Executive Summary / Key Takeaways

• DT Midstream is strategically positioned as a pure-play natural gas midstream leader, capitalizing on robust demand from LNG exports, data centers, and industrial onshoring across its integrated asset footprint.
• The company's disciplined execution and strong contractual framework, featuring over 80% investment-grade customers and 7-year average contract terms, provide exceptional financial durability and predictable cash flows, even amidst market volatility.
• A significant $2.3 billion organic growth backlog, 70% weighted towards high-quality pipeline projects, underpins an ambitious 5-7% long-term Adjusted EBITDA growth target, with key expansions like the Guardian G3+ and LEAP Phase 4 already advancing.
• DT Midstream has achieved investment-grade ratings from all three major credit agencies, boasts over $1.1 billion in liquidity, and expects minimal cash taxes until 2028, reinforcing its financial strength to fund growth and support a growing dividend.
• While facing permitting complexities for projects like Louisiana CCS and competition in key basins, DTM's integrated network, operational efficiency, and strategic focus on lower-carbon solutions provide a competitive edge in a rapidly evolving energy landscape.

A Foundation for Growth: DT Midstream's Strategic Imperative

DT Midstream, Inc. (NYSE: DTM), established in 2021 as a pure-play natural gas midstream company, has rapidly carved out a formidable position as an owner, operator, and developer of an integrated portfolio of natural gas assets. Its core business is structured around two synergistic segments: Pipeline and Gathering. The Pipeline segment encompasses interstate and intrastate pipelines, storage systems, and gathering laterals, while the Gathering segment focuses on collecting natural gas from wells and providing essential ancillary services like compression and treatment. This integrated approach allows DTM to offer comprehensive wellhead-to-market solutions, connecting premium production areas like the Marcellus/Utica and Haynesville formations to critical demand centers across the Midwestern, Northeastern, U.S., Eastern Canada, and the burgeoning Gulf Coast LNG export terminals.

The company's history since its spin-off has been marked by a consistent focus on disciplined capital deployment and strategic expansion. This culminated in the transformative Midwest Pipeline Acquisition from ONEOK on December 31, 2024, which brought Guardian, Midwestern, and Viking pipelines into DTM's fold. This acquisition not only significantly expanded DTM's FERC-regulated interstate network but also boosted its organic project backlog by approximately $1 billion, reaching an impressive $2.3 billion for the 2025-2029 period. This expanded backlog, with 70% of projects residing in the high-quality pipeline segment, is a testament to DTM's strategic foresight and its ability to identify and integrate accretive assets.

The broader industry landscape is experiencing a profound shift, with natural gas emerging as a foundational fuel for the American economy. Total U.S. natural gas supply and demand are projected to grow by approximately 19 Bcf per day through 2030, driven predominantly by LNG exports, escalating power generation needs from AI computing and data centers, and a resurgence in industrial onshoring. DTM's assets are strategically located to capture this growth, with its Haynesville system poised to serve a forecasted 16 Bcf per day increase in LNG feed gas demand by 2035. Similarly, the PJM and MISO power markets, where DTM's pipeline assets are concentrated, anticipate over 40% demand growth in the next two decades. This confluence of factors, coupled with a notable shift in public and political sentiment favoring natural gas infrastructure, signals what management describes as a "generational opportunity" for investment.

Technological Edge and Operational Prowess

In the midstream sector, technological differentiation often manifests not in a single proprietary hardware, but in the intelligent design, operational efficiency, and advanced commercial strategies that optimize asset utilization and service delivery. DT Midstream's competitive advantage is deeply rooted in these areas.

Its integrated network design is a core differentiator. The Haynesville system, for instance, stands out as the "most highly interconnected system" in the basin, boasting superior supply and market connectivity. This allows DTM to offer shippers "maximum flexibility and optionality," a critical benefit in a dynamic market. This integrated approach translates into tangible benefits for customers, fostering stronger loyalty and recurring revenue streams, and enabling DTM to achieve superior margins through efficient resource allocation.

Operational efficiency is another hallmark. The company consistently delivers "projects on schedule and on budget," demonstrating "capital efficiency" and "exemplary performance" from its construction teams. This ability to execute efficiently reduces project risk and enhances returns. Furthermore, DTM's advanced contracting strategies are a cornerstone of its financial durability. Its "firm service revenue contracts" provide "fixed revenue commitments regardless of actual volumes," which leads to "more stable operating performance, revenues and cash flows" and significantly limits "exposure to natural gas price fluctuations." With over 80% of its customer base being investment-grade rated and average contract terms extending to seven years, DTM has built a highly resilient revenue profile.

DTM is also actively pursuing strategic initiatives in low-carbon business opportunities and GHG reducing technologies. This includes the Clean Fuels Gathering project, now in service, and the Louisiana Carbon Capture and Sequestration (CCS) project, which, despite permitting delays, remains an "economically and strategically attractive" endeavor leveraging existing Haynesville assets. The company has set ambitious goals to achieve net-zero carbon emissions by 2050, with a 30% reduction target by 2030. Additionally, the ongoing interstate pipelines modernization program, particularly on Guardian Pipeline, aims to improve reliability and service quality, ensuring the long-term integrity and efficiency of its critical infrastructure. These technological and operational strengths collectively contribute to DTM's competitive moat, ensuring reliable service, predictable cash flows, and adaptability to evolving energy demands, thereby supporting sustained growth and dividend stability for investors.

Financial Performance: A Trajectory of Strength

DT Midstream's financial performance reflects its strategic execution and the durability of its asset base. In the third quarter of 2025, the company reported Adjusted EBITDA of $288 million, an $11 million increase from the prior quarter. This strong performance was significantly bolstered by its Gathering segment, which saw results $10 million higher, driven by record Haynesville volumes averaging 2.04 Bcf per day—a remarkable 35% increase over Q3 2024. The Pipeline segment's operating revenues for the nine months ended September 30, 2025, surged by $186 million, primarily due to the Midwest Pipeline Acquisition (contributing $159 million), new LEAP contracts (adding $25 million), and higher long-term storage revenue at Washington 10 Storage Complex (up $7 million).

Profitability metrics underscore DTM's operational effectiveness. The company boasts an impressive TTM EBITDA Margin of 83.15% and a Net Profit Margin of 34.55%, reflecting efficient cost management despite increased operating expenses related to the Midwest Pipeline Acquisition and new assets placed into service. For the nine months ended September 30, 2025, Net Income Attributable to DT Midstream reached $330 million, translating to diluted earnings per common share of $3.22.

The company's liquidity and balance sheet are robust. DT Midstream achieved investment-grade ratings from all three major credit rating agencies by July 2025, a significant strategic milestone. As of September 30, 2025, it commanded approximately $1.10 billion in available liquidity, with no borrowings outstanding under its Revolving Credit Facility and no debt maturities until 2029. The consolidated net leverage ratio stood at a healthy 3.0x, well within its covenant limits. Furthermore, the One Big Beautiful Bill Act (OBBBA), enacted in July 2025, is expected to defer a significant portion of DTM's federal tax payments for multiple years, contributing to higher distributable cash flow and positioning the company as a minimal cash taxpayer until 2028.

Strategic Initiatives and a Promising Outlook

DT Midstream's future growth is firmly anchored in its expanded $2.3 billion organic project backlog for 2025-2029, which management considers "high probability" opportunities. Key projects driving this outlook include:

• Guardian G3+ Expansion: A substantial increase of approximately 537 million cubic feet per day (a 40% capacity boost) on Guardian Pipeline, backed by five investment-grade utilities under 20-year contracts. This $850 million to $930 million investment, with a 5-6x build multiple, is expected in service by Q4 2028.
• LEAP Phase 4 Expansion: Placed into service early and on budget in Q1 2026, this expansion increases capacity from 1.9 to 2.1 Bcf per day, providing crucial access to growing Gulf Coast LNG markets through long-term demand-based contracts.
• Midwestern Gas Transmission Lateral: Construction is underway for a lateral to serve AES Indiana (AES)'s Petersburg power plant, with 300 MMcf/day capacity and a Q1 2026 in-service date.
• Stonewall and AGS Expansion: A precedent agreement is in place to serve a 2,060-megawatt combined cycle gas plant in West Virginia under a 20-year firm service contract, with DTM's pipeline expected in service by late 2028, contingent on the customer's FID in 2026.
• Interstate Modernization Program: The first phase, primarily on Guardian Pipeline, represents a $130 million to $150 million investment with a H2 2027 in-service date, with capital costs recoverable in the pipeline's next rate case.

For 2025, DTM has raised the midpoint of its Adjusted EBITDA guidance to $1.13 billion, representing an 18% increase from the prior year, with a narrowed range of $1.115 billion to $1.145 billion. The 2026 early outlook for Adjusted EBITDA is projected at $1.155 billion to $1.225 billion, with the midpoint indicating a 6% increase over 2025. The company maintains its long-term Adjusted EBITDA growth target of 5-7%. Growth capital for 2025 has been reduced to $385 million to $415 million due to capital efficiency, while 2026 committed capital stands at $280 million. The quarterly dividend of $0.82 per share is expected to grow annually by 5-7%, aligning with Adjusted EBITDA growth and maintaining strong coverage.

Competitive Landscape and Strategic Positioning

DT Midstream operates in a competitive environment alongside larger, more diversified players such as Williams Companies (WMB), Kinder Morgan (KMI), Enbridge (ENB), and ONEOK (OKE). While these competitors benefit from greater scale and broader geographic footprints, DTM differentiates itself through its integrated portfolio, regional expertise, and agile execution. In the Haynesville basin, DTM's system is lauded for its superior connectivity, enabling it to consistently win market share. Similarly, in the Midwest and Northeast, DTM's strategic asset placement allows it to compete effectively for growing power and industrial demand, often leveraging its existing network for "bite-sized" expansions that offer quicker in-service times compared to greenfield projects.

DTM's focus on FERC-regulated assets and long-term, demand-based contracts provides a stable revenue stream that contrasts with the commodity exposure of some rivals. Its commitment to low-carbon solutions, such as the Clean Fuels Gathering and the Louisiana CCS project, positions it favorably as customers increasingly seek lower-carbon molecules. While DTM's relatively smaller scale compared to industry giants might imply higher operating costs in some areas, its operational efficiency and strategic partnerships, such as with EOG (EOG) in the Utica oil window, mitigate these disadvantages. The company's ability to leverage blanket authorizations for FERC projects also allows for swifter project execution, a competitive advantage in a market demanding rapid infrastructure deployment.

Conclusion

DT Midstream stands at the precipice of a significant growth phase, propelled by a confluence of robust natural gas demand, a strategically located and integrated asset base, and a proven track record of disciplined execution. The company's commitment to a pure-play natural gas midstream strategy, underpinned by its technologically advanced integrated network and resilient contractual framework, provides a compelling investment thesis. With a substantial organic project backlog, strong financial health evidenced by investment-grade ratings and ample liquidity, and a clear path for dividend growth, DTM is well-positioned to capitalize on the "generational opportunity" presented by increasing LNG exports, data center power generation, and industrial onshoring. While challenges such as permitting timelines and competitive pressures persist, DT Midstream's strategic agility and focus on operational excellence and lower-carbon solutions reinforce its competitive standing, promising sustained value creation for shareholders in the evolving energy landscape.