Targa Resources Partners LP Investor Presentation Barclays Capital High Yield Bond and Syndicated Loan Conference March 27, 2012
Targa Resources - Overview 3
Position in the Midstream Natural Gas Industry The Partnership is one of the few midstream companies with leadership positions in both gathering and processing and NGL logistics Natural Gas Gathering and Processing Logisticsand…
Targa Resources Two Public Companies Targa Resources Partners LP Targa Resources Corp. (NYSE: NGLS) (NYSE: TRGP) IPO February 2007 IPO December 2010 MLP C-Corp Owner/Operator of all assets General Partner of NGLS Market Cap: 3.9…
The Targa Story Execution and Increasing Growth Industry Dynamics Favor Targas Integrated Midstream Platform Advances in E&P technology and strong oil and NGL prices drive drilling activity and volumes in gathering and processing…
Demonstrated Balance Sheet Discipline Growth Capital in millions Since 2007, TRP has invested over 1,000 3 billion on growth capital for dropdowns, expansions and 800 acquisitions 600 400 Management targets approximately 50%…
Industry Dynamics Favor Targas Platform Advances in E&P technology and strong oil and NGL pricing drive producer activity E&P activity, largely in oil or liquids- rich resource plays, benefits Targa G&P volumes Oilier portion of…
Partnership Growth Drivers Strong fundamentals and positive industry dynamics create attractive growth opportunities Organic growth projects and acquisitions contribute to increased scale and diversity Additional growth opportunities…
Strong Distribution Growth and Coverage Ratio 2011 Adjusted EBITDA increased 25% NGLS Annualized Distribution Per LP Unit 2.75 over 2010 2012 Adjusted EBITDA guidance range 2.50 2.41 2.33 Annualized Distributions per LP Unit…
Disciplined Hedging Program NGL and Condensate Hedge Arrangements as of 12/31/2011 14,000 2.50 Weighted average price 12,000 2.00 Volume (Bbls/d) 10,000 (/gallon) 8,000 1.50 6,000 1.00 4,000 0.50 2,000 0 0.00…
Diversity Drives EBITDA Stability TRPs scale, prudent hedging and business diversity have largely insulated EBITDA vs. Crude Oil Pricing TRP from movements in crude and natural 600 130 gas prices 500 120 EBITDA (millions) 110…
Solid Financial Profile Positions the Partnership for Growth Committed to maintaining relatively NGLS Leverage Ratio and Unit Price Since IPO conservative capital structure to underpin access to capital 6.0x 45 Target leverage…
Conservative TRP Capital Structure Debt / 2011A EBITDA (1) Committed to maintaining relatively 6.0x conservative capital structure to underpin access to capital 5.0x 4.7x 4.1x 4.2x 4.0x Average(3) TRP continues track record of…
Business Division and Segment Review 17
Targas Integrated Midstream Platform FY 2011 Segment Operating Margin Marketing and Distribution 17% Field G&P 38% Logistics Assets 19% Coastal G&P 26% 18
Gathering and Processing Division Gathering and Processing Highlights 20 natural gas processing plants 12,485 miles of natural gas pipeline 28 MBbl/d per day fractionation capacity at North Texas and LOU Leading position across…
Field Gathering and Processing Segment FY 2011 Segment Operating Margin Total of 9 plants with 847 MMcf/d of gross Marketing and Distribution processing capacity 17% Field G&P Field G&P segment contracts are almost entirely 38%…
North Texas and SAOU Overview North Texas Operating Statistics North Texas 204 174 180 4,200 miles of gathering pipeline, two processing plants 162 163 with gross capacity of 278 MMcf/d and fractionation 23 capacity of 15 MBbl/d…
Permian Business and Versado Overview Permian Business Operating Statistics Permian Business (primarily Sand Hills) (primarily Sand Hills) 1,400 miles of pipeline and one processing plant with 134 129 gross capacity of 150 MMcf/d…
Coastal Gathering and Processing Segment FY 2011 Segment Operating Margin Marketing and Distribution 17% Field G&P 38% Logistics Assets 19% Coastal G&P 26% LOU (Louisiana Operating Unit) Onshore gathering and…
Logistics and Marketing Division Logistics Assets Highlights The Partnership is the second largest operator of fractionation capacity in Mont Belvieu and Louisiana combined CBF, GCF and Mont Belvieu terminaling and fractionation…
Logistics Assets FY 2011 Segment Operating Margin Logistics Assets Highlights Marketing and Distribution Second largest operator of fractionation capacity 17% in Mont Belvieu and Louisiana Field G&P 38% Targa Logistics Assets…
Logistics Assets - Performance Trends CBF Y-grade Volumes MBbl/d Y-grade fractionation at Mont Belvieu 250 reached full capacity in 2009 225 Mont Belvieu Targas fractionation expansions Fractionation 200 78 MBbl/d CBF Train 3 43…
Mont Belvieu Fractionation and NGL Pipeline Expansions 2,500 New fractionation and pipeline capacity to accommodate increasing y-grade from Rocky 2123 Mountains, Mid-Continent, Permian Basin and South 2,000 MB Fractionation…
Game Changing Global LPG Dynamic Previous Supply View Middle East Centric Maps reflect changing global perspective as illustrated by multiple presentations at international conferences in recent years (previous) and 2012 (current /…
Environment Favors U.S. Propane/ Butane Export Growth Increasing shale production has filled U.S. US Propane fractionation capacity and encouraged investment 45 0.80 40 0.70 in expansions 35 0.60 30 0.50 Favorably priced U.S. Gulf…
Petroleum Logistics Majority of revenue generated through fixed-fee contracts based on volume capacity with take-or-pay features Favorable global supply-demand dynamics and increased need for terminal services Portfolio of…
Marketing and Distribution Segment FY 2011Segment Operating Margin Marketing NGL Marketing and Distribution Manage physical distribution of mixed NGLs 17% Field G&P and specification products using owned and 38% third party…
TRP Key Credit Considerations Producers driven by technology and economics to exploit oil production and combo oil-gas-NGL resource Strong industry plays in oilier Barnett, Wolfberry, Bone Springs/Avalon dynamics High activity supports…
Pro Forma Credit Metrics and Liquidity Pricing / Actual Jan 2012 Jan 2012 Pro Forma Current Capitalization Maturity Coupon YE 2011 Equity Offering High Yield Offering YE 2011 Cash and cash equivalents 55.6 65.1 120.7 Senior Secured…
Non-GAAP Measures Reconciliation This presentation includes non-GAAP financial measures of Adjusted EBITDA, operating margin and distributable cash flow. The presentation provides reconciliations of these non-GAAP financial measures…
Non-GAAP Measures Reconciliation The following table presents a reconciliation of Adjusted EBITDA and operating margin to net income (loss) for the periods shown for TRP: Three Months Ended Year Ended December 31, December 31, 2011…
Non-GAAP Measures Reconciliation Millions The following table presents a reconciliation of reported distributable cash flow to net income (loss) for the periods shown for TRP: Three Months Ended 31-Mar 30-Jun 30-Sep 31-Dec…
Non-GAAP Measures Reconciliation The following table presents a reconciliation of operating margin to net income (loss) for the periods shown for TRP: Three Months Ended 3/31/2010 6/30/2010 9/30/2010 12/31/2010 3/31/2011…
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