Targa Resources (TRGP) Reports $500M Common Share Buyback; Offers FY20 Outlook

Targa Resources Corp. (NYSE: TRGP) announced today that the board of directors of the Company has authorized a share repurchase program (the “Share Repurchase Program”) for the repurchase of up to $500 million of the Company’s outstanding common stock. The Share Repurchase Program is effective immediately. The repurchases will be made in accordance with applicable securities laws from time to time in open market or private transactions and may be made pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934. The repurchases will depend on market conditions and may be discontinued at any time.

While there continue to be uncertainties around the impacts of COVID-19, the Company’s overall business performance has been strong, and Targa currently estimates its full-year 2020 Adjusted EBITDA to be at or around the high end of its previously provided outlook of $1.5 billion to $1.625 billion. The Company also currently estimates that its 2020 net growth capital spending will be around the low end of its previously provided outlook of $700 million to $800 million.

“Our expected strong performance and lower growth capital spending through the second half of 2020 creates additional free cash flow, which positions us to continue to execute on our strategy of reducing leverage over time,” said Matt Meloy, Chief Executive Officer of Targa. “We are focused on continuing to improve our financial flexibility by reducing our leverage and simplifying our capital structure as we look forward, and that long-term strategy is unchanged by implementing a share repurchase program. Similar to earlier this year when we repurchased a portion of our publicly traded senior notes, this program allows us to be positioned to make similar opportunistic repurchases of our common shares. This provides us with an attractive opportunity to return value to our shareholders.”

Targa Resources Corp. - Non-GAAP Financial Measure

The Company defines Adjusted EBITDA as net income (loss) attributable to the Company before interest, income taxes, depreciation and amortization, and other items that the Company believes should be adjusted consistent with the Company’s core operating performance. The adjusting items are detailed in the Adjusted EBITDA reconciliation table and its footnotes. Adjusted EBITDA is used as a supplemental financial measure by the Company and by external users of the Company’s financial statements such as investors, commercial banks and others to measure the ability of the Company’s assets to generate cash sufficient to pay interest costs, support the Company’s indebtedness and pay dividends to the Company’s investors.

Targa currently estimates its full-year 2020 Adjusted EBITDA to be at or around the high end of its previously provided outlook of $1.5 billion to $1.625 billion. The following table presents a reconciliation of estimated net income of the Company to estimated Adjusted EBITDA for 2020:

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