DT Midstream Inc

Previous wording

For purposes of the following discussion, any increases or decreases refer to the comparison of the three months ended March 31, 2024 to the three months ended December 31, 2023, and the three months ended March 31, 2024 to the three months ended March 31, 2023, as applicable. The following table summarizes our consolidated financial results:

Current wording

For purposes of the following discussion, any increases or decreases refer to the comparison of the three months ended June 30, 2024 to the three months ended March 31, 2024, and the six months ended June 30, 2024 to the six months ended June 30, 2023, as applicable. The following table summarizes our consolidated financial results:

Previous wording

Operating revenues increased $22 million compared to the three months ended March 31, 2023 primarily due to new contracts for Haynesville System (LEAP) expansions of $13 million, higher Stonewall volumes of $4 million, higher long-term storage contracting rates at Washington 10 Storage Complex of $2 million and a full quarter of new transmission service contracts at the Michigan System of $2 million.

Current wording

Operating revenues increased $2 million for the three months ended June 30, 2024 primarily due to new contracts and expansion of the Haynesville System (LEAP) of $4 million and higher long-term storage contracting rates at Washington 10 Storage Complex of $2 million, partially offset by lower volumes on Stonewall and Bluestone. Operating revenues increased $41 million for the six months ended June 30, 2024 primarily due to new contracts and expansion of the Haynesville System (LEAP) of $30 million, higher Stonewall volumes of $6 million, and higher long-term storage contracting rates at Washington 10 Storage Complex of $5 million.

Previous wording

Operation and maintenance expense increased $5 million compared to the three months ended March 31, 2023 primarily due to operational flow order fee activity in the prior period and higher operation and maintenance expenses at LEAP in the current period.

Current wording

Operation and maintenance expense increased $6 million for the six months ended June 30, 2024 primarily due to operational flow order fee activity in the prior period and higher operation and maintenance expenses at LEAP in the current period.

Previous wording

Taxes other than income increased $3 million compared to the three months ended December 31, 2023 primarily due to new Haynesville System (LEAP) assets placed into service and higher state franchise taxes.

Current wording

Taxes other than income increased $4 million for the six months ended June 30, 2024 primarily due to new Haynesville System (LEAP) assets placed into service resulting in higher property taxes.

Previous wording

Interest expense decreased $3 million compared to the three months ended March 31, 2023 primarily due to lower outstanding borrowings under the Revolving Credit Facility, partially offset by lower capitalized interest due to lower construction in progress during 2024.

Current wording

Interest expense decreased $4 million for the six months ended June 30, 2024 primarily due to lower outstanding borrowings under the Revolving Credit Facility, partially offset by lower capitalized interest due to lower construction in progress during 2024 and higher interest rates on the Term Loan Facility.

Previous wording

Earnings from equity method investees decreased $4 million compared to the three months ended March 31, 2023 primarily due to higher interest expense driven by timing of new senior unsecured notes at NEXUS of $5 million, partially

Current wording

Earnings from equity method investees decreased $7 million for the three months ended June 30, 2024 primarily due to lower seasonal short-term contracting revenues of $3 million each at Millennium and Vector. Earnings from equity method investees decreased $6 million for the six months ended June 30, 2024 primarily due to higher interest expense driven by timing of new senior unsecured notes at NEXUS of $5 million.

Previous wording

Susquehanna Gathering volumes of $2 million, lower MVC deficiency fee revenues on Appalachia Gathering of $3 million and lower Haynesville System (Blue Union Gathering) volumes of $1 million, partially offset by a full quarter of a new customer contract on Ohio Utica Gathering of $2 million. Operating revenues decreased $2 million compared to the three months ended March 31, 2023 primarily due to lower volumes and lower recovery of production related operating expenses on Blue Union Gathering of $8 million, partially offset by higher Appalachia Gathering volumes of $5 million net of lower MVC deficiency fee revenues, and a new customer contract on Ohio Utica Gathering of $2 million.

Current wording

Operating revenues increased $2 million for the three months ended June 30, 2024 primarily due to higher contract rates from Appalachia Gathering of $3 million and new assets placed into service on Ohio Utica Gathering of $2 million, partially offset by lower Susquehanna Gathering volumes of $2 million. Operating revenues decreased $1 million for the six months ended June 30, 2024 primarily due to lower volumes and recovery of production related operating expenses on Blue Union Gathering of $14 million and lower Susquehanna Gathering volumes of $4 million, partially offset by higher Appalachia Gathering rates and volumes of $11 million, net of lower MVC deficiency fee revenues, and a new customer contract on Ohio Utica Gathering of $7 million.

Previous wording

Operation and maintenance expense decreased $14 million compared to the three months ended December 31, 2023 primarily due to lower planned maintenance on Blue Union Gathering of $11 million, lower Appalachia Gathering expenses of $1 million, higher capitalized labor and lower labor related expenses of $1 million. Operation and maintenance expense decreased $9 million compared to the three months ended March 31, 2023 primarily due to lower planned maintenance and production related operating expenses on Blue Union Gathering of $8 million.

Current wording

Operation and maintenance expense decreased $1 million for the three months ended June 30, 2024 primarily due to a reduction in Appalachia Gathering environmental contingent liabilities of $9 million, partially offset by higher planned maintenance on Blue Union Gathering of $6 million. Operation and maintenance expense decreased $18 million for the six months ended June 30, 2024 primarily due to lower planned maintenance and production related operating expenses on Blue Union Gathering of $10 million and a reduction in Appalachia Gathering environmental contingent liabilities of $9 million.

Previous wording

Depreciation and amortization expense increased $5 million compared to the three months ended March 31, 2023 primarily due to assets placed into service at Blue Union Gathering, Ohio Utica Gathering and Appalachia Gathering.

Current wording

Depreciation and amortization expense increased $12 million for the six months ended June 30, 2024 primarily due to assets placed into service at Blue Union Gathering and Ohio Utica Gathering.

Previous wording

Interest expense increased $5 million compared to the three months ended March 31, 2023 primarily due to lower capitalized interest due to lower construction in progress during 2024 and higher interest rates on the Term Loan Facility, partially offset by lower outstanding borrowings under the Revolving Credit Facility.

Current wording

Interest expense increased $10 million for the six months ended June 30, 2024 primarily due to lower capitalized interest due to lower construction in progress during 2024 and higher interest rates on the Term Loan Facility, partially offset by lower outstanding borrowings under the Revolving Credit Facility.

Previous wording

Income tax expense increased $8 million compared to the three months ended December 31, 2023 primarily due to the remeasurement of state deferred taxes recognized in 2023. Income tax expense decreased $4 million compared to the three months ended March 31, 2023 primarily due to the remeasurement of state deferred taxes recognized in 2023 and an increase in Income before income taxes. See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Current wording

Income tax expense decreased $4 million for the six months ended June 30, 2024 primarily due to the remeasurement of state deferred taxes recognized in 2023 and a decrease in Income before income taxes. See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Previous wording

We believe our long-term agreements with producers and the quality of the natural gas reserves in the Marcellus/Utica and Haynesville formations position the business for future growth. We will continue to pursue economically attractive expansion opportunities that leverage our current asset footprint and strategic relationships. These growth opportunities include further expansion at the Haynesville System (Blue Union Gathering), Appalachia Gathering, Tioga Gathering, and Ohio Utica Gathering.

Current wording

We believe our long-term agreements with producers and the quality of the natural gas reserves in the Marcellus/Utica and Haynesville formations position the business for future growth. We will continue to pursue economically attractive expansion opportunities that leverage our current asset footprint and strategic relationships. These growth opportunities include further expansion at the Haynesville System (Blue Union Gathering), Appalachia Gathering, Ohio Utica Gathering and Tioga Gathering.

Previous wording

For purposes of the following discussion, any increases or decreases refer to the comparison of the three months ended March 31, 2024 to the three months ended March 31, 2023.

Current wording

For purposes of the following discussion, any increases or decreases refer to the comparison of the six months ended June 30, 2024 to the six months ended June 30, 2023.

Previous wording

Net cash and cash equivalents from operating activities decreased $3 million for the three months ended March 31, 2024 primarily due to a decrease in dividends received from equity method investees, partially offset by an increase in operating income after adjustment for non-cash items including depreciation and amortization expense, stock-based compensation, and amortization of operating lease right-of-use assets.

Current wording

Net cash and cash equivalents from operating activities increased $17 million for the six months ended June 30, 2024 primarily due to an increase in operating income after adjustment for non-cash items including depreciation and amortization expense, stock-based compensation, and amortization of operating lease right-of-use assets, partially offset by a decrease in dividends received from equity method investees and a decrease in interest expense.

Previous wording

Net cash and cash equivalents used for investing activities decreased $145 million for the three months ended March 31, 2024 primarily due to a decrease in cash used for plant and equipment expenditures and higher distributions received from equity method investees in 2024.

Current wording

Net cash and cash equivalents used for investing activities increased $112 million for the six months ended June 30, 2024 primarily due to lower distributions received from equity method investees driven by the NEXUS distribution related to senior unsecured notes in 2023. This change was partially offset by a decrease in cash used for plant and equipment expenditures and lower contributions paid to equity method investees in 2024.

Previous wording

DT Midstream paid cash dividends on common stock of $67 million and $62 million during the three months ended March 31, 2024 and 2023, respectively. See Note 6, "Earnings Per Share and Dividends" to the Consolidated Financial Statements under Part I, Item 1. of this Form 10-Q.

Current wording

DT Midstream paid cash dividends on common stock of $138 million and $129 million during the six months ended June 30, 2024 and 2023, respectively. See Note 6, "Earnings Per Share and Dividends" to the Consolidated Financial Statements under Part I, Item 1. of this Form 10-Q.

Previous wording

Net cash and cash equivalents used for financing activitiesof $185 million for the three months ended March 31, 2024 increased as compared to net cash and cash equivalents from financing activities of $6 million for the three months ended March 31, 2023 primarily due to higher net repayments of borrowings under the Revolving Credit Facility and higher dividends paid on common stock, partially offset by lower distributions to noncontrolling interests.

Current wording

Net cash and cash equivalents used for financing activities decreased $128 million for the six months ended June 30, 2024 primarily due to lower net repayments of borrowings under the Revolving Credit Facility, partially offset by higher dividends paid on common stock.

Previous wording

Our sources of liquidity include cash and cash equivalents generated from operating activities and available borrowings under our Revolving Credit Facility. As of March 31, 2024, we had $16 million of letters of credit outstanding and $55 million of borrowings outstanding under our Revolving Credit Facility. We had approximately $970 million of available liquidity as of March 31, 2024, consisting of cash and cash equivalents and available borrowings under our Revolving Credit Facility.

Current wording

Our sources of liquidity include cash and cash equivalents generated from operating activities and available borrowings under our Revolving Credit Facility. As of June 30, 2024, we had $16 million of letters of credit outstanding and $70 million of borrowings outstanding under our Revolving Credit Facility. We had approximately $987 million of available liquidity as of June 30, 2024, consisting of cash and cash equivalents and available borrowings under our Revolving Credit Facility.

Previous wording

The Credit Agreement covering the Term Loan Facility and Revolving Credit Facility includes financial covenants that DT Midstream must maintain. See Note 9, "Debt" and Note 10, "Commitments and Contingencies" to the Consolidated Financial Statements under Part I, Item 1. of this Form 10-Q.

Current wording

The Credit Agreement covering the Term Loan Facility and Revolving Credit Facility includes financial covenants that DT Midstream must maintain. See Note 9, "Debt" to the Consolidated Financial Statements under Part I, Item 1. of this Form 10-Q.

Previous wording

Capital spending within our Company is primarily for ongoing maintenance and expansion of our existing assets, and if identified, attractive growth opportunities. We have been disciplined in our capital deployment and make growth investments that meet our criteria in terms of strategy, management skills, and identified risks and expected returns. All potential investments are analyzed for their rates of return and cash payback on a risk-adjusted basis. Our total capital expenditures, inclusive of $1 million in contributions to equity method investees, were $99 million for the three months ended March 31, 2024 primarily for expansions on Ohio Utica Gathering, Blue Union Gathering and LEAP. We anticipate total capital expenditures, inclusive of contributions to equity method investees, for the year ended December 31, 2024 of approximately $350 million to $435 million.

Current wording

Capital spending within our Company is primarily for ongoing maintenance and expansion of our existing assets, and if identified, attractive growth opportunities. We have been disciplined in our capital deployment and make growth investments that meet our criteria in terms of strategy, management skills, and identified risks and expected returns. All potential investments are analyzed for their rates of return and cash payback on a risk-adjusted basis. Our total capital expenditures, inclusive of $1 million in contributions to equity method investees, were $180 million for the six months ended June 30, 2024 primarily for expansions on Ohio Utica Gathering, Blue Union Gathering and LEAP. We anticipate total capital expenditures, inclusive of contributions to equity method investees, for the year ended December 31, 2024 of approximately $380 million to $435 million.

Previous wording

The estimated fair value in our annual goodwill impairment analysis utilizes significant assumptions that require judgement by management. One such significant assumption is the weighted average cost of capital (WACC) which is used to discount estimates of projected future results and cash flows to be generated by each reporting unit. The WACC is based on our cost of debt, which includes U.S. industrial bond spreads, and cost of equity, which consists of U.S. Treasury Rates plus an equity risk premium. We have noted that U.S. Treasury risk-free rates have decreased slightly since our last annual goodwill impairment test.

Current wording

The estimated fair value in our annual goodwill impairment analysis utilizes significant assumptions that require judgment by management. One such significant assumption is the weighted average cost of capital (WACC) which is used to discount estimates of projected future results and cash flows to be generated by each reporting unit. The WACC is based on our cost of debt, which includes U.S. industrial bond spreads, and cost of equity, which consists of U.S. Treasury Rates plus an equity risk premium. We have noted that U.S. Treasury risk-free rates have decreased slightly since our last annual goodwill impairment test.