DT Midstream(US:DTM)2024-02-16 15:22Financial Data and Key Metrics Changes - The company reported full-year adjusted EBITDA of $924 million, representing a 10% growth year-over-year, exceeding guidance midpoint [5][14] - For Q4, adjusted EBITDA was $239 million, an increase of $3 million over Q3 [14][51] - The company expects 2024 adjusted EBITDA guidance in the range of $930 million to $980 million, reflecting a $10 million midpoint increase from prior outlook [15][52] Business Line Data and Key Metrics Changes - The Pipeline segment saw an increase of $11 million over the prior quarter, driven by early service of LEAP expansions and higher revenues from joint ventures [51] - Gathering segment results were $8 million lower than the prior quarter due to environmental reserve adjustments and modestly lower volumes in Haynesville, although total gathering volumes averaged around 3.1 Bcf a day, up 100 million cubic feet from Q3 [31] Market Data and Key Metrics Changes - The company has a deep organic project backlog of over $1.3 billion through 2027, with a focus on pipeline and gathering segments [23][32] - The Northeast market showed a 10% growth in gathering volumes, indicating strong demand [31] Company Strategy and Development Direction - The company aims to minimize capital at risk while systematically derisking its CO2 storage site, pursuing a phased approach to its carbon capture project [9] - The company is focused on expanding its pipeline capacity to meet growing LNG demand, with significant expansions planned for the LEAP system [7][22] - The company has a goal of achieving an investment-grade credit rating by the end of 2024, supported by a strong balance sheet and financial flexibility [28][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current price environment and reflected this in their 2024 guidance [35][60] - The company views the U.S. Gulf Coast as a premier LNG export region and a critical supply source for international allies, emphasizing long-term energy security [24] - Management highlighted the importance of customer relationships and service quality, which have been recognized as best-in-class within the sector [29] Other Important Information - The company announced a 7% increase in its quarterly dividend to $0.735 per share, with plans to continue annual increases in line with long-term adjusted EBITDA growth [16][18] - The company's ESG program has improved its MSCI rating to AA, positioning it as a leader in sustainability within its sector [12] Q&A Session Summary Question: Potential for shut-ins due to weak pricing - Management acknowledged modest shut-ins last year and indicated that current guidance reflects awareness of the price environment and customer plans [35][56] Question: Long-term EBITDA growth guidance and pipeline share - Management confirmed that approximately 60% of the capital in the backlog is directed towards the Pipeline segment, which is expected to grow proportionately [36][37] Question: Capital allocation and M&A potential - Management emphasized prioritizing organic growth opportunities with higher returns while remaining aware of bolt-on M&A opportunities [42][62] Question: Viability of Northeast pipeline expansions - Management indicated that opportunities will be clearer post-merger, with potential for enhanced efficiency and capital deployment [47][84] Question: Investment grade rating milestones - Management noted that disciplined execution of plans shared with rating agencies is crucial for achieving investment grade status [88]