Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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 in our annual report on Form 10-K for the year ended December 31, 2025 ("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 March 31, 2026 ("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 infrastructure companies in North America. We own, operate, acquire, and develop a diversified portfolio of complementary domestic 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 our 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 our NGL pipeline system, 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 Basin Processing Expansions

Our new cryogenic natural gas processing plant additions include:

Fractionation Expansions

Our new 150 MBbl/d fractionation train additions include:

NGL Pipeline Expansions

LPG Export Expansion

Natural Gas Pipelines

Acquisitions and Joint Ventures

For additional information, see "Note 4 - Acquisitions and Joint Ventures" to our Consolidated Financial Statements.

Capital Allocation

In July 2024, our Board of Directors approved a $1.0 billion common share repurchase program (the "2024 Share Repurchase Program"). In addition, in August 2025, our Board of Directors approved a new $1.0 billion common share repurchase program (the "2025 Share Repurchase Program" and, together with the 2024 Share Repurchase Program, the "Share Repurchase Programs"). 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.

For the three months ended March 31, 2026, we repurchased 227,801 shares of our common stock at a weighted average per share price of $241.43 for a total net cost of $55.0 million. As of March 31, 2026, there was $1,318.6 million remaining under the Share Repurchase Programs.

In April 2026, we declared an increase to our quarterly common dividend to $1.25 per common share, or $5.00 per common share annualized, effective for the first quarter of 2026.

Financing Activities

In January 2026, we used $650.0 million in borrowings from our Commercial Paper Program and $600.0 million from our Securitization Facility to fund the Stakeholder Acquisition.

In January 2026, we completed the redemption of all of the Partnership's 6.875% Senior Unsecured Notes due 2029 (the "Partnership's 6.875% Notes due 2029") and recognized a debt extinguishment loss of $10.1 million, comprised of $7.8 million related to the redemption premium paid and $2.3 million from the write-off of debt issuance costs.

In March 2026, we completed an underwritten public offering of (i) $750.0 million aggregate principal amount of our 4.350% Senior Unsecured Notes due 2031 (the "4.350% Notes due 2031") and (ii) $750.0 million aggregate principal amount of our 6.050% Senior Unsecured Notes due 2056 (the "6.050% Notes due 2056") (collectively, the "March 2026 Senior Unsecured Notes"), resulting in net proceeds of approximately $1,483.2 million. The March 2026 Senior Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by our subsidiaries that guarantee the TRGP Revolver, so long as such subsidiary guarantors satisfy certain conditions. We used the net proceeds from the debt issuance for general corporate purposes, including to reduce borrowings under the Commercial Paper Program.

For additional information about our recent debt-related transactions, see "Note 7 - Debt Obligations" to our Consolidated Financial Statements.

Corporation Tax Matters

As of March 31, 2026, examinations by the Internal Revenue Service (the "IRS") are currently in process for the 2022 taxable year 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 2022 (for calendar year 2021) have expired. The statute of limitations expired on substantially all 2021 state income tax returns that were filed prior to October 15, 2022. For Texas, the statute of limitations has expired for 2021 returns (for calendar year 2020). 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.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (the "OBBBA") into law. Among other things, the OBBBA indefinitely extends the 100% first-year depreciation allowance on qualified property placed in service after January 19, 2025, includes favorable modifications to the business interest expense limitation, and otherwise extends and enhances certain key provisions of the Tax Cuts & Jobs Act. The OBBBA has multiple effective dates with respect to its various provisions, with certain provisions effective in 2025. While the OBBBA has not materially impacted our effective tax rate, we expect it to substantially decrease Targa's cash taxes over the next several years.

The U.S. Department of the Treasury and the IRS have issued guidance on the application of the corporate alternative minimum tax (the "CAMT"), which is a 15% minimum tax imposed on certain financial income of "applicable corporations," including proposed regulations issued in September 2024, which may be relied upon until final regulations are released. Based on our current interpretation of the Inflation Reduction Act of 2022 (the "IRA"), the CAMT and related guidance, the impact from the OBBBA, and several operational, economic, accounting and regulatory assumptions, we do not anticipate paying CAMT in the near term.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements that will affect us, see "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 natural gas, NGLs and crude oil, the impact of our commodity hedging program and its ability to mitigate exposure to commodity price movements, and the volumes of natural gas, NGLs and crude oil 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).

Throughput Volumes, Facility Efficiencies and Fuel Consumption

Our profitability is impacted by our ability to add new sources of natural gas and crude oil supplies 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 natural gas and crude oil 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 our NGL pipeline system, 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 our 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 spend associated with growth and maintenance projects is closely monitored. Return on investment is analyzed before a capital project is approved, spend 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.

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 and growth capital expenditures, net of any reimbursements of project costs and contributions from noncontrolling interests, and including 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.

Our Non-GAAP Financial Measures

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

Consolidated Results of Operations

The following table and discussion is a summary of our consolidated results of operations for the periods presented:

NM Due to a low denominator, the noted percentage change is disproportionately high and as a result, considered not meaningful.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The decrease in commodity sales reflected lower NGL, natural gas and condensate prices ($1,064.2 million), partially offset by higher NGL, natural gas and condensate volumes ($476.9 million) and the favorable impact of hedges ($47.5 million).

The increase in fees from midstream services was primarily due to higher gas gathering and processing fees, partially offset by lower export volumes.

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

The increase in operating expenses was primarily due to higher labor and maintenance costs due to increased activity and system expansions, and the acquisition of certain assets in the Permian Basin.

See "-Results of Operations-By Reportable Segment" for additional information on a segment basis.

The increase in depreciation and amortization expense was primarily due to the acquisition of certain assets in the Permian Basin and the impact of system expansions on our asset base.

The increase in general and administrative expense was primarily due to higher compensation and benefits.

The increase in interest expense, net, was primarily due to higher borrowings, partially offset by an increase in capitalized interest.

The decrease in other, net, was primarily due to the premium paid on the redemption of all of the Partnership's 6.875% Notes due 2029.

The increase in income tax (expense) benefit was primarily due to the increase in pre-tax book income.

The premium on repurchase of noncontrolling interests, net of tax was due to the Badlands Transaction in the first quarter of 2025.

Results of Operations-By Reportable Segment

The following table presents our operating margins by reportable segment:

Gathering and Processing Segment

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 March 31, 2026 Compared to Three Months Ended March 31, 2025

The increase in adjusted operating margin was predominantly due to higher natural gas inlet volumes in the Permian which drove higher fee-based margin, partially offset by lower commodity prices. The increase in natural gas inlet volumes in the Permian was attributable to the addition of the Pembrook II plant during the third quarter of 2025, the Bull Moose II plant during the fourth quarter of 2025, the Falcon II plant during the first quarter of 2026, continued strong producer activity and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.

The increase in operating expenses was primarily due to higher volumes, multiple plant additions and the acquisition of certain assets in the Permian Basin during the first quarter of 2026.

Logistics and Transportation Segment

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The increase in adjusted operating margin was due to higher marketing margin and higher pipeline transportation and fractionation margin. Marketing margin increased due to greater optimization opportunities. Pipeline transportation and fractionation volumes benefited from higher supply volumes primarily from our Permian Gathering and Processing systems.

The increase in operating expenses was due to higher repairs and maintenance and higher compensation and benefits.

Other

Other contains the unrealized 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 March 31, 2026, inclusive of our consolidated joint venture accounts, we had $100.1 million of Cash and cash equivalents on our Consolidated Balance Sheets. On a consolidated basis, our main sources of liquidity and capital resources are internally generated cash flows from operations, borrowings under the TRGP Revolver, the Commercial Paper Program, the Securitization Facility, and access to debt and equity capital markets. We have the ability to 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.

We believe our sources of liquidity and capital resources are sufficient to meet our anticipated cash requirements for at least the next twelve months to satisfy our obligations, including our day-to-day operations, growth capital expenditures, dividend payments, maintenance capital expenditures, debt service and other anticipated obligations. 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, see "Recent Developments."

Short-term Liquidity

Our short-term liquidity on a consolidated basis as of March 31, 2026, was:

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 18, 2030. The maturity date is extendable, subject to the lenders' consent, by one year up to two times.

In July 2025, the Partnership amended the Securitization Facility to, among other things, extend the facility termination date to August 31, 2026.

A portion of our capital resources are allocated to letters of credit to satisfy certain counterparty credit requirements. As of March 31, 2026, we had $17.9 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 changes in other current debt balances; and (vi) major structural changes in our asset base or business operations, such as certain organic growth capital projects and acquisitions or divestitures.

Our working capital as of March 31, 2026 increased $226.4 million compared to December 31, 2025. The increase was primarily due to the redemption of all of the Partnership's 6.875% Notes due 2029, higher trade receivables resulting from higher natural gas and NGL prices and lower interest payable due to timing of interest payments. The increase was partially offset by a higher outstanding balance on the Securitization Facility, higher net liabilities for hedging activities, lower NGL inventory balance and higher payable balances due to capital spending on growth projects.

Long-term Financing

Our long-term financing consists of potentially raising funds through long-term debt obligations, the issuance of common stock, preferred stock, or joint venture arrangements.

In January 2026, we used $650.0 million in borrowings from our Commercial Paper Program and $600.0 million from our Securitization Facility to fund the Stakeholder Acquisition.

In January 2026, we completed the redemption of all of the Partnership's 6.875% Notes due 2029 and recognized a debt extinguishment loss of $10.1 million, comprised of $7.8 million related to the redemption premium paid and $2.3 million from the write-off of debt issuance costs.

In March 2026, we completed an underwritten public offering of the 4.350% Notes due 2031 and the 6.050% Notes due 2056, resulting in net proceeds of approximately $1,483.2 million. We used the net proceeds from the debt issuance for general corporate purposes, including to reduce borrowings under the Commercial Paper Program.

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 7 - Debt Obligations" to our Consolidated Financial Statements. For information about our interest rate risk, see "Item 3. Quantitative and Qualitative Disclosures About Market Risk-Interest Rate Risk."

Compliance with Debt Covenants

As of March 31, 2026, 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

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 and natural gas; and (iii) 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 operating activities was primarily due to lower collections from customers resulting from lower revenues in 2026 compared to 2025, as well as higher operating costs, payments for hedging activities, and interest on debt, partially offset by a decrease in payments for product purchases.

Cash Flows from Investing Activities

The increase in net cash used in investing activities was primarily due to outlays for the Stakeholder Acquisition and higher outlays for major growth capital projects in 2026.

Cash Flows from Financing Activities

The change in net cash provided by (used in) financing activities was due to lower repurchases of noncontrolling interests primarily due to the Badlands Transaction in 2025 and lower repurchases of common stock, partially offset by lower borrowings of debt and higher dividends paid. The decrease in cash flows from our debt activity was due to the redemption of all of the Partnership's 6.875% Notes due 2029 and lower proceeds from the issuance of our senior unsecured notes in 2026, partially offset by higher net borrowings under the Securitization Facility and the Commercial Paper Program.

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 unsecured 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.

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 periods presented follows:

Common Stock Dividends

The following table details the dividends on common stock declared and/or paid by us for the three months ended March 31, 2026:

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 periods presented:

The increase in growth capital expenditures was primarily due to higher construction activities during 2026.

Off-Balance Sheet Arrangements

As of March 31, 2026, there were $62.3 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.