Dt Midstream, Inc. · NYSE:DTM
Dt Midstream — Q3 2022 Earnings Presentation
26 slides from Dt Midstream's earnings presentation, Oct 28, 2022
Slide 1: Third Quarter 2022 Earnings Call
THIRD QUARTER 2022 EARNINGS CALL OCTOBER 28, 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: Third quarter 2022 accomplishments
Third quarter 2022 accomplishments Strong financial performance Delivered net income of $113 million and Adjusted EBITDA1 of $207 million Raising 2022 Adjusted EBITDA guidance to $ 810 - 825 million due to strong base business performance and Millennium Pipeline acquisition uplift Increasing 2023 Ad
Slide 4: Strong sequential quarterly results driven by growth from key assets
Strong sequential quarterly results driven by growth from key assets Segment Adjusted EBITDA1 (millions) $191 $105 $86 Q1 2022 $205 $116 $89 Q2 2022 $207 $115 $92 Q3 2022 Gathering Pipeline Pipeline Higher revenues on LEAP due to increased short-term rates Higher contribution from NEXUS due to impro
Slide 5: Strong volume growth in both regions
Strong volume growth in both regions with over 3 Bcf/d of production volumes gathered in Q3 2022 Gathering segment average throughput1 (Bcf/d) +15% 2.62 1.35 1.27 Q3 2021 2.91 1.55 1.37 Q4 2021 2.91 1.57 1.34 Q1 2022 2.81 1.53 1.28 Q2 2022 3.01 1.66 1.35 Q3 2022 Northeast Haynesville Haynesville Vol
Slide 6: Increasing 2022 Adjusted EBITDA guidance and 2023 early outlook
Increasing 2022 Adjusted EBITDA guidance and 2023 early outlook, representing over 20% growth from 2021 original guidance Increased 2022 guidance Strong base business performance across both segments and regions Includes uplift from Millennium Pipeline acquisition Raised 2023 early outlook Full-year
Slide 7: Quarterly financial results
Quarterly financial results Three months ended (millions, except EPS September 30, 2022 June 30, 2022 Key drivers Adjusted EBITDA1 Pipeline segment Gathering segment Operating Earnings2 Operating EPS2 Distributable Cash Flow3 Growth Capital4 Maintenance capital $207 $115 $92 $88 $0.90 $186 $112 $8 $
Slide 8: Increasing 2022 Adjusted EBITDA guidance and 2023 early outlook
Increasing 2022 Adjusted EBITDA guidance and 2023 early outlook (millions, except EPS) Original guidance Revised guidance 2022 2023 Adjusted EBITDA1 Operating Earnings2 Operating EPS2 Distributable Cash Flow3 Capital Expenditures Growth Capital4 Maintenance Capital Adjusted EBITDA (early outlook) $7
Slide 9: Increasing LEAP capacity to 1.9 Bcf/d with phase expansion
Increasing LEAP capacity to 1.9 Bcf/d with phase 3 expansion Capital efficient, lower-risk expansions provides timely access to growing LNG demand New Phase 3 Haynesville system expansion will provide 200 MMcf/d of incremental LEAP capacity Project in-service in Q3 2024 Active commercial discussions
Slide 10: Increased ownership in a premier natural gas asset serving key demand markets
Increased ownership in a premier natural gas asset serving key demand markets Transaction overview Acquired additional 26.25% ownership interest in Millennium Pipeline, bringing DTM's total ownership to 52.5% ~$552 million purchase price represents a 10x multiple of 2023 Adjusted EBITDA1 Immediately
Slide 11: Major growth projects are on track
Major growth projects are on track Contracted growth investments (new projects in bold) Project In-service date(s) Status Pipeline Gathering Stonewall expansion Michigan Gathering to intrastate pipeline conversion Haynesville LEAP pipeline expansion - Phase 1 Haynesville LEAP pipeline expansion - Ph
Slide 12: Strong balance sheet with no near-term debt maturities
Strong balance sheet with no near-term debt maturities Maintaining flexible, well-capitalized balance sheet Upsized $750 million committed revolver to $1 billion and extended maturity by another year to 2027 $355 million of cash on hand2 Current leverage ratio of 3.4x3; committed to long-term debt /
Slide 13: Committed to a leading environmental, social and governance program
Committed to a leading environmental, social and governance program Environmental 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 strategic partnership Joined Appalach
Slide 14: 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 14
Slide 15: Appendix
Appendix DT Midstream
Slide 16: DTM assets are supporting growing LNG export demand
DTM assets are supporting growing LNG export demand Cove Point LNG Gulf Coast LNG corridor LNG facilities Operational Under development DTM assets currently provide ~2 Bcf/d of access to LNG export terminals and are well positioned to serve growing demand US LNG exports (Bcf/d) 24 20 16 12 8 4 0 +13
Slide 17: Favorable fundamentals and significant growth opportunities in both basins
Favorable fundamentals and significant growth opportunities in both basins that we serve Haynesville Expanding LEAP from 1.0 Bcf/d to 1.9 Bcf/d; can be further expanded up to ~3 Bcf/d with looping and compression Gathering and treating expansions serve growing production Growth opportunities driven
Slide 18: Year-to-date financial results
Year-to-date financial results Nine months ended (millions, except EPS September 30, 2022 September 30, 2021 Adjusted EBITDA1 Pipeline segment Gathering segment Operating Earnings2 Operating EPS2 Distributable Cash Flow3 Growth Capital4 Maintenance Capital $603 $336 $267 $248 $2.55 $507 $163 $15 $57
Slide 19: Adjusted EBITDA and Distributable Cash Flow (DCF) 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 from financing activities, further adjusted to include our proportional shar
Slide 20: 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 21: Reconciliation of Reported to Operating Earnings (non-GAAP)
Reconciliation of Reported to Operating Earnings (non-GAAP) Three Months Ended September 30, 2022 June 30, 2022 Reported Earnings Pre-tax Adjustments Income Taxes(1) Operating Earnings Reported Earnings Pre-tax Adjustments Income Taxes (l) Operating Earnings (millions) Pennsylvania income tax adjust
Slide 22: Reconciliation of Reported to Operating Earnings per diluted share (non-GAAP)
Reconciliation of Reported to Operating Earnings per diluted share(2) (non-GAAP) Three Months Ended September 30, 2022 June 30, 2022 Reported Earnings Pre-tax Adjustments Income Taxes (1) Operating Earnings Reported Earnings Pre-tax Adjustments Income Taxes(1) Operating Earnings (per share) Pennsylv
Slide 23: Reconciliation of Net Income to Adjusted EBITDA (non-GAAP)
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA (non-GAAP) Three Months Ended Nine Months Ended September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021 Consolidated (millions) Net Income Attributable to DT Midstream $113 $91 $285 $220 Plus: Interest expens
Slide 24: Reconciliation to Adjusted EBITDA Pipeline Segment (non-GAAP)
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Pipeline Segment (non-GAAP) Three Months Ended Nine Months Ended September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021 Pipeline (millions) Net Income Attributable to DT Midstream $70 $52 $170 $127 Plus: Int
Slide 25: Reconciliation to Adjusted EBITDA Gathering Segment (non-GAAP)
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Gathering Segment (non-GAAP) Three Months Ended Nine Months Ended September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021 (millions) Gathering Net Income Attributable to DT Midstream $43 $39 $115 $93 Plus: In
Slide 26: Reconciliation of Net Income to Distributable Cash Flow (non-GAAP)
Reconciliation of Net Income Attributable to DT Midstream to Distributable Cash Flow (non-GAAP) Three Months Ended Nine Months Ended September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021 (millions) Net Income Attributable to DT Midstream $113 $91 $285 $220 Plus: Interest expense 35