Targa Resources, Inc. · NYSE:TRGP
Targa Resources — Citi Midstream / Energy Infrastructure Conference 2023
29 slides from Targa Resources's conference presentation, Aug 22, 2023
Slide 1: Investor Presentation
Investor Presentation Citi Midstream / Energy Infrastructure Conference AUGUST 22-23, 2023 | TARGA RESOURCES CORP.
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this presentation are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fac
Slide 3: Targa's Unique Investment Proposition
Targa’s Unique Investment Proposition Valuable infrastructure assets backed by primarily fee-based contracts >> Growing EBITDA Significant adjusted EBITDA growth expected YoY and long-term >> Increasing Dividend Strong, flexible, investment grade balance sheet(1) >> Reducing Share Count Increasing r
Slide 4: Targa's System – Integrated NGL Solution
Targa’s System – Integrated NGL Solution Our assets and operations connect natural gas and NGLs to markets with growing demand for cleaner fuels and feedstocks NGL Pipeline Transportation Largest Permian Premier NGL Fractionation Connected to Domestic Connects Key Supply to NGL Natural Gas Processor
Slide 5: A Leading Infrastructure Company
A Leading Infrastructure Company Central Region Assets Bakken Assets ▪ 12 natural gas processing plants ▪ ~2.0 Bcf/d gross processing capacity ▪ 2 natural gas processing plants ▪ ~290 MMcf/d gross processing capacity ▪ Crude oil gathering and storage Permian Basin Assets NGL Fractionation ▪ Largest
Slide 6: Predominantly Fee-Based Margin
Predominantly Fee-Based Margin Durable earnings from significant fee-based margin, fee-floors, and disciplined hedging program Gathering & Processing(2) Pipeline Transportation Fractionation LPG Export Services ~85% Stable Earnings and Cash Flows Fee-based(1) ▪ Targa’s business is predominantly back
Slide 7: Significant EBITDA Growth and Balance Sheet Strength
Significant EBITDA Growth and Balance Sheet Strength Maintaining balance sheet strength and financial flexibility over the long-term remain a key priority Industry Leading Growth Strong Investment Grade Balance Sheet +150% Adjusted EBITDA(1) Growth Significant Financial Flexibility $4.0 6.0x $3.5 5.
Slide 8: Increasing Return of Capital to Shareholders
Increasing Return of Capital to Shareholders Returning incremental capital to shareholders: $149 million of common share repurchases in 2Q23 Growing Dividend Reducing Share Count(1) +43% YoY Dividend Increase in 2023 Over 12.5 million shares repurchased since inception of Share Repurchase Program in
Slide 9: Investing in Attractive Projects Driven by Permian Volume Growth
Investing in Attractive Projects Driven by Permian Volume Growth Organic investments across Targa’s integrated NGL business expected to drive strong return on invested capital Gathering & Processing Logistics & Transportation ▪ Adding +1.7 bcf/d of gas processing capacity in the Permian in response
Slide 10: Demonstrated Track Record of Strong Returns
Demonstrated Track Record of Strong Returns Investing in high-return projects across cycles expected to continue to drive increasing shareholder returns ~26% Return on Invested Capital(1) $7.0 $1.8 ~$6.0 billion of net investment $6.0 ~$1.6 billion of EBITDA growth $1.5 = ~4.0 times investment multi
Slide 11: 2023 – Targa Momentum Continues
2023 – Targa Momentum Continues Integrated NGL business and strong business fundamentals expected to drive increasing cash flow outlook +10% +24% +43% Strong and flexible YoY increase in Permian YoY increase in YoY increase to quarterly natural gas volumes(1) Adjusted EBITDA(2) cash dividend IG bala
Slide 12: Targa Full Year 2023 Financial and Operational Estimates
Targa Full Year 2023 Financial and Operational Estimates +24% year-over-year increase in estimated adjusted EBITDA is backed by volume-driven Permian growth(1)(2) FINANCIAL METRICS 2023 ESTIMATES YoY increase in 2023 adjusted Adjusted EBITDA(1)(2) $3,500 - $3,700 million EBITDA estimate driven by: N
Slide 13: Targa's Infrastructure Supported by Strong Fundamental Outlook
Targa’s Infrastructure Supported by Strong Fundamental Outlook INVESTOR PRESENTATION 13
Slide 14: Targa's Premier Permian Asset Footprint
Targa’s Premier Permian Asset Footprint Premier Permian supply aggregation Legend position backed by significant acreage Active Rigs Processing Plant dedications from diverse producer group Processing Plant In Progress Crude Terminal Existing Gathering Pipeline ▪ Multi-plant, multi-system Permian G&
Slide 15: Permian Basin Fundamentals
Permian Basin Fundamentals Targa Outperforming Permian Basin Production Curve Permian Basin is poised for continued 220 +100% robust growth, driving increasing demand for 200 Targa’s midstream services 180 Growth Indexed +68% 160 ▪ Strength and resiliency of Targa’s Permian Basin 140 position 120 〉
Slide 16: Targa's Industry Leading Permian G&P System
Targa’s Industry Leading Permian G&P System Permian Basin footprint underpinned by millions of dedicated acres and decades of Permian Natural Gas Inlet Volume Growth core drilling inventory Targa expects continued significant growth in Permian volumes going forward 8.0 8.0 ▪ Targa’s Permian natural
Slide 17: Targa's NGL Pipeline Transportation System
Targa’s NGL Pipeline Transportation System Targa is expanding its NGL takeaway from the Permian to support growth from Targa’s assets and its future plant additions NGL Pipeline Transportation Volumes To complement its Grand Prix NGL Pipeline, Targa is constructing the Daytona NGL Pipeline to suppor
Slide 18: NGL Production Feeds Logistics & Transportation Assets
NGL Production Feeds Logistics & Transportation Assets Targa’s wellhead to water NGL strategy adds significant barrels into its system that are available for export Significant NGLs from Targa’s Permian Plants Targa’s NGL Transportation Pipelines ▪ Grand Prix and Daytona NGL pipelines connect supply
Slide 19: Strong LPG Fundamentals Supportive of Increased Exports
Strong LPG Fundamentals Supportive of Increased Exports Targa’s wellhead to water NGL strategy adds significant barrels into its system that Global LPG Demand are available for export 12.0 ▪ Increasing global demand for propane and butane driven by broad application for 10.0 residential and commerci
Slide 20: Targa is Well-Positioned to Support Global Energy Needs
Targa is Well-Positioned to Support Global Energy Needs LPG exports provide critical source of cleaner fuels for developing nations and help reduce global CO2 emissions Use of LPGs Provides Emission Reductions CO2 Emissions(1) 4.9 Billion ~70% lower than wood gallons of LPGs from Targa’s facilities
Slide 21: Sustainability Highlights
Sustainability Highlights Our Goals by 2025 From 2021 Sustainability Report ▪ Reduced combined Scope 1 and Scope 2 GHG intensity by 12% ▪ Reduced flaring volumes from emissions events by 40% 0.08% ▪ Exported approximately 4.9 billion gallons of LPG globally in 2021 that can contribute to Reduce our
Slide 22: ESG Pillars and Highlights
ESG Pillars and Highlights We are proud to help deliver safe, reliable products that fuel the low-carbon economy and improve economic mobility and quality of life domestically and around the world Environmental Safety Governance Social ▪ Member of ONE Future Initiative: ▪ Promote a safety first cult
Slide 23: Key Takeaways: Targa's Compelling Investment Proposition
Key Takeaways: Targa’s Compelling Investment Proposition Valuable infrastructure assets backed by primarily fee-based contracts >> Growing EBITDA Significant adjusted EBITDA growth expected YoY and long-term >> Increasing Dividend Strong, flexible, investment grade balance sheet >> Reducing Share Co
Slide 24: Appendix and Reconciliations
Appendix and Reconciliations INVESTOR PRESENTATION 24
Slide 25: Hedge Disclosures
Hedge Disclosures Hedges provide cash flow stability and reduce exposure to commodity prices on non fee-based G&P contract exposure FIXED PRICE SWAPS Volumes Hedged Wtd. Avg. Hedge Price Volumes Hedged Wtd. Avg. Hedge Price 2H23 2024 Natural Gas 158,178 $2.87 105,377 $3.01 (MMBtu/d; $/MMBtu) Wtd Avg
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes the Company’s non-GAAP financial measures: adjusted EBITDA, distributable cash flow, and adjusted free cash flow. The following tables provide reconciliations of these non- GAAP financial measures to their most directly comparable GAAP measures.
Slide 27: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation (1) Includes the change in estimated redemption value of the mandatorily redeemable preferred interests. Year Ended December 31, (2) Gains or losses on debt repurchases or early debt 2022 2021 2020 2019 2018 2017 extinguishments. (In millions) (3) Includes financial
Slide 28: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Full Year 2023E (in millions) Reconciliation of Estimated Net Income attributable to Targa Resources Corp. to Estimated Adjusted EBITDA Net income attributable to Targa Resources Corp. $ 1,440.0 Interest expense, net 700.0 Income tax expense 400.0 Depreciation and am
Slide 29: General Inquiries/Corporate Headquarters
GENERAL INQUIRIES/CORPORATE HEADQUARTERS 811 LOUISIANA STREET, SUITE 2100 HOUSTON, TX 77002 Targa is a leading provider of midstream services as one of the largest independent midstream infrastructure PHONE: 713.584.1133 companies in North America. Our operations are critical to the efficient, safe,
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