Earnings per Common Share

12 Months Ended

Dec. 31, 2023

Note 13 — 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:


		Year Ended December 31,
		2023		2022		2021
	(In millions, except per share amounts)
Net income (loss) attributable to Targa Resources Corp.		$	1,345.9	$	1,195.5	$	71.2
Less: Premium on repurchase of noncontrolling interests, net of tax (1)			510.1		53.2		—
Less: Dividends on Series A Preferred Stock (2)			—		30.0		87.3
Less: Deemed dividends on Series A Preferred (3)			—		215.5		—
Net income (loss) attributable to common shareholders			835.8		896.8		(16.1	)
Less: Participating share-based earnings (4)			7.6		—		—
Net income (loss) allocated to common shareholders for basic earnings per share		$	828.2	$	896.8	$	(16.1	)

Weighted average shares outstanding - basic			224.6		227.3		228.6
Dilutive effect of unvested stock awards (5)			1.4		3.8		—
Weighted average shares outstanding - diluted			226.0		231.1		228.6

Net income (loss) available per common share - basic		$	3.69	$	3.95	$	(0.07	)
Net income (loss) available per common share - diluted		$	3.66	$	3.88	$	(0.07	)

(1)

Represents premium paid on the Grand Prix Transaction, Carnero Acquisition and the DevCo JV Repurchase. See Note 4 – Acquisitions and Divestitures.

(2)

Includes $8.2 million attributable to the dividends paid upon the full redemption of Series A Preferred in 2022.

(3)

Includes $215.5 million attributable to the full redemption of Series A Preferred in 2022. See Note 11 – Preferred Stock for further discussion.

(4)

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.

(5)

For the year ended December 31, 2021, all unvested restricted stock awards and Series A Preferred were antidilutive because a net loss existed in the period.

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):


	Year Ended December 31,
	2023		2022		2021
Unvested restricted stock awards		1.5		—		3.3
Series A Preferred (1)		—		14.9		44.3

(1)

The Series A Preferred had no mandatory redemption date, but was redeemable at our election for a 5% premium to the liquidation preference subsequent to March 16, 2022. In May 2022, we redeemed all of our issued and outstanding Series A Preferred at a redemption price of $1,050.00 per share, plus $8.87 per share, which is the amount of accrued and unpaid dividends from April 1, 2022 up to, but not including, the redemption date of May 3, 2022. See Note 11 – Preferred Stock for further discussion.