dtm-20240930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-40392

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Exchange on which Registered

Common stock, par value $0.01

DTM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding as of September 30, 2024:


Description						Shares
Common stock, par value $0.01						97,156,144

TABLE OF CONTENTS


		Page
	Definitions	1
	Filing Format	3
	Forward-Looking Statements	3
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements
	DT Midstream Con solidated Financial Stateme nts (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	12
	Note 1 — Description of the Business and Basis of Presentation	12
	Note 2 — Significant Accounting Policies	14
	Note 3 — New Accounting Pronouncements	15
	Note 4 — Goodwill	15
	Note 5 — Revenue	16
	Note 6 — Earnings Per Share and Dividends	18
	Note 7 — Income Taxes	18
	Note 8 — Fair Value	19
	Note 9 — Debt	20
	Note 10 — Commitments and Contingencies	21
	Note 11 — Segment and Related Information	22
	Note 12 — Acquisition	22
	Note 1 3 — Subsequent Event	23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33

Item 4.	Mine Safety Disclosure	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
	Signature	35

DEFINITIONS

Unless the context otherwise requires, references to "we," "us," "our," "Registrant," or the "Company" and words of similar importance refer to DT Midstream and, unless otherwise specified, our consolidated subsidiaries and our unconsolidated joint ventures. As used in this Form 10-Q, the terms and definitions below have the following meanings:


Appalachia Gathering						A 149-mile gathering system that gathers Marcellus shale natural gas to the Texas Eastern Pipeline and Stonewall

ASC 606						The Accounting Standards Codification of Revenue from Contracts with Customers issued by the FASB

ASU						Accounting Standards Update issued by the FASB

Bcf						Billion cubic feet of natural gas

Bluestone						A 65-mile gathering lateral pipeline, and two compression facilities, that gathers Marcellus shale natural gas to Millennium and the Tennessee Pipeline

Blue Union Gathering						A 424-mile gathering system that gathers shale natural gas from the Haynesville formation of Louisiana and Texas to markets in the Gulf Coast region

CAD						Canadian Dollar ($)

Clean Fuels Gathering						A 77-mile gathering system that gathers and treats coal mine methane into pipeline quality natural gas in Illinois

Columbia Pipeline						Columbia Gas Transmission, LLC, owned by TC Energy Corporation and Global Infrastructure Partners

Credit Agreement						DT Midstream's credit agreement which provides for the Revolving Credit Facility

DT Midstream						DT Midstream, Inc. and our consolidated subsidiaries

ETR						Effective tax rate

Expand Energy						Expand Energy Corporation, the company resulting from the merger of Chesapeake Energy Corporation and Southwestern Energy Company which closed on October 1, 2024, and/or its affiliates

FASB						Financial Accounting Standards Board

FERC						Federal Energy Regulatory Commission

GAAP						Generally Accepted Accounting Principles in the United States

Generation						A 25-mile intrastate pipeline in northern Ohio and owned by NEXUS

GHG						Greenhouse gas

Haynesville System						Pipeline and gathering system which is comprised of LEAP, Blue Union Gathering and associated facilities

Inflation Reduction Act						The Inflation Reduction Act of 2022 (H.R. 5374)

LEAP						Louisiana Energy Access Project, a 210-mile gathering lateral pipeline that gathers Haynesville shale natural gas to markets in the Gulf Coast region

LNG						Liquefied natural gas

Michigan System						A 335-mile pipeline system in northern Michigan

Millennium						Millennium Pipeline Intermediate Holdings LLC, a joint venture that, through its wholly owned subsidiary, Millennium Pipeline Company, LLC, owns a 263-mile interstate transportation pipeline and compression facilities serving markets in the northeast and supply from the northeast Marcellus region, in which DT Midstream owns a 52.5% interest

MVC						Minimum volume commitment

DEFINITIONS


NEXUS						NEXUS Gas Transmission, LLC, a joint venture that owns (i) a 256-mile interstate transportation pipeline and three compression facilities that transports Utica and Marcellus shale natural gas to Ohio, Michigan and Ontario market centers and (ii) Generation, in which DT Midstream owns a 50% interest

Ohio Utica Gathering						A 20-mile gathering system, including compression and dehydration facilities, that gathers Utica shale natural gas from producer wells to a nearby processing plant

Revolving Credit Facility						DT Midstream's secured revolving credit facility issued under the Credit Agreement

SEC						Securities and Exchange Commission

SOFR						Secured Overnight Financing Rate

South Romeo						South Romeo Gas Storage Company, LLC, a joint venture which owns the Washington 28 Storage Complex, in which DT Midstream owns a 50% interest

Stonewall						A 68-mile gathering lateral pipeline, in which DT Midstream owns an 85% interest, that gathers Marcellus and Utica shale natural gas to the Columbia Pipeline

Susquehanna Gathering						A 198-mile gathering system that gathers Marcellus shale natural gas to Bluestone

Tennessee Pipeline						Tennessee Gas Pipeline Company, LLC, owned by Kinder Morgan, Inc.

Term Loan Facility						DT Midstream's term loan facility issued under the Credit Agreement, which was repaid in 2024

Texas Eastern Pipeline						Texas Eastern Transmission, LP, owned by Enbridge Inc.

Tioga Gathering						A 3-mile gathering system that gathers shale natural gas to the Eastern Gas Transmission system

U.S.						United States of America

USD						United States Dollar ($)

Vector						Vector Pipeline LP, a joint venture that owns a 348-mile interstate transportation pipeline and five compression facilities connecting Illinois, Michigan, and Ontario market centers, in which DT Midstream owns a 40% interest

VIE						Variable Interest Entity

Washington 10 Storage Complex						An interstate storage system located in Michigan with 94 Bcf of storage capacity, in which DT Midstream owns a 91% interest, and associated compression facilities

2029 Notes						Senior unsecured notes of $1.1 billion in aggregate principal amount due June 2029

2031 Notes						Senior unsecured notes of $1.0 billion in aggregate principal amount due June 2031

2032 Notes						Senior secured notes of $600 million in aggregate principal amount due April 2032

FILING FORMAT

This Form 10-Q should be read in its entirety. This Form 10-Q should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements and with Management's Discussion and Analysis included in DT Midstream's 2023 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

Certain information presented herein includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, and businesses of DT Midstream. 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 in connection with a discussion of future operating or financial performance may signify 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 associated Federal Reserve policies, a potential economic recession, and the impact of inflation on our business;

•industry changes, including the impact of consolidations, alternative energy sources, technological advances, infrastructure constraints and changes in competition;

•global supply chain disruptions;

•actions taken by third-party operators, processors, transporters and gatherers;

•changes in expected production from Expand 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;

•our ability to successfully and timely 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;

•the effectiveness of our information technology and operational technology systems and practices to detect and defend against evolving cyber attacks on United States critical infrastructure;

•changing laws regarding cybersecurity and data privacy, and any cybersecurity threat or event;

•operating hazards, environmental risks and other risks incidental to gathering, storing and transporting natural gas;

•geologic and reservoir risks and considerations;

•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 impacts of geopolitical events, including the conflicts in Ukraine and the Middle East;

•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;

•the effects and associated cost of compliance with existing and future laws and governmental regulations, such as the Inflation Reduction Act;

•changes in environmental laws, regulations or enforcement policies, including laws and regulations relating to climate change and GHG emissions;

•ability to develop low carbon business opportunities and deploy GHG reducing technologies;

•changes in insurance markets impacting costs and the level and types of coverage available;

•the timing and extent of changes in commodity prices;

•the success of our risk management strategies;

•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; and

•the risks described in our Annual Report on Form 10-K for the year ended December 31, 2023 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. 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.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

DT Midstream, Inc.

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(millions, except per share amounts)
Revenues
Operating revenues	$	248	$	234	$	732	$	678
Operating Expenses
Operation and maintenance	63		58		169		176
Depreciation and amortization	53		46		156		133
Taxes other than income	10		7		31		22
Asset (gains) losses and impairments, net	—		(1)		—		(4)
Operating Income	122		124		376		351
Other (Income) and Deductions
Interest expense	38		38		117		111
Interest income	(1)		—		(2)		(1)
Earnings from equity method investees	(40)		(41)		(125)		(132)
Loss from financing activities	4		—		4		—
Other (income) and expense	—		—		(3)		(1)
Income Before Income Taxes	121		127		385		374
Income Tax Expense	30		33		94		102
Net Income	91		94		291		272
Less: Net Income Attributable to Noncontrolling Interests	3		3		10		9
Net Income Attributable to DT Midstream	$	88	$	91	$	281	$	263

Basic Earnings per Common Share
Net Income Attributable to DT Midstream	$	0.91	$	0.94	$	2.90	$	2.72

Diluted Earnings per Common Share
Net Income Attributable to DT Midstream	$	0.90	$	0.94	$	2.87	$	2.70

Weighted Average Common Shares Outstanding
Basic	97.1		97.0		97.1		96.9
Diluted	98.0		97.5		97.8		97.4

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(millions)
Net Income	$	91	$	94	$	291	$	272
Foreign currency translation and unrealized gain on derivatives, net of tax	1		—		1		1
Other comprehensive income	1		—		1		1
Comprehensive income	92		94		292		273
Less: Comprehensive income attributable to noncontrolling interests	3		3		10		9
Comprehensive Income Attributable to DT Midstream	$	89	$	91	$	282	$	264

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Financial Position

(Unaudited)


	September 30,		December 31,

	2024		2023
	(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	77	$	56
Accounts receivable (net of $— allowance for expected credit loss for each period end)	137		154



Deferred property taxes	8		31
Taxes receivable	6		15
Prepaid expenses and other	21		16
	249		272
Investments
Investments in equity method investees	1,301		1,762

Property
Property, plant, and equipment	5,508		5,282
Accumulated depreciation	(959)		(848)
	4,549		4,434
Other Assets
Goodwill	473		473
Long-term notes receivable — related party	4		4
Operating lease right-of-use assets	47		38
Intangible assets, net	1,925		1,968
Other	39		31
	2,488		2,514
Total Assets	$	8,587	$	8,982

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Financial Position

(Unaudited)


	September 30,		December 31,

	2024		2023
	(millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	67	$	94

Short-term borrowings	—		165
Operating lease liabilities	15		13
Dividends payable	71		67
Interest payable	38		10
Property taxes payable	25		34
Accrued compensation	14		18
Contract liabilities	18		18
Other	14		15
	262		434

SEC Form 10-Q filed by DT Midstream Inc.