Results
Targa Resources Corp. Reports Record Second Quarter 2026 Financial Results
Second quarter 2026 net income attributable to Targa Resources Corp. was $765 million compared to $629 million for the second quarter of 2025.
The Company reported adjusted earnings before interest, income taxes, depreciation and amortization, and other non-cash items (“adjusted EBITDA”) (1) of $1,603 million for the second quarter of 2026 compared to $1,163 million for the second quarter of 2025.
2Record adjusted EBITDA for the second quarter of $1.6 billion, an increase of 38% year-over-year and a 14% increase compared to the first quarter
Record Permian inlet, NGL transportation, fractionation, and LPG export volumes during the second quarter
Corporate events
Commenced operations of our Train 11 fractionator and Delaware Express NGL Pipeline expansion during the second quarter
Commenced operations of our new East Driver processing plant in Permian Midland late in the second quarter, ahead of schedule
Outlook
Estimate full year 2026 adjusted EBITDA to be towards the top end of $5.7 billion to $5.9 billion range
Continue to estimate 2026 net growth capital expenditures of approximately $4.5 billionGuidance reaffirmed
Capital return
On July 16, 2026, the Company declared a quarterly cash dividend of $1.25 per common share, or $5.00 per common share on an annualized basis, for the second quarter of 2026.
This dividend represents a 25 percent increase over the common dividend declared with respect to the second quarter of 2025.
Total cash dividends of approximately $268 million will be paid on August 14, 2026 on all outstanding shares of common stock to holders of record as of the close of business on July 31, 2026.
During the second quarter of 2026, Targa repurchased 308,102 shares of its common stock at a weighted average per share price of $259.93 for a total net cost of $80 million.
As of June 30, 2026, there was $1,239 million remaining under the Company’s share repurchase programs.
Management commentary
Second Quarter 2026 - Sequential Quarter over Quarter Commentary
Results
8Targa reported record second quarter adjusted EBITDA of $1,603 million, representing a 14 percent increase compared to the first quarter of 2026.
The sequential increase was driven by higher marketing margin in our Logistics and Transportation (“L&T”) segment, record Permian volumes in our Gathering and Processing (“G&P”) segment, and record NGL transportation, fractionation, and LPG export volumes in our L&T segment.
In our G&P segment, higher sequential adjusted operating margin was driven by record Permian natural gas inlet volumes, partially offset by lower natural gas prices.
5Permian inlet volumes increased more than 450 million cubic feet per day (“MMcf/d”) despite temporary curtailments by certain producer customers in response to negative Waha natural gas prices in the second quarter.
In our L&T segment, higher sequential adjusted operating margin was driven by higher marketing margin, and record NGL pipeline transportation, fractionation, and LPG export volumes.
Marketing margin increased due to greater optimization opportunities.
NGL pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian G&P systems and the addition of Train 11 early in the second quarter of 2026.
LPG export margin increased due to higher volumes and fees.
Corporate events
Capitalization, Financing and Liquidity
The Company’s total consolidated debt as of June 30, 2026 was $19,578 million, net of $128 million of debt issuance costs and $39 million of unamortized discount, with $17,900 million of outstanding senior unsecured notes, $600 million outstanding under our Commercial Paper Program, $451 million outstanding under our accounts receivable securitization facility (the “Securitization Facility”), and $794 million of finance lease liabilities.
Total consolidated liquidity as of June 30, 2026 was approximately $3.2 billion, including $2.9 billion available under the TRGP Revolver, $149 million under the Securitization Facility and $132 million of cash.
4In July 2026, Targa amended the Securitization Facility to, among other things, extend the facility termination date to July 30, 2027 and increase borrowing capacity to up to $800 million.
Growth Projects Update
In our G&P segment, we commenced operations of our new East Driver plant in the Permian Midland late in the second quarter, ahead of schedule.
Construction remains underway on our Copperhead, Yeti, Yeti II, Roadrunner III, and Copperhead II plants in Permian Delaware, and our G&P projects remain on track.
Management commentary
In our L&T segment, we commenced operations of our Train 11 fractionator in Mont Belvieu, TX and our Delaware Express NGL Pipeline expansion in the second quarter.
Construction continues on our Train 12 and Train 13 fractionators in Mont Belvieu, our Speedway NGL Pipeline, our GPMT LPG Export Expansion, and our Bull Run, Buffalo Run and Forza intra-basin residue gas pipeline projects.
Our L&T projects remain on track.
Outlook
2026 Outlook
1Given the strength of Targa’s performance through the first two quarters of the year, Targa now estimates full year 2026 adjusted EBITDA to be towards the top end of our $5.7 billion to $5.9 billion range.Guidance raised
7The higher outlook for full year 2026 is driven by the realization of strong marketing and optimization margin particularly in the first and second quarters of the year, and continued strength of volume growth of our integrated assets across the full year.Guidance raised
We continue to estimate net growth capital expenditures to be approximately $4.5 billion, and our estimate for 2026 net maintenance capital expenditures remains unchanged at approximately $250 million.Guidance reaffirmed
Results
3Commodity sales were relatively flat due to lower natural gas prices ($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 ($435.2 million).
Management commentary
The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, higher transportation and fractionation fees, and higher export volumes.
The decrease in product purchases and fuel reflected lower 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 system expansions, and the acquisition of certain assets in the Permian 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 Basin, higher amortization of right-of-use assets for finance leases, and the impact of system expansions on the Company’s 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 lower asset abandonment costs.
Results
The increase in income tax (expense) benefit was primarily due to the increase in pre-tax book income.
6The decrease in commodity sales reflected lower natural gas and NGL prices ($1,309.2 million) and the unfavorable impact of hedges ($244.1 million), partially offset by higher NGL, natural gas and condensate volumes ($899.6 million) and higher condensate prices ($70.5 million).
Management commentary
The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, higher transportation and fractionation fees, and higher export volumes.
The decrease in product purchases and fuel reflected lower natural gas and NGL prices, partially offset by higher NGL and natural gas volumes.
The increase in operating expenses was primarily due to higher labor and maintenance costs, and taxes in part due to system expansions, 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 Basin, higher amortization of right-of-use assets for finance leases, and the impact of system expansions on the Company’s asset base.
The increase in general and administrative expense was primarily due to higher compensation and benefits.
Results
The increase in other operating (income) expense was primarily due to recognition of Section 45Q tax credits earned through the Company’s carbon capture and sequestration activities, and lower asset abandonment costs.
The increase in interest expense, net, was primarily due to higher borrowings, partially offset by an increase in capitalized interest.
The decrease in other, net, was primarily due to the premium paid on the redemption of all of the Partnership’s 6.875% Notes due 2029.
The increase in income tax (expense) benefit was primarily due to the increase in pre-tax book income.
Corporate events
The premium on repurchase of noncontrolling interests, net of tax was due to the Badlands Transaction in the first quarter of 2025.
Results
Review of Segment Performance
Gathering and Processing Segment
The following table provides summary data regarding results of operations of this segment for the periods indicated:
Management commentary
Average realized prices, net of fees, include the effect of realized commodity hedge gain/loss attributable to the Company’s 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.
Results
The following table presents the realized commodity hedge gain (loss) attributable to the Company’s equity volumes that are included in the adjusted operating margin of the Gathering and Processing segment:
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The increase in adjusted operating margin was primarily due to higher natural gas inlet volumes in the Permian which drove higher fee-based margin, partially offset by lower natural 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 resulting from multiple plant additions and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The increase in adjusted operating margin was primarily due to higher natural gas inlet volumes in the Permian which drove higher fee-based margin, partially offset by lower natural gas and NGL 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 resulting from multiple plant additions and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.
Logistics and Transportation Segment
The following table provides summary data regarding results of operations of this segment for the periods indicated:
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
The increase in adjusted operating margin was due to higher marketing margin, 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 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 compensation and benefits including amounts related to system expansions.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
The increase in adjusted operating margin was due to higher marketing margin, 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 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 compensation and benefits including amounts related to system expansions.
Other contains the unrealized mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges.
The Company has entered into derivative instruments to hedge the commodity price associated with a portion of the Company’s future commodity purchases and sales and natural gas transportation basis risk within the Company’s Logistics and Transportation segment.
NGL and natural gas sales, less NGL and natural gas purchases, fuel, third-party transportation costs and the net inventory change.
Management commentary
the viability of capital expenditure projects and acquisitions and the overall rates of return on alternative investment opportunities.
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