DT Midstream, Inc.: Form 10-Q for the period ended Sep 30, 2026

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:

(millions, except per share amounts)

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:

31

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:

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.

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.

Market Price Risk

Our gathering business is dependent on the continued availability of natural gas production and reserves in our geographical areas of operation. Low prices for natural gas, including those resulting from regional basis differentials, could adversely affect development of additional reserves and future natural gas production that is accessible by our pipeline and storage assets. We manage our exposure through the use of short, medium, and long-term transportation, gathering, and storage contracts. Consequently, our existing operations and cash flows have limited direct exposure to natural gas price risk.

Credit Risk

We are exposed to credit risk, which is the risk of loss resulting from nonpayment or nonperformance under a contract. We manage our exposure to credit risk associated with customers through credit analysis, credit approval, credit limits and monitoring procedures. For certain transactions, we may request letters of credit, cash collateral, prepayments or guarantees as forms of credit support. Our FERC tariffs require tariff customers that do not meet specified credit standards to provide three months of credit support, however, we are exposed to credit risk beyond this three-month period when our tariffs do not require our customers to provide additional credit support. For some long-term contracts with associated system construction or expansion, we have entered into negotiated credit agreements that provide for enhanced forms of credit support if certain customer credit standards are not met.

We depend on a key customer, Expand Energy, in the Haynesville formation in the Gulf Coast and in the Marcellus formation in the Northeastern U.S. for a significant portion of our revenues. The loss of, or reduction in volumes from, this key customer could result in a decline in demand for our services and materially adversely affect our business, financial condition and results of operations.

Our key customer, Expand Energy, is investment grade. We engage with other customers that are sub-investment grade. These customers are otherwise considered creditworthy or are required to make prepayments or provide security to satisfy credit concerns. We regularly monitor for bankruptcy proceedings that may impact our customers and had no bankruptcy proceedings during the nine months ended September 30, 2026.

Interest Rate Risk

We are subject to interest rate risk in connection with floating rate debt borrowings under our Revolving Credit Facility and the Guardian Term Loan. Our exposure to interest rate risk arises primarily from changes in SOFR. As of September 30, 2026, we had $150 million of floating rate debt outstanding related to the variable rate Guardian Term Loan and no borrowings outstanding under our Revolving Credit Facility. See Note 9, "Debt" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

We are subject to interest rate risk in connection with our goodwill impairment assessment. See "Critical Accounting Estimates" under Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 31, 2025.

International Markets Risk

While virtually all of our business is in the United States, we also have an equity method investment in Vector, which has operations in Canada, in addition to the United States. Rapidly changing global trade policies, such as tariffs, may increase capital expenditures, operating costs and market uncertainty. We continue to monitor regulatory developments.

Summary of Sensitivity Analysis

A sensitivity analysis was performed on the fair values of our long-term debt obligations. The sensitivity analysis involved increasing and decreasing interest rates as of September 30, 2026 by a hypothetical 10% and calculating the resulting change in the fair values. We have no debt maturing until 2029, as described in Note 9, "Debt" to the Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q. The hypothetical losses related to long-term debt would be realized only if we transferred all of our fixed-rate long-term debt to other creditors. The results of the sensitivity analysis are as follows:

(a) Evaluation of disclosure controls and procedures

Management of DT Midstream carried out an evaluation, under the supervision and with the participation of DT Midstream's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of DT Midstream's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2026, which is the end of the period covered by this report. Based on this evaluation, DT Midstream's CEO and CFO have concluded that such disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by DT Midstream in reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and (ii) is accumulated and communicated to DT Midstream's management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Due to the inherent limitations in the effectiveness of any disclosure controls and procedures, management cannot provide absolute assurance that the objectives of our disclosure controls and procedures will be attained.

(b) Changes in internal control over financial reporting

There have been no changes in DT Midstream's internal control over financial reporting during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, DT Midstream's internal control over financial reporting.

There are various risks associated with the operations of DT Midstream's businesses. To provide a framework to understand the operating environment of DT Midstream, a brief explanation of the significant risks associated with DT Midstream's businesses is provided in Part I, Item 1A. "Risk Factors" in DT Midstream's 2025 Annual Report on Form 10-K. There have been no material changes to our risk factors since the Form 10-K. Although DT Midstream has identified and disclosed key risk factors, others could emerge in the future.