DT Midstream, Inc. · NYSE:DTM
DT Midstream — FY2021 Earnings Presentation
33 slides from DT Midstream's earnings presentation, Feb 25, 2022
Slide 1: Year End 2021 Earnings Call
YEAR END 2021 EARNINGS CALL F EB R U A RY 2 5 , 2 0 2 2
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: 2021 accomplishments
2021 accomplishments Executed spin-off from DTE Energy ✓ Successful debt raise and equity trading debut ✓ Stand-alone C-Corp Strong financial performance ✓ 2021 adjusted EBITDA1 provided 12% growth from 2020 original guidance ✓ Delivered distinctive total shareholder return Robust commercial activit
Slide 4: Positioned for continued success in 2022 and beyond
Positioned for continued success in 2022 and beyond Strong financial • Increased 2022 adjusted EBITDA1 guidance midpoint provides 8% growth from 2021 original guidance performance • 2023 adjusted EBITDA early outlook delivers continued organic growth Delivering superior • Increasing dividend by 7% s
Slide 5: Strong durable portfolio, delivering premium growth
Strong durable portfolio, delivering premium growth Adjusted EBITDA1 Operating earnings2 (millions) (millions) 800 350 +12% +18% $768 $336 $710 - $750 $710 $300 $296 - $312 700 300 $665 - $703 $277 - $293 600 250 2020 2021 2020 2021 Original guidance Actual Original guidance Actual 1. Definition and
Slide 6: Excellent 2021 performance across both segments
Excellent 2021 performance across both segments Adjusted EBITDA1 Operating earnings2 (millions) (millions) Business $768 mix Key drivers $336 • Greater contribution from pipeline segment $361 47% – LEAP in-service for full-year 2021 – Increased earnings from interstate pipeline joint ventures • High
Slide 7: Increased 2022 guidance provides 8% growth
Increased 2022 guidance provides 8% growth Adjusted EBITDA1 Operating earnings2 (millions) (millions) +8% +8% 800 $770 - $810 330 $319 - $335 Positioned to deliver strong organic $296 - $312 growth in 2022 $710 - $750 300 • Leveraging well positioned asset 700 platforms in the Haynesville and 270 Ap
Slide 8: Strengthening total shareholder returns with 7% dividend increase
Strengthening total shareholder returns with 7% dividend increase Annualized dividend ($/share) +7% $2.56 $2.40 Long-term contracted cash flow generation supports durable and growing dividend • Board approved increased dividend of $0.64 / share for Q1 2022 • ~2.4x coverage ratio providing cushion ab
Slide 9: Strong asset platforms are expected to deliver 5% - 7% growth into 2023
Strong asset platforms are expected to deliver 5% - 7% growth into 2023 Adjusted EBITDA1 (millions) 5% - 7% 850 CAGR $810 - $850 Well positioned asset platforms in premier dry gas 800 $770 - $810 basins will continue to drive growth 750 $710 - $750 • Investing in growth opportunities in both the Hay
Slide 10: Maximizing total shareholder return via our strong cash flow generation
Maximizing total shareholder return via our strong cash flow generation Distributable cash flow1 (millions) $575 - $625 Value creation ✓ Highly accretive growth projects – Substantial set of organic projects at favorable build multiples ✓ Return capital to shareholders – Increasing dividend with gro
Slide 11: Solidifying our 5-year growth investment plan through highly accretive organic projects
Solidifying our 5-year growth investment plan through highly accretive organic projects 2022 capital investments Completed or contracted growth investments (millions) Project In-service date(s) $350 - $400 $30 - $40 Vector Blue Water Energy Center lateral Q1 2021 Stonewall expansion Q2 2022 Pipeline
Slide 12: Phase 1 Haynesville wellhead to water system expansion
Phase 1 Haynesville “wellhead to water” system expansion connects highly economic supply with growing global demand Haynesville / LA Gulf Coast Strong fundamentals around our Haynesville system have yielded new contracted expansions ~2-3 Bcf/d of supply growth Phase 1 through 2023 • Expansion agreem
Slide 13: Our well positioned assets provide robust organic growth opportunities
Our well positioned assets provide robust organic growth opportunities Platform Region 2022/2023 commercial focus • We remain in active discussions with multiple LEAP Lateral Haynesville counterparties for a phase 2 expansion Pipeline NEXUS Pipeline Appalachia • Open season discussions underway Mill
Slide 14: Leading the industry with a mature environmental, social and governance program
Leading the industry with a mature environmental, social and governance program Environmental Social Governance • Targeting net zero greenhouse gas • Established $4 million charitable fund for • Strong C-Corp governance with separate emissions by 2050 and a 30% reduction community investment Chairma
Slide 15: 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 ✓ Delivering accretive growth in 2022 and 2023 ✓ Advancing opportunities for growth beyond 2023 Mature envir
Slide 16: Appendix
APPENDIX _ oe Ew § Midstream
Slide 17: DTM provides a clear, disciplined and balanced investment thesis
DTM provides a clear, disciplined and balanced investment thesis Integrated assets in world class dry Predictable, robust contracted gas basins serving key markets cash flows Haynesville / Appalachia dry gas focus Strong cash flow Integrated asset footprint Long-term take-or-pay contracts Well posit
Slide 18: Growing and durable business positioned for today and the future
Growing and durable business that is positioned for today and the future Well balanced Portfolio durability Strong growth Well positioned for business mix platforms energy transition 100% natural gas focused Irreplaceable Strategically ~90% positioned in the core energy infrastructure 53% 2021 Adjus
Slide 19: Strong gathering volume growth across both regions in 2021
Strong gathering volume growth across both regions in 2021 Gathering segment average throughput1 (Bcf/d) +19% Q3 to Q4 2.91 growth 2.62 Haynesville 2.46 2.52 • Higher production volumes on Blue Union in Q4 1.55 +15% 1.16 1.23 1.35 • Three new customers2 attached and flowing in September 2021 Northea
Slide 20: Executing on our plan to be net zero by 2050
Executing on our plan to be net zero by 2050 Annual GHG emissions (million metric tons / year) ~30% Currently executing – Carbon capture and sequestration – Electric compression – Renewable natural gas connections Opportunities being evaluated – Methane reducing technologies (e.g., vent control devi
Slide 21: Committed to strong governance practices
Committed to strong governance practices DT Midstream Board Members Best-in-class governance practices • Structured as C-Corp with separate CEO and Executive Chairman • Long-term incentive plans tied to total shareholder return targets Robert Skaggs, Jr. Wright Lassiter, III Executive Chairman Lead
Slide 22: Financial strength supported by strong balance sheet with no significant debt maturities
Financial strength is supported by strong balance sheet with no significant debt maturities for six years 1 Debt maturity profile (billions) $1.1 ~$1.0 $1.0 Maintaining flexible, well-capitalized balance sheet • Continuously monitoring market conditions for capital structure improvements • $3.1 bill
Slide 23: Financial policy overview
Financial policy overview Self-funded investment program Industry leading organic growth $1.2 - $1.7 billion 7% - 9% growth • Growth investment range from 2021 - • 2021 adjusted EBITDA1 original guidance 2025 is driven by organic opportunities to 2022 adjusted EBITDA guidance within existing platfor
Slide 24: 2021 results
2021 results Three months ended Year ended December 31 December 31 (millions, except EPS) Q4 2021 Q4 2020 Variance 2021 2020 Variance Adjusted EBITDA1 $196 $175 $21 $768 $710 $58 Pipeline segment $107 91 $16 $407 $348 $59 Gathering segment $89 $84 $5 $361 $362 ($1) Operating Earnings2 $87 $72 $15 $3
Slide 25: 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 recon
Slide 26: Adjusted EBITDA and distributable cash flow (DCF) 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 27: Operating earnings and operating earnings per share are non-GAAP measures
New slide 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
Slide 28: Reconciliation of Reported to Operating Earnings (non-GAAP)
New slide Reconciliation of Reported to Operating Earnings (non-GAAP) Three Months Ended December 31, 2021 2020 Reported Pre-tax Income Operating Reported Pre-tax Income Operating Earnings Adjustments Taxes (1) Earnings Earnings Adjustments Taxes (1) Earnings (millions) Transaction costs $ — $ — $ 4
Slide 29: Reconciliation of Reported to Operating Earnings per diluted share
New slide Reconciliation of Reported to Operating Earnings per diluted share (2) (non-GAAP) 29
Slide 30: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA (non-GAAP) 30
Slide 31: Reconciliation to Adjusted EBITDA Pipeline Segment
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Pipeline Segment (non-GAAP) 31
Slide 32: Reconciliation to Adjusted EBITDA Gathering Segment
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Gathering Segment (non-GAAP) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 Gathering (millions) Net Income Attributable to DT Midstream $ 36 $ 28 $ 129 $ 157 Plus: Interest expense 17 20 61 70
Slide 33: Reconciliation of Net Income to Distributable Cash Flow
Reconciliation of Net Income Attributable to DT Midstream to Distributable Cash Flow (non-GAAP) Three Months Ended Year Ended December 31, December 31, 2021 2020 2021 2020 (millions) Net Income Attributable to DT Midstream $ 87 $ 69 $ 307 $ 312 Plus: Interest expense 31 31 112 113 Plus: Income tax e