UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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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:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of exchange on which registered |
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.
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).
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.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
As of July 26, 2024, there were
TABLE OF CONTENTS
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:
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, 2024 (“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 |
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Barrels (equal to 42 U.S. gallons) |
BBtu |
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Billion British thermal units |
Bcf |
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Billion cubic feet |
Btu |
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British thermal units, a measure of heating value |
/d |
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Per day |
FERC |
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Federal Energy Regulatory Commission |
GAAP |
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Accounting principles generally accepted in the United States of America |
gal |
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U.S. gallons |
LPG |
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Liquefied petroleum gas |
MBbl |
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Thousand barrels |
MMBbl |
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Million barrels |
MMBtu |
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Million British thermal units |
MMcf |
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Million cubic feet |
MMgal |
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Million U.S. gallons |
NGL(s) |
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Natural gas liquid(s) |
NYMEX |
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New York Mercantile Exchange |
NYSE |
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New York Stock Exchange |
SCOOP |
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South Central Oklahoma Oil Province |
SOFR |
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Secured Overnight Financing Rate |
STACK |
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Sooner Trend, Anadarko, Canadian and Kingfisher |
3
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
TARGA RESOURCES CORP.
CONSOLIDATED BALANCE SHEETS
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June 30, 2024 |
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December 31, 2023 |
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(Unaudited) |
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(In millions) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Trade receivables, net of allowances of $ |
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Inventories |
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Assets from risk management activities |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Intangible assets, net |
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Long-term assets from risk management activities |
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Investments in unconsolidated affiliates |
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Other long-term assets |
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Total assets |
$ |
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$ |
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LIABILITIES AND OWNERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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Accrued liabilities |
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Interest payable |
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Liabilities from risk management activities |
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Current debt obligations |
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Total current liabilities |
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Long-term debt |
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Long-term liabilities from risk management activities |
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Deferred income taxes, net |
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Other long-term liabilities |
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) |
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Owners’ equity: |
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Targa Resources Corp. stockholders’ equity: |
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Common Stock ($ |
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Issued Outstanding |
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June 30, 2024 |
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December 31, 2023 |
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Additional paid-in capital |
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Retained earnings (deficit) |
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Accumulated other comprehensive income (loss) |
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Treasury stock, at cost ( |
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Total Targa Resources Corp. stockholders’ equity |
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Noncontrolling interests |
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Total owners’ equity |
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Total liabilities and owners’ equity |
$ |
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$ |
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See notes to consolidated financial statements.
4
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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(Unaudited) |
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(In millions, except per share amounts) |
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Revenues: |
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Sales of commodities |
$ |
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$ |
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$ |
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$ |
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Fees from midstream services |
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Total revenues |
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Costs and expenses: |
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Product purchases and fuel |
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Operating expenses |
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Depreciation and amortization expense |
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General and administrative expense |
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Other operating (income) expense |
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— |
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Income (loss) from operations |
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Other income (expense): |
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Interest expense, net |
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Equity earnings (loss) |
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Gain (loss) from financing activities |
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— |
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— |
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Other, net |
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( |
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( |
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Income (loss) before income taxes |
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Income tax (expense) benefit |
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Net income (loss) |
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Less: Net income (loss) attributable to noncontrolling interests |
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Net income (loss) attributable to Targa Resources Corp. |
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Premium on repurchase of noncontrolling interests, net of tax |
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— |
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— |
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— |
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Net income (loss) attributable to common shareholders |
$ |
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$ |
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$ |
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$ |
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Net income (loss) per common share - basic |
$ |
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$ |
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$ |
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$ |
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Net income (loss) per common share - diluted |
$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding - basic |
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Weighted average shares outstanding - diluted |
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See notes to consolidated financial statements.
5
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
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Three Months Ended June 30, |
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2024 |
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2023 |
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Pre-Tax |
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Related Income Tax |
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After Tax |
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Pre-Tax |
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Related Income Tax |
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After Tax |
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(Unaudited) |
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(In millions) |
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Net income (loss) |
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$ |
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$ |
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Other comprehensive income (loss): |
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Commodity hedging contracts: |
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Change in fair value |
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$ |
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$ |
( |
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$ |
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$ |
( |
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Settlements reclassified to revenues |
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( |
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( |
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Other comprehensive income (loss) |
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( |
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( |
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Comprehensive income (loss) |
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Less: Comprehensive income (loss) attributable to noncontrolling interests |
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Comprehensive income (loss) attributable to Targa Resources Corp. |
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$ |
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$ |
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Six Months Ended June 30, |
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2024 |
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2023 |
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Pre-Tax |
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Related Income Tax |
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After Tax |
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Pre-Tax |
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Related Income Tax |
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After Tax |
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(Unaudited) |
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(In millions) |
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Net income (loss) |
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$ |
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$ |
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Other comprehensive income (loss): |
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Commodity hedging contracts: |
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Change in fair value |
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$ |
( |
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$ |
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( |
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$ |
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$ |
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Settlements reclassified to revenues |
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( |
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( |
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Other comprehensive income (loss) |
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( |
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Comprehensive income (loss) |
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Less: Comprehensive income (loss) attributable to noncontrolling interests |
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Comprehensive income (loss) attributable to Targa Resources Corp. |
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$ |
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$ |
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See notes to consolidated financial statements.
6
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY
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Retained |
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Accumulated |
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Additional |
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Earnings |
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Other |
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Treasury |
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Total |
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Common Stock |
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Paid in |
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(Accumulated |
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Comprehensive |
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Shares |
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Noncontrolling |
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Owners’ |
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Shares |
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Amount |
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Capital |
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Deficit) |
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Income (Loss) |
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Shares |
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Amount |
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Interests |
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Equity |
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(Unaudited) |
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(In millions, except shares in thousands) |
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Balance, March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Compensation on equity grants |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Dividend equivalent rights |
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— |
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— |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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Shares issued under compensation program |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares tendered for tax withholding obligations |
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( |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Repurchases of common stock |
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( |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Excise tax on repurchases of common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Common stock dividends |
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Dividends - $ |
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— |
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— |
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— |
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( |
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— |
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— |
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— |
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— |
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( |
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Distributions to noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Contributions from noncontrolling interests |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive income (loss) |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
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Net income (loss) |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, June 30, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
$ |
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$ |
|
See notes to consolidated financial statements.
7
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY
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Retained |
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Accumulated |
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Additional |
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Earnings |
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Other |
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Treasury |
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Total |
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Common Stock |
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Paid in |
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(Accumulated |
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Comprehensive |
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Shares |
|
Noncontrolling |
|
Owners’ |
|
|||||||||||||
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit) |
|
Income (Loss) |
|
Shares |
|
Amount |
|
Interests |
|
Equity |
|
|||||||||
|
|
(Unaudited) |
|
|||||||||||||||||||||||||
|
|
(In millions, except shares in thousands) |
|
|||||||||||||||||||||||||
Balance, March 31, 2023 |
|
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
|||||||
Compensation on equity grants |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Dividend equivalent rights |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Shares issued under compensation program |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Shares tendered for tax withholding obligations |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
— |
|
|
( |
) |
|
Repurchases of common stock |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
— |
|
|
( |
) |
|
Excise tax on repurchases of common stock |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Common stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends - $ |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Dividends in excess of retained earnings |
|
|
— |
|
|
— |
|
|
( |
) |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Distributions to noncontrolling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Contributions from noncontrolling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Other comprehensive income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Net income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|||
Balance, June 30, 2023 |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
See notes to consolidated financial statements.
8
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY
|
|
|
|
|
|
|
|
Retained |
|
Accumulated |
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
Additional |
|
Earnings |
|
Other |
|
Treasury |
|
|
|
Total |
|
|||||||||||
|
|
Common Stock |
|
Paid in |
|
(Accumulated |
|
Comprehensive |
|
Shares |
|
Noncontrolling |
|
Owners’ |
|
|||||||||||||
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit) |
|
Income (Loss) |
|
Shares |
|
Amount |
|
Interests |
|
Equity |
|
|||||||||
|
|
(Unaudited) |
|
|||||||||||||||||||||||||
|
|
(In millions, except shares in thousands) |
|
|||||||||||||||||||||||||
Balance, December 31, 2023 |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
||||||||
Compensation on equity grants |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Dividend equivalent rights |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Shares issued under compensation program |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Shares tendered for tax withholding obligations |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
— |
|
|
( |
) |
|
Repurchases of common stock |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
— |
|
|
( |
) |
|
Excise tax on repurchases of common stock |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Common stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends - $ |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Distributions to noncontrolling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Contributions from noncontrolling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Other comprehensive income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Net income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|||
Balance, June 30, 2024 |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
See notes to consolidated financial statements.
9
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF CHANGES IN OWNERS’ EQUITY
|
|
|
|
|
|
|
|
Retained |
|
Accumulated |
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
Additional |
|
Earnings |
|
Other |
|
Treasury |
|
|
|
Total |
|
|||||||||||
|
|
Common Stock |
|
Paid in |
|
(Accumulated |
|
Comprehensive |
|
Shares |
|
Noncontrolling |
|
Owners’ |
|
|||||||||||||
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit) |
|
Income (Loss) |
|
Shares |
|
Amount |
|
Interests |
|
Equity |
|
|||||||||
|
|
(Unaudited) |
|
|||||||||||||||||||||||||
|
|
(In millions, except shares in thousands) |
|
|||||||||||||||||||||||||
Balance, December 31, 2022 |
|
|
|
$ |
|
$ |
|
$ |
( |
) |
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
|||||||
Compensation on equity grants |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Dividend equivalent rights |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Shares issued under compensation program |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Shares tendered for tax withholding obligations |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
— |
|
|
( |
) |
|
Repurchases of common stock |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
( |
) |
|
— |
|
|
( |
) |
|
Excise tax on repurchases of common stock |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
Common stock dividends |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Dividends - $ |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
Dividends in excess of retained earnings |
|
|
— |
|
|
— |
|
|
( |
) |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Distributions to noncontrolling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Contributions from noncontrolling interests |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Repurchase of noncontrolling interests, net of tax |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
Other comprehensive income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Net income (loss) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|||
Balance, June 30, 2023 |
|
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
( |
) |
$ |
|
$ |
|
See notes to consolidated financial statements.
10
TARGA RESOURCES CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Unaudited) |
|
|||||
|
|
(In millions) |
|
|||||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Amortization in interest expense |
|
|
|
|
|
|
||
Compensation on equity grants |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
|
|
|
|
||
(Gain) loss on sale or disposition of assets |
|
|
|
|
|
( |
) |
|
Write-downs of assets |
|
|
|
|
|
|
||
Accretion of asset retirement obligations |
|
|
|
|
|
|
||
Deferred income tax expense (benefit) |
|
|
|
|
|
|
||
Equity (earnings) loss of unconsolidated affiliates |
|
|
( |
) |
|
|
( |
) |
Distributions of earnings received from unconsolidated affiliates |
|
|
|
|
|
|
||
Risk management activities |
|
|
|
|
|
( |
) |
|
(Gain) loss from financing activities |
|
|
|
|
|
|
||
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Receivables and other assets |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
|
||
Accounts payable, accrued liabilities and other liabilities |
|
|
( |
) |
|
|
( |
) |
Interest payable |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities |
|
|
|
|
|
|
||
Outlays for property, plant and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of assets |
|
|
|
|
|
|
||
Investments in unconsolidated affiliates |
|
|
( |
) |
|
|
( |
) |
Return of capital from unconsolidated affiliates |
|
|
|
|
|
|
||
Other, net |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Debt obligations: |
|
|
|
|
|
|
||
Repayments of credit facilities |
|
|
|
|
|
( |
) |
|
Proceeds from borrowings of commercial paper notes |
|
|
|
|
|
|
||
Repayments of commercial paper notes |
|
|
( |
) |
|
|
( |
) |
Repayment of term loan facility |
|
|
( |
) |
|
|
|
|
Proceeds from borrowings under accounts receivable securitization facility |
|
|
|
|
|
|
||
Repayments of accounts receivable securitization facility |
|
|
( |
) |
|
|
( |
) |
Proceeds from issuance of senior notes |
|
|
|
|
|
|
||
Principal payments of finance leases |
|
|
( |
) |
|
|
( |
) |
Costs incurred in connection with financing arrangements |
|
|
|
|
|
( |
) |
|
Repurchase of shares |
|
|
( |
) |
|
|
( |
) |
Contributions from noncontrolling interests |
|
|
|
|
|
|
||
Distributions to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Repurchase of noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Dividends paid to common shareholders |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
( |
) |
|
|
( |
) |
Net change in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
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 consolidates the Partnership and its subsidiaries under GAAP, and the accompanying consolidated financial statements have been prepared 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:
Our Operations
The Company is primarily engaged in the business of:
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 significant 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, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.
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, 2024.
Recently issued accounting pronouncements not yet adopted
Improvements to Reportable Segment Disclosures
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update require, among other items, that public entities disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. Additionally, the amendments require annual disclosure of the title and position of the CODM and how that individual uses the reported measure(s) of segment profit or loss in assessing segment performance and how to allocate resources.
These amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The disclosures required in the amendments apply retrospectively to all prior periods presented in the financial statements. We are evaluating the effect of the amendments on our notes to consolidated financial statements and expect to disclose the required information for fiscal years beginning in the Annual Report on Form 10-K for the year ended December 31, 2024 and for interim periods beginning in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. The impact of the adoption will be limited to disclosure in the notes to consolidated financial statements.
Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update require, among other items, that public entities disclose, on an annual and interim basis, (i) specific categories of income taxes in the rate reconciliation, and (ii) a disaggregation of income taxes paid by federal, state, and foreign taxes.
These amendments are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied prospectively with retrospective application permitted. We are evaluating the effect of the amendments on our notes to consolidated financial statements and expect to disclose the required information beginning in the Annual Report on Form 10-K for the year ended December 31, 2025. The impact of the adoption will be limited to disclosure in the notes to consolidated financial statements.
Note 4 — Joint Ventures and Acquisitions
In January 2023, we completed the acquisition of Blackstone Energy Partners’
On July 31, 2024, we entered into an agreement with the WPC Joint Venture (“WPC”) to move forward with the Blackcomb Pipeline (“Blackcomb”). Blackcomb is designed to transport up to
13
Note 5 — Property, Plant and Equipment and Intangible Assets
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June 30, 2024 |
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December 31, 2023 |
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Estimated Useful Lives (In Years) |
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Gathering systems |
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$ |
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$ |
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Processing and fractionation facilities |
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Terminaling and storage facilities |
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Transportation assets |
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Other property, plant and equipment |
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Land |
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— |
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Construction in progress |
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— |
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Finance lease right-of-use assets |
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Property, plant and equipment |
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Accumulated depreciation, amortization and impairment |
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( |
) |
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( |
) |
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Property, plant and equipment, net |
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$ |
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$ |
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Intangible assets |
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Accumulated amortization and impairment |
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( |
) |
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( |
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Intangible assets, net |
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$ |
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$ |
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During the three and six months ended June 30, 2024, depreciation expense was $
Intangible Assets
Intangible assets consist of customer contracts and customer relationships acquired in prior business combinations. The fair value 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.
During the three and six months ended June 30, 2024, amortization expense was $
The estimated annual amortization expense for intangible assets is approximately $
14
Note 6 — Debt Obligations
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June 30, 2024 |
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December 31, 2023 |
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Current: |
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Partnership accounts receivable securitization facility, due (1) |
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$ |
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$ |
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Finance lease liabilities |
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Current debt obligations |
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Long-term: |
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Term loan facility, variable rate, due (2) |
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TRGP senior revolving credit facility, variable rate, due (3) |
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Senior unsecured notes issued by TRGP: |
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Unamortized discount |
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( |
) |
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( |
) |
Senior unsecured notes issued by the Partnership: (4) |
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Debt issuance costs, net of amortization |
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( |
) |
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( |
) |
Finance lease liabilities |
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Long-term debt |
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Total debt obligations |
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$ |
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$ |
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Irrevocable standby letters of credit: (3) |
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Letters of credit outstanding under the TRGP senior revolving credit facility |
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$ |
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$ |
|
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, 2024:
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Range of Interest Rates Incurred |
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Weighted Average Interest Rate Incurred |
TRGP Revolver and Commercial Paper Program |
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Securitization Facility |
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Term Loan Facility |
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Compliance with Debt Covenants
As of June 30, 2024, we were in compliance with the covenants contained in our various debt agreements.
15
Note 7 — Other Long-term Liabilities
Other long-term liabilities are comprised of the following:
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June 30, 2024 |
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December 31, 2023 |
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Deferred revenue |
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$ |
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$ |
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Asset retirement obligations |
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Operating lease liabilities |
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Other liabilities |
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Total other long-term liabilities |
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$ |
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$ |
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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, 2024 and December 31, 2023, was $
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.
The following table shows the components of deferred revenue:
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June 30, 2024 |
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December 31, 2023 |
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Contributions in aid of construction |
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$ |
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$ |
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Gas contract amendment |
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Splitter agreement |
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— |
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Other |
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Total deferred revenue |
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$ |
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$ |
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The following table shows the changes in deferred revenue:
Balance at December 31, 2023 |
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$ |
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Additions |
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Reclassification to accrued liabilities |
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( |
) |
Revenue recognized |
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( |
) |
Balance at June 30, 2024 |
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$ |
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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 $
16
In May 2023, our Board of Directors approved a share repurchase program (the “2023 Share Repurchase Program”) for the repurchase of up to $
For the three and six months ended June 30, 2024, we repurchased
As of June 30, 2024, there was $
Common Stock Dividends
In April 2024, we declared an increase to our common dividend to $
The following table details the dividends declared and/or paid by us to common shareholders for the six months ended June 30, 2024:
Three Months Ended |
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Date Paid or |
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Total Common |
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Amount of Common |
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Dividends on |
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Dividends Declared per Share of Common Stock |
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(In millions, except per share amounts) |
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June 30, 2024 |
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$ |
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$ |
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$ |
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$ |
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March 31, 2024 |
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December 31, 2023 |
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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:
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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(In millions, except per share amounts) |
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Net income (loss) attributable to Targa Resources Corp. |
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$ |
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$ |
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$ |
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$ |
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Less: Premium on repurchase of noncontrolling interests, net of tax (1) |
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— |
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— |
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— |
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Net income (loss) attributable to common shareholders |
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Less: Participating share-based earnings (2) |
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Net income (loss) allocated to common shareholders for basic earnings per share |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding - basic |
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Dilutive effect of unvested stock awards |
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Weighted average shares outstanding - diluted |
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Net income (loss) available per common share - basic |
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$ |
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$ |
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$ |
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$ |
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Net income (loss) available per common share - diluted |
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$ |
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$ |
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$ |
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$ |
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17
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):
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Unvested restricted stock awards |
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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, 2024, the notional volumes of our commodity derivative contracts were:
Commodity |
Instrument |
Unit |
2024 |
|
2025 |
|
2026 |
|
2027 |
|
2028 |
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Natural Gas |
Swaps |
MMBtu/d |
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Natural Gas |
Basis Swaps |
MMBtu/d |
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NGL |
Swaps |
Bbl/d |
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NGL |
Futures |
Bbl/d |
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Condensate |
Swaps |
Bbl/d |
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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. The master netting provisions reduced our maximum loss due to counterparty credit risk by $
18
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:
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Fair Value as of June 30, 2024 |
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Fair Value as of December 31, 2023 |
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Balance Sheet |
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Derivative |
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Derivative |
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Derivative |
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Derivative |
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Location |
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Assets |
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Liabilities |
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Assets |
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Liabilities |
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Derivatives designated as hedging instruments |
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Commodity contracts |
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Current |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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Long-term |
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( |
) |
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( |
) |
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Total derivatives designated as hedging instruments |
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$ |
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$ |
( |
) |
|
$ |
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$ |
( |
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Derivatives not designated as hedging instruments |
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Commodity contracts |
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Current |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
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Long-term |
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( |
) |
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( |
) |
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Total derivatives not designated as hedging instruments |
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$ |
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$ |
( |
) |
|
$ |
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$ |
( |
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Total current position |
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$ |
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$ |
( |
) |
|
$ |
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$ |
( |
) |
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Total long-term position |
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( |
) |
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( |
) |
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Total derivatives |
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$ |
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$ |
( |
) |
|
$ |
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$ |
( |
) |
The pro forma impact of reporting derivatives on our Consolidated Balance Sheets on a net basis is as follows:
|
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|
Gross Presentation |
|
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Pro Forma Net Presentation |
|
||||||||||||||
June 30, 2024 |
|
Asset |
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Liability |
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Collateral |
|
|
Asset |
|
|
Liability |
|
||||||
Current Position |
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|
||||||
|
Counterparties with offsetting positions or collateral |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
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|
$ |
( |
) |
|||
|
Counterparties without offsetting positions - |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Counterparties without offsetting positions - |
|
|
— |
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|
|
( |
) |
|
|
— |
|
|
|
— |
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( |
) |
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( |
) |
|
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( |
) |
|||
Long-Term Position |
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||||||
|
Counterparties with offsetting positions or collateral |
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( |
) |
|
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( |
) |
|||
|
Counterparties without offsetting positions - |
|
|
— |
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|
|
— |
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|
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— |
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— |
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— |
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|
Counterparties without offsetting positions - |
|
|
— |
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|
( |
) |
|
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— |
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— |
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( |
) |
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( |
) |
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( |
) |
|||
Total Derivatives |
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|
||||||
|
Counterparties with offsetting positions or collateral |
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( |
) |
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|
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|
( |
) |
|||
|
Counterparties without offsetting positions - assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Counterparties without offsetting positions - liabilities |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
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|
|||||
|
|
|
Gross Presentation |
|
|
Pro Forma Net Presentation |
|
||||||||||||||
December 31, 2023 |
|
Asset |
|
|
Liability |
|
|
Collateral |
|
|
Asset |
|
|
Liability |
|
||||||
Current Position |
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|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Counterparties with offsetting positions or collateral |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
|
Counterparties without offsetting positions - |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
||
|
Counterparties without offsetting positions - |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
|
|
|
|
|
( |
) |
|
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|
|
|
|
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( |
) |
|||
Long-Term Position |
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|
|
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|
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|
|
|
|
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|
||||||
|
Counterparties with offsetting positions or collateral |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||
|
Counterparties without offsetting positions - |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
||
|
Counterparties without offsetting positions - |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
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|
|
|
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|
( |
) |
|
|
( |
) |
|
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( |
) |
||
Total Derivatives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Counterparties with offsetting positions or collateral |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|||
|
Counterparties without offsetting positions - assets |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
||
|
Counterparties without offsetting positions - liabilities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
19
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 agreements (“ISDAs”), which govern the key terms with our counterparties. Our ISDAs 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, 2024, we have outstanding net derivative positions that contain credit-risk related contingent features that are in a net liability position of $
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 liability of $
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 |
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Hedging Relationships |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Commodity contracts |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|
Gain (Loss) Reclassified from OCI into |
|
|||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
Location of Gain (Loss) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
Based on valuations as of June 30, 2024, we expect to reclassify commodity hedge-related deferred gains of $
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.
|
|
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 |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Commodity contracts |
|
Revenue |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
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.
20
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 instruments 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 instruments we hold.
The fair values of our derivative instruments are sensitive to changes in forward pricing on natural gas, NGLs and crude oil. The derivatives at June 30, 2024, represent a net liability position of $
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:
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:
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, 2024 |
|
|||||||||||||||||
|
|
Carrying |
|
|
Fair Value |
|
||||||||||||||
|
|
Value |
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||||
Financial Instruments Recorded on Our |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
from commodity derivative contracts (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
from commodity derivative contracts (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial Instruments Recorded on Our |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
TRGP Revolver and Commercial Paper Program |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
TRGP Senior unsecured notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partnership’s Senior unsecured notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Securitization Facility |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
December 31, 2023 |
|
|||||||||||||||||
|
|
Carrying |
|
|
Fair Value |
|
||||||||||||||
|
|
Value |
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||||
Financial Instruments Recorded on Our |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Assets from commodity derivative contracts (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Liabilities from commodity derivative contracts (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Financial Instruments Recorded on Our |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
TRGP Revolver and Commercial Paper Program |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
TRGP Senior unsecured notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Term Loan Facility |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partnership’s Senior unsecured notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Securitization Facility |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 commodity forward curve. For these derivatives, the primary input to the valuation model was the commodity forward 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 the forward natural gas liquids pricing curves, for which a significant portion of the derivative’s term is beyond available forward pricing. As of June 30, 2024 and December 31, 2023, we had
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 (the “EPA”), 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
22
On
The cumulative interest on the award of $
On July 24, 2023, we received a Notice of Violation (“NOV”) from the New Mexico Environment Department, Air Quality Bureau, relating to alleged air permit violations between August 1, 2021 and June 30, 2022 by Lucid Energy Delaware, LLC, an entity we subsequently acquired in July 2022 in the Delaware Basin Acquisition and whose assets are now integrated into Targa Northern Delaware LLC, a wholly-owned subsidiary of the Company. We have been engaging with the New Mexico Environment Department to resolve this matter. Although this matter is ongoing and management cannot predict its ultimate outcome, we do not expect that any expenditures related to this matter will be material to our consolidated financial statements.
On
On April 3, 2024, the EPA issued an NOV for alleged violations of the Clean Air Act at certain Targa Badlands LLC compressor stations. The NOV stems from inspections the EPA conducted on June 15, 2023, and from subsequent records reviews. We have engaged with the EPA to resolve this matter. Although the matter is on-going and we cannot predict its ultimate outcome, we do not expect that any expenditures related to this matter will be material to our consolidated financial statements.
We are also a defendant in two other breach of contract cases related to force majeure events arising during the major winter storm in February 2021. We believe that the likelihood of a partial loss could be reasonably possible, and, while it is not possible to predict the ultimate outcome of these cases on an individual or consolidated basis, we estimate that the total range of potential loss resulting from all of these cases could be between $
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
|
|
|
|
|
|
|
and after |
|
|||||
Fixed consideration to be recognized as of June 30, 2024 |
|
|
$ |
|
|
$ |
|
|
$ |
|
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.
23
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, 2024 is lower than the U.S. corporate statutory rate of
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, 2024 and December 31, 2023, our valuation allowance was $
We are subject to tax in the U.S. and various state jurisdictions and we are subject to periodic audits and reviews by taxing authorities. As of June 30, 2024, Internal Revenue Service (“IRS”) examinations are currently in process for the 2019, 2020, 2021 and 2022 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 do not expect there to be any audit adjustments that would materially change our taxable income.
Note 15 — Supplemental Cash Flow Information
|
Six Months Ended June 30, |
|
|||||||
|
2024 |
|
|
2023 |
|
||||
Cash: |
|
|
|
|
|
|
|
||
Interest paid, net of capitalized interest (1) |
$ |
|
|
|
$ |
|
|
||
Income taxes (received) paid, net |
|
|
|
|
|
|
|
||
Non-cash investing activities: |
|
|
|
|
|
|
|
||
Impact of capital expenditure accruals on property, plant and equipment, net |
$ |
|
|
|
$ |
|
|
||
Non-cash financing activities: |
|
|
|
|
|
|
|
||
Changes in accrued distributions to noncontrolling interests |
$ |
|
( |
) |
|
$ |
|
|
Note 16 — Segment Information
We operate in
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.
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 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.
24
Reportable segment information is shown in the following tables:
|
|
Three Months Ended June 30, 2024 |
|
|||||||||||||||||
|
|
Gathering and Processing |
|
|
Logistics and Transportation |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|||
Fees from midstream services |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|||
Intersegment revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Fees from midstream services |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Operating margin (1) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
||||
Other financial information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Goodwill |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
|
Three Months Ended June 30, 2023 |
|
|||||||||||||||||
|
|
Gathering and Processing |
|
|
Logistics and Transportation |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Fees from midstream services |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Intersegment revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Fees from midstream services |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Operating margin (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|||||
Other financial information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Goodwill |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
|
Six Months Ended June 30, 2024 |
|
|||||||||||||||||
|
|
Gathering and Processing |
|
|
Logistics and Transportation |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
Fees from midstream services |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
Intersegment revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Fees from midstream services |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Operating margin (1) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
||||
Other financial information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Goodwill |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
25
|
|
Six Months Ended June 30, 2023 |
|
|||||||||||||||||
|
|
Gathering and Processing |
|
|
Logistics and Transportation |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Fees from midstream services |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Intersegment revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sales of commodities |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Fees from midstream services |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
||
Revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Operating margin (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|
|||||
Other financial information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Goodwill |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
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, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Sales of commodities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue recognized from contracts with customers: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Natural gas |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
NGL |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Condensate and crude oil |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-customer revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative activities - Hedge |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative activities - Non-hedge (1) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total sales of commodities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fees from midstream services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue recognized from contracts with customers: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering and processing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NGL transportation, fractionation and services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Storage, terminaling and export |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total fees from midstream services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
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, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Reconciliation of reportable segment operating |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering and Processing operating margin |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Logistics and Transportation operating margin |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating margin |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Depreciation and amortization expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
General and administrative expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other operating income (expense) |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Equity earnings (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain (loss) from financing activities |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Other, net |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Income (loss) before income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
26
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, 2023 (“Annual Report”), as well as the unaudited consolidated financial statements and notes hereto included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (“Quarterly Report”).
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:
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.
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
27
Permian Delaware Processing Expansions
Fractionation Expansion
NGL Pipeline Expansion
Joint Venture
On July 31, 2024, we entered into an agreement with the WPC Joint Venture (“WPC”) to move forward with the Blackcomb Pipeline (“Blackcomb”). Blackcomb is designed to transport up to 2.5 Bcf/d of natural gas through approximately 365 miles of 42-inch pipeline from the Permian Basin in West Texas to the Agua Dulce area in South Texas, and is expected to be in service in the second half of 2026, pending the receipt of customary regulatory and other approvals. Blackcomb is a joint venture owned 70.0% by WPC, 17.5% by Targa, and 12.5% by MPLX LP. WPC is a joint venture owned 50.6% by WhiteWater, 30.4% by MPLX LP, and 19.0% by Enbridge Inc.
Capital Allocation
In April 2024, we declared an increase to our common dividend to $0.75 per common share, or $3.00 per common share annualized effective for the first quarter of 2024.
In May 2023, our Board of Directors approved a $1.0 billion common share repurchase program (the “2023 Share Repurchase Program”). In July 2024, our Board of Directors approved a new $1.0 billion common share repurchase program (the “2024 Share Repurchase Program” and, together with the 2023 Share Repurchase Program, the “Share Repurchase Programs”). The amount authorized under the 2024 Share Repurchase Program is in addition to the amount remaining under the 2023 Share Repurchase Program. We are not obligated to repurchase any specific dollar amount or number of shares under the Share Repurchase Programs and may discontinue these programs at any time.
28
For the three and six months ended June 30, 2024, we repurchased 2,985,816 shares and 4,172,260 shares of our common stock at a weighted average per share price of $118.91 and $114.75 for a total net cost of $355.1 million and $478.8 million, respectively. As of June 30, 2024, there was $291.3 million remaining under the 2023 Share Repurchase Program.
Financing Activities
On May 21, 2024, we repaid all $500.0 million outstanding under the $1.5 billion unsecured term loan facility due July 2025 (the “Term Loan Facility”) and subsequently the Term Loan Facility was terminated. As a result of the repayment, we recorded a loss due to debt extinguishment of $0.8 million.
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, 2024, Internal Revenue Service (the “IRS”) examinations are currently in process for the 2019, 2020, 2021 and 2022 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 do not expect there to be any audit adjustments that would materially change our taxable income.
Federal statutes of limitations for returns filed in 2020 (for calendar year 2019) have expired, except for the 2019 returns under examination that have a statute extension to April 2025. The statute of limitations expired on substantially all 2019 state income tax returns that were filed prior to October 15, 2020. For Texas, the statute of limitations has expired for 2019 returns (for calendar year 2018). However, tax authorities could review and adjust carryover attributes (e.g., net operating losses) generated in a closed tax year if utilized in an open tax year.
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, 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, adjusted cash flow from operations, adjusted free cash flow and adjusted operating margin (segment).
29
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 inflation, 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, adjusted cash flow from operations, 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 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.
30
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:
Logistics and Transportation adjusted operating margin consists primarily of:
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:
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.
Adjusted Cash Flow from Operations and Adjusted Free Cash Flow
We define adjusted cash flow from operations as adjusted EBITDA less cash interest expense on debt obligations and cash tax (expense) benefit. We define adjusted free cash flow as adjusted cash flow from operations less maintenance capital expenditures (net of any reimbursements of project costs) and growth capital expenditures, net of contributions from noncontrolling interest and contributions to investments in unconsolidated affiliates. Adjusted cash flow from operations and adjusted free cash flow are performance measures used by us and by external users of our financial statements, such as investors, commercial banks and research analysts, to assess our ability to generate cash earnings (after servicing our debt and funding capital expenditures) to be used for corporate purposes, such as payment of dividends, retirement of debt or redemption of other financing arrangements.
31
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, |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
(In millions) |
|
|||||||||||||
Reconciliation of Net income (loss) attributable to Targa Resources Corp. to Adjusted EBITDA, Adjusted Cash Flow from Operations and Adjusted Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to Targa Resources Corp. |
$ |
298.5 |
|
|
$ |
329.3 |
|
|
$ |
573.7 |
|
|
$ |
826.3 |
|
Interest (income) expense, net |
|
176.0 |
|
|
|
166.6 |
|
|
|
404.6 |
|
|
|
334.7 |
|
Income tax expense (benefit) |
|
94.3 |
|
|
|
96.4 |
|
|
|
177.1 |
|
|
|
206.7 |
|
Depreciation and amortization expense |
|
348.6 |
|
|
|
332.1 |
|
|
|
689.1 |
|
|
|
656.9 |
|
(Gain) loss on sale or disposition of assets |
|
(0.6 |
) |
|
|
(1.7 |
) |
|
|
(1.6 |
) |
|
|
(3.2 |
) |
Write-down of assets |
|
0.3 |
|
|
|
1.7 |
|
|
|
1.2 |
|
|
|
2.6 |
|
(Gain) loss from financing activities |
|
0.8 |
|
|
|
— |
|
|
|
0.8 |
|
|
|
— |
|
Equity (earnings) loss |
|
(2.9 |
) |
|
|
(3.4 |
) |
|
|
(5.6 |
) |
|
|
(3.2 |
) |
Distributions from unconsolidated affiliates |
|
5.9 |
|
|
|
6.2 |
|
|
|
12.2 |
|
|
|
8.8 |
|
Compensation on equity grants |
|
15.1 |
|
|
|
15.0 |
|
|
|
29.7 |
|
|
|
30.0 |
|
Risk management activities |
|
46.6 |
|
|
|
(151.9 |
) |
|
|
68.8 |
|
|
|
(327.7 |
) |
Noncontrolling interests adjustments (1) |
|
1.7 |
|
|
|
(1.2 |
) |
|
|
0.8 |
|
|
|
(2.2 |
) |
Adjusted EBITDA |
$ |
984.3 |
|
|
$ |
789.1 |
|
|
$ |
1,950.8 |
|
|
$ |
1,729.7 |
|
Interest expense on debt obligations (2) |
|
(172.4 |
) |
|
|
(163.6 |
) |
|
|
(397.3 |
) |
|
|
(328.8 |
) |
Cash taxes |
|
(3.4 |
) |
|
|
(3.5 |
) |
|
|
(6.3 |
) |
|
|
(7.7 |
) |
Adjusted Cash Flow from Operations |
$ |
808.5 |
|
|
$ |
622.0 |
|
|
$ |
1,547.2 |
|
|
$ |
1,393.2 |
|
Maintenance capital expenditures, net (3) |
|
(52.8 |
) |
|
|
(46.2 |
) |
|
|
(102.7 |
) |
|
|
(88.0 |
) |
Growth capital expenditures, net (3) |
|
(798.7 |
) |
|
|
(579.5 |
) |
|
|
(1,484.5 |
) |
|
|
(994.9 |
) |
Adjusted Free Cash Flow |
$ |
(43.0 |
) |
|
$ |
(3.7 |
) |
|
$ |
(40.0 |
) |
|
$ |
310.3 |
|
Consolidated Results of Operations
The following table and discussion is a summary of our consolidated results of operations:
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
|||||||||||||
|
(In millions) |
|
||||||||||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sales of commodities |
$ |
2,991.1 |
|
|
$ |
2,914.6 |
|
|
$ |
76.5 |
|
|
|
3 |
% |
|
$ |
6,944.4 |
|
|
$ |
6,939.7 |
|
|
$ |
4.7 |
|
|
— |
|
Fees from midstream services |
|
570.9 |
|
|
|
489.1 |
|
|
|
81.8 |
|
|
|
17 |
% |
|
|
1,180.0 |
|
|
|
984.5 |
|
|
|
195.5 |
|
|
20 |
% |
Total revenues |
|
3,562.0 |
|
|
|
3,403.7 |
|
|
|
158.3 |
|
|
|
5 |
% |
|
|
8,124.4 |
|
|
|
7,924.2 |
|
|
|
200.2 |
|
|
3 |
% |
Product purchases and fuel |
|
2,197.4 |
|
|
|
2,068.9 |
|
|
|
128.5 |
|
|
|
6 |
% |
|
|
5,415.4 |
|
|
|
5,088.0 |
|
|
|
327.4 |
|
|
6 |
% |
Operating expenses |
|
290.7 |
|
|
|
272.6 |
|
|
|
18.1 |
|
|
|
7 |
% |
|
|
568.7 |
|
|
|
530.7 |
|
|
|
38.0 |
|
|
7 |
% |
Depreciation and amortization expense |
|
348.6 |
|
|
|
332.1 |
|
|
|
16.5 |
|
|
|
5 |
% |
|
|
689.1 |
|
|
|
656.9 |
|
|
|
32.2 |
|
|
5 |
% |
General and administrative expense |
|
98.3 |
|
|
|
81.0 |
|
|
|
17.3 |
|
|
|
21 |
% |
|
|
184.8 |
|
|
|
163.4 |
|
|
|
21.4 |
|
|
13 |
% |
Other operating (income) expense |
|
(0.2 |
) |
|
|
— |
|
|
|
(0.2 |
) |
|
|
(100 |
%) |
|
|
(0.3 |
) |
|
|
(0.6 |
) |
|
|
0.3 |
|
|
50 |
% |
Income (loss) from operations |
|
627.2 |
|
|
|
649.1 |
|
|
|
(21.9 |
) |
|
|
(3 |
%) |
|
|
1,266.7 |
|
|
|
1,485.8 |
|
|
|
(219.1 |
) |
|
(15 |
%) |
Interest expense, net |
|
(176.0 |
) |
|
|
(166.6 |
) |
|
|
(9.4 |
) |
|
|
6 |
% |
|
|
(404.6 |
) |
|
|
(334.7 |
) |
|
|
(69.9 |
) |
|
21 |
% |
Equity earnings (loss) |
|
2.9 |
|
|
|
3.4 |
|
|
|
(0.5 |
) |
|
|
(15 |
%) |
|
|
5.6 |
|
|
|
3.2 |
|
|
|
2.4 |
|
|
75 |
% |
Gain (loss) from financing activities |
|
(0.8 |
) |
|
|
— |
|
|
|
(0.8 |
) |
|
|
100 |
% |
|
|
(0.8 |
) |
|
|
— |
|
|
|
(0.8 |
) |
|
100 |
% |
Other, net |
|
(0.1 |
) |
|
|
(2.0 |
) |
|
|
1.9 |
|
|
|
95 |
% |
|
|
1.8 |
|
|
|
(4.9 |
) |
|
|
6.7 |
|
|
137 |
% |
Income tax (expense) benefit |
|
(94.3 |
) |
|
|
(96.4 |
) |
|
|
2.1 |
|
|
|
2 |
% |
|
|
(177.1 |
) |
|
|
(206.7 |
) |
|
|
29.6 |
|
|
14 |
% |
Net income (loss) |
|
358.9 |
|
|
|
387.5 |
|
|
|
(28.6 |
) |
|
|
(7 |
%) |
|
|
691.6 |
|
|
|
942.7 |
|
|
|
(251.1 |
) |
|
(27 |
%) |
Less: Net income (loss) attributable to noncontrolling interests |
|
60.4 |
|
|
|
58.2 |
|
|
|
2.2 |
|
|
|
4 |
% |
|
|
117.9 |
|
|
|
116.4 |
|
|
|
1.5 |
|
|
1 |
% |
Net income (loss) attributable to Targa Resources Corp. |
|
298.5 |
|
|
|
329.3 |
|
|
|
(30.8 |
) |
|
|
(9 |
%) |
|
|
573.7 |
|
|
|
826.3 |
|
|
|
(252.6 |
) |
|
(31 |
%) |
Premium on repurchase of noncontrolling interests, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
490.7 |
|
|
|
(490.7 |
) |
|
(100 |
%) |
Net income (loss) attributable to common shareholders |
$ |
298.5 |
|
|
$ |
329.3 |
|
|
$ |
(30.8 |
) |
|
|
(9 |
%) |
|
$ |
573.7 |
|
|
$ |
335.6 |
|
|
$ |
238.1 |
|
|
71 |
% |
Financial data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA (1) |
$ |
984.3 |
|
|
$ |
789.1 |
|
|
$ |
195.2 |
|
|
|
25 |
% |
|
$ |
1,950.8 |
|
|
$ |
1,729.7 |
|
|
$ |
221.1 |
|
|
13 |
% |
Adjusted cash flow from operations (1) |
|
808.5 |
|
|
|
622.0 |
|
|
|
186.5 |
|
|
|
30 |
% |
|
|
1,547.2 |
|
|
|
1,393.2 |
|
|
|
154.0 |
|
|
11 |
% |
Adjusted free cash flow (1) |
|
(43.0 |
) |
|
|
(3.7 |
) |
|
|
(39.3 |
) |
|
NM |
|
|
|
(40.0 |
) |
|
|
310.3 |
|
|
|
(350.3 |
) |
|
(113 |
%) |
32
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, 2024 Compared to Three Months Ended June 30, 2023
The increase in commodity sales reflects higher NGL prices ($357.7 million) and higher NGL, natural gas and condensate volumes ($272.7 million), partially offset by lower natural gas and condensate prices ($302.5 million) and the unfavorable impact of hedges ($251.6 million).
The increase in fees from midstream services is primarily due to higher gas gathering and processing fees, and higher export volumes, partially offset by lower transportation and fractionation fees.
The increase in product purchases and fuel reflects higher NGL prices and higher NGL, natural gas and condensate volumes, partially offset by lower natural gas and condensate prices.
The increase in operating expenses is primarily due to higher labor and rental costs as a result of increased activity and system expansions.
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 impact of system expansions on our asset base, partially offset by the shortening of depreciable lives of certain assets that were idled in the second quarter of 2023 and subsequently shut down in the third quarter of 2023.
The increase in general and administrative expense is primarily due to higher compensation and benefits.
The increase in interest expense, net, is due to higher borrowings, partially offset by an increase in capitalized interest.
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
The increase in commodity sales reflects higher NGL, natural gas and condensate volumes ($985.8 million) and higher NGL prices ($158.0 million), partially offset by lower natural gas prices ($632.3 million) and the unfavorable impact of hedges ($510.0 million).
The increase in fees from midstream services is primarily due to higher gas gathering and processing fees, and higher export volumes.
The increase in product purchases and fuel reflects higher NGL, natural gas and condensate volumes and higher NGL prices, partially offset by lower natural gas prices.
The increase in operating expenses is primarily due to higher labor and rental costs as a result of increased activity and system expansions.
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 impact of system expansions on our asset base, partially offset by the shortening of depreciable lives of certain assets that were idled in the second quarter of 2023 and subsequently shut down in the third quarter of 2023.
The increase in general and administrative expense is primarily due to higher compensation and benefits.
The increase in interest expense, net, is due to recognition of cumulative interest on a 2024 legal ruling associated with the Splitter Agreement and higher borrowings, partially offset by an increase in capitalized interest. See Note 12 – Contingencies for additional information related to the legal ruling.
The decrease in income tax expense is primarily due to a decrease in pre-tax book income, partially offset by the release of valuation allowance in 2023.
The premium on repurchase of noncontrolling interests, net of tax is due to the acquisition of Blackstone Energy Partners’ 25% interest in the Grand Prix Joint Venture in 2023 (the “Grand Prix Transaction”).
33
Results of Operations—By Reportable Segment
Our operating margins by reportable segment are:
|
|
Gathering and Processing |
|
|
Logistics and Transportation |
|
|
Other |
|
|||
|
|
(In millions) |
|
|||||||||
Three Months Ended: |
|
|
|
|
|
|
|
|
|
|||
June 30, 2024 |
|
$ |
572.6 |
|
|
$ |
547.7 |
|
|
$ |
(46.6 |
) |
June 30, 2023 |
|
|
502.5 |
|
|
|
408.0 |
|
|
|
151.9 |
|
|
|
|
|
|
|
|
|
|
|
|||
Six Months Ended: |
|
|
|
|
|
|
|
|
|
|||
June 30, 2024 |
|
$ |
1,128.9 |
|
|
$ |
1,079.8 |
|
|
$ |
(68.7 |
) |
June 30, 2023 |
|
|
1,040.9 |
|
|
|
937.1 |
|
|
|
327.7 |
|
34
Gathering and Processing Segment
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
|
||||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
||||||||||||||||||||
|
|
(In millions, except operating statistics and price amounts) |
|
||||||||||||||||||||||||||||||||||
Operating margin |
$ |
|
572.6 |
|
|
$ |
|
502.5 |
|
|
$ |
|
70.1 |
|
|
|
14 |
% |
|
$ |
|
1,128.9 |
|
|
$ |
|
1,040.9 |
|
|
$ |
|
88.0 |
|
|
|
8 |
% |
Operating expenses |
|
|
205.7 |
|
|
|
|
189.8 |
|
|
|
|
15.9 |
|
|
|
8 |
% |
|
|
|
393.7 |
|
|
|
|
371.2 |
|
|
|
|
22.5 |
|
|
|
6 |
% |
Adjusted operating margin |
$ |
|
778.3 |
|
|
$ |
|
692.3 |
|
|
$ |
|
86.0 |
|
|
|
12 |
% |
|
$ |
|
1,522.6 |
|
|
$ |
|
1,412.1 |
|
|
$ |
|
110.5 |
|
|
|
8 |
% |
Operating statistics (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Plant natural gas inlet, MMcf/d (2) (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Permian Midland (4) |
|
|
2,866.4 |
|
|
|
|
2,504.3 |
|
|
|
|
362.1 |
|
|
|
14 |
% |
|
|
|
2,806.3 |
|
|
|
|
2,426.9 |
|
|
|
|
379.4 |
|
|
|
16 |
% |
Permian Delaware |
|
|
2,805.1 |
|
|
|
|
2,560.8 |
|
|
|
|
244.3 |
|
|
|
10 |
% |
|
|
|
2,727.0 |
|
|
|
|
2,528.1 |
|
|
|
|
198.9 |
|
|
|
8 |
% |
Total Permian |
|
|
5,671.5 |
|
|
|
|
5,065.1 |
|
|
|
|
606.4 |
|
|
|
12 |
% |
|
|
|
5,533.3 |
|
|
|
|
4,955.0 |
|
|
|
|
578.3 |
|
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SouthTX (5) |
|
|
339.4 |
|
|
|
|
371.0 |
|
|
|
|
(31.6 |
) |
|
|
(9 |
%) |
|
|
|
322.2 |
|
|
|
|
363.5 |
|
|
|
|
(41.3 |
) |
|
|
(11 |
%) |
North Texas |
|
|
191.8 |
|
|
|
|
208.0 |
|
|
|
|
(16.2 |
) |
|
|
(8 |
%) |
|
|
|
188.1 |
|
|
|
|
201.8 |
|
|
|
|
(13.7 |
) |
|
|
(7 |
%) |
SouthOK (5) |
|
|
361.5 |
|
|
|
|
395.0 |
|
|
|
|
(33.5 |
) |
|
|
(8 |
%) |
|
|
|
359.3 |
|
|
|
|
389.5 |
|
|
|
|
(30.2 |
) |
|
|
(8 |
%) |
WestOK |
|
|
215.1 |
|
|
|
|
211.0 |
|
|
|
|
4.1 |
|
|
|
2 |
% |
|
|
|
212.6 |
|
|
|
|
207.6 |
|
|
|
|
5.0 |
|
|
|
2 |
% |
Total Central |
|
|
1,107.8 |
|
|
|
|
1,185.0 |
|
|
|
|
(77.2 |
) |
|
|
(7 |
%) |
|
|
|
1,082.2 |
|
|
|
|
1,162.4 |
|
|
|
|
(80.2 |
) |
|
|
(7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Badlands (5) (6) |
|
|
143.9 |
|
|
|
|
128.9 |
|
|
|
|
15.0 |
|
|
|
12 |
% |
|
|
|
135.5 |
|
|
|
|
130.3 |
|
|
|
|
5.2 |
|
|
|
4 |
% |
Total Field |
|
|
6,923.2 |
|
|
|
|
6,379.0 |
|
|
|
|
544.2 |
|
|
|
9 |
% |
|
|
|
6,751.0 |
|
|
|
|
6,247.7 |
|
|
|
|
503.3 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Coastal |
|
|
467.0 |
|
|
|
|
552.1 |
|
|
|
|
(85.1 |
) |
|
|
(15 |
%) |
|
|
|
495.8 |
|
|
|
|
530.7 |
|
|
|
|
(34.9 |
) |
|
|
(7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
|
7,390.2 |
|
|
|
|
6,931.1 |
|
|
|
|
459.1 |
|
|
|
7 |
% |
|
|
|
7,246.8 |
|
|
|
|
6,778.4 |
|
|
|
|
468.4 |
|
|
|
7 |
% |
NGL production, MBbl/d (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Permian Midland (4) |
|
|
424.1 |
|
|
|
|
363.6 |
|
|
|
|
60.5 |
|
|
|
17 |
% |
|
|
|
408.4 |
|
|
|
|
349.4 |
|
|
|
|
59.0 |
|
|
|
17 |
% |
Permian Delaware |
|
|
364.5 |
|
|
|
|
332.5 |
|
|
|
|
32.0 |
|
|
|
10 |
% |
|
|
|
335.7 |
|
|
|
|
326.7 |
|
|
|
|
9.0 |
|
|
|
3 |
% |
Total Permian |
|
|
788.6 |
|
|
|
|
696.1 |
|
|
|
|
92.5 |
|
|
|
13 |
% |
|
|
|
744.1 |
|
|
|
|
676.1 |
|
|
|
|
68.0 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
SouthTX (5) |
|
|
42.2 |
|
|
|
|
45.6 |
|
|
|
|
(3.4 |
) |
|
|
(7 |
%) |
|
|
|
35.6 |
|
|
|
|
42.0 |
|
|
|
|
(6.4 |
) |
|
|
(15 |
%) |
North Texas |
|
|
23.5 |
|
|
|
|
24.3 |
|
|
|
|
(0.8 |
) |
|
|
(3 |
%) |
|
|
|
22.7 |
|
|
|
|
23.7 |
|
|
|
|
(1.0 |
) |
|
|
(4 |
%) |
SouthOK (5) |
|
|
43.5 |
|
|
|
|
47.3 |
|
|
|
|
(3.8 |
) |
|
|
(8 |
%) |
|
|
|
35.8 |
|
|
|
|
43.1 |
|
|
|
|
(7.3 |
) |
|
|
(17 |
%) |
WestOK |
|
|
15.5 |
|
|
|
|
12.5 |
|
|
|
|
3.0 |
|
|
|
24 |
% |
|
|
|
13.6 |
|
|
|
|
12.8 |
|
|
|
|
0.8 |
|
|
|
6 |
% |
Total Central |
|
|
124.7 |
|
|
|
|
129.7 |
|
|
|
|
(5.0 |
) |
|
|
(4 |
%) |
|
|
|
107.7 |
|
|
|
|
121.6 |
|
|
|
|
(13.9 |
) |
|
|
(11 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Badlands (5) |
|
|
18.0 |
|
|
|
|
15.6 |
|
|
|
|
2.4 |
|
|
|
15 |
% |
|
|
|
16.3 |
|
|
|
|
15.5 |
|
|
|
|
0.8 |
|
|
|
5 |
% |
Total Field |
|
|
931.3 |
|
|
|
|
841.4 |
|
|
|
|
89.9 |
|
|
|
11 |
% |
|
|
|
868.1 |
|
|
|
|
813.2 |
|
|
|
|
54.9 |
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Coastal |
|
|
34.4 |
|
|
|
|
36.8 |
|
|
|
|
(2.4 |
) |
|
|
(7 |
%) |
|
|
|
36.7 |
|
|
|
|
36.5 |
|
|
|
|
0.2 |
|
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
|
965.7 |
|
|
|
|
878.2 |
|
|
|
|
87.5 |
|
|
|
10 |
% |
|
|
|
904.8 |
|
|
|
|
849.7 |
|
|
|
|
55.1 |
|
|
|
6 |
% |
Crude oil, Badlands, MBbl/d |
|
|
99.1 |
|
|
|
|
104.7 |
|
|
|
|
(5.6 |
) |
|
|
(5 |
%) |
|
|
|
96.8 |
|
|
|
|
107.7 |
|
|
|
|
(10.9 |
) |
|
|
(10 |
%) |
Crude oil, Permian, MBbl/d |
|
|
27.9 |
|
|
|
|
29.4 |
|
|
|
|
(1.5 |
) |
|
|
(5 |
%) |
|
|
|
27.7 |
|
|
|
|
27.5 |
|
|
|
|
0.2 |
|
|
|
1 |
% |
Natural gas sales, BBtu/d (3) |
|
|
2,876.8 |
|
|
|
|
2,672.6 |
|
|
|
|
204.2 |
|
|
|
8 |
% |
|
|
|
2,763.7 |
|
|
|
|
2,622.8 |
|
|
|
|
140.9 |
|
|
|
5 |
% |
NGL sales, MBbl/d (3) |
|
|
569.7 |
|
|
|
|
493.8 |
|
|
|
|
75.9 |
|
|
|
15 |
% |
|
|
|
534.3 |
|
|
|
|
476.6 |
|
|
|
|
57.7 |
|
|
|
12 |
% |
Condensate sales, MBbl/d |
|
|
21.2 |
|
|
|
|
19.4 |
|
|
|
|
1.8 |
|
|
|
9 |
% |
|
|
|
20.1 |
|
|
|
|
19.6 |
|
|
|
|
0.5 |
|
|
|
3 |
% |
Average realized prices (7): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Natural gas, $/MMBtu |
|
|
0.10 |
|
|
|
|
1.29 |
|
|
|
|
(1.19 |
) |
|
|
(92 |
%) |
|
|
|
0.77 |
|
|
|
|
1.94 |
|
|
|
|
(1.17 |
) |
|
|
(60 |
%) |
NGL, $/gal |
|
|
0.44 |
|
|
|
|
0.41 |
|
|
|
|
0.03 |
|
|
|
7 |
% |
|
|
|
0.46 |
|
|
|
|
0.47 |
|
|
|
|
(0.01 |
) |
|
|
(2 |
%) |
Condensate, $/Bbl |
|
|
72.83 |
|
|
|
|
85.79 |
|
|
|
|
(12.96 |
) |
|
|
(15 |
%) |
|
|
|
74.91 |
|
|
|
|
76.02 |
|
|
|
|
(1.11 |
) |
|
|
(1 |
%) |
35
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, 2024 |
|
|
Three Months Ended June 30, 2023 |
|
||||||||||||||||||
|
|
(In millions, except volumetric data and price amounts) |
|
|||||||||||||||||||||
|
|
Volume |
|
|
Price |
|
|
Gain |
|
|
Volume |
|
|
Price |
|
|
Gain |
|
||||||
Natural gas (BBtu) |
|
|
10.5 |
|
|
$ |
2.58 |
|
|
$ |
27.1 |
|
|
|
15.3 |
|
|
$ |
1.73 |
|
|
$ |
26.4 |
|
NGL (MMgal) |
|
|
112.0 |
|
|
|
0.05 |
|
|
|
5.1 |
|
|
|
164.9 |
|
|
|
0.11 |
|
|
|
17.7 |
|
Crude oil (MBbl) |
|
|
0.4 |
|
|
|
(11.25 |
) |
|
|
(4.5 |
) |
|
|
0.6 |
|
|
|
(3.67 |
) |
|
|
(2.2 |
) |
|
|
|
|
|
|
|
|
$ |
27.7 |
|
|
|
|
|
|
|
|
$ |
41.9 |
|
|
|
Six Months Ended June 30, 2024 |
|
|
Six Months Ended June 30, 2023 |
|
||||||||||||||||||
|
|
(In millions, except volumetric data and price amounts) |
|
|||||||||||||||||||||
|
|
Volume |
|
|
Price |
|
|
Gain |
|
|
Volume |
|
|
Price |
|
|
Gain |
|
||||||
Natural gas (BBtu) |
|
|
26.2 |
|
|
$ |
1.73 |
|
|
$ |
45.4 |
|
|
|
35.0 |
|
|
$ |
1.51 |
|
|
$ |
52.9 |
|
NGL (MMgal) |
|
|
246.1 |
|
|
|
0.03 |
|
|
|
6.8 |
|
|
|
349.0 |
|
|
|
0.08 |
|
|
|
27.2 |
|
Crude oil (MBbl) |
|
|
0.9 |
|
|
|
(8.22 |
) |
|
|
(7.4 |
) |
|
|
1.2 |
|
|
|
(4.17 |
) |
|
|
(5.0 |
) |
|
|
|
|
|
|
|
|
$ |
44.8 |
|
|
|
|
|
|
|
|
$ |
75.1 |
|
Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023
The increase in adjusted operating margin was due to higher natural gas inlet volumes and higher fees in the Permian, partially offset by lower natural gas and condensate prices. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Midway plant during the second quarter of 2023, the Greenwood and Wildcat II plants during the fourth quarter of 2023, the Roadrunner II plant during the second quarter of 2024, and continued strong producer activity.
The increase in operating expenses was primarily due to higher volumes in the Permian and the addition of the Midway, Greenwood, Wildcat II and Roadrunner II plants.
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
The increase in adjusted operating margin was due to higher natural gas inlet volumes and higher fees in the Permian, partially offset by lower commodity prices. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Legacy II plant during the first quarter of 2023, the Midway plant during the second quarter of 2023, the Greenwood and Wildcat II plants during the fourth quarter of 2023, the Roadrunner II plant during the second quarter of 2024, and continued strong producer activity.
The increase in operating expenses was primarily due to higher volumes in the Permian and the addition of the Legacy II, Midway, Greenwood, Wildcat II and Roadrunner II plants.
Logistics and Transportation Segment
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
|
||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
||||||||||||||||||
|
(In millions, except operating statistics) |
||||||||||||||||||||||||||||||||
Operating margin |
$ |
|
547.7 |
|
|
$ |
|
408.0 |
|
|
$ |
|
139.7 |
|
|
34% |
|
$ |
|
1,079.8 |
|
|
$ |
|
937.1 |
|
|
$ |
|
142.7 |
|
|
15% |
Operating expenses |
|
|
85.4 |
|
|
|
|
82.5 |
|
|
|
|
2.9 |
|
|
4% |
|
|
|
175.4 |
|
|
|
|
159.0 |
|
|
|
|
16.4 |
|
|
10% |
Adjusted operating margin |
$ |
|
633.1 |
|
|
$ |
|
490.5 |
|
|
$ |
|
142.6 |
|
|
29% |
|
$ |
|
1,255.2 |
|
|
$ |
|
1,096.1 |
|
|
$ |
|
159.1 |
|
|
15% |
Operating statistics MBbl/d (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
NGL pipeline transportation volumes (2) |
|
|
783.5 |
|
|
|
|
620.7 |
|
|
|
|
162.8 |
|
|
26% |
|
|
|
750.6 |
|
|
|
|
579.0 |
|
|
|
|
171.6 |
|
|
30% |
Fractionation volumes |
|
|
902.2 |
|
|
|
|
794.4 |
|
|
|
|
107.8 |
|
|
14% |
|
|
|
849.7 |
|
|
|
|
776.7 |
|
|
|
|
73.0 |
|
|
9% |
Export volumes (3) |
|
|
394.1 |
|
|
|
|
303.2 |
|
|
|
|
90.9 |
|
|
30% |
|
|
|
416.6 |
|
|
|
|
338.1 |
|
|
|
|
78.5 |
|
|
23% |
NGL sales |
|
|
1,018.4 |
|
|
|
|
947.0 |
|
|
|
|
71.4 |
|
|
8% |
|
|
|
1,123.0 |
|
|
|
|
977.1 |
|
|
|
|
145.9 |
|
|
15% |
36
Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023
The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin, higher marketing margin, and higher LPG export margin. Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems and the addition of Train 9 during the second quarter of 2024. Marketing margin increased due to greater optimization opportunities. LPG export margin increased due to higher volumes as we benefited from the completion of our export expansion during the third quarter of 2023 and the Houston Ship Channel allowing night-time vessel transits, partially offset by maintenance and required inspections.
The increase in operating expenses was due to higher system volumes, higher compensation and benefits, and the addition of Train 9, partially offset by lower repairs and maintenance.
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
The increase in adjusted operating margin was due to higher pipeline transportation and fractionation margin and higher LPG export margin, partially offset by lower marketing margin. Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems and the addition of Train 9 during the second quarter of 2024. LPG export margin increased due to higher volumes as we benefited from the completion of our export expansion during the third quarter of 2023 and the Houston Ship Channel allowing night-time vessel transits, partially offset by maintenance and required inspections. Greater seasonal optimization opportunities drove marketing margin higher during the first quarter of 2023.
The increase in operating expenses was due to higher system volumes, higher compensation and benefits, higher repairs and maintenance, and the addition of Train 9.
Other
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
||||||
|
|
(In millions) |
|
|||||||||||||||||||||
Operating margin |
|
$ |
(46.6 |
) |
|
$ |
151.9 |
|
|
$ |
(198.5 |
) |
|
$ |
(68.7 |
) |
|
$ |
327.7 |
|
|
$ |
(396.4 |
) |
Adjusted operating margin |
|
$ |
(46.6 |
) |
|
$ |
151.9 |
|
|
$ |
(198.5 |
) |
|
$ |
(68.7 |
) |
|
$ |
327.7 |
|
|
$ |
(396.4 |
) |
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, 2024, inclusive of our consolidated joint venture accounts, we had $166.4 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 $2.75 billion TRGP senior revolving credit facility (the “TRGP Revolver”), unsecured commercial paper note program (the “Commercial Paper Program”), the Partnership’s accounts receivable securitization facility (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. Our exposure to adverse credit conditions includes our credit facilities, cash investments, hedging abilities, customer performance risks and counterparty performance risks.
37
Short-term Liquidity
Our short-term liquidity on a consolidated basis as of June 30, 2024, was:
|
|
Consolidated Total |
|
|
|
|
(In millions) |
|
|
Cash on hand (1) |
|
$ |
166.4 |
|
Total availability under the Securitization Facility |
|
|
600.0 |
|
Total availability under the TRGP Revolver and Commercial Paper Program |
|
|
2,750.0 |
|
|
|
|
3,516.4 |
|
|
|
|
|
|
Outstanding borrowings under the Securitization Facility |
|
|
(550.0 |
) |
Outstanding borrowings under the TRGP Revolver and Commercial Paper Program |
|
|
(1,303.0 |
) |
Outstanding letters of credit under the TRGP Revolver |
|
|
(26.0 |
) |
Total liquidity |
|
$ |
1,637.4 |
|
Other potential capital resources associated with our existing arrangements include our right to request an additional $500.0 million in commitment increases under the TRGP Revolver, subject to the terms therein. The TRGP Revolver matures on February 17, 2027.
A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements. As of June 30, 2024, we had $26.0 million in letters of credit outstanding under the TRGP Revolver. The letters of credit also reflect certain counterparties’ views of our financial condition and ability to satisfy our performance obligations, as well as commodity prices and other factors.
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, 2024 decreased $457.7 million compared to December 31, 2023. The decrease was primarily due to lower net commodity receivables and payables resulting from lower natural gas prices and lower NGL volumes, higher accounts payable related to capital spending on growth projects, and higher net liabilities for hedging activities.
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 the future, we or the Partnership may redeem, purchase or exchange certain of our and/or 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.
For information about our debt obligations, 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.”
38
Compliance with Debt Covenants
As of June 30, 2024, both we and the Partnership were in compliance with the covenants contained in our various debt agreements.
Cash Flow Analysis
Cash Flows from Operating Activities
Six Months Ended June 30, |
|
|
|
|
||||||
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
|||
(In millions) |
|
|||||||||
$ |
1,780.9 |
|
|
$ |
1,846.6 |
|
|
$ |
(65.7 |
) |
The primary drivers of cash flows from operating activities are: (i) the collection of cash from customers from the sale of NGLs and natural gas, as well as fees for processing, gathering, export, fractionation, terminaling, storage and transportation; (ii) the payment of amounts related to the purchase of NGLs, 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 decrease in net cash provided by operations was primarily due to lower collections from customers and lower settlements for hedge transactions, offset by a decrease in payments for product purchases and fuel.
Cash Flows from Investing Activities
Six Months Ended June 30, |
|
|
|
|
||||||
2024 |
|
|
2023 |
|
|
2024 vs. 2023 |
|
|||
(In millions) |
|
|||||||||
$ |
(1,427.7 |
) |
|
$ |
(1,074.6 |
) |
|
$ |
(353.1 |
) |
The increase in net cash used in investing activities was primarily due to higher outlays for property, plant and equipment in 2024 primarily related to construction activities in the Permian region and Mont Belvieu, Texas.
Cash Flows from Financing Activities
|
Six Months Ended June 30, |
|
|||||
|
2024 |
|
|
2023 |
|
||
|
(In millions) |
|
|||||
Source of Financing Activities, net |
|
|
|
|
|
||
Debt, including financing costs |
$ |
579.8 |
|
|
$ |
801.5 |
|
Repurchase of noncontrolling interests |
|
(1.3 |
) |
|
|
(1,091.9 |
) |
Dividends |
|
(284.2 |
) |
|
|
(199.6 |
) |
Contributions from (distributions to) noncontrolling interests |
|
(107.3 |
) |
|
|
(96.7 |
) |
Repurchase of shares |
|
(515.5 |
) |
|
|
(234.9 |
) |
Net cash provided by (used in) financing activities |
$ |
(328.5 |
) |
|
$ |
(821.6 |
) |
The decrease in net cash used in financing activities was due to lower repurchases of noncontrolling interests primarily due to the Grand Prix Transaction in 2023, partially offset by lower borrowings of debt primarily due to the repayment of all amounts outstanding under the Term Loan Facility in May 2024, higher repurchases of common stock and higher dividends paid in 2024.
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.
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.
39
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, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(In millions) |
|
|||||
ASSETS |
|
|||||||
Current assets |
|
$ |
875.1 |
|
|
$ |
966.3 |
|
Current assets - affiliates |
|
|
1.7 |
|
|
|
11.2 |
|
Long-term assets |
|
|
15,928.9 |
|
|
|
15,267.6 |
|
Total assets |
|
$ |
16,805.7 |
|
|
$ |
16,245.1 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND OWNERS’ EQUITY |
|
|||||||
Current liabilities |
|
$ |
2,275.1 |
|
|
$ |
2,107.9 |
|
Current liabilities - affiliates |
|
|
27.1 |
|
|
|
26.2 |
|
Long-term liabilities |
|
|
14,002.6 |
|
|
|
13,278.8 |
|
Targa Resources Corp. stockholders’ equity |
|
|
500.9 |
|
|
|
832.2 |
|
Total liabilities and owners’ equity |
|
$ |
16,805.7 |
|
|
$ |
16,245.1 |
|
|
|
|
|
|
|
|
||
Summarized Combined Statement of Operations Information |
|
|
|
|
|
|
||
|
|
Six Months Ended |
|
|
Year Ended |
|
||
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
||
|
|
(In millions) |
|
|||||
Revenues |
|
$ |
7,889.4 |
|
|
$ |
15,737.0 |
|
Operating income (loss) |
|
|
960.5 |
|
|
|
2,134.2 |
|
Net income (loss) |
|
|
381.6 |
|
|
|
1,100.1 |
|
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, 2024:
Three Months Ended |
|
Date Paid or |
|
Total Common |
|
|
Amount of Common |
|
|
Dividends on |
|
|
Dividends Declared per Share of Common Stock |
|
||||
(In millions, except per share amounts) |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
June 30, 2024 |
|
August 15, 2024 |
|
$ |
166.1 |
|
|
$ |
164.3 |
|
|
$ |
1.8 |
|
|
$ |
0.75000 |
|
March 31, 2024 |
|
May 15, 2024 |
|
|
168.1 |
|
|
|
166.3 |
|
|
|
1.8 |
|
|
|
0.75000 |
|
December 31, 2023 |
|
February 15, 2024 |
|
|
112.8 |
|
|
|
111.6 |
|
|
|
1.2 |
|
|
|
0.50000 |
|
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.
Capital Expenditures
The following table details cash outlays for capital projects for the six months ended June 30, 2024 and 2023:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(In millions) |
|
|||||
Capital expenditures: |
|
|
|
|
|
|
||
Growth (1) |
|
$ |
1,470.2 |
|
|
$ |
994.7 |
|
Maintenance (2) |
|
|
106.2 |
|
|
|
92.5 |
|
Gross capital expenditures |
|
|
1,576.4 |
|
|
|
1,087.2 |
|
Change in capital project payables and accruals, net |
|
|
(166.3 |
) |
|
|
(13.5 |
) |
Cash outlays for capital projects |
|
$ |
1,410.1 |
|
|
$ |
1,073.7 |
|
40
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, 10 and 11 fractionators in Mont Belvieu, we currently estimate that in 2024 we will invest approximately $2.7 billion in net growth capital expenditures for announced projects. Future growth capital expenditures may vary based on investment opportunities. We expect that 2024 maintenance capital expenditures, net of noncontrolling interests, will be approximately $225 million.
Off-Balance Sheet Arrangements
As of June 30, 2024, there were $100.6 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 risk management counterparties and 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 2028. 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.
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, 2024, we have hedged the commodity price associated with a portion of our expected (i) natural gas, NGL, and condensate equity volumes in our Gathering and Processing operations that result from our percent-of-proceeds processing arrangements, (ii) future commodity purchases and sales in our Logistics and Transportation segment and (iii) natural gas transportation basis risk in our Logistics and Transportation segment. 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
41
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 values of our natural gas and NGL hedges are based on published index prices for delivery at various locations, which closely approximate the actual natural gas and NGL delivery points. A portion of our condensate sales are hedged using crude oil hedges that are based on 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, 2024:
|
Fair Value |
|
|
Result of 10% Price Decrease |
|
|
Result of 10% Price Increase |
|
|||
|
(In millions) |
|
|||||||||
Natural gas |
$ |
(65.6 |
) |
|
$ |
(28.7 |
) |
|
$ |
(102.5 |
) |
NGLs |
|
(18.1 |
) |
|
|
40.3 |
|
|
|
(76.5 |
) |
Crude oil |
|
(13.9 |
) |
|
|
7.0 |
|
|
|
(34.8 |
) |
Total |
$ |
(97.6 |
) |
|
$ |
18.6 |
|
|
$ |
(213.8 |
) |
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 $(56.6) million and $195.0 million during the three months ended June 30, 2024 and 2023, respectively, and $(91.7) million and $418.2 million during the six months ended June 30, 2024 and 2023, respectively, as a result of transactions accounted for as derivatives. The estimated fair value of our risk management position has moved from a net asset position of $74.4 million at December 31, 2023 to a net liability position of $97.6 million at June 30, 2024. Forward commodity prices have increased relative to the fixed prices on our derivative contracts creating the net liability position.
42
Interest Rate Risk
We are exposed to the risk of changes in interest rates, primarily as a result of variable rate borrowings under the TRGP Revolver, the Commercial Paper Program and the Securitization Facility. As of June 30, 2024, 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 and the Securitization Facility will also increase. As of June 30, 2024, we had $1.9 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 $18.5 million based on our June 30, 2024 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 $12.8 million as of June 30, 2024. The range of losses attributable to our individual counterparties as of June 30, 2024 would be between $0.4 million and $3.4 million, depending on the counterparty in default.
For more information about our hedging activities, see Note 10 – Derivative Instruments and Hedging Activities and Note 11 – Fair Value Measurements to our Consolidated Financial Statements.
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 credit losses was $2.5 million as of both June 30, 2024 and December 31, 2023.
During the three and six months ended June 30, 2024 and 2023, 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 President – Finance and Administration (Principal 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 Exchange Act as of the end of the period covered in this Quarterly Report. Based on such evaluation, our Chief Executive Officer and President – Finance and Administration (Principal Financial Officer) have concluded that, as of June 30, 2024, 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 President – Finance and Administration (Principal Financial Officer), as appropriate, to allow for timely decisions regarding required disclosure.
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, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
43
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 alleged that Targa Channelview breached an agreement, dated December 27, 2015, for crude oil and condensate between Targa Channelview and Noble Americas Corp. (the “Splitter Agreement”), which provided for Targa Channelview to construct a crude oil and condensate splitter (the “Splitter”) adjacent to a barge dock owned by Targa Channelview to provide services contemplated by the Splitter Agreement. 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 alleged Targa Channelview made a series of misrepresentations about the capability of the barge dock that would service crude oil and condensate volumes to be processed by the Splitter and Splitter products. Vitol sought return of $129.0 million in payments made to Targa Channelview prior to the start-up of the Splitter, as well as additional damages. 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 sought 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 filed a petition for review with the Supreme Court of Texas, which was denied on October 20, 2023. We then filed a petition for rehearing with the Supreme Court of Texas, which was denied on April 19, 2024. On April 26, 2024, as a result of the final determination of Targa’s appeal to the Texas Supreme Court related to the Splitter Agreement, we made a cash payment of $184.8 million which included cumulative interest on the award of $55.8 million to Vitol in satisfaction of the Texas state court judgment.
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 Equity Securities.
None.
Repurchase of Equity by Targa Resources Corp, or Affiliated Purchasers.
Period |
|
Total number of shares purchased (1) |
|
|
Average price per share |
|
|
Total number of shares purchased as part of publicly announced plans (2) |
|
|
Maximum approximate dollar value of shares that may yet be purchased under the plan (in thousands) (2) |
|
||||
April 1, 2024 - April 30, 2024 |
|
|
436,815 |
|
|
$ |
114.67 |
|
|
|
436,084 |
|
|
$ |
596,378 |
|
May 1, 2024 - May 31, 2024 |
|
|
994,355 |
|
|
$ |
115.80 |
|
|
|
993,155 |
|
|
$ |
481,371 |
|
June 1, 2024 - June 30, 2024 |
|
|
1,556,577 |
|
|
$ |
122.09 |
|
|
|
1,556,577 |
|
|
$ |
291,329 |
|
44
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Rule 10b-5 Trading Plans.
Item 6. Exhibits.
Number |
|
Description |
|
|
|
3.1 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.3 |
|
|
|
|
|
3.4 |
|
|
|
|
|
4.1 |
|
|
|
|
|
4.2 |
|
|
|
|
|
4.3* |
|
|
|
|
|
4.4* |
|
|
|
|
|
4.5* |
|
|
|
|
|
4.6* |
|
|
|
|
|
4.7* |
|
|
|
|
|
22.1* |
|
|
|
|
|
31.1* |
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
45
Number |
|
Description |
31.2* |
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1** |
|
|
|
|
|
32.2** |
|
|
|
|
|
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 With Embedded Linkbase Documents |
|
|
|
104* |
|
The cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included with Exhibit 101 attachments). |
|
|
|
* Filed herewith
** Furnished herewith
+ Management contract or compensatory plan or arrangement
46
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 1, 2024 |
By: |
|
/s/ Jennifer R. Kneale |
|
|
|
Jennifer R. Kneale |
|
|
|
President – Finance and Administration |
|
|
|
(Principal Financial Officer) |
47