DT Midstream, Inc. (DTM)

DT Midstream is an owner, operator, and developer of an integrated portfolio of natural gas midstream assets. The company provides multiple, integrated natural gas services to customers through interstate pipelines, intrastate pipelines, storage systems, gathering lateral pipelines, compression and surface facilities, and gathering systems including related treatment plants. The core assets strategically connect key demand centers in the Midwestern U.S., Eastern Canada and Northeastern U.S. regions to the premium production areas of the Marcellus/Utica natural gas formation in the Appalachian Basin and connect key demand centers and LNG export terminals in the Gulf Coast region to premium production areas of the Haynesville natural gas formation.

The company has an established history of stable, long-term growth with contractual cash flows from customers that include natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. Expand Energy accounted for approximately 45% ¹ of operating revenues for the year ended December 31, 2025. Primary competitors in the natural gas interstate pipelines and transmission market and in the gathering lateral pipelines market include major interstate pipelines and midstream companies that can transport and gather natural gas volumes between interstate systems and between central delivery points within a basin. For gathering operations, primary competitors include other independent midstream companies with gathering operations and producer owned systems.

The company generates revenue primarily through two types of services: firm service and interruptible service. Firm service revenue contracts are typically long-term and structured using fixed demand charges or minimum volume commitments with fixed deficiency fee rates, providing for fixed revenue commitments regardless of actual volumes of natural gas that flow, which leads to more stable operating performance, revenues and cash flows and limits exposure to natural gas price fluctuations. For the year ended December 31, 2025, approximately 92% ² of Pipeline revenue was generated under firm service revenue contracts and approximately 99% ³ of the revenue of unconsolidated joint ventures was generated under firm service revenue contracts. For the Gathering segment, approximately 57% ⁴ and 36% ⁵ of revenue was generated under firm revenue contracts and flowing gas, respectively.

The Pipeline segment includes interstate pipelines, intrastate pipelines, storage systems, gathering lateral pipelines and compression and surface facilities, as well as joint venture interests in equity method investees which own and operate interstate pipelines that connect to wholly owned assets. For the year ended December 31, 2025, revenue from the Pipeline segment accounted for approximately 55% ⁶ of consolidated revenue. The Pipeline segment reported operating revenues of $687 million ⁷ for 2025, compared to $443 million ⁸ in 2024 and $377 million ⁹ in 2023. The segment reported Net Income Attributable to DT Midstream of $370 million ¹⁰ for 2025, compared to $276 million ¹¹ in 2024 and $278 million ¹² in 2023.

The Gathering segment includes gathering systems, related treatment plants, and compression and surface facilities. For the year ended December 31, 2025, revenue from the Gathering segment accounted for approximately 45% ¹³ of consolidated revenue. The Gathering segment reported operating revenues of $556 million ¹⁴ for 2025, compared to $538 million ¹⁵ in 2024 and $545 million ¹⁶ in 2023. The segment reported Net Income Attributable to DT Midstream of $71 million ¹⁷ for 2025, compared to $78 million ¹⁸ in 2024 and $106 million ¹⁹ in 2023. Average throughput from the Gathering segment was 3.1 Bcf/d ²⁰ in 2025 and 2.9 Bcf/d ²¹ in 2024.

During the year ended December 31, 2025, the company placed the LEAP phase 4 expansion into service on budget, increasing the system capacity to approximately 2.1 Bcf/d ²². The company reached a final investment decision on the Guardian G3 expansion, which will increase Guardian's capacity by 537 MMcf/d ²³ or approximately 40% ²⁴ from current capacity, anchored by 20-year ²⁵ negotiated rate precedent agreements with investment-grade utility customers, and is expected to be fully placed into service in the fourth quarter of 2028 ²⁶. The company also reached a final investment decision on the initial phase of modernization across DTM Interstate Transportation assets, predominantly focused on improving system efficiency and reliability on Guardian Pipeline, expected to be placed into service in the second half of 2027 ²⁷. The company received FERC approval for the Bluestone Extended Supply Transportation agreement between Bluestone and Millennium, with firm transportation service beginning on January 1, 2026 ²⁸. The company began construction of an interconnect between Stonewall and Mountain Valley Pipeline, placed into service on February 1, 2026 ²⁹, as well as a lateral connecting Midwestern to a power plant, expected to be placed into service during the first half of 2026 ³⁰. The company gathered record high volumes on the Haynesville System and placed into service expansions on Blue Union Gathering, Tioga Gathering, and Clean Fuels Gathering. The company achieved investment grade rating with all three major credit rating agencies. The company declared total cash dividends of $3.28 ³¹ per common share.

For the year ended December 31, 2025, total operating revenues were $1,243 million ³², compared to $981 million ³³ in 2024 and $922 million ³⁴ in 2023. Net Income Attributable to DT Midstream was $441 million ³⁵, compared to $354 million ³⁶ in 2024 and $384 million ³⁷ in 2023. Diluted Earnings per Common Share was $4.30 ³⁸, compared to $3.60 ³⁹ in 2024 and $3.94 ⁴⁰ in 2023. Net cash and cash equivalents from operating activities were $867 million ⁴¹ for 2025, compared to $763 million ⁴² in 2024 and $798 million ⁴³ in 2023.

The company anticipates total capital investments, inclusive of contributions to equity method investees, for the year ended December 31, 2026 of approximately $490 million to $570 million ⁴⁴.

The company intends to continue pursuing economically attractive expansion opportunities that leverage the current asset footprint and strategic relationships. For the Pipeline segment, growth opportunities include expansion opportunities on the DTM Interstate Transportation assets, further expansion at LEAP and Stonewall, new contracts at the Washington 10 Storage Complex, and additional growth related to equity method investments. The Guardian G3 expansion will increase Guardian capacity by 537 MMcf/d ⁴⁵ or approximately 40% ⁴⁶ from current capacity, anchored by 20-year ⁴⁷ negotiated rate precedent agreements with investment-grade utility customers, and is expected to be fully placed into service in the fourth quarter of 2028 ⁴⁸. The initial phase of modernization across DTM Interstate Transportation assets is expected to be placed into service in the second half of 2027 ⁴⁹. The company continues to evaluate opportunities for additional LEAP expansions to serve growing Gulf Coast LNG and industrial corridor demand.

For the Gathering segment, growth opportunities include further expansions at Blue Union Gathering, Appalachia Gathering, Ohio Utica Gathering, and Tioga Gathering. The company advanced its carbon capture and sequestration project in Louisiana, with the Class VI permit application moving to formal technical review with the Louisiana Department of Conservation and Energy in July 2025 ⁵⁰, and the company is awaiting the completion of that review. The company also intends to develop low carbon business opportunities and deploy GHG reducing technologies as part of its goal of being leading environmental stewards in the midstream industry, executing on a plan to achieve net zero carbon emissions by 2050 ⁵¹. The company established its baseline Scope 1 carbon emissions in 2021 and is targeting a 30% ⁵² reduction from this baseline by 2030 ⁵³.

Operating income increased to $614 million ⁵⁴ for 2025 from $489 million ⁵⁵ in 2024 and $471 million ⁵⁶ in 2023. The increase in operating income for 2025 was driven by a $244 million ⁵⁷ increase in Pipeline operating revenues, primarily due to activity from the interstate pipelines acquired in the Midwest Pipeline Acquisition of $212 million ⁵⁸, new LEAP contracts of $31 million ⁵⁹, and higher long-term storage revenue at Washington 10 Storage Complex of $9 million ⁶⁰. Operation and maintenance expense increased $66 million ⁶¹ for the Pipeline segment in 2025 primarily due to effects from the Midwest Pipeline Acquisition. For the Gathering segment, operating revenues increased $18 million ⁶² in 2025 primarily due to new Blue Union Gathering contracts of $18 million ⁶³ and higher Blue Union Gathering volumes of $15 million ⁶⁴, partially offset by lower volumes at Susquehanna Gathering of $22 million ⁶⁵ and Appalachia Gathering of $9 million ⁶⁶.

The company currently employs 588 ⁶⁷ employees, all of whom are employed full-time, exclusive of the student intern program. All employees are in the U.S., with headquarters in Detroit, Michigan. None of the employees are covered by collective bargaining agreements. The company maintains and grows its team through practices that help identify and hire new talent, as well as incentivize and retain existing employees, with access to online learning resources, tuition reimbursement programs, and formal leadership development for emerging leaders.

Total capital investments were $431 million ⁶⁸ for the year ended December 31, 2025, inclusive of $5 million ⁶⁹ in contributions to equity method investees and $426 million ⁷⁰ in plant and equipment expenditures, primarily related to expansions on Blue Union Gathering, Appalachia Gathering, LEAP, Clean Fuels Gathering, Stonewall and Ohio Utica Gathering. The company anticipates total capital investments, inclusive of contributions to equity method investees, for the year ended December 31, 2026 of approximately $490 million to $570 million ⁷¹. The company paid cash dividends on common stock of $324 million ⁷² during 2025, $280 million ⁷³ in 2024, and $263 million ⁷⁴ in 2023. Over the long-term, the company expects to grow its dividend with cash flow growth. As of December 31, 2025, the company had $17 million ⁷⁵ of letters of credit outstanding and no borrowings outstanding under the Revolving Credit Facility, with approximately $1 billion ⁷⁶ of available liquidity.

The company faces structural headwinds including its dependence on the continued availability of and demand for natural gas in its areas of operation, which include the Midwestern U.S., Canada, Northeastern U.S. and Gulf Coast regions. A reduction in natural gas volumes supplied by producers due to factors such as the level of successful drilling activity, competition for volumes, national and regional economic and political factors including tariffs and periods of changing inflation, could result in reduced throughput and corresponding service revenues. Alternative fuel sources such as coal, fuel oils, or nuclear energy, as well as technological advances and renewable sources of energy, could reduce demand for natural gas. Government imposed constraints, such as changes in regulatory policy and permitting and environmental limitations, could also artificially limit new demand for natural gas. The company has one key customer, Expand Energy, which accounted for approximately 45% ⁷⁷ of operating revenues for the year ended December 31, 2025, and the loss of or reduction in volumes from this customer could result in a decline in demand for services.

The company faces execution risks related to expansion projects, including the inability to complete expansion projects on schedule or within budgeted cost, the inability to secure adequate customer commitments, and unforeseen difficulties operating in new service areas. The company also faces risks related to its joint ventures, including limited control over operations of assets owned by joint ventures, dependence on joint venture partners to fund their required share of capital expenditures, and exposure to third party credit risk through contractual arrangements with joint venture partners. The company faces opposition to the development or operation of its assets from environmental groups, landowners, local and national groups, activists and other advocates, which could take many forms including organized protests, intervention in regulatory proceedings, lawsuits, or legislation designed to prevent, disrupt or delay operations.

Management's message emphasizes the company's principal business objective to safely and reliably operate and develop midstream natural gas assets across its premier footprint, with a strategy premised on operating assets in a sustainable and responsible manner, providing exceptional service to customers, disciplined capital deployment in assets supported by strong fundamentals, capitalizing on asset integration and utilization opportunities, pursuing economically attractive opportunities, and growing cash flows supported by long-term firm service revenue contracts. Key themes include the company's intention to develop low carbon business opportunities and deploy GHG reducing technologies as part of its goal of being leading environmental stewards in the midstream industry, executing on a plan to achieve net zero carbon emissions by 2050 ⁷⁹. The company established its baseline Scope 1 carbon emissions in 2021 and is targeting a 30% ⁸⁰ reduction from this baseline by 2030 ⁸¹. Management highlighted the achievement of investment grade rating with all three major credit rating agencies during 2025. The company anticipates total capital investments, inclusive of contributions to equity method investees, for the year ended December 31, 2026 of approximately $490 million to $570 million ⁸².

For the year ended December 31, 2025, total operating revenues were $1,243 million ⁸³ compared to $981 million ⁸⁴ in 2024 and $922 million ⁸⁵ in 2023. Net Income Attributable to DT Midstream was $441 million ⁸⁶ compared to $354 million ⁸⁷ in 2024 and $384 million ⁸⁸ in 2023. Diluted Earnings per Common Share was $4.30 ⁸⁹ compared to $3.60 ⁹⁰ in 2024 and $3.94 ⁹¹ in 2023. Operating income was $614 million ⁹² compared to $489 million ⁹³ in 2024 and $471 million ⁹⁴ in 2023. Net cash and cash equivalents from operating activities were $867 million ⁹⁵ compared to $763 million ⁹⁶ in 2024 and $798 million ⁹⁷ in 2023. As of December 31, 2025, the company had $54 million ⁹⁸ in cash and cash equivalents, $3,324 million ⁹⁹ in long-term debt net, and $4,878 million ¹⁰⁰ in total equity. The company had outstanding approximately $3.35 billion ¹⁰¹ of senior notes and no borrowings under the Revolving Credit Facility as of December 31, 2025. The Pipeline segment reported operating revenues of $687 million ¹⁰² and Net Income Attributable to DT Midstream of $370 million ¹⁰³. The Gathering segment reported operating revenues of $556 million ¹⁰⁴ and Net Income Attributable to DT Midstream of $71 million ¹⁰⁵. The company recorded a loss from financing activities of $5 million ¹⁰⁶ in 2024 related to the repayment of the Term Loan Facility, which included a loss on extinguishment of debt of $4 million ¹⁰⁷ related to the write-off of unamortized discount and issuance costs.

The company is dependent on one key customer, Expand Energy, which accounted for approximately 45% ⁷⁸ of operating revenues for the year ended December 31, 2025, and the loss of or reduction in volumes from this customer could result in a decline in demand for services. The company faces significant operational hazards including damage to pipelines, leaks, ruptures, fires, explosions, and natural events, with certain segments located in or near populated areas increasing potential damages. The company does not own the majority of the land on which its assets are located, subjecting it to the possibility of more onerous terms and increased costs or delays to retain necessary land use rights. The company is subject to extensive regulation by FERC, and changes in FERC or state regulation could materially adversely affect business, financial condition and results of operations. The company faces risks related to climate change, including physical risks from more frequent or severe weather events and transition risks from legislation and policies that disfavor fossil fuels, which could impose additional compliance costs and reduce market interest in the business.