Dt Midstream, Inc. · NYSE:DTM
Dt Midstream — Q1 2022 Earnings Presentation
29 slides from Dt Midstream's earnings presentation, May 5, 2022
Slide 1: First Quarter 2022 Earnings Call
First Quarter 2022 earnings call May 5, 2022 DT Midstream
Slide 2: Safe Harbor Statement
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 expectations or pla
Slide 3: First quarter 2022 accomplishments
First quarter 2022 accomplishments Strong financial performance Delivered adjusted EBITDA1 of $191 million – on plan for the first quarter and firmly on track to achieve 2022 guidance Converted a significant portion of our variable rate debt to a fixed rate and extended term Robust commercial activi
Slide 4: Delivered strong quarterly results on track with full-year guidance
Delivered strong quarterly results on track with full-year guidance Segment adjusted EBITDA1 (millions) $196 $191 $89 $86 $107 $105 Q4 2021 Q12022 Pipeline Gathering Continued strong business performance in both segments • Stable gathering segment volumes across both the Haynesville and Appalachia –
Slide 5: Strong confidence in achieving 2022 guidance and 2023 early outlook
Strong confidence in achieving 2022 guidance and 2023 early outlook New projects and existing business will deliver incremental growth • Investing in growth opportunities in both basins and both segments • Expansion projects with long-term contracted cash flows • New growth projects to be placed in-
Slide 6: Over 2.9 Bcf/d of production volumes gathered in Q1 2022
Over 2.9 Bcf/d of production volumes gathered in Q1 2022 Gathering segment average throughput1 (Bcf/d) +18% 2.46 2.52 2.62. 2.91 2.91 1.16 1.23 1.35 1.55 1.57 1.29 1.29 1.27 1.37 1.34 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Haynesville Northeast Haynesville • Q1 2022 volumes in-line with Q4 2021 as
Slide 7: Quarterly financial results
Quarterly financial results Three months ended (millions, except EPS) March 31, 2022 December 31, 2021 Adjusted EBITDA1 $191 $196 Pipeline segment $105 $107 Gathering segment $86 $89 Operating Earnings2 $81 $87 Operating EPS2 $0.84 $0.89 Distributable cash flow3 $182 $121 Growth capital4 $17 $37 Mai
Slide 8: Strong balance sheet with weighted average debt maturity of 8 years
Financial strength is supported by strong balance sheet with a weighted average debt maturity of 8 years Converted 60% of 7-year variable rate term loan to 10-year fixed rate senior notes • $3.1 billion in long-term debt – $0.4 billion term loan B due 2028 – $1.1 billion senior notes due 2029 – $1.0
Slide 9: Haynesville rig count has surged above pre-pandemic levels
Haynesville rig count has surged above pre-pandemic levels; production is expected to experience strong growth through 2030 Haynesville gas rig count +34 rigs since June 2020 low 70 65 60 55 50 45 40 35 30 25 20 2017 2018 2019 2020 2021 2022 Haynesville production (Bcf/d) 20 18 16 14 12 10 8 6 4 +7
Slide 10: DTM has significant exposure to growing LNG export demand
DTM has significant exposure to growing LNG export demand Arkansas Mississippi HAYNESVILLE SHALE Blue Union Gathering LEAP Lateral Texas Louisiana Golden Pass Sabine Pass Lake Charles Driftwood Cameron CP2 Calcasieu Pass Plaquemines Gulf Coast LNG corridor Cove Point LNG MARCELLUS SHALE Appalachia G
Slide 11: Haynesville system is well-positioned to serve growing supply
Haynesville system is well-positioned to serve growing supply Phase 1 • Expansion is on track and on budget – Critical long-lead equipment has been ordered • Project will provide ~0.5 Bcf/d incremental gathering and treating capacity1 and ~0.3 Bcf/d of incremental LEAP capacity to Gillis • Expansion
Slide 12: Appalachia expected to account for greater than 1/3 of US gas supply through 2030
Appalachia is expected to account for greater than 1/3 of US gas supply through 2030 Appalachia production (Bcf/d) Marcellus Utica 40 36 32 28 24 20 16 12 2021 2025 2030 % of US gas supply ~35% ~35% ~35% Largest US supply basin with durable production Appalachia is expected to maintain its ~35% shar
Slide 13: Favorable fundamentals and growth opportunities in both basins
Favorable fundamentals and growth opportunities in both basins that we serve Haynesville 300 MMcf/d LEAP pipeline phase 1 expansion in-flight; can be further expanded to 2.0 Bcf/d with compression Gathering and treating expansions serve growing production Growth opportunities driven by strong produc
Slide 14: Major growth projects are on track
Major growth projects are on track Contracted growth investments (New projects in bold) Project In-service date(s) Pipeline Stonewall expansion Q2 2022 Michigan Gathering to intrastate pipeline conversion Q4 2022 Haynesville LEAP pipeline expansion – Phase 1 Q4 2023 Gathering Appalachia Gathering Sy
Slide 15: Well positioned assets provide incremental organic growth opportunities
Our well positioned assets provide incremental organic growth opportunities Platform Region 2022/2023 commercial focus Pipeline LEAP Lateral Haynesville • In active discussions with multiple customers for a phase 2 expansion NEXUS Pipeline Appalachia • Re-contracting opportunities • Open season disc
Slide 16: Leading the industry with a mature ESG program
Leading the industry with a mature environmental, social and governance program Environmental Social Governance • Targeting net zero greenhouse gas emissions by 2050 and a 30% reduction by 2030 • Continuing to advance CCS opportunity in Louisiana • Advancing hydrogen development opportunities with s
Slide 17: Clean assets, clean balance sheet, clean story
Clean assets, clean balance sheet, clean story DT Midstream Integrated assets in premier dry gas basins serving key markets Stable balance sheet with low leverage Predictable, robust contracted cash flows Mature environmental, social and governance leadership DT Midstream 17
Slide 18: Appendix
Appendix i» ws Ew’ Bf Midstream
Slide 19: Disciplined financial approach
Disciplined financial approach Self-funded investment program Strong organic growth $1.2 - $1.7 billion • Growth investment range from 2021 - 2025 is driven by organic opportunities within existing platforms 7% - 9% growth • 2021 adjusted EBITDA1 original guidance to 2022 adjusted EBITDA guidance Di
Slide 20: 2022 guidance summary
2022 guidance summary (millions, except EPS)2022 Guidance Adjusted EBITDA1 $770 - $810 Operating Earnings2 $319 - $335 Operating EPS2 $3.30 - $3.46 Distributable Cash Flow3 $575 - $625 Capital Expenditures $350 - $400 Growth Capital4 $320 - $360 Maintenance Capital $30 - $40 1. Definition and reconc
Slide 21: Quarterly financial results
Quarterly financial results Three months ended (millions, except EPS) March 31, 2022 March 31, 2021 Adjusted EBITDA1 $191 $193 Pipeline segment $105 $100 Gathering segment $86 $93 Operating Earnings2 $81 $85 Operating EPS2 $0.84 $0.88 Distributable cash flow3 $182 $160 Growth capital4 $17 $24 Mainte
Slide 22: Adjusted EBITDA and distributable cash flow are non-GAAP measures
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 on extinguishment of debt, further adjusted to include our proportional shar
Slide 23: Operating earnings and operating earnings per share are non-GAAP measures
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 operating earnings provide a more me
Slide 24: Reconciliation of Reported to Operating Earnings
Reconciliation of Reported to Operating Earnings (non-GAAP) Three Months Ended March 31, 2022 December 31, 2021 Report Earnings Pre-tax Adjustments Income Taxes Operating Earnings Report Earnings Pre-tax Adjustments Income Taxes Operating Earnings (millions) Adjustments $ — $ — $ — $ — Net Income At
Slide 25: Reconciliation of Reported to Operating Earnings per diluted share
Reconciliation of Reported to Operating Earnings per diluted share(2) (non-GAAP) Three Months Ended March 31, 2022 December 31, 2021 Report Earnings Pre-tax Adjustments Income Taxes Operating Earnings Report Earnings Pre-tax Adjustments Income Taxes Operating Earnings (per share) Adjustments $ — $ —
Slide 26: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA (non-GAAP) Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 (millions) Consolidated Net Income Attributable to DT Midstream $ 81 $ 87 $ 78 Plus: Interest expense 31 31 26 Plus: Income tax expense 25 25 29
Slide 27: Reconciliation to Adjusted EBITDA: Pipeline Segment
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Pipeline Segment (non-GAAP) Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 (millions) Pipeline Net Income Attributable to DT Midstream $ 48 $ 51 $ 42 Plus: Interest expense 13 14 11 Plus: Income tax expe
Slide 28: Reconciliation to Adjusted EBITDA: Gathering Segment
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Gathering Segment (non-GAAP) Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 (millions) Gathering Net Income Attributable to DT Midstream $ 33 $ 36 $ 36 Plus: Interest expense 18 17 15 Plus: Income tax ex
Slide 29: Reconciliation of Net Income to Distributable Cash Flow
DT Midstream 29 Reconciliation of Net Income Attributable to DT Midstream to Distributable Cash Flow (non-GAAP) Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 (millions) Net Income Attributable to DT Midstream $ 81 $ 87 $ 78 Plus: Interest expense 31 31 26 Plus: Income tax expens