UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____
Commission File Number: 001-34991

TARGA RESOURCES CORP.

(Exact name of registrant as specified in its charter)

Delaware	20-3701075	
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)	
811 Louisiana Street, Suite 2100, Houston, Texas	77002	
(Address of principal executive offices)	(Zip Code)	
(713) 584-1000		
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock

Trading Symbol(s)

TRGP

Name of exchange on which registered

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑	No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑	No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	
Non-accelerated filer	☐	Smaller reporting company	☐	
		Emerging growth company	☐	

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial

accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐

No

☑

As of July 31, 2023, there were 223,712,284 shares of the registrant’s common stock, $0.001 par value, outstanding.

														TABLE OF CONTENTS		
													PART I—FINANCIAL INFORMATION			
Item 1. Financial Statements	4	
																								
	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	4	
																							
	Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	5	
																						
	Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022			6	
	Consolidated Statements of Changes in Owners’ Equity and Series A Preferred Stock for the three and six months ended June		
	30, 2023 and 2022			7	
	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022		11	
	Notes to Consolidated Financial Statements	12	
																	
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28	
Item 3. Quantitative and Qualitative Disclosures About Market Risk			43	
Item 4. Controls and Procedures	45	
														PART II—OTHER INFORMATION		
Item 1. Legal Proceedings				47	
Item 1A. Risk Factors			47	
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	47	
Item 3. Defaults Upon Senior Securities			47	
Item 4. Mine Safety Disclosures		48	
Item 5. Other Information		48	
Item 6. Exhibits	48	
														SIGNATURES		
Signatures			50	

1

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

Targa Resources Corp.’s (together with its subsidiaries, including Targa Resources Partners LP (the “Partnership”), “we,” “us,” “our,” “Targa,” “TRGP,” or the “Company”) reports, filings and other public announcements may from time to time contain statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements.” You can typically identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, by the use of forward-looking statements, such as “may,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “potential,” “plan,” “forecast” and other similar words.

All statements that are not statements of historical facts, including statements regarding our future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements.

These forward-looking statements reflect our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside our control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Known risks and uncertainties include, but are not limited to, the following risks and uncertainties:

•	the level and success of crude oil and natural gas drilling around our assets, our success in connecting natural gas supplies to our gathering and processing systems, oil supplies to our gathering systems and natural gas liquid supplies to our logistics and transportation facilities and our success in connecting our facilities to transportation services and markets;

•	the timing and extent of changes in natural gas, natural gas liquids, crude oil and other commodity prices, interest rates and demand for our services;

•	our ability to access the capital markets, which will depend on general market conditions, including the impact of increased interest rates and the potential for additional increases, and associated Federal Reserve policies and potential economic recession, our credit ratings and debt obligations, and demand for our common equity, senior notes and commercial paper;

•	downside commodity price volatility from a variety of potential factors;

•	actions taken by other countries with significant hydrocarbon production;

•	the timing and success of business development efforts;

•	the amount of collateral required to be posted from time to time in our transactions;

•	our success in risk management activities, including the use of derivative instruments to hedge commodity price risks;

•	the level of creditworthiness of counterparties to various transactions with us;

•	changes in laws and regulations, such as the Inflation Reduction Act of 2022 (the “IRA”), particularly with regard to taxes, safety and the protection of the environment;

•	the impact of outbreaks of illnesses, pandemics or any other public health crises;

•	weather and other natural phenomena, and related impacts;

•	industry changes, including the impact of consolidations, changes in competition and the drive to reduce fossil fuel use and substitute alternative forms of energy for oil and gas;

•	our ability to timely obtain and maintain necessary licenses, permits and other approvals;

•	our ability to grow through internal growth capital projects or acquisitions and the successful integration and future performance of such assets;

•	general economic, market and business conditions;

•	the impact of disruptions in the bank and capital markets, including those resulting from lack of access to liquidity for banking and financial services firms; and

•	the risks described in our Annual Report on Form 10-K for the year ended December 31, 2022 (“Annual Report”) and our reports and registration statements filed from time to time with the United States Securities and Exchange Commission (“SEC”).

2

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of the assumptions could be inaccurate, and, therefore, we cannot assure you that the forward-looking statements included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (“Quarterly Report”) will prove to be accurate. Some of these and other risks and uncertainties that could cause actual results to differ materially from such forward-looking statements are more fully described in our Annual Report. Except as may be required by applicable law, we undertake no obligation to publicly update or advise of any change in any forward-looking statement, whether as a result of new information, future events or otherwise.

As generally used in the energy industry and in this Quarterly Report, the identified terms have the following meanings:

Bbl	Barrels (equal to 42 U.S. gallons)	
BBtu	Billion British thermal units	
Bcf	Billion cubic feet	
Btu	British thermal units, a measure of heating value	
/d	Per day	
FERC	Federal Energy Regulatory Commission	
GAAP	Accounting principles generally accepted in the United States of America	
gal	U.S. gallons	
LPG	Liquefied petroleum gas	
MBbl	Thousand barrels	
MMBbl	Million barrels	
MMBtu	Million British thermal units	
MMcf	Million cubic feet	
MMgal	Million U.S. gallons	
NGL(s)	Natural gas liquid(s)	
NYMEX	New York Mercantile Exchange	
NYSE	New York Stock Exchange	
SCOOP	South Central Oklahoma Oil Province	
SOFR	Secured Overnight Financing Rate	
STACK	Sooner Trend, Anadarko, Canadian and Kingfisher	
	3	

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TARGA RESOURCES CORP.
CONSOLIDATED BALANCE SHEETS

							June 30, 2023		December 31, 2022			
							(Unaudited)				
					ASSETS		(In millions)				
Current assets:													
													
Cash and cash equivalents						$	169.4		$	219.0			
Trade receivables, net of allowances of $2.5 million and $2.2 million at June 30, 2023 and December 31, 2022		988.1			1,408.4			
Inventories							312.3			393.8			
Assets from risk management activities					194.2			179.9			
Other current assets							64.8			155.5			
Total current assets							1,728.8			2,356.6			
Property, plant and equipment, net							14,890.4			14,214.6			
Intangible assets, net							2,542.6			2,734.6			
Long-term assets from risk management activities					48.5			24.5			
Investments in unconsolidated affiliates							131.8			131.3			
Other long-term assets							119.7			98.4			
Total assets						$	19,461.8		$	19,560.0			

	LIABILITIES, SERIES A PREFERRED STOCK AND OWNERS’ EQUITY					
Current liabilities:													
Accounts payable						$	1,173.3		$	1,448.8			
Accrued liabilities							283.0			289.5			
Interest payable							227.2			174.0			
Liabilities from risk management activities					51.1			320.1			
Current debt obligations							586.0			834.3			
Total current liabilities							2,320.6			3,066.7			
Long-term debt							11,812.8			10,702.1			
Long-term liabilities from risk management activities					24.1			140.1			
Deferred income taxes, net							405.1			327.7			
Other long-term liabilities							359.0			341.2			
Contingencies (see Note 12)													
Series A Preferred 9.5% Stock, $1,000 per share liquidation preference (1,200,000 shares authorized, zero shares issued		—		—		
and outstanding as of June 30, 2023 and December 31, 2022), net of discount						
Owners’ equity:													
Targa Resources Corp. stockholders’ equity:											
Common stock ($0.001 par value, 450,000,000 shares authorized as of June 30, 2023 and December 31, 2022)		0.2			0.2			
	Issued	Outstanding								
													
June 30, 2023	239,212,098	224,052,233								
December 31, 2022	237,939,058	226,042,229								
Preferred stock ($0.001 par value, after designation of Series A Preferred Stock: 98,800,000 shares authorized,		—		—		
zero shares issued and outstanding)											
Additional paid-in capital							3,045.8			3,702.3			
Retained earnings (deficit)							199.5			(626.8 )		
Accumulated other comprehensive income (loss)					130.8			54.7			
Treasury stock, at cost (15,159,865 shares as of June 30, 2023 and 11,896,829 shares as of December 31, 2022)		(701.1 )		(464.7 )		
Total Targa Resources Corp. stockholders’ equity					2,675.2			2,665.7			
Noncontrolling interests							1,865.0			2,316.5			
Total owners’ equity							4,540.2			4,982.2			
Total liabilities, Series A Preferred Stock and owners’ equity	$	19,461.8		$	19,560.0			

See notes to consolidated financial statements.

4

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended June 30,		Six Months Ended June 30,		
	2023				2022			2023			2022			
					(Unaudited)							
Revenues:					(In millions, except per share amounts)					
														
Sales of commodities	$	2,914.6		$	5,624.2		$	6,939.7		$	10,190.3			
Fees from midstream services		489.1			431.6			984.5			824.6			
Total revenues		3,403.7			6,055.8			7,924.2			11,014.9			
Costs and expenses:														
Product purchases and fuel		2,068.9			5,047.3			5,088.0			9,251.5			
Operating expenses		272.6			215.8			530.7			399.3			
Depreciation and amortization expense		332.1			269.9			656.9			479.0			
General and administrative expense		81.0			71.0			163.4			138.0			
Other operating (income) expense		—		(0.1 )		(0.6 )		(0.6 )		
Income (loss) from operations		649.1			451.9			1,485.8			747.7			
Other income (expense):														
Interest expense, net		(166.6 )		(81.2 )		(334.7 )		(174.7 )		
Equity earnings (loss)		3.4			1.4			3.2			7.0			
Gain (loss) from financing activities		—		(33.8 )		—		(49.6 )		
Gain (loss) from sale of equity method investment		—		435.9			—		435.9			
Other, net		(2.0 )		0.5			(4.9 )		—		
Income (loss) before income taxes		483.9			774.7			1,149.4			966.3			
Income tax (expense) benefit		(96.4 )		(87.1 )		(206.7 )		(110.1 )		
Net income (loss)		387.5			687.6			942.7			856.2			
Less: Net income (loss) attributable to noncontrolling interests		58.2			91.2			116.4			171.8			
Net income (loss) attributable to Targa Resources Corp.		329.3			596.4			826.3			684.4			
Premium on repurchase of noncontrolling interests, net of tax		—		—		490.7			53.1			
Dividends on Series A Preferred Stock		—		8.2			—		30.0			
Deemed dividends on Series A Preferred Stock		—		215.5			—		215.5			
Net income (loss) attributable to common shareholders	$	329.3		$	372.7		$	335.6		$	385.8			
														
Net income (loss) per common share - basic	$	1.44		$	1.64		$	1.47		$	1.69			
Net income (loss) per common share - diluted	$	1.44		$	1.61		$	1.46		$	1.66			
														
Weighted average shares outstanding - basic		225.6			227.8			226.0			228.1			
Weighted average shares outstanding - diluted		226.8			231.7			227.3			232.0			

See notes to consolidated financial statements.

5

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

							Three Months Ended June 30,									
					2023										2022						
		Pre-Tax			Related			After Tax			Pre-Tax			Related	After Tax			
				Income Tax									Income Tax						
									(Unaudited)									
									(In millions)									
Net income (loss)							$	387.5						$	687.6			
Other comprehensive income (loss):																					
Commodity hedging contracts:																					
Change in fair value	$	109.6		$	(25.3 )			84.3		$	25.2	$	(5.7 )		19.5			
Settlements reclassified to revenues		(49.8 )		11.5				(38.3 )		157.7			(35.2 )		122.5			
																					
Other comprehensive income (loss)		59.8			(13.8 )			46.0			182.9			(40.9 )		142.0			

Comprehensive income (loss)

Less: Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income (loss) attributable to Targa Resources Corp.

	433.5			829.6	
	58.2			91.2	
$	375.3		$	738.4	

Six Months Ended June 30,

	2023				2022			
Pre-Tax	Related	After Tax		Pre-Tax	Related	After Tax		
	Income Tax				Income Tax			

(Unaudited)

(In millions)

Net income (loss)					$	942.7								$	856.2		
Other comprehensive income (loss):																			
Commodity hedging contracts:																			
Change in fair value	$	193.5		$	(43.9 )		149.6		$	(362.1 )  $	80.9			(281.2 )	
Settlements reclassified to revenues		(95.0 )		21.5			(73.5 )		303.5			(67.8 )		235.7		
																			
Other comprehensive income (loss)		98.5			(22.4 )		76.1			(58.6 )		13.1			(45.5 )	

Comprehensive income (loss)

Less: Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income (loss) attributable to Targa Resources Corp.

1,018.8

116.4

$	902.4

810.7

171.8

$	638.9

See notes to consolidated financial statements.

6

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY AND SERIES A PREFERRED STOCK

										Retained	Accumulated															
						Additional		Earnings		Other	Treasury					Total		Series A			
	Common Stock			Paid in	(AccumulatedComprehensive	Shares	NoncontrollingOwners’	Preferred			
													Income																
			Amount																								
	Shares				Capital			Deficit)			(Loss)			Shares		Amount		Interests		Equity		Stock			

													(Unaudited)														
										(In millions, except shares in thousands)											
Balance, March 31, 2023	226,136		$	0.2		$	3,146.0		$	(129.8 ) $	84.8			13,070	$ (550.5)	$	1,861.5		$	4,412.2		$	—			
Compensation on equity grants	—		—		15.0			—		—	—		—		—		15.0			—			
Dividend equivalent rights	—		—		(1.0 )		—		—	—		—		—		(1.0 )		—			
Shares issued under compensation	6			—		—		—		—	—		—		—		—		—			
program																						
Shares tendered for tax withholding	(2 )		—		—		—		—	2	(0.1 )		—		(0.1 )		—			
obligations																				
Repurchases of common stock	(2,088 )		—		—		—		—	2,088	(149.0)		—		(149.0 )		—			
Excise tax on repurchases of common	—		—		—		—		—	—	(1.5 )		—		(1.5 )		—			
stock																				
Common stock dividends																														
Dividends - $0.50 per share	—		—		—		(114.2 )		—	—		—		—		(114.2 )		—			
Dividends in excess of retained	—		—		(114.2 )		114.2			—	—		—		—		—		—			
earnings																						
Distributions to noncontrolling interests	—		—		—		—		—	—		—		(57.4 )		(57.4 )		—			
Contributions from noncontrolling	—		—		—		—		—	—		—		2.7			2.7			—			
interests																							
Other comprehensive income (loss)	—		—		—		—		46.0			—		—		—		46.0			—			
Net income (loss)	—		—		—		329.3			—	—		—		58.2			387.5			—			
Balance, June 30, 2023	224,052		$	0.2		$	3,045.8		$	199.5		$	130.8			15,160		$ (701.1)		$	1,865.0		$	4,540.2		$	—			

See notes to consolidated financial statements.

7

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY AND SERIES A PREFERRED STOCK

										Retained   Accumulated															
						Additional		Earnings	Other	Treasury					Total		Series A		
	Common Stock			Paid in	(AccumulatedComprehensive	Shares	NoncontrollingOwners’	Preferred		
													Income																
			Amount																								
	Shares				Capital			Deficit)			(Loss)			Shares		Amount		Interests		Equity		Stock		

													(Unaudited)														
										(In millions, except shares in thousands)											
Balance, March 31, 2022	228,181		$	0.2		$	4,125.8		$	(1,734.3 ) $	(418.4 )		9,019	$ (276.3)	$	2,320.3		$	4,017.3		$	749.7			
Compensation on equity grants	—		—		13.8			—	—	—		—		—		13.8			—		
Dividend equivalent rights	—		—		(1.7 )		—	—	—		—		—		(1.7 )		—		
Shares issued under compensation	4			—		—		—	—	—		—		—		—		—		
program																				
Shares tendered for tax withholding	(1 )		—		—		—	—	1		—		—		—		—		
obligations																			
Repurchases of common stock	(1,122 )		—		—		—	—	1,122	(74.1 )		—		(74.1 )		—		
Series A Preferred Stock dividends																														
Dividends - $23.75 per share	—		—		—		(8.2 )		—	—		—		—		(8.2 )		—		
Dividends in excess of retained	—		—		(8.2 )		8.2			—	—		—		—		—		—		
earnings																					
Deemed dividends - repurchase of	—		—		(215.5 )		—	—	—		—		—		(215.5 )		—		
Series A Preferred Stock																			
Common stock dividends																														
Dividends - $0.35 per share	—		—		—		(79.8 )		—	—		—		—		(79.8 )		—		
Dividends in excess of retained	—		—		(79.8 )		79.8			—	—		—		—		—		—		
earnings																					
Repurchase of Series A Preferred Stock	—		—		—		—	—	—		—		—		—		(749.7 )		
Distributions to noncontrolling interests	—		—		—		—	—	—		—		(86.6 )		(86.6 )		—		
Contributions from noncontrolling	—		—		—		—	—	—		—		6.1			6.1			—		
interests																					
Other comprehensive income (loss)	—		—		—		—	142.0			—		—		—		142.0			—		
Net income (loss)	—		—		—		596.4			—	—		—		91.2			687.6			—		
Balance, June 30, 2022	227,062		$	0.2		$	3,834.4		$	(1,137.9	)	$	(276.4	)		10,142		$ (350.4)		$	2,331.0		$	4,400.9		$	—			

See notes to consolidated financial statements.

8

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY AND SERIES A PREFERRED STOCK

										Retained	Accumulated															
						Additional		Earnings		Other	Treasury					Total		Series A			
	Common Stock			Paid in	(AccumulatedComprehensive	Shares	NoncontrollingOwners’	Preferred			
													Income																
			Amount																								
	Shares				Capital			Deficit)			(Loss)			Shares		Amount		Interests		Equity		Stock			

													(Unaudited)														
										(In millions, except shares in thousands)											
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	—		—		30.0			—		—	—		—		—		30.0			—			
Dividend equivalent rights	—		—		(2.3 )		—		—	—		—		—		(2.3 )		—			
Shares issued under compensation	1,273			—		—		—		—	—		—		—		—		—			
program																						
Shares tendered for tax withholding	(451 )		—		—		—		—	451	(33.9 )		—		(33.9 )		—			
obligations																				
Repurchases of common stock	(2,812 )		—		—		—		—	2,812	(201.0)		—		(201.0 )		—			
Excise tax on repurchases of common	—		—		—		—		—	—	(1.5 )		—		(1.5 )		—			
stock																				
Common stock dividends																														
Dividends - $0.85 per share	—		—		—		(193.5 )		—	—		—		—		(193.5 )		—			
Dividends in excess of retained	—		—		(193.5 )		193.5			—	—		—		—		—		—			
earnings																						
Distributions to noncontrolling interests	—		—		—		—		—	—		—		(113.5 )		(113.5 )		—			
Contributions from noncontrolling	—		—		—		—		—	—		—		2.9			2.9			—			
interests																							
Repurchase of noncontrolling interests,	—		—		(490.7 )		—		—	—		—		(457.3 )		(948.0 )		—			
net of tax																					
Other comprehensive income (loss)	—		—		—		—		76.1			—		—		—		76.1			—			
Net income (loss)	—			—			—			826.3			—			—		—			116.4			942.7			—			
Balance, June 30, 2023	224,052		$	0.2		$	3,045.8		$	199.5		$	130.8			15,160	$ (701.1)	$	1,865.0		$	4,540.2		$	—			

See notes to consolidated financial statements.

9

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY AND SERIES A PREFERRED STOCK

										Retained   Accumulated															
						Additional		Earnings	Other	Treasury					Total		Series A		
	Common Stock			Paid in	(AccumulatedComprehensive	Shares	NoncontrollingOwners’	Preferred		
													Income																
			Amount																								
	Shares				Capital			Deficit)			(Loss)			Shares		Amount		Interests		Equity		Stock		

													(Unaudited)														
										(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	—		—		27.3			—	—	—		—		—		27.3			—		
Dividend equivalent rights	—		—		(3.4 )		—	—	—		—		—		(3.4 )		—		
Shares issued under compensation	1,099			—		—		—	—	—		—		—		—		—		
program																				
Shares tendered for tax withholding	(398 )		—		—		—	—	398	(22.5 )		—		(22.5 )		—		
obligations																		
Repurchases of common stock	(1,860 )		—		—		—	—	1,860	(123.8)		—		(123.8 )		—		
Series A Preferred Stock dividends																														
Dividends - $47.50 per share	—		—		—		(30.0 )		—	—		—		—		(30.0 )		—		
Dividends in excess of retained	—		—		(30.0 )		30.0			—	—		—		—		—		—		
earnings																					
Deemed dividends - repurchase of	—		—		(215.5 )		—	—	—		—		—		(215.5 )		—		
Series A Preferred Stock																			
Common stock dividends																														
Dividends - $0.70 per share	—		—		—		(159.8 )		—	—		—		—		(159.8 )		—		
Dividends in excess of retained	—		—		(159.8 )		159.8			—	—		—		—		—		—		
earnings																					
Repurchase of Series A Preferred Stock	—		—		—		—	—	—		—		—		—		(749.7 )		
Distributions to noncontrolling interests	—		—		—		—	—	—		—		(158.8 )		(158.8 )		—		
Contributions from noncontrolling	—		—		—		—	—	—		—		9.0			9.0			—		
interests																					
Repurchase of noncontrolling interests,	—		—		(53.1 )		—	—	—		—		(857.9 )		(911.0 )		—		
net of tax																			
Other comprehensive income (loss)	—		—		—		—	(45.5 )		—		—		—		(45.5 )		—		
Net income (loss)	—			—			—			684.4			—			—		—			171.8			856.2			—			
Balance, June 30, 2022	227,062		$	0.2		$	3,834.4		$	(1,137.9 ) $	(276.4 )		10,142	$ (350.4)	$	2,331.0		$	4,400.9		$	—		

See notes to consolidated financial statements.

10

TARGA RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,				
	2023			2022				
		(Unaudited)				
Cash flows from operating activities		(In millions)				
								
Net income (loss)	$	942.7		$	856.2			
Adjustments to reconcile net income (loss) to net cash provided by operating activities:								
Amortization in interest expense		6.4			4.3			
Compensation on equity grants		30.0			27.3			
Depreciation and amortization expense		656.9			479.0			
(Gain) loss on sale or disposition of assets		(3.2 )		(1.6 )		
Write-downs of assets		2.6			1.0			
Accretion of asset retirement obligations		3.1			2.2			
Deferred income tax expense (benefit)		199.0			105.8			
Equity (earnings) loss of unconsolidated affiliates		(3.2 )		(7.0 )		
Distributions of earnings received from unconsolidated affiliates		4.8			7.3			
Risk management activities		(327.7 )		182.7			
(Gain) loss from financing activities		—		49.6			
(Gain) loss from sale of equity method investment		—		(435.9 )		
Changes in operating assets and liabilities, net of acquisitions:								
Receivables and other assets		512.7			(250.9 )		
Inventories		89.2			(51.2 )		
Accounts payable, accrued liabilities and other liabilities		(319.9 )		421.6			
Interest payable		53.2			(6.7 )		
Net cash provided by operating activities		1,846.6			1,383.7			
Cash flows from investing activities								
Outlays for property, plant and equipment		(1,073.7 )		(419.5 )		
Outlays for asset acquisition, net of cash acquired		—		(203.7 )		
Proceeds from sale of assets		1.9			2.3			
Investments in unconsolidated affiliates		(6.2 )		(1.5 )		
Proceeds from sale of equity method investment		—		857.0			
Return of capital from unconsolidated affiliates		4.0			13.8			
Other, net		(0.6 )		—		
Net cash provided by (used in) investing activities		(1,074.6	)		248.4			
Cash flows from financing activities								
Debt obligations:								
Proceeds from borrowings under credit facilities		—		3,425.0			
Repayments of credit facilities		(290.0 )		(2,875.0 )		
Proceeds from borrowings of commercial paper notes		28,982.8			—		
Repayments of commercial paper notes		(29,331.5 )		—		
Proceeds from borrowings under accounts receivable securitization facility		51.0			380.0			
Repayments of accounts receivable securitization facility		(303.1 )		(130.0 )		
Proceeds from issuance of senior notes		1,717.1			1,493.6			
Redemption of senior notes		—		(1,473.2 )		
Principal payments of finance leases		(20.7 )		(6.7 )		
Costs incurred in connection with financing arrangements		(4.1 )		(27.0 )		
Repurchase of shares		(234.9 )		(146.3 )		
Contributions from noncontrolling interests		2.9			9.0			
Distributions to noncontrolling interests		(99.6 )		(176.7 )		
Repurchase of noncontrolling interests		(1,091.9 )		(926.3 )		
Redemption of Series A Preferred Stock		—		(965.2 )		
Dividends paid to common and Series A Preferred shareholders		(199.6 )		(217.8 )		
								
Net cash provided by (used in) financing activities		(821.6 )		(1,636.6 )		
Net change in cash and cash equivalents		(49.6	)		(4.5	)		
Cash and cash equivalents, beginning of period		219.0			158.5			
Cash and cash equivalents, end of period	$	169.4		$	154.0			

See notes to consolidated financial statements.

11

TARGA RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Except as noted within the context of each footnote disclosure, the dollar amounts presented in the tabular data within these footnote disclosures are stated in millions of dollars.

Note 1 — Organization and Operations

Our Organization

Targa Resources Corp. (NYSE: TRGP) is a publicly traded Delaware corporation formed in October 2005. Targa is a leading provider of midstream services and is one of the largest independent infrastructure companies in North America. We own, operate, acquire, and develop a diversified portfolio of complementary domestic midstream infrastructure assets.

In this Quarterly Report, unless the context requires otherwise, references to “we,” “us,” “our,” “the Company,” “Targa” or “TRGP” are intended to mean our consolidated business and operations. TRGP controls the general partner of and owns all of the outstanding common units representing limited partner interests in Targa Resources Partners LP, referred to herein as the “Partnership”. Targa consolidated the Partnership and its subsidiaries under GAAP, and prepared the accompanying consolidated financial statements under the rules and regulations of the SEC. Targa’s consolidated financial statements include differences from the consolidated financial statements of the Partnership. The most noteworthy differences are:

•	the inclusion of the TRGP senior revolving credit facility and term loan facility;

•	the inclusion of the TRGP senior notes;

•	the inclusion of the TRGP commercial paper notes;

•	the inclusion of Series A Preferred Stock (“Series A Preferred”) prior to full redemption in May 2022; and

•	the impacts of TRGP’s treatment as a corporation for U.S. federal income tax purposes.

Our Operations

The Company is primarily engaged in the business of:

•	gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas;

•	transporting, storing, fractionating, treating, and purchasing and selling NGLs and NGL products, including services to LPG exporters; and
•	gathering, storing, terminaling, and purchasing and selling crude oil.

See Note 16 – Segment Information for certain financial information regarding our business segments.

Note 2 — Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by GAAP. Therefore, this information should be read in conjunction with our consolidated financial statements and notes contained in our Annual Report. The information furnished herein reflects all adjustments that are, in the opinion of management, of a normal recurring nature and considered necessary for a fair statement of the results of the interim periods reported. All intercompany balances and transactions have been eliminated in consolidation. Certain amounts in prior periods have been reclassified to conform to the current year presentation. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

12

Note 3 — Significant Accounting Policies

The accounting policies that we follow are set forth in Note 3 – Significant Accounting Policies of the Notes to Consolidated Financial Statements in our Annual Report. Other than the updates noted below, there were no significant updates or revisions to our accounting policies during the six months ended June 30, 2023.

Recently Adopted Accounting Pronouncements

Supplier Finance Programs

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50). Amendments in this update require annual and interim disclosure of the key terms of outstanding supplier finance programs and a rollforward of the related obligations. These amendments do not affect the recognition, measurement or financial statement presentation of the supplier finance program obligations. These amendments are effective for fiscal years beginning after December 15, 2022, except for the rollforward requirements, which are effective for fiscal years beginning after December 15, 2023. We maintain a supply chain finance program that allows participating suppliers to request early payment from a third-party financial institution of invoices that we confirm as valid. Under this program, we make payments in full to the third-party financial institution for the prior month’s outstanding balance within 15 days. The outstanding balance at the end of each reporting period is included in Accounts payable on our Consolidated Balance Sheets. We adopted the amendments on January 1, 2023, with no material impact on our consolidated financial statements.

Note 4 – Acquisitions and Divestitures

In February 2018, we formed three development joint ventures (“DevCo JVs”) with investment vehicles affiliated with Stonepeak Infrastructure Partners (“Stonepeak”) to fund portions of Grand Prix NGL Pipeline (“Grand Prix”), Gulf Coast Express Pipeline (“GCX”) and a 110 MBbl/d fractionator in Mont Belvieu, Texas (“Train 6”). For a four-year period beginning on the date that all three projects commenced commercial operations, we had the option to acquire all or part of Stonepeak’s interests in the DevCo JVs (the “DevCo JV Call Right”). The purchase price payable for such partial or full interests was based on a predetermined fixed return or multiple on invested capital, including distributions received by Stonepeak from the DevCo JVs.

In January 2022, we exercised the DevCo JV Call Right and closed on the purchase of all of Stonepeak’s interests in the DevCo JVs for $926.3 million (the “DevCo JV Repurchase”). Following the DevCo JV Repurchase, we owned a 75% interest in the Permian region to Mont Belvieu segment of Grand Prix through Grand Prix Pipeline LLC (the “Grand Prix Joint Venture”) (prior to the Grand Prix Transaction, as defined below), a 100% interest in Train 6 and a 25% equity interest in GCX (prior to the sale of Targa GCX Pipeline LLC in February 2022 to a third party, with payment received in full in May 2022). The change in our ownership interests was accounted for as an equity transaction representing the acquisition of noncontrolling interests. The amount of the redemption price in excess of the carrying amount, net of tax, was $53.1 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. In addition, the DevCo JV Repurchase resulted in an $857.9 million reduction of Noncontrolling interests on our Consolidated Balance Sheets.

In January 2023, we completed the acquisition of Blackstone Energy Partners’ 25% interest in the Grand Prix Joint Venture (the “Grand Prix Transaction”) for aggregate consideration of $1.05 billion in cash and a final closing adjustment of $41.9 million. Following the closing of the Grand Prix Transaction, we own 100% of the interest in Grand Prix. The change in our ownership interests was accounted for as an equity transaction representing the acquisition of noncontrolling interests. The amount of the redemption price in excess of the carrying amount, net of tax, was $490.7 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. In addition, the Grand Prix Transaction resulted in a $457.3 million reduction of Noncontrolling interests on our Consolidated Balance Sheets.

13

Note 5 — Property, Plant and Equipment and Intangible Assets

		June 30, 2023		December 31, 2022	Estimated Useful Lives (In Years)	
Gathering systems	$	10,655.5		$	10,403.1		5 to 20	
Processing and fractionation facilities		7,784.2			7,421.2		5 to 25	
Terminaling and storage facilities		1,341.3			1,341.6		5 to 25	
Transportation assets		3,066.3			2,919.3		10 to 50	
Other property, plant and equipment		401.4			387.6		3 to 50	
Land		178.9			163.3		—	
Construction in progress		1,266.9			1,011.0		—	
Finance lease right-of-use assets		311.1			266.1		5 to 14	
Property, plant and equipment		25,005.6			23,913.2			
Accumulated depreciation, amortization and impairment		(10,115.2 )		(9,698.6 )		
Property, plant and equipment, net	$	14,890.4		$	14,214.6			
								
Intangible assets		4,378.0			4,379.7		10 to 20	
Accumulated amortization and impairment		(1,835.4 )		(1,645.1 )		
Intangible assets, net	$	2,542.6		$	2,734.6			

During the three and six months ended June 30, 2023, depreciation expense was $236.1 million and $464.9 million, respectively. During the three and six months ended June 30, 2022, depreciation expense was $241.9 million and $423.0 million, respectively.

Intangible Assets

Intangible assets consist of customer relationships and customer contracts acquired in prior business combinations. The fair values of these acquired intangible assets were determined at the date of acquisition based on the present values of estimated future cash flows. Amortization expense attributable to these assets is recorded over the periods in which we benefit from services provided to customers.

The estimated annual amortization expense for intangible assets is approximately $384.0 million, $373.2 million, $326.0 million, $279.8 million and $252.2 million for each of the years 2023 through 2027, respectively.

The changes in our intangible assets are as follows:

		June 30, 2023	
Balance at beginning of period	$	2,734.6		
Amortization		(192.0 )	
Balance at end of period	$	2,542.6		

14

Note 6 — Debt Obligations

Current:		June 30, 2023		December 31, 2022		
								
Partnership accounts receivable securitization facility, due September 2023 (1)	$	547.9		$	800.0			
Finance lease liabilities		38.1			34.3			
Current debt obligations		586.0			834.3			
								
Long-term:								
Term loan facility, variable rate, due July 2025		1,500.0			1,500.0			
TRGP senior revolving credit facility, variable rate, due February 2027 (2)		660.0			1,298.7			
Senior unsecured notes issued by TRGP:								
5.200% fixed rate, due July 2027		750.0			750.0			
4.200% fixed rate, due February 2033		750.0			750.0			
6.125% fixed rate, due March 2033		900.0			—		
4.950% fixed rate, due April 2052		750.0			750.0			
6.250% fixed rate, due July 2052		500.0			500.0			
6.500% fixed rate, due February 2053		850.0			—		
Unamortized discount		(40.8 )		(8.4 )		
Senior unsecured notes issued by the Partnership: (3)								
6.500% fixed rate, due July 2027		705.2			705.2			
5.000% fixed rate, due January 2028		700.3			700.3			
6.875% fixed rate, due January 2029		679.3			679.3			
5.500% fixed rate, due March 2030		949.6			949.6			
4.875% fixed rate, due February 2031		1,000.0			1,000.0			
4.000% fixed rate, due January 2032		1,000.0			1,000.0			
		11,653.6			10,574.7			
Debt issuance costs, net of amortization		(65.6 )		(65.6 )		
Finance lease liabilities		224.8			193.0			
Long-term debt		11,812.8			10,702.1			
Total debt obligations	$	12,398.8		$	11,536.4			
Irrevocable standby letters of credit: (2)								
Letters of credit outstanding under the TRGP senior revolving credit facility	$	18.8		$	33.2			
	$	18.8		$	33.2			

(1)	The Partnership’s accounts receivable securitization facility (the “Securitization Facility”) provides up to $800.0 million of borrowing capacity. As of June 30, 2023, the Partnership had $547.9 million of qualifying receivables.

(2)	We maintain an unsecured commercial paper note program (the “Commercial Paper Program”), the borrowings of which are supported through maintaining a minimum available borrowing capacity under our $2.75 billion TRGP senior revolving credit facility (the “TRGP Revolver”) equal to the aggregate amount outstanding under the Commercial Paper Program. As of June 30, 2023, the TRGP Revolver had no borrowings outstanding and the Commercial Paper Program had $660.0 million borrowings outstanding, resulting in approximately $2.1 billion of available liquidity, after accounting for outstanding letters of credit.
(3)	We guarantee all of the Partnership’s outstanding senior unsecured notes.

The following table shows the range of interest rates and weighted average interest rate incurred on our variable-rate debt obligations during the six months ended June 30, 2023:

	Range of Interest Rates		Weighted Average Interest	
	Incurred		Rate Incurred	
TRGP Revolver and Commercial Paper Program	5.2% - 6.0%		5.6%	
Securitization Facility	5.2% - 5.9%	5.5%	
Term Loan Facility	5.8% - 6.6%	6.2%	

Compliance with Debt Covenants

As of June 30, 2023, we were in compliance with the covenants contained in our various debt agreements.

In February 2022, we and certain of our subsidiaries entered into a parent guarantee whereby each party to the agreement unconditionally guarantees, jointly and severally, the payment of all of the obligations of the Partnership and Targa Resources Partners Finance Corporation (together with the Partnership, the “Partnership Issuers”) under the respective indentures governing the Partnership Issuers’ senior unsecured notes. As of June 30, 2023, $5.0 billion of the Partnership Issuers’ senior unsecured notes was outstanding.

15

Debt Obligations

Commercial Paper Program

In 2022, we established the Commercial Paper Program. Under the terms of the Commercial Paper Program, we may issue, from time to time, unsecured commercial paper notes with varying maturities of less than one year. 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 $2.75 billion. We maintain a minimum available borrowing capacity under the TRGP Revolver equal to the aggregate amount outstanding under the Commercial Paper Program as support. 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.

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 Notes due 2033 (the “6.125% Notes”) and (ii) $850.0 million aggregate principal amount of our 6.500% Senior Notes due 2053 (the “6.500% Notes”), resulting in net proceeds of approximately $1.7 billion. The 6.125% Notes and the 6.500% 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 6.125% Notes and the 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 3, 2023, among us, each subsidiary guarantor and U.S. Bank Trust Company, National Association, as trustee. 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 TRGP Revolver and the Commercial Paper Program.

In the future, we or the Partnership may redeem, purchase or exchange certain of our and the Partnership’s outstanding debt through redemption calls, cash purchases and/or exchanges for other debt, in open market purchases, privately negotiated transactions or otherwise. Such calls, repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Note 7 — Other Long-term Liabilities

Other long-term liabilities are comprised of the following:

	June 30, 2023				December 31, 2022		
Deferred revenue	$	200.1		$	198.8		
Asset retirement obligations		104.3			97.9		
Operating lease liabilities		39.6			28.6		
Other liabilities		15.0			15.9		
Total other long-term liabilities	$	359.0		$	341.2		

Deferred Revenue

We have certain long-term contractual arrangements for which we have received consideration that we are not yet able to recognize as revenue. The resulting deferred revenue will be recognized once all conditions for revenue recognition have been met.

Deferred revenue as of June 30, 2023 and December 31, 2022, was $200.1 million and $198.8 million, respectively, which includes $129.0 million of payments received from Vitol Americas Corp. (“Vitol”) (formerly known as Noble Americas Corp.), a subsidiary of Vitol US Holding Co., in 2016, 2017, and 2018 as part of an agreement (the “Splitter Agreement”) related to the construction and operation of a crude oil and condensate splitter. In December 2018, Vitol elected to terminate the Splitter Agreement. The Splitter Agreement provides that the first three annual payments are ours if Vitol elects to terminate, which Vitol disputes. The timing of revenue recognition related to the Splitter Agreement deferred revenue is dependent on the outcome of current litigation with Vitol. See Note 12 – Contingencies.

Deferred revenue includes nonmonetary consideration received in a 2015 amendment to a gas gathering and processing agreement and consideration received for other construction activities of facilities connected to our systems. Deferred revenue also includes contributions in aid of construction received from customers for which revenue is recognized over the expected contract term.

16

Note 8 — Common Stock and Related Matters

Common Share Repurchase Program

In October 2020, our Board of Directors approved a share repurchase program (the “2020 Share Repurchase Program”) for the repurchase of up to $500.0 million of our outstanding common stock. In May 2023, our Board of Directors approved a new share repurchase program (the “2023 Share Repurchase Program”) for the repurchase of up to $1.0 billion of our outstanding common stock. During the second quarter of 2023, we exhausted the 2020 Share Repurchase Program. As of June 30, 2023, there was $942.7 million remaining under the 2023 Share Repurchase Program. We may discontinue the 2023 Share Repurchase Program at any time and are not obligated to repurchase any specific dollar amount or number of shares thereunder.

For the three and six months ended June 30, 2023, we repurchased 2,088,062 shares and 2,812,202 shares of our common stock at a weighted average per share price of $71.37 and $71.49 for a total net cost of $149.0 million and $201.0 million, respectively. For the three and six months ended June 30, 2022, we repurchased 1,121,925 shares and 1,859,724 shares of our common stock at a weighted average per share price of $66.07 and $66.59 for a total net cost of $74.1 million and $123.8 million, respectively.

Common Stock Dividends

In April 2023, we declared an increase to our common dividend to $0.50 per common share or $2.00 per common share annualized effective for the first quarter of 2023.

The following table details the dividends declared and/or paid by us to common shareholders for the six months ended June 30, 2023:

						Amount of		Dividends on		Dividends Declared			
		Date Paid or		Total Common		Common							
Three Months Ended						Dividends Paid or		Share-Based		per Share of			
		To Be Paid		Dividends Declared		To Be Paid		Awards		Common Stock			
		(In	millions, except per share	amounts)							
June 30, 2023		August 15, 2023	$	113.6	$	111.8	$	1.8	$	0.50000			
March 31, 2023		May 15, 2023		114.7		113.0		1.7		0.50000			
December 31, 2022		February 15, 2023		80.5		79.3		1.2		0.35000			

17

Note 9 — Earnings per Common Share

In March 2023, the Compensation Committee amended the Restricted Stock Units Grant Agreements that govern the Restricted Stock Unit awards (“RSUs”) that vest no later than three years following the RSUs’ grant date. The amendment resulted in quarterly cash dividend payments to RSU holders beginning with the common stock dividend paid in May 2023. As the amended RSUs and certain four-year retention awards participate in nonforfeitable dividends with the common equity owners of the Company, they are considered participating securities.

We calculate earnings per share using the two-class method. 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.

The following table sets forth a reconciliation of net income and weighted average shares outstanding used in computing basic and diluted net income per common share:

	Three Months Ended June 30,				Six Months Ended June 30,		
	2023					2022				2023				2022		
				(In millions, except	per share amounts)						
Net income (loss) attributable to Targa Resources Corp.	$	329.3	$	596.4	$	826.3			$	684.4		
Less: Premium on repurchase of noncontrolling interests, net of tax (1)		—				—				490.7				53.1		
Less: Dividends on Series A Preferred Stock (2)		—				8.2				—		30.0		
Less: Deemed dividends on Series A Preferred (2)		—				215.5				—		215.5		
Net income (loss) attributable to common shareholders		329.3				372.7				335.6				385.8		
Less: Participating share-based earnings (3)		3.6				—				2.8				—		
Net income (loss) allocated to common shareholders for basic earnings per share	$	325.7		$	372.7		$	332.8			$	385.8		
																
Weighted average shares outstanding - basic		225.6				227.8				226.0				228.1		
Dilutive effect of unvested stock awards		1.2				3.9				1.3				3.9		
Weighted average shares outstanding - diluted		226.8				231.7				227.3				232.0		
												
Net income (loss) available per common share - basic	$	1.44	$	1.64	$	1.47			$	1.69		
Net income (loss) available per common share - diluted	$	1.44	$	1.61	$	1.46			$	1.66		

(1)	Represents premium paid on the Grand Prix Transaction and the DevCo JV Repurchase. See Note 4 – Acquisitions and Divestitures.
(2)	The Series A Preferred had no mandatory redemption date, but was redeemable at our election for a 5% premium to the liquidation preference subsequent to March 16, 2022. In May 2022, we redeemed all of our issued and outstanding Series A Preferred.
(3)	Represents the distributed and undistributed earnings of the Company attributable to the participating securities. The dilutive effect of the reallocation of participating securities to diluted net income attributable to common shareholders was immaterial.

The following potential common stock equivalents are excluded from the determination of diluted earnings per share because the inclusion of such shares would have been anti-dilutive (in millions on a weighted-average basis):

	Three Months Ended June 30,		Six Months Ended June 30,		
	2023		2022		2023	2022		
Unvested restricted stock awards		1.8		0.2		1.7		0.2		
Series A Preferred (1)	—	16.1		—	30.1		

(1)	The Series A Preferred had no mandatory redemption date, but was redeemable at our election for a 5% premium to the liquidation preference subsequent to March 16, 2022. In May 2022, we redeemed all of our issued and outstanding Series A Preferred.

18

Note 10 — Derivative Instruments and Hedging Activities

The primary purpose of our commodity risk management activities is to manage our exposure to commodity price risk and reduce volatility in our operating cash flow due to fluctuations in commodity prices. We have entered into derivative instruments to hedge the commodity price risks associated with a portion of our expected (i) natural gas, NGL, and condensate equity volumes in our Gathering and Processing operations that result from 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. The hedge positions associated with (i) and (ii) above will move favorably in periods of falling commodity prices and unfavorably in periods of rising commodity prices and are primarily designated as cash flow hedges for accounting purposes.

The hedges generally match the NGL product composition and the NGL delivery points of our physical equity volumes. Our natural gas hedges are a mixture of specific gas delivery points and Henry Hub. The NGL hedges may be transacted as specific NGL hedges or as baskets of ethane, propane, normal butane, isobutane and natural gasoline based upon our expected equity NGL composition. We believe this approach avoids uncorrelated risks resulting from employing hedges on crude oil or other petroleum products as “proxy” hedges of NGL prices. Our natural gas and NGL hedges are settled using published index prices for delivery at various locations.

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. 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. We have not designated these derivatives as hedges and record changes in fair value and cash settlements to revenues as current income.

At June 30, 2023, the notional volumes of our commodity derivative contracts were:

	Commodity			Instrument			Unit	2023		2024		2025	2026	2027		
																								
	Natural Gas			Swaps		MMBtu/d	155,692	103,512	49,774	3,406		—	
	Natural Gas	Basis Swaps	MMBtu/d	673,329	356,918	256,658	102,500	25,000	
	NGL		Swaps	Bbl/d	40,805	26,376	15,647	1,042		—	
	NGL		Futures	Bbl/d	(1,065 )	16,779	4,356		—		—	
	Condensate		Swaps	Bbl/d	6,124	4,126	2,738	193		—	

Our derivative contracts are subject to netting arrangements that permit our contracting subsidiaries to net cash settle offsetting asset and liability positions with the same counterparty within the same Targa entity. We record derivative assets and liabilities on our Consolidated Balance Sheets on a gross basis, without considering the effect of master netting arrangements.

19

The following schedules reflect the fair value of our derivative instruments and their location on our Consolidated Balance Sheets as well as pro forma reporting assuming that we reported derivatives subject to master netting agreements on a net basis:

	Balance Sheet		Fair Value as of June 30, 2023	Fair Value as of December 31, 2022		
			Derivative			Derivative			Derivative			Derivative			
Derivatives designated as hedging instruments	Location		Assets			Liabilities		Assets			Liabilities		
																
Commodity contracts	Current	$	151.9	$	(33.9 )	$	158.7	$	(93.8 )		
	Long-term		42.8			(6.9 )		24.2			(30.9 )		
Total derivatives designated as hedging instruments			$	194.7		$	(40.8	)	$	182.9		$	(124.7	)		
Derivatives not designated as hedging instruments																
Commodity contracts	Current	$	42.3	$	(17.2 )	$	21.2	$	(226.3 )		
	Long-term		5.7			(17.2 )		0.3			(109.2 )		
Total derivatives not designated as hedging instruments			$	48.0		$	(34.4	)	$	21.5		$	(335.5	)		
Total current position			$	194.2	$	(51.1 )	$	179.9	$	(320.1 )		
Total long-term position				48.5			(24.1 )		24.5			(140.1 )		
																
Total derivatives			$	242.7		$	(75.2 )	$	204.4	$	(460.2 )		

The pro forma impact of reporting derivatives on our Consolidated Balance Sheets on a net basis is as follows:

				Gross Presentation					Pro Forma Net Presentation		
June 30, 2023			Asset			Liability			Collateral			Asset			Liability		
Current Position																
Counterparties with offsetting positions or collateral	$	180.1	$	(51.1 )	$	(56.4 )	$	79.2	$	(6.6 )	
Counterparties without offsetting positions - assets		14.1			—		—		14.1			—	
Counterparties without offsetting positions - liabilities		—			—			—			—			—		
			194.2			(51.1 )		(56.4 )		93.3			(6.6 )	
Long-Term Position																
Counterparties with offsetting positions or collateral		41.8			(24.1 )		1.4			22.1			(3.0 )	
Counterparties without offsetting positions - assets		6.7			—		—		6.7			—	
Counterparties without offsetting positions - liabilities		—			—		—		—			—	
			48.5			(24.1	)		1.4			28.8			(3.0	)	
Total Derivatives																
Counterparties with offsetting positions or collateral		221.9			(75.2 )		(55.0 )		101.3			(9.6 )	
Counterparties without offsetting positions - assets		20.8			—		—		20.8			—	
Counterparties without offsetting positions - liabilities		—			—			—			—			—		
		$	242.7	$	(75.2 )	$	(55.0 )	$	122.1	$	(9.6 )	

				Gross Presentation					Pro Forma Net Presentation		
December 31, 2022		Asset			Liability		Collateral			Asset			Liability	
Current Position																	
Counterparties with offsetting positions or collateral	$	162.2	$	(316.7 )	$	12.2	$	27.2	$	(169.5 )	
Counterparties without offsetting positions - assets		17.7			—		—			17.7			—	
Counterparties without offsetting positions - liabilities		—			(3.4 )		—			—			(3.4 )	
																	
			179.9			(320.1 )		12.2			44.9			(172.9 )	
Long-Term Position																
Counterparties with offsetting positions or collateral		24.5			(137.4 )		22.4			7.3			(97.8 )	
Counterparties without offsetting positions - assets		—			—		—			—			—	
Counterparties without offsetting positions - liabilities		—			(2.7 )		—			—			(2.7 )	
			24.5			(140.1	)		22.4			7.3			(100.5	)	
Total Derivatives																
Counterparties with offsetting positions or collateral		186.7			(454.1 )		34.6			34.5			(267.3 )	
Counterparties without offsetting positions - assets		17.7			—		—			17.7			—	
Counterparties without offsetting positions - liabilities		—			(6.1 )		—			—			(6.1 )	
																	
		$	204.4		$	(460.2 )	$	34.6	$	52.2	$	(273.4 )	

20

Some of our hedges are futures contracts executed through brokers that clear the hedges through an exchange. 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. Our derivative instruments other than our futures contracts are executed under International Swaps and Derivatives Association (“ISDA”) agreements, which govern the key terms with our counterparties. Our ISDA agreements contain credit-risk related contingent features. Following the release of the collateral securing our TRGP Revolver, our derivative positions are no longer secured. As of June 30, 2023, we have outstanding net derivative positions that contain credit-risk related contingent features that are in a net liability position of $9.6 million. We have not been required to post any collateral related to these positions due to our credit rating. If our credit rating was to be downgraded one notch below investment grade by both Moody’s Investors Service, Inc. and Standard & Poor’s Financial Services LLC, as defined in our ISDAs, we estimate that as of June 30, 2023, we would not be required to post collateral to certain counterparties per the terms of our ISDAs.

The fair value of our derivative instruments, depending on the type of instrument, was determined by the use of present value methods or standard option valuation models with assumptions about commodity prices based on those observed in underlying markets. The estimated fair value of our derivative instruments was a net asset of $167.5 million as of June 30, 2023. The estimated fair value is net of an adjustment for credit risk based on the default probabilities as indicated by market quotes for the counterparties’ credit default swap rates. The credit risk adjustment was immaterial for all periods presented. Our futures contracts that are cleared through an exchange are margined daily and do not require any credit adjustment.

The following tables reflect amounts recorded in Other comprehensive income (“OCI”) and amounts reclassified from OCI to revenue for the periods indicated:

						Gain (Loss) Recognized in OCI on						
Derivatives in Cash Flow					Derivatives (Effective Portion)						
		Three Months Ended June 30,		Six Months Ended June 30,			
Hedging Relationships		2023			2022			2023			2022			
Commodity contracts		$	109.6		$	25.2		$	193.5		$	(362.1	)		
						Gain (Loss) Reclassified from OCI into						
						Income (Effective Portion)							
Location of Gain (Loss)		Three Months Ended June 30,		Six Months Ended June 30,			
		2023			2022			2023			2022			
Revenues		$	49.8		$	(157.7	)	$	95.0		$	(303.5	)		

Based on valuations as of June 30, 2023, we expect to reclassify commodity hedge-related deferred gains of $161.8 million included in accumulated other comprehensive income (loss) into earnings before income taxes through the end of 2026, with $125.8 million of gains to be reclassified over the next twelve months.

Our consolidated earnings are also affected by the use of the mark-to-market method of accounting for derivative instruments that do not qualify for hedge accounting or that have not been designated as hedges. The changes in fair value of these instruments are recorded on the balance sheet and through earnings rather than being deferred until the anticipated transaction settles. The use of mark-to-market accounting for financial assets and liabilities (“financial instruments”) can cause non-cash earnings volatility due to changes in the underlying commodity price indices. For the three and six months ended June 30, 2023, the unrealized mark-to-market gains are primarily attributable to favorable movements in natural gas forward prices, as compared to our positions.

		Location of Gain (Loss)		Gain (Loss) Recognized in Income on Derivatives				
Derivatives Not Designated		Recognized in Income on		Three Months Ended June 30,				Six Months Ended June 30,		
as Hedging Instruments		Derivatives		2023	2022				2023			2022		
Commodity contracts		Revenue		$	145.2		$	(19.0	)	$	323.2		$	(196.1	)	

See Note 11 – Fair Value Measurements and Note 16 – Segment Information for additional disclosures related to derivative instruments and hedging activities.

Note 11 — Fair Value Measurements

Under GAAP, our Consolidated Balance Sheets reflect a mixture of measurement methods for financial instruments. Derivative financial instruments are reported at fair value on our Consolidated Balance Sheets. Other financial instruments are reported at historical cost or amortized cost on our Consolidated Balance Sheets. The following are additional qualitative and quantitative disclosures regarding fair value measurements of financial instruments.

21

Fair Value of Derivative Financial Instruments

Our derivative instruments consist of financially settled commodity swaps, futures, option contracts and fixed-price forward commodity contracts with certain counterparties. We determine the fair value of our derivative contracts using present value methods or standard option valuation models with assumptions about commodity prices based on those observed in underlying markets. We have consistently applied these valuation techniques in all periods presented and we believe we have obtained the most accurate information available for the types of derivative contracts we hold.

The fair values of our derivative instruments are sensitive to changes in forward pricing on natural gas, NGLs and crude oil. The financial position of these derivatives at June 30, 2023, a net asset position of $167.5 million, reflects the present value, adjusted for counterparty credit risk, of the amount we expect to receive or pay in the future on our derivative contracts. 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 asset of $36.6 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 $299.2 million.

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. We determined the supplemental fair value disclosures for our long-term debt as follows:

•	the 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.

Fair Value Hierarchy

We categorize the inputs to the fair value measurements of financial assets and liabilities at each balance sheet reporting date using a three-tier fair value hierarchy that prioritizes the significant inputs used in measuring fair value:

•	Level 1 – observable inputs such as quoted prices in active markets;

•	Level 2 – inputs other than quoted prices in active markets that we can directly or indirectly observe to the extent that the markets are liquid for the relevant settlement periods; and
•	Level 3 – unobservable inputs in which little or no market data exists, therefore we must develop our own assumptions.

The following table shows a breakdown by fair value hierarchy category for (i) financial instruments measurements included on our

Consolidated Balance Sheets at fair value, and (ii) supplemental fair value disclosures for other financial instruments:

					June 30, 2023									
		Carrying					Fair Value						
Financial Instruments Recorded on Our		Value		Total			Level 1			Level 2			Level 3			
																	
Consolidated Balance Sheets at Fair Value:																	
Assets from commodity derivative contracts (1)	$	241.7		$	241.7	$	—	$	241.7	$	—			
Liabilities from commodity derivative contracts (1)		74.2			74.2			—			74.2			—			
Financial Instruments Recorded on Our																	
Consolidated Balance Sheets at Carrying Value:																	
Cash and cash equivalents		169.4			169.4			—			—			—			
TRGP Revolver and Commercial Paper Program		660.0			660.0			—			660.0			—			
TRGP Senior unsecured notes		4,459.2			4,269.3			—			4,269.3			—			
Term Loan Facility		1,500.0			1,500.0			—			1,500.0			—			
Partnership’s Senior unsecured notes		5,034.4			4,776.8			—			4,776.8			—			
Securitization Facility		547.9			547.9			—			547.9			—			

22

					December 31, 2022									
		Carrying					Fair Value						
Financial Instruments Recorded on Our		Value		Total			Level 1			Level 2			Level 3			
																	
Consolidated Balance Sheets at Fair Value:																	
Assets from commodity derivative contracts (1)	$	201.6		$	201.6	$	—	$	201.6	$	—			
Liabilities from commodity derivative contracts (1)		457.4			457.4			—			457.4			—			
Financial Instruments Recorded on Our																	
Consolidated Balance Sheets at Carrying Value:																	
Cash and cash equivalents		219.0			219.0			—			—			—			
TRGP Revolver and Commercial Paper Program		1,298.7			1,298.7			—			1,298.7			—			
TRGP Senior unsecured notes		2,741.6			2,452.6			—			2,452.6			—			
Term Loan Facility		1,500.0			1,500.0			—			1,500.0			—			
Partnership’s Senior unsecured notes		5,034.4			4,711.3			—			4,711.3			—			
Securitization Facility		800.0			800.0			—			800.0			—			

(1)	The fair value of derivative contracts in this table is presented on a different basis than the Consolidated Balance Sheets presentation as disclosed in Note 10 – Derivative Instruments and Hedging Activities. The above fair values reflect the total value of each derivative contract taken as a whole, whereas the Consolidated Balance Sheets presentation is based on the individual maturity dates of estimated future settlements. As such, an individual contract could have both an asset and liability position when segregated into its current and long-term portions for Consolidated Balance Sheets classification purposes.

Additional Information Regarding Level 3 Fair Value Measurements Included on Our Consolidated Balance Sheets

We have historically reported certain of our swaps and option contracts at fair value using Level 3 inputs due to such derivatives not having observable market prices or implied volatilities for substantially the full term of the derivative asset or liability. For valuations that include both observable and unobservable inputs, if the unobservable input was determined to be significant to the overall inputs, the entire valuation was categorized in Level 3. This included derivatives valued using indicative price quotations whose contract length extends into unobservable periods.

The fair value of these swaps was determined using a discounted cash flow valuation technique based on a forward commodity basis curve. For these derivatives, the primary input to the valuation model was the forward commodity basis curve, which was based on observable or public data sources and extrapolated when observable prices were not available.

The significant unobservable inputs used in the fair value measurements of our Level 3 derivatives were (i) the forward natural gas liquids pricing curves, for which a significant portion of the derivative’s term is beyond available forward pricing, and (ii) implied volatilities, which are unobservable as a result of inactive natural gas liquids options trading. As of June 30, 2023 and December 31, 2022, we had no derivative contracts categorized as Level 3.

Note 12 — Contingencies

Legal Proceedings

We and the Partnership are parties to various legal, administrative and regulatory proceedings that have arisen in the ordinary course of our business. We and the Partnership are also parties to various proceedings with governmental environmental agencies, including, but not limited to the U.S. Environmental Protection Agency, Texas Commission on Environmental Quality, Oklahoma Department of Environmental Quality, New Mexico Environment Department, Louisiana Department of Environmental Quality and North Dakota Department of Environmental Quality, which assert monetary sanctions for alleged violations of environmental regulations, including air emissions, discharges into the environment and reporting deficiencies, related to events that have arisen at certain of our facilities in the ordinary course of our business.

On December 26, 2018, 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. Vitol alleges that Targa Channelview breached 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. 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. Vitol’s lawsuit also alleges 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 seeks return of $129.0 million in payments made to Targa Channelview prior to the start-up of the Splitter, as well as additional damages. 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. Targa also seeks recovery of its attorneys’ fees and costs in the lawsuit.

23

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. 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. 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. We have filed a petition for review with the Supreme Court of Texas, and the appeal remains pending. The cumulative amount of interest on the award through June 30, 2023, if accrued, would have been approximately $49.1 million.

Note 13 — Revenue

Fixed consideration allocated to remaining performance obligations

The following table presents the estimated minimum revenue related to unsatisfied performance obligations at the end of the reporting period, and is comprised of fixed consideration primarily attributable to contracts with minimum volume commitments, for which a guaranteed amount of revenue can be calculated. These contracts are comprised primarily of gathering and processing, fractionation, export, terminaling and storage agreements, with remaining contract terms ranging from 1 to 16 years.

		2023			2024			2025 and after		
Fixed consideration to be recognized as of June 30, 2023	$	226.4		$	459.6		$	2,388.5		

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.

For disclosures related to disaggregated revenue, see Note 16 – Segment Information.

Note 14 — Income Taxes

We record income taxes using an estimated annual effective tax rate and recognize specific events discretely as they occur. Our effective tax rate for the three and six months ended June 30, 2023 is lower than the U.S. corporate statutory rate of 21% primarily due to the release of a portion of our state valuation allowances in addition to income allocated to noncontrolling interests that is not taxable. The effective tax rate for the three and six months ended June 30, 2022 was lower than the U.S. corporate statutory rate of 21% primarily due to the release of a portion of our federal valuation allowances in addition to income allocated to noncontrolling interests that is not taxable to the Company.

We regularly evaluate the realizable tax benefits of deferred tax assets and record a valuation allowance, if required, based on an estimate of the amount of deferred tax assets that we believe does not meet the more-likely-than-not criteria of being realized. As of June 30, 2023, our valuation allowance was $10.9 million, a decrease of $26.0 million from December 31, 2022. After the change in valuation allowance, we have a net deferred tax liability of $405.1 million.

We are subject to tax in the U.S. and various state jurisdictions. Additionally, we are subject to periodic audits and reviews by U.S. federal and state taxing authorities. As of June 30, 2023, Internal Revenue Service (“IRS”) examinations are currently in process for the 2019 and 2020 taxable years 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 are not aware of any potential audit findings that would give rise to adjustments to taxable income and do not anticipate material changes related to these audits.

Note 15 — Supplemental Cash Flow Information

		Six Months Ended June 30,			
	2023				2022		
Cash:							
Interest paid, net of capitalized interest (1)	$	274.8	$	180.5		
Income taxes (received) paid, net		8.7			1.1		
Non-cash investing activities:							
Impact of capital expenditure accruals on property, plant and equipment, net	$	13.5	$	(13.3 )	
Non-cash financing activities:							
Changes in accrued distributions to noncontrolling interests	$	13.9	$	(17.9 )	

(1)	Interest capitalized on major projects was $17.6 million and $5.5 million for the six months ended June 30, 2023 and 2022.

24

Note 16 — Segment Information

We operate in two primary segments: (i) Gathering and Processing, and (ii) Logistics and Transportation (also referred to as the Downstream Business). Our reportable segments include operating segments that have been aggregated based on the nature of the products and services provided.

Our Gathering and Processing segment includes assets used in the gathering and/or purchase and sale of natural gas produced from oil and gas wells, removing impurities and processing this raw natural gas into merchantable natural gas by extracting NGLs; and assets used for the gathering and terminaling and/or purchase and sale of crude oil. The Gathering and Processing segment’s assets are located in the Permian Basin of West Texas and Southeast New Mexico (including the Midland, Central and Delaware Basins); the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma Basins in Oklahoma (including the SCOOP and STACK) and South Central Kansas; the Williston Basin in North Dakota (including the Bakken and Three Forks plays); and the onshore and near offshore regions of the Louisiana Gulf Coast and the Gulf of Mexico.

Our Logistics and Transportation segment includes the activities and assets necessary to convert mixed NGLs into NGL products and also includes other assets and value-added services such as transporting, storing, fractionating, terminaling, and marketing of NGLs and NGL products, including services to LPG exporters and certain natural gas supply and marketing activities in support of our other businesses. 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. The associated assets are generally connected to and supplied in part by our Gathering and Processing segment and, except for the pipelines and smaller terminals, are located predominantly in Mont Belvieu and Galena Park, Texas, and in Lake Charles, Louisiana.

Other contains the unrealized mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges.

Elimination of inter-segment transactions are reflected in the corporate and eliminations column.

Reportable segment information is shown in the following tables:

					Three Months Ended June 30, 2023					
	Gathering and			Logistics and						Corporate					
							Other			and		Total			
		Processing		Transportation						Eliminations					
Revenues																	
Sales of commodities	$	268.0	$	2,494.7	$	151.9	$	—	$	2,914.6			
Fees from midstream services		321.6			167.5			—			—		489.1			
		589.6			2,662.2			151.9			—			3,403.7			
Intersegment revenues																	
Sales of commodities		976.0			83.0			—			(1,059.0 )		—			
Fees from midstream services		0.6			10.9			—			(11.5 )		—			
		976.6			93.9			—			(1,070.5	)		—			
Revenues	$	1,566.2		$	2,756.1		$	151.9		$	(1,070.5 )	$	3,403.7			
																	
Operating margin (1)	$	502.5		$	408.0		$	151.9									
Other financial information:																	
Total assets (2)	$	12,316.5		$	6,890.4		$	13.4		$	241.5		$	19,461.8			
Goodwill	$	45.2		$	—		$	—		$	—		$	45.2			
														
Capital expenditures	$	390.7		$	238.7		$	—		$	3.5		$	632.9			

25

						Three Months Ended June 30, 2022					
		Gathering and		Logistics and						Corporate					
							Other		and		Total			
			Processing	Transportation					Eliminations					
Revenues																	
Sales of commodities	$	261.9		$	5,366.8	$	(4.5 )	$	—	$	5,624.2			
Fees from midstream services		251.6			180.0			—		—		431.6			
			513.5			5,546.8			(4.5	)		—			6,055.8			
Intersegment revenues																	
Sales of commodities		2,656.6			131.6			—		(2,788.2 )		—			
Fees from midstream services		(0.5 )		12.0			—		(11.5 )		—			
			2,656.1			143.6			—			(2,799.7	)		—			
Revenues	$	3,169.6		$	5,690.4		$	(4.5 )	$	(2,799.7 )	$	6,055.8			
																		
Operating margin (1)	$	474.7		$	322.3		$	(4.5	)								
Other financial information:																	
Total assets (2)	$	8,227.9		$	6,940.5		$	0.8		$	165.1		$	15,334.3			
Goodwill	$	45.2		$	—		$	—		$	—		$	45.2			
																
Capital expenditures	$	196.7		$	42.6		$	—		$	4.4		$	243.7			
						Six Months Ended June 30, 2023					
		Gathering and		Logistics and						Corporate					
							Other		and		Total			
			Processing	Transportation					Eliminations					
Revenues																	
Sales of commodities	$	555.8		$	6,056.2	$	327.7		$	—	$	6,939.7			
Fees from midstream services		642.1			342.4			—		—		984.5			
			1,197.9			6,398.6			327.7			—			7,924.2			
Intersegment revenues																	
Sales of commodities		2,323.0			161.2			—		(2,484.2 )		—			
Fees from midstream services		1.1			21.7			—		(22.8 )		—			
			2,324.1			182.9			—			(2,507.0	)		—			
Revenues	$	3,522.0		$	6,581.5		$	327.7		$	(2,507.0 )	$	7,924.2			
																		
Operating margin (1)	$	1,040.9		$	937.1		$	327.7									
Other financial information:																	
Total assets (2)	$	12,316.5		$	6,890.4		$	13.4		$	241.5		$	19,461.8			
Goodwill	$	45.2		$	—		$	—		$	—		$	45.2			
																
Capital expenditures	$	660.2		$	415.3		$	—		$	11.7		$	1,087.2			
						Six Months Ended June 30, 2022					
		Gathering and		Logistics and						Corporate					
							Other		and		Total			
			Processing	Transportation					Eliminations					
Revenues																	
Sales of commodities	$	396.4		$	9,976.6	$	(182.7 )	$	—	$	10,190.3			
Fees from midstream services		462.2			362.4			—		—		824.6			
			858.6			10,339.0			(182.7	)		—			11,014.9			
Intersegment revenues																	
Sales of commodities		4,687.2			255.8			—		(4,943.0 )		—			
Fees from midstream services		(0.2 )		22.6			—		(22.4 )		—			
			4,687.0			278.4			—			(4,965.4	)		—			
Revenues	$	5,545.6		$	10,617.4		$	(182.7 )	$	(4,965.4 )	$	11,014.9			
																		
Operating margin (1)	$	872.3		$	674.5		$	(182.7	)								
Other financial information:																	
Total assets (2)	$	8,227.9		$	6,940.5		$	0.8		$	165.1		$	15,334.3			
Goodwill	$	45.2		$	—		$	—		$	—		$	45.2			
																
Capital expenditures	$	329.7		$	67.8		$	—		$	8.7		$	406.2			

(1)	Operating margin is calculated by subtracting Product purchases and fuel and Operating expenses from Revenues.

(2)	Assets in the Corporate and Eliminations column primarily include tax-related assets, cash, prepaids and debt issuance costs for our revolving credit facilities.

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The following table shows our consolidated revenues disaggregated by product and service for the periods presented:

		Three Months Ended June 30,		Six Months Ended June 30,		
Sales of commodities:		2023			2022			2023			2022			
														
Revenue recognized from contracts with customers:														
Natural gas	$	413.8	$	1,531.7		$	1,229.9	$	2,496.0			
NGL		2,151.7			4,096.4			5,016.3			7,903.0			
Condensate and crude oil		154.1			172.8			275.3			290.9			
		2,719.6			5,800.9			6,521.5			10,689.9			
Non-customer revenue:														
Derivative activities - Hedge		49.8			(157.7 )		95.0			(303.5 )		
Derivative activities - Non-hedge (1)		145.2			(19.0 )		323.2			(196.1 )		
														
		195.0			(176.7 )		418.2			(499.6 )		
Total sales of commodities		2,914.6			5,624.2			6,939.7			10,190.3			
														
Fees from midstream services:														
Revenue recognized from contracts with customers:														
Gathering and processing		317.4			247.1			632.8			453.4			
NGL transportation, fractionation and services		63.4			66.9			119.4			132.7			
Storage, terminaling and export		91.4			101.9			200.2			202.8			
Other		16.9			15.7			32.1			35.7			
Total fees from midstream services		489.1			431.6			984.5			824.6			
												
Total revenues	$	3,403.7		$	6,055.8		$	7,924.2		$	11,014.9			

(1)	Represents derivative activities that are not designated as hedging instruments under ASC 815.

The following table shows a reconciliation of reportable segment Operating margin to Income (loss) before income taxes for the periods presented:

	Three Months Ended June 30,			Six Months Ended June 30,				
Reconciliation of reportable segment operating	2023			2022			2023			2022				
														
margin to income (loss) before income taxes:														
Gathering and Processing operating margin	$	502.5		$	474.7		$	1,040.9		$	872.3			
Logistics and Transportation operating margin		408.0			322.3			937.1			674.5			
Other operating margin		151.9			(4.5 )		327.7			(182.7 )		
Depreciation and amortization expense		(332.1 )		(269.9 )		(656.9 )		(479.0 )		
General and administrative expense		(81.0 )		(71.0 )		(163.4 )		(138.0 )		
Other operating income (expense)		—		0.1			0.6			0.6			
Interest expense, net		(166.6 )		(81.2 )		(334.7 )		(174.7 )		
Equity earnings (loss)		3.4			1.4			3.2			7.0			
Gain (loss) from financing activities		—		(33.8 )		—		(49.6 )		
Gain (loss) from sale of equity method investment		—		435.9			—		435.9			
Other, net		(2.2 )		0.7			(5.1 )		—		
Income (loss) before income taxes	$	483.9		$	774.7		$	1,149.4		$	966.3			

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 contained in our Annual Report on Form 10-K for the year ended December 31, 2022 (“Annual Report”), as well as the unaudited consolidated financial statements and notes hereto included in this Quarterly Report on Form 10-Q.

Overview

Targa Resources Corp. (NYSE: TRGP) is a publicly traded Delaware corporation formed in October 2005. Targa is a leading provider of midstream services and is one of the largest independent midstream infrastructure companies in North America. We own, operate, acquire, and develop a diversified portfolio of complementary domestic midstream infrastructure assets.

Our Operations

We are engaged primarily in the business of:

•	gathering, compressing, treating, processing, transporting, and purchasing and selling natural gas;

•	transporting, storing, fractionating, treating, and purchasing and selling NGLs and NGL products, including services to LPG exporters; and

•	gathering, storing, terminaling, and purchasing and selling crude oil.

To provide these services, we operate in two primary segments: (i) Gathering and Processing, and (ii) Logistics and Transportation (also referred to as the Downstream Business).

Our Gathering and Processing segment includes assets used in the gathering and/or purchase and sale of natural gas produced from oil and gas wells, removing impurities and processing this raw natural gas into merchantable natural gas by extracting NGLs; and assets used for the gathering and terminaling and/or purchase and sale of crude oil. The Gathering and Processing segment’s assets are located in the Permian Basin of West Texas and Southeast New Mexico (including the Midland, Central and Delaware Basins); the Eagle Ford Shale in South Texas; the Barnett Shale in North Texas; the Anadarko, Ardmore, and Arkoma Basins in Oklahoma (including the SCOOP and STACK) and South Central Kansas; the Williston Basin in North Dakota (including the Bakken and Three Forks plays); and the onshore and near offshore regions of the Louisiana Gulf Coast and the Gulf of Mexico.

Our Logistics and Transportation segment includes the activities and assets necessary to convert mixed NGLs into NGL products and also includes other assets and value-added services such as transporting, storing, fractionating, terminaling, and marketing of NGLs and NGL products, including services to LPG exporters and certain natural gas supply and marketing activities in support of our other businesses. The Logistics and Transportation segment also includes the Grand Prix NGL Pipeline (“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.

Other contains the unrealized mark-to-market gains/losses related to derivative contracts that were not designated as cash flow hedges.

Recent Developments

In response to increasing production and to meet the infrastructure needs of producers and our downstream customers, our major expansion projects include the following:

Permian Midland Processing Expansions

•	In February 2022, we announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant in Permian Midland (the “Legacy II plant”). The Legacy II plant commenced operations late in the first quarter of 2023.

•	In August 2022, we announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant in Permian Midland (the “Greenwood plant”). The Greenwood plant is expected to begin operations late in the fourth quarter of 2023.

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•	In August 2023, we announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant in Permian Midland (the “Greenwood II plant”). The Greenwood II plant is expected to begin operations in the fourth quarter of 2024.

Permian Delaware Processing Expansions

•	In February 2022, we announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant in Permian Delaware (the “Midway plant”). The Midway plant commenced operations in the second quarter of 2023 and we expect to subsequently idle an existing 165 MMcf/d cryogenic natural gas processing plant in the third quarter of 2023.

•	In November 2022, we announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant in Permian Delaware (the “Wildcat II plant”). The Wildcat II plant is expected to begin operations in the first quarter of 2024.

•	In February 2023, we announced the transfer of an existing cryogenic natural gas processing plant acquired in the purchase of Southcross Energy Operating LLC and its subsidiaries to the Permian Delaware. The plant will be installed as a new 230 MMcf/d cryogenic natural gas processing plant (the “Roadrunner II plant”). The Roadrunner II plant is expected to begin operations in the second quarter of 2024.

•	In August 2023, we announced the construction of a new 275 MMcf/d cryogenic natural gas processing plant in Permian Delaware (the “Bull Moose plant”). The Bull Moose plant is expected to begin operations in the second quarter of 2025.

Fractionation Expansion

•	In August 2022, we announced plans to construct a new 120 MBbl/d fractionation train in Mont Belvieu, Texas (“Train 9”). Train 9 is expected to begin operations in the second quarter of 2024.

•	In January 2023, we reached an agreement with our partners in Gulf Coast Fractionators (“GCF”) to reactivate GCF’s 135 MBbl/d fractionation facility. The facility is expected to be operational during the first quarter of 2024.

•	In May 2023, we announced plans to construct a new 120 MBbl/d fractionation train in Mont Belvieu, Texas (“Train 10”). Train 10 is expected to begin operations in the first quarter of 2025.

NGL Pipeline Expansion

•	In November 2022, we announced plans to construct a new NGL pipeline (the “Daytona NGL Pipeline”) as an addition to our common carrier Grand Prix system. The pipeline will transport NGLs from the Permian Basin and connect to the 30-inch diameter segment of Grand Prix in North Texas, where volumes will be transported to our fractionation and storage complex in the NGL market hub at Mont Belvieu, Texas. The Daytona NGL Pipeline is expected to be in service by the end of 2024.

Acquisitions

In January 2023, we completed the acquisition of Blackstone Energy Partners’ 25% interest in the Grand Prix Joint Venture (the “Grand Prix Transaction”) for approximately $1.05 billion in cash and paid a final closing adjustment of $41.9 million. Following the closing of the Grand Prix Transaction, we own 100% of Grand Prix, including the Daytona NGL Pipeline. For further details on our acquisitions and divestitures, see Note 4 - Acquisitions and Divestitures to our Consolidated Financial Statements.

Capital Allocation

In April 2023, we declared an increase to our common dividend to $0.50 per common share or $2.00 per common share annualized effective for the first quarter of 2023.

For the three and six months ended June 30, 2023, we repurchased 2,088,062 shares and 2,812,202 shares of our common stock at a weighted average per share price of $71.37 and $71.49 for a total net cost of $149.0 million and $201.0 million, respectively.

In October 2020, our Board of Directors approved a share repurchase program (the “2020 Share Repurchase Program”) for the repurchase of up to $500.0 million of our outstanding common stock. In May 2023, our Board of Directors authorized a new $1.0 billion common share repurchase program (the “2023 Share Repurchase Program” and, together with the 2020 Share Repurchase Program, the “Share Repurchase Programs”). The amount authorized under the 2023 Share Repurchase Program was in addition to the amount remaining under the 2020 Share Repurchase Program. During the second quarter of 2023, we exhausted the 2020 Share Repurchase

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Program. There was $942.7 million remaining under the 2023 Share Repurchase Program as of June 30, 2023. We may discontinue the 2023 Share Repurchase Program at any time and are not obligated to repurchase any specific dollar amount or number of shares thereunder.

Financing Activities

In January 2023, we completed an underwritten public offering of (i) $900.0 million in aggregate principal amount of our 6.125% Senior Notes due 2033 (the “6.125% Notes”) and (ii) $850.0 million in aggregate principal amount of our 6.500% Senior Notes due 2053 (the “6.500% Notes”), resulting in net proceeds of approximately $1.7 billion. We used a portion of the net proceeds from the issuance to fund the Grand Prix Transaction and the remaining net proceeds for general corporate purposes, including to reduce borrowings under our $2.75 billion TRGP senior revolving credit facility (the “TRGP Revolver”) and our unsecured commercial paper note program (the “Commercial Paper Program”).

For additional information about our recent debt-related transactions, see Note 6 - Debt Obligations to our Consolidated Financial Statements.

Corporation Tax Matters

As of June 30, 2023, Internal Revenue Service (“IRS”) examinations are currently in process for the 2019 and 2020 taxable years of certain wholly-owned and consolidated subsidiaries that are treated as partnerships for U.S federal income tax purposes. We are responding to the information requests from the IRS with respect to these audits. We are not aware of any potential audit findings that would give rise to adjustments to taxable income and do not anticipate material changes related to these audits.

On August 16, 2022, President Biden signed into law the IRA which, among other things, introduced a corporate alternative minimum tax (the “CAMT”), imposed a 1% excise tax on stock buybacks, and provided tax incentives to promote clean energy. Under the CAMT, a 15% minimum tax will be imposed on certain financial statement income of “applicable corporations.” The IRA treats a corporation as an applicable corporation in any taxable year in which the “average annual adjusted financial statement income” of such corporation for the three taxable year period ending prior to such taxable year exceeds $1.0 billion. The 1% excise tax on stock buybacks is accrued in the current year for payment with the first quarterly excise tax return of the subsequent year.

On December 27, 2022, IRS Notice 2023-7 (the “Notice”) was issued by the U.S. Department of the Treasury and the IRS. The Notice provides guidance on the application of the CAMT which may be relied upon until final regulations are released. Based on our interpretation of the IRA, the CAMT and related guidance, and a number of operational, economic, accounting and regulatory assumptions, including the safe harbor provided for in the Notice, the company should not qualify as an “applicable corporation” for 2023.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements that will affect us, see “Recent Accounting Pronouncements” included within Note 3 – Significant Accounting Policies to our Consolidated Financial Statements.

How We Evaluate Our Operations

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 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 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 also impacted by fee-based contracts. Our growing capital expenditures for pipelines and gathering and processing assets underpinned by fee-based margin, expansion of our Downstream facilities, continued focus on adding fee-based margin to our existing and future gathering and processing contracts, as well as third-party acquisitions of businesses and assets, will continue to increase the number of our contracts that are fee-based. Fixed fees for services such as gathering and processing, transportation,

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fractionation, storage, terminaling and crude oil gathering are not directly tied to changes in market prices for commodities. Nevertheless, a change in market dynamics such as available commodity throughput does affect profitability.

Management uses a variety of financial measures and operational measurements to analyze our performance. These include: (i) throughput volumes, facility efficiencies and fuel consumption, (ii) operating expenses, (iii) capital expenditures and (iv) the following non-GAAP measures: adjusted EBITDA, distributable cash flow, adjusted free cash flow and adjusted operating margin (segment).

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. 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. 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.

In addition, we seek to increase adjusted operating margin by limiting volume losses, reducing fuel consumption and by increasing efficiency. With our gathering systems’ extensive use of remote monitoring capabilities, we monitor the volumes received at the wellhead or central delivery points along our gathering systems, the volume of natural gas received at our processing plant inlets and the volumes of NGLs and residue natural gas recovered by our processing plants. We also monitor the volumes of NGLs received, stored, fractionated and delivered across our logistics assets. 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.

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. We also track the difference between the volume of natural gas received at the inlet of the processing plant and the NGLs and residue gas produced at the outlet of such plant to monitor the fuel consumption and recoveries of our facilities. Similar tracking is performed for our crude oil gathering and logistics assets and our NGL pipelines. These volume, recovery and fuel consumption measurements are an important part of our operational efficiency analysis and safety programs.

Operating Expenses

Operating expenses are costs associated with the operation of specific assets. Labor, contract services, repair and maintenance and ad valorem taxes comprise the most significant portion of our operating expenses. These expenses remain relatively stable and independent of the volumes through our systems, but may increase with system expansions and will fluctuate depending on the scope of the activities performed during a specific period.

Capital Expenditures

Our capital expenditures are classified as growth capital expenditures and maintenance capital expenditures. 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. 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. 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. Adjusted EBITDA, distributable cash flow, adjusted free cash flow 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 our results as reported under GAAP. Additionally, because our non-GAAP measures exclude some, but not all, items that affect income and segment operating margin, and

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are defined differently by different companies within our industry, our definitions may not be comparable with similarly titled measures of other companies, thereby diminishing their utility. Management compensates for the limitations of our non-GAAP measures as analytical tools by reviewing the comparable GAAP measures, understanding the differences between the measures and incorporating these insights into our decision-making processes.

Adjusted Operating Margin

We define 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 our equity volume hedge settlements.

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.

The adjusted operating margin impacts of mark-to-market hedge unrealized changes in fair value are reported in Other.

Adjusted operating margin for our 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 our assets without regard to financing methods, capital structure or historical cost basis;

•	our 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.

Management reviews adjusted operating margin and operating margin for our segments monthly as a core internal management process. We believe that investors benefit from having access to the same financial measures that management uses in evaluating our operating results. The reconciliation of our adjusted operating margin to the most directly comparable GAAP measure is presented under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – By Reportable Segment.”

Adjusted EBITDA

We define adjusted EBITDA as Net income (loss) attributable to Targa Resources Corp. before interest, income taxes, depreciation and amortization, and other items that we believe should be adjusted consistent with our 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 us and by external users of our financial statements such as investors, commercial banks and others to measure the ability of our assets to generate cash sufficient to pay interest costs, support our indebtedness and pay dividends to our investors.

Distributable Cash Flow and Adjusted Free Cash Flow

We define distributable cash flow as adjusted EBITDA less cash interest expense on debt obligations, cash tax (expense) benefit and maintenance capital expenditures (net of any reimbursements of project costs). We define adjusted free cash flow as distributable cash flow less growth capital expenditures, net of contributions from noncontrolling interest and net contributions to investments in unconsolidated affiliates. Distributable cash flow and adjusted free cash flow are performance measures used by us and by external users

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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.

Our Non-GAAP Financial Measures

The following tables reconcile the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the periods indicated:

		Three Months Ended June 30,		Six Months Ended June 30,		
		2023			2022			2023			2022			
Reconciliation of Net income (loss) attributable to Targa Resources Corp. to					(In	millions)							
														
Adjusted EBITDA, Distributable Cash Flow and Adjusted Free Cash Flow														
Net income (loss) attributable to Targa Resources Corp.	$	329.3		$	596.4		$	826.3		$	684.4			
Interest (income) expense, net		166.6			81.2			334.7			174.7			
Income tax expense (benefit)		96.4			87.1			206.7			110.1			
Depreciation and amortization expense		332.1			269.9			656.9			479.0			
(Gain) loss on sale or disposition of assets		(1.7 )		(0.6 )		(3.2 )		(1.6 )		
Write-down of assets		1.7			0.5			2.6			1.0			
(Gain) loss from financing activities (1)		—		33.8			—		49.6			
(Gain) loss from sale of equity method investment		—		(435.9 )		—		(435.9 )		
Equity (earnings) loss		(3.4 )		(1.4 )		(3.2 )		(7.0 )		
Distributions from unconsolidated affiliates and preferred partner interests, net		6.2			6.8			8.8			19.3			
Compensation on equity grants		15.0			13.8			30.0			27.3			
Risk management activities		(151.9 )		4.5			(327.7 )		182.7			
Noncontrolling interests adjustments (2)		(1.2 )		10.3			(2.2 )		8.5			
Adjusted EBITDA	$	789.1		$	666.4		$	1,729.7		$	1,292.1			
Interest expense on debt obligations (3)		(163.6	)		(90.7	)		(328.8	)		(182.2	)		
Maintenance capital expenditures, net (4)		(46.2 )		(39.7 )		(88.0 )		(77.4 )		
Cash taxes		(3.5 )		(2.6 )		(7.7 )		(4.3 )		
Distributable Cash Flow	$	575.8		$	533.4		$	1,305.2		$	1,028.2			
Growth capital expenditures, net (4)		(579.5	)		(199.3	)		(994.9	)		(320.7	)		
Adjusted Free Cash Flow	$	(3.7 )	$	334.1		$	310.3		$	707.5			

(1)	Gains or losses on debt repurchases or early debt extinguishments.
(2)	Noncontrolling interest portion of depreciation and amortization expense.
(3)	Excludes amortization of interest expense.
(4)	Represents capital expenditures, net of contributions from noncontrolling interests and includes net contributions to investments in unconsolidated affiliates.

33

Consolidated Results of Operations

The following table and discussion is a summary of our consolidated results of operations:

Three Months Ended June 30,		2023 vs. 2022			Six Months Ended June 30,		2023 vs. 2022		
2023		2022					2023		2022				
				(In millions)							

Revenues:

Sales of commodities

Fees from midstream services Total revenues
Product purchases and fuel Operating expenses

Depreciation and amortization expense

General and administrative expense

Other operating (income) expense

Income (loss) from operations

Interest expense, net

Equity earnings (loss)

Gain (loss) from financing activities

Gain (loss) from sale of equity method investment Other, net

Income tax (expense) benefit Net income (loss)
Less: Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to Targa Resources Corp.

Premium on repurchase of noncontrolling interests, net of tax

Dividends on Series A Preferred Stock Deemed dividends on Series A Preferred Stock

Net income (loss) attributable to common shareholders

Financial data: Adjusted EBITDA (1) Distributable cash flow (1) Adjusted free cash flow (1)

$	2,914.6		$	5,624.2		$	(2,709).6	(48 %) $	6,939.7		$	10,190.3		$ (3,250).6	(32 %)		
	489.1			431.6			57.5		13 %		984.5			824.6		159.9		19 %		
	3,403.7			6,055.8			(2,652)	.1	(44 %)		7,924.2			11,014.9		(3,090)	.7	(28 %)		
	2,068.9			5,047.3			(2,978).4	(59 %)		5,088.0			9,251.5		(4,163).5	(45 %)		
	272.6			215.8			56.8		26 %		530.7			399.3		131.4		33 %		
	332.1			269.9			62.2		23 %		656.9			479.0		177.9		37 %		
	81.0			71.0			10.0		14 %		163.4			138.0		25.4		18 %		
	—		(0.1 )		0.1		100 %		(0.6 )		(0.6 )	—	—		
	649.1			451.9			197.2		44 %		1,485.8			747.7		738.1		99 %		
	(166.6 )		(81.2 )		(85.4 )	105 %		(334.7 )		(174.7 )	(160.0)	92 %		
	3.4			1.4			2.0		143 %		3.2			7.0		(3.8 )	(54 %)		
	—		(33.8 )		33.8		100 %		—		(49.6 )	49.6		100 %		
	—		435.9			(435.9)	(100 %)		—		435.9		(435.9)	(100 %)		
	(2.0 )		0.5			(2.5 )	NM	(4.9 )		—	(4.9 )  (100 %)		
	(96.4 )		(87.1 )		(9.3 )	11 %		(206.7 )		(110.1 )	(96.6 )	88 %		
									(44 %)									10 %		
	387.5			687.6			(300.1)			942.7			856.2		86.5				
	58.2			91.2			(33.0 )	(36 %)		116.4			171.8		(55.4 )	(32 %)		
																				
	329.3			596.4			(267.1)	(45 %)		826.3			684.4		141.9		21 %		
	—		—		—	—	490.7			53.1		437.6		NM		
	—		8.2			(8.2 )	(100 %)		—		30.0		(30.0 )  (100 %)		
	—			215.5			(215.5)	(100 %)		—		215.5		(215.5)	(100 %)		
																				
$	329.3		$	372.7		$	(43.4 )	(12 %) $	335.6		$	385.8		$ (50.2 )	(13 %)		
																				
$	789.1		$	666.4		$	122.7		18 % $	1,729.7		$	1,292.1		$ 437.6		34 %		
	575.8			533.4			42.4		8 %		1,305.2			1,028.2		277.0		27 %		
	(3.7 )		334.1			(337.8)	(101 %)		310.3			707.5		(397.2)	(56 %)		

(1)	Adjusted EBITDA, distributable cash flow 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.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

The decrease in commodity sales reflects lower NGL, natural gas and condensate prices ($3,412.8 million), partially offset by higher natural gas, condensate and NGL volumes ($331.5 million) and the favorable impact of hedges ($371.7 million).

The increase in fees from midstream services is primarily due to higher gas gathering and processing fees including the impact of the acquisition of certain assets in the Delaware Basin, partially offset by lower export volumes.

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

The increase in operating expenses is primarily due to increased activity and system expansions, the acquisition of certain assets in the Delaware Basin and South Texas, and higher costs attributable to inflation.

See “—Results of Operations—By Reportable Segment” for additional information on a segment basis.

The increase in depreciation and amortization expense is primarily due to the acquisition of certain assets in the Delaware Basin, partially offset by the shortening of the depreciable lives of certain assets that were idled in 2022.

The increase in general and administrative expense is primarily due to higher compensation and benefits, insurance costs and professional fees.

34

The increase in interest expense, net is due to higher net borrowings primarily for the acquisition of certain assets in the Delaware Basin and the Grand Prix Transaction, and higher interest rates on the Partnership’s accounts receivable securitization facility (the “Securitization Facility”), partially offset by higher capitalized interest resulting from higher growth capital investments.

During 2022, the Partnership redeemed its 5.875% Senior Notes due 2026 (the “5.875% Notes”) resulting in a net loss from financing activities.

During 2022, we completed the sale of Targa GCX Pipeline LLC to a third party (the “GCX Sale”) resulting in a gain from sale of an equity method investment.

The increase in income tax expense is primarily due to a smaller release of the valuation allowance in 2023 compared to 2022, partially offset by a decrease in pre-tax book income.

The decrease in net income (loss) attributable to noncontrolling interests is primarily due to the Grand Prix Transaction and lower earnings allocated to our joint venture partner in WestTX.

The decrease in dividends on Series A Preferred Stock (“Series A Preferred”) is due to the full redemption of all of our issued and outstanding shares of Series A Preferred in May 2022.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

The decrease in commodity sales reflects lower NGL, natural gas and condensate prices ($5,197.2 million), partially offset by higher NGL, natural gas and condensate volumes ($1,028.9 million) and the favorable impact of hedges ($917.7 million).

The increase in fees from midstream services is primarily due to higher gas gathering and processing fees including the impact of the acquisition of certain assets in the Delaware Basin and South Texas, partially offset by lower transportation and fractionation fees.

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

The increase in operating expenses is primarily due to increased activity and system expansions, the acquisition of certain assets in the Delaware Basin and South Texas, and higher costs attributable to inflation.

See “—Results of Operations—By Reportable Segment” for additional information on a segment basis.

The increase in depreciation and amortization expense is primarily due to the acquisition of certain assets in the Delaware Basin and the impact of system expansions on our asset base, partially offset by the shortening of depreciable lives of certain assets that were idled in 2022.

The increase in general and administrative expense is primarily due to higher compensation and benefits, insurance costs and professional fees.

The increase in interest expense, net is due to higher net borrowings primarily for the acquisition of certain assets in the Delaware Basin and the Grand Prix Transaction, and higher interest rates on the Securitization Facility, partially offset by higher capitalized interest resulting from higher growth capital investments.

During 2022, we terminated the previous TRGP senior secured revolving credit facility and the Partnership’s senior secured revolving credit facility. In addition, the Partnership redeemed its 5.375% Senior Notes due 2027 and 5.875% Notes. These transactions resulted in a net loss from financing activities.

During 2022, we completed the GCX Sale resulting in a gain from sale of an equity method investment.

The increase in income tax expense is primarily due to an increase in pre-tax book income and a smaller release of the valuation allowance in 2023 compared to 2022.

The decrease in net income (loss) attributable to noncontrolling interests is primarily due to the Grand Prix Transaction and lower earnings allocated to our joint venture partner in WestTX, the Carnero Joint Venture and Venice Energy Services, L.L.C.

35

The premium on repurchase of noncontrolling interests, net of tax is due to the Grand Prix Transaction in 2023 and the purchase of all of Stonepeak Infrastructure Partners’ interests in our development company joint ventures in 2022.

The decrease in dividends on Series A Preferred is due to the full redemption of all of our issued and outstanding shares of Series A Preferred in May 2022.

Results of Operations—By Reportable Segment

Our operating margins by reportable segment are:

		Gathering and Processing			Logistics and Transportation			Other		
Three Months Ended:					(In millions)						
											
June 30, 2023	$	502.5	$	408.0	$	151.9			
June 30, 2022		474.7			322.3			(4.5 )		
											
Six Months Ended:											
June 30, 2023	$	1,040.9	$	937.1	$	327.7			
June 30, 2022		872.3			674.5			(182.7 )		

36

Gathering and Processing Segment

		Three Months Ended June 30,			2023 vs. 2022			Six Months Ended June 30,			2023 vs. 2022			
		2023			2022						2023			2022						
					(In	millions, except operating	statistics and price	amounts)										
Operating margin	$	502.5	$	474.7	$	27.8		6 % $	1,040.9	$	872.3	$	168.6		19 %		
Operating expenses		189.8			141.4			48.4		34 %		371.2			258.0			113.2		44 %		
Adjusted operating margin	$	692.3		$	616.1		$	76.2		12 %	$	1,412.1		$	1,130.3		$	281.8		25 %		
Operating statistics (1):																									
																									
Plant natural gas inlet, MMcf/d (2)																									
(3)																									
Permian Midland (4)		2,504.3			2,132.0			372.3		17 %		2,426.9			2,103.7			323.2		15 %		
Permian Delaware (5)		2,560.8			993.3			1,567.5	158 %		2,528.1			985.1			1,543.0	157 %		
Total Permian										62 %										60 %		
		5,065.1			3,125.3			1,939.8			4,955.0			3,088.8			1,866.2			
																							
SouthTX (6)		371.0			271.2			99.8		37 %		363.5			216.9			146.6		68 %		
North Texas		208.0			175.3			32.7		19 %		201.8			175.3			26.5		15 %		
SouthOK (6)		395.0			460.4			(65.4 )	(14 %)		389.5			434.0			(44.5 )	(10 %)		
WestOK		211.0			212.0			(1.0 )	—	207.6			207.2			0.4		—			
																									
Total Central		1,185.0			1,118.9			66.1		6 %		1,162.4			1,033.4			129.0		12 %		
																					
Badlands (6) (7)		128.9			129.4			(0.5 )	—	130.3			127.2			3.1		2 %		
Total Field										46 %										47 %		
		6,379.0			4,373.6			2,005.4			6,247.7			4,249.4			1,998.3			
Coastal		552.1			553.6			(1.5 )	—	530.7			577.7			(47.0 )	(8 %)		
																						
Total		6,931.1			4,927.2			2,003.9	41 %		6,778.4			4,827.1			1,951.3	40 %		
NGL production, MBbl/d (3)																									
																									
Permian Midland (4)		363.6			310.6			53.0		17 %		349.4			305.7			43.7		14 %		
Permian Delaware (5)		367.9			135.8			232.1		171 %		355.4			132.8			222.6		168 %		
Total Permian		731.5			446.4			285.1		64 %		704.8			438.5			266.3		61 %		
SouthTX (6)		45.6			33.5			12.1		36 %		42.0			26.9			15.1		56 %		
North Texas		24.3			19.6			4.7		24 %		23.7			19.4			4.3		22 %		
SouthOK (6)		47.3			55.8			(8.5 )	(15 %)		43.1			53.1			(10.0 )	(19 %)		
WestOK		12.5			16.6			(4.1 )	(25 %)		12.8			15.8			(3.0 )	(19 %)		
Total Central		129.7			125.5			4.2		3 %		121.6			115.2			6.4		6 %		
Badlands (6)		15.6			14.7			0.9		6 %		15.5			14.7			0.8		5 %		
Total Field		876.8			586.6			290.2		49 %		841.9			568.4			273.5		48 %		
																					
Coastal		36.8			36.7			0.1		—	36.5			36.9			(0.4 )	(1 %)		
																							
Total		913.6			623.3			290.3		47 %		878.4			605.3			273.1		45 %		
Crude oil, Badlands, MBbl/d									(6 %)									(8 %)		
		104.7			111.8			(7.1	)			107.7			117.2			(9.5	)			
Crude oil, Permian, MBbl/d		29.4			28.8			0.6		2 %		27.5			29.7			(2.2 )	(7 %)		
Natural gas sales, BBtu/d (3)		2,672.6			2,277.1			395.5		17 %		2,622.8			2,202.1			420.7		19 %		
NGL sales, MBbl/d (3)		493.8			440.4			53.4		12 %		476.6			432.7			43.9		10 %		
Condensate sales, MBbl/d		24.0			15.7			8.3		53 %		21.9			15.0			6.9		46 %		
Average realized prices (8):																									
Natural gas, $/MMBtu		1.29			6.12			(4.83 )	(79 %)		1.94			5.15			(3.21 )	(62 %)		
NGL, $/gal		0.41			0.89			(0.48 )	(54 %)		0.47			0.84			(0.37 )	(44 %)		
Condensate, $/Bbl		69.52			103.10			(33.58 )	(33 %)		68.09			90.06			(21.97 )	(24 %)		

(1)	Segment operating statistics include the effect of intersegment amounts, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the period and the denominator is the number of calendar days during the period.

(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.
(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.
(4)	Permian Midland includes operations in WestTX, of which we own a 72.8% undivided interest, and other plants that are owned 100% by us. Operating results for the WestTX undivided interest assets are presented on a pro-rata net basis in our reported financials.
(5)	Includes operations from the acquisition of certain assets in the Delaware Basin for the period effective August 1, 2022.
(6)	Operations include facilities that are not wholly owned by us. SouthTX operating statistics include the impact of the acquisition of certain assets in South Texas for the period effective April 21, 2022.
(7)	Badlands natural gas inlet represents the total wellhead volume and includes the Targa volumes processed at the Little Missouri 4 plant.
(8)	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.

37

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:

		Three Months Ended June 30, 2023		Three Months Ended June 30, 2022		
					(In millions, except volumetric data and price amounts)				
		Volume			Price		Gain	Volume			Price		Gain	
		Settled			Spread (1)		(Loss)	Settled			Spread (1)		(Loss)	
Natural gas (BBtu)	15.3		$	1.73		$	26.4		16.7		$	(3.29	)	$	(54.9	)	
NGL (MMgal)	164.9			0.11			17.7		164.4			(0.47 )		(77.9 )	
Crude oil (MBbl)	0.6			(3.67 )		(2.2 )	0.5			(51.00 )		(25.5 )	
																		
							$	41.9							$	(158.3 )	
								
		Six Months Ended June 30, 2023		Six Months Ended June 30, 2022		
					(In millions, except volumetric data and price amounts)				
		Volume			Price		Gain	Volume			Price		Gain	
		Settled			Spread (1)		(Loss)	Settled			Spread (1)		(Loss)	
Natural gas (BBtu)	35.0		$	1.51		$	52.9		34.2		$	(2.52	)	$	(86.1	)	
NGL (MMgal)	349.0			0.08			27.2		334.8			(0.47 )		(155.8 )	
Crude oil (MBbl)	1.2			(4.17 )		(5.0 )	1.0			(45.20 )		(45.2 )	
																		
							$	75.1							$	(287.1 )	

(1)	The price spread is the differential between the contracted derivative instrument pricing and the price of the corresponding settled commodity transaction.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

The increase in adjusted operating margin was due to higher natural gas inlet volumes and higher fees resulting in increased margin predominantly in the Permian, partially offset by lower commodity prices. The increase in natural gas inlet volumes in the Permian was attributable to the acquisition of certain assets in the Delaware Basin during the third quarter of 2022, the addition of the Legacy I and Red Hills VI plants during the third quarter of 2022 and the Legacy II plant late in the first quarter of 2023, and continued strong producer activity. Natural gas inlet volumes in the Central region increased primarily due to the acquisition of certain assets in South Texas during the second quarter of 2022 and increased producer activity.

The increase in operating expenses was predominantly due to the acquisition of certain assets in the Delaware Basin. Additionally, higher volumes in the Permian, the addition of the Legacy I, Red Hills VI, Legacy II and Midway plants, and inflation impacts resulted in increased costs.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

The increase in adjusted operating margin was due to higher natural gas inlet volumes and higher fees resulting in increased margin predominantly in the Permian, partially offset by lower commodity prices. The increase in natural gas inlet volumes in the Permian was attributable to the acquisition of certain assets in the Delaware Basin during the third quarter of 2022, the addition of the Legacy I and Red Hills VI plants during the third quarter of 2022 and the Legacy II plant late in the first quarter of 2023, and continued strong producer activity. Natural gas inlet volumes in the Central region increased due to the acquisition of certain assets in South Texas during the second quarter of 2022 and increased producer activity.

The increase in operating expenses was predominantly due to the acquisition of certain assets in South Texas and the Delaware Basin. Additionally, higher volumes in the Permian, the addition of the Legacy I, Red Hills VI and Legacy II plants, and inflation impacts resulted in increased costs.

Logistics and Transportation Segment

	Three Months Ended June 30,			2023 vs. 2022			Six Months Ended June 30,			2023 vs. 2022		
	2023				2022						2023			2022					
							(In millions, except	operating statistics)										
Operating margin	$	408.0	$	322.3	$	85.7		27%		$	937.1	$	674.5	$	262.6		39%		
Operating expenses		82.5			74.4			8.1		11%			159.0			141.3			17.7		13%		
Adjusted operating margin	$	490.5		$	396.7		$	93.8		24%		$	1,096.1		$	815.8		$	280.3		34%		
Operating statistics MBbl/d (1):																							
NGL pipeline transportation		620.7			492.3			128.4		26%			579.0			476.1			102.9		22%		
volumes (2)																							
Fractionation volumes		794.4			737.2			57.2		8%			776.7			720.1			56.6		8%		
Export volumes (3)		303.2			342.6			(39.4 )	(12%)			338.1			341.7			(3.6 )	(1%)		
NGL sales		947.0			906.9			40.1		4%			977.1			890.0			87.1		10%		

(1)	Segment operating statistics include intersegment amounts, which have been eliminated from the consolidated presentation. For all volume statistics presented,

38

the numerator is the total volume sold during the period and the denominator is the number of calendar days during the period.
(2)	Represents the total quantity of mixed NGLs that earn a transportation 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.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin and higher marketing margin, partially offset by lower LPG export margin. Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems and higher fees. Marketing margin increased due to greater optimization opportunities. LPG export margin decreased due to lower volumes.

The increase in operating expenses was primarily due to higher equipment rentals and higher compensation and benefits.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

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 higher fees. LPG export margin increased primarily due to lower fuel and power costs.

The increase in operating expenses was due to higher compensation and benefits, higher taxes and higher equipment rentals.

Other

	Three Months Ended June 30,				2023 vs. 2022			Six Months Ended June 30,		2023 vs. 2022			
	2023			2022							2023			2022						
								(In	millions)										
Operating margin	$	151.9		$	(4.5 )	$	156.4		$	327.7	$	(182.7 )	$	510.4			
																				
Adjusted operating margin	$	151.9		$	(4.5 )	$	156.4		$	327.7	$	(182.7 )	$	510.4			

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. We have entered into derivative instruments to hedge the commodity price associated with a portion of our future commodity purchases and sales and natural gas transportation basis risk within our Logistics and Transportation segment. See further details of our risk management program in “Item 3. – Quantitative and Qualitative Disclosures About Market Risk.”

Our Liquidity and Capital Resources

As of June 30, 2023, inclusive of our consolidated joint venture accounts, we had $169.4 million of Cash and cash equivalents on our Consolidated Balance Sheets. We believe our cash positions, our cash flows from operating activities, our free cash flow after dividends and remaining borrowing capacity on our credit facilities (discussed below in “Short-term Liquidity”) are adequate to allow us to manage our day-to-day cash requirements and anticipated obligations as discussed further below. Our liquidity and capital resources are managed on a consolidated basis.

On a consolidated basis, our ability to finance our operations, including funding capital expenditures and acquisitions, meeting our indebtedness obligations, refinancing or repaying our indebtedness, meeting our collateral requirements and to pay dividends declared by our Board of Directors will depend on our ability to generate cash in the future. 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, please see “Recent Developments.”

On a consolidated basis, our main sources of liquidity and capital resources are internally generated cash flows from operations, borrowings under the TRGP Revolver, Commercial Paper Program, the 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. For companies involved in hydrocarbon production, transportation and other oil and gas related services, the capital markets have experienced and may continue to experience volatility. Our exposure to adverse credit conditions includes our credit facilities, cash investments, hedging abilities, customer performance risks and counterparty performance risks.

39

Short-term Liquidity

Our short-term liquidity on a consolidated basis as of June 30, 2023, was:

				Consolidated Total	
				(In millions)		
Cash on hand (1)	$	169.4		
Total availability under the Securitization Facility		547.9		
Total availability under the TRGP Revolver and Commercial Paper Program		2,750.0		
				3,467.3		
				
Less: Outstanding borrowings under the Securitization Facility		(547.9 )	
Outstanding borrowings under the TRGP Revolver and Commercial Paper Program		(660.0 )	
Outstanding letters of credit under the TRGP Revolver		(18.8 )	
Total liquidity	$	2,240.6		
						
(1)	Includes cash held in our consolidated joint venture accounts.				

Other potential capital resources associated with our existing arrangements includes 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 17, 2027.

A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements. As of June 30, 2023, we had $18.8 million letters of credit outstanding under the TRGP Revolver. They 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. 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. The factors that typically cause overall variability in our reported total working capital are: (i) our cash position; (ii) liquids inventory levels, which we closely manage, as well as liquids valuations; (iii) changes in payables and accruals related to major growth capital projects; (iv) changes in the fair value of the current portion of derivative contracts; (v) monthly swings in borrowings under the Securitization Facility; and (vi) major structural changes in our asset base or business operations, such as certain organic growth capital projects and acquisitions or divestitures.

Working capital as of June 30, 2023 increased $118.3 million compared to December 31, 2022. The increase was primarily due to lower net borrowings on the Securitization Facility and lower net liabilities for hedging activities, partially offset by lower NGL Inventory and lower net receivables and product purchases and fuel payables resulting from lower commodity prices.

Based on our anticipated levels of operations and absent any disruptive events, we believe that our internally generated cash flow, borrowings available under the TRGP Revolver, Commercial Paper Program, Securitization Facility, and proceeds from debt and equity offerings, as well as joint ventures and/or asset sales, should provide sufficient resources to finance our operations, capital expenditures, long-term debt obligations, collateral requirements and quarterly cash dividends for at least the next twelve months.

Long-term Financing

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.

In January 2023, we, along with certain of our subsidiaries as guarantors thereto, completed an underwritten public offering of the 6.125% Notes and the 6.500% Notes, resulting in net proceeds of approximately $1.7 billion. 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 TRGP Revolver and the Commercial Paper Program.

In the future, we or the Partnership may redeem, purchase or exchange certain of our and the Partnership’s outstanding debt through redemption calls, cash purchases and/or exchanges for other debt, in open market purchases, privately negotiated transactions or otherwise. 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.

40

For additional information about our debt-related transactions, see Note 6 - Debt Obligations to our Consolidated Financial Statements. For information about our interest rate risk, see “Item 3. Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”

Compliance with Debt Covenants

As of June 30, 2023, both we and the Partnership were in compliance with the covenants contained in our various debt agreements.

Cash Flow

Cash Flows from Operating Activities

	Six Months Ended June 30,				2023 vs. 2022			
2023		2022							
			(In millions)							
$	1,846.6	$	1,383.7	$	462.9			

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, natural gas and crude oil; (iii) changes in payables and accruals related to major growth capital projects; and (iv) the payment of other expenses, primarily field operating costs, general and administrative expense and interest expense. 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.

The increase in net cash provided by operations was primarily due to higher settlements for hedge transactions and a decrease in payments for product purchases and fuel, offset by lower collections from customers.

Cash Flows from Investing Activities

	Six Months Ended June 30,				2023 vs. 2022		
2023			2022						
			(In millions)							
$	(1,074.6 )	$	248.4	$	(1,323.0 )		

The change in net cash provided by (used in) investing activities was primarily due to higher outlays for property, plant and equipment in 2023 resulting from construction activities in the Permian region and Mont Belvieu, Texas, whereas in 2022 we received proceeds from the GCX Sale, partially offset by outlays for the acquisition of certain assets in South Texas.

Cash Flows from Financing Activities

	Six Months Ended June 30,				
	2023			2022				
Source of Financing Activities, net		(In	millions)				
								
Debt, including financing costs	$	801.5		$	786.7			
Redemption of Series A Preferred Stock		—		(965.2 )		
Repurchase of noncontrolling interests		(1,091.9 )		(926.3 )		
Dividends		(199.6 )		(217.8 )		
Contributions from (distributions to) noncontrolling interests		(96.7 )		(167.7 )		
Repurchase of shares		(234.9 )		(146.3 )		
Net cash provided by (used in) financing activities	$	(821.6	)	$	(1,636.6	)		

The decrease in net cash used in financing activities was primarily due to lower distributions to noncontrolling interests in 2023, whereas in 2022 we redeemed all of our Series A Preferred, partially offset by higher repurchases of noncontrolling interests and common stock in 2023 as compared to 2022.

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 notes, subject to certain limited exceptions.

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In lieu of providing separate financial statements for the Obligated Group, we have presented the following supplemental summarized Combined Balance Sheet and Statement of Operations information for the Obligated Group based on Rule 13-01 of the SEC’s Regulation S-X.

All significant intercompany items among the Obligated Group have been eliminated in 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.

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

		June 30, 2023					December 31, 2022			
	ASSETS	(In	millions)				
									
Current assets	$	964.1	$	1,425.4			
Current assets - affiliates			1.2				6.0			
Long-term assets			14,749.3				14,398.8			
Long-term assets - affiliates			10.5				10.5			
Total assets		$	15,725.1		$	15,840.7			

	LIABILITIES AND OWNERS’ EQUITY						
Current liabilities	$	1,684.9	$	2,169.6		
Current liabilities - affiliates			22.3			28.0		
Long-term liabilities			12,590.1			11,503.4		
Targa Resources Corp. stockholders’ equity			1,427.8			2,139.7		
Total liabilities and owners’ equity	$	15,725.1	$	15,840.7		

Summarized Combined Statement of Operations Information

		Six Months Ended			Year Ended		
		June 30, 2023			December 31, 2022		
		(In	millions)			
Revenues	$	7,761.4	$	20,477.0		
Operating income (loss)		1,249.5			1,108.3		
Net income (loss)		714.2			909.0		
Dividends on Series A Preferred		—			30.0		

Common Stock Dividends

The following table details the dividends on common stock declared and/or paid by us for the six months ended June 30, 2023:

						Amount of		Dividends on		Dividends Declared			
		Date Paid or		Total Common		Common							
Three Months Ended						Dividends Paid or		Share-Based		per Share of			
		To Be Paid		Dividends Declared		To Be Paid		Awards		Common Stock			
		(In	millions, except per share	amounts)							
June 30, 2023		August 15, 2023	$	113.6	$	111.8	$	1.8	$	0.50000			
March 31, 2023		May 15, 2023		114.7		113.0		1.7		0.50000			
December 31, 2022		February 15, 2023		80.5		79.3		1.2		0.35000			

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.

42

Capital Expenditures

The following table details cash outlays for capital projects for the six months ended June 30, 2023 and 2022:

	Six Months Ended June 30,				
	2023			2022				
Capital expenditures:		(In	millions)				
								
Growth (1)	$	994.7		$	326.3			
Maintenance (2)		92.5			79.9			
Gross capital expenditures		1,087.2			406.2			
Change in capital project payables and accruals, net		(13.5 )		13.3			
Cash outlays for capital projects	$	1,073.7		$	419.5			

(1)	Growth capital expenditures, net of contributions from noncontrolling interests and including net contributions to investments in unconsolidated affiliates, were $994.9 million and $320.7 million for the six months ended June 30, 2023 and 2022.

(2)	Maintenance capital expenditures, net of contributions from noncontrolling interests, were $88.0 million and $77.4 million for the six months ended June 30, 2023 and 2022.

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. The increase in total maintenance capital expenditures was primarily due to our growing infrastructure footprint.

With our announced natural gas processing additions currently under construction in the Permian region, coupled with the construction of our Daytona NGL Pipeline and Train 9 and Train 10 fractionators in Mont Belvieu, we currently estimate that in 2023 we will invest between $2.0 to $2.2 billion in net growth capital expenditures for announced projects. Future growth capital expenditures may vary based on investment opportunities. We expect that 2023 maintenance capital expenditures, net of noncontrolling interests, will be approximately $175 million.

Off-Balance Sheet Arrangements

As of June 30, 2023, there were $245.6 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our principal market risks are our exposure to changes in commodity prices, particularly to the prices of natural gas, NGLs and crude oil, changes in interest rates, as well as nonperformance by our customers.

Risk Management

We evaluate counterparty risks related to our commodity derivative contracts and trade credit. All of our commodity derivatives are with major financial institutions or major energy companies. Should any of these financial counterparties not perform, we may not realize the benefit of some of our hedges under lower commodity prices, which could have a material adverse effect on our results of operations. We sell our natural gas, NGLs and condensate to a variety of purchasers. Non-performance by a trade creditor could result in losses.

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 2027. Market conditions may also impact our ability to enter into future commodity derivative contracts.

Commodity Price Risk

A portion of our revenues are derived from percent-of-proceeds contracts under which we receive a portion of the proceeds from the sale of commodities as payment for services. The prices of natural gas, NGLs and crude oil are subject to fluctuations in response to changes in supply, demand, market uncertainty and a variety of additional factors beyond our control. We monitor these risks and enter into hedging transactions designed to mitigate the impact of commodity price fluctuations on our business. 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.

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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. In an effort to reduce the variability of our cash flows, as of June 30, 2023, 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. We hedge a higher percentage of our expected equity volumes in the current year compared to future years, for which we hedge incrementally lower percentages of expected equity volumes. We also enter into commodity financial instruments to help manage other short-term commodity-related business risks of our ongoing operations and in conjunction with marketing opportunities available to us in the operations of our logistics and transportation assets. With swaps, we typically receive an agreed fixed price for a specified notional quantity of commodities and we pay the hedge counterparty a floating price for that same quantity based upon published index prices. Since we receive from our customers substantially the same floating index price from the sale of the underlying physical commodity, these transactions are designed to effectively lock-in the agreed fixed price in advance for the volumes hedged. 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. 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.

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. We 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 value 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 the NYMEX futures contracts for West Texas Intermediate light, sweet crude.

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. While we have no current obligation to post cash, letters of credit or other additional collateral to secure these hedges so long as we maintain our current credit rating, we could be obligated to post collateral to secure the hedges in the event of an adverse change in our creditworthiness where a counterparty’s exposure to our credit increases over the term of the hedge as a result of higher commodity prices. A purchased put (or floor) transaction does not expose our counterparties to credit risk, as we have no obligation to make future payments beyond the premium paid to enter into the transaction; however, we are exposed to the risk of default by the counterparty, which is the risk that the counterparty will not honor its obligation under the put transaction.

We also enter into commodity price hedging transactions using futures contracts on futures exchanges. Exchange traded futures are subject to exchange margin requirements, so we may have to increase our cash deposit due to a rise in natural gas, NGL or crude oil prices. Unlike bilateral hedges, we are not subject to counterparty credit risks when using futures on futures exchanges.

These contracts may expose us to the risk of financial loss in certain circumstances. Generally, our hedging arrangements provide us protection on the hedged volumes if prices decline below the prices at which these hedges are set. If prices rise above the prices at which they have been hedged, we will receive less revenue on the hedged volumes than we would receive in the absence of hedges (other than with respect to purchased calls).

To analyze the risk associated with our derivative instruments, we utilize a sensitivity analysis. The sensitivity analysis measures the change in fair value of our derivative instruments based on a hypothetical 10% change in the underlying commodity prices, but does not reflect the impact that the same hypothetical price movement would have on the related hedged items. The financial statement impact on the fair value of a derivative instrument resulting from a change in commodity price would normally be offset by a corresponding gain or loss on the hedged item under hedge accounting. The fair values of our derivative instruments are also influenced by changes in market volatility for option contracts and the discount rates used to determine the present values.

The following table shows the effect of hypothetical price movements on the estimated fair value of our derivative instruments as of June 30, 2023:

	Fair Value				Result of 10% Price Decrease			Result of 10% Price Increase	
					(In millions)					
Natural gas	$	28.2	$	67.1	$	(10.8 )	
NGLs		132.2			201.0			64.1		
Crude oil		7.1			31.1			(16.7 )	
Total	$	167.5		$	299.2		$	36.6		

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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.

Our operating revenues increased (decreased) by $195.0 million and $(176.7) million during the three months ended June 30, 2023 and 2022, respectively, and $418.2 million and $(499.6) million during the six months ended June 30, 2023 and 2022, respectively, as a result of transactions accounted for as derivatives. The estimated fair value of our risk management position has moved from a net liability position of $255.8 million at December 31, 2022 to a net asset position of $167.5 million at June 30, 2023.

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, the Securitization Facility, and the Term Loan Facility. As of June 30, 2023, 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. To the extent that interest rates increase, interest expense for the TRGP Revolver, the Commercial Paper Program, the Securitization Facility and the Term Loan Facility will also increase. As of June 30, 2023, we had $2.7 billion in outstanding variable rate borrowings. A hypothetical change of 100 basis points in the rate of our variable interest rate debt would impact our consolidated annual interest expense by $27.1 million based on our June 30, 2023 debt balances.

Counterparty Credit Risk

We are subject to risk of losses resulting from nonpayment or nonperformance by our counterparties. The credit exposure related to commodity derivative instruments is represented by the fair value of the asset position (i.e. the fair value of expected future receipts) at the reporting date. Our futures contracts have limited credit risk since they are cleared through an exchange and are margined daily. Should the creditworthiness of one or more of the counterparties decline, our ability to mitigate nonperformance risk is limited to a counterparty agreeing to either a voluntary termination and subsequent cash settlement or a novation of the derivative contract to a third party. In the event of a counterparty default, we may sustain a loss and our cash receipts could be negatively impacted. We have master netting provisions in the ISDA agreements with our derivative counterparties. 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 $49.4 million as of June 30, 2023. The range of losses attributable to our individual counterparties as of June 30, 2023 would be between $0.4 million and $35.1 million, depending on the counterparty in default.

Customer Credit Risk

We extend credit to customers and other parties in the normal course of business. We have established various procedures to manage our credit exposure, including performing initial and subsequent credit risk analyses, setting maximum credit limits and terms and requiring credit enhancements when necessary. We use credit enhancements including (but not limited to) letters of credit, prepayments, parental guarantees and rights of offset to limit credit risk to ensure that our established credit criteria are followed and financial loss is mitigated or minimized.

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 doubtful accounts was $2.5 million and $2.2 million as of June 30, 2023 and December 31, 2022, respectively.

During the three and six months ended June 30, 2023 and 2022, no customer comprised 10% or greater of our consolidated revenues.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the design and effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered in this Quarterly Report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2023, the design and operation of our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and (ii) accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

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Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

46

PART II – OTHER INFORMATION

Item 1. 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. Vitol alleges 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. 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. Vitol’s lawsuit also alleges 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 seeks return of $129.0 million in payments made to Targa Channelview prior to the start-up of the Splitter, as well as additional damages. 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. Targa also seeks recovery of its attorneys’ fees and costs in the lawsuit.

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. 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. 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. We have filed a petition for review with the Supreme Court of Texas, and the appeal remains pending. The cumulative amount of interest on the award through June 30, 2023, if accrued, would have been approximately $49.1 million.

Additional information required for this item is provided in Note 12 – Contingencies, under the heading “Legal Proceedings” included in the Notes to Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report, which is incorporated by reference into this item.

Item 1A. Risk Factors.

For an in-depth discussion of our risk factors, see “Part I—Item 1A. Risk Factors” of our Annual Report. All of these risks and uncertainties could adversely affect our business, financial condition and/or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Recent Sales of Unregistered Securities.

None.

Repurchase of Equity by Targa Resources Corp. or Affiliated Purchasers.

							Total number of shares		Maximum approximate dollar			
		Total number of			Average price				value of shares that may yet be			
Period							purchased as part of publicly		purchased under the plan (in			
		shares purchased (1)			per share		announced plans (2)			thousands) (2)			
April 1, 2023 - April 30, 2023		119,434		$	75.81		118,704		$	82,751			
May 1, 2023 - May 31, 2023	504,438	$	69.41	504,355	$	1,047,744			
June 1, 2023 - June 30, 2023	1,465,733	$	71.69	1,465,003	$	942,722			

(1)	Includes 2,088,062 shares repurchased under the Share Repurchase Programs, as well as 1,543 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.

(2)	In the fourth quarter of 2020, our Board of Directors approved the 2020 Share Repurchase Program for the repurchase of up to $500.0 million of our outstanding common stock. 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. During the second quarter of 2023, we exhausted the 2020 Share Repurchase Program. We may discontinue the 2023 Share Repurchase Program at any time and are not obligated to repurchase any specific dollar amount or number of shares thereunder.

Item 3. Defaults Upon Senior Securities.

Not applicable.

47

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.

Number	Description

3.1	Amended and Restated Certificate of Incorporation of Targa Resources Corp. (incorporated by reference to Exhibit 3.1 to Targa Resources Corp.’s Current Report on Form 8-K filed December 16, 2010 (File No. 001-34991)).

3.2	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Targa Resources Corp. (incorporated by reference to Exhibit 3.1 to Targa Resources Corp.’s Current Report on Form 8-K filed May 26, 2021 (File No. 001-34991)).

3.3	Certificate of Designations of Series A Preferred Stock of Targa Resources Corp., filed with the Secretary of State of the State of Delaware on March 16, 2016 (incorporated by reference to Exhibit 3.1 to Targa Resources Corp.’s Current Report on Form 8-K/A filed March 17, 2016 (File No. 001-34991)).

3.4	Second Amended and Restated Bylaws of Targa Resources Corp. (incorporated by reference to Exhibit 3.4 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed on May 5, 2022 (File No. 001-34991)).

4.1	Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Targa Resources Corp.’s Registration Statement on Form S-1/A filed November 12, 2010 (File No. 333-169277)).

4.2	Sixth Supplemental Indenture, dated as of April 12, 2023, among Targa Resources Corp., as issuer, the guarantors named therein and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.4 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed May 4, 2023 (File No. 001-34991)).

4.3	Supplemental Indenture dated April 12, 2023 to Indenture dated October 17, 2017 among the Guaranteeing Subsidiary, Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the other Subsidiary Guarantors and U.S. Bank National Association (incorporated by reference to Exhibit 4.5 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed May 4, 2023 (File No. 001-34991)).

4.4	Supplemental Indenture dated April 12, 2023 to Indenture dated January 17, 2019 among the Guaranteeing Subsidiary, Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the other Subsidiary Guarantors and U.S. Bank National Association (incorporated by reference to Exhibit 4.6 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed May 4, 2023 (File No. 001-34991)).

4.5	Supplemental Indenture dated April 12, 2023 to Indenture dated November 27, 2019 among the Guaranteeing Subsidiary, Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the other Subsidiary Guarantors and U.S. Bank National Association (incorporated by reference to Exhibit 4.7 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed May 4, 2023 (File No. 001-34991)).

4.6	Supplemental Indenture dated April 12, 2023 to Indenture dated August 18, 2020 among the Guaranteeing Subsidiary, Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the other Subsidiary Guarantors and U.S. Bank National Association (incorporated by reference to Exhibit 4.8 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed May 4, 2023 (File No. 001-34991)).

4.7	Supplemental Indenture dated April 12, 2023 to Indenture dated February 2, 2021 among the Guaranteeing Subsidiary, Targa Resources Partners LP, Targa Resources Partners Finance Corporation, the other Subsidiary Guarantors and U.S. Bank National Association (incorporated by reference to Exhibit 4.9 to Targa Resources Corp.’s Quarterly Report on Form 10-Q filed May 4, 2023 (File No. 001-34991)).

10.1*	Second Amended and Restated Targa Resources Corp. 2010 Stock Incentive Plan, as amended and restated effective August

1, 2023.

22.1*	List of Subsidiary Guarantors.

48

Number			Description	
31.1*			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.			
31.2*			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.			
32.1**			Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the		
			Sarbanes-Oxley Act of 2002.	
						
32.2**			Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the	
			Sarbanes-Oxley Act of 2002.		
					
101.INS*			Inline XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags	
			are embedded within the Inline XBRL document	
101.SCH*			Inline XBRL Taxonomy Extension Schema Document	
101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document	
101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document	
101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document	
101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document	
104*			The cover page from this Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL	
			(included with Exhibit 101 attachments).	

* Filed herewith

** Furnished herewith

+ Management contract or compensatory plan or arrangement

49

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Targa Resources Corp.	
	(Registrant)	
Date: August 3, 2023	By:  /s/ Jennifer R. Kneale	
		Jennifer R. Kneale		
		Chief Financial Officer	
		(Principal Financial Officer)	
	50			

Exhibit 10.1

Execution Version

SECOND AMENDED AND RESTATED
TARGA RESOURCES CORP.

2010 STOCK INCENTIVE PLAN

(As Amended and Restated August 1, 2023)

I.

PURPOSE OF THE PLAN

The purpose of the SECOND AMENDED AND RESTATED TARGA RESOURCES CORP. 2010 STOCK INCENTIVE PLAN (As Amended and Restated August 1, 2023) (the “Plan”) is to provide a means through which TARGA RESOURCES CORP., a Delaware corporation (the “Company”), and its Affiliates may attract able persons to serve as Directors or Consultants or to enter the employ of the Company and its Affiliates and to provide a means whereby those individuals upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributions to the Company and its Affiliates are of importance, can acquire and maintain stock ownership, thereby strengthening their concern for the welfare of the Company and its Affiliates. A further purpose of the Plan is to provide such individuals with additional incentive and reward opportunities designed to enhance the profitable growth of the Company and its Affiliates. Accordingly, the Plan provides for the grant of Options (including Incentive Stock Options), Stock Appreciation Rights, Restricted Stock Awards, Performance Awards, Phantom Stock Awards, Bonus Stock Awards, Other Stock-Based Awards, Dividend Equivalents, Cash Awards, Substitute Awards or any combination of the foregoing, as is best suited to the circumstances of the particular employee, Consultant, or Director as provided herein.

II.

DEFINITIONS

The following definitions shall be applicable throughout the Plan unless specifically modified by any paragraph:

(a)“Affiliate” means any corporation, partnership (including the Partnership), limited liability company or partnership, association, trust, or other organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization or

(ii)	to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.

(b)“ASC Topic 718” means the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, as amended or any successor accounting standard.

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(c)“Award” means, individually or collectively, any Option, Stock Appreciation Right, Restricted Stock
Award, Performance Award, Phantom Stock Award, Bonus Stock Award, Other Stock-Based Award, Dividend

Equivalent, Cash Award, or Substitute Award.

(d)“Award Agreement” means any document (including any employment, severance or change in control agreement), in written or electronic form, communicating the terms, conditions and limitations applicable to an Award.

(e)“Board” means the Board of Directors of the Company.

(f)“Bonus Stock Award” means an Award granted under Paragraph XI(a) of the Plan.

(g)“Cash Award” means an Award granted under Paragraph XI(d) of the Plan.

(h)“Change in Control” means, unless otherwise provided in an Award Agreement, the occurrence of one of the following events:

(i)	any Person, including a “group” as contemplated by section 13(d)(3) of the Exchange Act (other than an Affiliate), acquires or gains, directly or indirectly, ownership or control (including, without limitation, the power to vote), by way of merger, consolidation, recapitalization, reorganization or otherwise, of more than 50% of the outstanding shares of the Company’s voting stock (based upon voting power) or more than 50% of the combined voting power of the equity interests in the Partnership or the general partner of the Partnership;

(ii)	any Person, including a “group” as contemplated by section 13(d)(3) of the Exchange Act (other than an Affiliate), acquires in any twelve-month period (in one transaction or a series of related transactions) ownership, directly or indirectly, of 30% or more of the outstanding shares of the Company’s voting stock (based upon voting power) or of the combined voting power of the equity interests in the Partnership or the general partner of the Partnership;

(iii)	the completion of a liquidation or dissolution of the Company or the approval by the limited partners of the Partnership, in one or a series of transactions, of a plan of complete liquidation of the Partnership;

(iv)	the sale or other disposition by the Company of all or substantially all of its assets in or more transactions to any Person other than an Affiliate;

(v)	the sale or disposition by either the Partnership or the general partner of the Partnership of all or substantially all of its assets in one or more transactions to any Person other than to an Affiliate;

(vi)	a transaction resulting in a Person other than Targa GP or an Affiliate being the general partner of the Partnership; or

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(vii)	as a result of or in connection with a contested election of Directors, the individuals who were Directors of the Company before such election shall cease to constitute a majority of the Board.

Notwithstanding the foregoing, with respect to an Award that provides for a deferral of compensation under the Nonqualified Deferred Compensation Rules and with respect to which a Change in Control will accelerate or otherwise result in payment, “Change in Control” for such purposes shall mean a “change of control event” as defined in the Nonqualified Deferred Compensation Rules, unless otherwise expressly determined by the Committee.

(i)	“Change in Control Price” means the amount determined in the following clause (i), (ii), (iii), (iv) or (v), whichever the Committee determines is applicable, as follows: (i) the price per share offered to holders of Common Stock in any merger or consolidation, (ii) the per share fair market value of the Common Stock immediately before the Change in Control or other event without regard to assets sold in the Change in Control or other event and assuming the Company has received the consideration paid for the assets in the case of a sale of the assets, (iii) the amount distributed per share of Common Stock in a dissolution transaction, (iv) the price per share offered to holders of Common Stock in any tender offer or exchange offer whereby a Change in Control or other event takes place, or (v) if such Change in Control or other event occurs other than pursuant to a transaction described in clauses (i), (ii), (iii) or (iv) of this Paragraph II(i) the value per share of the Common Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards. In the event that the consideration offered to stockholders of the Company in any transaction described in this Paragraph II(i) or in Paragraph XIV(d) consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash and such determination shall be binding on all affected Participants to the extent applicable to Awards held by such Participants.

(j)	“Code” means the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any regulations under such section.

(k)“Committee” means a committee of the Board that is selected by the Board as provided in Paragraph

IV(a).

(l)	“Common Stock” means the common stock, par value $0.001 per share, of the Company, or any security into which such common stock may be changed by reason of any transaction or event of the type described in Paragraph XIV.

(m)“Consultant” means an individual who is not an employee or a Director and who is providing advisory or consulting services to the Company or any Affiliate.

(n)“Covered Employee” means an individual eligible to receive an Award under Paragraph VI who is designated by the Committee, at the time of grant of a Performance Award, as likely to be a “covered employee” within the meaning of Section 162(m) for a specified fiscal year.

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(o)“Director” means an individual who is a member of the Board.

(p)“Dividend Equivalent” means a right, granted under Paragraph XI(c), to receive cash, Common Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock, or other periodic payments.

(q)An “employee” means an individual (including a Director) in an employment relationship with the Company or any Affiliate.

(r)“Exchange Act” means the Securities Exchange Act of 1934, as amended. Reference in the Plan to any section of the Exchange Act shall be deemed to include any amendments or successor provisions to such section and any rules and regulations under such section.

(s)“Fair Market Value” means, as of any specified date, (i) if the Common Stock is listed on a national securities exchange, the closing sales price of the Common Stock, as reported on the stock exchange composite tape on that date (or if no sales occur on such date, on the last preceding date on which such sales of the Common Stock are so reported); (ii) if the Common Stock is not traded on a national securities exchange but is traded over the counter at the time a determination of its fair market value is required to be made under the Plan, the closing sales price of the Common Stock on the most recent date on which Common Stock was publicly traded; or (iii) in the event Common Stock is not publicly traded at the time a determination of its value is required to be made under the Plan, the amount determined by the Committee in its discretion in such manner as it deems appropriate, taking into account all factors the Committee deems appropriate including, without limitation, the Nonqualified Deferred Compensation Rules. Notwithstanding this definition of Fair Market Value, with respect to one or more Awards types, or for any other purpose for which the Committee must determine the Fair Market Value under the Plan, the Committee may elect a different measurement date or methodology for determining Fair Market Value, taking into account all factors the Committee deems appropriate including, without limitation, the Nonqualified Deferred Compensation Rules.

(t)	“Incentive Stock Option” means an Option intended to be and designated as an incentive stock option within the meaning of section 422 of the Code.

(u)“Nonqualified Deferred Compensation Rules” means the limitations or requirements of section 409A of the Code and the guidance and regulations promulgated thereunder.

(v)“Option” means an Award granted under Paragraph VII of the Plan and includes both Incentive Stock Options to purchase Common Stock and Options that do not constitute Incentive Stock Options to purchase Common Stock.

(w)“Other Stock-Based Award” means an Award granted under Paragraph XI(b) of the Plan.

(x)“Participant” means an employee, Consultant, or Director who has been granted an Award that remains outstanding, including a Person who is no longer eligible under Paragraph VI to receive an Award.

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(y)“Partnership” means Targa Resources Partners LP, a Delaware limited partnership.

(z)“Performance Award” means an Award granted under Paragraph XII of the Plan, the grant, vesting, exercisability and/or settlement of which (and/or the timing or amount thereof) is subject to the achievement of one or more Performance Goals or other performance criteria specified by the Committee.

(aa)“Performance Goal” means one or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries, Affiliates, business or geographical units or operating areas of the Company, shall be used by the Committee in establishing performance goals for Section 162(m) Awards: (1) revenues or other income; (2) cash flow, discretionary cash flow, cash flows from operations, cash flows from investing activities, and/or cash flows from financing activities; (3) return on net assets, return on assets, return on investment, return on capital, return on capital employed or return on stockholders’ equity; (4) income, operating income, operating income margin, net income or net income margin; (5) earnings or earnings margin determined before or after any one or more of depletion, depreciation and amortization expense; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; net gain or loss on the disposition of assets; income or loss from discontinued operations, net of tax; noncash derivative related activity; amortization of stock-based compensation; income taxes; or other items; (6) equity; net worth; tangible net worth; book capitalization; debt; debt, net of cash and cash equivalents; capital budget or other balance sheet goals;

(7)	debt or equity financings or improvement of financial ratings; (8) general and administrative expenses and operational downtime; (9) capital expenditures or operating costs; (10) net asset value; (11) Fair Market Value of the Stock, share price, share price appreciation, total stockholder return or payments of dividends or dividend growth; (12) achievement of savings from business improvement projects and achievement of capital projects deliverables; (13) working capital or working capital changes; (14) operating profit or net operating profit; (15) internal research or development programs; (16) geographic business expansion or market share; (17) corporate development (including licenses, innovation, research or establishment of third party collaborations); (18) performance against sales, environmental, ethics or sustainability targets; (19) safety performance and/or incident rate; (20) human resources management targets, including medical cost reductions, employee satisfaction or retention, workforce diversity and time to hire; (21) satisfactory internal or external audits; (22) consummation, implementation or completion of a Change in Control or other strategic partnerships, transactions, projects, processes or initiatives or other goals relating to acquisitions or divestitures (in whole or in part), joint ventures or strategic alliances; (23) regulatory approvals or other regulatory milestones; and (24) legal compliance or risk reduction. Any of the above goals may be determined pre-tax or post-tax, on an absolute or relative basis, as compared to the performance of a published or special index deemed applicable by the Committee including the Standard & Poor’s 500 Stock Index or a group of comparable companies, as a ratio with other business criteria, as a ratio over a period of time or on a per unit of measure (such as per day, or per barrel, a volume or thermal unit of gas or a barrel-of-oil equivalent), on a per-share basis (basic or diluted), and on a basis of continuing operations only. The terms above may, but shall not be required to be, used as applied under generally accepted accounting principles, as applicable.

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(bb)“Person” means an individual or a corporation, limited liability company, partnership, joint venture,
trust, unincorporated organization, association, government agency or political subdivision thereof, or other entity.

(cc)“Phantom Stock Award” means an Award granted under Paragraph X of the Plan.

(dd)“Restricted Stock Award” means an Award granted under Paragraph IX of the Plan.

(ee)“Rule 16b-3” means Securities Exchange Commission Rule 16b-3 promulgated under the Exchange Act, as such may be amended from time to time, and any successor rule, regulation, or statute fulfilling the same or a similar function.

(ff)“Securities Act” means the Securities Act of 1933, as amended. Reference in the Plan to any section of the Securities Act shall be deemed to include any amendments or successor provisions to such section and any rules and regulations under such section.

(gg)“Section 162(m) Award” means a Performance Award granted under Paragraph XII(b) of the Plan to a Covered Employee that is intended to satisfy the requirements for “performance-based compensation” within the meaning of Section 162(m).

(hh)“Section 162(m)” means section 162(m) of the Code and Treasury Regulation § 1.162-27, as amended from time to time, and any other guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.

(ii)“Stock Appreciation Right” or “SAR” means a right granted under Paragraph VIII to acquire, upon exercise of the right, Common Stock and/or, in the sole discretion of the Committee, cash having an aggregate value equal to the then excess of the Fair Market Value of the shares with respect to which the right is exercised over the exercise price therefor. The Committee shall retain final authority to determine whether a Participant shall be permitted, and to approve an election by a Participant, to receive cash in full or partial settlement of a Stock Appreciation Right.

(jj)“Substitute Award” means an Award granted under Paragraph XI(e) in substitution for a similar award as a result of certain business transactions.

(kk)“Targa GP” means Targa Resources GP LLC, the general partner of the Partnership.

III.

HISTORY, EFFECTIVE DATE AND DURATION OF THE PLAN

The Plan as set forth herein constitutes a second amendment and restatement of the Targa Resources Corp. 2010 Stock Incentive Plan, as amended from time to time (the “2010 Plan”), originally adopted by the Company and approved by the Company’s stockholders effective as of November 12, 2010. The 2010 Plan was then amended and restated in its entirety by the Company, and approved by the Company’s stockholders, effective May 22, 2017 (the “2017 Effective Date”). Following the 2017 Effective Date, the Plan was amended effective February 12, 2021 in a manner

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that did not require stockholder approval.	The Plan is now being amended and restated a second time to be
effective August 1, 2023 (the “Effective Date”), and shall supersede and replace the 2017 Plan in its entirety. No
further Awards may be granted under the Plan after 10 years from the 2017 Effective Date. The Plan shall remain in

effect until all Awards granted under the Plan have vested or been settled or forfeited or satisfied or expired.

IV.

ADMINISTRATION

(a)Composition of Committee. The Plan shall be administered by a committee of, and appointed by, the Board. In the absence of the Board’s appointment of a committee to administer the Plan or upon the Board’s election, the Board shall serve as the Committee, in which case references herein to the “Committee” shall be deemed to include references to the “Board.” Notwithstanding the foregoing, unless otherwise determined by the Board, the Committee shall be comprised solely of two or more members of the Board who are (i) “outside directors” (within the meaning of Section 162(m)), (ii) “non-employee directors” (within the meaning of Rule 16b-3), and (iii) “independent” (within the meaning of the listing standards or rules of the securities exchange upon which the Common Stock is traded, but only to the extent such independence is required in order to take the action at issue pursuant to such standards or rules).

(b)Powers. Subject to the express provisions of the Plan, Rule 16b-3 and other applicable laws, the Committee shall have authority, in its discretion, to determine (i) which employees, Consultants, or Directors shall receive an Award, (ii) the time or times when such Awards shall be made, (iii) the type of Awards that shall be made, and (iv) the number of shares or amount of cash to be subject to each Award or the other value of each Award. In making such determinations, the Committee shall take into account the nature of the services rendered by the respective employees, Consultants, or Directors, their present and potential contribution to the Company’s success, and such other factors as the Committee in its sole discretion shall deem relevant.

(c) Additional Powers. The Committee shall have such additional powers as are delegated to it by the other provisions of the Plan. Subject to the express provisions of the Plan, Rule 16b-3 and other applicable laws, this shall include the power to (i) construe the Plan and the respective Award Agreements, (ii) prescribe rules and regulations relating to the Plan, (iii) determine the terms, restrictions, and provisions of each Award Agreement, including such terms, restrictions, and provisions as shall be requisite in the judgment of the Committee to cause designated Options to qualify as Incentive Stock Options, (iv) modify, waive or adjust any term or condition of an Award that has been granted, which may include the acceleration of vesting, waiver of forfeiture restrictions, modification of the form of settlement of the Award (for example, from cash to Common Stock or vice versa), early termination of a performance period, or modification of any other condition or limitation regarding an Award, (v) determine the treatment of an Award upon a termination of employment or other service relationship, (vii) impose a holding period with respect to an Award or the shares of Common Stock received in connection with an Award, and (viii) make all other determinations necessary or advisable for administering the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any agreement relating to an Award in the manner and to the extent the Committee shall deem expedient to carry the Plan or any such agreement into effect. All determinations and

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decisions made by the Committee on the matters referred to in this Paragraph IV and in construing the provisions of
the Plan shall be final, conclusive and binding on all Persons.

(d)Delegation of Authority by the Committee. Notwithstanding the preceding provisions of this Paragraph IV or any other provision of the Plan to the contrary, subject to the constraints of applicable law, the Committee may from time to time, in its sole discretion, delegate to the Chairman of the Board or the Chief Executive Officer of the Company the administration (or interpretation of any provision) of the Plan, and the right to grant Awards under the Plan, insofar as such administration (and interpretation) and power to grant Awards relates to any Person who is not subject to section 16 of the Exchange Act (including any successor section to the same or similar effect). Any such delegation to the Chief Executive Officer may be effective only so long as the Chief Executive Officer of the Company is a Director, and the Committee may revoke such delegation at any time. The Committee may put any conditions and restrictions on the powers that may be exercised by the Chairman of the Board or the Chief Executive Officer of the Company upon such delegation as the Committee determines in its sole discretion. In the event of any conflict in a determination or interpretation under the Plan as between the Committee and the Chief Executive Officer of the Company, the determination or interpretation, as applicable, of the Committee shall be final, conclusive and binding on all Persons.

(e)Limitation of Liability. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any of its Affiliates, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or any of its Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.

(f)	Participants in Non-U.S. Jurisdictions. Notwithstanding any provision of the Plan to the contrary, to comply with applicable laws in countries other than the United States in which the Company or any of its Affiliates operates or has employees, directors or other service providers from time to time, or to ensure that the Company complies with any applicable requirements of foreign securities exchanges, the Committee, in its sole discretion, shall have the power and authority to: (i) determine which of the Company’s Affiliates shall be covered by the Plan;

(ii)	determine which individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to individuals outside the United States to comply with applicable foreign laws or listing requirements of any foreign exchange; (iv) establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such sub-plans and/or modifications shall be attached to the Plan as appendices), provided, however, that no such sub-plans and/or modifications shall increase the share limitations contained in Paragraph V; and (v) take any action, before or after an Award is granted, that it deems advisable to comply with any applicable governmental regulatory exemptions or approval or listing requirements of any such foreign securities exchange. For purposes of the Plan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction other than the United States or a political subdivision thereof.

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V.
SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF AWARDS

(a)Shares Subject to the Plan. Subject to adjustment in a manner consistent with Paragraph XIV, the aggregate maximum number of shares of Common Stock that may be issued under the Plan, and the aggregate maximum number of shares of Common Stock that may be issued under the Plan through Incentive Stock Options, shall not exceed, since its original inception as the 2010 Plan, 15,000,000 shares (which aggregate maximum number of shares shall be comprised of the 5,000,000 shares originally available under the 2010 Plan and an additional 10,000,000 shares that became available as of the 2017 Effective Date). Shares shall be deemed to have been issued under the Plan only to the extent actually issued and delivered pursuant to an Award.

(b)Application of Limitation to Grants of Awards. Subject to Paragraph V(c), no Award may be granted if the number of shares of Common Stock that may be delivered in connection with such Award exceeds the number of shares of Common Stock remaining available under the Plan minus the number of shares of Common Stock issuable in settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or Substitute Awards) and make adjustments if the number of shares of Common Stock actually delivered differs from the number of shares previously counted in connection with an Award.

(c)Availability of Shares Not Delivered. To the extent that an Award lapses, expires, is cancelled, forfeited, exchanged, settled in cash or the rights of its holder otherwise terminate, any shares of Common Stock subject to such Award (including (i) shares forfeited with respect to Restricted Stock, and (ii) the number of shares withheld or surrendered to the Company in payment of any exercise or purchase price of an Award or any taxes relating to Awards) shall again be available for the grant of an Award under the Plan. Notwithstanding the foregoing, (A) the number of shares tendered or withheld in payment of any exercise or purchase price of an Option or SAR or taxes relating to an Option or SAR, (B) shares that were subject to an Option or an SAR but were not issued or delivered as a result of the net settlement or net exercise of such Option or SAR and (C) shares repurchased on the open market with the proceeds of an Option’s exercise price, will not, in each case, be available for Awards. If an Award may be settled only in cash, such Award need not be counted against the share limitation under Paragraph V(a).

(d)Per Person Award Limitations. During a calendar year, a Covered Employee may not be granted Awards intended to be Section 162(m) Awards (i) to the extent such Award is based on a number of shares of Common Stock (including Awards that may be settled in either cash or shares of Common Stock) relating to more than 2,000,000 shares of Common Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Paragraph XIV, and (b) to the extent such Award is designated to be paid only in cash and is not based on a number of shares of Stock, having a value determined on the date of grant in excess of $20,000,000. If an Award is cancelled, then the cancelled Award shall continue to be counted toward the applicable limitation in this paragraph to the extent required by Section 162(m).

(e)Director Award Limitations. During a calendar year, a non-employee Director may not be granted Awards under the Plan (i) relating to more than 35,000 shares of Common

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Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Paragraph XIV, or (ii) if
greater, having a value (determined based on the grant date fair value of any such Award for financial reporting
purposes) on the date of grant in excess of $750,000; provided, however, that the number of shares of Common
Stock granted during a single calendar year of the Company to any non-employee Director, taken together with any
cash fees paid to such non-employee member of the Board during such calendar year, shall not, in each case, exceed
$1,000,000 in total value (calculating the value of any such shares based on the grant date fair value of such shares
for financial reporting purposes and excluding, for this purpose, the value of any dividend or dividend equivalent
payments paid pursuant to any shares of Common Stock granted in a previous calendar year). Notwithstanding the
foregoing, the limits set forth in this Paragraph V(e) shall be without regard to grants of Awards, if any, made to a
non-employee Director during any period in which such individual was an employee of the Company or of any of
its Affiliates or was otherwise providing services to the Company or to any of its Affiliates other than in the
capacity as a Director.

(f)	Stock Offered. The shares of Common Stock to be delivered under the Plan shall be made available from (i) authorized but unissued shares of Common Stock, (ii) Common Stock held in the treasury of the Company, or (iii) previously issued shares of Common Stock reacquired by the Company, including shares purchased on the open market.

VI.

ELIGIBILITY

Awards may be granted only to Persons who, at the time of grant, are employees, Consultants, or Directors; provided, that, any such Person must be an “employee” of the Company or any of its parents or subsidiaries within the meaning of General Instruction A.1(a) to Form S-8 if such Person is granted an Award that may be settled in Stock. An Award may be granted on more than one occasion to the same Person, and, subject to the limitations set forth in the Plan, the Committee may from time to time grant Awards to one or more employees, Consultants, or Directors determined by it to be eligible for participation in the Plan in accordance with the terms of the Plan.

VII.

STOCK OPTIONS

(a)Option Price and Payment. The price at which a share of Common Stock may be purchased upon exercise of an Option shall be determined by the Committee but, subject to Paragraph XI(e) and Paragraph XIV, such purchase price shall not be less than the greater of (i) the par value per share of the Common Stock, or (ii) 100% of the Fair Market Value per share of Common Stock on the date such Option is granted. The Option, or portion thereof, may be exercised by delivery of an irrevocable notice of exercise to the Company, as specified by the Committee, and an Option shall be exercisable in whole or in such installments and at such times as determined by the Committee. The purchase price of the Option, or portion thereof, shall be paid in full. The Committee shall determine the methods by which the purchase price may be paid or deemed to be paid, the form of such payment, including cash or cash equivalents, Common Stock (including previously owned shares or through a cashless exercise, i.e., “net settlement”, a broker-assisted exercise, or other reduction of the amount of shares otherwise issuable pursuant to

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the Option), other Awards or awards granted under other plans of the Company or any Affiliate, other property, or
any other legal consideration the Committee deems appropriate (including notes or other contractual obligations of
Participants to make payment on a deferred basis), and the methods by or forms in which Stock will be delivered or

deemed to be delivered to Participants, including the delivery of Restricted Stock.

(b)Option Period. The term of each Option shall be as specified by the Committee at the date of grant, but in no event shall an Option be exercisable after the expiration of 10 years from the date of grant.

(c)Special Limitations on Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of section 422 of the Code. Incentive Stock Options shall not be granted more than 10 years after the earlier of the adoption of the Plan or the approval of the Plan by the Company’s stockholders. An Incentive Stock Option may be granted only to an individual who is employed by the Company or any parent or subsidiary corporation (as defined in section 424 of the Code) of the Company at the time the Option is granted. To the extent that the aggregate fair market value (determined at the time the respective Incentive Stock Option is granted) of stock with respect to which Incentive Stock Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company and its parent and subsidiary corporations exceeds $100,000, such Incentive Stock Options shall be treated as Options which do not constitute Incentive Stock Options. The Committee shall determine, in accordance with applicable provisions of the Code, Treasury regulations, and other administrative pronouncements, which of a Participant’s Incentive Stock Options will not constitute Incentive Stock Options because of such limitation and shall notify the Participant of such determination as soon as practicable after such determination. No Incentive Stock Option shall be granted to an individual if, at the time the Option is granted, such individual owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of its parent or subsidiary corporation, within the meaning of section 422(b)(6) of the Code, unless (i) on the date immediately preceding the date such Option is granted, the option price is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) such Option by its terms is not exercisable after the expiration of five years from the date of grant. Except as otherwise provided in sections 421 or 422 of the Code, an Incentive Stock Option shall not be transferable otherwise than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by such Participant or the Participant’s guardian or legal representative. If a Participant shall make any disposition of shares of Common Stock issued pursuant to an Incentive Stock Option under the circumstances described in section 421(a) of the Code (relating to disqualifying dispositions), the Participant shall notify the Company of such disposition within 20 days thereof.

VIII.

STOCK APPRECIATION RIGHTS

(a)Stock Appreciation Rights. An Award may be in the form of a SAR. SARs may be either free-standing or in tandem with other Awards.

(b)Exercise Price. Except as provided in Paragraph XI(e) and Paragraph XIV, the exercise price for a SAR shall not be less than the greater of (i) the par value per share of the

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Common Stock, or (ii) 100% of the Fair Market Value per share of Common Stock on the date such SAR is
granted.

(c)Other Terms. Subject to the foregoing provisions, the Committee shall determine the terms, conditions and limitations applicable to any SAR, including, but not limited to, (i) the term of any SAR, (ii) the date or dates upon which the SAR becomes vested and exercisable, (iii) the form of consideration payable upon settlement, (iv) the method by or forms in which shares of Common Stock (if any) will be delivered or deemed to be delivered to Participants, and (v) any other terms and conditions of any SAR. The exercise period for a SAR shall extend no more than 10 years after the date on which such SAR is granted.

(d)Rights Related to Options. An SAR granted in connection with an Option shall entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount determined by multiplying (i) the difference obtained by subtracting the purchase price with respect to a share of Common Stock specified in the related Option from the Fair Market Value of a share of Common Stock on the date of exercise of the SAR, by (ii) the number of shares as to which that SAR has been exercised. The Option shall then cease to be exercisable to the extent surrendered. SARs granted in connection with an Option shall be subject to the terms and conditions of the Award Agreement governing the Option, which shall provide that the SAR is exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable except to the extent that the related Option is transferrable.

IX.

RESTRICTED STOCK AWARDS

(a) Forfeiture Restrictions to be Established by the Committee. Shares of Common Stock that are the subject of a Restricted Stock Award shall be subject to restrictions on disposition by the Participant and an obligation of the Participant to forfeit and surrender the shares to the Company under certain circumstances (the “Forfeiture Restrictions”). The Forfeiture Restrictions shall be determined by the Committee in its sole discretion, and the Committee may provide that the Forfeiture Restrictions shall lapse upon (i) the attainment of one or more Performance Goals or other performance criteria, (ii) the Participant’s continued employment with the Company or its Affiliates or continued service as a Consultant or Director for a specified period of time, (iii) the occurrence of any event or the satisfaction of any other condition specified by the Committee in its sole discretion (including, without limitation, a Change in Control), or (iv) a combination of any of the foregoing. Each Restricted Stock Award may have different Forfeiture Restrictions, in the discretion of the Committee. Except as provided in Paragraph XVI(d), while subject to Forfeiture Restrictions, the Restricted Stock may not be sold, transferred, pledged, hedged, margined or otherwise encumbered by the Participant.

(b)Dividends and Splits. Unless provided otherwise in an Award Agreement, the Participant shall have the right to receive dividends with respect to Common Stock subject to a Restricted Stock Award, to vote Common Stock subject thereto, and to enjoy all other stockholder rights. As a condition to the grant of an Award of Restricted Stock, the Committee may allow a Participant to elect, or may require, that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock, applied to the purchase of

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additional Awards under the Plan or deferred without interest to the date of vesting of the associated Award of
Restricted Stock. Notwithstanding the foregoing, dividends with respect to any Restricted Stock Award (including
Common Stock distributed in connection with a stock split or stock dividend, and other property (other than cash)
distributed as a dividend) shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted
Stock with respect to which such dividend has been distributed.

X.

PHANTOM STOCK AWARDS

(a)Phantom Stock Awards. Phantom Stock Awards are rights to receive shares of Common Stock, cash or a combination thereof at the end of a specified period (which may or may not be coterminous with the vesting schedule of the Award).

(b)Payment. Following the end of the vesting period for a Phantom Stock Award (or at such other time as the applicable Award Agreement may provide), the holder of a Phantom Stock Award shall be entitled to receive payment of an amount based on the then vested amount of the Award. Payment of a Phantom Stock Award may be made in cash, Common Stock, or a combination thereof as determined by the Committee. Payment shall be made in a lump sum or in installments as prescribed by the Committee. Any payment to be made in cash shall be based on the Fair Market Value of the Common Stock on the payment date or such other date or dates as may be specified by the Committee in the Award Agreement.

XI.

OTHER AWARDS

(a)Bonus Stock Awards. Each Bonus Stock Award granted to a Participant shall constitute a transfer of unrestricted shares of Common Stock on such terms and conditions as the Committee shall determine. Bonus Stock Awards shall be made in shares of Common Stock and need not be subject to performance criteria or objectives or to forfeiture. The purchase price, if any, for shares of Common Stock issued in connection with a Bonus Stock Award shall be determined by the Committee in its sole discretion.

(b)Other Stock-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock, as deemed by the Committee to be consistent with the purposes of this Plan, including without limitation convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Stock, purchase rights for Common Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Common Stock or the value of securities of or the performance of specified Affiliates of the Company. The Committee shall determine the terms and conditions of such Other Stock-Based Awards. Common Stock delivered pursuant to an Award in the nature of a purchase right granted under this Paragraph XI(b) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation, cash, Common Stock, other Awards, or other property, as the Committee shall determine.

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(c)Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to a Participant, entitling the Participant to receive cash, Common Stock, other Awards, or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Common Stock, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify. Notwithstanding the foregoing, unless specifically provided otherwise within an Award Agreement, with respect to Dividend Equivalents granted in connection with another Award, such Dividend Equivalents shall be subject to the same restrictions and a risk of forfeiture as the Award with respect to which the dividends accrue and shall not be paid unless and until such Award has vested and been earned.

(d)Cash Awards. An Award may be in the form of a Cash Award, either on a free-standing basis, as part of the Company’s annual incentive bonus programs (an “Annual Award”), or as an element of or supplement to, or in lieu of, any other Award under the Plan. Subject to the terms applicable to Annual Awards below, the terms, conditions and limitations applicable to a Cash Award, including, but not limited to, vesting or other restrictions, shall be determined by the Committee in accordance with this Plan.

(i)	Annual Award Performance Criteria. If the Committee determines that a Cash Award should be granted as an Annual Award, the Annual Award shall be designed to vest based upon the achievement of certain business priorities, including financial, operational, sustainability and safety objectives, as determined by the Committee. The eligible performance criteria for Annual Awards will include the Performance Goals, which for the purposes of an Annual Award shall also be deemed to include the following items: (1) financial performance, including earnings before interest, depreciation and amortization (“EBITDA”), cash flow and other measures; (2) growth; (3) funding or liquidity; (4) volume goals or volume growth; and (5) environmental, social and governance (“ESG”) goals.

(ii)	Annual Award Amounts. Annual Award target amounts may be determined on a stand-alone basis as a percentage of an individual’s base salary or annual compensation, or may be calculated as a percentage of a bonus pool.

(iii)	Performance Period. An Annual Award shall have a performance period of no less than one calendar year, provided that the Committee may grant a pro-rata award to a new hire or an individual that is promoted during any given performance period.

(iv)	Committee Discretion for Annual Awards. Notwithstanding Section XI(d)(i) above, the Committee shall retain the sole discretion to determine the amount of the Annual Award to be paid to any Participant (which may be reduced or increased), or may adjust the performance criteria for any Annual Award to reflect extraordinary or unexpected events, occurrences, or transactions that the Committee determines should be taken into account when calculating the achievement of performance for the applicable performance period.

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(e)Substitute Awards; No Repricing; No Reload. Awards may be granted in substitution or exchange for any other Award granted under the Plan or under another plan of the Company or an Affiliate or any other right to receive payment from the Company or an Affiliate. Awards may also be granted under the Plan in substitution for awards held by individuals who become eligible to participate in the Plan as a result of a merger, consolidation or acquisition of another entity or the assets of another entity by or with the Company or an Affiliate. Such Substitute Awards referred to in the immediately preceding sentence that are Options or SARs may have an exercise price or purchase price that is less than the Fair Market Value of a share of Common Stock on the date of the substitution if such substitution complies with the Nonqualified Deferred Compensation Rules and other applicable laws and exchange rules, as determined to be appropriate by the Committee. Except as provided in this Paragraph XI(e) or Paragraph XIV, without the approval of the stockholders of the Company, the terms of outstanding Awards may not be amended to (i) reduce the exercise price or purchase price of an outstanding Option or SAR, (ii) grant a new Option, SAR or other Award in substitution for, or upon the cancellation of, any previously granted Option or SAR that has the effect of reducing the exercise price or purchase price thereof, (iii) exchange any Option or SAR for Common Stock, cash or other consideration when the exercise price or purchase price per share of Common Stock under such Option or SAR exceeds the Fair Market Value of a share of Stock or (iv) take any other action that would be considered a “repricing” of an Option or SAR under the applicable listing standards of the national securities exchange on which the Stock is listed (if any). Reload Options may not be granted under the Plan.

XII.

PERFORMANCE AWARDS

(a)Performance Awards Generally. The Committee is authorized to designate any of the Awards granted under the foregoing provisions of this Plan as Performance Awards. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any Performance Goals or other performance criteria applicable to a Performance Award, and may exercise its discretion to reduce or increase the amounts payable under any Performance Award, except as limited under Paragraph XII(b). Performance goals or other performance criteria may differ for Performance Awards granted to any one Participant or to different Participants. The performance period applicable to any Performance Award shall be set by the Committee in its discretion but shall not exceed ten years.

(b)Section 162(m) Awards . If the Committee determines in its discretion that a Performance Award granted to a Covered Employee shall be designated as a Section 162(m) Award, the grant, exercise, vesting and/or settlement of such Performance Award shall be contingent upon achievement of one or more pre-established Performance Goals (as defined in Paragraph II(aa)) and other terms set forth in this Paragraph XII; provided, however, that nothing in this Paragraph XII or elsewhere in the Plan shall be interpreted as preventing the Committee from granting Performance Awards or other Awards to Covered Employees that are not intended to constitute Section 162(m) Awards or from determining that it is no longer necessary or appropriate for a Section 162(m) Award to qualify as such.

(i)	Performance Goals. The Performance Goals for Section 162(m) Awards shall consist of one or more business criteria and a targeted level or levels of performance with

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respect to each of such criteria as specified by the Committee. Performance Goals shall be objective and
shall otherwise meet the requirements of Section 162(m), including the requirement that the level or levels
of performance targeted by the Committee must be “substantially uncertain” at the time the Committee

actually establishes the Performance Goal.

(ii)	Effect of Certain Events. The Committee may, at the time the Performance Goals in respect of a Section 162(m) Award are established, provide for the manner in which actual performance and Performance Goals with regard to the business criteria selected will reflect the impact of specified events or occurrences during the relevant performance period, which may mean excluding the impact of one or more events or occurrences, as specified by the Committee, for such performance period. The adjustments described in this paragraph shall only be made, in each case, to the extent that such adjustments in respect of a Section 162(m) Award would not cause the Section 162(m) Award to fail to qualify as “performance-based compensation” under Section 162(m), as determined to be appropriate by the Committee.

(iii)	Timing for Establishing Performance Goals. No later than 90 days after the beginning of any performance period applicable to a Section 162(m) Award, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m), the Committee shall establish (A) the individuals who will be granted Section 162(m) Awards, and (B) the objective formula used to calculate the amount of cash or Common Stock payable, if any, under such Section 162(m) Awards, based upon the level of achievement of a Performance Goal and, if desired, the effect of any events as described in Paragraph XII(b)(ii).

(iv)	Performance Award Pool. The Committee may establish an unfunded pool, with the amount of such pool calculated using an objective formula based upon the level of achievement of one or more Performance Goals during the given performance period. The Committee may specify the amount of the pool as a percentage of any of such business criteria, a percentage in excess of a threshold amount with respect to such business criteria, or as another amount which need not bear a direct relationship to such business criteria but shall be objectively determinable and calculated based upon the level of achievement of pre-established Performance Goals with regard to the business criteria. If a pool is established, the Committee shall also establish the maximum amount payable to each Covered Employee from the pool for each performance period.

(v)	Settlement or Payout of Awards; Negative Discretion. Except as otherwise permitted under Section 162(m), after the end of each performance period and before any Section 162(m) Award is settled or paid, the Committee shall certify the level of performance achieved with regard to each business criteria established with respect to each Section 162(m) Award and shall determine the amount of cash or Common Stock, if any, payable to each Participant with respect to each Section 162(m) Award. The Committee may, in its discretion, reduce the amount of a payment or settlement otherwise to be made in connection with a Section 162(m) Award, but may not exercise discretion to increase any such amount.

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(vi)	Written Determinations. With respect to each Section 162(m) Award, all determinations by the Committee as to (A) the establishment of Performance Goals and performance period with respect to the selected business criteria, (B) the establishment of the objective formula used to calculate the amount of cash or Common Stock payable, if any, based on the level of achievement of such Performance Goals, and

(C)	the certification of the level of performance achieved during the performance period with regard to each business criteria selected, shall each be made in writing.

(vii)	Options and SARs. Notwithstanding the foregoing provisions of this Paragraph XII(b), Options and SARs with an exercise price or purchase price not less than the Fair Market Value on the date of grant awarded to Covered Employees are intended to be Section 162(m) Awards even if not otherwise contingent upon achievement of one or more pre-established Performance Goals.

(viii)	Status of Section 162(m) Awards. The terms governing Section 162(m) Awards shall be interpreted in a manner consistent with Section 162(m), in particular the prerequisites for qualification as “performance-based compensation,” and, if any provision of the Plan as in effect on the date of adoption of any Award Agreement relating to a Section 162(m) Award does not comply or is inconsistent with the requirements of Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

XIII.

PROVISIONS APPLICABLE TO AWARDS

(a)Award Agreements; Minimum Vesting Requirements. Each Award shall be evidenced by an Award Agreement in such form and containing such provisions not inconsistent with the provisions of the Plan as the Committee from time to time shall approve. Each Award Agreement shall specify the effect of termination of (i) employment, (ii) the consulting or advisory relationship or (iii) membership on the Board, as applicable, or a Change in Control on the Award. The terms and provisions of the respective Award Agreements need not be identical. Notwithstanding any provision of the Plan to the contrary, the Committee shall not award to eligible individuals more than 5% of the aggregate number of shares of Common Stock available under the Plan on and after the 2017 Effective Date pursuant to Awards with a vesting schedule that provides for full vesting in less than one year following the date of grant of applicable Award, subject to the Committee’s authority under the Plan to vest Awards earlier, as the Committee deems appropriate, upon the occurrence of certain events described in Paragraph XIV, in the event of a Participant’s termination of employment or service or otherwise as permitted by the Plan.

(b)Form and Timing of Payment under Awards; Deferrals. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or any of its Affiliates upon the exercise or settlement of an Award may be made in such forms as the Committee shall determine in its discretion, including cash, Common Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis (which may be required by the Committee or permitted at the election of the Participant on terms and conditions established by the Committee); provided, however, that any such deferred or installment payments will be set forth in the Award Agreement. Payments may include, without

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limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the
grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments

denominated in Common Stock.

(c)Evidencing Stock. The Common Stock or other securities of the Company delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise, and shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Common Stock or other securities are then listed, and any applicable federal, state or other laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions. Further, if certificates representing Restricted Stock are registered in the name of the Participant, the Company may retain physical possession of the certificates and may require that the Participant deliver a stock power to the Company, endorsed in blank, related to the Restricted Stock.

(d)Consideration for Grants. Awards may be granted for such consideration, including services, as the Committee shall determine, but shall not be granted for less than the minimum lawful consideration.

(e)Additional Agreements. Each Person to whom an Award is granted under the Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Person’s termination of employment or service to a general release of claims and/or a noncompetition or other restricted covenant agreement in favor of the Company and its Affiliates, with the terms and conditions of such agreement(s) to be determined in good faith by the Committee.

XIV.

RECAPITALIZATION OR REORGANIZATION

(a)No Effect on Right or Power. The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization, or other change in the Company’s or any Affiliate’s capital structure or its business, any merger or consolidation of the Company or any Affiliate, any issue of debt or equity securities ahead of or affecting Common Stock or the rights thereof, the dissolution or liquidation of the Company or any Affiliate, any sale, lease, exchange, or other disposition of all or any part of its assets or business, or any other corporate act or proceeding.

(b)Subdivision or Consolidation of Shares; Stock Dividends. The shares with respect to which Awards may be granted are shares of Common Stock as presently constituted, but if, and whenever, prior to the expiration of an Award theretofore granted, the Company shall effect a subdivision or consolidation of shares of Common Stock or the payment of a stock dividend on Common Stock without receipt of consideration by the Company, the number of shares of Common Stock with respect to which such Award may thereafter be exercised or satisfied, as applicable, the maximum number of shares of Stock available for issuance with respect

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to Awards and applicable limitations with respect to Awards provided in Paragraph V, (i) in the event of an increase
in the number of outstanding shares, shall be proportionately increased, and the purchase price or exercise price per
share shall be proportionately reduced, and (ii) in the event of a reduction in the number of outstanding shares, shall
be proportionately reduced, and the purchase price or exercise price per share shall be proportionately increased.
Any fractional share resulting from such adjustment shall be rounded up to the next whole share.

(c)Recapitalization. In the event of any change in the capital structure or business of the Company or other corporate transaction or event that would be considered an “equity restructuring” within the meaning of ASC Topic 718 and, in each case, that would result in an additional compensation expense to the Company pursuant to the provisions of ASC Topic 718, if adjustments to Awards with respect to such event were discretionary or otherwise not required (each such an event, an “Adjustment Event”), then the Committee shall equitably adjust (i) the aggregate number or kind of shares that thereafter may be delivered under the Plan, (ii) the number or kind of shares or other property (including cash) subject to an Award, (iii) the terms and conditions of Awards, including the purchase price or exercise price of Awards and performance goals or other performance criteria, as applicable, and (iv) the applicable limitations with respect to Awards provided in Paragraph V to equitably reflect such Adjustment Event (“Equitable Adjustments”). In the event of any change in the capital structure or business of the Company or other corporate transaction or event that would not be considered an Adjustment Event, and is not otherwise addressed in this Paragraph XIV, the Committee shall have complete discretion to make Equitable Adjustments in such manner and to such extent as it deems appropriate with respect to such other event.

(d)Change in Control and Other Events. Except to the extent otherwise provided in any applicable Award Agreement, vesting of any Award shall not occur solely upon the occurrence of a Change in Control and, in the event of a Change in Control or other changes in the Company or the outstanding Common Stock by reason of a recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant change occurring after the date of the grant of any Award, the Committee, acting in its sole discretion without the consent or approval of any holder, may exercise any power enumerated in Paragraph IV and may also effect one or more of the following alternatives, which may vary among individual holders and which may vary among Awards held by any individual holder:

(i)	Accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of holders thereunder shall terminate;

(ii)	Provide for a cash payment with respect to outstanding Awards by requiring the mandatory surrender to the Company by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then vested or exercisable) as of a date, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and the Company shall pay to each holder an amount of cash or other consideration per Award (other than a Dividend Equivalent or Cash Award, which the Committee may separately require to be surrendered in exchange for cash or other consideration determined by the Committee in its discretion) equal to the Change in

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Control Price, less the exercise price or purchase price with respect to an Option or SAR, as applicable to
such Awards; provided, however, that to the extent the exercise price or purchase price of an Option or SAR

exceeds the Change in Control Price, such Award may be cancelled for no consideration;

(iii)	Cancel Awards that remain subject to a restricted period as of the date of a Change in Control or other such event without payment of any consideration to the Participant for such Awards; or

(iv)	Make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control or other such event (including but not limited to the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof);

provided, however, that so long as the event is not an Adjustment Event, the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding. If an Adjustment Event occurs, this Paragraph XIV(d) shall only apply to the extent it is not in conflict with Paragraph XIV(c).

(e)No Adjustments Unless Otherwise Provided. Except as hereinbefore expressly provided, the issuance by the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Common Stock subject to Awards theretofore granted or the purchase price or exercise price per share, if applicable.

XV.

AMENDMENT AND TERMINATION OF THE PLAN

The Committee may amend, alter, suspend, discontinue or terminate any Award or Award Agreement, the Plan or the Committee’s authority to grant Awards under the Plan without the consent of stockholders or Participants, except that any amendment or alteration to the Plan, including any increase in any share limitation, shall be subject to the approval of the Company’s stockholders not later than the annual meeting next following such Committee action if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Common Stock may then be listed or quoted, and the Committee may otherwise, in its discretion, determine to submit other changes to the Plan to stockholders for approval; provided, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award. For purposes of clarity, any adjustments made to Awards pursuant to Paragraph XIV will be deemed not to materially and adversely affect the rights of any Participant under any previously granted and outstanding Award and therefore may be made without the consent of affected Participants.

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XVI.
MISCELLANEOUS

(a)Limitation on Rights Conferred under Plan. Neither the adoption of the Plan nor any action of the Board or of the Committee shall be deemed to give any individual any right to be granted an Award, or any other rights hereunder except as may be evidenced by an Award Agreement issued by the Company, and then only to the extent and on the terms and conditions expressly set forth therein. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of funds or assets to assure the performance of its obligations under any Award. Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Person the right to continue as a Participant or in the employ or service of the Company or any of its Affiliates, (ii) interfering in any way with the right of the Company or any of its Affiliates to terminate any Person’s employment or service relationship at any time, (iii) giving any Person any claim to be treated uniformly with other Participants and/or employees and/or other service providers, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Common Stock in accordance with the terms of an Award.

(b)Other Laws; Withholding. The Company shall not be obligated to issue any Common Stock pursuant to any Award granted under the Plan at any time when the shares covered by such Award have not been registered under the Securities Act and such other state and federal laws, rules, and regulations as the Company or the Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration requirements of such laws, rules, and regulations available for the issuance and sale of such shares. No fractional shares of Common Stock shall be delivered, nor shall any cash in lieu of fractional shares be paid. The Company and any of its Affiliates are authorized to withhold from any Award granted, or any payment relating to an Award under the Plan, including from a distribution of Common Stock, amounts of withholding and other taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, its Affiliates and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. The Committee shall determine, in its sole discretion, the form of payment acceptable for such tax withholding obligations, including, without limitation, the delivery of cash or cash equivalents, Common Stock (including previously owned shares, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to the Award), other property, or any other legal consideration the Committee deems appropriate. Any determination made by the Committee to allow a Participant who is subject to Rule 16b-3 to pay taxes with shares of Common Stock through net settlement or previously owned shares, whether pursuant to an Award Agreement or otherwise, shall be approved by either a committee made up of solely two or more “non-employee directors” (within the meaning of Rule 16b-3) or the full Board. If such tax obligations are satisfied through net settlement or previously owned shares, the maximum number of shares of Common Stock that may be so withheld (or surrendered) shall be the number of shares of Common Stock that have an aggregate Fair Market Value on the date of withholding or surrender equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment with respect to such Award, as determined by the Committee.

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(c)No Restriction on Corporate Action. Nothing contained in the Plan shall be construed to prevent the Company or any Affiliate from taking any action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No Participant, beneficiary or other person shall have any claim against the Company or any Affiliate as a result of any such action.

(d)Restrictions on Transfer. An Award (other than an Incentive Stock Option, which shall be subject to the transfer restrictions set forth in Paragraph VII(c)) shall not be transferable otherwise than (i) by will or the laws of descent and distribution, (ii) pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder, or (iii) with the consent of the Committee.

(e) Section 409A of the Code. It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the Nonqualified Deferred Compensation Rules, and Awards will be operated and construed accordingly. Neither this Paragraph XVI(e) nor any other provision of the Plan is or contains a representation to any Participant regarding the tax consequences of the grant, vesting, exercise, settlement, or sale of any Award (or the Common Stock underlying such Award) granted hereunder, and should not be interpreted as such. In no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with the Nonqualified Deferred Compensation Rules. Notwithstanding any provision in the Plan or an Award Agreement to the contrary, in the event that a “specified employee” (as defined under the Nonqualified Deferred Compensation Rules) becomes entitled to a payment under an Award that would be subject to additional taxes and interest under the Nonqualified Deferred Compensation Rules if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (i) the date of the Participant’s death, or (ii) the date that is six months after the Participant’s “separation from service,” as defined under the Nonqualified Deferred Compensation Rules (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date. Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date. The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith.

(f)	Clawback. The Plan and all Awards granted hereunder are subject to any written clawback policies that the Company, with the approval of the Board or an authorized committee thereof, may adopt either prior to or following the Effective Date, including any policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the Securities and Exchange Commission and that the Company determines should apply to Awards under the Plan. Any such policy may subject a Participant’s Awards and amounts paid or realized with respect to Awards under the Plan to reduction, cancelation, forfeiture or recoupment if certain specified events or wrongful conduct occur, including but not limited to an accounting restatement due to the Company’s material

22

Execution Version

noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such
clawback policy.

(g)Severability and Reformation. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to eligible persons who are subject to section 16 of the Exchange Act), Section 162(m) (with respect to any Section 162(m) Award) or section 422 of the Code (with respect to Incentive Stock Options), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 or Section 162(m) (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3 or Section 162(m)) or section 422 of the Code, in each case, only to the extent such sections of the Code are applicable. With respect to Incentive Stock Options, if the Plan does not contain any provision required to be included herein under section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, further, that, to the extent any Option that is intended to qualify as an Incentive Stock Option cannot so qualify, that Option (to that extent) shall be deemed an Option that is not an Incentive Stock Option for all purposes of the Plan.

(h)Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to conflicts of laws principles thereof.

23

Exhibit 22.1

	List of Subsidiary Guarantors				
			State of		
			Incorporation or		
	Name		Organization		
	Arkoma Newco LLC		Delaware		
	Delaware-Permian Pipeline LLC		Delaware		
	FCPP Pipeline, LLC		Delaware		
	Flag City Processing Partners, LLC		Delaware		
	Grand Prix Development LLC		Delaware		
	Grand Prix Pipeline LLC		Delaware		
	Lasso Acquiror LLC		Delaware		
	Midland-Permian Pipeline LLC		Delaware		
	Setting Sun Pipeline Corporation		Delaware		
	Slider WestOk Gathering, LLC		Delaware		
	Targa Capital LLC		Delaware		
	Targa Cayenne LLC		Delaware		
	Targa Chaney Dell LLC		Delaware		
	Targa Cogen LLC		Delaware		
	Targa Condensate Marketing LLC		Delaware		
	Targa Delaware LLC		Delaware		
	Targa Delaware QOF LLC		Delaware		
	Targa Delaware QOZB LLC		Delaware		
	Targa Downstream LLC		Delaware		
	Targa Energy GP LLC		Delaware		
	Targa Energy LP		Delaware		
	Targa Frio LaSalle GP LLC		Texas		
	Targa Frio LaSalle Pipeline LP		Texas		
	Targa Gas Marketing LLC		Delaware		
	Targa Gas Pipeline LLC		Delaware		
	Targa Gas Processing LLC		Delaware		
	Targa GP Inc.		Delaware		
	Targa Gulf Coast NGL Pipeline LLC		Delaware		
	Targa Intrastate Pipeline LLC		Delaware		
	Targa LA Holdings LLC		Delaware		
	Targa LA Operating LLC		Delaware		
	Targa Liquids Marketing and Trade LLC		Delaware		
	Targa Louisiana Intrastate LLC		Delaware		
	Targa LP Inc.		Delaware		
	Targa Midkiff LLC		Delaware		
	Targa Midland Crude LLC		Delaware		
	Targa Midland LLC		Delaware		
	Targa Midstream Services LLC		Delaware		
	Targa MLP Capital LLC		Delaware		
	Targa NGL Pipeline Company LLC		Delaware		
	Targa Northern Delaware LLC		Delaware		
	Targa Permian Condensate Pipeline LLC		Delaware		
	Targa Pipeline Mid-Continent Holdings LLC		Delaware		
	Targa Pipeline Mid-Continent LLC		Delaware		
	Targa Pipeline Mid-Continent WestOk LLC		Delaware		
	Targa Pipeline Mid-Continent WestTex LLC		Delaware		
	Targa Pipeline Operating Partnership LP		Delaware		
	Targa Pipeline Partners GP LLC		Delaware		
	Targa Pipeline Partners LP		Delaware		
	Targa Resources Finance Corporation		Delaware		
	Targa Resources GP LLC		Delaware		

Targa Resources LLC	Delaware	
Targa Resources Operating GP LLC	Delaware	
Targa Resources Operating LLC	Delaware	
Targa Resources Partners LP	Delaware	
Targa Rich Gas Services GP LLC	Texas	
Targa Rich Gas Services LP	Texas	
Targa Rich Gas Utility GP LLC	Texas	
Targa Rich Gas Utility LP	Texas	
Targa Southern Delaware LLC	Delaware	
Targa SouthOk NGL Pipeline LLC	Oklahoma	
Targa SouthTex Energy GP LLC	Delaware	
Targa SouthTex CCNG Gathering Ltd.	Texas	
Targa SouthTex Energy LP LLC	Delaware	
Targa SouthTex Energy Operating LLC	Delaware	
Targa SouthTex Gathering Ltd.	Texas	
Targa SouthTex Midstream Company LP	Texas	
Targa SouthTex Midstream Marketing Company Ltd.	Texas	
Targa SouthTex Midstream T/U GP LLC	Texas	
Targa SouthTex Midstream Utility LP	Texas	
Targa SouthTex Mustang Transmission Ltd.	Texas	
Targa SouthTex NGL Pipeline Ltd.	Texas	
Targa SouthTex Processing LLC	Delaware	
Targa Train 6 LLC	Delaware	
Targa Train 8 LLC	Delaware	
Targa Train 9 LLC	Delaware	
Targa Transport LLC	Delaware	
TPL Arkoma Midstream LLC	Delaware	
TPL Gas Treating LLC	Delaware	
TPL SouthTex Gas Utility Company LP	Texas	
TPL SouthTex Midstream Holding Company LP	Texas	
TPL SouthTex Midstream LLC	Delaware	
TPL SouthTex Pipeline Company LLC	Texas	
TPL SouthTex Processing Company LP	Texas	
TPL SouthTex Transmission Company LP	Texas	
T2 Eagle Ford Gathering Company LLC	Delaware	
T2 Gas Utility LLC	Texas	
T2 LaSalle Gas Utility LLC	Texas	
T2 LaSalle Gathering Company LLC	Delaware	
Velma Gas Processing Company, LLC	Delaware	
Velma Intrastate Gas Transmission Company, LLC	Delaware	
Versado Gas Processors, L.L.C.	Delaware	

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Matthew J. Meloy, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Targa Resources Corp. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules

13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023

By: /s/ Matthew J. Meloy

Name: Matthew J. Meloy

Title: Chief Executive Officer of Targa Resources Corp.

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Jennifer R. Kneale, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Targa Resources Corp. (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules

13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2023

By: /s/ Jennifer R. Kneale

Name: Jennifer R. Kneale

Title: Chief Financial Officer of Targa Resources Corp.

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Targa Resources Corp., for the three months ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Matthew J. Meloy, as Chief Executive Officer of Targa Resources Corp., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Targa Resources Corp.

By: /s/ Matthew J. Meloy

Name: Matthew J. Meloy

Title: Chief Executive Officer of Targa Resources Corp.

Date: August 3, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Targa and will be retained by Targa and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Targa Resources Corp., for the three months ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Jennifer R. Kneale, as Chief Financial Officer of Targa Resources Corp., hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to her knowledge:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Targa Resources Corp.

By: /s/ Jennifer R. Kneale

Name: Jennifer R. Kneale

Title: Chief Financial Officer of Targa Resources Corp.

Date: August 3, 2023

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Targa and will be retained by Targa and furnished to the Securities and Exchange Commission or its staff upon request.