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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
_______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 1, 2023
Commission File Number: 1-40392
DT Midstream, Inc.
| Delaware |
38-2663964 |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S Employer
Identification No.) |
Registrant's address of principal executive offices:
500 Woodward Ave., Suite 2900, Detroit, Michigan 48226-1279
Registrant’s telephone number, including
area code: (313) 402-8532
_______________________
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
|
Trading Symbol(s) |
|
Name of Exchange on which Registered |
| Common stock, par value $0.01 |
|
DTM |
|
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
DT Midstream, Inc. (“DT Midstream”) is furnishing
the Securities and Exchange Commission with its earnings release issued August 1, 2023, announcing financial results for the quarter ended
June 30, 2023. A copy of the earnings release, including supplemental financial information, is furnished as Exhibit 99.1 and incorporated
by reference.
| Item 7.01. | Regulation FD Disclosure. |
In
DT Midstream’s earnings release issued on August 1, 2023, DT Midstream also announced that its Board of Directors has declared a
quarterly cash dividend of $0.69 per share of common stock. The dividend is payable to DT Midstream’s stockholders of record as
of September 18, 2023, and is expected to be paid on October 15, 2023.
DT Midstream is furnishing
the SEC with its slide presentation issued August 1, 2023. A copy of the slide presentation is furnished as Exhibit 99.2 and incorporated
herein by reference.
In accordance with General
Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed
"filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities
of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except
as shall be expressly set forth in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
Forward-Looking Statements:
This Current Report on Form 8-K contains forward-looking
statements that are subject to various assumptions, risks and uncertainties. It should be read in conjunction with the “Cautionary
Statement Concerning Forward-Looking Statements” section in DT Midstream’s Form 10-K (which section is incorporated by reference
herein), and in conjunction with other SEC reports filed by DT Midstream that discuss important factors that could cause DT Midstream’s
actual results to differ materially. DT Midstream expressly disclaims any current intention to update any forward-looking statements contained
in this report as a result of new information or future events or developments.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 1, 2023
|
DT MIDSTREAM, INC.
(Registrant) |
| by |
| |
/s/ Jeffrey Jewell |
| |
Name: Jeffrey Jewell |
| |
Title: Chief Financial Officer |
NEWS RELEASE
DT Midstream Reports Strong Second Quarter 2023 Results; Announces
New Ohio Utica Investment
DETROIT, Aug. 1, 2023 – DT Midstream, Inc. (NYSE: DTM)
today announced second quarter 2023 reported net income of $91 million, or $0.93 per diluted share. For the second quarter of 2023, operating
earnings were $91 million, or $0.93 per diluted share. Adjusted EBITDA for the quarter was $224 million.
Reconciliations of operating earnings and adjusted EBITDA (non-GAAP
measures) to reported net income are included at the end of this news release.
The company also announced that the DT Midstream Board of Directors
declared a $0.69 per share dividend on its common stock payable October 15, 2023 to stockholders of record at the close of business September
18, 2023.
“We had another strong quarter, and the business continues
to perform in-line with our full-year plan,” said David Slater, President and CEO. “We continue to make great progress advancing
organic opportunities across our traditional and energy transition business platforms.”
Slater noted the following accomplishments:
| · | Reached a final investment decision on a new greenfield investment opportunity
in the Ohio Utica |
| · | Filed a Class V characterization well permit application for our carbon capture
and sequestration project in Louisiana |
| · | Published our annual Corporate Sustainability Report, highlighting our progress
on ESG initiatives |
“Our second quarter financial results give us confidence
in meeting our financial goals,” said Jeff Jewell, Executive Vice President and CFO. “We are in a strong position to achieve
our goals in 2023 and beyond.”
The company has scheduled a conference call to discuss results
for 9:00 a.m. ET (8:00 a.m. CT) today. Investors, the news media and the public may listen to a live internet broadcast of the call at
this link. The participant toll-free telephone dial-in number in the U.S. and Canada is 888.330.2022,
and the toll number is 646.960.0690; the passcode is 8347152. International access numbers are available here.
The webcast will be archived on the DT Midstream website at investor.dtmidstream.com.
# # #
About DT Midstream
DT Midstream (NYSE: DTM) is an owner, operator and developer of natural
gas interstate and intrastate pipelines, storage and gathering systems, compression, treatment and surface facilities. The company transports
clean natural gas for utilities, power plants, marketers, large industrial customers and energy producers across the Southern, Northeastern
and Midwestern United States and Canada. The Detroit-based company offers a comprehensive, wellhead-to-market array of services, including
natural gas transportation, storage and gathering. DT Midstream is transitioning towards net zero greenhouse gas emissions by 2050, including
a plan of achieving 30% of its carbon emissions reduction by 2030. For more information, please visit the DT Midstream website at www.dtmidstream.com.
Why DT Midstream Uses Operating Earnings, Adjusted EBITDA
and Distributable Cash Flow
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 meaningful representation of the company’s earnings from ongoing operations and uses Operating Earnings as the primary
performance measurement for external communications with analysts and investors. Internally, DT Midstream uses Operating Earnings to measure
performance against budget and to report to the Board of Directors.
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 the
proportional share of net income from equity method investees (excluding interest, taxes, depreciation and amortization), and to exclude
certain items the company considers non-routine. DT Midstream believes Adjusted EBITDA is useful to the company and external users of
DT Midstream’s financial statements in understanding operating results and the ongoing performance of the underlying business because
it allows management and investors to have a better understanding of actual operating performance unaffected by the impact of interest,
taxes, depreciation, amortization and non-routine charges noted in the table below. We believe the presentation of Adjusted EBITDA is
meaningful to investors because it is frequently used by analysts, investors and other interested parties in the midstream industry to
evaluate a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary
substantially from company to company depending on accounting methods, book value of assets, capital structure and the method by which
assets were acquired, among other factors. DT Midstream uses Adjusted EBITDA to assess the company’s performance by reportable segment
and as a basis for strategic planning and forecasting.
Distributable Cash Flow (DCF) is calculated by deducting earnings from
equity method investees, depreciation and amortization attributable to noncontrolling interests, cash interest expense, maintenance capital
investment (as defined below), and cash taxes from, and adding interest expense, income tax expense, depreciation and amortization, certain
items we consider non-routine and dividends and distributions from equity method investees to, Net Income Attributable to DT Midstream.
Maintenance capital investment is defined as the total capital expenditures used to maintain or preserve assets or fulfill contractual
obligations that do not generate incremental earnings. We believe DCF is a meaningful performance measurement because it is useful to
us and external users of our financial statements in estimating the ability of our assets to generate cash earnings after servicing our
debt, paying cash taxes and making maintenance capital investments, which could be used for discretionary purposes such as common stock
dividends, retirement of debt or expansion capital expenditures.
Forward-Looking Statements
This release 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 plans for our future operating and financial performance,
business prospects, outcomes of regulatory proceedings, market conditions, and other matters, based on what we believe to be reasonable
assumptions and on information currently available to us.
Forward-looking statements can be identified by the use of words such
as “believe,” “expect,” “expectations,” “plans,” “strategy,” “prospects,”
“estimate,” “project,” “target,” “anticipate,” “will,” “should,”
“see,” “guidance,” “outlook,” “confident” and other words of similar meaning. The absence
of such words, expressions or statements, however, does not mean that the statements are not forward-looking. In particular, express or
implied statements relating to future earnings, cash flow, results of operations, uses of cash, tax rates and other measures of financial
performance, future actions, conditions or events, potential future plans, strategies or transactions of DT Midstream, and other statements
that are not historical facts, are forward-looking statements.
Forward-looking statements are not guarantees of future results and
conditions, but rather are subject to numerous assumptions, risks, and uncertainties that may cause actual future results to be materially
different from those contemplated, projected, estimated, or budgeted. Many factors may impact forward-looking statements of DT Midstream
including, but not limited to, the following: changes in general economic conditions, including increases in interest rates and the impact
of inflation on our business; competitive conditions in our industry; global supply chain disruptions; actions taken by third-party operators,
processors, transporters and gatherers; changes in expected production from Southwestern Energy and other third parties in our areas of
operation; demand for natural gas gathering, transmission, storage, transportation and water services; the availability and price of natural
gas to the consumer compared to the price of alternative and competing fuels; competition from the same and alternative energy sources;
our ability to successfully implement our business plan; our ability
to complete organic growth projects on time and on budget; our ability to finance, complete, or successfully integrate acquisitions; the
price and availability of debt and equity financing; restrictions in our existing and any future credit facilities and indentures; energy
efficiency and technology trends; changing laws regarding cyber security and data privacy, and any cyber security threat or event; operating
hazards, environmental risks, and other risks incidental to gathering, storing and transporting natural gas; changes in environmental
laws, regulations or enforcement policies, including laws and regulations relating to climate change and greenhouse gas emissions; natural
disasters, adverse weather conditions, casualty losses and other matters beyond our control; the impact of outbreaks of illnesses, epidemics
and pandemics, and any related economic effects; the ongoing conflict between Russia and Ukraine, including resulting commodity price
volatility and risk of cyber-based attacks; labor relations and markets, including the ability to attract, hire and retain key employee
and contract personnel; large customer defaults; changes in tax status, as well as changes in tax rates and regulations; ability to develop
low carbon business opportunities and deploy greenhouse gas reducing technologies; the effects of existing and future laws and governmental
regulations; changes in insurance markets impacting costs and the level and types of coverage available; the timing and extent of changes
in commodity prices; the suspension, reduction or termination of our customers’ obligations under our commercial agreements; disruptions
due to equipment interruption or failure at our facilities, or third-party facilities on which our business is dependent; the effects
of future litigation; the qualification of the spin-off of DT Midstream from DTE Energy (“the Spin-Off”) as a tax-free distribution;
the allocation of tax attributes from DTE Energy in accordance with the agreement that governs the respective rights, responsibilities
and obligations of DTE Energy and DT Midstream after the Spin-Off with respect to all tax matters; and the risks described in our Annual
Report on Form 10-K for the year ended December 31, 2022 and our reports and registration statements filed from time to time with the
SEC.
The above list of factors is not exhaustive. New factors emerge from
time to time. We cannot predict what factors may arise or how such factors may cause actual results to vary materially from those stated
in forward-looking statements, see the discussion under the section entitled “Risk Factors” in our Annual Report for the year
ended December 31, 2022, filed with the SEC on Form 10-K and any other reports filed with the SEC. Given the uncertainties and risk factors
that could cause our actual results to differ materially from those contained in any forward-looking statement, you should not put undue
reliance on any forward-looking statements.
Any forward-looking statements speak only as of the date on which such
statements are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements,
whether as a result of new information, subsequent events or otherwise.
Investor Relations
Todd Lohrmann, DT Midstream, 313.774.2424
investor_relations@dtmidstream.com
DT Midstream, Inc. Reconciliation of Reported to Operating Earnings (non-GAAP)
|
| | |
| |
| |
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| |
| |
|
| | |
Three Months Ended |
| | |
June 30, | |
March 31, |
| | |
2023 | |
2023 |
| | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings |
| | |
(millions) |
| Adjustments | |
| | | |
$ | — | | |
$ | — | | |
| | | |
| | | |
$ | — | | |
$ | — | | |
| | |
| Net Income Attributable to DT Midstream | |
$ | 91 | | |
$ | — | | |
$ | — | | |
$ | 91 | | |
$ | 81 | | |
$ | — | | |
$ | — | | |
$ | 81 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
Six Months Ended |
| | |
June 30, | |
June 30, |
| | |
2023 | |
2022 |
| | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings |
| | |
(millions) |
| Gain on sale | |
| | | |
$ | — | | |
$ | — | | |
| | | |
| | | |
$ | (17 | )A | |
$ | 5 | | |
| | |
| Net Income Attributable to DT Midstream | |
$ | 172 | | |
$ | — | | |
$ | — | | |
$ | 172 | | |
$ | 172 | | |
$ | (17 | ) | |
$ | 5 | | |
$ | 160 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| (1) |
Excluding tax related adjustments, the amount of income taxes was calculated based on a combined federal and state income tax rate, considering the applicable jurisdictions of the respective segments and deductibility of specific operating adjustments |
| Adjustments Key |
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| A |
Gain on sale of certain assets in the Utica shale region — recorded in Assets (gains) losses and impairments, net |
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DT Midstream, Inc. Reconciliation of Reported to Operating Earnings per diluted share (2) (non-GAAP)
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|
| | |
Three Months Ended |
| | |
June 30, | |
March 31, |
| | |
2023 | |
2023 |
| | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings |
| | |
(per share) |
| Adjustments | |
| | | |
$ | — | | |
$ | — | | |
| | | |
| | | |
$ | — | | |
$ | — | | |
| | |
| Net Income Attributable to DT Midstream | |
$ | 0.93 | | |
$ | — | | |
$ | — | | |
$ | 0.93 | | |
$ | 0.84 | | |
$ | — | | |
$ | — | | |
$ | 0.84 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
Six Months Ended |
| | |
June 30, | |
June 30, |
| | |
2023 | |
2022 |
| | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings | |
Reported Earnings | |
Pre-tax Adjustments | |
Income Taxes (1) | |
Operating Earnings |
| | |
(per share) |
| Gain on sale | |
| | | |
$ | — | | |
$ | — | | |
| | | |
| | | |
$ | (0.17 | )A | |
$ | 0.04 | | |
| | |
| Net Income Attributable to DT Midstream | |
$ | 1.76 | | |
$ | — | | |
$ | — | | |
$ | 1.76 | | |
$ | 1.77 | | |
$ | (0.17 | ) | |
$ | 0.04 | | |
$ | 1.64 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| (1) |
Excluding tax related adjustments, the amount of income taxes was calculated based on a combined federal and state income tax rate, considering the applicable jurisdictions of the respective segments and deductibility of specific operating adjustments |
| (2) |
Per share amounts are divided by Weighted Average Common Shares Outstanding — Diluted, as noted on the Consolidated Statements of Operations |
| Adjustments Key |
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| A |
Gain on sale of certain assets in the Utica shale region — recorded in Assets (gains) losses and impairments, net |
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DT Midstream, Inc. Reconciliation
of Net Income Attributable to DT Midstream to Adjusted EBITDA (non-GAAP) |
| | |
| |
| |
| |
|
| | |
Three Months Ended | |
Six Months Ended |
| | |
June 30, | |
March 31, | |
June 30, | |
June 30, |
| | |
2023 | |
2023 | |
2023 | |
2022 |
| Consolidated | |
(millions) |
| Net Income Attributable to DT Midstream | |
$ | 91 | | |
$ | 81 | | |
$ | 172 | | |
$ | 172 | |
| Plus: Interest expense | |
| 35 | | |
| 38 | | |
| 73 | | |
| 64 | |
| Plus: Income tax expense | |
| 30 | | |
| 39 | | |
| 69 | | |
| 58 | |
| Plus: Depreciation and amortization | |
| 44 | | |
| 43 | | |
| 87 | | |
| 84 | |
| Plus: Loss from financing activities | |
| — | | |
| — | | |
| — | | |
| 13 | |
| Plus: EBITDA from equity method investees (1) | |
| 67 | | |
| 75 | | |
| 142 | | |
| 100 | |
| Plus: Adjustments for non-routine items (2) | |
| — | | |
| — | | |
| — | | |
| (17 | ) |
| Less: Interest income | |
| (1 | ) | |
| — | | |
| (1 | ) | |
| (1 | ) |
| Less: Earnings from equity method investees | |
| (41 | ) | |
| (50 | ) | |
| (91 | ) | |
| (71 | ) |
| Less: Depreciation and amortization attributable to noncontrolling interests | |
| (1 | ) | |
| (1 | ) | |
| (2 | ) | |
| (1 | ) |
| Adjusted EBITDA | |
$ | 224 | | |
$ | 225 | | |
$ | 449 | | |
$ | 401 | |
| | |
| | | |
| | | |
| | | |
| | |
| (1) |
Includes share of our equity method investees’ earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA.” A reconciliation of earnings from equity method investees to EBITDA from equity method investees follows: |
| | |
Three Months Ended | |
Six Months Ended |
| | |
June 30, | |
March 31, | |
June 30, | |
June 30, |
| | |
2023 | |
2023 | |
2023 | |
2022 |
| | |
(millions) |
| Earnings from equity methods investees | |
$ | 41 | | |
$ | 50 | | |
$ | 91 | | |
$ | 71 | |
| Plus: Depreciation and amortization attributable to equity method investees | |
| 20 | | |
| 21 | | |
| 41 | | |
| 24 | |
| Plus: Interest expense attributable to equity method investees | |
| 6 | | |
| 4 | | |
| 10 | | |
| 5 | |
| EBITDA from equity method investees | |
$ | 67 | | |
$ | 75 | | |
$ | 142 | | |
$ | 100 | |
| | |
| | | |
| | | |
| | | |
| | |
| (2) |
Adjusted EBITDA calculation excludes certain items we consider non-routine. For the six months ended June 30, 2022, adjustments for non-routine items included a $17 million gain on sale of certain assets in the Utica shale region. |
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DT Midstream, Inc. Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Pipeline
Segment (non-GAAP) |
| | |
| |
| |
| |
|
| | |
Three Months Ended | |
Six Months Ended |
| | |
June 30, | |
March 31, | |
June 30, | |
June 30, |
| | |
2023 | |
2023 | |
2023 | |
2022 |
| Pipeline | |
(millions) |
| Net Income Attributable to DT Midstream | |
$ | 64 | | |
$ | 57 | | |
$ | 121 | | |
$ | 100 | |
| Plus: Interest expense | |
| 13 | | |
| 16 | | |
| 29 | | |
| 26 | |
| Plus: Income tax expense | |
| 21 | | |
| 28 | | |
| 49 | | |
| 35 | |
| Plus: Depreciation and amortization | |
| 17 | | |
| 16 | | |
| 33 | | |
| 31 | |
| Plus: Loss from financing activities | |
| — | | |
| — | | |
| — | | |
| 6 | |
| Plus: EBITDA from equity method investees (1) | |
| 67 | | |
| 75 | | |
| 142 | | |
| 100 | |
| Less: Interest income | |
| (1 | ) | |
| — | | |
| (1 | ) | |
| — | |
| Less: Earnings from equity method investees | |
| (41 | ) | |
| (50 | ) | |
| (91 | ) | |
| (71 | ) |
| Less: Depreciation and amortization attributable to noncontrolling interests | |
| (1 | ) | |
| (1 | ) | |
| (2 | ) | |
| (1 | ) |
| Adjusted EBITDA | |
$ | 139 | | |
$ | 141 | | |
$ | 280 | | |
$ | 226 | |
| | |
| | | |
| | | |
| | | |
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|
| (1) |
Includes share of our equity method investees’ earnings before interest, taxes, depreciation and amortization, which we refer to as “EBITDA.” A reconciliation of earnings from equity method investees to EBITDA from equity method investees follows: |
| | |
Three Months Ended | |
Six Months Ended |
| | |
June 30, | |
March 31, | |
June 30, | |
June 30, |
| | |
2023 | |
2023 | |
2023 | |
2022 |
| | |
(millions) |
| Earnings from equity methods investees | |
$ | 41 | | |
$ | 50 | | |
$ | 91 | | |
$ | 71 | |
| Plus: Depreciation and amortization attributable to equity method investees | |
| 20 | | |
| 21 | | |
| 41 | | |
| 24 | |
| Plus: Interest expense attributable to equity method investees | |
| 6 | | |
$ | 4 | | |
| 10 | | |
| 5 | |
| EBITDA from equity method investees | |
$ | 67 | | |
$ | 75 | | |
$ | 142 | | |
$ | 100 | |
| | |
| | | |
| | | |
| | | |
| | |
DT Midstream, Inc. Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA Gathering
Segment (non-GAAP) |
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|
| | |
Three Months Ended | |
Six Months Ended |
| | |
June 30, | |
March 31, | |
June 30, | |
June 30, |
| | |
2023 | |
2023 | |
2023 | |
2022 |
| Gathering | |
(millions) |
| Net Income Attributable to DT Midstream | |
$ | 27 | | |
$ | 24 | | |
$ | 51 | | |
$ | 72 | |
| Plus: Interest expense | |
| 22 | | |
| 22 | | |
| 44 | | |
| 38 | |
| Plus: Income tax expense | |
| 9 | | |
| 11 | | |
| 20 | | |
| 23 | |
| Plus: Depreciation and amortization | |
| 27 | | |
| 27 | | |
| 54 | | |
| 53 | |
| Plus: Loss from financing activities | |
| — | | |
| — | | |
| — | | |
| 7 | |
| Plus: Adjustments for non-routine items (1) | |
| — | | |
| — | | |
| — | | |
| (17 | ) |
| Less: Interest income | |
| — | | |
| — | | |
| — | | |
| (1 | ) |
| Adjusted EBITDA | |
$ | 85 | | |
$ | 84 | | |
$ | 169 | | |
$ | 175 | |
| | |
| | | |
| | | |
| | | |
| | |
| (1) |
Adjusted EBITDA calculation excludes certain items we consider non-routine. For the six months ended June 30, 2022, adjustments for non-routine items included a $17 million gain on sale of certain assets in the Utica shale region. |
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DT Midstream, Inc. Reconciliation
of Net Income Attributable to DT Midstream to Distributable Cash Flow (non-GAAP) |
| | |
| |
| |
| |
|
| | |
Three Months Ended | |
Six Months Ended |
| | |
June 30, | |
March 31, | |
June 30, | |
June 30, |
| | |
2023 | |
2023 | |
2023 | |
2022 |
| | |
(millions) |
| Net Income Attributable to DT Midstream | |
$ | 91 | | |
$ | 81 | | |
$ | 172 | | |
$ | 172 | |
| Plus: Interest expense | |
| 35 | | |
| 38 | | |
| 73 | | |
| 64 | |
| Plus: Income tax expense | |
| 30 | | |
| 39 | | |
| 69 | | |
| 58 | |
| Plus: Depreciation and amortization | |
| 44 | | |
| 43 | | |
| 87 | | |
| 84 | |
| Plus: Loss from financing activities | |
| — | | |
| — | | |
| — | | |
| 13 | |
| Plus: Adjustments for non-routine items (1) | |
| (371 | ) | |
| — | | |
| (371 | ) | |
| (17 | ) |
| Less: Earnings from equity method investees | |
| (41 | ) | |
| (50 | ) | |
| (91 | ) | |
| (71 | ) |
| Less: Depreciation and amortization attributable to noncontrolling interests | |
| (1 | ) | |
| (1 | ) | |
| (2 | ) | |
| (1 | ) |
| Plus: Dividends and distributions from equity method investees | |
| 427 | | |
| 82 | | |
| 509 | | |
| 88 | |
| Less: Cash interest expense | |
| (63 | ) | |
| (6 | ) | |
| (69 | ) | |
| (55 | ) |
| Less: Cash taxes | |
| (18 | ) | |
| — | | |
| (18 | ) | |
| (7 | ) |
| Less: Maintenance capital investment (2) | |
| (8 | ) | |
| (3 | ) | |
| (11 | ) | |
| (7 | ) |
| Distributable Cash Flow | |
$ | 125 | | |
$ | 223 | | |
$ | 348 | | |
$ | 321 | |
| | |
| | | |
| | | |
| | | |
| | |
| (1) |
Distributable Cash Flow calculation excludes certain items we consider non-routine. For the three and six months ended June 30, 2023, adjustments for non-routine items included the $371 million NEXUS financing distribution. For the six months ended June 30, 2022, adjustments for non-routine items included a $17 million gain on sale of certain assets in the Utica shale region. |
| (2) |
Maintenance capital investment is defined as the total capital expenditures used to maintain or preserve assets or fulfill contractual obligations that do not generate incremental earnings. |
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SECOND QUARTER 2023 EARNINGS CALL
AUGUST 1, 2023
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 current expectations or plans for our future
operating and financial performance, business prospects, outcomes of regulatory
proceedings, market conditions, and other matters, based on what we believe to
be reasonable assumptions and on information currently available to us.
Forward-looking statements can be identified by the use of words such as
"believe," "expect," "expectations," "plans," "strategy," "prospects,"
"estimate," "project," "target," "anticipate," "will," "should," "see,"
"guidance," "outlook," "confident" and other words of similar meaning. The
absence of such words, expressions or statements, however, does not mean that
the statements are not forward-looking. In particular, express or implied
statements relating to future earnings, cash flow, results of operations, uses
of cash, tax rates and other measures of financial performance, future actions,
conditions or events, potential future plans, strategies or transactions of DT
Midstream, and other statements that are not historical facts, are
forward-looking statements.
Forward-looking statements are not guarantees of future results and conditions,
but rather are subject to numerous assumptions, risks, and uncertainties that
may cause actual future results to be materially different from those
contemplated, projected, estimated, or budgeted. Many factors may impact
forward-looking statements of DT Midstream including, but not limited to, the
following: changes in general economic conditions, including increases in
interest rates and the impact of inflation on our business; competitive
conditions in our industry; global supply chain disruptions; actions taken by
third-party operators, processors, transporters and gatherers; changes in
expected production from Southwestern Energy and other third parties in our
areas of operation; demand for natural gas gathering, transmission, storage,
transportation and water services; the availability and price of natural gas to
the consumer compared to the price of alternative and competing fuels;
competition from the same and alternative energy sources; our ability to
successfully implement our business plan; our ability to complete organic growth
projects on time and on budget; our ability to finance, complete, or
successfully integrate acquisitions; the price and availability of debt and
equity financing; restrictions in our existing and any future credit facilities
and indentures; energy efficiency and technology trends; changing laws regarding
cyber security and data privacy, and any cyber security threat or event;
operating hazards, environmental risks, and other risks incidental to gathering,
storing and transporting natural gas; changes in environmental laws, regulations
or enforcement policies, including laws and regulations relating to climate
change and greenhouse gas emissions; natural disasters, adverse weather
conditions, casualty losses and other matters beyond our control; the impact of
outbreaks of illnesses, epidemics and pandemics, and any related economic
effects; the ongoing conflict between Russia and Ukraine, including resulting
commodity price volatility and risk of cyber-based attacks; relations and
markets, including the ability to attract, hire and retain key employee and
contract personnel; large customer defaults; changes in tax status, as well as
changes in tax rates and regulations; ability to develop low carbon business
opportunities and deploy greenhouse gas reducing technologies; the effects of
existing and future laws and governmental regulations; changes in insurance
markets impacting costs and the level and types of coverage available; the
timing and extent of changes in commodity prices; the suspension, reduction or
termination of our customers' obligations under our commercial agreements;
disruptions due to equipment interruption or failure at our facilities, or
third-party facilities on which our business is dependent; the effects of future
litigation; the qualification of the spin-off of DT Midstream from DTE Energy
("the Spin-Off") as a tax-free distribution; the allocation of tax attributes
from DTE Energy in accordance with the agreement that governs the respective
rights, responsibilities and obligations of DTE Energy and DT Midstream after
the Spin-Off with respect to all tax matters; and the risks described in our
Annual Report on Form 10-K for the year ended December 31, 2022 and our reports
and registration statements filed from time to time with the SEC.
The above list of factors is not exhaustive. New factors emerge from time to
time. We cannot predict what factors may arise or how such factors may cause
actual results to vary materially from those stated in forward-looking
statements, see the discussion under the section entitled "Risk Factors" in our
Annual Report for the year ended December 31, 2022, filed with the SEC on Form
10-K and any other reports filed with the SEC. Given the uncertainties and risk
factors that could cause our actual results to differ materially from those
contained in any forward-looking statement, you should not put undue reliance on
any forward-looking statements.
Any forward-looking statements speak only as of the date on which such
statements are made. We are under no obligation to, and expressly disclaim any
obligation to, update or alter our forward-looking statements, whether as a
result of new information, subsequent events or otherwise.
2
Second Quarter 2023 Accomplishments
Strong financial performance
Net income of $91 million and Adjusted EBITDA1 of $224 million
Confident in 2023 Adjusted EBITDA guidance and 2024 Adjusted EBITDA early
outlook
Successful development activity
New greenfield gathering opportunity in emerging Ohio Utica play
Growth investments are on-schedule and on-budget
LEAP phase 1 construction currently ahead of schedule
Advancing energy transition platform and ESG initiatives
Louisiana CCS project progressing towards 1H 2024 final investment decision
Published 2023 Corporate Sustainability Report
1. Definition and reconciliation of Adjusted EBITDA (non-GAAP) to net income
included in the appendix
3
DT Midstream Investment Thesis
Clean assets, clean balance sheet, clean story
Integrated and well-positioned assets
Haynesville / Appalachia dry gas focus
Assets providing wellhead to market service
Directly serving growing LNG export demand
Highly contracted cash flows
Long-term take-or-pay contracts
Committed to a durable and growing dividend
No direct commodity exposure
Strong balance sheet with low leverage
Self-funded investment program
No significant near-term debt maturities
Low and declining leverage
Mature environmental, social and governance leadership
Executing on energy transition projects
Committed to 30% emissions reduction by 2030 and net zero by 2050
4
Second Quarter 2023 Financial Results
Adjusted EBITDA
(millions), xx segment % of overall
$225 $224
$141 63% $139 62%
$84 37% $85 38%
Q1 2023 Q2 2023
Gathering
Pipeline
Pipeline
Lower winter weather related revenues from pipeline joint ventures in Q2 2023
Gathering
Q2 2023 results in-line with Q1 2023
1. Definition and reconciliation of Adjusted EBITDA (non-GAAP) to net income
included in the appendix
5
New Greenfield Investment in Ohio Utica Resource
Finalized development plan with new owner1, accelerated build into 2023 from
2024
Emerging associated gas resource development area
Initial gathering backbone buildout of >200 MMcf/d capacity
Expected DTM investment 2 of ~$100 million for 2023-2024
~5x build multiple at full run-rate
In-service 1H 2024
New customer is a large-cap investment-grade producer that has an advantaged
cost structure via sizeable minerals ownership within 395k total net acres
Strong commercial structure
Long-term contract, dedication, and minimum volume commitment that
protects project economics
Volume expected to ramp over 18 to 24 months
Opportunity for significant future development
Potential large-scale, multi-year natural gas gathering buildout
Integration with DTM downstream assets (e.g., NEXUS, Vector, and W10 Storage),
providing access to premium markets
1. DTM had acreage dedication with previous owner
2. DTM's investment is net of customer contribution
6
Louisiana Carbon Capture and Sequestration
Advancing our energy transition platform
Louisiana CCS project area
Utilizing CO2 from DTM owned treating facilities
Leveraging our strong expertise and integrated asset platform
Project scope includes capture equipment, a new CO2 pipeline and storage
development
Targeting a proximal geological storage formation with capacity of over 1
million metric tons per annum
Recently completed seismic surveys with favorable results; plan to drill Class V
characterization well in Q4 2023
Class VI application review is proceeding as planned
Dual benefit of attractive organic growth and meaningful emissions reduction
Economics are fully supported by 45Q tax credit
Supports carbon neutral "wellhead to water" service offering on LEAP
Reduces DTM emissions in pursuit of net zero by 2050
DTM assets
Operating DTM treating plants
DTM treating plant under construction
Project Timeline
Class VI well permit application filed
Q4 2022
Class V test well permit application filed
Q2 2023
Drill Class V well
Q4 2023
Final investment decision
1H 2024
Expected Class VI well permit approval
Q4 2024
Expected project in-service
Q4 2025
7
2023-2027 Overall Growth Capital Outlook Remains Unchanged
Shifting 2024 committed capital into 2023 for new Ohio Utica opportunity
2023-2027 capital outlook
(Growth capex), Committed capital
$1.7-$2.2 billion
~$0.8 billion committed capital in 2023/2024
$700-$750 million1
$575-$650 million original guidance
Customer-driven timing shift
2023 updated guidance
2024
Additional organic growth opportunities
2023-2027 guidance
Accelerating new greenfield investment
Committed capital of ~$0.8 billion is unchanged
Shifting 2024 capital into 2023 for new Ohio Utica opportunity
Investment of ~$15 million for Louisiana CCS in 2023
Self funded five-year capital program
Investments in 2024 will be funded via cash flow after dividends
Expect to end 2024 with a leverage ratio2 of 4.0x or below
1. DTM's investment in 2023 is net of a~$60 million customer contribution
2. Leverage ratio is inclusive of proportional debt at our joint venture equity
method investees
8
Growth Investment Summary
Projects remain on-schedule and on-budget
Contracted growth investments
Project
In-service date(s)
Pipeline
Haynesville LEAP pipeline expansion-Phase 1
Q4 2023
Haynesville LEAP pipeline expansion-Phase 2
Q1 2024
Haynesville LEAP pipeline expansion-Phase 3
Q3 2024
Gathering
Appalachia Gathering System expansion-Phase 2
Q4 2023
Haynesville Blue Union expansion
Q3 2022 -Q1 2024
Ohio Utica System (New)
1H 2024
Key project updates
LEAP phase 1 construction on-track for early Q4 2023 in-service
Gathering expansions on-schedule
LEAP pipe looping
9
Gathering Volume Summary
Haynesville throughput
(bcf/d)Blue Union Gathering
1.53
1.66
1.70
1.63
1.53
July exit rate ~1.65 Bcf/d
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q2 2023 volumes down compared to Q1 2023 due to planned treating outage in April
and weather-related outage in May
Northeast throughput
(bcf/d) Susquehanna Gathering Appalachia Gathering Tioga Gathering
1.28
1.35
1.35
1.36
1.39
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q2 2023 volumes up compared to Q1 2023 due to higher volumes at Appalachia
Gathering
10
Financial Results
Three months ended
(millions, except EPS)
June 30, 2023
March 31, 2023
Key drivers
Adjusted EBITDA1
$224
$225
Pipeline segment
$139
$141
Gathering segment
$85
$84
Operating Earnings2
$91
$81
Deferred tax adjustment in Q1 2023
Operating EPS2
$0.93
$0.84
Distributable Cash Flow3
$125
$223
Interest payment and cash taxes in Q2 2023
Growth Capital4
$189
$227
Maintenance Capital
$8
$3
1. Definition and reconciliation of Adjusted EBITDA (non-GAAP) to net income
included in the appendix
2. Definition and reconciliation of Operating Earnings and Operating Earnings
per Share (non-GAAP) to reported earnings included in the appendix; EPS
calculation based on average share count of approximately 97 million shares
outstanding - diluted
3. Definition and reconciliation of Distributable Cash Flow (non-GAAP) included
in the appendix
4. includes contribution to equity method investees
11
Diversified Asset Base Anchored by Strong Pipeline Segment
Q2 2023 Adjusted EBITDA by demand area
62%
38%
Pipeline
Gathering
Q2 2023 Adjusted EBITDA1 by segment
7%
43%
22%
28%
Gulf Coast
Midwest
Northeast & Mid-Atlantic
Eastern Canada
Q2 2023 Adjusted EBITDA by supply area
7%
67%
25%
Marcellus / Utica
Haynesville
Michigan Operations2
1. Definition and reconciliation of Adjusted EBITDA (non-GAAP) to net income
included in the appendix
2. Includes Washington 10 Storage and Michigan System
12
Appendix
DT Midstream
2023/2024 Guidance Summary
(millions, except EPS)
Prior guidance
Current guidance
Key drivers
2023
Adjusted EBITDA1
$895-$935
$895-$935
Operating Earnings2
$340-$356
$340-$356
Operating EPS2
$3.50-$3.66
$3.50-$3.66
Distributable Cash Flow3
$625-$675
$625-$675
Capital Expenditures4
$605-$690
$730-$790
Growth Capital4
$575-$650
$700-$750
Shifting 2024 committed capital into 2023 due to customer
driven timing shift
Maintenance Capital
$30-$40
$30-$40
2024
Adjusted EBITDA (early outlook)
$920-$970
$920-$970
1. Definition and reconciliation of Adjusted EBITDA (non-GAAP) to net income
included in this appendix
2. Definition and reconciliation of Operating Earnings and Operating Earnings
per Share (non-GAAP) to reported earnings included in this appendix; EPS
calculation based on average share count of approximately 97 million shares
outstanding - diluted
3. Definition and reconciliation of Distributable Cash Flow (non-GAAP) included
in this appendix
4. Includes contribution to equity method investees, guidance range is net of a ~$60 million customer contribution
14
Capital Allocation Approach
Preserve balance sheet strength
Current plan naturally deleverages the business into mid 3x's over the 5-year
period
Committed to long-term 4x leverage ratio ceiling
Durable and growing dividend
+15% dividend increase since the Sspin-Off
2. 4x dividend coverage, with financial policy of a 2x coverage ratio floor
Invest in accretive organic growth projects
Deploy capital at attractive 5-8x build multiples1
Strong organic growth project backlog
Maintain financial flexibility
Strong value creation optionality to pursue the most accretive use of excess
cash flow (i.e., growth investments,increased dividend, share buybacks, and/or
debt reduction)
1. New project build multiples differ based on business segments (i.e., pipeline
vs gathering)
15
Strong Organic Opportunities Across Our Existing Footprint
Asset
2023-2027 commercial focus
Overview
Pipeline
LEAP
Active discussions for expansions up to ~3 Bcf/d
Connecting growing Haynesville supply with growing LNG demand
Stonewall
Active discussions with existing and new customers for expansion opportunities
Providing incremental Appalachia pipeline takeaway to East Coast LNG and Gulf
Coast markets
NEXUS
Generation Pipeline interconnection
New supply connections; hydraulic optimization
Providing Ohio industrial corridor access to NEXUS supply
Millennium
Recently completed open season for potential expansion opportunity
Enabling additional supply into New York and New England markets through
compression expansion
Gathering
Blue Union
Active discussions for gathering and treating expansion opportunities
Serving growing production from existing customers; step out expansions to
connect new customers
Appalachia Gathering
Active discussions for further expansion
Serving growing production from existing customers
Ohio Utica (New)
Initial buildout of new trunkline and gathering network
Emerging resource development in Ohio Utica
Tioga
Active discussions regarding full-scale development
Supporting new drilling activity in undeveloped acreage
Energy Transition
Carbon Capture and Sequestration
Continue to advance Louisiana CCS opportunity towards final investment decision
New project development
Permanently sequestering CO2 from DTM treating assets; supported by 45Q tax
credit
Leveraging strong expertise to advance CCS in new regions
Hydrogen
Advance hydrogen hub project concepts
Work with strategic partner to identify and advance development opportunities
Commercializing hydrogen transportation, storage and production
16
Phase 1 LEAP Expansion On-track for Early Q4 2023 In-service
Serving growing LNG export demand via capital efficient expansion
Haynesville / Louisiana Gulf Coast
DTM assets
LNG facilities
DTM treating plants
Operational
Blue Union expansion build
Under development
New electric compression
Contracted LEAP capacity (Bcf/d)
In-service
Current
1.0
Phase 1 expansion
0.3
Q4 2023
Phase 2 expansion
0.4
Q1 2024
Phase 3 expansion
0.2
Q3 2024
Total
1.9
Full expansion opportunity
3.0
Increasing LEAP by 90% from 1.0 Bcf/d to 1.9 Bcf/d
Capital efficient, lower-risk expansions provide timely access to growing LNG
demand
Project includes a combination of looping and compression
LEAP can be further expanded up to ~3 Bcf/d
17
DTM Assets are Supporting Growing LNG Export Demand
DTM assets currently provide ~2 Bcf/d of access to LNG export terminals and are
well-positioned to serve growing demand
US LNG export capacity1
(bcf/d)
+12 Bcf/d
~10 Bcf/d of Louisiana Gulf Coast area LNG export growth through 20302
28
24
20
16
12
8
4
0
2022
2023
2024
2025
2026
2027
2028
2029
2030
Sabine Pass
Cameron
Calcasieu Pass
Golden Pass
Plaquemines
LA FLNG
Port Arthur
Cove Point
Corpus Christi
Freeport
Elba Island
Cove Point LNG
Gulf Coast LNG corridor
LNG facilities
Operational
Under development
1. Source: Wood Mackenzie North America Gas Markets Long-Term Outlook - March
2023
2. Represents growth from annual average level in 2022
18
Strong Long-term Production Outlook in Both Basins
Haynesville & Appalachia production is expected to experience significant growth
through 2030
Historical production
(bcf/d)
Haynesville
Appalachia
60
50
40
30
20
10
0
2018
2019
2020
2021
2022
2023
2022
2030
DUC inventory1
Haynesville
473
710
776
Appalachia
672
781
710
Production forecast
(bcf/d)
Haynesville
Appalachia
+15 Bcf/d
46
61
33
40
2022
2030
1. Drilled but uncompleted (DUC) wells data reflects year end inventory. Data
through June 2023
Sources: EIA, S & P Global Commodity Insights, & Wood Mackenzie North America Gas
Markets Long-Term Outlook - March 2023
19
Focused on Impactful Sustainability Initiatives
2023 Corporate Sustainability Report Highlights
MSCI upgraded DTM to the second highest ESG rating of "AA"
Reduced year-over-year employee safety incident rate by 43%
Doubled the percentage of ethnically diverse leadership
Increased workforce diversity by 44%
Created Chief Diversity Officer role to champion diversity initiatives
2,752 volunteer hours logged by employees to support local communities
Sustainability and Climate Risks integrated into Enterprise Risk Management
99% compressor availability delivers best in class customer service
Link to full report: Corporate Sustainability Report 2023
20
Non-GAAP Definitions
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 share of net
income from our equity method investees (excluding interest, taxes, depreciation
and amortization), and to exclude certain items we consider non-routine. We
believe Adjusted EBITDA is useful to us and external users of our financial
statements in understanding our operating results and the ongoing performance of
our underlying business because it allows our management and investors to have a
better understanding of our actual operating performance unaffected by the
impact of interest, taxes, depreciation, amortization and non-routine charges
noted in the table below. We believe the presentation of Adjusted EBITDA is
meaningful to investors because it is frequently used by analysts, investors and
other interested parties in our industry to evaluate a company's operating
performance without regard to items excluded from the calculation of such
measure, which can vary substantially from company to company depending on
accounting methods, book value of assets, capital structure and the method by
which assets were acquired, among other factors. We use Adjusted EBITDA to
assess our performance by reportable segment and as a basis for strategic
planning and forecasting.
Distributable Cash Flow (DCF)is calculated by deducting earnings from equity
method investees, depreciation and amortization attributable to noncontrolling
interests, cash interest expense, maintenance capital investment (as defined
below), and cash taxes from, and adding interest expense, income tax expense,
depreciation and amortization, certain items we consider non-routine and
dividends and distributions from equity method investees to, Net Income
Attributable to DT Midstream. Maintenance capital investment is defined as the
total capital expenditures used to maintain or preserve assets or fulfill
contractual obligations that do not generate incremental earnings. We believe
DCF is a meaningful performance measurement because it is useful to us and
external users of our financial statements in estimating the ability of our
assets to generate cash earnings after servicing our debt, paying cash taxes and
making maintenance capital investments, which could be used for discretionary
purposes such as common stock dividends, retirement of debt or expansion capital
expenditures.
Adjusted EBITDA and DCF are not measures calculated in accordance with GAAP and
should be viewed as a supplement to and not a substitute for the results of
operations presented in accordance with GAAP. There are significant limitations
to using Adjusted EBITDA and DCF as a measure of performance, including the
inability to analyze the effect of certain recurring and non-recurring items
that materially affect our net income or loss. Additionally, because Adjusted
EBITDA and DCF exclude some, but not all, items that affect net income and are
defined differently by different companies in our industry, Adjusted EBITDA and
DCF do not intend to represent net income attributable to DT Midstream, the most
comparable GAAP measure, as an indicator of operating performance and are not
necessarily comparable to similarly titled measures reported by other companies.
Reconciliation of net income attributable to DT Midstream to Adjusted EBITDA or
DCF as projected for full-year 2023 is not provided. We do not forecast net
income as we cannot, without unreasonable efforts, estimate or predict with
certainty the components of net income. These components, net of tax,
mayinclude, but are not limited to, impairments of assets and other charges,
divestiture costs, acquisition costs, or changes in accounting principles. All
of these components could significantly impact such financial measures. At this
time, management is not able to estimate the aggregate impact, if any, of these
items on future period reported earnings. Accordingly, we are not able to
provide a corresponding GAAP equivalent for Adjusted EBITDA or DCF.
21
Non-GAAP Definitions
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 meaningful
representation of the company's earnings from ongoing operations and uses
Operating Earnings as the primary performance measurement for external
communications with analysts and investors. Internally, DT Midstream uses
Operating Earnings to measure performance against budget and to report to the
Board of Directors.
In this presentation, DT Midstream provides guidance for future period Operating
Earnings. It is likely that certain items that impact the company's future
period reported results will be excluded from operating results. A
reconciliation to the comparable future period reported earnings is not provided
because it is not possible to provide a reliable forecast of specific line items
(i.e., future non-recurring items, certain mark-to-market adjustments and
discontinued operations). These items may fluctuate significantly from period to
period and may have a significant impact on reported earnings.
22
Non-GAAP Reconciliations
Reconciliation of Reported to Operating Earnings
Three Months Ended
June 30, 2023
March 31, 2023
Reported Earnings
Pre-tax Adjustments
Income Taxes(1)
Operating Earnings
Reported Earnings
Pre-tax Adjustments
Income Taxes(1)
Operating Earnings
(millions)
Adjustments
$ -
$ -
$ -
$ -
Net Income Attributable to DT Midstream
$ 91
$ -
$ -
$ 91
$ 81
$ -
$ -
$ 81
Six Months Ended
June 30, 2023
June 30, 2022
Reported Earnings
Pre-tax Adjustments
Income Taxes(1)
Operating Earnings
Reported Earnings
Pre-tax Adjustments
Income Taxes(1)
Operating Earnings
(millions)
Gain on sale
$ -
$ -
$ (17)
$
$ 5
Net Income Attributable to DT Midstream
$ 172
$ -
$ -
$ 172
$ 172
$ (17)
$ 5
$ 160
(1) Excluding tax related adjustments, the amount of income taxes was calculated
based on a combined federal and state income tax rate, considering the
applicable jurisdicitons of the respective segments and deductibility of
specific operating adjustments
Adjustments Key
A Gain on sale of certain assets in the Utica shale region - recorded in Assets
(gains) losses and impairments, net
23
Non-GAAP Reconciliations
Reconciliation of Reported to Operating Earnings per diluted share(2)
Three Months Ended
June 30, 2023
March 31, 2023
Reported Earnings
Pre-tax Adjustments
Income Taxes(1)
Operating Earnings
Reported Earnings
Pre-tax Adjustments
Income Taxes(1)
Operating Earnings
(per share)
Adjustments
$ -
$ -
$ -
$ -
Net Income Attributable to DT Midstream
$ 0.93
$ -
$ -
$ 0.93
$ 0.84
$ -
$ -
$ 0.84
Six Months Ended
June 30, 2023
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)
Gain on sale
$ -
$ -
$ (0.17)
A
$ 0.04
Net Income Attributable to DT Mainstream
$ 1.76
$ -
$ -
$ 1.76
$ 1.77
$ (0.17)
$ 0.04
$ 1.64
(1) Excluding tax related adjustments, the amount of income taxes was calculated
based on a combined federal and state income tax rate, considering the
applicable jurisdicitons of the respective segments and deductibility of
specific operating adjustments
(2) Per share amounts are divided by Weighted Average Common Shares Outstanding
- Diluted, as noted on the Consolidated Statements of Operations
Adjustments Key
A Gain on sale of certain assets in the Utica shale region - recorded in Assets
(gains) losses and impairments, net
24
Non-GAAP Reconciliations
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2023
June 30, 2022
Consolidated
(millions)
Net Income Attributable to DT Midstream
$ 91
$ 81
$ 172
$ 172
Plus: Interest expense
35
38
73
64
Plus: Income tax expense
30
39
69
58
Plus: Depreciation and amortization
44
43
87
84
Plus: Loss from financing activities
--
--
--
13
Plus: EBITDA from equity method investees(1)
67
75
142
100
Plus: Adjustments for non-routine items(2)
--
--
--
(17)
Less: Interest income
(1)
--
(1)
(1)
Less: Earnings from equity method investees
(41)
(50)
(91)
(71)
Less: Depreciation and amortization attributable to noncontrolling interests
(1)
(1)
(2)
(1)
Adjusted EBITDA
$ 224
$ 225
$ 449
$ 401
(1) Includes share of our equity method investees' earnings before interest,
taxes, depreciation and amortization. which we refer to as "EBITDA." A
reconciliation of earnings from equity method investees to EBITDA from equity
method investees follows:
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2023
June 30, 2022
(millions)
Earnings from equity methods investees
$ 41
$ 50
$ 91
$ 71
Plus: Depreciation and amortization attributable to equity method investees
20
21
41
24
Plus: Interest expense attributable to equity method investees
6
4
10
5
EBITDA from equity method investees
$ 67
$ 75
$ 142
$ 100
(2) Adjusted EBITDA calculation excludes certain items we consider non-routine.
For the six months ended June 30, 2022, adjustments for non-routine items
included a $17 million gain on sale of certain assets in the Utica shale region.
25
Non-GAAP Reconciliations
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA
Pipeline Segment
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2023
June 30, 2022
Pipeline
(millions)
Net Income Attributable to DT Midstream
$ 64
$ 57
$ 121
$ 100
Plus: Interest expense
13
16
29
26
Plus: Income tax expense
21
28
49
35
Plus: Depreciation and amortization
17
16
33
31
Plus: Loss from financing activities
--
--
--
6
Plus: EBITDA from equity method investees (1)
67
75
142
100
Less: Interest income
(1)
--
(1)
--
Less: Earnings from equity method investees
(41)
(50)
(91)
(71)
Less: Depreciation and amortization attributable to noncontrolling interests
(1)
(1)
(2)
(1)
Adjusted EBITDA
$ 139
$ 141
$ 280
$ 226
(1) Includes share of our equity method investees' earnings before interest,
taxes, depreciation and amortization, which we refer to as "EBITDA." A
reconciliation of earnings from equity method investees to EBITDA from equity
method investees follows:
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2023
June 30, 2022
(millions)
Earnings from equity methods investees
$ 41
$ 50
$ 91
$ 71
Plus: Depreciation and amortization attributable to equity method investees
20
21
41
24
Plus: Interest expense attributable to equity method investees
6
4
10
5
EBITDA from equity method investees
$ 67
$ 75
$ 142
$ 100
26
Non-GAAP Reconciliations
Reconciliation of Net Income Attributable to DT Midstream to Adjusted EBITDA
Gathering Segment
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2023
June 30, 2022
Gathering
(millions)
Net Income Attributable to DT Midstream
$ 27
$ 24
$ 51
$ 72
Plus: Interest expense
22
22
44
38
Plus: Income tax expense
9
11
20
23
Plus: Depreciation and amortization
27
27
54
53
Plus: Loss from financing activities
--
--
--
7
Plus: Adjustments for non-routine items (1)
--
--
--
(17)
Less: Interest income
--
--
--
(1)
Adjusted EBITDA
$ 85
$ 84
$ 169
$ 175
(1) Adjusted EBITDA calculation excludes certain items we consider non-routine.
For the six months ended June 30, 2022, adjustments for non-routine items
included a $17 million gain on sale of certain assets in the Utica shale region.
27
Non-GAAP Reconciliations
Reconciliation of Net Income Attributable to DT Midstream to Distributable Cash
Flow
Three Months Ended
Six Months Ended
June 30, 2023
March 31, 2023
June 30, 2023
June 30, 2022
(millions)
Net Income Attributable to DT Midstream
$ 91
$ 81
$ 172
$ 172
Plus: Interest expense
35
38
73
64
Plus: Income tax expense
30
39
69
58
Plus: Depreciation and amortization
44
43
87
84
Plus: Loss from financing activities
--
--
--
13
Plus: Adjustments for non-routine items(1)
(371)
--
(371)
(17)
Less: Earnings from equity method investees
(41)
(50)
(91)
(71)
Less: Depreciation and amortization attributable to noncontrolling interests
(1)
(1)
(2)
(1)
Plus: Dividends and distributions from equity method investees
427
82
509
88
Less: Cash interest expense
(63)
(6)
(69)
(55)
Less: Cash taxes
(18)
--
(18)
(7)
Less: Maintenance capital investment(2)
(8)
(3)
(11)
(7)
Distributable Cash Flow
$ 125
$ 223
$ 348
$ 321
(1) Distributable Cash Flow calculation excludes certain items we consider
non-routine. For the three and six months ended June 30, 2023. adjustments for
non-routine items included the $371 million NEXUS financing distribution. For
the six months ended June 30, 2022, adjustments for non-routine items included a
$17 million gain on sale of certain assets in the Utica shale region.
(2) Maintenance capital investment is defined as the total capital expenditures
used to maintain or preserve assets or fulfill contractual obligations that do
not generate incremental earnings.
28
v3.23.2
Cover
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Aug. 01, 2023 |
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Detroit
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