The second quarter earnings release, along with a supplemental presentation that accompanies our call, are available on our website at targaresources.com. We have also added some new material to our investor presentation, which lends support for our continued growth outlook. Over the past five years, Permian gas production has grown at a higher rate than crude production due to the general increase in gas-to-oil ratios across the basin over time. While year-over-year growth in crude production from the Permian has averaged 8% per year over the past five years, associated gas growth has averaged 13% per year.
Targa's volume growth has outperformed crude and gas production over that timeframe. Our year-over-year volume growth has averaged 17%, 4% higher than associated gas and 9% higher than crude per year. Looking forward, third-party forecasts call for 7% growth in Permian associated gas over the next five years. With this strong outlook, coupled with Targa's footprint across the best rock in the basin and world-class producers, we are well positioned for meaningful growth over the long term.
We move a lot of natural gas to end markets, and the demand for natural gas is expected to continue to increase. We transport and fractionate a lot of natural gas liquids to domestic and international end markets, and the demand for NGLs is expected to continue to increase. Our customers across our value chain are very good at what they do, and we think we'll continue to create meaningful growth opportunities for our company. Our focus continues to be on increasing adjusted EBITDA and increasing common dividend per share and declining share count while maintaining our strong investment-grade balance sheet.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year 2025 adjusted EBITDA | FY2025 | $4.65B-$4.85B (Reaffirmed) |
| Net growth capital spending | FY2025 | ~$3 billion (Raised) |
| Net maintenance capital spending | FY2025 | $250 million (Reaffirmed) |
| Metric | YoY | Note |
|---|---|---|
| Adjusted EBITDA | +18% | Higher Permian volumes generating higher margin across GMP and LMP segments plus contribution from 100% ownership of Badlands assets |
| Permian natural gas inlet volumes | +11% | Record volumes averaging 6.3 Bcf/d on strong production ramp and rebound from weather-impacted first quarter |
| NGL pipeline transportation volumes | Record | Record 961,000 bbl/d on growing Permian GMP supply |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Permian volume growth outperforming the basin | — | Volume growth has averaged 17% per year over five years, outpacing associated gas (13%) and crude (8%); outlook for 2026 as strong as at the start of the year | Strengthening |
| LPG export competition and margins | — | Docks effectively full and highly contracted; management sees new entrants as not changing competitive dynamics given Targa's supply advantage | Stable |
| Capital allocation / buybacks | — | Opportunistic repurchases ($324M in Q2), new $1B authorization, targeting return of 40%-50% of adjusted cash flow from operations to equity holders | Continuing |
| M&A appetite | — | Bar remains high as strategic needs are met; focus on organic growth with selective bolt-ons | Stable |