DT Midstream Inc.

10/29/2026 | Press release | Distributed by Public on 10/29/2026 14:41

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our results of operations and financial condition should be read in conjunction with our unaudited Consolidated Financial Statements and the Notes to Consolidated Financial Statements, which are included under Part I, Item 1 of this quarterly report, and the historical consolidated financial statements and notes thereto, which are included in the DT Midstream 2025 Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about the midstream industry and our business and financial results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in the sections entitled "Forward-Looking Statements" and "Risk Factors."
OVERVIEW
Our Business
We are an owner, operator, and developer of an integrated portfolio of natural gas midstream assets. We provide multiple, integrated natural gas services to customers through our Pipeline segment, which includes interstate pipelines, intrastate pipelines, storage systems, and gathering lateral pipelines, and through our Gathering segment. We also own joint venture interests in equity method investees which own and operate interstate pipelines that connect to our wholly owned assets.
Our 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.
We have 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.
STRATEGY
Our principal business objective is to safely and reliably operate and develop midstream natural gas assets across our premier footprint. Our proven leadership and highly engaged employees have an excellent track record. Prospectively, we intend to continue this track record by executing on our natural gas-centric business strategy focused on disciplined capital deployment and supported by a flexible, well capitalized balance sheet. Additionally, we intend to develop low carbon business opportunities and deploy GHG reducing technologies as part of our goal of being leading environmental stewards in the midstream industry. We are executing on a plan to achieve net zero carbon emissions by 2050.
Our strategy is premised on the following principles:
•operate our assets in a sustainable and responsible manner;
•provide exceptional service to our customers;
•disciplined capital deployment in assets supported by strong fundamentals;
•capitalize on asset integration and utilization opportunities;
•pursue economically attractive opportunities; and
•grow cash flows supported by long-term firm revenue contracts.
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations includes financial information prepared in accordance with GAAP. The following sections discuss the operating performance and future outlook of our segments. Segment information includes intercompany revenues and expenses, as well as other income and deductions that are eliminated, as presented in Note 11 "Segment and Related Information" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
For purposes of the following discussion, any increases or decreases refer to the comparison of the three months ended September 30, 2026 to the three months ended June 30, 2026, and the nine months ended September 30, 2026 to the nine months ended September 30, 2025, as applicable. The following table summarizes our consolidated financial results:
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2026 2026 2026 2025
(millions, except per share amounts)
Operating revenues $ 336 $ 343 $ 1,015 $ 926
Net Income Attributable to DT Midstream 118 112 360 330
Diluted Earnings per Common Share $ 1.16 $ 1.09 $ 3.51 $ 3.22
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2026 2026 2026 2025
(millions)
Net Income Attributable to DT Midstream
Pipeline $ 93 $ 86 $ 287 $ 277
Gathering 25 26 73 53
Total $ 118 $ 112 $ 360 $ 330
Pipeline
The Pipeline segment consists of our interstate pipelines, intrastate pipelines, storage systems, gathering lateral pipelines and compression and surface facilities. This segment also includes our equity method investments. Pipeline results and outlook are discussed below:
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2026 2026 2026 2025
(millions)
Operating revenues $ 182 $ 183 $ 550 $ 514
Operation and maintenance 36 39 110 98
Depreciation and amortization 29 28 86 83
Taxes other than income 8 8 25 23
Asset losses and impairments, net 2 - 2 -
Operating Income 107 108 327 310
Interest expense 14 14 42 38
Interest income (1) - (2) (1)
Earnings from equity method investees (34) (33) (110) (101)
Gain from financing activities - (1) (1) -
Other income (2) (3) (5) -
Income tax expense 33 41 104 87
Net Income 97 90 299 287
Less: Net Income Attributable to Noncontrolling Interests 4 4 12 10
Net Income Attributable to DT Midstream $ 93 $ 86 $ 287 $ 277
Operating revenues increased $36 million for the nine months ended September 30, 2026 primarily due to higher Stonewall inter-segment revenue from the MVP expansion of $20 million, higher LEAP revenue of $16 million from new customer and firm service contracts and higher production-related revenue, and higher volumes on Viking of $5 million.
Operation and maintenance expense increased $12 million for the nine months ended September 30, 2026 primarily due to higher production-related operating expenses on LEAP of $6 million and higher pipeline integrity evaluation expenses on DTM Interstate Transportation of $3 million.
Depreciation and amortization expense increased $3 million for the nine months ended September 30, 2026 primarily due to assets placed into service at LEAP and Stonewall.
Earnings from equity method investees increased $9 million for the nine months ended September 30, 2026 primarily due to higher short-term contract revenues and lower expenses at Vector of $5 million.
Other income increased $5 million for the nine months ended September 30, 2026 primarily due to higher equity AFUDC.
Income tax expense decreased $8 million for the three months ended September 30, 2026 primarily due to a decrease in the effective tax rate. Income tax expense increased $17 million for the nine months ended September 30, 2026 due to an increase in the effective tax rate and higher income before income taxes. See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
Pipeline Outlook
We believe our long-term agreements with customers and the location and connectivity of our pipeline assets 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 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 our equity method investments.
Gathering
The Gathering segment includes gathering systems, related treatment plants and compression and surface facilities. Gathering results and outlook are discussed below:
Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2026 2026 2026 2025
(millions)
Operating revenues $ 161 $ 168 $ 485 $ 412
Operation and maintenance 60 59 174 144
Depreciation and amortization 42 40 122 108
Taxes other than income 3 4 13 12
Asset losses and impairments, net - - 1 -
Operating Income 56 65 175 148
Interest expense 26 28 80 82
Interest income (1) (1) (2) (1)
Gain from financing activities (1) - (1) -
Other income (1) - (1) (3)
Income tax expense 8 12 26 17
Net Income Attributable to DT Midstream $ 25 $ 26 $ 73 $ 53
Operating revenues decreased $7 million for the three months ended September 30, 2026 primarily due to lower Appalachia Gathering volumes of $4 million. Operating revenues increased $73 million for the nine months ended September 30, 2026 primarily due to higher volumes of $34 million and higher recovery of production-related operating expenses of $6 million on Blue Union Gathering, higher Appalachia Gathering volumes of $23 million, higher Tioga Gathering volumes of $8 million, and higher volumes on Ohio Utica Gathering of $7 million, partially offset by lower Susquehanna Gathering volumes of $7 million.
Operation and maintenance expense increased $30 million for the nine months ended September 30, 2026 primarily due to higher inter-segment fees at Appalachia Gathering from the MVP expansion of $20 million and higher production-related operating expenses at Blue Union Gathering of $13 million.
Depreciation and amortization expense increased $14 million for the nine months ended September 30, 2026 primarily due to assets placed into service at Blue Union Gathering, Clean Fuels Gathering, Ohio Utica Gathering, and Appalachia Gathering.
Income tax expense decreased $4 million for the three months ended September 30, 2026 due to a decrease in the effective tax rate and lower income before income taxes. Income tax expense increased $9 million for the nine months ended September 30, 2026 due to higher income before income taxes and an increase in the effective tax rate. See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
Gathering Outlook
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 expansions at Blue Union Gathering, Appalachia Gathering, Ohio Utica Gathering, and Tioga Gathering.
ENVIRONMENTAL MATTERS
We are subject to U.S. federal, state, and local laws and environmental regulations, including laws and regulations relating to pipeline safety, climate change and GHG emissions. Additional compliance costs may result as the effects of various substances on the environment and human health are studied and laws and regulations are developed and implemented. Actual costs to comply with such laws and regulations could vary substantially from our expectations. Pending or future legislation or regulation could have a material impact on our operations and financial position. Potential impacts include unplanned expenditures for environmental equipment, such as pollution control equipment, financing costs related to additional capital expenditures, and the replacement costs of aging pipelines and other facilities.
For further discussion of environmental matters, see Note 10, "Commitments and Contingencies" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
CAPITAL RESOURCES AND LIQUIDITY
Cash Requirements
Our principal liquidity requirements are to finance our operations, fund capital expenditures, satisfy our indebtedness obligations, and pay approved dividends. We believe we will have sufficient internal and external capital resources to fund anticipated capital and operating requirements.
Nine Months Ended
September 30,
2026 2025
(millions)
Cash and Cash Equivalents at Beginning of Period $ 54 $ 68
Net cash and cash equivalents from operating activities 777 706
Net cash and cash equivalents used for investing activities (244) (254)
Net cash and cash equivalents used for financing activities (356) (422)
Net Increase in Cash and Cash Equivalents 177 30
Cash and Cash Equivalents at End of Period $ 231 $ 98
For purposes of the following discussion, any increases or decreases refer to the comparison of the nine months ended September 30, 2026 to the nine months ended September 30, 2025.
Operating Activities
Cash flows from our operating activities can be impacted in the short term by the natural gas volumes gathered or transported through our systems under interruptible service revenue contracts, changing natural gas prices, seasonality, weather fluctuations, dividends received from equity method investees, working capital changes and the financial condition of our customers. Our preference to enter into firm service revenue contracts leads to more stable operating performance, revenues and cash flows and limits our exposure to natural gas price fluctuations.
Net cash and cash equivalents from operating activities increased $71 million for the nine months ended September 30, 2026 primarily due to an increase in operating income of $64 million after adjustment for non-cash items including depreciation and amortization expense, stock-based compensation, and amortization of operating lease right-of-use assets, an increase in dividends received from equity method investees of $8 million, and increases in net working capital changes of $5 million, partially offset by an increase in cash paid for income taxes, net of refunds received, of $6 million.
Investing Activities
Cash outflows associated with our investing activities are primarily the result of plant and equipment expenditures, acquisitions, and contributions to equity method investees. Cash inflows from our investing activities are generated from proceeds from sale or collection of notes receivable, distributions received from equity method investees, and proceeds from asset sales.
Net cash and cash equivalents used for investing activities decreased $10 million for the nine months ended September 30, 2026 primarily due to a decrease in plant and equipment expenditures of $21 million, and higher distributions received from equity method investees of $13 million, partially offset by higher contributions to equity method investees of $14 million, and a purchase price adjustment for the Midwest Pipeline Acquisition in 2025 of $10 million.
Financing Activities
DT Midstream paid cash dividends on common stock of $262 million and $241 million during the nine months ended September 30, 2026 and 2025, respectively. See Note 6, "Earnings Per Share and Dividends" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
Net cash and cash equivalents used for financing activities decreased $66 million for the nine months ended September 30, 2026 primarily due to lower net repayments under the Revolving Credit Facility of $150 million, and net proceeds received from the issuance of the Guardian Term Loan of $149 million, partially offset by repurchases of the 2029 Notes and 2031 Notes of $197 million, higher dividends paid on common stock of $21 million, higher stock-based compensation tax withholding payments of $8 million, and lower contributions from noncontrolling interests of $6 million.
Outlook
We expect to continue executing on our natural gas-centric business strategy focused on disciplined capital deployment and supported by a flexible, well capitalized balance sheet. Other than the impact of the items discussed below on our debt and equity capitalization, we are not aware of any trends, other demands, commitments, events or uncertainties that are reasonably likely to materially impact our liquidity position.
Our working capital requirements will be primarily driven by changes in accounts receivable, accounts payable and taxes payable. We continue our efforts to identify opportunities to improve cash flows through working capital initiatives and obtaining long-term firm service revenue contracts from customers.
Our sources of liquidity include cash and cash equivalents generated from operating activities and available borrowings under our Revolving Credit Facility. As of September 30, 2026, we had $17 million of letters of credit outstanding and no borrowings outstanding under our Revolving Credit Facility. We had approximately $1.2 billion of available liquidity as of September 30, 2026, consisting of Cash and cash equivalents and available borrowings under our Revolving Credit Facility.
We expect to pay regular cash dividends to DT Midstream common stockholders in the future. Any payment of future dividends is subject to approval by the Board of Directors and may depend on our future earnings, cash flows, capital requirements, financial condition, and the effect a dividend payment would have on our compliance with relevant financial covenants. Over the long term, we expect to grow our dividend with cash flow growth.
We believe we will have sufficient operating flexibility, cash resources and funding sources to maintain adequate liquidity amounts and to meet future operating cash, capital expenditure and debt servicing requirements. However, our business is capital intensive, and an inability to access adequate capital could adversely impact future earnings and cash flows.
The credit agreements covering the Revolving Credit Facility and Guardian Term Loan include financial covenants that must be maintained. We are in compliance with these covenants as of September 30, 2026. See Note 9, "Debt" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
CAPITAL INVESTMENTS
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 investments were $291 million for the nine months ended September 30, 2026, inclusive of $17 million in contributions to equity method investees and $274 million in plant and equipment expenditures. These were primarily related to investments on Guardian, Blue Union Gathering, Appalachia Gathering, Midwestern, Viking and Ohio Utica Gathering. We anticipate total capital investments, inclusive of contributions to equity method investees and plant and equipment expenditures, for the year ended December 31, 2026 of approximately $450 million to $510 million.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our Consolidated Financial Statements in conformity with GAAP requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the amounts of assets and liabilities reported in the Consolidated Financial Statements. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
OFF-BALANCE SHEET ARRANGEMENTS
We are party to off-balance sheet arrangements, which include our equity method investments. See Note 1, "Description of the Business and Basis of Presentation-Equity Method Investments" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for further discussion of the nature, purpose and other details of such agreements.
Other off-balance sheet arrangements include the Vector line of credit and our surety bonds, which are discussed in Note 10, "Commitments and Contingencies" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
NEW ACCOUNTING PRONOUNCEMENTS
See Note 3, "New Accounting Pronouncements" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
DT Midstream Inc. published this content on October 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 29, 2026 at 20:49 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]