Thank you for standing by. And welcome to the DT Midstream’s Third Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session [Operator Instructions]. I'd now like to turn the call over to Todd Lohrmann, Director of Investor Relations. You may begin.

Good morning. And welcome, everyone. Before we get started, I would like to remind you to read the safe harbor statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to non-GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, President and CEO; and Jeff Jewell, Executive Vice President and CFO. I'll now turn it over to David to start the call.

Thanks, Todd. And good morning, everyone. And thank you for joining. During today's call, I'll touch on our financial results, provide an update on the latest commercial development activity and progress on our growth initiatives. I'll then close with some observations on the overall gas market before turning it over to Jeff to review our financial performance and outlook. So starting off, we had another strong quarter operationally and the team continues to commercialize new organic projects that support our future growth. Our strong year-to-date performance is enabling us to increase our 2024 adjusted EBITDA guidance range to $950 million to $980 million. We are also reaffirming our 2025 adjusted EBITDA early outlook range. By continuing to advance projects from our organic project backlog and leveraging the scale from our existing integrated asset platforms, we are well positioned for continued growth in '25 and beyond. Our track record of strong performance was also recognized earlier this month by Finch ratings who upgraded us to investment grade, a strategic goal that we have had since we spun the company in 2021. This morning, we are excited to announce that we have reached a final investment decision on a LEAP Phase 4 expansion, which will increase capacity by 200 million cubic feet per day and further expand our integrated wellhead to water system to the LNG corridor. Our premier Haynesville system has established itself as the leader in both overall capacity and interconnectivity. This expansion, which we expect will be completed in the first half of 2026, increases total LEAP capacity from 1.9 to 2.1 Bcf per day via incremental compression and looping and is underpinned by long term demand based contracts with two new customers. This project highlights our Haynesville system's ability to quickly serve our customers' growing needs with rightsized,…

Thanks, David. And good morning, everyone. In the third quarter, we delivered overall adjusted EBITDA of $241 million, representing a $7 million decrease from the prior quarter. Our pipeline segment results were $3 million greater than the second quarter, reflecting a full quarter contribution from our LEAP Phase 3 expansion, which was placed in service in June. Gathering segment results decreased by $10 million compared to the second quarter, a result in line with the second quarter when adjusted for favorable onetime items of approximately $10 million that did not repeat in the third quarter. Operationally, total gathering volumes across both the Haynesville and the Northeast averaged approximately 2.9 billion cubic feet a day in the third quarter with volumes up slightly in the Haynesville compared to the prior quarter while lower in the Northeast, primarily due to the lower volumes on our Appalachia Gathering System. In the fourth quarter, we expect a ramp in gathering volumes compared to the third quarter, as well as incremental maintenance expense. As David mentioned in his opening remarks, following our strong year-to-date performance and considering our expectations for the fourth quarter, we are raising our 2024 adjusted EBITDA guidance range to $950 million to $980 million. In addition, we are reaffirming our 2025 adjusted EBITDA early outlook and plan to provide our formal 2025 guidance on our year end call. We are also raising our distributable cash flow guidance range to $670 million to $700 million due to lower interest and cash taxes. Our 2024 committed growth capital remains unchanged with approximately $330 million committed and we are increasing our 2025 committed capital to reflect new projects reaching FID with approximately $310 million committed. This increase in 2025 committed growth capital is driven by new projects reaching FID, including our new LEAP Phase…

Thanks, Jeff. So in summary, we are very pleased with how the year is continuing to progress and are feeling confident in our increased guidance for 2024 and early outlook range for 2025. Our short cycle growth investments continue to track on budget and on schedule, which will contribute meaningful growth over the next two years. Our approach to capital allocation remains thoughtful and disciplined with our focus on spending within cash flow over the balance of our five year plan, and growing our dividend in line with our EBITDA. As we look across the portfolio, we continue to see significant growth opportunities enabled by the scale of our strategically located and integrated asset footprint and through the emergence of our energy transition platform. We can now open up the line for questions.

[Operator Instructions] Your first question comes from the line of Jeremy Tonet from JP Morgan.

Just want to kind of follow up on the guidance increase for this year. And I know you're not going to update '25 at this juncture, but just any high level thoughts on forward read throughs on that. And as focus starts to shift to 2026 early look, can you talk about operating leverage across the asset base as the macro improves?

So I'd say -- first off, I'd just say the portfolio has been incredibly durable this year as we've kind of gone through the commodity cycle. So we're very happy with how the year's played out and it's allowed us to increase the guidance as we were navigating into Q4. As you kind of alluded to, we'll sit tight on making any adjustments to 2025 until we get to the end of the year and get better information from our core customers in terms of their activity levels. But I'd say some of the items we announced today feel encouraging in terms of signaling 2025, at least in the Haynesville, our renewed interest in growing volumes again as I think the market clearly is seeing incremental demand coming. And I think our LEAP Phase 4 announcement is somewhat of a derivative of that sentiment in the market. And again, if you look at how we filled in our 2025 growth capital, that's a very encouraging position. It really is cementing in our growth trajectory for the next couple of years as we've FID projects and have a full slate of opportunity that we're going to execute on next year that's already contracted and sort of kind of in hand, if I can say it that way. So that's giving me some optimism as I look forward and reflect on our growth aspirations and what I'll call incremental commercial opportunity that's coming to us across the portfolio.

And speaking about incremental opportunities, I think Louisiana connectivity, specifically into Henry Hub is an item of concern, I think, for maybe some on the customer side and the producers are looking to get there. It seems like there might not be enough connectivity in the hub and that could lead to a wider basis. Just wondering if you subscribe to this view and what opportunities this could present for DTM.

I think that's why we've been so adamant with our Haynesville network. And it's really our premier network now in terms of its interconnectivity both on the supply side and on the demand side. And I can say with confidence today that we're the most interconnected kind of wellhead to water system in the Haynesville period. And we've been hearing what you said very clearly from all of our customers and having that robust downstream connectivity so that those customers can take advantage of market opportunities, whether it's industrial opportunities along the Gulf Coast or directly to the LNG markets along the Gulf Coast. That's been kind of foundational to our build-out over the last three years of the entire system. So it's clearly something that our anchor customers are watching closely and they want to have infrastructure that can take advantage of those market opportunities and be a first mover.

Your next question comes from the line of Michael Blum from Wells Fargo.

You've been talking about these six potential data center projects. I’m wondering if you can give us a sense of timing and how these opportunities are developing. I believe they're all behind the meter solutions. I'm just wondering, does that make the regulatory process faster, more onerous? Just trying to get a little more color on what's going on.

So those opportunities that we previously discussed continue to advance this quarter, and they continue to move forward. We're in very detailed active discussions with a number of those. So it's moving in the right direction. It's not advanced enough to say we have a commercial agreement yet but it's definitely moving in the right direction. The underpinning of these power opportunities, as I think we've talked about on previous calls, speed is a critical consideration in the site development plans. So to the extent that you can put infrastructure in the ground under more favorable regulatory treatment, I think that's a key consideration in site viability. And so that detail has not been lost on us as a developer and looking for opportunity to do, what I'll call, intrastate development opportunities when those are feasible and are aligned with the regulatory construct. So yes, I think that's part of the equation as these developers are trolling for different site locations and ultimately, it will be part of the decision making when they commercialize the site.

And then I just wanted to ask about Northeast volumes, they've been trending slightly lower the last few quarters. Can you speak to what you're seeing there? And then your comment that Q4, you're expecting a ramp in volumes. Can you just clarify, is that referring to Haynesville or also Appalachia or both?

Yes, I think we've been saying this all year that we're kind of expecting sort of a tea saucer profile for the year and our volumes, we've definitely seen those volumes dipping in both basins in Q2 and Q3. Haynesville has been remarkably resilient for us, which has been very encouraging. And yes, I do expect to see some modest recovery in Q4 in both the north and the south. And I think our attention is more focused on that exit rate coming out of this year and going into next year, again, with a general thesis that we're hearing from a lot of our customers that they'll be a much more constructive market shaping up for '25 for our producer customers.

Our next question comes from the line of Theresa Chen from Barclays.

On the data center power demand fund, putting the competitive processes aside. Can you just remind us how should we book end the size and scope of these projects? And how much can this move the needle relative to your base assets?

I think as we've discussed in the past, we're looking at these primarily as lateral opportunities into these site locations. And the analogy that I've used in the past is our Birdsboro project where we built a lateral off Texas Eastern to a power plant. So call it between $50 million and $100 million CapEx investment range depending on the distance of the lateral. And again, for us given our size that's very rightsized for us in terms of an investment opportunity driving growth in our plan. So that's kind of how we're thinking about it. And again, it also put additional load on the, what I'll call, the interstate backbone system. And as we're thinking about it, we're really just thinking about that lateral opportunity right now but it also puts resilience and durability into the pipeline assets as well as these become long term markets that will be served off that infrastructure. So it's got a knock-on effect across the entire portfolio. So I'll stop there. Hopefully, that was helpful, Theresa.

And then on the heels of the Fitch upgrade, can you just provide additional color on your credit outlook in general and next steps with Moody's?

So where we are, like you mentioned, Fitch has upgraded us. Moody's is on positive outlook and S&P is on neutral. So what we're seeing is, again, the positive momentum with both of them and they're reviewing the merger, the discourse happened with SWN and Chesapeake. So we're still on the same path probably before the end of the year or into the first quarter that they sort of make their determinations on what they're going to do related to us. But we're thinking that probably two of the three before the end of the year.

Your next question comes from the line of John Mackay from Goldman Sachs.

I wanted to go back to the gas macro and the production ramp a little bit. I appreciate the comments on kind of towards the year-end recovery. I guess I'd just be curious if you could flesh that a little bit and talk a little bit about when you think we might get back to the production peaks that we saw almost a year ago and then maybe when we can start to break through that, really kind of a view on when we'll really need production to ramp above those year end '23 levels?

Yes, that's the million-dollar question, John, that you're asking. And I wish I had a more insightful answer to that question. I think we're somewhat patiently waiting as well with our key customers as they get into their year end planning cycle for 2025. I think a lot of this is a function of how the weather plays out across North America this winter. Again, the forecast we're looking at kind of a 10 year average is what we're seeing. If that plays out, I think that in combination with demand showing up in 2025, incremental demand showing up in '25 will be a constructive backdrop for producers generally across North America. Specifically as it relates to the Haynesville, we're down about 2 Bcf a day from the peak. My personal view is that some of that just has to come back for a number of reasons. One is, you've got a couple of LNG facilities coming online next year that are truly incremental demand that really does need to be served out of the Haynesville Basin and you've got two other companies building significant pipeline infrastructure that's expected to be in service towards the end of next year, perhaps early '26. And again, those anchor shippers are going to want to be drilling into that capacity when it arrives. So all that leads me to believe that '25 is going to be a more constructive year for producers in the Haynesville and we should be seeing volume ramps. The timing and trajectory, I think, is TBD. And I think we're as curious as you are as we get to the end of the year and get better information.

I definitely appreciate the thoughts. Maybe just a quick follow-up. Could you just remind us where NEXUS sits in terms of potential expansion capacity? What opportunities there could look like from a cost or timing perspective? I know it probably goes back to some of the conversations we've had earlier in this call, but kind of specific update on NEXUS would be great.

I'll summarize NEXUS kind of into two categories is, about two years ago, we didn't open season there, looking to expand. We had very favorable response. What we elected to do is to, what I'll call, optimize the system hydraulically. And you've probably seen a couple of different regulatory filings at the FERC where we've upsized the physical capacity of the system without really doing any capital investment. And that was really just having four, five years of experience under our belt since we've built it really reassessing the engineering design based on how it's actually being used we're able to increase capacity. And I'm going to just round the numbers to make it simple, about 100 million a day. So that was kind of step number one and that's kind of behind us now. Step number two will be to really look at a capital driven expansion. And that would be next up for NEXUS and it's likely a compression expansion and that's likely in the 100 million to 200 million a day range. So more to come on that, John, as we advance that further but that's the update on NEXUS.

[Operator Instructions] Your next question comes from the line of Keith Stanley from Wolfe Research.

So last time with Q4 earnings, you gave new details on the project backlog and the medium term growth target of 5% to 7%. I want to confirm, is that something you plan to update again with Q4 earnings? And any color you could give on puts and takes to the backlog and five year outlook since you provided it earlier this year?

And Keith, yes, that's kind of our play is on the year end call, we'll kind of do a refresh. We won't be changing -- I'll just tell you right now, we won't be changing the long term outlook that we're highly confident in that long term outlook and nothing, as we sit here today, is changing that. But yes, we'll provide more granularity around the backlog and more of the details around a bunch of things that were in the backlog last year, we've just been meticulously commercializing. So yes, you should expect a refresh backlog, likely some new things get dropped into that backlog. And again, we'll just continue to run the disciplined execution play that we've been doing since we spun the company. It's just working our way through that backlog, commercializing those opportunities, driving that organic growth rate and moving the company forward. So that's what you should expect on the year end call.

The second question, just going back to the data centers, and I know this is pretty fresh still. But how has the Supreme Court's decision to not stay the EPA 111(d) that sets a utilization cap on new gas plants impacted your discussions, if at all, with data center customers? Is that something customers want clarity on for that rule or are they comfortable knowing they might need a carbon capture solution at some point?

I think most of the counterparties are looking at that and saying that's got to be dealt within the lower court. And I think that's kind of what the Supreme Court said is we're not going to touch it yet, because it's still being adjudicated in the lower court. And depending on how that plays out, they may be back added again or not. Right now, we're not seeing that as driving behavior at the moment. I think everybody is watching it and paying attention to it. But we're not seeing it change the nature or the velocity of the conversations that we're having regarding these opportunities.

Our next question comes from the line of Spiro Dounis from Citi.

The first question maybe just start with the CapEx outlook. It looks like 2025 is kind of filling up nicely here. But Jeff, you talked about staying free cash flow positive in '24 and '25. So just curious how you're thinking about the headroom from here to add more projects next year? And maybe if you could just provide a sense of what types of projects you're looking to get over the line in the next quarter or two?

Let me take a crack at that, and Jeff, you can jump in if you need to fill in the blanks. So number one, we've been really clear with operating inside our free cash flow over the five year plan. I mean that's just sort of one of those financial boundaries that we've put in place. In terms of 2025, getting a good chunk of that CapEx deployment executed and contracted really puts high confidence in our growth rate over the next couple of years. So that's a real positive sign. The commercial team has been doing just a wonderful job over the last six months getting after that backlog and commercializing those opportunities. Again, I'm going to kind of move back to the answer that I gave, Keith, which is we'll refresh that backlog for you on the year end call. So we're not going to do that on this call. But suffice it to say that we continue to see significant organic opportunities presenting themselves across our footprint. And so you'll see that refreshed on the year end call. And again, we are long organic opportunities, not short organic opportunities. And I think that's a great place to be in, in this current market environment. Jeff, I don't know if you want to add anything to that?

No, David. I think that's spot on, Spiro. Our financial policies are not changing. I think that's the bottom line.

Second question, just kind of on this topic, still, David, you just mentioned a sort of long organic sort of growth backlog there. Just curious how you're thinking about the relative attractiveness here on the M&A side? You have that strong backlog, of course, organically, but hard to ignore the equity currency here. So just curious, are there any asset candidates out there that maybe didn't make sense a year ago that suddenly look a little more attractive now?

I think maybe I'll just kind of refresh what we've said publicly in the past about M&A is, number one, we're focused on very disciplined strategy execution. And our investment thesis has been really clear and consistent since we spun the company, which is we're a pure play gas only midstream company with no commodity exposure in the portfolio, highly durable cash flows, highly contracted portfolio with significant demand based contracts that underpin the entire company. So that strategy is the guiding light or the north star on any opportunities that would come our way and present themselves. So that's how we think about it in terms of M&A. And I'd say on the flip side, our job and our goal for you and all of our investors is to run a high quality midstream company and that gets obviously reflected in stock price and that also gets reflected in any interest that anybody would have in the company. So I mean those are our guiding principles and I don't see any of that changing. We're going to be very consistent in our execution. And we won't surprise anybody with any moves that would be inconsistent with that strategy.

Our next question comes from the line of Robert Mosca from Mizuho Securities.

So now that Chesapeake and SWN is closed, just wondering if there's any updated outlook on commercial puts and takes with Expand and whether you're expecting any shifts in production that could potentially benefit your acreage? And on LEAD Phase 4, were those customers you mentioned, was that related to the Blue Union expansion announced last quarter?

You got a couple of questions in there, I'll try to unpack that. So first off, let's start with Expand. Firstly, I'd like to publicly congratulate them for closing the merger. And we're really excited about working with them going forward. They're going through, what I'll call, post close integration activity right now. Just to give a little color and I'm sure they'll provide an update more on their call but we plan to be sitting down with them here in the near term to go through all those questions that you asked, Rob. So again, we're patiently waiting for them to get through what I'll call the post close activity so we can sit down and have those conversations. That being said, I'm highly confident that the acreage that we gather for them is premium acreage in their portfolio in Haynesville. And what I mean by that it's literally the most economic rock in the basin. So that's the gravity that I think guides their capital allocation decisions. And ultimately, it's their decisions. But that's a gravity that I look at in terms of our investments around that acreage is that it's really good acreage. And they have just a wonderful acreage position in the basin and we're a big part of that in terms of the infrastructure to move that to market. So look forward to working with them just like we have for over a decade. We have a very close relationship with them and our key people that we work with will also be the key people we will continue to work with going forward in the new entity. So we feel real positive about that. I'll say no more, we'll let them talk about it publicly tomorrow. And I'm sure we'll be able to give you a better update on the other side of their public disclosures. So that's that one. Rob, I'm trying to remember, you had another question related to LEAP, I believe, and our customers on LEAP…

Just wondering if that's in any way related to the Blue Union expansion that you announced last quarter?

That's probably a good -- you said it, I didn't say it. So that's probably a safe assumption. We have been cognizant with our customers. And as you would expect all of the customers on the network are competing for the same markets at the end of the network. So we've been very respectful. And when those customers don't want to be publicly disclosed, we don't. But yes, what I'll call wellhead the water network and the interconnectivity of the network and the ability of the network to grow in what I call timely bite sized increments that can get really customized to our customers' needs, that's been a very attractive feature of our network. And I think we're harvesting that as we continue to announce these expansions even coming through a very, what I would call, challenged year in the Haynesville. We continue to see growth. So very encouraged by that. We'll task our commercial team to start working on LEAP Phase 5 and get after the next tranche of capacity that we can compete for.

And maybe last one for me is, it seems like the CCS project, maybe the expectation for FID was pushed out a couple of quarters. Just anything to call out there?

No, I think the only thing I'll call out is we continue to be really meticulous in our execution and control the controllables that we are accountable for. We're obviously working collaboratively with the Louisiana DENR and encouraging them to move along, if I can use those words. But yes, we're in a, what I'll call, regulatory holding pattern waiting on them to complete their application requirements. My sense is that they're trying to be very judicious and create highly durable regulatory orders so that these projects can move forward with, what I'll call, clear sailing once you kind of move through the regulatory process. So we're obviously in close contact with them. It hasn't changed our in service date but we are patiently waiting for Louisiana to move things along.

And that concludes our question-and-answer session. I will now turn the call back over to David Slater for closing remarks.

Well, thank you again, everybody, for your participation in the call and for joining us. We certainly appreciate your interest and support of DT Midstream, and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.