TRGP 10-K & 10-Q changes, risk factors and insider trading

WeOur operatebusiness inis areashighly of high industry activity,competitive, which may affect our ability to hire, train or retain qualifiedofficers personneland employees needed to manage and operate our business.

Weather events may damage our pipelines and other facilities,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.

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 a materialan adverse effect on our business and results of operations.

If we do not develop growth projects and/or make acquisitions for expanding existing assets or constructing new assets on economically acceptable terms, or fail to efficiently and effectively integrate developed or acquired assets with our asset base, our future growth will be limited. 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.operations. 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.

Inflationary issuesInflation 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.

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 tofor investother uses in our business.

Our and our customers’ operations are subject to a number of risks arisingrelated out ofto the potential threat of climate change, including the potential for increasingly stringentevolving 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 andmay impact the disclosure obligations may impactof our business.

WeOur operatebusiness inis areashighly of high industry activity,competitive, which may affect our ability to hire, train or retain qualifiedofficers personneland employees needed to manage and operate our business.

Any delay or inability to secure the personnelofficers and employees necessary for us to continue or complete our current and planned development projects, or any significant increases in costs with respect to the hiring, training or retention of qualified personnel, could have a material adverse effect on our business, financial condition and results of operations.

Weather events may damage our pipelines and other facilities,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 operations along the Gulf Coast, in offshore waters and at major river crossings in particular could be adversely impacted by changing climatic conditions, as rising sea levels, subsidence and erosion are potential causes for serious damage to our pipelines and other facilities, which could affect our ability to provide services. 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 MexicoAmerica and could result in liability, remedial obligations or otherwise have a negative impact on continued operations. Additionally, rising sea levels, subsidence and erosion processes could impact our oil and gas exploration and production customers who operate along the Gulf Coast, and they may be unable to utilize our services. Adverse climatic impacts, whether inland or along the coast or offshore, could also affect our third-party suppliers, which could limit their ability to provide us with the necessary products and services enabling us to maintain operation of our pipelines and other facilities. 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. Such costs could adversely affect our business, financial condition, results of operations and cash flows.

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 a materialan adverse effect on our business and results of operations.

The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (“2011 Pipeline Safety Act”), the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (“2016 Pipeline Safety Act”) and the Protecting Our Infrastructure of Pipelines and Enhancing Safety (“PIPES”) Act of 2020, require PHMSA to impose more stringent pipeline safety standards on pipeline operators. As a result of those legislative enactments, PHMSA has issued several significant rulemakings. In August 2022, PHMSA finalized the last of three rules known collectively as the “Gas Mega Rule,” which collectively, among other items, imposed safety regulations on previously unregulated onshore gas gathering lines, required updated inspection and maintenance plans for the elimination of hazardous leaks and minimization of natural gas released from pipeline facilities and adjusted and strengthened repair, maintenance and integrity management assessment criteria for pipelines in HCAs and non-HCAs. The rule has been subject to litigation, and in August 2024, the D.C. Circuit Court agreed with the challengers that PHMSA had failed to conduct an adequate cost-benefit analysis of four of the new standards, vacating those aspects of the rules. In January 2025, PHMSA finalized a rule that enhances the safety requirements for gas distribution pipelines and requires updates to distribution integrity management programs, emergency response plans, operation and maintenance manuals and other safety practices. However, the current administration withdrew the final rule and, accordingly, it has not been codified. The integrity-related requirements and other provisions of the 2011 Pipeline Safety Act, the 2016 Pipeline Safety Act, and the PIPES Act of 2020, as well as any implementation of PHMSA rules thereunder, could require us to pursue additional capital projects or conduct integrity or maintenance programs on an accelerated basis and incur increased operating costs that could have a material adverse effect on our costs of transportation services as well as our business, results of operations and financial condition.

The construction of additions or modifications to our existing systems and the construction of new midstream assets involve numerous regulatory, environmental, political and legal uncertainties beyond our control and may require the expenditure of significant amounts of capital. If we undertake these projects, they may not be completed on schedule, at the budgeted cost or at all. For example, the construction of additional systems may be delayed or require greater capital investment if the commodity prices of certain supplies, such as steel pipe, increase due to imposed tariffs. Moreover, our revenues may not increase immediately upon the expenditure of funds on a particular project. For instance, if we build a new pipeline, fractionation facility or gas processing plant, the construction may occur over an extended period of time and we will not receive any material increases in revenues until the project is completed. Moreover, we may construct pipelines or facilities to capture anticipated future growth in production in a region in which such growth does not materialize. SinceFor we are not engaged in the exploration for and development of natural gas and oil reserves,example, we do not possess reservereserves expertiseestimation expertise, and we oftentypically do not haveobtain accessindependent to third-party estimatesevaluations of potentialnatural gas or crude oil reserves in an area prior to constructing pipelines or facilities in such area. To the extent we rely on estimates of future production in any decision to construct additionsconnected to our systems,gathering such estimates may prove to be inaccurate because there are numerous uncertainties inherent in estimating quantities of future production.systems. As a result, the total reserves or estimated life of the reserves connected to our gathering systems could be less than we anticipate. Thus, new pipelines or facilities may receive lower volumes than we anticipate and may not be able to attract enough throughput to achieve our expected investment return, which could adversely affect our results of operations and financial condition. 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. 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.

If we do not develop growth projects and/or make acquisitions for expanding existing assets or constructing new assets on economically acceptable terms, or fail to efficiently and effectively integrate developed or acquired assets with our asset base, our future growth will be limited. 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.operations. 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.

Our ability to grow depends, in part, on our ability to develop growth projects and/or make acquisitions that result in an increase in cash generated from operations. 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.

the failure to realize expected volumes, revenues, profitability or growth or any expected synergies and cost savings;

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.operations.

Inflationary issuesInflation 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.

The rate of inflation in the U.S. began to increase significantly beginning in the second half of 2021. Although the rate of inflation has generally declined since the second half of 2022, inflationaryInflationary pressures remainhave 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. Sustained levels of high inflation likewise caused the U.S. Federal Reserve and other central banks to increase interest rates multiple times in 2022 and 2023. The U.S. Federal Reserve made cuts to benchmark interest rates in 2024; however, there is no guarantee that additional cuts will occur. To the extent elevated inflation levels exist, we may experience further cost increases for our operations, including services, labor and equipment cost increases, and any subsequent increases in benchmark interest rates could have the effect of raising the cost of capital and depressing economic growth, either of which (or the combination thereof) could negatively impact the financial and operating results of our business. 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.

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 tofor investother uses in our business.

While we expect to be able to utilize our NOL carryforwards and generate deductions to offset all or a portion of our future taxable income (subject to the CAMT discussed below), in the event that deductions are not generated as expected, one or more of our tax positions are successfully challenged by the IRS (in a tax audit or otherwise) or our NOL carryforwards are subject to future limitations under Section 382, our future tax liability may be greater than expected. We cannot predict our future cash tax payments and tax liabilities given the recent change in Presidential administrations.

Our long-term unsecured debt is currently rated by Fitch, Moody’s and S&P. As of December 31, 2024,2025, Targa’s senior unsecured debt was rated “BBB” by Fitch, “Baa2” by Moody’s and “BBB” by S&P. 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.

We may be able to incur substantial additional indebtedness in the future. 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 ourthe Commercial Paper Program, and allows us to request increases in commitments up to an additional $500.0 million. Although our debt agreements contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and any indebtedness incurred in compliance with these restrictions could be substantial. If we incur additional debt, this could increase the risks associated with compliance with our financial covenants.

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 during an event of default;

enterincur into sale and lease-back transactions or take-or-pay contractsliens; and change business activities conducted by us.

A downgrade in our credit rating could also result in our indebtedness agreements imposing additional restrictive covenants that may place further operating and financial limitations on our business. In addition, certain of our debt agreements require us to satisfy and maintain specified financial ratios and other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will meet those ratios and tests.

Our and our customers’ operations are subject to a number of risks arisingrelated out ofto the potential threat of climate change, including the potential for increasingly stringentevolving 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 recent years, there has been considerable focus on the regulation of methane emissions from the oil and gas sector. 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. FinesHowever, in March 2025, the EPA announced plans to reconsider OOOOb and penaltiesOOOOc, forin violations of these rules can be substantial. The rules have been subject to legal challenge, and may also be repealed or modified by the Presidential administration or Congress, though we cannot predict the substance or timing of such changes, if any. Moreover, complianceline with the newcurrent rulesPresidential mayadministration’s affectderegulatory agenda. Additionally, in November 2025, the amountEPA wefinalized owean underinterim rule extending the IRA’s methane fee described above because compliance withdeadlines EPA’sfor methanecertain rulesprovisions wouldprovided exemptin anOOOOb otherwiseand coveredOOOOc. facilityLitigation from the requirement to pay the methane fee. To the extent not repealed or modified by the Presidential administration or Congress, the requirements ofchallenging the EPA’s final methaneinterim rulesrule haveextending thesuch potentialcompliance todeadlines increasefor our operating costsnew and thusexisting may adversely affect our financial resultsoil and cashgas flows.sources Moreover,remains failure to comply with these CAA requirements can result in the imposition of substantial fines and penalties as well as costly injunctive relief.pending.

Governmental, scientific, and public concern from sources in the United States and across the world over the potential threat of climate change arising from GHG emissions has resulted in increasing political risks that may limit hydraulic fracturing of oil and natural gas wells, restrict flaring and venting during natural gas production on government-owned properties, and ban or restrict new or existing leases for production of minerals on government-owned properties. For instance, in the United States,States. For instance, the prior Presidential administration issued several executive orders focused on addressing climate change, including items that may impact 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. Additionally, inIn 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. This rule is currently subject to litigation and its implementation has been halted in North Dakota, Texas, Utah, Montana and Wyoming. TheAdditionally, U.S.the DepartmentBLM has halted enforcement of various regulatory compliance deadlines associated with the Interior’srule comprehensiveuntil reviewthe end of the federal leasing program resulted in a reduction in the volume of onshore land held for lease and an increased royalty rate.2026. Any regulatory changes that restrict or require modifications to our or our suppliers’ existing operations or future expansions plans could reduce the demand for the products and services we provide, increase our operating costs and may have a negative impact on our financial condition.

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. 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.companies, although this trend has waned in recent times. 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 addition,October in March 2024, the SEC finalized a rule that would establish a framework for the reporting of climate risks, targets, and metrics. However, implementation of the rule has been stayed pending the outcome of legal challenges, and the future of the rule is uncertain at this time following the change in Presidential administrations. Separately,2023, the State of California adopted several laws that require similar, or in some situations more extensive, disclosure. While implementing rules on certaindisclosure of various climate risks, targets, and metrics. However, these laws are outstanding,currently both the California laws and the SEC rule,subject to litigation. 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. 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. For further discussion, please see Weather events may damage our pipelines and other facilities,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.

Stakeholder and market attention to sustainability matters andmay impact the disclosure obligations may impactof our business.

As part of our ongoing effort to enhance our sustainability practices, our Board of Directors has established a Sustainability Committee. Committee members oversee management’s implementation of sustainability policies and procedures in coordination with other committees of the Board as appropriate. We also have a vice president of sustainability, who reports directly to our CEO and also regularly provides reports on relevant sustainability matters to our Board of Directors. We published our 20232024 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. Moreover, despite our governance oversight in place, many of our sustainability targets and goals are ambitious, and we may not be able to adequately identify sustainability-related risks and opportunities and, further, may not be able to meet our sustainability targets and goals in the manner or on such a timeline as initially contemplated, or at all, including as a result of unforeseen costs or technical difficulties associated with achieving such results. Moreover, even if we are to achieve our targets and goals or complete other sustainability initiatives, there is no guarantee that doing so will have the desired effect. Sustainability-related actions or statements that we may make or take are sometimes based on expectations, assumptions, or third-party information that we currently believe to be reasonable, but which may subsequently be determined to be erroneous or be subject to misinterpretation. For example, methodologies regarding the monitoring and calculation of climate risks and GHG emissions are evolving, and it is possible that stakeholders, either currently or at some point in future, may not agree with our approach. Moreover, to the extent we elected to pursue such targets and were able to achieve the desired target levels, such achievement may have been accomplished as a result of entering into various contractual arrangements, including the purchase of various credits or offsets that may be deemed to mitigate our sustainability impact instead of actual changes in our sustainability performance. However, we cannot guarantee that there will be sufficient offsets for purchase or that, notwithstanding our reliance on any reputable third party registries, that the offsets we do purchase will successfully achieve the emissions reductions they represent. Notwithstanding our election to pursue aspirational targets now or in the future, we may receive pressure from investors, lenders or other groups to adopt more aggressive climate or other sustainability-related goals, but we cannot guarantee that we will be able to pursue or implement such goals because of potential costs or technical or operational obstacles. 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.

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. Additionally, we and other companies in our industry publish sustainability reports that are made available to investors. Such ratingsratings, proxy advisory services, and reports are used by some investors to inform their investment and voting decisions. Certain lenders may decide not to provide funding to us or our customers’ companies based on sustainability concerns, which could adversely affect our financial condition and access to capital for potential growth projects. Investors, lenders, and other stakeholders that focus on issues related to environmental justice and natural capital may result in increased scrutiny of our processes on such issues.

PublicCertain 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,issues are becoming increasingly subject to heightened scrutiny from public and governmental authoritiesauthorities, as well as other parties, related to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential sustainability benefits. For example, the SEC has recently taken enforcement action against companies for ESG-relatedsustainability-related misconduct, including alleged greenwashing. CertainRegulators, 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. As a result, we may face increased litigation risks from private parties and governmental authorities related to our sustainability efforts. In addition, any alleged claims of greenwashing against us or others in our industry may lead to further negative sentiment and diversion of investments. 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.

Current economic conditions and competition for asset purchases and development opportunities could limit our ability to fully execute our growth strategy. Due to increasedIncreased volatility in commodity prices and the broader market,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 has been negatively impacted.all. 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 20252026 and beyond. For additional information regarding our financing activities, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Our Liquidity and Capital Resources.”

The profitability of our business is a function of the difference between: (i) the revenues we receive from our operations, including fee-based revenues from services and revenues from the natural gas, NGLs, crude oil and condensate we sell, and (ii) the costs associated with conducting our operations, including the costs of wellhead natural gas, crude oil and mixed NGLs that we purchase as well as operating, general and administrative costs and the impact of our commodity hedging activities. Because commodity price movements tend to impact both revenues and costs, increases or decreases in our revenues alone are not necessarily indicative of increases or decreases in our profitability. Our contract portfolio, the prevailing pricing environment for natural gas, NGLs and 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 gasgas, NGLs and NGLcrude oil throughput on our systems are important factors in determining our profitability. Our profitability is also affected by the NGL content in gathered wellhead natural gas, supply and demand for our products and services, utilization of our assets and changes in our customer mix.

Our profitability is impacted by our ability to add new sources of natural gas supply and crude oil supplysupplies to offset the natural decline of existing volumes from oil and natural gas wells that are connected to our gathering and processing systems. 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 and natural gas supplies currently gathered by third parties. Similarly, our profitability is impacted by our ability to add new sources of mixed NGL supply, connected by third-party transportation and Grandour Prix,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.

Our capital expenditures are classified as growth capital expenditures and maintenance capital expenditures. Growth capital expenditures improve the service capability of theour existing assets, extend asset useful lives, increase capacities from existing levels, add capabilities, and reduce costs or enhance revenues. 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 spendingspend associated with growth and maintenance projects is closely monitored. Return on investment is analyzed before a capital project is approved, spendingspend 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.

We define adjusted cash flow from operations as adjusted EBITDA less cash interest expense on debt obligations and cash taxes.tax (expense) benefit. 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 growth capital expenditures, net of contributions from noncontrolling interestinterests and including contributions to investments in unconsolidated affiliates. 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.

The following table reconciles the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the periods indicatedpresented:

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.interest accounting.

Litigation expenseand environmental reserves includes charges related to specific litigation resultingand fromenvironmental thecompliance majormatters winterthat stormare nonrecurring in Februarynature 2021 that we considerand outside the ordinary course of our business and/or not reflective of our ongoing core operations. We may incur such charges from time to time, and we believe it is useful to exclude suchthese charges becauseas we do not consider them reflective of our ongoing core operations and because of the generally singular nature of the claims underlying such litigation.operations.

Excludes amortization ofrecognized in interest expense. 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 ruling.”).

Represents capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests and includes contributions to investments in unconsolidated affiliates.

The following table and discussion is a summary of our consolidated results of operations for the periods presented:

CommodityThe increase in commodity sales arereflected relatively flat reflecting lowerhigher 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 ($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$860.2 million).

The increase in fees from midstream services iswas primarily due to higher gas gathering and processing fees, and higher export volumes, partially offset by lower transportation and fractionation fees,fees. Lower transportation and higherfractionation exportfees volumes.were due to a planned turnaround at a portion of our facilities in Mont Belvieu, Texas.

ProductThe decrease in product purchases and fuel arereflected relativelylower flatNGL reflectingprices, partially offset by higher natural gas prices, and higher NGL and natural gas volumes, offset by lower natural gas prices.volumes.

The increase in operating expenses iswas primarily due to higher labor, maintenance, rentaltaxes and chemicalmaintenance costs as a result of increased activity and system expansions, partially offset by lower taxes.expansions.

The increase in depreciation and amortization expense iswas 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.base.

The increase in general and administrative expense iswas primarily due to higher compensation and benefits and professional fees.benefits.

The increase in other operating (income tax) expense iswas primarily due to the releaserecognition of stateSection valuation45Q allowancetax incredits 2023.earned through our carbon capture and sequestration activities.

The premium on repurchase of noncontrolling interests, net of tax is primarilywas due to the Badlands Transaction in 2025 and the CBF Acquisition in 2024 and the Grand Prix Transaction in 2023.2024.

OurThe following table presents our operating margins by reportable segment are:

Operations include facilities that are not wholly ownedwholly-owned by us. For more information regarding our joint ventures and jointly owned facilities, see “Item 1. Business—Our Business Operations.”

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 naturalvolumes gasin andother condensate prices.areas. The increase in natural gas inlet volumes in the Permian 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, 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.

The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin, higher marketing margin,margin and higher LPG exportmarketing margin. 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-serviceaddition of the Daytona NGL Pipeline during the third quarter of 2024, and the addition of Train 10 during the fourth quarter of 2024. 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.

The increase in operating expenses was predominantly due to higher system volumes, higher compensationexpansions and benefits,planned higher taxes, higher repairs and maintenance and the addition of two trains during 2024.maintenance.

As of December 31, 2024,2025, inclusive of our consolidated joint venture accounts, we had $157.3$166.1 million of Cash and cash equivalents on our Consolidated Balance Sheets. 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, 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. 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, including our day-to-day operations, growth capital expenditures, dividend payments, maintenance capital expenditures, debt service and other anticipated obligations. Our ability to generate cash is subject to a number of factors, some of which are beyond our control. These include commodity prices and ongoing efforts to manage operating costs and maintenance capital expenditures, as well as general economic, financial, competitive, legislative, regulatory and other factors. For additional discussion on recent factors impacting our liquidity and capital resources, see “Recent Developments.”

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, ourthe Commercial Paper Program, the Securitization Facility, proceeds from debt and equity offerings, and joint ventures and/or asset sales. Based on anticipated levels of operations and absent any disruptive events, we believe our liquidity is sufficient to finance our operations, capital expenditures, quarterly cash dividends and obligations, as discussed further below, for at least the next twelve months.

Our short-term liquidity on a consolidated basis as of FebruaryJanuary 18,31, 20252026 was:

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.

In AugustJuly 2024,2025, the Partnership amended the Securitization Facility to, among other things, extend the facility termination date of the Securitization Facility to August 29,31, 2025.2026.

A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements. As of December 31, 2024,2025, we had $17.6$20.0 million in letters of credit outstanding under the Existing TRGP Revolver. 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.

WorkingOur working capital as of December 31, 20242025 decreased $310.0$307.8 million compared to December 31, 2023.2024. The decrease was primarily due to higher accountscurrent debt obligations as a result of the reclassification of the 6.875% Notes due 2029 from Long-term debt in our Consolidated Balance Sheets in November 2025, higher payable relatedbalances due to capital spending on growth projects,projects higherand lower trade receivables resulting from lower NGL prices. The decrease was partially offset by a lower outstanding balance on the Securitization Facility, lower product purchases and fuel payables resulting from higherlower NGL volumesprices and prices, and higher net liabilities for hedging activities, partially offset by higher receivables resulting froma higher NGL volumesinventory andbalance. prices,See anddiscussion abelow lowerabout outstandingour balancefinancing on the Securitization Facility.activities.

Our long-term financing consists of potentially raising funds through long-term debt obligations, the issuance of common stock, preferred stock, or joint venture arrangements. 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. 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, 2024,2025, we did not have any interest rate hedges.

In AugustFebruary 2024,2025, we completed an underwritten public offering of the 5.500%5.550% Notes,Notes due 2035 and the 6.125% Notes 2055, resulting in net proceeds of approximately $990.1$2.0 million.billion. We used a portion of the net proceeds from the debt issuance to fund the Badlands Transaction and for general corporate purposes, including 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.Program.

For information about our debt obligations, see “Note 8 – Debt Obligations” to our consolidatedConsolidated financialFinancial statements.Statements. For information about our interest rate risk, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”

The increase in net cash provided by operating activities was primarily due to higher collections from customers resulting from increased revenues duringin 20242025 compared to 2023,2024, partially offset by an increase in payments for product purchasespurchases, operating costs and fuel, lower settlementsinterest on ourdebt. hedgingIn transactions,addition, anduring increase2024 inwe interest payments, andmade a nonrecurring one-time payment associated with the Splitter Agreement ruling.Agreement.

The increase in net cash used in investing activities was due to higher outlays for major growth capital projects in 20242025 primarily related to construction activitiesactivities, outlays for the acquisitions completed in the Permian region2025, and Montan Belvieu,increase Texas.in contributions to unconsolidated affiliates.

Our subsidiaries that guaranteedguarantee our obligations under the Existing TRGP Revolver (the “Obligated Group”) also fully and unconditionally guaranteed,guarantee, jointly and severally, the payment of TRGP’s senior unsecured notes, subject to certain limited exceptions.

The following table details cash outlays for capital projects for the yearsperiods ended December 31, 2024 and 2023presented:

We have invested in entities that are not consolidated in our financial statements. 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.Obligations” to our Consolidated Financial Statements.

We believe we have sufficient liquidity to fund our operations and meet our short-term and long-term cash obligations. The following table is a summary of our material future contractual cash obligations as of December 31, 2025:

Represents scheduled future maturities of long-term debt obligation and excludes the Securitization Facility. See “Note 8 - Debt Obligations” to our Consolidated Financial Statements for more information.

Represents interest expense on long-term debt obligations based on both fixed debt interest rates and prevailing December 31, 20242025 rates for floating debt. See “Note 8 - Debt Obligations” to our Consolidated Financial Statements for more information.

Includes minimum payments on operating lease obligations for compressors, office space and railcars. See “Note 10 - Leases” to our Consolidated Financial Statements for more information.

Includes minimum payments on finance lease obligations for compressors, substations,vehicles, vehiclesgenerators, substations and tractors. See “Note 10 - Leases” to our Consolidated Financial Statements for more information.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2025 (“Annual Report”), as well as the unaudited consolidated financial statements and notes hereto included in this quarterly report on Form 10-Q for the quarter ended MarchJune 31,30, 2026 (“Quarterly Report”).

East Driver plant, a 275 MMcf/d plant in Permian Midland (the “East Driver plant”), expected to begincommenced operations late in the thirdsecond quarter of 2026.

Train 11 in Mont Belvieu, Texas (“Train 11”), commenced operations early in the second quarter of 2026.

In February 2025, we announced an intra-Delaware Basin expansion of our NGL pipeline system, (“Delaware Express”) in Permian Delaware. The expansion is expected to begincommenced operations in the second quarter of 2026.

For the three and six months ended MarchJune 31,30, 2026, we repurchased 227,801308,102 shares and 535,903 shares of our common stock at a weighted average per share price of $241.43$259.93 and $252.07 for a total net cost of $55.0$80.1 million.million and $135.1 million, respectively. As of MarchJune 31,30, 2026, there was $1,318.6$1,238.5 million remaining under the Share Repurchase Programs.

As of MarchJune 31,30, 2026, examinations by the Internal Revenue Service (the “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. We do not expect there to be any audit adjustments that would materially change our taxable income.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The decrease in commodityCommodity sales reflectedwere relatively flat due to lower NGL, natural gas and condensate prices ($1,064.2$784.8 million) and the unfavorable impact of hedges ($291.6 million), partially offset by higher NGL and condensate prices ($597.8 million) and higher NGL, natural gas and condensate volumes ($476.9 million) and the favorable impact of hedges ($47.5$435.2 million).

The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, partiallyhigher offsettransportation byand lowerfractionation fees, and higher export volumes.

The decrease in product purchases and fuel reflected lower NGL and natural gas prices, partially offset by higher NGL prices, and higher NGL and natural gas volumes.

The increase in operating expenses was primarily due to higher labor and maintenance costs in part due to increased activity and system expansions, and the acquisition of certain assets in the Permian Basin.Basin, partially offset by lower compressor rental costs.

The increase in depreciation and amortization expense was primarily due to the acquisition of certain assets in the Permian BasinBasin, higher amortization of right-of-use assets for finance leases, and the impact of system expansions on our asset base.

Average realized prices, net of fees, include the effect of realized commodity hedge gain/loss attributable to our equity volumes. The price is calculated using total commodity sales plus the hedge gain/loss as the numerator and total sales volume as the denominator, net of fees. Negative realized natural gas prices during the second quarter of 2026 were a result of an extended period of negative Waha prices due to significant egress constraint in the Permian Basin.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The increase in adjusted operating margin was predominantlyprimarily due to higher natural gas inlet volumes in the Permian which drove higher fee-based margin, partially offset by lower commoditynatural gas prices. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Pembrook II plant during the third quarter of 2025, the Bull Moose II plant during the fourth quarter of 2025, the Falcon II plant during the first quarter of 2026, the East Pembrook plant during the second quarter of 2026, continued strong producer activity and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.

The increase in operating expenses was primarily due to higher volumes,volumes resulting from multiple plant additions and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

The increase in adjusted operating margin was due to higher marketing margin andmargin, higher pipeline transportation and fractionation margin and higher LPG export margin. Marketing margin increased due to greater optimization opportunities. Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems.systems and the addition of Train 11 early in the second quarter of 2026. LPG export margin increased due to higher volumes and fees.

The increase in operating expenses was primarily due to higher repairs and maintenance and higher compensation and benefits.benefits including amounts related to system expansions.

As of MarchJune 31,30, 2026, inclusive of our consolidated joint venture accounts, we had $100.1$132.3 million of Cash and cash equivalents on our Consolidated Balance Sheets. 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. Our exposure to adverse credit conditions includes our credit facilities, cash investments, hedging abilities, customer performance risks and counterparty performance risks.

Our short-term liquidity on a consolidated basis as of MarchJune 31,30, 2026, was:

A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements. As of MarchJune 31,30, 2026, we had $17.9 million in letters of credit outstanding under the TRGP Revolver. 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.

Our working capital as of MarchJune 31,30, 2026 increased $226.4$402.1 million compared to December 31, 2025. The increase was primarily due to the redemption of all of the Partnership’s 6.875% Notes due 2029,2029 and higher trade receivables resulting from higher natural gas and NGL prices and lower interest payable due to timing of interest payments. The increase wasreceivables, partially offset by a higher outstanding balance on the Securitization Facility, higher net liabilities for hedging activities, lower NGL inventory balance anda higher payablepayables balancesbalance due to capital spending on growth projects.projects, a lower NGL inventory balance, and higher product purchases and fuel payables.

As of MarchJune 31,30, 2026, both we and the Partnership were in compliance with the covenants contained in our various debt agreements.

The decreaseincrease in net cash provided by operating activities was primarily due to a decrease in payments for product purchases resulting from lower natural gas and NGL prices, partially offset by lower collections from customers resulting from lower revenues in 2026 compared to 2025, as well asand higher payments for operating costs, payments for hedging activities, and interest on debt, partially offset by a decrease in payments for product purchases.debt.

The increase in net cash used in investing activities was primarily due to outlays for the Stakeholder Acquisition and higher outlays for major capital growth capital projects in 2026.

The change in net cash provided by (used in) financing activities was due to lower repurchases of noncontrolling interests primarily due to the Badlands Transaction in 2025 and lower repurchases of common stock, partially offset by lower borrowingsproceeds offrom debt activity and by higher dividends paid. The decrease in cash flows from our debt activity during the six months ended June 30, 2026 as compared to the same period in 2025 was due to the redemption of all of the Partnership’s 6.875% Notes due 2029 and lower proceeds from the issuance of our senior unsecured notes in 2026,2026 and the use of cash in January 2026 to redeem all of the Partnership’s 6.875% Notes due 2029, partially offset by higher proceeds from net borrowings under the SecuritizationCommercial FacilityPaper Program and the CommercialSecuritization Paper Program.Facility.

The following table details the dividends on common stock declared and/or paid by us for the threesix months ended MarchJune 31,30, 2026:

Growth capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests, and including contributions to investments in unconsolidated affiliates, were $914.4$2,027.7 million and $594.5$1,479.6 million for the threesix months ended MarchJune 31,30, 2026 and 2025.

Maintenance capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests, were $37.6$90.0 million and $47.3$106.2 million for the threesix months ended MarchJune 31,30, 2026 and 2025.

As of MarchJune 31,30, 2026, there were $62.3$64.1 million in surety bonds outstanding related to various performance obligations. 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.