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January 2016 Investor Presentation – Targa Resources Corp.

Targa Resources Corp. · Jan 10, 2016 · 48 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. January 2016 Investor Presentation – Targa Resources Corp. – slide 1
    Targa Resources Investor Presentation January 2016
  2. January 2016 Investor Presentation – Targa Resources Corp. – slide 2
    TRC Acquisition of TRP Transaction Overview On November 3rd, 2015 Targa Resources Corp. (NYSE: TRGP; TRC or the Company) announced it has executed a definitive agreement to acquire all of the outstanding common units of Targa Resources…
  3. January 2016 Investor Presentation – Targa Resources Corp. – slide 3
    TRC Acquisition of TRP Forward Timeline January 12 Record date for TRC and TRP special meetings January 19 Estimated quarterly TRC dividend and TRP distribution announcement date* February 2 Estimated record date for quarterly TRC…
  4. January 2016 Investor Presentation – Targa Resources Corp. – slide 4
    TRC Acquisition of TRP Positioned for Long-Term Success Expected cumulative incremental coverage of over 400 million through 2018(1) Increased coverage supports dividend growth outlook, while reducing external financing Improved…
  5. January 2016 Investor Presentation – Targa Resources Corp. – slide 5
    TRC Acquisition of TRP Simplified Public Structure Current Public Structure Pro Forma Public Structure TRC Public TRC Public Shareholders Shareholders 100% Interest 100% Interest (56,019,151 Shares) (160,512,901 Shares)…
  6. January 2016 Investor Presentation – Targa Resources Corp. – slide 6
    Pro Forma Targa in Current Environment TRCs acquisition of TRP best positions Targa to successfully manage through the current commodity price environment Targa benefits from its improved coverage and credit profile, simplified…
  7. January 2016 Investor Presentation – Targa Resources Corp. – slide 7
    Managing Capex Spending 2015 as an Illustrative Example Targa managed its 2015 growth 2015E Growth Capex(1) and Crude Oil Prices capex spending based on market conditions 1,500 2015 Guidance Capex WTI Crude Oil Price 100 High…
  8. January 2016 Investor Presentation – Targa Resources Corp. – slide 8
    2016 Net Growth Capex Targa has four major projects underway, representing approximately 275 million of 2016E growth capex (net) Pre-funded equity portion of 2016E growth capex via a 125 million Series A Preferred Unit Offering in…
  9. January 2016 Investor Presentation – Targa Resources Corp. – slide 9
    Pro Forma Targa Leverage Profile Targa Pro Forma Senior Note Maturities(1) Current capital structure will remain in place post close of acquisition of TRP by TRC 2,000 Senior Note Maturities ( in MM) TRP will continue as a…
  10. January 2016 Investor Presentation – Targa Resources Corp. – slide 10
    Initial 2016 Financial Projections Pro Forma - November 3, 2015 Standalone - Transaction Announcement and October 5, 2015 Press Release December 3, 2015 S-4 TRP Distribution Growth (FY2016 vs FY2015) Consensus Pricing 0% TRC…
  11. January 2016 Investor Presentation – Targa Resources Corp. – slide 11
    Targas Attractive Asset Footprint
  12. January 2016 Investor Presentation – Targa Resources Corp. – slide 12
    Attractive Asset Positions Despite Lower Producer Activity Rig activity has decreased significantly across the U.S. Targas footprint has been impacted, but positioning in some of the best basins / areas provides resiliency…
  13. January 2016 Investor Presentation – Targa Resources Corp. – slide 13
    Producer Activity Drives NGL Flows to Mont Belvieu Marcellus & Others Rockies Growing field NGL production increases NGL flows to Mont Belvieu Increased NGL production could support Targas existing and expanding Mont Belvieu and…
  14. January 2016 Investor Presentation – Targa Resources Corp. – slide 14
    Logistics Assets Extensive Gulf Coast Footprint Fractionators Gross Net Capacity Capacity (MBbl/d) (MBbl/d)(2) CBF - Mont Belvieu(1) Trains 1-3 253 223 Backend Capacity 40 35 Train 4 100 88 GCF - Mont Belvieu 125 47 Total - Mont…
  15. January 2016 Investor Presentation – Targa Resources Corp. – slide 15
    Targas LPG Export Business Trailing 12 Months(1) Trailing 12 Months(1) Targa LPG Exports by Destination Targa Propane and Butane Exports 15% 30% 50% 85% 20% Latin America/South America Caribbean Rest of the World…
  16. January 2016 Investor Presentation – Targa Resources Corp. – slide 16
    Extensive Field Gathering and Processing Position Summary Footprint Over 24,000 miles of pipeline across attractive positions in the Permian Basin, Eagle Ford Shale, Barnett Shale, Anadarko Basin, Ardmore Basin, Arkoma Basin and…
  17. January 2016 Investor Presentation – Targa Resources Corp. – slide 17
    Permian East Premier Midland Basin Footprint Summary Footprint Footprint includes approximately 5,500 miles of pipeline in the Midland Basin Targa is one of the largest Midland Basin gas processors with over 1.0 Bcf/d in gross…
  18. January 2016 Investor Presentation – Targa Resources Corp. – slide 18
    Permian West Well Positioned to Capture Growth Summary Footprint Footprint includes approximately 5,000 miles of pipeline Growth opportunities driven by continued producer activity Processing capacity available at Versado to…
  19. January 2016 Investor Presentation – Targa Resources Corp. – slide 19
    Strategic North Texas, SouthTX and Oklahoma Positions Summary Footprint Four footprints including over 13,000 miles of pipeline Over 1.8 Bcf/d of gross processing capacity 200 MMcf/d Longhorn, Silver Oak II, and Stonewall plants…
  20. January 2016 Investor Presentation – Targa Resources Corp. – slide 20
    Strategic Position in the Core of the Williston Basin Summary Footprint System currently consists of oil gathering and terminaling and natural gas gathering and processing in McKenzie, Dunn and Mountrail Counties, ND Acquired in…
  21. January 2016 Investor Presentation – Targa Resources Corp. – slide 21
    Counterparty Credit Exposure and Mitigants Area Potential Description of (Predominant Counterparty Payments Contract Type) Credit Risk Mitigants Downstream Targa invoices for fees N/A Low Creditworthiness of due customers…
  22. January 2016 Investor Presentation – Targa Resources Corp. – slide 22
    TRC Acquisition of TRP Additional Information
  23. January 2016 Investor Presentation – Targa Resources Corp. – slide 23
    Improved Dividend Growth and Coverage TRC Pro Forma Dividends per Share Consensus Pricing(1) Pro Forma: 5.50 2016 2017 2018 Strong pro forma dividend Consensus Pricing growth compared to Targa BBL Wtd. Avg. (/Gal) 0.51 0.66 0.71…
  24. January 2016 Investor Presentation – Targa Resources Corp. – slide 24
    Improved Credit Profile TRP Compliance Leverage Consensus Pricing(1) TRPs existing debt 5.5x TRP Compliance remains outstanding Covenant 5.0x TRP will continue as a 4.5x 4.5x reporting entity 4.5x 4.4x 4.3x 4.3x 4.3x TRP will…
  25. January 2016 Investor Presentation – Targa Resources Corp. – slide 25
    Better Positioned in Lower Commodity Price Environments TRC Pro Forma Dividends per Share Price Sensitivity(1) Pro Forma: 4.50 2016 2017 2018 Dividend growth with Price Sensitivity positive coverage even in Targa BBL Wtd. Avg. (/Gal)…
  26. January 2016 Investor Presentation – Targa Resources Corp. – slide 26
    Better Positioned in Lower Commodity Price Environments TRP Compliance Leverage Price Sensitivity(1) TRPs existing debt 5.5x TRP Compliance remains outstanding 5.2x Covenant TRP will continue as a 5.0x 4.8x 4.7x reporting entity…
  27. January 2016 Investor Presentation – Targa Resources Corp. – slide 27
    Consensus Pricing and Price Sensitivity Summary Assumptions Consensus Pricing: 2016 2017 2018 Commodity Price Deck Targa BBL Wtd. Avg. (/Gal)(1) 0.51 0.66 0.71 Henry Hub Natural Gas (/MMBtu) 3.25 3.53 3.67 WTI Crude Oil (/Bbl)…
  28. January 2016 Investor Presentation – Targa Resources Corp. – slide 28
    Additional Information
  29. January 2016 Investor Presentation – Targa Resources Corp. – slide 29
    TRP Capitalization ( millions) Actual Actual Cash and Debt Maturity Coupon 6/30/2015 Adjustments 9/30/2015 Cash and Cash Equivalents 85.5 7.3 92.8 Accounts Receivable Securitization Dec-15 124.2 11.3 135.5 Revolving Credit Facility…
  30. January 2016 Investor Presentation – Targa Resources Corp. – slide 30
    Targa Leverage and Liquidity Liquidity(1) 1,400 Approximately 1.25 billion of current liquidity at quarter end 1,200 1,000 From January through October in Millions 800 2015, received proceeds of 600 approximately 500…
  31. January 2016 Investor Presentation – Targa Resources Corp. – slide 31
    Business Mix, Diversity and Fee Based Margin Business Mix Field G&P Diversity Q3 2015 Operating Margin Q3 2015 Natural Gas Inlet Volumes 2% 9% 20% 23% 50% 50% 17% 6% 7% 12% 5% G&P Downstream SAOU WestTX Sand Hills Versado…
  32. January 2016 Investor Presentation – Targa Resources Corp. – slide 32
    Diversity and Scale Mitigate Commodity Price Changes Growth has been driven by investing in the Adjusted EBITDA vs. Commodity Prices business, not by changes in commodity prices Adjusted EBITDA - Actual Adjusted EBITDA Annualized (1)…
  33. January 2016 Investor Presentation – Targa Resources Corp. – slide 33
    Strong Growth in Fee-Based Margin Continues Increasing Fee-Based Margin Provides Additional Stability to Our Business ( in millions) 250 235 236 150% 227 140% 219 211 130% 200 120% 187 110% 164 160 100% 150 90% 80% 113 70%…
  34. January 2016 Investor Presentation – Targa Resources Corp. – slide 34
    Galena Park Marine Terminal Effective Export Capacity Phase I expansion completed in September 2013 Phase II expansion completed in September 2014 Phase II expansion was completed in stages Additional 12 pipeline, refrigeration,…
  35. January 2016 Investor Presentation – Targa Resources Corp. – slide 35
    Dynamics of the Waterborne Propane Market VLGC Freight Rates(1) Increasing VLGC Fleet(2) 1.80 0.35 300 +10 1.60 +44 0.30 250 1.40 +32 253 243 Number of VLGCs 0.25 1.20 200 199 1.00 0.20 /gal /gal 150 167 0.80…
  36. January 2016 Investor Presentation – Targa Resources Corp. – slide 36
    Long and Short-Term Demand for Exports Continues U.S. Propane(1) 250 0.80 0.70 200 0.60 U.S. Gulf Coast propane and butane have 0.50 been favorably priced compared to world 150 0.40 markets over the last several years MMbbls…
  37. January 2016 Investor Presentation – Targa Resources Corp. – slide 37
    Petroleum Logistics Highlights At TRPs Channelview and Patriot Terminals: Expanding presence along the Houston Ship Channel In 2014 completed construction of a new 8 bay truck rack and installed a marine vapor combustor for…
  38. January 2016 Investor Presentation – Targa Resources Corp. – slide 38
    Marketing and Distribution Segment Marketing and Distribution Highlights NGL and Natural Gas Marketing Manage physical distribution of mixed NGLs and specification products using owned and third party facilities Manage inventories…
  39. January 2016 Investor Presentation – Targa Resources Corp. – slide 39
    Well Positioned Along the Louisiana Gulf Coast Summary Footprint LOU (Louisiana Operating Unit) 440 MMcf/d of gas processing (180 MMcf/d Gillis plant, 80 MMcf/d Acadia plant and 180 MMcf/d Big Lake plant) Interconnected to Lake…
  40. January 2016 Investor Presentation – Targa Resources Corp. – slide 40
    TRC Capitalization ( millions) Actual Actual Capitalization Maturity 6/30/2015 Adjustments 9/30/2015 Cash and Cash Equivalents -- 20.2 (10.1) 10.1 Senior Secured Revolver (670 MM) Feb-20 460.0 (15.0) 445.0 Term Loan B Feb-22…
  41. January 2016 Investor Presentation – Targa Resources Corp. – slide 41
    Reconciliations
  42. January 2016 Investor Presentation – Targa Resources Corp. – slide 42
    Non-GAAP Measures Reconciliation Adjusted EBITDA The Partnership defines Adjusted EBITDA as net income attributable to Targa Resources Partners LP before: interest; income taxes; depreciation and amortization; gains or losses on debt…
  43. January 2016 Investor Presentation – Targa Resources Corp. – slide 43
    Non-GAAP Reconciliation Q3 2015 EBITDA and Gross Margin 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 Six Months Ended…
  44. January 2016 Investor Presentation – Targa Resources Corp. – slide 44
    Non-GAAP Reconciliation DCF The following table presents a reconciliation of reported distributable cash flow to net income (loss) for the periods shown for TRP: Three Months Ended ( in millions) 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar…
  45. January 2016 Investor Presentation – Targa Resources Corp. – slide 45
    Non-GAAP Reconciliation 2010-2012 Fee-Based Margin 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…
  46. January 2016 Investor Presentation – Targa Resources Corp. – slide 46
    Non-GAAP Reconciliation 2013-2015 Fee-Based Margin The following table presents a reconciliation of operating margin to net income (loss) for the periods shown for TRP: Three Months Ended 3/31/2013 6/30/2013 9/30/2013 12/31/2013…
  47. January 2016 Investor Presentation – Targa Resources Corp. – slide 47
    Reconciliation of Total TRP Distributions ( in Millions, except per unit data) Actual Actual Actual Actual Actual Q3 2015 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Annualized Distributions to LP Units 96.3 138.9 143.1 143.1 572.4…
  48. January 2016 Investor Presentation – Targa Resources Corp. – slide 48
    1000 Louisiana Suite 4300 Houston, TX 77002 Phone: (713) 584-1000 Email: InvestorRelationstargaresources.com Website: www.targaresources.com 51

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