DT Midstream, Inc. Q4 FY2025 earnings call

• 2025 was a record year with adjusted EBITDA exceeding increased guidance midpoint. Completed integration of Midwestp pipeline acquisition. Advanced over $1 billion of organic opportunities with 80% for pipeline projects. Placed LEAP Phase 4 expansion and gathering projects into service. Achieved investment-grade credit ratings. Since spin-off 5 years ago, outperformed market and peers with 280% total shareholder return, 12% CAGR adjusted EBITDA, and growing dividend. 2026 has an organic project backlog increased to $3.4 billion over 5 years, with 75% being pipeline projects. Reached FID on 2 new Pipeline segment projects. Placed Stonewall Mountain Valley pipeline expansion and Phase III Appalachia gathering system expansion into service early and on budget. Natural gas market fundamentals: natural gas is a core fuel with strong demand drivers, and DTM's infrastructure is well-positioned for growth.

For 2025, adjusted EBITDA was $1.138 billion, an increase of 17% over the prior year, driven by growth in the Pipeline segment. The Pipeline segment increased from 50% of the business to 70% today. The portfolio is 95% contracted with demand-based agreements and an average contract tenure of 8 years.

• 2026 adjusted EBITDA guidance range is $1.155 billion to $1.225 billion, midpoint 6% growth over 2025 original guidance midpoint. 2027 early outlook range is $1.225 billion to $1.295 billion, midpoint 6% increase over 2026 guidance midpoint. 2026 growth capital guidance is $420 million to $480 million, with ~$390 million committed. 2027 growth investments expected to be above 2026, with ~$430 million committed. 2026 year-end forecast for on-balance sheet leverage is 2.9x and proportional leverage is 3.5x. Board declared a quarterly dividend of $0.88 per share, a 7.3% increase from the prior year.

Q: Enthusiastic about the robust project backlog, discuss the expected pace and cadence of commercialization, key drivers, and its impact on capital spending beyond 2027.

A: David Slater states the market is fluid, opportunities grow with utility announcements, assets in the Upper Midwest have detailed conversations with utilities, demand is anchored in the regulatory framework, and there's a domino effect across assets.

Q: Specifically regarding Midwestern Gas Transmission expansion, talk about progress, scale, and the overall opportunity.

A: David Slater mentions deep conversations with existing customers on northern and southern expansions, REX connection provides supply diversity, and there are strong demand signals north and south.

Q: Big update on the 5-year growth CapEx outlook, how the number was arrived at, risk adjusting uncommitted CapEx, and the texture of uncommitted capital.

A: David Slater says the backlog has increased from the previous year, half is already FID, the other half is highly probable, the gross backlog is multiples of the committed one, the market is fluid, and there's a disciplined and conservative approach.

Q: Large open season for pipeline, impact on planned expansions, whether mutually exclusive.

A: David Slater says not afraid of competition, assets are in the right location, connectivity and track record matter, the addressable opportunity set is sizable, and there's no concern about competition.

Q: Gross backlog is much larger than the risk-adjusted one, give the gross number or size with peers' shadow backlog.

A: David Slater says it's multiples, it's a generational investment opportunity, and it's a healthy backdrop for the business.

Q: Growth CapEx was light vs guidance in 2025, reason.

A: David Slater says it's due to performance, capital efficiency, and timing.

Q: View on behind the meter demand for utilities and affordability.

A: David Slater says some demand is manifesting, utilities use the regulatory construct, there's all-pro subsidization, and large load customers like utility counterparties.

Q: Greenfield vs brownfield projects, opportunity.

A: David Slater says focusing on footprint expansions is easier, more economic, and lower risk, and pursuing greenfield storage opportunities due to price volatility.

Q: Translation of capital to EBITDA growth, elevated growth post 2027.

A: David Slater says the backlog drives EBITDA growth, 75% of capital is in the Pipeline segment with a longer cycle, the market is fluid, it's early in the cycle, and there's bullishness on fundamentals.

Q: Gathering and new backlog increase, expected gathering spend and drivers.

A: David Slater says he will follow up as he's not 100% sure, but gathering assets are interconnected to pipelines.

Q: LEAP expansions tied to next wave of LNG in 2028 - 2030, clarification.

A: David Slater says there are detailed conversations with shippers, and the next wave is for incremental expansion.

Q: 2030 outlook, green bar, sanctioned projects.

A: David Slater says the green bar boxes out to the $3.4 billion backlog, it's too early to put a number as the market is fluid.

Q: Midwestern expansion timing, open season, and clarity.

A: David Slater says it's in deep conversations, is front and center, and will move at the customer's pace.

Q: Capital allocation priorities, balance between dividend growth and leverage.

A: David Slater says the majority of the backlog is in the regulated pipeline segment with strong cash flows, committed to growing the dividend in line with EBITDA growth, and Jeff Jewell says there's plenty of room on the credit metric to fund everything.