Targa Resources, Inc. · NYSE:TRGP
Targa Resources — Investor Presentation (November 2021)
24 slides from Targa Resources's investor presentation, November 2021
Slide 1: Targa Resources Corp. Investor Presentation
Targa Resources Corp. Investor Presentation November 2021
Slide 2: Forward Looking Statements and Corporate Structure
Forward Looking Statements and Corporate Structure Certain statements in this release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Targa Corporate Structure and Section 21E of the Securities Exchange Act of 1934, as amended. All statem
Slide 3: Premier Midstream Infrastructure Company
Premier Midstream Infrastructure Company Integrated assets that connect natural gas and NGL supply to domestic and international demand markets Substantial natural gas gathering and processing in multiple basins 43 natural gas processing plants ~8.5 Bcf/d gross processing capacity Grand Prix NGL Pip
Slide 4: Strategic Outlook
Strategic Outlook 2021 adjusted EBITDA now expected to exceed top end of $1.9 - $2.0 billion range; year-end leverage now estimated ~3.25x ▪ Targa’s operations connect natural gas and NGLs to markets with Diverse increasing demand for cleaner fuels and feedstocks & Vertically ▪ Premier G&P footprint
Slide 5: Capital Allocation Strategy
Capital Allocation Strategy ✓1 $ $ Invest in Accretive Provide Attractive Return Additional Maintain Strong Simplify Capital Growth Common Dividend Capital to Balance Sheet Structure Opportunities with Growth Shareholders ▪ In 2021, prioritizing ▪ Expect to repurchase ▪ Continuing to invest in ▪ Pla
Slide 6: FCF Profile Drives Longer Term Financial Flexibility
FCF Profile Drives Longer Term Financial Flexibility Maintaining balance sheet strength and financial flexibility over the long-term remain a key priority ▪ Well positioned to return incremental capital to shareholders over time ▪ Strong business performance and embedded operating leverage driving a
Slide 7: Targa Development Company Joint Ventures (DevCo JVs)
Targa Development Company Joint Ventures (“DevCo JVs”) Repurchasing the DevCo JV interests would provide additional EBITDA growth in 2022 at an attractive multiple ▪ FY2021 adjusted EBITDA estimate does not include any EBITDA associated with Stonepeak’s DevCo JV interests(1); acquisition of Stonepea
Slide 8: Integrated Platform Supports Fee-Based Profile
Integrated Platform Supports Fee-Based Profile Durable earnings power from significant fee-based margin across Targa businesses Segment Business Mix 2021E(1) Fee-Based Profile 2021E(1) Gathering & Processing(2) Permian Basin Grand Prix Grand Prix Badlands Fractionation Fractionation SouthOK / WestOK
Slide 9: Risk Management
Risk Management Hedging program and credit risk management framework further strengthens cash flow stability 2021 Hedges 2022 Hedges Volumes Exposure Wtd. Avg. Volumes Exposure Wtd. Avg. Commodity Hedged(1) Hedged (%)(1) Hedge Price Commodity Hedged(1) Hedged (%)(1) Hedge Price Natural Gas 150,511 ~
Slide 10: Integrated Infrastructure Platform
Integrated Infrastructure Platform
Slide 11: Permian Basin is a World-Class Resource
Permian Basin is a World-Class Resource Targa’s leadership position in the Permian and integrated platform provide reliable access to NGL hub in Mont Belvieu Near-Term Permian Crude Oil & Natural Gas Supply Forecast(1) Targa’s Inlet Volume Growth has Outpaced Permian Basin Production(2) 2020 2021 20
Slide 12: Targa's Premier Permian Asset Footprint
Targa’s Premier Permian Asset Footprint Super-system across the Midland and Delaware Basins with significant access to NGL supply Legend Active Rigs Processing Plant Processing Plant In Progress Multi-plant, multi-system Permian Crude Terminal Existing Gathering Pipeline footprint, complemented by G
Slide 13: NGL Production Feeds Logistics & Transportation Assets
NGL Production Feeds Logistics & Transportation Assets Grand Prix NGL Pipeline connects and directs significant NGL volumes to Targa’s fractionation complex in Mont Belvieu Significant NGLs from Targa Permian Plants Grand Prix NGL Pipeline 450 +22% 400 +22% 350 300 +39% Permian Basin 250 up to 550 M
Slide 14: NGL Market Hub With Global Reach
NGL Market Hub With Global Reach Logistics assets exceedingly difficult to replicate, fee-based businesses, with significant take-or-pay Premier Fractionation Ownership Position in Mont Belvieu LPG Export Services Business Connects to Global Demand ▪ Mont Belvieu is the U.S. NGL market hub developed
Slide 15: ESG – Environmental, Social, Governance
ESG – Environmental, Social, Governance Targa is part of the energy infrastructure that is delivering safe, reliable energy to global communities Environment & Safety Social We recognize that our We employ a talented and commitment to implement dedicated workforce and are programs and practices
Slide 16: We Own and Operate Critical Infrastructure
We Own and Operate Critical Infrastructure Our operations are essential to the efficient, safe, and reliable delivery of energy across the U.S. and increasingly the world ▪ Targa’s operations connect natural gas and NGLs to domestic and international markets with growing demand for cleaner fuel and
Slide 17: Global Demand Outlook and the Call on U.S. Supply
Global Demand Outlook and the Call on U.S. Supply Increasing global energy demand requires diverse supply source; U.S. exports expected to fuel future energy needs Global Energy Demand by Fuel(1) U.S. Natural Gas and Natural Gas Liquids Supply Growth(2) 6.0 Billion tons oil equivalent (Btoe) Quadril
Slide 18: Targa is Well-Positioned to Support Global Energy Needs
Targa is Well-Positioned to Support Global Energy Needs Targa’s facilities exported ~4.6 billion gallons of LPGs globally in 2020 and helped reduce global CO2 emissions ▪ LPGs are replacing biomass in many rural communities, and LPG Use of LPGs Provides Emission Reductions demand is growing in China
Slide 19: Reconciliations
@ TARGA Reconciliations
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes the Company’s non-GAAP financial measures: adjusted EBITDA, distributable cash flow, adjusted free cash flow, adjusted gross margin and adjusted operating margin. The following tables provide reconciliations of these non-GAAP financial measures
Slide 21: Segment Adjusted Operating Margin Comparative Results
Segment Adjusted Operating Margin Comparative Results G&P ($MM) 1Q20 2Q20 3Q20 4Q20 Adjusted Gross Margin $367.8 $336.5 $363.1 $380.0 Operating Expenses 112.1 99.3 102.1 116.1 Adjusted Operating $255.7 $237.2 $261.0 $263.9 Margin L&T ($MM) 1Q20 2Q20 3Q20 4Q20 Adjusted Gross Margin $363.6 $297.1 $342
Slide 22: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Year Ended December 31, 2020 2019 (In millions) Reconciliation of Net Income (Loss) attributable to TRC to Adjusted EBITDA, Distributable Cash Flow and Free Cash Flow Net income attributable to TRC $ (1,553.9) $ (209.2) Income attributable to TRP preferred limited pa
Slide 23: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Reconciliation of estimated net income attributable to Full Year 2021E TRC to estimated Adjusted EBITDA (In millions) Net income attributable to TRC $ 555.0 Interest expense, net 370.0 Income tax expense 50.0 Depreciation and amortization expense 870.0 Equity (earnin
Slide 24: Visit us at targaresources.com
Visit us at targaresources.com Contact Information: Email: InvestorRelations@targaresources.com Phone: (713) 584-1133 811 Louisiana Street Suite 2100 Houston, TX 77002
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