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- **Record Q3 EBITDA**: $1.275B (+19% YoY), full-year 2025 EBITDA at top end of $4.65-4.85B range.
- **Permian Growth**: 2025 volumes up 10%, 2026 guidance for low double-digit growth; 5+ new plants under construction.
- **Major Projects**: Speedway NGL pipeline (500,000 b/d), LPG export expansion to 19M b/mo, and Copperhead gas plant.
- **Free Cash Flow Inflection**: 2027+ with downstream capex dropping ~$1B/yr.
- **Dividend Hike**: 25% increase to $5/share, with $642M in YTD buybacks.
- **Competitive Edge**: Largest Permian sour gas processor (2.5 Bcf/d), 7 AGI wells, and integrated infrastructure.

**【CEO Summary Section】**
- Targa reported record Q3 2025 adjusted EBITDA of $1.275 billion, up 19% YoY, driven by Permian NGL volume growth. Full-year 2025 EBITDA expected at top end of $4.65-4.85 billion range.
- Permian inlet volumes grew 11% YoY to 6.6 Bcf/d, with 2025 volumes up ~10% and 2026 guidance for low double-digit growth.
- Major projects announced: Copperhead gas plant in New Mexico, Speedway NGL pipeline (500,000 b/d capacity), and LPG export expansion to 19 million b/mo.
- Free cash flow inflection expected in late 2027 as downstream projects (Speedway, LPG export) come online, with downstream capex declining significantly post-2027.
- Dividend increased 25% to $5/share, with $642M in share buybacks YTD.

**【President (Jen Kneale) Operational Update】**
- Permian NGL transportation volumes hit record 1.02M b/d, fractionation at 1.13M b/d, and LPG exports at 12.5M b/mo.
- New plants coming online: Pembrook II (Midland) and Bull Moose II (Delaware), with 5+ plants under construction.
- Intra-basin residue gas projects announced: Buffalo Run (Midland), Forza pipeline (NM-TX), and Blackcomb/Traverse pipelines.
- Operational resilience demonstrated through Q3 storms, with volumes quickly returning to pre-shutdown levels.

**【CFO Financial Commentary】**
- Q3 2025 net growth capex: $3.3B (aligned with prior guidance), with 2025 maintenance capex at $250M.
- Pro forma leverage ratio 3.6x, within 3-4x target range.
- Share repurchases: $156M in Q3, $642M YTD, with ongoing opportunistic buybacks.
- Dividend increased to $5/share (25% hike), effective Q1 2026.

**【Q&A Highlights】**
- **Volume Growth Drivers**: Producer execution on 2025 ramp, better-than-expected Permian GOR trends, and minimal rig count sensitivity.
- **Project Returns**: Downstream projects (Speedway, LPG export) expected to generate 5-6x returns, similar to G&P business.
- **Competitive Advantage**: Largest Permian sour gas processor (2.5 Bcf/d capacity), integrated wellhead-to-water infrastructure, and 7 AGI wells.
- **Free Cash Flow Outlook**: 2027+ with Speedway and LPG export online, downstream capex dropping ~$1B/yr.
- **Dividend Policy**: 40-50% payout ratio target, with balance between dividend growth and buybacks.

Targa Resources Corp. (TRGP) Q3 2025 Earnings Call Transcript

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