DT Midstream Q1 2025 Earnings Report

DT Midstream EPS Results

• Actual EPS: $1.06
• Consensus EPS: $1.07
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.99

DT Midstream Revenue Results

• Actual Revenue: $288.81 million
• Expected Revenue: $285.48 million
• Beat/Miss: Beat by +$3.33 million
• YoY Revenue Growth: N/A

DT Midstream Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 9:00AM ET

DT Midstream (NYSE:DTM), together with its subsidiaries, provides integrated natural gas services in the United States. The company operates through two segments, Pipeline and Gathering. The Pipeline segment owns and operates interstate and intrastate natural gas pipelines, storage systems, and natural gas gathering lateral pipelines. This segment also engages in the transportation and storage of natural gas for intermediate and end-user customers. The Gathering segment owns and operates gas gathering systems. This segment is involved in the collection of natural gas for delivery to plants for treating, to gathering pipelines for further gathering, or to pipelines for transportation; and provision of associated ancillary services, including compression, dehydration, gas treatment, water impoundment, water transportation, water disposal, and sand mining. It serves natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. The company was incorporated in 2021 and is headquartered in Detroit, Michigan.

DT Midstream Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Welcome to the DTE Midstream First Quarter twenty twenty five Earnings Call. I will now turn it over to our speaker today, Todd Lerman, Director of Investor Relations. Please go ahead.

[Todd Lohrmann, Director of Investor Relations at DT Midstream]

Good morning, and welcome, everyone. Before we get started, I would like to remind you to read the Safe Harbor statement on Page two of the presentation, including the reference to forward looking statements. Our presentation also includes references to non GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, President and CEO and Jeff Jewell, Executive Vice President and CFO.

[Todd Lohrmann, Director of Investor Relations at DT Midstream]

So with that, I'll go ahead and turn the call over to David.

[David Slater, President & CEO at DT Midstream]

Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll touch on our financial results, provide an update on the latest commercial activity and construction progress on our growth projects. I'll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook. So with that, we are off to a strong start in 2025, giving us confidence in our full year plan. We are reaffirming our 2025 adjusted EBITDA guidance range and our 2026 adjusted EBITDA early outlook range.

[David Slater, President & CEO at DT Midstream]

And we continue to execute on our $2,300,000,000 organic growth project backlog. Our teams remain focused on integrating our newly acquired interstate pipelines. The key integration activities are progressing on schedule, and we completed full cutover of all financial activities in the DTM systems on April 1 and are on track to complete all remaining milestones by year end. We onboarded all key employees at close and benefited from the team's expertise with these assets during the winter season, in which our pipelines were highly utilized and provided reliable service. As we gain additional insights into these assets and how they operate, we're developing a clearer view of the commercial opportunities they present, including synergies with our existing network, and we feel that the growth and modernization opportunities offered from them are better than our initial assessment.

[David Slater, President & CEO at DT Midstream]

Construction is currently underway on the first of these growth projects, the Midwestern Gas Transmission Power Plant lateral to serve AES, Indiana's Petersburg Generating Station. On the broader construction front, all of our in flight growth investments remain on track and on budget, And expansions across the gathering footprint will begin to contribute during the second half of the year. As a reminder, we expect these projects to ramp over a period of time and look forward to their contributions as they serve some of the most strategic supply areas in the country. Finally, I'd like to take a moment to address the recent market volatility and its long term impacts to DTM and the broader natural gas sector fundamentals. The first quarter of twenty twenty five was a volatile period for the market, with significant cold weather in January rebalancing the market and driving natural gas prices up, followed by a decline in pricing as the markets tried to understand the impact of tariff announcements.

[David Slater, President & CEO at DT Midstream]

Despite the uncertainty ahead and volatility, ETM, a pure play natural gas midstream company, is fundamentally well positioned, and our plan remains unchanged. Our contracts have been structured to be durable even in volatile markets with significant demand based revenues, a customer base that is over 80% investment grade rated and contract terms that average seven years. In addition, we have no commodity exposure and minimal volume exposure across our portfolio with our pipeline segment comprising 70% of adjusted EBITDA, serving strong demand pull utility customers anchored by long term contracts. We expect tariffs will have no material effect on us as we have procured long lead critical components for our projects currently in progress and maintain strong strategic relationships with suppliers, which is why we are confident in reaffirming our 2025 and 2026 adjusted EBITDA guidance ranges as well as our CapEx guidance. Looking out over a longer term time horizon, we remain bullish about the outlook for natural gas infrastructure.

[David Slater, President & CEO at DT Midstream]

Total U. S. Natural gas supply and demand are both expected to grow by approximately 19 Bcf per day through 02/1930, with demand growth primarily driven by LNG exports, data center power generation, utility scale power generation and industrial onshoring. Our Louisiana assets are very well positioned to serve this growing LNG demand in the Gulf Coast region. Likewise, data center and utility scale power generation is expected to drive 25% growth in the PJM and MISO power market regions by 02/1930, and this is where the bulk of our pipeline assets are located.

[David Slater, President & CEO at DT Midstream]

In addition, the long term positive effects of higher tariffs will result in reshoring of industrial demand, require more power and natural gas to serve energy intensive industries to relocate manufacturing and industrial operations to The United States. Two thirds of the supply increase to meet this demand growth is expected to come from the Haynesville and Appalachian regions where our assets are located, providing opportunities for higher utilization and expansion of our gathering systems to feed our pipelines. Finally, there is growing political and regulatory support emerging for natural gas and energy infrastructure. With the recognition of a national energy emergency and appreciation of the need to streamline the process, for getting much needed infrastructure built. So overall, the fundamentals supporting the need for more natural gas infrastructure remain intact, and we are confident in our ability to continue to deliver on our commitments to our customers, suppliers and investors.

[David Slater, President & CEO at DT Midstream]

I'll now pass it over to Jeff to walk you through our quarterly financials and outlook.

[Jeff Jewell, EVP & CFO at DT Midstream]

Thanks, David, and good morning, everyone. In the first quarter, we delivered adjusted EBITDA of $280,000,000 representing a $45,000,000 increase from the prior quarter. Our pipeline segment results were 39,000,000 higher than the fourth quarter twenty twenty four, which includes a full quarter contribution from our acquired interstate pipelines. Gathering segment results were $6,000,000 greater than the fourth quarter twenty twenty four, reflecting lower overall expenses in the first quarter twenty twenty five and the impact of growing volumes in the Haynesville. Operationally, total gathering volumes across the Haynesville averaged 1.67 Bcf per day, an increase from the fourth quarter, driven by new volumes and the return of offline production.

[Jeff Jewell, EVP & CFO at DT Midstream]

In the Northeast, volumes averaged 1.3 Bcf per day, a decrease from the fourth quarter driven by timing of producer activity primarily across our Appalachia and Susquehanna gathering systems, but remain in line with our full year plan. Looking ahead to the second quarter, our plan, which our full year guidance is based on, is for adjusted EBITDA to be lower than the first quarter, driven by seasonality across our interstate pipelines including JVs and expected rate step down on Guardian pipeline, which was settled earlier in 2024 and included on our transaction purchase multiple and typical maintenance activity across our gathering assets. We remain confident in our full year outlook and reaffirm our 2025 adjusted EBITDA guidance range and our 2026 adjusted EBITDA early outlook, reflecting the strong positioning of our assets and the durable nature of our contracting. We've increased our committed capital in 2025 and 2026 to reflect several new projects being executed. With approximately $365,000,000 total committed in 2025 and approximately $100,000,000 committed in 2026.

[Jeff Jewell, EVP & CFO at DT Midstream]

We look forward to our annual rating agency meetings in mid May, where we will discuss the strength of our credit profile and our commitment to preserving the strength of our balance sheet and achieving an investment grade credit rating. As a reminder, we are currently investment grade with Fitch ratings and on positive outlook with both Moody's and S and P, requiring only one additional agency to upgrade us before fully achieving an investment grade rating. Finally, today we also announced that our Board of Directors approved our first quarter dividend of $0.82 per share, unchanged from the prior quarter, And we remain committed to grow the dividend 5% to 7% per year in line with our long term adjusted EBITDA growth. I'll now pass it back over to David for closing remarks.

[David Slater, President & CEO at DT Midstream]

Thanks, Jeff. So in summary, we remain confident in delivering on our guidance, continuing our track record of strong performance that we've maintained since we spun the company in 2021. Our high quality pure play natural gas pipeline asset portfolio is very well positioned to take advantage of opportunities across our network and execute on our large organic project backlog. And the fundamentals supporting natural gas infrastructure remain stronger than ever, with significant increases in demand coming from LNG exports and the power sector, increased political support behind natural gas and energy infrastructure and a broader realization of the key role natural gas will need to play as a reliable, cost effective and clean fuel to meet our country's growing energy demands. And with that, we can now open up the line for questions.

[Operator]

Thank you. And we will now begin the question and answer session. And your first question comes from the line of Michael Blue with Wells Fargo. Please go ahead.

[Michael Blum, Managing Director at Wells Fargo Securities]

Thanks. Good morning, everybody.

[David Slater, President & CEO at DT Midstream]

Good morning, Michael.

[Michael Blum, Managing Director at Wells Fargo Securities]

So I wanted to start on the volumes, the gathering volumes in Q1. So you had a really big uptick in Haynesville and obviously a downtick in Northeast. Wanted to get, first of all, your your just speak to what's happening there, particularly in the Haynesville. Is this kind of a new run rate or is there anything in particular going on there? And then, how do you see, the rest of, '25 and and and beyond playing out in in both Northeast and Haynesville?

[David Slater, President & CEO at DT Midstream]

Yeah. In Haynesville, which is where you saw the biggest uptick, that's completely in line with our large public producers and what they've communicated and reported to the markets on their activity. I'd say the other activity that's happening, particularly in the Haynesville, is the privates are have become very active. We have a number of privates on the network. So we're working very closely with them as they seem to have been responding quicker to the price signals and the and the demand showing up in the area than some of the publics.

[David Slater, President & CEO at DT Midstream]

But, yeah, we feel very confident in in the Haynesville activity, very confident in our guidance for what we expect to see there for the balance of the year, likely continuing to see some ramp, throughout the year towards year end. So again, feel very, optimistic about the Haynesville right now. Appalachia, it's playing out exactly as we expected it to play out in our guidance. There's some timing, of activity that's kind of embedded in those volume numbers. And, I think in our disclosures, we've talked about a number of projects clicking in in the second half of the year in Appalachia.

[David Slater, President & CEO at DT Midstream]

And, that's how you should think about the profile for Appalachia. But in general, very aligned with what we've got in our full year plan.

[Michael Blum, Managing Director at Wells Fargo Securities]

Okay. Great. Thanks for that. And then just wanted to ask in the past, you've you've talked about, you know, multiple, I think, or maybe even more potential projects aimed at supplying data centers and want to kinda hear the update where that stands today. Thanks.

[David Slater, President & CEO at DT Midstream]

Yeah. That continues to be very active, that file. And, yeah, there's there's a large group of proposals on the table with numerous sites across our entire footprint. And that I'm referring to what I'll call behind the meter, data center power demand. In addition to that, there's also numerous proposals across our entire footprint on what I would call utility scale power generation.

[David Slater, President & CEO at DT Midstream]

So we're seeing both those sectors very active, you know, and, you know, advanced commercial conversations in both those categories. It's very active and ongoing. And, yes, as we FID projects, we'll be happy to share that with our investors.

[Michael Blum, Managing Director at Wells Fargo Securities]

Thank you.

[Operator]

And your next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Hi, good morning.

[David Slater, President & CEO at DT Midstream]

Good morning, Jeremy.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Hi. Just want to start off with Millennium here if I could. Looks like I think there might be an open season, for about a half a year or so. And just wondering if you could, provide any color there on the outlook, if that's in the backlog or any other thoughts you could share?

[David Slater, President & CEO at DT Midstream]

Yes. Thanks for bringing that one up, Jeremy. That is literally hot off the press. I think that went public, at the end of, the week last week. But, yes, I'd say that's a good example of the level of inbound inquiries we're getting right now across all of our pipelines, especially in the Upper Midwest and Northeast areas.

[David Slater, President & CEO at DT Midstream]

There's just strong interest in incremental capacity. And Millennium is in a fairly unique position there. They've got some abilities to repurpose existing capacity and to leverage, other assets that are in the ground locally that, there's synergies between the Millennium pipeline and those other assets to get deeper into that New York and New England market. I think that market area has come to a realization that they are materially short capacity. And I think what I talked about in my opening statement, just that fundamental backdrop has shifted and changed in a positive way.

[David Slater, President & CEO at DT Midstream]

And I think those those utilities and those markets are sort of reassessing their situation, and we'll see how the open season goes, but this open season is really to draw in and get a better read from those markets, the nature of the demands that they're they need to meet and and how Millennium can serve that. So stay tuned. That's kind of the first step in a in a larger expansion project. We're seeing similar inbounds, across other FERC assets, you know, including our newly acquired assets. So again, it it just kinda goes to that fundamental backdrop that we're operating in.

[David Slater, President & CEO at DT Midstream]

Just clear demand growth occurring across our footprint. We're in the early stages of assessing how we can respond to that and what type of expansions are acceptable in the market. You know, another data point to kind of support this early activity, You know, we've we had peak day, send outs on three of our FERC regulated assets, our our storage business and two of our, our new pipelines. And that's just an indication of that demand has grown in this region, and there's constraints emerging. In terms of business in our backlog, no, this is not in our backlog.

[David Slater, President & CEO at DT Midstream]

So this is another good example of you know, what we communicate with investors are projects that are either FID ed or near FID in the backlog. Projects like this that are earlier days are kind of excluded from the backlog. So the backlog is, you know, the gross backlog, the unadjusted backlog is actually growing right now. So, again, very optimistic. Our job is we need to commercialize that and stay tuned as we as we move these projects along, and we'll share the updates with the investors as appropriate.

[David Slater, President & CEO at DT Midstream]

Great question, though.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. And maybe if I could just dig in at a high level a little bit more on some of the comments you say there. I mean, clearly, there's a change at the federal level with dealing with energy infrastructure, and the utilities have a duty to serve their customers. And so we see that alignment. But just curious, guess, more at the local level or really at the state level, we've seen legal filibuster and other tactics in the past, stymie energy infrastructure development.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Do you see, I guess, different tone coming out of, you know, some of those stakeholders?

[David Slater, President & CEO at DT Midstream]

We do. And, you know, I think there's a series of events that has occurred over the last twelve months, you know, and I'll rattle off a few that I think are changing the sentiment in the market. I'd say one is a lot of the renewal builds that have been announced. You know, they haven't delivered as advertised. They they've either been canceled or they're showing up late or the cost is significantly different than what was originally intended.

[David Slater, President & CEO at DT Midstream]

So that would be one thing that I think is soaking into the market. I'd say on a reliability perspective, the true impact to reliability on on the intermittency of these new generation assets is sinking into the market and being realized. You said it well, Jeremy, the utilities have an obligation to serve. And if there are service challenges in the future that, likely lands, you know, the public sentiment will be with the utilities, and they don't wanna be the ones, quote, holding the bag on that public sentiment. So I think that's shifting the the thinking around the executives, with a bunch of utilities.

[David Slater, President & CEO at DT Midstream]

Significant growth happening behind utilities, both gas and power. So these are all just the fundamentals that that are, I think, causing the sentiment in the market to shift and a realization that, you know, we're probably short capacity. We need to shore up the supply side. And I think we're in the early days of that. So and I think public sentiment has shifted as well.

[David Slater, President & CEO at DT Midstream]

I think on the other side of the the new administration and how the election played out, I think there's just this recognition in the public the general recognition in the public that, hey. We need we need this fuel. We need, economic fuel, and energy, and we have it within the country. This is a domestic supply. So there's just a lot of things I think have shifted here over the last twelve months that's really moved the pendulum, you know, from what I'll call maybe on the far left side to bringing it back to the center, where there's an appreciation we need all of the above.

[David Slater, President & CEO at DT Midstream]

And I think that's gonna benefit the, you know, the natural gas, the pipeline sector, and and it's also gonna benefit the, the electric sector as well. So

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. That's very helpful. Thank you for that. One last one, if I could sneak in here just on the LNG demand pull side. We saw the Woodside FID here.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

And just wondering if you could comment on opportunities that might stem from that or anything else we're seeing on, you know, LNG commercialization moving forward across the board?

[David Slater, President & CEO at DT Midstream]

Yeah. That FID was really positive when I when I read that the other day. And, just to remind everybody, Woodside, part of that FID is the header system that serves that facility. It's about a three BCF a day header system, and it's designed to connect directly into LEAP. So LEAP will be one of a handful of supply points into that header system.

[David Slater, President & CEO at DT Midstream]

So we're really happy and pleased to see that FID. And, as we worked hand in glove with the previous owner, we will continue to work hand in glove with, Woodside and the, you know, the new ownership. So very pleased to see that FID.

[Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan]

Got it. Sounds like expansion opportunity there. Thank you for the color.

[David Slater, President & CEO at DT Midstream]

You're welcome, Jeremy.

[Operator]

Next question comes from the line of Theresa Chen with Barclays. Please go ahead.

[Theresa Chen, Senior Analyst at Barclays]

Good morning. David, I'd like

[Theresa Chen, Senior Analyst at Barclays]

to dig in a little bit more on your backlog, specifically related to your comments about potential further expansions that are under development. Can you provide some more color on where things stand with the integrated solution across your Northeast gathering as well as the existing pipelines into your Midwest newly acquired Midwest assets. Are there any commercial developments to note there? And can we just think about how much CapEx that could be for DTM if you were to bring that molecule from your gathering system onto Nexus expansion, vector expansion straight to the end user in the Midwest?

[David Slater, President & CEO at DT Midstream]

Yes. Sure. I can provide a bit more color there. Maybe I'm gonna pivot. I think we talked about what's happening already on Millennium.

[David Slater, President & CEO at DT Midstream]

So I'm gonna pivot over to the new pipelines that we acquired from OneOak. So we're we're in month four. We had a really strong winter. Those assets, like I mentioned earlier, performed really well, really strong demand, had some record high send outs on those assets. So really pleased fundamentally with how they performed and our assessment of their importance to serve those load centers in the Upper Midwest.

[David Slater, President & CEO at DT Midstream]

We're taking a harder look, and we obviously have more information now around the growth opportunities, the modernization opportunities, and how they will integrate into the other assets, so particularly storage vector. And what I'll say at this point is that what we thought when we announced the transaction based on what we think today, we are more bullish. The opportunity set is more robust than we thought it was when we announced the acquisition. So very positive about that. Obviously, it's our job to commercialize that now.

[David Slater, President & CEO at DT Midstream]

You know, that that power plant on Midwestern literally commercializing late last year right around close was was a really good early indication of the opportunity set and the speed at which it can move. So as we get more confident in this, we will be providing more clarity and updates to the investors. But at this point, I would just put a green arrow up on backlog opportunities that are manifesting. As we get more confident with them and can clarify them, we'll provide further updates.

[Theresa Chen, Senior Analyst at Barclays]

Thank you.

[Operator]

And your next question comes from the line of Spiro Dounis with Citi. Please go ahead.

[Spiro Dounis, Director at Citigroup]

Thanks, operator. Good morning, team.

[Spiro Dounis, Director at Citigroup]

I wanted to start with LEAP, actually. David, just want to pull some of your comments together. It sounds like diesel activity is kind of ramping back up again. The same time, Woodside LNG is starting to FID again. And I think our working assumption around the next lease expansion was that maybe it was years away just given the two competing pipelines coming online soon.

[Spiro Dounis, Director at Citigroup]

But any sense of that timeline is moving forward? Just want to get your latest thoughts there.

[David Slater, President & CEO at DT Midstream]

Good morning, Spiro. Yes. So our thoughts on LEAP, LEAP, if you look at how we've expanded that over the last two, three years, it's been in these nice bite sized digestible increments. I don't see that changing going forward. I think we're really well positioned in the market in terms of the service offering.

[David Slater, President & CEO at DT Midstream]

We offer very competitive rates. We are highly interconnected to the supply across the entire footprint of the basin. And we have a lot of delivery flexibility in terms of the physical deliveries we can make to a myriad of the LNG facilities on the Gulf Coast. So I'd say from a competitive perspective, we're well positioned. You should expect the continued, what I'll call, bite size expansion opportunities.

[David Slater, President & CEO at DT Midstream]

We're kind of coming out of this period where Haynesville kind of tapped the brake over the last eighteen months, right? And they're now feels like they're putting their foot back on the gas. So I think we just need to let the clock run here a little bit to see how the basin responds. You alluded to the new projects coming into service. They're expected to come in later this year.

[David Slater, President & CEO at DT Midstream]

That that'll digest into the market, and then, you know, we'll carry on from there. So nothing has changed in terms of how I think that will play out over time. Clearly, the Woodside FID is a positive catalyst. Absolutely. So and that's hot off the press.

[David Slater, President & CEO at DT Midstream]

So, you know, we're gonna digest that. The market's gonna digest that, and we'll we'll see where that takes us. But I I feel good about our position right now.

[Spiro Dounis, Director at Citigroup]

Got it. Got it.

[Jeff Jewell, EVP & CFO at DT Midstream]

Good to hear.

[Spiro Dounis, Director at Citigroup]

Second question, maybe just a a finer point on maybe just the cadence as we think about the rest of the year. Jeff, as you pointed out, QQ maybe just down a little bit on seasonality and some other factors, which does seem to imply kind of a pretty strong second half of the year.

[Jeff Jewell, EVP & CFO at DT Midstream]

And so just curious if you

[Spiro Dounis, Director at Citigroup]

guys could make a finer point on what the specific drivers are to communicate you to that midpoint, how much is volume growth versus projects versus other items?

[Jeff Jewell, EVP & CFO at DT Midstream]

Yes, sure Ken. Hello, this is Farrell. Yes, so what we've got you're exactly right. The second half of the year, we're planning on being stronger than the first half. And you're right that's driven by volume and a couple of other projects coming online.

[Jeff Jewell, EVP & CFO at DT Midstream]

So you got a couple of those factors. And then the move from the first quarter to the second quarter is one item I mentioned was related to the Guardian. There's a small decline in the rates related to that. That was all contemplated in the acquisition and that's all built into the guidance that we provided and for the full year pieces of guidance there. So I think those are really the factors to think about as you're thinking about the modeling.

[Jeff Jewell, EVP & CFO at DT Midstream]

It's the second half of the year is is stronger, than the first half.

[David Slater, President & CEO at DT Midstream]

Spiro, I I do wanna be clear, though. We haven't changed our guidance for the year. So if we felt Correct. You know, if we felt we were getting outside of that, we would be updating you on that, on the call. And I'll just add to what Jeff said there.

[David Slater, President & CEO at DT Midstream]

We had a pretty cold winter. Right? So we had some really robust seasonality. I'll use that word on our pipeline assets because of the severe winter that we had. We almost a thirty year normal winter up here in the Midwest, which it's been a long, long time since we've had a winter like that.

[David Slater, President & CEO at DT Midstream]

So there's some of that playing through in q one as well.

[Spiro Dounis, Director at Citigroup]

Got it. Got it. Alright. Appreciate the color. I'll leave it there.

[Spiro Dounis, Director at Citigroup]

Thank you, gentlemen.

[Jeff Jewell, EVP & CFO at DT Midstream]

You bet. Thanks, Spiro.

[Operator]

And your next question comes from the line of John Mackay with Goldman Sachs. Please go ahead.

[John Mackay, VP - Equity Research at Goldman Sachs]

Hey, good morning. Thanks for

[John Mackay, VP - Equity Research at Goldman Sachs]

the time. I wanted to, go back to some of your comments, David, on the privates in the Haynesville. You commented that they're kind of responding, quicker to price signals. Definitely makes sense for first quarter. I guess I'd be curious, your view though, we've kind of bounced back from, you know, $4.50 down to about $3 now.

[John Mackay, VP - Equity Research at Goldman Sachs]

Are we seeing them kind of respond quicker in the, in the opposite direction at this point? Or you think this kind of first quarter, you know, strength can follow through even if prices are a little weaker here in a shorter season?

[David Slater, President & CEO at DT Midstream]

Yeah, John. That's a really good question. That's a topic that's forefront of my mind right now. We're watching that very closely to to see if what you just described, if we see any signals of that happening. My high level sense, John, is that they're fairly quick on the draw, but they also are pretty disciplined about hedging when they see those attractive prices.

[David Slater, President & CEO at DT Midstream]

Privates are typically PE backed and capital recovery is paramount in their minds. Right? So if they can drill and hedge and turn that capital quickly, that's their business model. So we're watching for that. We're not seeing any signals of that at this point.

[David Slater, President & CEO at DT Midstream]

You know, we've seen a little bounce back here, on price over the last week or so, but, we're definitely watching closely for that. Currently, we don't see any evidence of that.

[John Mackay, VP - Equity Research at Goldman Sachs]

I appreciate it. That's helpful. Maybe, just staying and gathering, we're, I don't know, about a year into the the Utica, pickup. Maybe if you can kind of just share your, you know, latest thoughts there, maybe what that looks like in, this kind of softer liquids environment, and maybe anything you can kind of share on just, you know, pace of development from here.

[David Slater, President & CEO at DT Midstream]

Sure. Yeah. So just to remind everybody, the area of the Utica that we're gathering for EOG, it's really the oil window, which is you know, their economics are not NGL dependent. So it's predominantly driven economically by by oil. And, you know, I would just point you to what they've said publicly about their resource there.

[David Slater, President & CEO at DT Midstream]

They have a massive resource footprint that they've established in that area. It's a it's a virgin area. They've unlocked the rock technically, and, you know, the pace of development is consistent with kind of what we have in our guidance for this year and next year. And they're a great counterparty. We're working closely with them.

[David Slater, President & CEO at DT Midstream]

And, we view that as kind of a long term growth opportunity inside the Appalachian gathering portfolio. And the nice thing about it is that it feeds one of our pipelines as well. So it feeds the Nexus pipeline.

[John Mackay, VP - Equity Research at Goldman Sachs]

I appreciate that. Thank you.

[Operator]

Your next question comes from the line of Keith Stanley with Wolfe Research. Please go ahead.

[Keith Stanley, Director at Wolfe Research, LLC]

Hi, good morning. First, just wanted to start and clarify slide 10, the the high end of the 2026 CapEx range looks lower than last quarter. Was that intentional or or not?

[David Slater, President & CEO at DT Midstream]

Hey. Good morning, Keith. No. There is no change to the high end. And if if that looks different, we'll we'll check the formatting on the slide.

[David Slater, President & CEO at DT Midstream]

There there could be a formatting glitch there, but, there is no change in the high end of '26 CapEx guidance.

[Jeff Jewell, EVP & CFO at DT Midstream]

And so Keith from our guidance and what we guided you guys to is we're going to spend our free cash flow on organic growth projects. So that's in your model that's what you'd assume and you're right that We'll adjust that slide and make that match up to that guidance. There's been no change in that.

[Keith Stanley, Director at Wolfe Research, LLC]

Great. Thanks for that.

[Keith Stanley, Director at Wolfe Research, LLC]

Second one, Keith.

[David Slater, President & CEO at DT Midstream]

For mentioning that.

[Keith Stanley, Director at Wolfe Research, LLC]

Second question. So last quarter, put out a large number of pre FID projects in the refreshed backlog, and you talked to a number of opportunities today, too. Are there any projects you'd flag as closer to moving forward based on customer demand and and timing from that list? And I guess I'm just curious what's looking most interesting near term or making the most progress?

[David Slater, President & CEO at DT Midstream]

Yeah. I I'm gonna give you

[David Slater, President & CEO at DT Midstream]

a high level answer to that because I I don't wanna get too specific just given the the discussions that are happening directly with the the anchor customers and some of our commitments, you know, contractual commitments with them. But what I'll say generally, and I'm probably gonna repeat what I said earlier, is there's a green up arrow sitting in that $2,300,000,000 backlog. A number of things are driving that. Our assessment of the new pipelines we acquired is part of what's driving that. The millennium open season, which is hot off the press is is driving that.

[David Slater, President & CEO at DT Midstream]

I'd say a number of the projects that we've been talking to you about, are progressing to FID. So what I'm seeing in that backlog is is nothing but, kind of fundamental green arrows up. And, again, as we get more confident because just to remind everybody, that backlog is not the total opportunity set. It's only the opportunity set that we feel highly confident in executing on and delivering to our investors. So as that gross backlog continues to grow, it's going to eventually push into that 2.3, which we talked to the investors about.

[David Slater, President & CEO at DT Midstream]

So I'm feeling really bullish about it, but I don't wanna communicate anything until we're highly confident in it. And I just say it's consistent with my fundamental assessment earlier on the call that there is just a it feels like we have you know, we went from a situation a year ago where it felt like we had a a headwind that we're constantly bucking To today, it feels like we actually have a tailwind now, around around the business. And, we're working hard to better quantify and assess that tailwind and how that would adjust into our future long term outlook for the company.

[Keith Stanley, Director at Wolfe Research, LLC]

Thank you.

[Operator]

And your next question comes from the line of Jean Ann Salisbury with Bank of America. Please go ahead.

[Jean Ann Salisbury, Managing Director at Bank of America]

Hi, good morning. Boardwalk recently announced an open season for the Borealis project, which would source gas very close to your Appalachian footprint. If this project goes forward, do you see DTM as being a material beneficiary?

[David Slater, President & CEO at DT Midstream]

Well, good morning, and thanks for the question. Yes. That's a really interesting project because as we look at our new asset footprint, just to remind everybody, Midwestern connects directly to Texas Gas at a point called Portland. And, there is a existing pathway in the Clearington between that asset and one other asset that could potentially avoid a greenfield build. Or maybe said a different way, there could be some lower cost capacity expansions that could kind of marry into their open season.

[David Slater, President & CEO at DT Midstream]

So we're very aware of that and assessing that. But so if if there's a benefit to our asset footprint, it would predominantly be, as I just described, and that's on the pipeline side. Looking over to the gathering side, a project like that leaving Clarington, there is not an incremental couple BCF a day of gathering capacity to Clarington. So, yes, if a project like that of that size and scale was to FID, I think there would be upstream incremental gathering investments that that would trigger. And I think we would be, you know, one of the short list of parties that would be the be a beneficiary or be able to participate in some of that to get more gas to Clarendon.

[Jean Ann Salisbury, Managing Director at Bank of America]

That's super helpful. Thank you.

[David Slater, President & CEO at DT Midstream]

Yeah. So so that's a great ex example of what I just talked about on the previous question. Just this this tailwind that's emerging in in the region. So

[Jean Ann Salisbury, Managing Director at Bank of America]

Great. Thank you for the the detailed answer. That's that's super helpful. And then as a follow-up, there are concerns that if the China tariffs remain in place, you could see eventual significant pressure on US propane prices, which could reduce kind of the call on the NGL portion of Appalachia. Can you remind us what share of your Appalachia footprint is in the wet versus dry footprints?

[Jean Ann Salisbury, Managing Director at Bank of America]

And do you view that as a risk?

[David Slater, President & CEO at DT Midstream]

Yeah. So first off, we don't view that as a risk, and very little of our Appalachian gathering footprints, gathers what I'll call the wet side of the Marcellus or the NGL side of the Utica. So the EOG, assets is really the oil side of the Utica, not the NGL side of the Utica. And the bulk of our, gathering in Appalachia is on the dry side. So we we don't have any derivative exposure to the NGL side in Appalachia.

[David Slater, President & CEO at DT Midstream]

What I will say, though, is if that crack spread collapses or shrinks, What we do see is we see ethane rejection. And what that means is they put more of the NGLs into the gas stream, which basically grows the gas production in the basin by kind of toggling over to the gas infrastructure versus the NGL infrastructure. And that would be a positive for us because that typically would show up on the egress pipelines, Nexus, for example. The capability to pivot that in Appalachia is capped by the gas quality specs. So you can only put so much ethane into the stream before you cap out on the quality specs.

[David Slater, President & CEO at DT Midstream]

But that would actually be an opportunity for us versus a risk.

[Jean Ann Salisbury, Managing Director at Bank of America]

Great. Super interesting. I'll leave it there. Thanks.

[David Slater, President & CEO at DT Midstream]

You're welcome. Great question.

[Operator]

And your next question comes from the line of Manav Gupta with UBS. Please go ahead.

[Manav Gupta, Executive Director at UBS Group]

Good morning. There's a lot of macro uncertainty out there. You saw GDP shrinking a little today. Some companies are actually withdrawing guidance. It's very positive that you actually reaffirmed your 2025 guide and 2026 guide.

[Manav Gupta, Executive Director at UBS Group]

So help us understand what gives you the confidence that you can navigate this kind of very tough macro environment and deliver on both 2025 and 2026 goals.

[David Slater, President & CEO at DT Midstream]

Yes. So I would say the worry in the market is the R word, right? That's the worry is that we slide into a recession in the short term. So we've talked already about the long term fundamentals and how we feel about that. I'd say in the near term, the way we've built the, the portfolio, it's a highly durable portfolio, and it's intentionally built to protect to the downside.

[David Slater, President & CEO at DT Midstream]

So if I just talk at a very high level, we have no commodity exposure in this portfolio, none. Very minimal volumetric exposure, and that only exists in our gathering segment, which is only 30% of the business. And on the pipeline segment, which is the bulk of the business, 70%, that's predominantly, you know, a % demand based contracts. So it's highly resilient to short term economic fluctuations. So that's really the short answer.

[David Slater, President & CEO at DT Midstream]

I think, Jeff, you may want to add from a balance sheet perspective and a durability perspective how we feel about what I'll call our company itself going through Yes. Sure, Ken.

[Jeff Jewell, EVP & CFO at DT Midstream]

Again, just like Gary talked about on the commercial side, how we built the company, we've done the same thing on the balance sheet. We don't have any maturities throughout through 2029. We've got over $1,000,000,000 worth of liquidity. We're right here on the doorstep of getting upgraded to investment grade here soon. So I mean we have and again you see where our leverage metrics those things are.

[Jeff Jewell, EVP & CFO at DT Midstream]

So again, from a balance sheet perspective, same thing between '25, '20 '6 and beyond. We're

[Jeff Jewell, EVP & CFO at DT Midstream]

in a

[Jeff Jewell, EVP & CFO at DT Midstream]

very healthy position. So we're also not impacted by the broader macro, sort of events.

[David Slater, President & CEO at DT Midstream]

And and maybe my last my last proof point on that question because it's an important question. I think it's on the mind of a lot of investors, so I'm glad you're asking it. Is when you look at historically, look back at other cycles, the economic cycles that we've gone through, we've we've been able to grow through those cycles. And, I'd say that's the other maybe proof point, to provide confidence that nothing has changed with the management team in terms of how we're running the company. And past performance is only one data point, but I think it's another comforting data point to point to.

[Manav Gupta, Executive Director at UBS Group]

Perfect. My quick follow-up here is, you know, last year, we were in this power trade where data centers are gonna need a lot more power. And And then first deep sea came and then came these all these announcements that Microsoft is pulling back from the data center. You are obviously negotiating with a bunch of customers about their power needs. Has anything actually changed on the ground because of either DeepSeek or Microsoft pulling back the data center spend?

[Manav Gupta, Executive Director at UBS Group]

Or or when you go out there, the underlying demand for power is still growing and and very resilient out there.

[David Slater, President & CEO at DT Midstream]

Yes. So let me kind of break that question up into two parts. I'll address the behind the meter site specific power generation opportunities, and then I'll address the utility scale power generation opportunities because I think there's different fundamentals driving those two different opportunity sets. On the site specific data centers, we have numerous, like many. And I don't I don't wanna put a number out there because every time I put a number out there, everybody chases the number.

[David Slater, President & CEO at DT Midstream]

I'm just gonna tell you there are a lot of, what I'll call mature commercial proposals sitting in front of developers for numerous sites across our entire footprint. A lot of different elements have to come together for a site to commercialize. You know, energy and fuel supply is only one of many elements. And then once all those elements are together and commercially sort of lined up, then ultimately, the host has to commercialize the site. And I'd say that's the phase that we're in right now.

[David Slater, President & CEO at DT Midstream]

We're in the phase where sites have all the elements that they need now, and the final step is commercialization of the site. So that's where we are with a host of opportunities across a myriad of our pipelines. So to the extent to the extent that the ultimate host is waiting or making decisions, that's where I think we are today. And and I suspect that's true for all the other pipelines as well. Flipping over the utility scale generation that we announced, the West Virginia project, that project is expected to FID next year.

[David Slater, President & CEO at DT Midstream]

They continue to move along and do the things that they need to do to commercialize that site. They're in the PJM interconnect. They have full control of the site now. They've gone through the West Virginia regulatory process. Their air permit is underway.

[David Slater, President & CEO at DT Midstream]

So we see these utility scale sites advancing and continuing. And and like I said in my in my earlier comments, this realization that there's a reliability issue in PJM and emerging in MISO. The demand is robust than they thought. The other generation, that they thought was coming in isn't coming in or it's coming in at a different pace. All of those are positive catalysts to drive incremental utility scale generation.

[David Slater, President & CEO at DT Midstream]

And I'd say the last thing that we're seeing on the utility side is the utilities many utilities have been quietly very successful in connecting these data centers directly to the utility grid. And I would point the investors to, you know, public announcements made out of Wisconsin by some of the utilities there, in Michigan, by some of the utilities there, You know, Louisiana, the energy announcements. So the utilities are are being are are getting a fair share of this demand directly connected to utilities. And what that does is it drives utility scale generation. So instead of site generation, utilities are just rolling it into their portfolio and will add a plant to their future development.

[David Slater, President & CEO at DT Midstream]

So that's how I would characterize what's happening on the data center side. I know that was a long answer, but it's very interesting to watch. We're active on both of those two dimensions, the utility scale and on the site specific. And again, I'm highly confident we're going to get our fair share of that market across our geographic footprint. So I'll stop there.

[Manav Gupta, Executive Director at UBS Group]

Thank you so much.

[David Slater, President & CEO at DT Midstream]

You're welcome.

[David Slater, President & CEO at DT Midstream]

Do we have another question?

[Operator]

Your next question comes from the line of Robert Mosca with Mizuho. Please go ahead.

[Robert Mosca, Equity Research Associate at Mizuho Financial Group]

Hey, thanks everyone. Just one for me. Seems like your major customer in the Haynesville is building product capacity this year that they could tap into in '26. Just wondering the extent to which that's captured in your preliminary 2026 guidance, and if possible the base case you're assuming there?

[David Slater, President & CEO at DT Midstream]

Yeah. So I I I'll just keep it

[David Slater, President & CEO at DT Midstream]

at a high level. Our, you know, all of our customers, provide us insights into their plan. And for all of our customers, that's reflected in our '25 and '26 guidance. So I I the short answer is in there.

[Robert Mosca, Equity Research Associate at Mizuho Financial Group]

Great. Thank you.

[David Slater, President & CEO at DT Midstream]

Operator, do we have another question?

[Operator]

This time, we have no further questions at this time. I would like to turn it back to David Slater for closing remarks.

[David Slater, President & CEO at DT Midstream]

Well, thank you very much, everybody, for your great questions today, and I appreciate the support. And I look forward to catching up with everybody on the next quarter.

[Operator]

Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.

Participants

Executives

• Todd Lohrmann, Director of Investor Relations
• David Slater, President & CEO
• Jeff Jewell, EVP & CFO

Analysts

• Michael Blum, Managing Director at Wells Fargo Securities
• Jeremy Tonet, Equity Research Analyst, Executive Director at JP Morgan
• Theresa Chen, Senior Analyst at Barclays
• Spiro Dounis, Director at Citigroup
• John Mackay, VP - Equity Research at Goldman Sachs
• Keith Stanley, Director at Wolfe Research, LLC
• Jean Ann Salisbury, Managing Director at Bank of America
• Manav Gupta, Executive Director at UBS Group
• Robert Mosca, Equity Research Associate at Mizuho Financial Group