Restricted Stock Unit awards (“RSUs”) that vest no later than three years following the RSUs’ grant date participate in quarterly cash dividend payments. As these 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 March 31,
		2026		2025
	(In millions, except per share amounts)
Net income (loss) attributable to Targa Resources Corp.		$	479.6	$	270.5
Less: Premium on repurchase of noncontrolling interests, net of tax (1)			—		70.5
Net income (loss) attributable to common shareholders			479.6		200.0
Less: Participating share-based earnings (2)			2.5		1.2
Net income (loss) allocated to common shareholders for basic earnings per share		$	477.1	$	198.8

Weighted average shares outstanding - basic			214.8		217.9
Dilutive effect of unvested restricted stock awards			0.7		0.8
Weighted average shares outstanding - diluted			215.5		218.7

Net income (loss) available per common share - basic		$	2.22	$	0.91
Net income (loss) available per common share - diluted		$	2.21	$	0.91

(1)

Represents premium paid on the Badlands Transaction. See “Note 4 – Acquisitions and Joint Ventures.”

(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.