affect both demand for the services we provide and NGL prices, which could negatively impact our results of operations and financial condition.
Any reduced demand or increased supply for ethane, propane, normal butane, isobutane or natural gasoline in the markets we access for any of the reasons stated above could adversely affect both demand for the services we provide and NGL prices, which could negatively impact our results of operations and financial condition. 30 The natural decline in production in our operating regions and in other regions from which we source NGL supplies means our long-term success depends on our ability to obtain new sources of supplies of natural gas, NGLs and crude oil, which depends on certain factors beyond our control.
Additionally, from time to time, certain stockholders and bondholders currently invested in fossil fuel energy companies but concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors.
Should we be targeted by such litigation, involvement in such a case could have adverse financial and reputational impacts and an unfavorable ruling could significantly impact our operations and adversely impact our financial condition. 44 Additionally, from time to time, certain stockholders and bondholders currently invested in fossil fuel energy companies but concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors.
As of December 31, 2024, we have U.S. federal NOL carryforwards of $4.7 billion, which do not expire under current tax laws. Subject to the CAMT discussed below, we expect to be able to utilize these NOL carryforwards and generate deductions to offset all or a portion of our future taxable income.
Subject to the CAMT discussed below, we expect to be able to utilize these NOL carryforwards and generate deductions to offset all or a portion of our future taxable income.
Although the rate of inflation has generally declined since the second half of 2022, inflationary pressures remain volatile and have resulted in and may result in additional increases to the costs of our goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise. Sustained levels of high inflation likewise caused the U.S.
Inflationary pressures have been volatile and have resulted in and may result in additional increases to the costs of our goods, services and personnel, which in turn cause our capital expenditures and operating costs to rise.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs a result, security awareness and training are provided to employees and contractors with access to our facilities or systems. We focus on increasing employee awareness of phishing attempts and train employees to be aware of cyber risks. We recognize that cybersecurity risks continue to emerge and evolve.
Biggest changeWe focus on increasing employee awareness of phishing attempts and train employees to be aware of cyber risks. We recognize that cybersecurity risks continue to emerge and evolve. Assessment and enhancement of our security posture in predicting and responding to the changing threat landscape are core goals of our cybersecurity program.
We continue to make investments in new technologies to protect our facilities, users, and stakeholders, and to protect the personally identifiable information we maintain. 50 Board of Directors’ Oversight of Risks from Cybersecurity Risks Cybersecurity risks are overseen at the board level through the Audit Committee.
We continue to make investments in new technologies to protect our facilities, users, and stakeholders, and to protect the personally identifiable information we maintain. 49 Board of Directors’ Oversight of Risks from Cybersecurity Risks Cybersecurity risks are overseen at the board level through the Audit Committee.
Assessment and enhancement of our security posture in predicting and responding to the changing threat landscape are core goals of our cybersecurity program. Targa maintains relationships with various cybersecurity industry subject matter experts, governmental agencies, law enforcement research and benchmarking organizations, and industry peers as part of our effort to improve our program based on threat information and available countermeasures.
Targa maintains relationships with various cybersecurity industry subject matter experts, governmental agencies, law enforcement research and benchmarking organizations, and industry peers as part of our effort to improve our program based on threat information and available countermeasures.
The Company has a cybersecurity program, which uses technology and processes to help mitigate cybersecurity risks, with our Security Operations team working to monitor, assess, identify, and respond to potential cybersecurity incidents that threaten the Company. The program also focuses on security awareness and training for employees and contractors with access to Company facilities or systems.
The Company has a cybersecurity program, which uses technology and processes to help mitigate cybersecurity risks, with our Security Operations team working to monitor, assess, identify, and respond to potential cybersecurity incidents that threaten the Company.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAdditional information required for this item is provided in Note 17 – Contingencies, under the heading “Legal Proceedings” included in the Notes to Consolidated Financial Statements included under Part II, Item 8 of this Annual Report, which is incorporated by reference into this item. Item 4. Mine Saf ety Disclosures Not applicable. 52 PART II
Biggest changeItem 3. Legal Proceedings The information required for this item is provided in “Note 17 – Contingencies,” under the heading “Legal Proceedings” included in the Notes to Consolidated Financial Statements included under Part II, Item 8 of this Annual Report, which is incorporated by reference into this item. Item 4. Mine Saf ety Disclosures Not applicable. 50 PART II
Removed
Item 3. Legal Proceedings On December 26, 2018, Vitol Americas Corp. (“Vitol”) filed a lawsuit in the 80th District Court of Harris County (the “District Court”), Texas against Targa Channelview LLC, then a subsidiary of the Company (“Targa Channelview”), seeking recovery of $129.0 million in payments made to Targa Channelview, additional monetary damages, attorneys’ fees and costs.
Removed
Vitol alleged that Targa Channelview breached an agreement, dated December 27, 2015, for crude oil and condensate between Targa Channelview and Noble Americas Corp. (the “Splitter Agreement”), which provided for Targa Channelview to construct a crude oil and condensate splitter (the “Splitter”) adjacent to a barge dock owned by Targa Channelview to provide services contemplated by the Splitter Agreement.
Removed
In January 2018, Vitol acquired Noble Americas Corp. and on December 23, 2018, Vitol voluntarily elected to terminate the Splitter Agreement claiming that Targa Channelview failed to timely achieve start-up of the Splitter.
Removed
Vitol’s lawsuit also alleged Targa Channelview made a series of misrepresentations about the capability of the barge dock that would service crude oil and condensate volumes to be processed by the Splitter and Splitter products. Vitol sought return of $129.0 million in payments made to Targa Channelview prior to the start-up of the Splitter, as well as additional damages.
Removed
On the same date that Vitol filed its lawsuit, Targa Channelview filed a lawsuit against Vitol seeking a judicial determination that Vitol’s sole and exclusive remedy was Vitol’s voluntarily termination of the Splitter Agreement and, as a result, Vitol was not entitled to the return of any prior payments under the Splitter Agreement or other damages as alleged.
Removed
Targa also sought recovery of its attorneys’ fees and costs in the lawsuit. 51 On October 15, 2020, the District Court awarded Vitol $129.0 million (plus interest) following a bench trial. In addition, the District Court awarded Vitol $10.5 million in damages for losses and demurrage on crude oil that Vitol purchased for start-up efforts.
Removed
The Company appealed the award in the Fourteenth Court of Appeals in Houston, Texas. In October 2020, we sold Targa Channelview, but under the agreements governing the sale, we retained the liabilities associated with the Vitol proceedings.
Removed
On September 13, 2022, the Fourteenth Court of Appeals upheld the trial court’s judgment in part with regard to the return of Vitol’s prior payments, but modified the judgment to delete Vitol’s ability to recover any damages related to losses or demurrage on crude oil.
Removed
We filed a petition for review with the Supreme Court of Texas which was denied on October 20, 2023. We then filed a petition for rehearing with the Supreme Court of Texas, which was denied on April 19, 2024.
Removed
On April 26, 2024, as a result of the final determination of Targa’s appeal to the Texas Supreme Court related to the Splitter Agreement, we made a cash payment of $184.8 million which included cumulative interest on the award of $55.8 million to Vitol in satisfaction of the Texas state court judgment.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRepurchase of Equity by Targa Resources Corp, or Affiliated Purchasers Period Total number of shares purchased (1) Average price per share Total number of shares purchased as part of publicly announced plans (2) Maximum approximate dollar value of shares that may yet be purchased under the plan (in thousands) (2) October 1, 2024 - October 31, 2024 325,129 $ 156.30 306,520 $ 1,075,390 November 1, 2024 - November 30, 2024 181,192 $ 200.06 179,702 $ 1,039,389 December 1, 2024 - December 31, 2024 124,610 $ 192.82 124,461 $ 1,015,387 _________________________________ (1) Includes 610,683 shares purchased under our 2023 Share Repurchase Program, as well as 20,248 shares that were withheld by us to satisfy tax withholding obligations of certain of our officers, directors and key employees that arose upon the lapse of restrictions on restricted stock.
Biggest changeRepurchase of Equity by Targa Resources Corp, or Affiliated Purchasers Period Total number of shares purchased (1) Average price per share Total number of shares purchased as part of publicly announced plans (2) Maximum approximate dollar value of shares that may yet be purchased under the plan (in thousands) (2) October 1, 2025 - October 31, 2025 246,867 $ 163.41 226,987 $ 1,373,581 November 1, 2025 - November 30, 2025 1,408 $ 154.04 — $ 1,373,581 December 1, 2025 - December 31, 2025 — $ — — $ 1,373,581 _________________________________ (1) Includes 226,987 shares purchased under our 2024 Share Repurchase Program, as well as 21,288 shares that were withheld by us to satisfy tax withholding obligations of certain of our officers, directors and key employees that arose upon the lapse of restrictions on restricted stock.
Stock Performance Graph The graph below compares the cumulative total return to holders of Targa Resources Corp.’s common stock, the Standard & Poor's 500 Stock Index (“S&P 500”) and the Alerian US Midstream Energy Index (“AMUS”) during the period beginning on December 31, 2019 and ending on December 31, 2024.
Stock Performance Graph The graph below compares the cumulative total return to holders of Targa Resources Corp.’s common stock, the Standard & Poor's 500 Stock Index (“S&P 500”) and the Alerian US Midstream Energy Index (“AMUS”) during the period beginning on December 31, 2020 and ending on December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the symbol “TRGP.” As of December 31, 2024, there were 154 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the symbol “TRGP.” As of December 31, 2025, there were 136 stockholders of record of our common stock.
Covenants contained in our debt agreements could limit the payment of dividends. For a discussion of restrictions on our and our subsidiaries’ ability to pay dividends or make distributions, please see Note 8 – Debt Obligations in our Consolidated Financial Statements.
Covenants contained in our debt agreements could limit the payment of dividends. For a discussion of restrictions on our and our subsidiaries’ ability to pay dividends or make distributions, please see “Note 8 – Debt Obligations” to our Consolidated Financial Statements.
Recent Sales of Unregistered Equity Securities There were no sales of unregistered equity securities for the year ended December 31, 2024.
Recent Sales of Unregistered Equity Securities There were no sales of unregistered equity securities for the year ended December 31, 2025.
In July 2024, our Board of Directors approved the 2024 Share Repurchase Program for the repurchase of up to $1.0 billion of our outstanding common stock. We are not obligated to repurchase any specific dollar amount or number of shares under the Share Repurchase Programs and may discontinue these programs at any time. Item 6. Reserved 54
In addition, in August 2025, our Board of Directors approved the 2025 Share Repurchase Program for the repurchase of up to $1.0 billion of our outstanding common stock. We are not obligated to repurchase any specific dollar amount or number of shares under the Share Repurchase Programs and may discontinue these programs at any time. Item 6. Reserved 52
This number does not include stockholders whose shares are held in trust by other entities. The actual number of stockholders is greater than the number of holders of record. As of February 14, 2025, there were 218,106,765 shares of common stock outstanding.
This number does not include stockholders whose shares are held in trust by other entities. The actual number of stockholders is greater than the number of holders of record. As of February 13, 2026, there were 214,951,798 shares of common stock outstanding.
See Note 21 – Compensation Plans for a discussion of our compensation plans. (2) In May 2023, our Board of Directors approved the 2023 Share Repurchase Program for the repurchase of up to $1.0 billion of our outstanding common stock.
See “Note 21 – Compensation Plans” to our Consolidated Financial Statements for a discussion of our compensation plans. (2) In July 2024, our Board of Directors approved the 2024 Share Repurchase Program for the repurchase of up to $1.0 billion of our outstanding common stock.
Year Ended December 31, 2019 2020 2021 2022 2023 2024 Targa Resources Corp. $ 100.00 $ 67.30 $ 134.60 $ 193.25 $ 233.78 $ 490.51 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 AMUS Index $ 100.00 $ 75.04 $ 108.82 $ 140.99 $ 168.00 $ 253.25 53 Pursuant to Instruction 7 to Item 201(e) of Regulation S-K, the above stock performance graph and related information is being furnished and is not being filed with the SEC, and as such shall not be deemed to be incorporated by reference into any filing that incorporates this Annual Report by reference.
Year Ended December 31, 2020 2021 2022 2023 2024 2025 Targa Resources Corp. $ 100.00 $ 200.01 $ 287.16 $ 347.40 $ 728.89 $ 769.90 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 AMUS Index $ 100.00 $ 145.02 $ 187.88 $ 223.87 $ 337.47 $ 346.67 51 Pursuant to Instruction 7 to Item 201(e) of Regulation S-K, the above stock performance graph and related information is being furnished and is not being filed with the SEC, and as such shall not be deemed to be incorporated by reference into any filing that incorporates this Annual Report by reference.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations—By Reportable Segment Our operating margins by reportable segment are: Gathering and Processing Logistics and Transportation Other (In millions) Year Ended: December 31, 2024 $ 2,312.4 $ 2,355.1 $ (164.6 ) December 31, 2023 2,082.2 1,948.7 275.5 Gathering and Processing Segment Year Ended December 31, 2024 2023 2024 vs. 2023 (In millions, except operating statistics and price amounts) Operating margin $ 2,312.4 $ 2,082.2 $ 230.2 11 % Operating expenses 814.6 746.6 68.0 9 % Adjusted operating margin $ 3,127.0 $ 2,828.8 $ 298.2 11 % Operating statistics (1): Plant natural gas inlet, MMcf/d (2) (3) Permian Midland (4) 2,933.1 2,535.2 397.9 16 % Permian Delaware 2,837.3 2,526.5 310.8 12 % Total Permian 5,770.4 5,061.7 708.7 14 % SouthTX 325.9 367.4 (41.5 ) (11 %) North Texas 186.9 205.9 (19.0 ) (9 %) SouthOK (5) 351.7 385.0 (33.3 ) (9 %) WestOK 212.8 207.1 5.7 3 % Total Central 1,077.3 1,165.4 (88.1 ) (8 %) Badlands (5) (6) 136.3 130.0 6.3 5 % Total Field 6,984.0 6,357.1 626.9 10 % Coastal 449.6 541.1 (91.5 ) (17 %) Total 7,433.6 6,898.2 535.4 8 % NGL production, MBbl/d (3) Permian Midland (4) 428.4 367.7 60.7 17 % Permian Delaware 359.9 321.6 38.3 12 % Total Permian 788.3 689.3 99.0 14 % SouthTX (5) 32.8 40.9 (8.1 ) (20 %) North Texas 22.6 24.0 (1.4 ) (6 %) SouthOK (5) 35.0 43.1 (8.1 ) (19 %) WestOK 15.1 12.5 2.6 21 % Total Central 105.5 120.5 (15.0 ) (12 %) Badlands (5) 16.6 15.5 1.1 7 % Total Field 910.4 825.3 85.1 10 % Coastal 35.8 39.2 (3.4 ) (9 %) Total 946.2 864.5 81.7 9 % Crude oil, Badlands, MBbl/d 106.6 105.5 1.1 1 % Crude oil, Permian, MBbl/d 27.9 27.4 0.5 2 % Natural gas sales, BBtu/d (3) 2,780.5 2,685.8 94.7 4 % NGL sales, MBbl/d (3) 558.2 495.8 62.4 13 % Condensate sales, MBbl/d 19.3 18.5 0.8 4 % Average realized prices (7): Natural gas, $/MMBtu 0.67 1.94 (1.27 ) (65 %) NGL, $/gal 0.46 0.46 — — Condensate, $/Bbl 73.35 74.35 (1.00 ) (1 %) (1) Segment operating statistics include the effect of intersegment amounts, which have been eliminated from the consolidated presentation.
Biggest changeResults of Operations—By Reportable Segment The following table presents our operating margins by reportable segment: Gathering and Processing Logistics and Transportation Other (In millions) Year Ended: December 31, 2025 $ 2,439.2 $ 2,788.3 $ (5.3 ) December 31, 2024 2,312.4 2,355.1 (164.6 ) Gathering and Processing Segment Year Ended December 31, 2025 2024 2025 vs. 2024 (In millions, except operating statistics and price amounts) Operating margin $ 2,439.2 $ 2,312.4 $ 126.8 5 % Operating expenses 907.0 814.6 92.4 11 % Adjusted operating margin $ 3,346.2 $ 3,127.0 $ 219.2 7 % Operating statistics (1): Plant natural gas inlet, MMcf/d (2) (3) Permian Midland (4) 3,146.0 2,933.1 212.9 7 % Permian Delaware 3,245.4 2,837.3 408.1 14 % Total Permian 6,391.4 5,770.4 621.0 11 % Central (5) 1,055.4 1,077.3 (21.9 ) (2 %) Badlands (5) (6) 130.3 136.3 (6.0 ) (4 %) Coastal 439.1 449.6 (10.5 ) (2 %) Total 8,016.2 7,433.6 582.6 8 % NGL production, MBbl/d (3) Permian Midland (4) 461.2 428.4 32.8 8 % Permian Delaware 419.4 359.9 59.5 17 % Total Permian 880.6 788.3 92.3 12 % Central (5) 111.5 105.5 6.0 6 % Badlands (5) 16.3 16.6 (0.3 ) (2 %) Coastal 34.7 35.8 (1.1 ) (3 %) Total 1,043.1 946.2 96.9 10 % Crude oil gathered, MBbl/d 116.5 134.5 (18.0 ) (13 %) Natural gas sales, BBtu/d (3) 2,826.1 2,780.5 45.6 2 % NGL sales, MBbl/d (3) 615.8 558.2 57.6 10 % Condensate sales, MBbl/d 19.3 19.3 — — Average realized prices (7): Natural gas, $/MMBtu 1.17 0.67 0.50 75 % NGL, $/gal 0.42 0.46 (0.04 ) (9 %) Condensate, $/Bbl 66.23 73.35 (7.12 ) (10 %) (1) Segment operating statistics include the effect of intersegment amounts, which have been eliminated from the consolidated presentation.
This is achieved by connecting new wells and adding new volumes in existing areas of production, as well as by capturing crude oil and natural gas supplies currently gathered by third parties.
This is achieved by connecting new wells and adding new volumes in existing areas of production, as well as by capturing natural gas and crude oil supplies currently gathered by third parties.
For additional discussion on recent factors impacting our liquidity and capital resources, see “Recent Developments.” Short-term Liquidity Our principal sources of short-term liquidity consist of internally generated cash flow, borrowings available under the New TRGP Revolver, as well as our right to request additional commitment increases under the New TRGP Revolver, our Commercial Paper Program, the Securitization Facility, proceeds from debt and equity offerings, and joint ventures and/or asset sales.
For additional discussion on recent factors impacting our liquidity and capital resources, see “Recent Developments.” Short-term Liquidity Our principal sources of short-term liquidity consist of internally generated cash flow, borrowings available under the TRGP Revolver, as well as our right to request additional commitment increases under the TRGP Revolver, the Commercial Paper Program, the Securitization Facility, proceeds from debt and equity offerings, and joint ventures and/or asset sales.
Other potential capital resources associated with our existing arrangements include our right to request an additional $500.0 million in commitment increases under the New TRGP Revolver, subject to the terms therein. The New TRGP Revolver matures on February 18, 2030. The maturity date is extendable, subject to the lenders’ consent, by one year up to two times.
Other potential capital resources associated with our existing arrangements include our right to request an additional $500.0 million in commitment increases under the TRGP Revolver, subject to the terms therein. The TRGP Revolver matures on February 18, 2030. The maturity date is extendable, subject to the lenders’ consent, by one year up to two times.
Such calls, repurchases, exchanges or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. To date, our debt balances and our subsidiaries’ debt balances have not adversely affected our operations, ability to grow or ability to repay or refinance indebtedness.
Such calls, repurchases, exchanges or redemptions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. 63 To date, our debt balances and our subsidiaries’ debt balances have not adversely affected our operations, ability to grow or ability to repay or refinance indebtedness.
We determine the fair value of our derivative instruments using 69 present value methods or standard option valuation models with assumptions about commodity prices based on those observed in underlying markets. Changes in the methods or assumptions we use to calculate the fair value of our derivative instruments could have a material effect on our consolidated financial statements.
We determine the fair value of our derivative instruments using present value methods or standard option valuation models with assumptions about commodity prices based on those observed in underlying markets. Changes in the methods or assumptions we use to calculate the fair value of our derivative instruments could have a material effect on our consolidated financial statements.
Our contract portfolio, the prevailing pricing environment for crude oil, natural gas and NGLs, the impact of our commodity hedging program and its ability to mitigate exposure to commodity price movements, and the volumes of crude oil, natural gas and NGL throughput on our systems are important factors in determining our profitability.
Our contract portfolio, the prevailing pricing environment for natural gas, NGLs and crude oil, the impact of our commodity hedging program and its ability to mitigate exposure to commodity price movements, and the volumes of natural gas, NGLs and crude oil throughput on our systems are important factors in determining our profitability.
The majority of our debt is fixed rate borrowings; however, we have some exposure to the risk of changes in interest rates, primarily as a result of the variable rate borrowings under the New TRGP Revolver, the Securitization Facility, and the Commercial Paper Program.
The majority of our debt is fixed rate borrowings; however, we have some exposure to the risk of changes in interest rates, primarily as a result of the variable rate borrowings under the TRGP Revolver, Securitization Facility, and Commercial Paper Program.
This information is tracked through our processing plants and Downstream Business facilities to determine customer settlements for sales and volume related fees for service and helps us increase efficiency and reduce fuel consumption. 57 As part of monitoring the efficiency of our operations, we measure the difference between the volume of natural gas received at the wellhead or central delivery points on our gathering systems and the volume received at the inlet of our processing plants as an indicator of fuel consumption and line loss.
This information is tracked through our processing plants and Downstream Business facilities to determine customer settlements for sales and volume related fees for service and helps us increase efficiency and reduce fuel consumption. 55 As part of monitoring the efficiency of our operations, we measure the difference between the volume of natural gas received at the wellhead or central delivery points on our gathering systems and the volume received at the inlet of our processing plants as an indicator of fuel consumption and line loss.
Growth capital expenditures improve the service capability of the existing assets, extend asset useful lives, increase capacities from existing levels, add capabilities, and reduce costs or enhance revenues.
Growth capital expenditures improve the service capability of our existing assets, extend asset useful lives, increase capacities from existing levels, add capabilities, and reduce costs or enhance revenues.
Logistics and Transportation adjusted operating margin consists primarily of: • service fees (including the pass-through of energy costs included in certain fee rates); • system product gains and losses; and • NGL and natural gas sales, less NGL and natural gas purchases, fuel, third-party transportation costs and the net inventory change. 58 The adjusted operating margin impacts of mark-to-market hedge unrealized changes in fair value are reported in Other.
Logistics and Transportation adjusted operating margin consists primarily of: • service fees (including the pass-through of energy costs included in certain fee rates); • system product gains and losses; and • NGL and natural gas sales, less NGL and natural gas purchases, fuel, third-party transportation costs and the net inventory change. 56 The adjusted operating margin impacts of mark-to-market hedge unrealized changes in fair value are reported in Other.
Risk Factors.” Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023.
Risk Factors.” Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024.
Maintenance capital expenditures are those expenditures that are necessary to maintain the service capability of our existing assets, including the replacement of system components and equipment, which are worn, obsolete or completing their useful life and expenditures to remain in compliance with environmental laws and regulations. Capital spending associated with growth and maintenance projects is closely monitored.
Maintenance capital expenditures are those expenditures that are necessary to maintain the service capability of our existing assets, including the replacement of system components and equipment, which are worn, obsolete or completing their useful life and expenditures to remain in compliance with environmental laws and regulations. Capital spend associated with growth and maintenance projects is closely monitored.
The employees supporting our operations are employees of Targa Resources LLC, a Delaware limited liability company, and a wholly-owned subsidiary of ours. 56 Volatile Capital Markets and Competition We continuously consider and enter into discussions regarding potential growth projects and acquisitions and may contemplate external funding for potential growth projects and acquisitions.
The employees supporting our operations are employees of Targa Resources LLC, a Delaware limited liability company, and a wholly-owned subsidiary of ours. 54 Volatile Capital Markets and Competition We continuously consider and enter into discussions regarding potential growth projects and acquisitions and may contemplate external funding for potential growth projects and acquisitions.
Return on investment is analyzed before a capital project is approved, spending is closely monitored throughout the development of the project, and the subsequent operational performance is compared to the assumptions used in the economic analysis performed for the capital investment approval. Non-GAAP Measures We utilize non-GAAP measures to analyze our performance.
Return on investment is analyzed before a capital project is approved, spend is closely monitored throughout the development of the project, and the subsequent operational performance is compared to the assumptions used in the economic analysis performed for the capital investment approval. Non-GAAP Measures We utilize non-GAAP measures to analyze our performance.
(2) “Illustrative Targa NGL” pricing is weighted using average quarterly prices from Mont Belvieu Non-TET monthly commercial index and represents the following composition for the periods noted: 2024: 44% ethane, 32% propane, 11% normal butane, 4% isobutane and 9% natural gasoline 2023: 44% ethane, 32% propane, 11% normal butane, 4% isobutane and 9% natural gasoline (3) Crude oil prices are based on average quarterly prices of West Texas Intermediate crude oil as measured on the NYMEX. 55 Volumes and Demand for our Services Fluctuations in energy prices can greatly affect production rates and investments by third parties in the development and production of new oil and natural gas reserves.
(2) “Illustrative Targa NGL” pricing is weighted using average quarterly prices from Mont Belvieu Non-TET monthly commercial index and represents the following composition for the periods noted: 2025: 44% ethane, 32% propane, 11% normal butane, 4% isobutane and 9% natural gasoline 2024: 44% ethane, 32% propane, 11% normal butane, 4% isobutane and 9% natural gasoline (3) Crude oil prices are based on average quarterly prices of West Texas Intermediate crude oil as measured on the NYMEX. 53 Volumes and Demand for our Services Fluctuations in energy prices can greatly affect production rates and investments by third parties in the development and production of new oil and natural gas reserves.
(2) Plant natural gas inlet represents our undivided interest in the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant, other than Badlands. 62 (3) Plant natural gas inlet volumes and gross NGL production volumes include producer take-in-kind volumes, while natural gas sales and NGL sales exclude producer take-in-kind volumes.
(2) Plant natural gas inlet represents our undivided interest in the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant, other than Badlands. 60 (3) Plant natural gas inlet volumes and gross NGL production volumes include producer take-in-kind volumes, while natural gas sales and NGL sales exclude producer take-in-kind volumes.
Throughput Volumes, Facility Efficiencies and Fuel Consumption Our profitability is impacted by our ability to add new sources of natural gas supply and crude oil supply to offset the natural decline of existing volumes from oil and natural gas wells that are connected to our gathering and processing systems.
Throughput Volumes, Facility Efficiencies and Fuel Consumption Our profitability is impacted by our ability to add new sources of natural gas and crude oil supplies to offset the natural decline of existing volumes from oil and natural gas wells that are connected to our gathering and processing systems.
We believe we have sufficient access to financial resources and liquidity necessary to meet our requirements for working capital, debt service payments and capital expenditures in 2025 and beyond. For additional information regarding our financing activities, see “Item 7.
We believe we have sufficient access to financial resources and liquidity necessary to meet our requirements for working capital, debt service payments and capital expenditures in 2026 and beyond. For additional information regarding our financing activities, see “Item 7.
On a consolidated basis, our main sources of liquidity and capital resources are internally generated cash flows from operations, borrowings under the New TRGP Revolver, Commercial Paper Program, Securitization Facility, and access to debt and equity capital markets. We supplement these sources of liquidity with joint venture arrangements and proceeds from asset sales.
On a consolidated basis, our main sources of liquidity and capital resources are internally generated cash flows from operations, borrowings under the TRGP Revolver, the Commercial Paper Program, the Securitization Facility, and access to debt and equity capital markets. We have the ability to supplement these sources of liquidity with joint venture arrangements and proceeds from asset sales.
We define adjusted free cash flow as adjusted cash flow from operations less maintenance capital expenditures (net of any reimbursements of project costs) and growth capital expenditures, net of contributions from noncontrolling interest and including contributions to investments in unconsolidated affiliates.
We define adjusted free cash flow as adjusted cash flow from operations less maintenance capital expenditures and growth capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests and including contributions to investments in unconsolidated affiliates.
Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems, the addition of Train 9 during the second quarter of 2024, the in-service of the Daytona NGL Pipeline during the third quarter of 2024, and the addition of Train 10 during the fourth quarter of 2024.
Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems, the addition of Train 9 during the second quarter of 2024, the addition of the Daytona NGL Pipeline during the third quarter of 2024, and the addition of Train 10 during the fourth quarter of 2024.
Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.” Compliance with Debt Covenants As of December 31, 2024, both we and the Partnership were in compliance with the covenants contained in our various debt agreements.
Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.” Compliance with Debt Covenants As of December 31, 2025, both we and the Partnership were in compliance with the covenants contained in our various debt agreements.
(3) Export volumes represent the quantity of NGL products delivered to third-party customers at our Galena Park Marine Terminal that are destined for international markets. 2024 Compared to 2023 The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin, higher marketing margin, and higher LPG export margin.
(3) Export volumes represent the quantity of NGL products delivered to third-party customers at our Galena Park Marine Terminal that are destined for international markets. 2025 Compared to 2024 The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin and higher marketing margin.
Similarly, our profitability is impacted by our ability to add new sources of mixed NGL supply, connected by third-party transportation and Grand Prix, to our Downstream Business fractionation facilities and at times to our export facilities. We fractionate NGLs generated by our gathering and processing plants, as well as by contracting for mixed NGL supply from third-party facilities.
Similarly, our profitability is impacted by our ability to add new sources of mixed NGL supply, connected by third-party transportation and our NGL pipeline system, to our Downstream Business fractionation facilities and at times to our export facilities. We fractionate NGLs generated by our gathering and processing plants, as well as by contracting for mixed NGL supply from third-party facilities.
Cash Flow Analysis Cash Flows from Operating Activities Year Ended December 31, 2024 2023 2024 vs. 2023 (In millions) $ 3,649.7 $ 3,211.6 $ 438.1 The primary drivers of cash flows from operating activities are: (i) the collection of cash from customers from the sale of NGLs and natural gas, as well as fees for processing, gathering, export, fractionation, terminaling, storage and transportation; (ii) the payment of amounts related to the purchase of NGLs and natural gas; and (iii) the payment of other expenses, primarily field operating costs, general and administrative expense and interest expense.
Cash Flow Analysis Cash Flows from Operating Activities Year Ended December 31, 2025 2024 2025 vs. 2024 (In millions) $ 3,917.4 $ 3,649.7 $ 267.7 The primary drivers of cash flows from operating activities are: (i) the collection of cash from customers from the sale of NGLs and natural gas, as well as fees for processing, gathering, export, fractionation, terminaling, storage and transportation; (ii) the payment of amounts related to the purchase of NGLs and natural gas; and (iii) the payment of other expenses, primarily field operating costs, general and administrative expense and interest expense.
See further details of our risk management program in “Item 7A. – Quantitative and Qualitative Disclosures About Market Risk.” Our Liquidity and Capital Resources As of December 31, 2024, inclusive of our consolidated joint venture accounts, we had $157.3 million of Cash and cash equivalents on our Consolidated Balance Sheets.
See further details of our risk management program in “Item 7A. – Quantitative and Qualitative Disclosures About Market Risk.” Our Liquidity and Capital Resources As of December 31, 2025, inclusive of our consolidated joint venture accounts, we had $166.1 million of Cash and cash equivalents on our Consolidated Balance Sheets.
Adjusted Cash Flow from Operations and Adjusted Free Cash Flow We define adjusted cash flow from operations as adjusted EBITDA less cash interest expense on debt obligations and cash taxes.
Adjusted Cash Flow from Operations and Adjusted Free Cash Flow We define adjusted cash flow from operations as adjusted EBITDA less cash interest expense on debt obligations and cash tax (expense) benefit.
For information about our debt obligations, see Note 8 – Debt Obligations to our consolidated financial statements. For information about our interest rate risk, see “Item 7A.
For information about our debt obligations, see “Note 8 – Debt Obligations” to our Consolidated Financial Statements. For information about our interest rate risk, see “Item 7A.
The judgments made in the determination of the estimated fair value assigned to the assets acquired, liabilities assumed and any noncontrolling interest in the investee, the duration of each liability, and any resulting goodwill can materially impact the financial statements in periods after acquisition. See Note 4 – Acquisitions and Divestitures in our Consolidated Financial Statements.
The judgments made in the determination of the estimated fair value assigned to the assets acquired, liabilities assumed and any noncontrolling interest in the investee, the duration of each liability, and any resulting goodwill can materially impact the financial statements in periods after acquisition.
Due to increased volatility in commodity prices and the broader market, the ability of companies in the oil and gas industry to seek financing and access the capital markets on favorable terms or at all has been negatively impacted.
Increased volatility in commodity prices and the broader market could negatively impact the ability of companies in the oil and gas industry to seek financing and access the capital markets on favorable terms or at all.
Adjusted cash flow from operations and adjusted free cash flow are performance measures used by us and by external users of our financial statements, such as investors, commercial banks and research analysts, to assess our ability to generate cash earnings (after servicing our debt and funding capital expenditures) to be used for corporate purposes, such as payment of dividends, retirement of debt or redemption of other financing arrangements. 59 Our Non-GAAP Financial Measures The following table reconciles the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the periods indicated: Year Ended December 31, 2024 2023 (In millions) Reconciliation of Net income (loss) attributable to Targa Resources Corp. to Adjusted EBITDA, Adjusted Cash Flow from Operations and Adjusted Free Cash Flow Net income (loss) attributable to Targa Resources Corp. $ 1,312.0 $ 1,345.9 Interest (income) expense, net 767.2 687.8 Income tax expense (benefit) 384.5 363.2 Depreciation and amortization expense 1,423.0 1,329.6 (Gain) loss on sale or disposition of assets (3.1 ) (5.3 ) Write-down of assets 6.2 6.9 (Gain) loss from financing activities 0.8 2.1 Equity (earnings) loss (9.4 ) (9.0 ) Distributions from unconsolidated affiliates 25.3 18.6 Compensation on equity grants 63.2 62.4 Risk management activities 164.6 (275.4 ) Noncontrolling interests adjustments (1) 3.9 (3.7 ) Litigation expense (2) 4.1 6.9 Adjusted EBITDA $ 4,142.3 $ 3,530.0 Interest expense on debt obligations (3) (752.4 ) (675.8 ) Cash taxes (17.5 ) (13.6 ) Adjusted Cash Flow from Operations $ 3,372.4 $ 2,840.6 Maintenance capital expenditures, net (4) (231.9 ) (223.4 ) Growth capital expenditures, net (4) (3,000.4 ) (2,224.5 ) Adjusted Free Cash Flow $ 140.1 $ 392.7 (1) Represents adjustments related to our subsidiaries with noncontrolling interests, including depreciation and amortization expense as well as earnings for certain plants within our WestTX joint venture not subject to noncontrolling interest.
Adjusted cash flow from operations and adjusted free cash flow are performance measures used by us and by external users of our financial statements, such as investors, commercial banks and research analysts, to assess our ability to generate cash earnings (after servicing our debt and funding capital expenditures) to be used for corporate purposes, such as payment of dividends, retirement of debt or redemption of other financing arrangements. 57 Our Non-GAAP Financial Measures The following table reconciles the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the periods presented: Year Ended December 31, 2025 2024 (In millions) Reconciliation of Net income (loss) attributable to Targa Resources Corp. to Adjusted EBITDA, Adjusted Cash Flow from Operations and Adjusted Free Cash Flow Net income (loss) attributable to Targa Resources Corp. $ 1,923.0 $ 1,312.0 Interest (income) expense, net 852.8 767.2 Income tax expense (benefit) 529.7 384.5 Depreciation and amortization expense 1,515.3 1,423.0 (Gain) loss on sale or disposition of assets (6.1 ) (3.1 ) Write-down of assets 18.8 6.2 (Gain) loss from financing activities 2.4 0.8 Equity (earnings) loss (11.8 ) (9.4 ) Distributions from unconsolidated affiliates 28.5 25.3 Compensation on equity grants 69.5 63.2 Risk management activities 5.3 164.6 Noncontrolling interests adjustments (1) 11.4 3.9 Litigation and environmental reserves (2) 18.6 4.1 Adjusted EBITDA $ 4,957.4 $ 4,142.3 Interest expense on debt obligations (3) (835.4 ) (752.4 ) Cash tax (expense) benefit (13.1 ) (17.5 ) Adjusted Cash Flow from Operations $ 4,108.9 $ 3,372.4 Maintenance capital expenditures, net (4) (226.4 ) (231.9 ) Growth capital expenditures, net (4) (3,343.5 ) (3,000.4 ) Adjusted Free Cash Flow $ 539.0 $ 140.1 (1) Represents adjustments related to our subsidiaries with noncontrolling interests, including depreciation and amortization expense as well as earnings for certain plants within our WestTX joint venture not subject to noncontrolling interest accounting.
Working Capital Working capital is the amount by which current assets exceed current liabilities. On a consolidated basis, at the end of any given month, accounts receivable and payable tied to commodity sales and purchases are relatively balanced, with receivables from customers being offset by plant settlements payable to producers.
On a consolidated basis, at the end of any given month, accounts receivable and payable tied to commodity sales and purchases are relatively balanced, with receivables from customers being offset by plant settlements payable to producers.
Recent Accounting Pronouncements For a discussion of recent accounting pronouncements that will affect us, see Note 3 – Significant Accounting Policies in our Consolidated Financial Statements.
Recent Accounting Pronouncements For a discussion of recent accounting pronouncements that will affect us, see “Note 3 – Significant Accounting Policies” to our Consolidated Financial Statements.
Quantitative and Qualitative Disclosures about Market Risk — Commodity Price Risk.” The following table presents selected average annual and quarterly industry index prices for natural gas, selected NGL products and crude oil for the periods presented: Natural Gas $/MMBtu (1) Illustrative Targa NGL $/gal (2) Crude Oil $/Bbl (3) 2024 4th Quarter $ 2.80 $ 0.65 $ 69.40 3rd Quarter 2.16 0.59 78.71 2nd Quarter 1.89 0.61 79.97 1st Quarter 2.24 0.65 75.61 2024 Average 2.27 0.63 75.92 2023 4th Quarter $ 2.88 $ 0.60 $ 78.33 3rd Quarter 2.54 0.62 82.18 2nd Quarter 2.09 0.56 73.75 1st Quarter 3.45 0.70 76.11 2023 Average 2.74 0.62 77.59 (1) Natural gas prices are based on average first of month prices from Henry Hub Inside FERC commercial index prices.
Quantitative and Qualitative Disclosures about Market Risk — Commodity Price Risk.” The following table presents selected average annual and quarterly industry index prices for natural gas, selected NGL products and crude oil for the periods presented: Natural Gas $/MMBtu (1) Illustrative Targa NGL $/gal (2) Crude Oil $/Bbl (3) 2025 4th Quarter $ 3.55 $ 0.56 $ 59.95 3rd Quarter 3.07 0.57 65.35 2nd Quarter 3.44 0.61 65.04 1st Quarter 3.66 0.70 71.96 2025 Average 3.43 0.61 65.58 2024 4th Quarter $ 2.80 $ 0.65 $ 69.40 3rd Quarter 2.16 0.59 78.71 2nd Quarter 1.89 0.61 79.97 1st Quarter 2.24 0.65 75.61 2024 Average 2.27 0.63 75.92 (1) Natural gas prices are based on average first of month prices from Henry Hub Inside FERC commercial index prices.
The following table presents the realized commodity hedge gain (loss) attributable to our equity volumes that are included in the adjusted operating margin of the Gathering and Processing segment: Year Ended December 31, 2024 Year Ended December 31, 2023 (In millions, except volumetric data and price amounts) Volume Settled Price Spread (1) Gain (Loss) Volume Settled Price Spread (1) Gain (Loss) Natural gas (BBtu) 43.7 $ 1.92 $ 84.1 63.2 $ 1.22 $ 77.4 NGL (MMgal) 449.8 0.04 15.8 680.3 0.07 49.9 Crude oil (MBbl) 2.1 (2.05 ) (4.3 ) 2.4 (6.92 ) (16.6 ) $ 95.6 $ 110.7 (1) The price spread is the differential between the contracted derivative instrument pricing and the price of the corresponding settled commodity transaction. 2024 Compared to 2023 The increase in adjusted operating margin was predominantly due to higher natural gas inlet volumes which drove higher fee-based income in the Permian, partially offset by lower natural gas and condensate prices.
The following table presents the realized commodity hedge gain (loss) attributable to our equity volumes that are included in the adjusted operating margin of the Gathering and Processing segment: Year Ended December 31, 2025 Year Ended December 31, 2024 (In millions, except volumetric data and price amounts) Volume Settled Price Spread (1) Gain (Loss) Volume Settled Price Spread (1) Gain (Loss) Natural gas (BBtu) 30.1 $ 1.711 $ 51.5 43.7 $ 1.924 $ 84.1 NGL (MMgal) 304.9 (0.005 ) (1.5 ) 449.8 0.035 15.8 Crude oil (MBbl) 2.9 6.586 19.1 2.1 (2.048 ) (4.3 ) $ 69.1 $ 95.6 (1) The price spread is the differential between the contracted derivative instrument pricing and the price of the corresponding settled commodity transaction. 2025 Compared to 2024 The increase in adjusted operating margin was predominantly due to higher natural gas inlet volumes in the Permian, partially offset by lower volumes in other areas.
We may incur such charges from time to time, and we believe it is useful to exclude such charges because we do not consider them reflective of our ongoing core operations and because of the generally singular nature of the claims underlying such litigation. (3) Excludes amortization of interest expense.
We may incur such charges from time to time, and we believe it is useful to exclude these charges as we do not consider them reflective of our ongoing core operations. (3) Excludes amortization recognized in interest expense.
Our short-term liquidity on a consolidated basis as of February 18, 2025 was: Consolidated Total (In millions) Cash on hand (1) $ 254.5 Total availability under the Securitization Facility 600.0 Total availability under the New TRGP Revolver and Commercial Paper Program 3,500.0 4,354.5 Outstanding borrowings under the Securitization Facility (600.0 ) Outstanding borrowings under the New TRGP Revolver and Commercial Paper Program (881.0 ) Outstanding letters of credit under the New TRGP Revolver (9.4 ) Total liquidity $ 2,864.1 (1) Includes cash held in our consolidated joint venture accounts.
Our short-term liquidity on a consolidated basis as of January 31, 2026 was: Consolidated Total (In millions) Cash on hand (1) $ 203.2 Total availability under the Securitization Facility 600.0 Total availability under the TRGP Revolver and Commercial Paper Program 3,500.0 4,303.2 Outstanding borrowings under the Securitization Facility (600.0 ) Outstanding borrowings under the TRGP Revolver and Commercial Paper Program (1,761.0 ) Outstanding letters of credit under the TRGP Revolver (20.0 ) Total liquidity $ 1,922.2 (1) Includes cash held in our consolidated joint venture accounts.
The increase in operating expenses is primarily due to higher labor, maintenance, rental and chemical costs as a result of increased activity and system expansions, partially offset by lower taxes. See “—Results of Operations—By Reportable Segment” for additional information on a segment basis.
The decrease in product purchases and fuel reflected lower NGL prices, partially offset by higher natural gas prices, and higher NGL and natural gas volumes. The increase in operating expenses was primarily due to higher labor, taxes and maintenance costs as a result of system expansions. See “—Results of Operations—By Reportable Segment” for additional information on a segment basis.
The increase in natural gas inlet volumes was attributable to the addition of the Legacy II plant during the first quarter of 2023, the Midway plant during the second quarter of 2023, the Greenwood I and Wildcat II plants during the fourth quarter of 2023, the Roadrunner II plant during the second quarter of 2024, the Greenwood II plant during the fourth quarter of 2024, and continued strong producer activity.
The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Roadrunner II plant during the second quarter of 2024, the Greenwood II plant during the fourth quarter of 2024, the Bull Moose plant during the first quarter of 2025, the Pembrook II plant during the third quarter of 2025, the Bull Moose II plant during the fourth quarter of 2025, and continued strong producer activity.
(2) Maintenance capital expenditures, net of contributions from noncontrolling interests, were $231.9 million and $223.4 million for the years ended December 31, 2024 and 2023. The increase in total growth capital expenditures was primarily due to system expansions in the Permian region in response to forecasted production growth and higher activity levels, and expansions in our downstream business.
(2) Maintenance capital expenditures, net of contributions from noncontrolling interests, were $226.4 million and $231.9 million for the years ended December 31, 2025 and 2024. The increase in growth capital expenditures was primarily due to expansions in our Gathering and Processing and Downstream Business.
The increase in operating expenses was due to higher system volumes, higher compensation and benefits, higher taxes, higher repairs and maintenance and the addition of two trains during 2024. 63 Other Year Ended December 31, 2024 2023 2024 vs. 2023 (In millions) Operating margin $ (164.6 ) $ 275.5 $ (440.1 ) Adjusted operating margin $ (164.6 ) $ 275.5 $ (440.1 ) Other contains the results of commodity derivative activity mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges.
The increase in operating expenses was predominantly due to system expansions and planned maintenance. 61 Other Year Ended December 31, 2025 2024 2025 vs. 2024 (In millions) Operating margin $ (5.3 ) $ (164.6 ) $ 159.3 Adjusted operating margin $ (5.3 ) $ (164.6 ) $ 159.3 Other contains the results of commodity derivative activity mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges.
Significant intercompany balances and activity for the Obligated Group with other related parties, including our non-guarantor subsidiaries (referred to as “affiliates”), are presented separately in the following supplemental summarized combined financial information. 66 Summarized Combined Balance Sheet and Statement of Operations information for the Obligated Group as of the end of the most recent period presented follows: Summarized Combined Balance Sheet Information December 31, 2024 December 31, 2023 (In millions) ASSETS Current assets $ 986.9 $ 966.3 Current assets - affiliates 1.1 11.2 Long-term assets 16,574.0 15,267.6 Total assets $ 17,562.0 $ 16,245.1 LIABILITIES AND OWNERS’ EQUITY (DEFICIT) Current liabilities $ 2,763.0 $ 2,107.9 Current liabilities - affiliates 36.7 26.2 Long-term liabilities 15,120.9 13,278.8 Targa Resources Corp. stockholders’ equity (deficit) (358.6 ) 832.2 Total liabilities and owners’ equity (deficit) $ 17,562.0 $ 16,245.1 Summarized Combined Statement of Operations Information Year Ended December 31, 2024 2023 (In millions) Revenues $ 15,939.3 $ 15,737.0 Operating income 2,031.3 2,134.2 Net income 888.7 1,100.1 Common Stock Dividends The following table details the dividends declared and/or paid by us to common shareholders for 2024: Three Months Ended Date Paid or To Be Paid Total Common Dividends Declared Amount of Common Dividends Paid or To Be Paid Dividends on Share-Based Awards Dividends Declared per Share of Common Stock (In millions, except per share amounts) December 31, 2024 February 14, 2025 $ 165.1 $ 163.6 $ 1.5 $ 0.75000 September 30, 2024 November 15, 2024 165.2 163.5 1.7 0.75000 June 30, 2024 August 15, 2024 166.1 164.3 1.8 0.75000 March 31, 2024 May 15, 2024 168.1 166.3 1.8 0.75000 The actual amount we declare as dividends in the future depends on our consolidated financial condition, results of operations, cash flow, the level of our capital expenditures, future business prospects, compliance with our debt covenants and any other matters that our Board of Directors deems relevant. 67 Capital Expenditures The following table details cash outlays for capital projects for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (In millions) Capital expenditures: Growth (1) $ 2,950.1 $ 2,211.0 Maintenance (2) 241.7 232.6 Gross capital expenditures 3,191.8 2,443.6 Change in capital project payables and accruals, net (226.0 ) (58.2 ) Cash outlays for capital projects $ 2,965.8 $ 2,385.4 (1) Growth capital expenditures, net of contributions from noncontrolling interests and including contributions to investments in unconsolidated affiliates, were $3,000.4 million and $2,224.5 million for the years ended December 31, 2024 and 2023.
Summarized Combined Balance Sheet and Statement of Operations information for the Obligated Group as of the end of the most recent period presented follows: Summarized Combined Balance Sheet Information December 31, 2025 December 31, 2024 (In millions) ASSETS Current assets $ 160.3 $ 127.8 Current assets - affiliates 6.5 22.7 Long-term assets 73.3 76.4 Total assets $ 240.1 $ 226.9 LIABILITIES AND OWNERS’ EQUITY (DEFICIT) Current liabilities $ 928.9 $ 262.0 Long-term liabilities 3,749.4 5,121.7 Targa Resources Corp. stockholders’ equity (deficit) (4,438.2 ) (5,156.8 ) Total liabilities and owners’ equity (deficit) $ 240.1 $ 226.9 Summarized Combined Statement of Operations Information Year Ended December 31, 2025 2024 (In millions) Operating income (loss) $ (357.1 ) $ (328.0 ) Net income (loss) (603.6 ) (583.0 ) Common Stock Dividends The following table details the dividends declared and/or paid by us to common shareholders for 2025: Three Months Ended Date Paid or To Be Paid Total Common Dividends Declared Amount of Common Dividends Paid or To Be Paid Dividends on Share-Based Awards Dividends Declared per Share of Common Stock (In millions, except per share amounts) December 31, 2025 February 13, 2026 $ 216.7 $ 215.0 $ 1.7 $ 1.00000 September 30, 2025 November 17, 2025 216.9 214.7 2.2 1.00000 June 30, 2025 August 15, 2025 217.6 215.2 2.4 1.00000 March 31, 2025 May 15, 2025 219.0 216.9 2.1 1.00000 The actual amount we declare as dividends in the future depends on our consolidated financial condition, results of operations, cash flow, the level of our capital expenditures, future business prospects, compliance with our debt covenants and any other matters that our Board of Directors deems relevant. 65 Capital Expenditures The following table details cash outlays for capital projects for the periods presented: Year Ended December 31, 2025 2024 (In millions) Capital expenditures: Growth (1) $ 3,213.0 $ 2,950.1 Maintenance (2) 228.3 241.7 Gross capital expenditures 3,441.3 3,191.8 Change in capital project payables and accruals, net (108.0 ) (226.0 ) Cash outlays for capital projects $ 3,333.3 $ 2,965.8 (1) Growth capital expenditures, net of contributions from noncontrolling interests and including contributions to investments in unconsolidated affiliates, were $3,343.5 million and $3,000.4 million for the years ended December 31, 2025 and 2024.
Cash Flows from Investing Activities Year Ended December 31, 2024 2023 2024 vs. 2023 (In millions) $ (3,021.3 ) $ (2,400.8 ) $ (620.5 ) The increase in net cash used in investing activities was due to higher outlays for major growth capital projects in 2024 primarily related to construction activities in the Permian region and Mont Belvieu, Texas.
Cash Flows from Investing Activities Year Ended December 31, 2025 2024 2025 vs. 2024 (In millions) $ (3,642.0 ) $ (3,021.3 ) $ (620.7 ) The increase in net cash used in investing activities was due to higher outlays for major growth capital projects in 2025 primarily related to construction activities, outlays for the acquisitions completed in 2025, and an increase in contributions to unconsolidated affiliates.
These are in place to support various performance obligations as required by (i) statutes within the regulatory jurisdictions where we operate and (ii) counterparty support. Obligations under these surety bonds are not normally called, as we typically comply with the underlying performance requirement. We have invested in entities that are not consolidated in our financial statements.
Obligations under these surety bonds are not normally called, as we typically comply with the underlying performance requirement. We have invested in entities that are not consolidated in our financial statements.
Logistics and Transportation Segment Year Ended December 31, 2024 2023 2024 vs. 2023 (In millions, except operating statistics) Operating margin $ 2,355.1 $ 1,948.7 $ 406.4 21% Operating expenses 362.3 332.0 30.3 9% Adjusted operating margin $ 2,717.4 $ 2,280.7 $ 436.7 19% Operating statistics MBbl/d (1): NGL pipeline transportation volumes (2) 800.8 635.5 165.3 26% Fractionation volumes 936.1 798.1 138.0 17% Export volumes (3) 423.6 365.2 58.4 16% NGL sales 1,159.1 1,019.8 139.3 14% (1) Segment operating statistics include intersegment amounts, which have been eliminated from the consolidated presentation.
Logistics and Transportation Segment Year Ended December 31, 2025 2024 2025 vs. 2024 (In millions, except operating statistics) Operating margin $ 2,788.3 $ 2,355.1 $ 433.2 18% Operating expenses 393.7 362.3 31.4 9% Adjusted operating margin $ 3,182.0 $ 2,717.4 $ 464.6 17% Operating statistics MBbl/d (1): NGL pipeline transportation volumes (2) 968.3 800.8 167.5 21% Fractionation volumes 1,057.6 936.1 121.5 13% Export volumes (3) 429.1 423.6 5.5 1% NGL sales 1,212.3 1,159.1 53.2 5% (1) Segment operating statistics include intersegment amounts, which have been eliminated from the consolidated presentation.
In an effort to reduce the volatility of our cash flows, we have entered into derivative financial instruments to hedge the commodity price associated with a portion of our expected natural gas, NGL, and condensate equity volumes, future commodity purchases and sales, and transportation basis risk.
In an effort to reduce the volatility of our cash flows, we have entered into derivative financial instruments to hedge the commodity price associated with a portion of our expected natural gas, NGL, and condensate equity volumes, future commodity purchases and sales, and transportation basis risk. 67 One of the factors that can affect our operating results each period is the price assumptions used to value our derivative financial instruments, which are reflected at their fair values on the balance sheet.
Working capital as of December 31, 2024 decreased $310.0 million compared to December 31, 2023.
Our working capital as of December 31, 2025 decreased $307.8 million compared to December 31, 2024.
We may enter into interest rate hedges with the intent to mitigate the impact of changes in interest rates on cash flows. As of December 31, 2024, we did not have any interest rate hedges. In August 2024, we completed an underwritten public offering of the 5.500% Notes, resulting in net proceeds of approximately $990.1 million.
We may enter into interest rate hedges with the intent to mitigate the impact of changes in interest rates on cash flows. As of December 31, 2025, we did not have any interest rate hedges.
See Note 9 - Other Long-term Liabilities for more information. 68 Critical Accounting Policies and Estimates The accounting policies and estimates discussed below are considered by management to be critical to an understanding of our financial statements because their application requires the most significant judgments from management in estimating matters for financial reporting that are inherently uncertain.
Contracts that will be settled at future spot prices are valued using prices as of December 31, 2025. 66 Critical Accounting Policies and Estimates The accounting policies and estimates discussed below are considered by management to be critical to an understanding of our financial statements because their application requires the most significant judgments from management in estimating matters for financial reporting that are inherently uncertain.
Changes in the prices of the commodities we hedge impact our derivative settlements as well as our margin deposit requirements on unsettled futures contracts. 65 The increase in net cash provided by operating activities was primarily due to higher collections from customers resulting from increased revenues during 2024 compared to 2023, partially offset by an increase in payments for product purchases and fuel, lower settlements on our hedging transactions, an increase in interest payments, and a nonrecurring one-time payment associated with the Splitter Agreement ruling.
The increase in net cash provided by operating activities was primarily due to higher collections from customers resulting from increased revenues in 2025 compared to 2024, partially offset by an increase in payments for product purchases, operating costs and interest on debt. In addition, during 2024 we made a nonrecurring one-time payment associated with the Splitter Agreement.
These agreements expire at various dates with varying terms, some of which are perpetual. See Note 16 - Commitments for more information. (6) Includes commitments for pipeline capacity payments for firm transportation and throughput and deficiency agreements, purchase of natural gas and NGLs, capital expenditures, operating expenses and service contracts.
(6) Includes commitments for pipeline capacity payments for firm transportation and throughput and deficiency agreements, purchase of natural gas and NGLs, capital expenditures, operating expenses and service contracts.
(4) Represents capital expenditures, net of contributions from noncontrolling interests and includes contributions to investments in unconsolidated affiliates. 60 Consolidated Results of Operations The following table and discussion is a summary of our consolidated results of operations: Year Ended December 31, 2024 2023 2024 vs. 2023 (In millions) Revenues: Sales of commodities $ 13,891.8 $ 13,962.1 $ (70.3 ) (1 %) Fees from midstream services 2,489.7 2,098.2 391.5 19 % Total revenues 16,381.5 16,060.3 321.2 2 % Product purchases and fuel 10,703.0 10,676.4 26.6 — Operating expenses 1,175.6 1,077.9 97.7 9 % Depreciation and amortization expense 1,423.0 1,329.6 93.4 7 % General and administrative expense 384.9 348.7 36.2 10 % Other operating (income) expense (0.4 ) 1.5 (1.9 ) NM Income (loss) from operations 2,695.4 2,626.2 69.2 3 % Interest expense, net (767.2 ) (687.8 ) (79.4 ) 12 % Equity earnings (loss) 9.4 9.0 0.4 4 % Gain (loss) from financing activities (0.8 ) (2.1 ) 1.3 62 % Other, net 1.2 (2.8 ) 4.0 NM Income tax (expense) benefit (384.5 ) (363.2 ) (21.3 ) 6 % Net income (loss) 1,553.5 1,579.3 (25.8 ) (2 %) Less: Net income (loss) attributable to noncontrolling interests 241.5 233.4 8.1 3 % Net income (loss) attributable to Targa Resources Corp. 1,312.0 1,345.9 (33.9 ) (3 %) Premium on repurchase of noncontrolling interests, net of tax 32.9 510.1 (477.2 ) (94 %) Net income (loss) attributable to common shareholders $ 1,279.1 $ 835.8 $ 443.3 53 % Financial data: Adjusted EBITDA (1) $ 4,142.3 $ 3,530.0 $ 612.3 17 % Adjusted cash flow from operations (1) 3,372.4 2,840.6 531.8 19 % Adjusted free cash flow (1) 140.1 392.7 (252.6 ) (64 %) (1) Adjusted EBITDA, adjusted cash flow from operations and adjusted free cash flow are non-GAAP financial measures and are discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–How We Evaluate Our Operations.” NM Due to a low denominator, the noted percentage change is disproportionately high and as a result, considered not meaningful. 2024 Compared to 2023 Commodity sales are relatively flat reflecting lower natural gas and condensate prices ($1,242.8 million) and the unfavorable impact of hedges ($686.5 million), offset by higher NGL, natural gas and condensate volumes ($1,607.2 million), and higher NGL prices ($251.6 million).
(4) Represents capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests and includes contributions to investments in unconsolidated affiliates. 58 Consolidated Results of Operations The following table and discussion is a summary of our consolidated results of operations for the periods presented: Year Ended December 31, 2025 2024 2025 vs. 2024 (In millions) Revenues: Sales of commodities $ 14,403.5 $ 13,891.8 $ 511.7 4 % Fees from midstream services 2,624.8 2,489.7 135.1 5 % Total revenues 17,028.3 16,381.5 646.8 4 % Product purchases and fuel 10,507.8 10,703.0 (195.2 ) (2 %) Operating expenses 1,298.3 1,175.6 122.7 10 % Depreciation and amortization expense 1,515.3 1,423.0 92.3 6 % General and administrative expense 406.0 384.9 21.1 5 % Other operating (income) expense (30.3 ) (0.4 ) (29.9 ) NM Income (loss) from operations 3,331.2 2,695.4 635.8 24 % Interest expense, net (852.8 ) (767.2 ) (85.6 ) 11 % Equity earnings (loss) 11.8 9.4 2.4 26 % Other, net (3.8 ) 0.4 (4.2 ) NM Income tax (expense) benefit (529.7 ) (384.5 ) (145.2 ) 38 % Net income (loss) 1,956.7 1,553.5 403.2 26 % Less: Net income (loss) attributable to noncontrolling interests 33.7 241.5 (207.8 ) (86 %) Net income (loss) attributable to Targa Resources Corp. 1,923.0 1,312.0 611.0 47 % Premium on repurchase of noncontrolling interests, net of tax 70.5 32.9 37.6 114 % Net income (loss) attributable to common shareholders $ 1,852.5 $ 1,279.1 $ 573.4 45 % Financial data: Adjusted EBITDA (1) $ 4,957.4 $ 4,142.3 $ 815.1 20 % Adjusted cash flow from operations (1) 4,108.9 3,372.4 736.5 22 % Adjusted free cash flow (1) 539.0 140.1 398.9 285 % (1) Adjusted EBITDA, adjusted cash flow from operations and adjusted free cash flow are non-GAAP financial measures and are discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations–How We Evaluate Our Operations.” NM Due to a low denominator, the noted percentage change is disproportionately high and as a result, considered not meaningful. 2025 Compared to 2024 The increase in commodity sales reflected higher natural gas prices ($766.2 million), higher NGL and natural gas volumes ($518.7 million) and the favorable impact of hedges ($85.0 million), partially offset by lower NGL and condensate prices ($860.2 million).
(2) Litigation expense includes charges related to litigation resulting from the major winter storm in February 2021 that we consider outside the ordinary course of our business and/or not reflective of our ongoing core operations.
(2) Litigation and environmental reserves includes charges related to specific litigation and environmental compliance matters that are nonrecurring in nature and outside the ordinary course of our business and/or not reflective of our ongoing core operations.
The following is a summary of our material future contractual obligations: Contractual Obligations: Total Within 12 Months (in millions) Long-term debt obligations (1) $ 13,664.9 $ — Interest on debt obligations (2) 7,031.9 758.3 Operating leases (3) 134.1 22.2 Finance leases (4) 335.3 70.3 Land site lease and rights of way (5) 333.1 9.3 Purchase obligations (6) 2,736.9 1,316.3 Other long-term liabilities (7) 123.2 17.9 Total $ 24,359.4 $ 2,194.3 (1) Represents scheduled future maturities of long-term debt obligation and excludes the Securitization Facility.
The following table is a summary of our material future contractual cash obligations as of December 31, 2025: Contractual Obligations: Total Within 12 Months (in millions) Long-term debt obligations (1) $ 17,240.2 $ 679.3 Interest on debt obligations (2) 9,790.0 948.1 Operating leases (3) 130.0 23.1 Finance leases (4) 388.0 107.5 Land site lease and rights of way (5) 374.3 11.8 Purchase obligations (6) 4,174.1 1,928.3 Other 6.8 3.2 Total $ 32,103.4 $ 3,701.3 (1) Represents scheduled future maturities of long-term debt obligation and excludes the Securitization Facility.
See Note 8 - Debt Obligations for more information. (2) Represents interest expense on long-term debt obligations based on both fixed debt interest rates and prevailing December 31, 2024 rates for floating debt. See Note 8 - Debt Obligations for more information. (3) Includes minimum payments on operating lease obligations for compressors, office space and railcars.
See “Note 8 - Debt Obligations” to our Consolidated Financial Statements for more information. (2) Represents interest expense on long-term debt obligations based on both fixed debt interest rates and prevailing December 31, 2025 rates for floating debt. See “Note 8 - Debt Obligations” to our Consolidated Financial Statements for more information.
We used the net proceeds from the issuance to repay borrowings under the Commercial Paper Program, a portion of which were incurred to repay the remaining balance under the Term Loan Facility, and for general corporate purposes.
We used a portion of the net proceeds from the debt issuance to fund the redemption of all of the Partnership’s 6.500% Notes due 2027 in July 2025, and the remaining net proceeds for general corporate purposes, including to repay borrowings under the Commercial Paper Program.
For information on our obligations with respect to these investments, as well as our obligations with respect to related letters of credit, see Note 7 – Investments in Unconsolidated Affiliates and Note 8 – Debt Obligations. Contractual Obligations We believe we have sufficient liquidity to fund our operations and meet our short-term and long-term cash obligations.
For information on our obligations with respect to these investments, as well as our obligations with respect to related letters of credit, see “Note 7 – Investments in Unconsolidated Affiliates” and “Note 8 – Debt Obligations” to our Consolidated Financial Statements.
The increase in income tax expense is primarily due to the release of state valuation allowance in 2023. 61 The premium on repurchase of noncontrolling interests, net of tax is primarily due to the CBF Acquisition in 2024 and the Grand Prix Transaction in 2023.
The premium on repurchase of noncontrolling interests, net of tax was due to the Badlands Transaction in 2025 and the CBF Acquisition in 2024.
The decrease was primarily due to higher accounts payable related to capital spending on growth projects, higher product purchases and fuel payables resulting from higher NGL volumes and prices, and higher net liabilities for hedging activities, partially offset by higher receivables resulting from higher NGL volumes and prices, and a lower outstanding balance on the Securitization Facility.
The decrease was partially offset by a lower outstanding balance on the Securitization Facility, lower product purchases and fuel payables resulting from lower NGL prices and a higher NGL inventory balance. See discussion below about our financing activities.
Our exposure to adverse credit conditions includes our credit facilities, cash investments, hedging abilities, customer performance risks and counterparty performance risks. We believe our sources of liquidity and capital resources are sufficient to meet our anticipated cash requirements for at least the next twelve months to satisfy our obligations.
We believe our sources of liquidity and capital resources are sufficient to meet our anticipated cash requirements for at least the next twelve months to satisfy our obligations, including our day-to-day operations, growth capital expenditures, dividend payments, maintenance capital expenditures, debt service and other anticipated obligations.
The Obligated Group’s investment balances in our non-guarantor subsidiaries have been excluded from the supplemental summarized combined financial information.
The Obligated Group’s investment balances in our non-guarantor subsidiaries have been excluded from the supplemental summarized combined financial information. Significant intercompany balances and activity for the Obligated Group with other related parties, including our non-guarantor subsidiaries (referred to as “affiliates”), are presented separately in the following supplemental summarized combined financial information.
The increase in interest expense, net, is due to recognition of cumulative interest on a 2024 legal ruling associated with the Splitter Agreement and higher borrowings, partially offset by higher capitalized interest. Higher capitalized interest is due to system expansions and higher interest rates. See Note 17 – Contingencies for additional information related to the legal ruling.
The increase in interest expense, net, was primarily due to higher borrowings in 2025, partially offset by the recognition of cumulative interest on a legal ruling associated with the Splitter Agreement in 2024. 59 The increase in income tax (expense) benefit was primarily due to the increase in pre-tax book income and a decrease in income allocated to noncontrolling interest that is not taxable to the Company.
As of December 31, 2024, we had $17.6 million in letters of credit outstanding under the Existing TRGP Revolver. The letters of credit also reflect certain 64 counterparties’ views of our financial condition and ability to satisfy our performance obligations, as well as commodity prices and other factors.
The letters of credit also reflect certain counterparties’ views of our financial condition and ability to satisfy our performance obligations, as well as commodity prices and other factors. Working Capital Working capital is the amount by which current assets exceed current liabilities.
Cash Flows from Financing Activities Year Ended December 31, 2024 2023 (In millions) Source of Financing Activities, net Debt, including financing costs $ 1,149.9 $ 1,300.0 Repurchase of noncontrolling interests (112.9 ) (1,118.9 ) Dividends (615.5 ) (427.3 ) Contributions from (distributions to) noncontrolling interests (220.6 ) (212.4 ) Repurchase of shares (813.7 ) (429.5 ) Net cash provided by (used in) financing activities $ (612.8 ) $ (888.1 ) The decrease in net cash used in financing activities was due to lower repurchases of noncontrolling interests primarily due to the Grand Prix Transaction in 2023, partially offset by higher repurchases of common stock, higher dividends paid and lower borrowings of debt in 2024.
Cash Flows from Financing Activities Year Ended December 31, 2025 2024 (In millions) Source of Financing Activities, net Debt, including financing costs $ 3,101.1 $ 1,149.9 Repurchase of noncontrolling interests (1,800.4 ) (112.9 ) Dividends paid to common shareholders (818.3 ) (615.5 ) Contributions from (distributions to) noncontrolling interests, net (33.5 ) (220.6 ) Repurchases of shares (715.5 ) (813.7 ) Net cash provided by (used in) financing activities $ (266.6 ) $ (612.8 ) The decrease in net cash used in financing activities was due to higher proceeds from debt financings in 2025, lower distributions to noncontrolling interests subsequent to the CBF Acquisition in the fourth quarter of 2024 and the Badlands Transaction in the first quarter of 2025 and lower repurchases of common stock, partially offset by higher repurchases of noncontrolling interests due to the Badlands Transaction and higher dividends paid in 2025. 64 Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries Our subsidiaries that guarantee our obligations under the TRGP Revolver (the “Obligated Group”) also fully and unconditionally guarantee, jointly and severally, the payment of TRGP’s senior unsecured notes, subject to certain limited exceptions.
The increase in fees from midstream services is primarily due to higher gas gathering and processing fees, higher transportation and fractionation fees, and higher export volumes. Product purchases and fuel are relatively flat reflecting higher NGL and natural gas volumes, offset by lower natural gas prices.
The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, and higher export volumes, partially offset by lower transportation and fractionation fees. Lower transportation and fractionation fees were due to a planned turnaround at a portion of our facilities in Mont Belvieu, Texas.
See Note 10 - Leases for more information. (4) Includes minimum payments on finance lease obligations for compressors, substations, vehicles and tractors. See Note 10 - Leases for more information. (5) Land site lease and rights of way provide for surface and underground access for gathering, processing and distribution assets that are located on property not owned by us.
(5) Land site lease and rights of way provide for surface and underground access for gathering, processing and distribution assets that are located on property not owned by us. These agreements expire at various dates with varying terms, some of which are perpetual. See “Note 16 - Commitments” to our Consolidated Financial Statements for more information.
The increase in depreciation and amortization expense is primarily due to the impact of system expansions on our asset base, partially offset by the shortening of depreciable lives of certain assets that were idled in 2023. The increase in general and administrative expense is primarily due to higher compensation and benefits and professional fees.
The increase in depreciation and amortization expense was primarily due to the impact of system expansions on our asset base. The increase in general and administrative expense was primarily due to higher compensation and benefits. The increase in other operating (income) expense was primarily due to recognition of Section 45Q tax credits earned through our carbon capture and sequestration activities.
In addition, we use derivative instruments to manage our exposure to commodity price risk.
In addition, we use derivative instruments to manage our exposure to commodity price risk. Changes in the prices of the commodities we hedge impact our derivative settlements as well as our margin deposit requirements on unsettled futures contracts.
In August 2024, the Partnership amended the Securitization Facility to, among other things, extend the termination date of the Securitization Facility to August 29, 2025. A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements.
A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements. As of December 31, 2025, we had $20.0 million in letters of credit outstanding under the TRGP Revolver.
The year ended December 31, 2024 includes $55.8 million of interest expense associated with the Splitter Agreement ruling.
The year ended December 31, 2024 includes $55.8 million of interest expense on a 2024 legal ruling associated with an agreement, dated December 27, 2015, for crude oil and condensate between Targa Channelview LLC, then a subsidiary of the Company, and Noble Americas Corp (the “Splitter Agreement”).
Removed
Marketing margin increased due to greater optimization opportunities. LPG export margin increased due to higher volumes as we benefited from the completion of the export expansion project during the third quarter of 2023 and the Houston Ship Channel allowing night-time vessel transits, partially offset by maintenance and required inspections.
Added
The decrease in net income attributable to noncontrolling interests was primarily due to the Badlands Transaction in the first quarter of 2025 and the acquisition of the remaining membership interest in CBF (the “CBF Acquisition”) in the fourth quarter of 2024.
Removed
This decrease in debt borrowing activity was due to lower proceeds from senior unsecured notes, partially offset by higher net borrowings under the Commercial Paper Program, lower repayments under the Term Loan Facility in 2024, and repayments under the Existing TRGP Revolver in 2023.
Added
Marketing margin increased due to greater optimization opportunities.
Removed
Summarized Combined Financial Information for Guarantee of Securities of Subsidiaries Our subsidiaries that guaranteed our obligations under the Existing TRGP Revolver (the “Obligated Group”) also fully and unconditionally guaranteed, jointly and severally, the payment of TRGP’s senior unsecured notes, subject to certain limited exceptions.
Added
Our exposure to adverse credit conditions includes our credit facilities, cash investments, hedging abilities, customer performance risks and counterparty performance risks.
Removed
The increase in total maintenance capital expenditures was primarily due to our growing infrastructure footprint. Future capital expenditures may vary based on investment opportunities and maintenance capital requirements. Off-Balance Sheet Arrangements As of December 31, 2024, there were $73.8 million in surety bonds outstanding related to various performance obligations.
Added
In July 2025, the Partnership amended the Securitization Facility to, among other things, extend the facility termination date to August 31, 2026. 62 On January 6, 2026, we used $650.0 million in borrowings from the Commercial Paper Program and $600.0 million from the Securitization Facility to fund the Stakeholder Acquisition.
Removed
Contracts that will be settled at future spot prices are valued using prices as of December 31, 2024. (7) Includes long-term liabilities of which we are certain of the amount and timing, including certain arrangements that resulted in deferred revenue and other liabilities pertaining to accrued dividends.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

16 edited+5 added−2 removed22 unchanged
Biggest changeWe believe this strategy avoids uncorrelated risks resulting from employing hedges on crude oil or other petroleum products as “proxy” hedges of NGL prices. The fair values of our natural gas and NGL hedges are based on published index prices for 70 delivery at various locations, which closely approximate the actual natural gas and NGL delivery points.
Biggest changeThe NGL hedges cover specific NGL products based upon the expected equity NGL composition. We believe this strategy avoids uncorrelated risks resulting from employing hedges on crude oil or other petroleum products as “proxy” hedges of NGL prices.
In order to avoid having a greater volume hedged than our actual equity volumes, we typically limit our use of swaps to hedge the prices of less than our expected equity volumes. We utilize purchased puts (or floors) and calls (or caps) to hedge additional expected equity commodity volumes without creating volumetric risk.
In order to avoid having a greater volume hedged than our actual equity volumes, we typically limit our use of swaps to hedge the prices of less than our expected equity volumes. We may utilize purchased puts (or floors) and calls (or caps) to hedge additional expected equity commodity volumes without creating volumetric risk.
In an effort to reduce the variability of our cash flows, as of December 31, 2024, we have hedged the commodity price associated with a portion of our expected (i) natural gas, NGL, and condensate equity volumes in our Gathering and Processing operations that result from our percent-of-proceeds processing arrangements, (ii) future commodity purchases and sales in our Logistics and Transportation segment and (iii) natural gas transportation basis risk in our Logistics and Transportation segment.
In an effort to reduce the variability of our cash flows, as of December 31, 2025, we have hedged the commodity price associated with a portion of our expected (i) natural gas, NGL, and condensate equity volumes in our Gathering and Processing operations that result from our percent-of-proceeds processing arrangements, (ii) future commodity purchases and sales in our Logistics and Transportation segment and (iii) natural gas transportation basis risk in our Logistics and Transportation segment.
Crude oil, NGL and natural gas prices are volatile. In an effort to reduce the variability of our cash flows, we have entered into derivative instruments to hedge the commodity price associated with a portion of our expected natural gas, NGL and condensate equity volumes, future commodity purchases and sales, and transportation basis risk through 2028.
The prices for natural gas, NGLs and crude oil are volatile. In an effort to reduce the variability of our cash flows, we have entered into derivative instruments to hedge the commodity price associated with a portion of our expected natural gas, NGL and condensate equity volumes, future commodity purchases and sales, and transportation basis risk through 2029.
A hypothetical change of 100 basis points in the rate of our variable interest rate debt would impact our consolidated annual interest expense by $14.6 million based on our December 31, 2024 debt balances. 71 Counterparty Credit Risk We are subject to risk of losses resulting from nonpayment or nonperformance by our counterparties.
A hypothetical change of 100 basis points in the rate of our variable interest rate debt would impact our consolidated annual interest expense by $1.6 million based on our December 31, 2025 debt balances. Counterparty Credit Risk We are subject to risk of losses resulting from nonpayment or nonperformance by our counterparties.
The range of losses attributable to our individual counterparties as of December 31, 2024 would be between $0.0 million and $3.8 million, depending on the counterparty in default. Customer Credit Risk We extend credit to customers and other parties in the normal course of business.
The range of losses attributable to our individual counterparties as of December 31, 2025 would be between $0.1 million and $14.9 million, depending on the counterparty in default. Customer Credit Risk We extend credit to customers and other parties in the normal course of business.
These netting provisions allow us to net settle asset and liability positions with the same counterparties within the same Targa entity, and would reduce our maximum loss due to counterparty credit risk by $13.4 million as of December 31, 2024.
These netting provisions allow us to net settle asset and liability positions with the same counterparties within the same Targa entity, and reduce our maximum loss due to counterparty credit risk by $6.2 million as of December 31, 2025.
During the years ended December 31, 2024 and 2023, our operating revenues increased (decreased) by $(245.4) million and $441.1 million as a result of transactions accounted for as derivatives.
Our operating revenues increased (decreased) by $(160.3) million and $(245.4) million during the years ended December 31, 2025 and 2024, respectively, as a result of transactions accounted for as derivatives.
The following table shows the effect of hypothetical price movements on the estimated fair value of our derivative instruments as of December 31, 2024: Fair Value Result of 10% Price Decrease Result of 10% Price Increase (In millions) Natural gas $ (162.8 ) $ (105.6 ) $ (219.9 ) NGLs (20.4 ) 33.1 (74.0 ) Crude oil 11.0 51.7 (29.7 ) Total $ (172.2 ) $ (20.8 ) $ (323.6 ) The table above contains all derivative instruments outstanding as of the stated date for the purpose of hedging commodity price risk, which we are exposed to due to our equity volumes and future commodity purchases and sales, as well as basis differentials related to our gas transportation arrangements.
The following table shows the effect of hypothetical price movements on the estimated fair value of our derivative instruments as of December 31, 2025: Fair Value Result of 10% Price Decrease Result of 10% Price Increase (In millions) Natural gas $ (161.1 ) $ (94.1 ) $ (228.1 ) NGL 51.2 124.6 (22.2 ) Crude oil 43.0 71.3 14.7 Total $ (66.9 ) $ 101.8 $ (235.6 ) The table above contains all derivative instruments outstanding as of the stated date for the purpose of hedging commodity price risk, which we are exposed to due to our equity volumes and future commodity purchases and sales, as well as basis differentials related to our gas transportation arrangements.
We have an active credit management process, which is focused on controlling loss exposure due to bankruptcies or other liquidity issues of counterparties. Our allowance for credit losses was $2.5 million as of both December 31, 2024 and 2023. During the years ended December 31, 2024 and 2023, no customer comprised 10% or greater of our consolidated revenues. 72
We have an active credit management process, which is focused on controlling loss exposure due to bankruptcies or other liquidity issues of counterparties. Our allowance for credit losses was $0.7 million and $2.5 million as of December 31, 2025 and 2024, respectively.
Cash flows from a derivative instrument designated as a hedge are classified in the same category as the cash flows from the item being hedged. The primary purpose of our commodity risk management activities is to hedge some of the exposure to commodity price risk and reduce fluctuations in our operating cash flow due to fluctuations in commodity prices.
The primary purpose of our commodity risk management activities is to hedge some of the exposure to commodity price risk and reduce fluctuations in our operating cash flow due to fluctuations in commodity prices.
The estimated fair value of our risk management position has moved from a net asset position of $74.4 million at December 31, 2023 to a net liability position of $172.2 million at December 31, 2024. The net liability position on our derivative contracts is primarily attributable to unfavorable movement in natural gas forward basis prices.
The estimated fair value of our risk management position has moved from a net liability position of $172.2 million at December 31, 2024 to a net liability position of $66.9 million at December 31, 2025.
Interest Rate Risk We are exposed to the risk of changes in interest rates, primarily as a result of variable rate borrowings under the New TRGP Revolver, the Commercial Paper Program and the Securitization Facility. As of December 31, 2024, we do not have any interest rate hedges.
The net liability position on our derivative contracts is primarily attributable to unfavorable movement in natural gas forward basis prices. 69 Interest Rate Risk We are exposed to the risk of changes in interest rates, primarily as a result of variable rate borrowings under the TRGP Revolver, the Commercial Paper Program and the Securitization Facility.
A portion of our condensate sales are hedged using crude oil hedges that are based on the NYMEX futures contracts for West Texas Intermediate light, sweet crude. A majority of these commodity price hedges are documented pursuant to a ISDA with customized credit and legal terms. The principal counterparties (or, if applicable, their guarantors) have investment grade credit ratings.
A majority of these commodity price hedges are documented pursuant to a standard International Swaps and Derivatives Association (“ISDA”) form with customized credit and legal terms. The principal counterparties (or, if applicable, their guarantors) have investment grade credit ratings.
We may buy calls in connection with swap positions to create a price floor with upside. We intend to continue to manage our exposure to commodity prices in the future by entering into derivative transactions using swaps, collars, purchased puts (or floors), futures or other derivative instruments as market conditions permit.
We intend to continue to manage our exposure to commodity prices in the future by entering into derivative transactions using swaps, collars, purchased puts (or floors), futures or other derivative instruments as market conditions permit. 68 When entering into new hedges, we intend to generally match the NGL product composition and the NGL and natural gas delivery points to those of our physical equity volumes.
However, we may enter into interest rate hedges in the future with the intent to mitigate the impact of changes in interest rates on cash flows. To the extent that interest rates increase, interest expense for the New TRGP Revolver, the Commercial Paper Program and the Securitization Facility will also increase.
As of December 31, 2025, we do not have any interest rate hedges. However, we may enter into interest rate hedges in the future with the intent to mitigate the impact of changes in interest rates on cash flows.
Removed
When entering into new hedges, we intend to generally match the NGL product composition and the NGL and natural gas delivery points to those of our physical equity volumes. The NGL hedges cover specific NGL products based upon the expected equity NGL composition.
Added
Both the realized settlements for a derivative instrument designated as a hedge and the related cash flows are classified in the same category as the item being hedged within the Consolidated Statement of Operations and within the Consolidated Statements of Cash Flows.
Removed
As of December 31, 2024, we had $1.5 billion in outstanding variable rate borrowings.
Added
We may buy calls in connection with swap positions to create a price floor with upside.
Added
The fair values of our natural gas and NGL hedges are based on published index prices for delivery at various locations, which closely approximate the actual natural gas and NGL delivery points. A portion of our condensate sales are hedged using crude oil hedges that are based on NYMEX futures contracts for West Texas Intermediate light, sweet crude.
Added
To the extent that interest rates increase, interest expense for the TRGP Revolver, the Commercial Paper Program and the Securitization Facility will also increase. As of December 31, 2025, we had $161.0 million in outstanding variable rate borrowings.
Added
During the years ended December 31, 2025 and 2024, no customer comprised 10% or greater of our consolidated revenues. 70

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