Earnings per Common Share

6 Months Ended

Jun. 30, 2024

Note 9 — Earnings per Common Share

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

We calculate earnings per share using the two-class method. Earnings are allocated to common stock and participating securities based on the amount of dividends paid in the current period plus an allocation of the undistributed earnings to the extent that each security participates in earnings.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(In millions, except per share amounts)
Net income (loss) attributable to Targa Resources Corp.	$	298.5	$	329.3	$	573.7	$	826.3
Less: Premium on repurchase of noncontrolling interests, net of tax (1)		—		—		—		490.7
Net income (loss) attributable to common shareholders		298.5		329.3		573.7		335.6
Less: Participating share-based earnings (2)		2.3		3.6		4.5		2.8
Net income (loss) allocated to common shareholders for basic earnings per share	$	296.2	$	325.7	$	569.2	$	332.8

Weighted average shares outstanding - basic		221.0		225.6		221.9		226.0
Dilutive effect of unvested stock awards		0.9		1.2		1.0		1.3
Weighted average shares outstanding - diluted		221.9		226.8		222.9		227.3

Net income (loss) available per common share - basic	$	1.34	$	1.44	$	2.56	$	1.47
Net income (loss) available per common share - diluted	$	1.33	$	1.44	$	2.55	$	1.46

(1)

Represents premium paid on the Grand Prix Transaction. See Note 4 – Joint Ventures and Acquisitions.

(2)

Represents the distributed and undistributed earnings of the Company attributable to the participating securities. The dilutive effect of the reallocation of participating securities to diluted net income attributable to common shareholders was immaterial.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Unvested restricted stock awards		1.2		1.8		1.2		1.7