    Targa
Resources Goldman Sachs
Global Energy Conference 2015
January 7-8, 2015
Filed by Targa Resources Partners LP
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Atlas Pipeline Partners, L.P.
Commission File No.: 001-14998
This
filing
relates
to
a
proposed
business
combination
involving
Targa
Resources
Partners
LP
and
Atlas
Pipeline
Partners,
L.P. |
 2
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
facts,
included
in
this
presentation
that
address
activities,
events
or
developments
that
Targa
Resources
Partners
LP
(“TRP”
or
the
“Partnership”)
or
Targa
Resources
Corp.
(“TRC”
or
the
“Company”)
expect,
believe
or
anticipate
will
or
may
occur
in
the
future
are
forward-looking
statements.
These
forward-looking
statements
rely
on
a
number
of
assumptions
concerning
future
events
and
are
subject
to
a
number
of
uncertainties,
factors
and
risks,
many
of
which
are
outside
the
Partnership’s
and
the
Company’s
control,
which
could
cause
results
to
differ
materially
from
those
expected
by
management
of
Targa
Resources
Partners
LP
and
Targa
Resources
Corp.
Such
risks
and
uncertainties
include,
but
are
not
limited
to,
weather,
political,
economic
and
market
conditions,
including
declines
in
the
production
of
natural
gas
or
in
the
price
and
market
demand
for
natural
gas
and
natural
gas
liquids,
the
timing
and
success
of
business
development
efforts,
the
credit
risk
of
customers
and
other
uncertainties.
These
and
other
applicable
uncertainties,
factors
and
risks
are
described
more
fully
in
the
Partnership's
and
the
Company’s
Annual
Reports
on
Form
10-K
for
the
year
ended
December
31,
2013
and
other
reports
filed
with
the
Securities
and
Exchange
Commission.
The
Partnership
and
the
Company
undertake
no
obligation
to
update
or
revise
any
forward-looking
statement,
whether
as
a
result
of
new
information,
future
events
or
otherwise. |
 3
Additional Information
Additional Information and Where to Find It
In connection with the proposed transaction, Targa Resources Corp.
(“TRC”) will file with the U.S. Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 that will include a joint proxy statement of Atlas
Energy, L.P. (“ATLS”) and TRC and a prospectus of TRC (the “TRC joint proxy
statement/prospectus”). In connection with the proposed transaction, TRC
plans to mail the definitive TRC joint proxy statement/prospectus to its shareholders, and
ATLS plans to mail the definitive TRC joint proxy statement/prospectus to its
unitholders. Also in connection with the proposed transaction, Targa
Resources Partners LP (“TRP”) will file with the SEC a registration statement on Form S-4 that will include a
proxy statement of Atlas Pipeline Partners, L.P. (“APL”) and a prospectus
of TRP (the “TRP proxy statement/prospectus”). In connection with the proposed
transaction, APL plans to mail the definitive TRP proxy statement/prospectus to its
unitholders. INVESTORS, SHAREHOLDERS AND UNITHOLDERS ARE URGED TO READ THE
TRC JOINT PROXY STATEMENT/PROSPECTUS, THE TRP PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT TRC, TRP, ATLS AND APL, AS WELL AS THE PROPOSED
TRANSACTION AND RELATED MATTERS.
This communication does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or approval.
A
free
copy
of
the
TRC
Joint
Proxy
Statement/Prospectus,
the
TRP
Proxy
Statement/Prospectus
and
other
filings
containing
information
about
TRC,
TRP,
ATLS
and
APL
may
be
obtained
at
the
SEC’s
Internet
site
at
www.sec.gov.
In
addition,
the
documents
filed
with
the
SEC
by
TRC
and
TRP
may
be
obtained
free
of
charge
by
directing
such
request
to:
Targa
Resources,
Attention:
Investor
Relations,
1000
Louisiana,
Suite
4300,
Houston,
Texas
77002
or
emailing
InvestorRelations@targaresources.com
or
calling
(713)
584-1133.
These
documents
may
also
be
obtained
for
free
from
TRC’s
and
TRP’s
investor
relations
website
at
www.targaresources.com.
The
documents
filed
with
the
SEC
by
ATLS
may
be
obtained
free
of
charge
by
directing
such
request
to:
Atlas
Energy,
L.P.,
Attn:
Investor
Relations,
1845
Walnut
Street,
Philadelphia,
Pennsylvania
19103
or
emailing
InvestorRelations@atlasenergy.com.
These
documents
may
also
be
obtained
for
free
from
ATLS’s
investor
relations
website
at
www.atlasenergy.com.
The
documents
filed
with
the
SEC
by
APL
may
be
obtained
free
of
charge
by
directing
such
request
to:
Atlas
Pipeline
Partners,
L.P.,
Attn:
Investor
Relations,
1845
Walnut
Street,
Philadelphia,
Pennsylvania
19103
or
emailing
IR@atlaspipeline.com.
These
documents
may
also
be
obtained
for
free
from
APL’s
investor
relations
website
at
www.atlaspipeline.com.
Participants in Solicitation Relating to the Merger
TRC, TRP, ATLS and APL and their respective directors, executive
officers and other persons may be deemed to be participants in the solicitation of
proxies from TRC, ATLS or APL shareholders or unitholders, as applicable, in
respect of the proposed transaction that will be described in the TRC joint proxy
statement/prospectus and TRP proxy statement/prospectus. Information
regarding TRC’s directors and executive officers is contained in TRC’s definitive proxy
statement dated April 7, 2014, which has been filed with the SEC. Information
regarding directors and executive officers of TRP’s general partner is contained in
TRP’s Annual Report on Form 10-K for the year ended December 31, 2013,
which has been filed with the SEC. Information regarding directors and executive
officers of ATLS’s general partner is contained in ATLS’s definitive
proxy statement dated March 21, 2014, which has been filed with the SEC. Information regarding
directors and executive officers of APL’s general partner is contained in
APL’s Annual Report on Form 10-K for the year ended December 31, 2013, which has been
filed with the SEC.
A more complete description will be available in the registration statement and the
joint proxy statement/prospectus. |
 4
Targa Resources’
Two Public Companies
(1)
2010 covers time period from IPO (December 6, 2010) through December 31, 2010
Source: Bloomberg
TRP –
Annual Total Return Since 2010
TRC –
Annual Total Return Since IPO
TRC –
Dividends
TRP –
Distributions
NGLS Out/(Under)
Performance vs. AMZ
16%
3%
2%
21%
(9)%
TRGP Out/(Under)
Performance vs. AMZ
20%
42%
30%
44%
18% |
 Targa’s Diversified Midstream Platform
5
(1)
Operating margin percentages based on LTM as of September 30, 2014
Operating Margin
(1) |
 6
A Strong Footprint in
Active Basins
And a Leading Position at
Mont Belvieu
Drive Targa’s
Long-Term Growth
Leadership position in oil
and liquids rich Permian
Basin
Bakken position
capitalizes on strong
crude oil fundamentals
and active drilling activity
Leadership position in
the active portion of
Barnett Shale “combo”
play
GOM and onshore
Louisiana provide longer
term upside potential for
well positioned assets
Mont Belvieu is the
NGL hub of North
America
Increased domestic
NGL production is
driving capacity
expansions into and at
Mont Belvieu
Second largest
fractionation
ownership position at
Mont Belvieu
One of only two
operating commercial
NGL export facilities
on the Gulf Coast
linked to Mont Belvieu
Position not easily
replicated
Approximately $2.6
billion in announced
organic capex projects
completed or underway
Increased capacity to
support multiple U.S.
shale / resource plays
Additional fractionation
expansion to support
increased NGL supply
Increased connectivity to
U.S. end users of NGLs
Expansion of export
services capacity for
global LPG markets at
Galena Park marine
terminal
Positioning Pro Forma for
Targa/Atlas Transaction:
Expect to close Q1 2015
An even stronger footprint in
active
basins
–
modest
change
in fee based margin % and
G&P %
Additional NGL opportunities
Better growth prospects than
standalone
December 10
th
Press Release:
Maintaining pro forma 2015
estimates of 11-13% distribution
growth at TRP and 35%
dividend growth at TRC
Expect distribution coverage
of 1.0 to 1.2 times
Commodity prices of
$3.75/MMBtu for natural gas,
$60/barrel for crude oil and
$0.60/gallon for NGLs and
related volume expectations
Commodity prices of
$4.00/MMBtu for natural gas,
$80/barrel for crude oil and
$0.80/gallon for NGLs and
related
volume
expectations
Well Positioned for 2014 and Beyond |
 7
2014 End of Year Challenges Continue into 2015
Beginning in Q4 2014, the significant drop and resulting uncertainty in commodity
prices is impacting producers, and therefore Targa and other midstream
companies Resulting
difficulty
predicting,
planning
and
adjusting
for
producers’
future
activity
and
volume
levels
Targa is focused on:
Cost management and flexibility
Capital expenditure efficiency and flexibility
Other opportunities in a challenging environment |
 Major
Announced Capital Projects and Preliminary 2015 CapEx 8
Over $1 billion of projects completed in 2013 and approximately $1 billion completed
in 2014 Additional high quality growth projects under development for 2015 and
beyond, with focus on capex efficiency CBF Train 5 Expansion (100
MBbl/d) New Badlands Infrastructure and Potential Plant, which may be
downsized/delayed New Delaware Basin Plant, which may be
downsized/delayed (1)
35
MBbl/d
condensate
splitter/alternative
project
expected
to
be
in-service
end
of
2016
or
early
2017,
depending
on
permit
timing
and
customer
preference
(2)
Includes
additional
spending
in
both
Permian
Basin
and
North
Texas
(3)
Additional gas processing plant will be in-service in Q1 2015
(4)
~$2.2-$2.4 billion of fee-based capital, ~74-76% of listed
projects (4)
Downstream Growth Projects
Preliminary
Total CapEx
($ millions)
2013 CapEx
($ millions)
2014 CapEx
($ millions)
Preliminary
2015 CapEx
($ millions)
Actual /
Expected
Completion
Primarily
Fee-Based
Petroleum Logistics Projects -
2013 -
2015+
(1)
$250
$40
$50
$30
2013 -
2015+
CBF Train 4 Expansion (100 MBbl/d)
385
120
20
0
Mid 2013
CBF Train 5 Expansion (100 MBbl/d)
385
0
50
200
Mid 2016
International Export Project
480
250
165
0
Q3 2013/Q3 2014
Other
130
30
50
25
Total Downstream Projects
$1,630
$440
$335
$255
$1,630
G&P Growth Projects
Preliminary
Total CapEx
($ millions)
2013 CapEx
($ millions)
2014 CapEx
($ millions)
Preliminary
2015 CapEx
($ millions)
Actual /
Expected
Completion
Primarily
Fee-Based
Gathering & Processing Expansion Program -
2013 -
2015+
(2)
$185
$75
$110
$50
2013 -
2015+
North Texas Longhorn Project (200 MMcf/d)
150
40
20
0
May 2014
SAOU High Plains Plant (200 MMcf/d)
225
125
85
0
June 2014
Badlands Expansion Program -
2013 -
Q1 2015
(3)
465
250
215
0
2013/Q1 2015
New Badlands Infrastructure and Potential Plant
150-320
0
0
125-250
YE 2015+
New Delaware Basin Plant (100-300 MMcf/d)
100-250
0
0
50-110
Mid 2016+
Other
40
25
15
10
Total G&P Projects
$1,315 -
$1,635
$515
$445
$235 -
$420
$615 -
$785
Total Projects
$2,945 -
$3,265
$955
$780
$490 -
$675
$2,245 -
$2,415 |
 Additional Growth
Opportunities Total CapEx
($ millions)
Estimated
Timing
Primarily
Fee-Based
Badlands Expansion Program
Permian Expansion Program
Train 6 Expansion
Train 7 Expansion
Additional Condensate Splitter/Export Projects
Ethane Export Project
Other Projects
primarily
Total
$2,000+
2015 and beyond
Major Capital Projects Under Development
9
In current environment, Targa is focused on capital efficiency and flexibility
Over $2 billion of additional opportunities are in various stages of
development Opportunities include additional infrastructure in both G&P and
Downstream Increasing NGL supplies across the country will continue to drive
the need for more processing, fractionation and connectivity
|
 Diversity
and Scale Mitigate Commodity Price Changes Growth has been driven by investing
in the business, not by changes in commodity prices
TRP benefits from multiple factors that help mitigate
commodity price volatility, including:
Scale
Business and geographic diversity
Increasing fee-based margin
Hedging
TRP’s current hedges include:
Approximately 80% of 2014 natural gas and
approximately 30% of 2014 combined NGL and
condensate
Approximately 50% to 60% of natural gas equity
volumes for 2015
(1)
and 20% to 30% for 2016
(1)
Approximately 45% to 55% of condensate equity
volumes for 2015 and 25% to 35% for 2016
Given our hedge position and our large fee-based
operating margin, we estimate the following
sensitivities
for
Targa
Standalone
2015
EBITDA:
A $5 drop in crude price would decrease EBITDA by
~$3 million
A $0.05 drop in the weighted average NGLS price
would decrease EBITDA by ~$12 million
A $0.25 drop in natural gas price would result in an
approximate $5 million decrease in EBITDA
10
Adjusted EBITDA vs. Commodity Prices
(1)
Will be towards bottom-end of range if there is significant ethane rejection in
these years |
 11
Targa Leverage and Liquidity
(1)
Includes TRP’s total availability under the revolver plus cash, less
outstanding borrowings and letters of credit under the TRP revolver (2)
Adjusts EBITDA to provide credit for material capital projects that are in process,
but have not started commercial operation, and other items (2)
Compliance Leverage Ratio
Liquidity
(1)
Completed $800 million 4.125%
unsecured notes offering in
October 2014
Pro forma for offering, liquidity as of
September 30, 2014 is $1.45 billion
including capacity under accounts
receivable securitization facility
YTD through September 2014, raised
net proceeds of $257 million from
equity issuances under at-the-market
(“ATM”) program
Target
compliance
leverage
3x
-
4x
Debt/EBITDA
Have historically been on low end of
range
Leverage increased at end of 2012
due to Badlands acquisition
Q3 2014 compliance leverage was
2.7x |
 12
Targa + Atlas: Transaction Overview
Targa Resources Partners LP (NYSE: NGLS; “TRP”
or the “Partnership”) has executed a definitive agreement to acquire
Atlas Pipeline Partners, L.P. (NYSE: APL) for $5.8 billion
(1)
0.5846 NGLS common units plus a one-time cash payment of $1.26 for each APL LP
unit (implied premium (1)
of 15%)
$1.8 billion of debt at September 30, 2014
Targa Resources Corp. (NYSE: TRGP; “TRC”
or the “Company”) has executed a definitive agreement to acquire Atlas
Energy, L.P. (NYSE: ATLS), after its spin-off of non APL-related
assets, for $1.9 billion (1)
Prior to TRGP’s acquisition, all assets held by ATLS not associated with APL
will be spun out to existing ATLS unitholders 10.35 million TRGP shares
issued to ATLS unitholders $610 million of cash to ATLS
Each existing ATLS (after giving effect to ATLS’
spin out) unit will receive 0.1809 TRGP shares and $9.12 in cash
Accretive to NGLS and TRGP cash flow per unit and share, respectively, immediately
and over the longer-term, while providing APL and ATLS unitholders
increased value now and into the future Post
closing
(2)
,
NGLS
plans
to
increase
its
quarterly
distribution
by
$0.04
per
LP
unit
($0.16
per
LP
unit
annualized
rate)
NGLS
expects
11-13%
distribution
growth
in
2015
compared
to
7-9%
in
2014
Post closing
(2)
, TRGP plans to increase its quarterly dividend by $0.10 per share ($0.40 per
share annualized rate) TRGP expects approximately 35% dividend growth
(3)
in 2015 compared to 25%+ in 2014
Transactions are cross-conditional and subject to shareholder and regulatory
approvals HSR clearance received
Continue to expect transaction to close in Q1 2015
(1) Based on market data as of October 10, 2014, excluding transaction fees and
expenses (2) Management intends to recommend this increase at the first
regularly scheduled quarterly distribution declaration Board meeting after transaction closes
(3) Assumes NGLS distribution growth of 11-13% |
 13
Targa + Atlas: Attractive Positions in Active Basins
Barnett
Eagle Ford
Delaware
Bakken
Mississippi
Lime
Woodford
Pro Forma Asset Highlights
39 natural gas processing plants (~6.9 Bcf/d gross processing
capacity)
Over 22,500 miles of natural gas and crude oil gathering
pipeline
Gross NGL production of 278.9 MBbls/d in 2Q 2014
3 crude oil and refined products terminals with 2.5 MMBbls of
storage
17 gas treating facilities
573 MBbl/d gross fractionation capacity
~6.5 MMBbl/month effective capacity LPG export terminal
Atlas
Natural Gas Processing Plant
Natural Gas Pipeline
Targa
Natural Gas Processing Plant
Terminal
Fractionator
Natural Gas Pipeline
Crude Oil Pipeline
NGL Pipeline
Legend
(1) Source: Baker Hughes Incorporated, as of October 20, 2014
SCOOP
Midland
U.S. Land Rig Count by Basin
(1) |
 14
World Class Permian Footprint
Atlas’
WestTX system sits in the core of the Midland Basin
between Targa’s existing SAOU and Sand Hills systems
More than 75% of the rigs currently running in the Midland
Basin are in counties served by the combined systems
Pro forma, NGLS will be the 2
nd
largest Permian processor
with 1.4 Bcf/d in gross processing capacity
Recent activity includes Targa’s 200 MMcf/d High Plains
plant
placed
in
service
June
2014
and
Atlas’
200
MMcf/d
Edward plant placed in service September 2014
Announced
expansions
include
Atlas’
200
MMcf/d
Buffalo
plant (in service mid 2015) and Targa’s 300 MMcf/d Delaware
Basin plant (in service mid 2016)
Combined Permian Footprint
Year-End Permian Gross Processing Capacity
Legend
Atlas
Natural Gas Processing Plant
Natural Gas Pipeline
Targa
Natural Gas Processing Plant
Natural Gas Pipeline
Current Permian Gross
Processing Capacity
(MMcf/d)
Miles of Pipeline
SAOU
369
1,800
Sand Hills
175
1,500
Versado
240
3,350
Total: Targa
784
6,650
Atlas WestTX
655
3,600
Total: PF Targa
1,439
10,250
Delaware
Midland |
  15
Leading Positions in Active Basins
Combined Footprint
Year-End NorthTX/SouthTX/OK Gross Processing Capacity
Atlas
Natural Gas Processing Plant
Natural Gas Pipeline
Targa
Natural Gas Processing Plant
Terminal
Fractionator
Natural Gas Pipeline
Crude Oil Pipeline
NGL Pipeline
Legend
Barnett
Eagle Ford
Woodford
Mississippi Lime
Atlas’
assets also provide exposure to significant drilling
activity in the Mississippi Lime, SCOOP, Arkoma Woodford
and Eagle Ford plays
Largest gathering and processing footprint in the Mississippi
Lime with 458 MMcf/d of nameplate capacity
System remains full with volumes offloaded to third parties
Current project underway to connect Velma & Arkoma
systems to create a gathering and processing super-system
Further potential to connect to Targa’s North Texas assets
Long-term contracts with active producers in the Eagle Ford
SCOOP
Current North
Texas/SouthTX/OK Gross
Processing Capacity
(MMcf/d)
Miles of Pipeline
SouthOK
500
1,300
WestOK
458
5,700
SouthTX
400
500
Total: Atlas
1,358
7,500
Targa North Texas
478
4,500
Total: PF Targa
1,836
12,000 |
 16
16
Producer Activity Drives NGL Flows to Mont Belvieu
Growing field NGL production
increases NGL flows to Mont
Belvieu
Increased NGL production
could support Targa’s existing
and expanding Mont Belvieu
and Galena Park presence
Petrochemical investments,
fractionation and export
services will continue to clear
additional supply
Targa’s Mont Belvieu and
Galena Park businesses very
well positioned
Barnett
Eagle Ford
Midland
Mississippi Lime
Woodford
Delaware
Marcellus &
Others
Rockies
Galena Park Marine
Import / Export
Terminal
Mont
Belvieu
Terminal
SCOOP |
   Market Cap
~ $10 Billion
(1)
~ $3 Billion
(2)
~ $13 Billion
(1)
Enterprise Value
~ $13 Billion
(1)
~ $6 Billion
(2)
~ $19 Billion
(1)
2014E EBITDA ($MM)
$925 - $975 Million
$400 - $425 Million
$1,325 - $1,400 Million
2014E Growth
CAPEX ($MM)
$780 Million
$400 - $450 Million
$1,180 - $1,230 Million
2014E Operating
Margin by Segment
YE 2014E % Fee-
Based
68%
32%
Fixed Fee
Percent of Proceeds
35%
7%
38%
20%
Field G&P
Coastal G&P
Logistics
Marketing and Dist.
40%
60%
Texas
Oklahoma
25%
5%
27%
15%
11%
17%
Field G&P - Targa
Coastal G&P - Targa
Logistics - Targa
Marketing and Dist. - Targa
Texas - Atlas
Oklahoma - Atlas
40%
60%
Fixed Fee
Percent of Proceeds
60%
40%
Fixed Fee
Percent of Proceeds
17
Targa + Atlas: Increased Size and Scale Enhance Credit Profile
Targa
Atlas
Pro Forma Targa
(1) Represents
combined
market
cap
and
enterprise
value
for
NGLS
and
TRGP
as
of
December
31,
2014,
less
the
value
of
NGLS
units
or
PF
NGLS
units
owned
by
TRGP
(2) Represents combined market cap and enterprise value for APL and ATLS as of
December 31, 2014 based on transaction consideration (3) Includes
keep-whole at 1% of total margin (3) |
 18
Targa + Atlas: Strategic Highlights
Attractive Positions
in Active Basins
Creates World-
Class Permian
Footprint
Complementary
Assets with
Significant Growth
Opportunities
Enhances
Credit Profile
Significant Long-
Term Value Creation
Already strong positions in Permian and Bakken enhanced with entry into Mississippi
Lime and Eagle Ford 4
of
the
top
5
basins
by
active
rig
count
and
unconventional
well
spuds
(1)
Top 3 basins by oil production
(1)
Also
exposed
to
emerging
SCOOP
play
and
continued
development
of
NGL-rich
Barnett
Shale
Adds diversity and leadership position in all basins/plays
Combines strong Permian Basin positions to create a premier franchise
Provides new customer relationships with the most active operators in each
basin Current combined processing capacity of 1,439 MMcf/d
Significant organic growth project opportunities
2014 pro forma growth capex of ~$1.2 billion
Additional projects under development of over $3 billion
NGL production to support Targa’s leading NGL position in Mont Belvieu and
Galena Park Estimated
pro
forma
leverage
ratio
of
3.3x
Total
Debt
/
2014E
EBITDA
(4)
at
NGLS
Increased size and scale move NGLS credit metrics closer to investment grade over
time Immediately accretive to distributable cash flow at both NGLS and
TRGP Increases FY 2015 vs FY 2014 distribution growth at NGLS to 11-13%
and at TRGP to approximately 35% Provides larger asset base with additional
long-term growth opportunities Higher long-term distribution/dividend
growth profile than Targa standalone (1) Source: Oil & Gas Investor
(2) Based
on
market
data
as
of
December
31,
2014,
less
the
value
of
16.3
MM
PF
NGLS
units
owned
by
TRGP
(3) Based on NGLS and APL guidance ranges
(4) Based on estimated compliance ratio
Increased Size and
Scale
Combined partnership will be one of the largest diversified MLPs
Pro forma enterprise value
(2)
of $19 billion
Pro
forma
2014E
EBITDA
of
approximately
$1.3-$1.4
billion
(3) |
 Targa
Resources – Diversified MLP with Increased Scale
19
MLPs
Ranked
by
2015E
EBITDA
(1)
Creates 11th largest diversified MLP on EBITDA basis (upper mid-cap / lower
large-cap MLP) Note: TRP/APL combination includes $20 million of
synergies (1) Source: Wall Street research estimates
Investment Grade MLPs
Non-Investment Grade MLPs |
 20
Targa + Atlas: Current Commodity Price Environment
Despite the current and forward commodity price environment being weaker than when
the Targa/Atlas transaction was announced on October 13, 2014, we maintain the
pro forma distribution and dividend growth estimates originally
provided: 2015 distribution growth for TRP of 11% to 13%
2015 dividend growth for TRC of 35%
TRP
currently
expects
the
above
referenced
pro
forma
distribution
growth
range
for
2015,
along
with
pro
forma
distribution
coverage
of
approximately
1.0
to
1.2
times,
under
a
range
of
possible
scenarios:
(i)
(a)
commodity
prices
of
$3.75
per
MMBtu
for
natural
gas,
$60
per
barrel
for
crude
oil
and
$0.60
per
gallon
for
NGLs;
(b)
current
expectations
of
activity
levels
at
these
prices,
resulting
in
low
single
digit
annual
volume
growth
for
pro
forma
TRP
and
APL
field
gathering
and
processing
businesses
compared
to
current
estimated
fourth
quarter
2014
volumes;
and
(c)
only
LPG
export
volumes
that
are
currently
under
contract
(ii)
(a)
commodity
prices
of
$4.00
per
MMBtu
for
natural
gas,
$80
per
barrel
for
crude
oil
and
$0.80
per
gallon
for
NGLs;
(b)
volume
growth
in
line
with
historical
growth
rates
as
expected
at
the
time
of
announcement
for
pro
forma
TRP
and
APL
field
gathering
and
processing
businesses;
and
(c)
a
modest
level
of
export
volumes
above
those
currently
under
contract |
 Targa
Investment Highlights 21
Well positioned in U.S.
shale / resource plays, with
an even stronger footprint in
active basins with close of
the Targa/Atlas transaction
Leadership position at Mont
Belvieu and associated LPG
export facility at Houston
Ship Channel
Increasing scale, diversity
and fee-based margin
Strong financial profile
Strong track record of
distribution and dividend
growth
Experienced management
team |
 Appendix |
 23
This presentation includes the non-GAAP financial measure of Adjusted EBITDA.
The presentation provides a reconciliation of this non-GAAP
financial measures to its most directly comparable financial measure calculated and
presented in accordance with generally accepted accounting principles in the United
States of America ("GAAP"). Our non-GAAP financial measures
should not be considered as alternatives to GAAP measures such as net
income, operating income, net cash flows provided by operating activities or any
other GAAP measure of liquidity or financial performance.
Non-GAAP Measures Reconciliation |
 24
Adjusted EBITDA –
The Partnership and Targa define Adjusted EBITDA as net income attributable to
Targa Resources Partners LP before: interest; income taxes; depreciation and
amortization; gains or losses on debt repurchases and redemptions; early
debt extinguishment and asset disposals; non-cash risk management
activities related to derivative instruments; changes in the fair value of
the Badlands acquisition contingent consideration and the
non-controlling interest portion of depreciation and amortization expenses.
Adjusted EBITDA is used as a supplemental financial measure by our
management and by external users of our financial statements such as
investors, commercial banks and others. The economic substance behind
management’s use of Adjusted EBITDA is to measure the ability of our
assets to generate cash sufficient to pay interest costs, support our
indebtedness and make distributions to our investors.
Adjusted EBITDA is a non-GAAP financial measure. The GAAP measures most
directly comparable to Adjusted EBITDA are net cash provided by operating
activities and net income (loss) attributable to Targa Resources Partners
LP. Adjusted EBITDA should not be considered as an alternative to GAAP net cash
provided by operating activities or GAAP net income. Adjusted EBITDA has
important limitations as an analytical tool. Investors should not consider
Adjusted EBITDA in isolation or as a substitute for analysis of our results
as reported under GAAP. Because Adjusted EBITDA excludes some, but not all,
items that affect net income and net cash provided by operating activities and is
defined differently by different companies in our industry, our definition of
Adjusted EBITDA may not be comparable to similarly titled measures of other
companies. Management compensates for the limitations of Adjusted
EBITDA as an analytical tool by reviewing the comparable
GAAP measures, understanding the differences between the measures and incorporating
these insights into management’s decision-making processes.
Non-GAAP Measures Reconciliation |
 25
1000 Louisiana
Suite 4300
Houston, TX 77002
Phone: (713) 584-1000
Email: InvestorRelations@targaresources.com
Website: www.targaresources.com |