Targa Resources : Presentation (260504 TRGP 1Q26 Earnings Supplement vF)

Published: 2026-05-07 06:23:46 ET TRGP

Published on 05/07/2026 at 06:23 am EDT

G&P segment operating margin increased $101 million(1)

$1,600

$1,403

$1,179

($ in Millions)

+ Higher Permian inlet volumes

+ Higher fee-margin in the Permian

+ Acquisition of certain assets in the Permian Basin

Lower commodity prices

Higher operating expenses associated with higher volumes, multiple new Permian plants in-service, and the acquisition of certain assets in the Permian Basin

$1,400

$1,200

$1,000

$800

+ Higher NGL pipeline transportation and fractionation volumes

+ Higher marketing margin

Higher operating expenses due to higher repairs and maintenance and higher compensation and benefits

$600

L&T segment operating margin increased $127 million

$400

$200

1Q25 Adj. EBITDA

G&P Adj. Op Margin

G&P Opex

L&T Adj. Op Margin

L&T Opex

G&A and Other

1Q26 Adj. EBITDA

Note: This slide contains non-GAAP measures. A reconciliation of all non-GAAP financial measures used in this presentation to their nearest comparable GAAP financial

Q 1 2 0 2 6 EA RN IN GS SU PPL EMEN T PRESEN TA TIO N measure is included at the end of this presentation. 3

(1) Inclusive of realized hedge gain/(loss).

G&P segment operating margin increased $92 million(1)

$1,600

$1,403

$1,341

($ in Millions)

+ Acquisition of certain assets in the Permian Basin

+ Higher Permian inlet volumes and higher fee-based margin in the Permian region

+ Lower operating expenses primarily due to lower environmental and compensation expense, partially offset by the acquisition of certain assets in the Permian Basin

Permian and Central volumes negatively impacted by severe winter weather

$1,400

$1,200

$1,000

$800

NGL pipeline transportation and fractionation volumes reduced due to impacts from severe winter weather to our G&P supply

Lower LPG export volumes due to unplanned outage at a portion of our LPG export facility late in the first quarter

Operating expenses increased due to higher taxes and higher repairs and maintenance

+ Higher marketing margin

$600

L&T segment operating margin decreased $26 million

$400

$200

4Q25 Adj. EBITDA

G&P Adj. Op Margin

G&P Opex

L&T Adj. Op Margin

L&T Opex

G&A and Other

1Q26 Adj. EBITDA

Note: This slide contains non-GAAP measures. A reconciliation of all non-GAAP financial measures used in this presentation to their nearest comparable GAAP financial

Q 1 2 0 2 6 EA RN IN GS SU PPL EMEN T PRESEN TA TIO N measure is included at the end of this presentation. 4

(1) Inclusive of realized hedge gain/(loss).

Operational Performance

6,278

6,006

6,730

6,651

6,622

1,122

1,217

1,154

1,203

1,201

9,000

8,000

7,000

6,000

MMcf/d

5,000

4,000

3,000

2,000

1,000

(1)

1,000

NGL Production (MBbl/d)

800

600

400

200

1,200

1,000

MBbl/d

800

600

400

200

(1)

1,049

1,017

961

844

(1)

1Q25 2Q25 3Q25 4Q25 1Q26

Permian Central and Badlands NGL Production

1Q25 2Q25 3Q25 4Q25 1Q26

1,400

1,200

1,000

MBbl/d

800

600

400

200

1,134

1,144

1,145

980

969

(1)

16.0

14.0

12.0

MMBbl/Month

10.0

8.0

6.0

4.0

2.0

0.0

13.4

13.5

13.1

12.8

12.5

(1)

1Q25 2Q25 3Q25 4Q25 1Q26 1Q25 2Q25 3Q25 4Q25 1Q26

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(1) Targa G&P volumes were impacted by severe winter weather events in 1Q25 and 1Q26 which also impacted NGL transportation and fractionation volumes.

Fractionation volumes were impacted by a planned turnaround at a portion of Targa's facilities in MB in 1Q25 and 2Q25. LPG export volumes were impacted by 5

weather events in 1Q25 and by an unplanned outage at a portion of our export facilities late in 1Q26.

Business Mix - 1Q 2026

100%

75%

50%

52%

48%

25% 25%

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(1) Fully consolidated operating margin and excludes Coastal.

(2) Marketing & Other includes Domestic NGL Marketing, Wholesale Propane, Refinery Services, Commercial Transportation, and Gas Marketing. 6

Increased 2026 Outlook

2026 Outlook

17% Adjusted EBITDA Growth in 2026

Adjusted EBITDA

$5,700 - $5,900MM

Meaningful growth across Targa's Permian G&P footprint

Record volumes through Targa's integrated NGL system

Strength in marketing and optimization opportunities

Strong fee-based cash flow profile

Fee-based(1)

Net Growth Capital

~$4,500MM

90%+

Net Maintenance Capital

$250MM

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Note: This slide contains non-GAAP measures. A reconciliation of all non-GAAP financial measures used in this presentation to their nearest comparable GAAP financial measure is included at the end of this presentation.

Estimated FY26 adjusted EBITDA is based on a range of commodity price scenarios. 7

YoY expected growth in adjusted EBITDA based on the midpoint of $5.7-$5.9 billion range.

(1) Based on 2026E adjusted operating margin.

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Non-GAAP Financial Measures

This presentation includes the Company's non-GAAP financial measures: adjusted EBITDA and adjusted operating margin. The following tables provide reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures.

The Company utilizes non-GAAP measures to analyze the Company's performance. Adjusted EBITDA and adjusted operating margin (segment) are non-GAAP measures. The GAAP measures most directly comparable to these non-GAAP measures are income (loss) from operations, Net income (loss) attributable to Targa Resources Corp. and segment operating margin. These non-GAAP measures should not be considered as an alternative to GAAP measures and have important limitations as analytical tools. Investors should not consider these measures in isolation or as a substitute for analysis of the Company's results as reported under GAAP. Additionally, because the Company's non-GAAP measures exclude some, but not all, items that affect income and segment operating margin, and are defined differently by different companies within the Company's industry, the Company's definitions may not be comparable with similarly titled measures of other companies, thereby diminishing their utility. Management compensates for the limitations of the Company's non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these insights into the Company's decision-making processes.

Adjusted EBITDA

The Company defines adjusted EBITDA as Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other items that the Company believes should be adjusted consistent with the Company's core operating performance. The adjusting items are detailed in the adjusted EBITDA reconciliation table and its footnotes. Adjusted EBITDA is used as a supplemental financial measure by the Company and by external users of the Company's financial statements such as investors, commercial banks and others to measure the ability of the Company's assets to generate cash sufficient to pay interest costs, support the Company's indebtedness and pay dividends to the Company's investors.

Adjusted Operating Margin

The Company defines adjusted operating margin for our segments as revenues less product purchases and fuel. It is impacted by volumes and commodity prices as well as by our contract mix and commodity hedging program.

Gathering and Processing adjusted operating margin consists primarily of:

Service fees related to natural gas and crude oil gathering, treating and processing; and revenues from the sale of natural gas, condensate, crude oil and NGLs less producer settlements, fuel and transport and the Company's equity volume hedge settlements.

Logistics and Transportation adjusted operating margin consists primarily of:

Service fees (including the pass-through of energy costs included in 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.

Adjusted operating margin for the Company's segments provides useful information to investors because it is used as a supplemental financial measure by management and by external users of our financial statements, including investors and commercial banks, to assess: The financial performance of the Company's assets without regard to financing methods, capital structure or historical cost basis; the Company's operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to financing or capital structure; and the viability of capital expenditure projects and acquisitions and the overall rates of return on alternative investment opportunities.

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Three Months Ended,

March 31, 2026 December 31, 2025 March 31, 2025 (in millions)

Net income (loss) attributable to Targa Resources Corp.

479.6

545.0

270.5

Interest (income) expense, net

227.6

216.0

197.1

Income tax expense (benefit)

123.9

139.1

72.2

Depreciation and amortization expense

426.0

390.5

367.6

(Gain) loss on sale or disposition of assets

(1.0)

(0.7)

(0.5)

Write-down of assets

4.3

5.7

2.0

(Gain) loss from financing activities

10.1

(0.1)

0.6

Equity (earnings) loss

(8.6)

5.2

(5.5)

Distributions from unconsolidated affiliates

4.7

9.8

4.9

Change in contingent consideration

0.7

Compensation on equity grants

23.2

17.3

17.6

Risk management activities

110.3

0.5

248.8

Noncontrolling interests adjustments (1)

1.9

2.8

3.2

Litigation and environmental reserves(2)

10.0

Adjusted EBITDA

1,402.7

1,341.1

1,178.5

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(1) Represents adjustments related to the Company's subsidiaries with noncontrolling interests, including depreciation and amortization expense as well as earnings for certain plants within Targa's WestTX joint venture not subject to noncontrolling interest accounting.

(2) Litigation and environmental reserves includes charges related to specific litigation and environmental compliance matters that are nonrecurring in nature and outside 10

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 these charges as we do not consider them reflective of our ongoing core operations.

Three Months Ended,

March 31, 2026

December 31, 2025

March 31, 2025

Gathering and Processing Segment

(in millions)

Operating margin

703.5

611.8

602.2

Operating expenses

233.6

243.3

208.2

Adjusted operating margin

937.1

855.1

810.4

Operating margin

773.3

799.0

646.7

Operating expenses

100.2

94.2

95.5

Adjusted operating margin

873.5

893.2

742.2

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Full Year 2026E

Net income (loss) attributable to Targa Resources Corp. $

2,265

Interest (income) expense, net 945

Income tax expense (benefit) 640

Depreciation and amortization expense 1,745

Equity (earnings) loss (30)

Distributions from unconsolidated affiliates 35

Compensation on equity grants 80

Risk management and other 123

Noncontrolling interests adjustments(1) (3)

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Targa is a leading provider of midstream services and is one of the largest independent infrastructure companies in North America. Our operations are critical to the efficient, safe, and reliable delivery of energy across the United States and increasingly to the world. Our assets connect natural gas and natural gas liquids (NGLs) to domestic and international markets with growing demand for cleaner fuels and feedstocks.

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Disclaimer

Targa Resources Corp. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 10:21 UTC.