DT Midstream, Inc. (DTM)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered Adjusted EBITDA of $235M, Operating EPS of $0.94 and reported EPS of $0.73; pipeline segment held steady while gathering was softer on a key producer outage and maintenance .
• Management raised 2025 Adjusted EBITDA guidance to $1.095–$1.155B and provided a 2026 early outlook of $1.155–$1.225B; the Board increased the quarterly dividend 12% to $0.82 per share .
• Strategic catalysts: closed $1.2B Midwest pipeline acquisition (Guardian, Midwestern, Viking) on Dec 31, 2024, expanded organic backlog to ~$2.3B, and executed two utility-scale power generation projects (Midwestern lateral ~300 MMcf/d in-service Q1 2026; Appalachia/Stonewall 2,060 MW, 375 MMcf/d, 20-year contract, targeted in-service late 2028) .
• Estimate comparisons were unavailable due to S&P Global request limits; use internal guidance and non-GAAP measures for result assessment (consensus not included).

What Went Well and What Went Wrong

What Went Well

• Record full-year results: 2024 Adjusted EBITDA $969M; pipeline segment grew ~7% YoY supported by LEAP expansions and storage revenue. CEO: “We delivered record results in 2024, exceeding our increased guidance” .
• Strategic footprint expansion: closed largest acquisition in company history, adding three FERC-regulated pipelines; immediate commercialization with a Midwestern Gas Transmission lateral to AES Indiana (~300 MMcf/d, Q1 2026) .
• Dividend and guidance raised: 12% dividend increase to $0.82/share; 2025 Adjusted EBITDA guidance up to $1.095–$1.155B; CFO expressed “high confidence” in meeting goals given backlog and balance sheet .

What Went Wrong

• Q4 gathering softness: Adjusted EBITDA fell to $79M from $85M in Q3 on producer deferrals and an unplanned outage; Haynesville throughput declined to ~1.42 Bcf/d vs ~1.51 Bcf/d in Q3 .
• Transaction costs: pipeline segment was “in line” but affected by costs related to integrating the Midwest acquisition .
• CCS timeline uncertainty: Louisiana Class VI permit remains pending; management cautious on timing despite local support and completed Class V test well .

Financial Results

Consolidated Quarterly Metrics

Note: Wall Street consensus estimates unavailable due to S&P Global request limits; estimate comparisons not included.

Segment Adjusted EBITDA

KPIs

Cross-reference: CFO attributed Q4 gathering softness to producer deferrals and a key customer outage; pipeline demand seasonally strong but offset by acquisition transaction costs .

Guidance Changes

Tax and leverage context: Minimal cash taxpayer until 2028; forecast 2025 YE on-balance sheet leverage 3.1x; proportional 3.9x .

Earnings Call Themes & Trends

Management Commentary

• CEO: “We successfully closed on the largest acquisition in our history last year and completed key organic growth projects ahead of schedule and on budget” .
• CFO: “Our strong financial results for 2024, along with our increased organic project backlog, expanded asset footprint, and flexible balance sheet give us high confidence in meeting our goals for this year and beyond” .
• CEO on macro: “It certainly feels like we are entering a golden age for energy infrastructure investment… Our pure-play natural gas pipeline asset portfolio is very well positioned to take advantage of this opportunity” .

Q&A Highlights

• Power generation projects: Midwestern lateral under blanket authorization is a “short, easy build,” adding long-term load; Appalachia project tied to a customer FID with a 20-year contract across Stonewall and AGS .
• Returns and backlog: Management targets 5–8x multiples on organic projects; backlog probability-weighted; opportunity set in acquired Midwest assets larger than initially expected .
• Production trajectory: Expect Haynesville volumes to ramp during 2025; Appalachia broadly flat; cautious optimism as prices improve and LNG/power demand rises .
• Regulatory cadence: FERC assets utilize blanket authorization for faster builds; capital later rolls into rate cases; cadence varies by asset (details to be provided offline) .
• CCS optionality for power: Developers pivoting to conventional combined cycle with optionality for hydrogen blends or future carbon capture .

Estimates Context

• Wall Street consensus estimates (EPS, revenue, EBITDA) via S&P Global were unavailable due to request limits; as a result, comparisons vs. consensus are not provided for Q4 2024.
• Given guidance raises and dividend increase, sell-side models likely need to reflect higher 2025–2026 Adjusted EBITDA trajectory ($1.095–$1.155B for 2025; $1.155–$1.225B for 2026) and a pipeline-skewed mix (~70%) .

Key Takeaways for Investors

• Mix shift and durability: Pipeline segment maintained at ~66% of Q4 Adjusted EBITDA; acquisition plus new power projects underpin resilient, demand-based cash flows .
• Near-term volume recovery: Q4 gathering softness looks transitory; Haynesville throughput trending ~1.6 Bcf/d early Q1, supportive of H1’25 sequential improvement .
• Guidance upgrade and dividend growth: 2025 Adjusted EBITDA guidance raised with a 12% dividend increase; coverage policy remains ≥2.0x floor, reinforcing capital returns .
• Self-funded growth: ~$2.3B backlog is largely pipeline projects, funded within free cash flow; expect steady FIDs across utility-scale and modernization opportunities .
• Credit trajectory: Fitch IG in place; positive outlooks from S&P/Moody’s with leverage forecast of 3.1x/3.9x (on-balance sheet/proportional) potentially catalyzing further upgrades in 2025 .
• Strategic optionality: CCS remains a medium-term lever pending permit; developers designing power assets with decarbonization options (hydrogen blends/CCS add-ons) .
• Trading setup: In the absence of consensus prints, stock narrative likely driven by guidance raise, dividend step-up, utility-scale project wins, and observable volume recovery; watch for CCS permit progress and incremental Midwest modernization disclosures .