Dt Midstream, Inc. · NYSE:DTM
Dt Midstream — Q1 2023 Earnings Presentation
30 slides from Dt Midstream's earnings presentation, May 2, 2023
Slide 1: First Quarter 2023 Earnings Call
FIRST QUARTER 2023 EARNINGS CALL MAY 2, 2023
Slide 2: Safe Harbor Statement
New slide Safe Harbor Statement This presentation contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the securities laws. These forward-looking statements are intended to provide management’s current expectati
Slide 3: First Quarter 2023 Accomplishments
First Quarter 2023 Accomplishments Strong financial performance ✓ Net income of $81 million and Adjusted EBITDA1 of $225 million ✓ Confident in 2023 Adjusted EBITDA guidance ✓ Issued investment grade debt at NEXUS to fund organic growth Successful development activity TBD - Construction photo ✓ Grow
Slide 4: Midstream Investment Thesis
Midstream Investment Thesis Clean assets, clean balance sheet, clean story Integrated and Mature environmental, Highly contracted Strong balance sheet well-positioned social and governance cash flows with low leverage assets leadership • Haynesville / Appalachia • Long-term take-or-pay • Self-funded
Slide 5: NEXUS Pipeline Project Financing Supports Organic Growth
NEXUS Pipeline Project Financing Supports Organic Growth Optimizes balance sheet by providing additional liquidity and interest expense savings NEXUS project financing sources and uses1 (millions) $375 $375 Issuance of non-recourse debt at NEXUS • $750 million of total debt at NEXUS Pipeline (DTM’s
Slide 6: Updated Adjusted EBITDA Methodology
Updated Adjusted EBITDA Methodology New methodology reflects full proportional EBITDA from equity method investees Adjusted EBITDA1 (millions) 950 Proportionate share of equity method investee interest expense2 $895 - $935 $15 • Adjusted EBITDA excludes the interest expense 900 associated with equit
Slide 7: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results Adjusted EBITDA1 (millions), xx segment % of overall Pipeline $230 $225 • Impact of updated Adjusted EBITDA methodology – Q1 2023: $4 million $142 62% $141 63% – Q4 2022: $3 million Gathering • ~$2 million impact from transferring Michigan Gathering to Pipeline s
Slide 8: Financial Results
Financial Results Three months ended (millions, except EPS) March 31, 2023 December 31, 2022 Key drivers $225 $230 Adjusted EBITDA1 ($4 million impact of ($3 million impact of updated Adj. EBITDA methodology) updated Adj. EBITDA methodology) $141 $142 Pipeline segment ($4 million impact of ($3 milli
Slide 9: Gathering Volume Summary
Gathering Volume Summary Haynesville throughput Northeast throughput (bcf/d) Blue Union Gathering (bcf/d) Susquehanna Gathering Appalachia Gathering Tioga Gathering 1.70 1.34 1.35 1.35 1.36 1.66 1.63 1.57 1.28 1.53 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 9
Slide 10: Growth Investment Summary
Growth Investment Summary Projects remain on-schedule and on-budget and have been significantly de-risked Contracted growth investments Project capital Capital spend to date & committed procurement contracts Project In-service date(s) Haynesville LEAP pipeline expansion – Phase 1 Q4 2023 ~80% of ove
Slide 11: Capital Allocation Approach
Capital Allocation Approach Preserve balance sheet strength • Current plan naturally deleverages the business into low 3x’s over the 5-year period • Committed to long-term 4x leverage ratio ceiling Durable and growing dividend • +15% dividend increase since the spin-off • 2.4x dividend coverage, wit
Slide 12: Disciplined Capital Investment Approach to Deliver Shareholder Value
Disciplined Capital Investment Approach to Deliver Shareholder Value 2023-2027 capital outlook (Growth capex) $1.7 - $2.2 billion 5-year capital outlook is self-funded and supports deleveraging to low 3x’s • Cash flow will be deployed to the most accretive ~$0.8 billion committed to option (i.e., gr
Slide 13: Geared to Capture Future Growth
Geared to Capture Future Growth Differentiated Commercial Approach Provides a Unique Competitive Advantage Pure play natural gas focus • Dominant position in the two premier dry gas basins • Integrated wellhead to market connectivity Positioned for Energy Transition Investments • Executing on CCS pr
Slide 14: Louisiana Carbon Capture and Sequestration
Louisiana Carbon Capture and Sequestration Advancing our energy transition platform Louisiana CCS project area Leveraging our strong expertise and integrated asset platform • Project scope includes capture equipment, a new CO2 pipeline and storage development • Targeting a proximal geological storag
Slide 15: Appendix
Appendix _ oe Ew’ & Midstream
Slide 16: 2023/2024 Guidance Summary
2023/2024 Guidance Summary (millions, except EPS) Current Guidance $895 - $935 Adjusted EBITDA1 ($15 million impact of updated Adj. EBITDA methodology) Operating Earnings2 $340 - $356 Operating EPS2 $3.50 - $3.66 2023 Distributable Cash Flow3 $625 - $675 Capital Expenditures $605 - $690 Growth Capit
Slide 17: Strong Organic Opportunities Across Our Existing Footprint
Strong Organic Opportunities Across Our Existing Footprint Asset 2023-2027 commercial focus Overview • Connecting growing Haynesville supply with growing LNG LEAP • Active discussions for expansions up to ~3 Bcf/d demand • Active discussions with existing and new customers for • Providing incrementa
Slide 18: Phase 1 LEAP Expansion On-track for Q4 2023 In-service
Phase 1 LEAP Expansion On-track for Q4 2023 In-service Serving growing LNG export demand via capital efficient expansion Haynesville / Louisiana Gulf Coast DTM assets LNG facilities DTM treating plants Operational Blue Union expansion build Under development Louisiana New electric compression Contra
Slide 19: Serving Highly Economic Resource Areas
Serving Highly Economic Resource Areas DTM’s assets are well positioned on the new drilling cost supply curve New drill supply curve 20251 Breakeven $/MMBtu Annual new supply needed to offset production declines and meet new demand DTM asset resource areas Blue Union / LEAP AGS / Stonewall SGC / Blu
Slide 20: DTM Assets are Supporting Growing LNG Export Demand
DTM Assets are Supporting Growing LNG Export Demand DTM assets currently provide ~2 Bcf/d of access to LNG export terminals and are well-positioned to serve growing demand 1 US LNG export capacity (bcf/d) 28 24 +12 Bcf/d Cove Point LNG 20 16 ~10 Bcf/d of Louisiana Gulf 12 Coast area LNG export growt
Slide 21: Strong Long-term Production Outlook in Both Basins
Strong Long-term Production Outlook in Both Basins Haynesville & Appalachia drilling activity levels remain strong; production is expected to experience significant growth through 2030 Historical dry gas rig count DTM basin production forecast Haynesville Appalachia (bcf/d) Haynesville Appalachia 10
Slide 22: Equity Method Investee Debt Details
Equity Method Investee Debt Details DTM proportionate share End of year debt balances Interest expense Asset Weighted average (DTM ownership %) 2022 2023 2024 2022 2023 2024 interest rate1 Maturity NEXUS Pipeline Bullets, 2028 - $375 $375 - $14 $21 5.52% (50%) through 2035 Fully Millennium Pipeline
Slide 23: Non-GAAP Definitions
New slide Non-GAAP Definitions Adjusted EBITDA and Distributable Cash Flow (DCF) are non-GAAP measures Adjusted EBITDA is defined as GAAP net income attributable to DT Midstream before expenses for interest, taxes, depreciation and amortization, and loss from financing activities, further adjusted t
Slide 24: Non-GAAP Definitions
New slide Non-GAAP Definitions Operating Earnings and Operating Earnings per share are non-GAAP measures Use of Operating Earnings Information – Operating Earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations. DT Midstream management believes that Opera
Slide 25: Non-GAAP Reconciliations
New slide Non-GAAP Reconciliations Reconciliation of Reported to Operating Earnings 25
Slide 26: Non-GAAP Reconciliations
New slide Non-GAAP Reconciliations Reconciliation of Reported to Operating Earnings per diluted share(2) 26
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA 27
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Pipeline Segment 28
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Gathering Segment 29
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of Net Income Attributable to DT Midstream to Distributable Cash Flow 30