Dt Midstream, Inc. · NYSE:DTM
Dt Midstream — Merger or Acquisition (June 2021)
39 slides from Dt Midstream's merger presentation, Jun 8, 2021
Slide 1: DTE Energy Spin of DT Midstream
EXHIBIT 99.1 DTE ENERGY SPIN OF DT MIDSTREAM J U N E 9 , 2 0 2 1EXHIBIT 99.1 DTE ENERGY SPIN OF DT MIDSTREAM J U N E 9 , 2 0 2 1
Slide 2: Safe harbor statement
Safe harbor statement The information contained herein is as of the date of this document. DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this document as a result of new information or future events or developments. Words such as “anticipa
Slide 3: Introduction
Introduction DTE Energy DT Midstream Appendix 3Introduction DTE Energy DT Midstream Appendix 3
Slide 4: Strong strategic rationale for the separation of DTE and DTM
Strong strategic rationale for the separation of DTE and DTM Positions DTE as a high-growth, Positions DTM as a premier midstream C-Corp, predominantly pure-play, best-in-class with high-quality assets located in premium regulated Michigan based utility basins connected to major demand markets NYSE:
Slide 5: Spin generates a combined dividend expected to be higher than DTE's current dividend
Spin generates a combined dividend that is expected to be higher than DTE’s current, pre-transaction dividend ($ per share) Annualized dividend 3 ~$4.70 - $4.80 • Increased annualized dividend per share every year since 1 2010 $4.34 2x coverage 2 ratio floor • Spin generates a combined dividend that
Slide 6: DTE Energy
Introduction DTE Energy DT Midstream Appendix 6Introduction DTE Energy DT Midstream Appendix 6
Slide 7: DTE will be a predominantly pure-play utility upon spin execution
DTE will be a predominantly pure-play utility upon spin execution DTE Electric DTE Gas ✓ 2.2 million customers✓ 1.3 million customers th ✓ Largest electric utility in Michigan✓ Nation’s 7 largest natural gas utility Non-utility ✓ Leading developer of energy-related projects including RNG and cogener
Slide 8: Maintaining long-term operating EPS growth of 5% - 7%
1 Maintaining long-term operating EPS growth of 5% - 7% (millions, except EPS) • 7.4% operating EPS growth (excluding DTM) from 2020 original 3 DTE annualized operating EPS guidance midpoint to 2021 guidance midpoint excluding Midstream • Continuing 5% - 7% long-term operating EPS growth through sig
Slide 9: DT Midstream
Introduction DTE Energy DT Midstream Appendix 9Introduction DTE Energy DT Midstream Appendix 9
Slide 10: Spin is on track
Spin is on track Achieved progress to date ✓ Board of Directors nominated ✓ SEC Form 10 effective ✓ Successful debt raise Upcoming milestones on track ❑ Virtual equity road show June 9 - 28 ❑ When-issued trading expected to begin on or about June 17 ❑ Record date for distribution of DTM shares on Ju
Slide 11: Investment thesis
Investment thesis • Positioned to capitalize on growing natural gas production volumes in the Marcellus / Utica and Haynesville, which are expected to produce a majority of U.S. gas by 2035 Integrated assets in premier dry gas basins serving key markets • Fully integrated platforms providing service
Slide 12: Dry gas-focused independent midstream C-Corp with diverse pipeline and gathering assets
Dry gas-focused independent midstream C-Corp with a diverse portfolio of pipeline and gathering assets 1 Q1 2021 adjusted EBITDA Pipeline and Other 52% Gathering DT Midstream, Inc. 48% Pipeline and Other Gathering Unconsolidated JV Consolidated pipelines Storage pipelines Appalachia NEXUS - 50% Blue
Slide 13: Experienced management team with a proven track record of success
Experienced management team with a proven track record of success Robert Skaggs, Jr. David Slater Christopher Zona Executive Chairman President and CEO COO Over 28 years of experience in the energy Over 35 years of experience in the energy Over 30 years of experience in the energy industry; independ
Slide 14: 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 • Focusing on the safety, diversity, well- • Focusing on the oversight of emissions by 2050; among the first in being and success of our employees envir
Slide 15: Fully integrated platform transporting production to growing demand markets
Fully integrated platform transporting production from leading low-cost dry gas formations to growing demand markets Pipeline and Other connect world-class basins to high-quality Eastern Canada Northeast markets • 900 miles of FERC-regulated interstate pipelines that have interconnections with multi
Slide 16: Diversified asset base providing critical infrastructure
Diversified asset base providing critical infrastructure and fully integrated wellhead to end market service 6% 7% 52% 40% 29% Q1 2021 adjusted Q1 2021 adjusted Q1 2021 adjusted 36% 1 EBITDA by segment EBITDA by demand area EBITDA by supply area 65% 48% 17% Pipeline and Other Gathering Gulf Coast Mi
Slide 17: Highly stable cash flows backed by long-term fee-based contracts
Supported by highly stable cash flows backed by long-term fee-based contracts Strong cash flow support Underpinned by long-term, fee-based contracts with average life of approximately % MVC / demand ~90% ~90% 2 nine years or flowing gas 1 • ~90% of total contribution is from MVCs / demand charges (t
Slide 18: Long history and strong working relationship with key customers
Long history and strong working relationship with key customers Solid and improving credit profile 1 • Mix of demand pull and supply push customers across our assets Top 10 customers • Utility and pipeline customers provide strong demand pull • Financial health of producers continues to improve • Pr
Slide 19: Visibility into highly accretive growth projects
Visibility into highly accretive growth projects Platforms Growth Phase Growth opportunities Blue Union Gathering Early Gathering build-outs Tioga Gathering Early Gathering build-outs Appalachia Gathering Early / Mid Gathering build-outs Gathering Michigan Gathering Advanced Service conversions Susq
Slide 20: Consistent track record of organic development and acquisitions
Consistent track record of successful organic development and acquisitions underpinned by premium financial returns 1 Historical adjusted EBITDA growth $710 (millions) $82 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Asset growth timeline ✓ Washington 10 expansion✓ Bluestone late
Slide 21: Asset portfolio leads to consistent growth
Asset portfolio supported by long-term contracts leads to consistent growth Positioned for continued success with strong growth outlooks for 1 2 Adjusted EBITDA , operating earnings and EPS 2021 and 2022 (millions, except EPS) • Consistent with historical performance; on track to achieve 2021 ~7% ad
Slide 22: Strong balance sheet with no significant debt maturities for seven years
Financial strength is supported by strong balance sheet with no significant debt maturities for seven years 1 Debt maturity profile (billions) $1.4 $1.2 Maintaining flexible, well-capitalized balance sheet $1.1 $1.0 $1.0 $1.0 • No significant debt maturities for seven years from initial debt offerin
Slide 23: Strong cash flow generation provides significant financial flexibility
Strong cash flow generation provides significant financial flexibility 1 Annualized proforma 2021 distributable cash flow (millions) $710 - $750 $500 - $550 $275 - $325 2 Adjusted EBITDA Interest Payments Maintenance Capital Other Distributable Cash Flow Dividend Value creation Considerations for 20
Slide 24: Clean assets, clean balance sheet, clean story
Clean assets, clean balance sheet, clean story Integrated assets in premier dry gas basins serving key markets Stable balance sheet with low leverage Predictable, robust contracted cash flows NYSE: DTM Mature environmental, social and governance leadership 24Clean assets, clean balance sheet, clean
Slide 25: Appendix
Introduction DTE Energy DT Midstream Appendix 25Introduction DTE Energy DT Midstream Appendix 25
Slide 26: Committed to ethical and transparent governance practices
Committed to ethical and transparent governance practices Best-in-class governance practices • Structured as C-Corp with separate CEO and Executive Chairman Robert Skaggs, Jr. David Slater • Incentive plans tied to safety and total shareholder return targets Executive Chairman President and CEO • Bo
Slide 27: Focusing on diversity, safety, well-being of employees and communities
Focusing on the diversity, safety, well-being and success of our employees, customers and communities Embodying a strong safety culture • Safety culture is built on empowerment, training, process safety, proactive risk mitigation and maintaining high safety standards 1 • Consistent safety performanc
Slide 28: Mature environmental culture and industry leading aspirations
Mature environmental culture and industry leading aspirations Annual GHG emissions Goal of leading environmental stewardship in the industry (million metric tons / year) • Announced net zero emissions target by 2050; among first in sector to establish ~30% this goal – Targeting ~30% emissions reduct
Slide 29: Pipeline and Other segment is critical, low-risk infrastructure
Pipeline and Other segment is comprised of critical, low-risk infrastructure 1 Segment contribution composition Stable cash flows • Revenue is predominantly from MVCs / demand charges (take-or-pay) and currently flowing gas • Substantially all fee-based revenue with no commodity price exposure Contr
Slide 30: High-quality Pipeline and Other segment backed by strong customers
High-quality Pipeline and Other segment backed by strong customers and fee-based demand charges Average Q1 2021 segment remaining Ownership Overview Key customers 1 contribution contract tenor • NEXUS is a 256-mile, 1.4 Bcf/d pipeline linking Appalachia supply with ~9 years Midwest and Ontario marke
Slide 31: High-quality Pipeline and Other segment backed by strong customers (continued)
New slide High-quality Pipeline and Other segment backed by strong customers and fee-based demand charges Average Q1 2021 segment remaining Overview Key customers 1 contribution contract tenor • 155-mile, 1.0 Bcf/d pipeline connecting Haynesville supply to the Gulf Coast ~9 years LEAP • Supported by
Slide 32: Gathering segment features strategically-located assets
Gathering segment features strategically-located assets serving top-tier supply 1 Q1 2021 contribution composition Premier supply basins • Gathering assets serve the Marcellus / Utica and Haynesville, which are the largest and among the most economic dry gas basins in the U.S. Contract type Supply b
Slide 33: Well-positioned assets backed by MVCs and acreage dedications
Well-positioned assets are backed by substantial MVCs, acreage dedications and strong contract enhancements Q1 2021 Average segment remaining Overview Key customers 1 contribution contract tenor • 343-mile gathering system in Haynesville basin in Louisiana and east Texas • Capacity of over 2.0 Bcf/d
Slide 34: Key demand markets feature positive long-term growth outlooks
Key demand markets feature positive long-term growth outlooks 1 Gulf Coast demand Midwest demand Northeast and Mid-Atlantic demand Eastern Canada demand (Bcf/d) (Bcf/d) (Bcf/d) (Bcf/d) 39% 13% 5% 21% 14.8 54.6 14.1 2.9 19.3 14.0 17.1 2.4 39.2 8.1 7.5 8.4 1.6 11.6 2 11.4 Other 8.4 1.5 Industrial 9.7
Slide 35: Assets are backed by well-positioned, high-quality resources
Assets are backed by well-positioned, high-quality resources 1 2022 - 2024 drill supply curve (Bcf/d) $ / MMBtu 3.5 3.0 2.5 ~18 Bcf/d of new supply is needed to meet expected demand 2.0 1.5 Susquehanna Gathering / Bluestone Blue Union / LEAP 1.0 Appalachia Gathering System / Stonewall Gas Gathering
Slide 36: Reconciliation of reported to operating earnings (non-GAAP)
Reconciliation of reported to operating earnings (non-GAAP) Use of Operating Earnings Information – Operating earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations. DTE Energy management believes that operating earnings provide a more meaningful represe
Slide 37: Adjusted EBITDA and distributable cash flow are non-GAAP measures
New slide 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, further adjusted to include our proportional share of net income from our e
Slide 38: Reconciliation of net income to Adjusted EBITDA
New slide Reconciliation of net income attributable to DT Midstream to Adjusted EBITDA (millions) 2008 2020 1. Includes share of our equity method investees’ earnings before taxes, depreciation and amortization, which we refer to as “EBTDA.” A reconciliation Net income attributable to DT Midstream $
Slide 39: DT Midstream Safe Harbor Statement
New slide DT Midstream 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 curr