DT Midstream Inc Stock

Welcome to the DT Midstream Second Quarter 2026 Earnings Call. [Operator Instructions] I will now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Thank you. Please go ahead.

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 Executive Chairman and CEO; Chris Zona, President and COO; and Jeff Jewell, Executive Vice President and CFO.

So with that, I'll go ahead and turn the call over to David.

Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll highlight our key accomplishments for the quarter and discuss the constructive market fundamentals driving demand across our footprint.

I'll then turn it over to Chris and Jeff to review our commercial activity, project execution and financial performance and outlook. So with that, midway through the year, we continue to execute our focused strategy while delivering strong results. The organization is firing on all cylinders, giving us confidence in our full year plan and the future. We're successfully converting strong demand from LNG, power generation and data center development into new commercial opportunities organic growth across our footprint.

With today's announcements, we have now commercialized 60% of our $3.4 billion organic project backlog with more than 80% of this being committed to pipeline projects. The momentum we're seeing across our business is underpinned by durable market fundamentals that will support growth for many years to come. Market environment continues to reinforce the critical role of natural gas infrastructure with both domestic and global demand growth, highlighting the importance of reliable, secure and affordable energy supply.

A study released earlier this year by the Inga Foundation concluded that North America will require over $1 trillion of new pipeline infrastructure investment over the next 25 years, highlighting the significant need to connect supply to growing demand centers, supporting the strong investment thesis in natural gas pipeline infrastructure in North America.

Internationally, growing LNG demand and ongoing supply disruptions are favoring U.S.-sourced LNG exports as a secure and reliable procurement strategy. We continue to believe this dynamic will support additional LNG-related infrastructure investment along the Gulf Coast, creating expansion opportunities across the natural gas value chain, including on our Haynesville system.

Natural gas also remains the most reliable and affordable domestic energy source available at scale and plays a critical role in supporting future power demand growth. Our interstate gas pipeline footprint is strategically located to serve this growth, and we continue to advance multiple opportunities across our systems supported by these favorable market fundamentals.

I'll now turn it over to Chris to walk you through the commercial activity and construction projects that are converting this demand into growth across our footprint.

Thanks, David. Good morning, everyone. As David indicated, the second quarter was another active quarter for us commercially, and we are announcing today that we've reached FID and approximately $300 million of new organic growth projects from our capital project backlog. Unpacking the new investment projects, the first is an expansion of our Haynesville system, which increases our access to East Texas supply expands our LEAP pipeline by 200 MMcf per day and is supported by new long-term agreements with 2 producer customers.

The expansion brings total capacity of LEAP to 2.3 Bcf per day through a combination of incremental compression and looping with an expected in-service date during the second half of 2028. This project highlights our commercial capability to provide timely, competitive customer solutions and the unique advantages of our Haynesville system, which combines premier basin connectivity, direct LNG market access and efficient scalable infrastructure.

The next project we are moving forward with is the first phase of modernization on Viking, which will improve the reliability of this critical capacity serving the Twin Cities in Minnesota and is expected to be in service in Q4 2028.

This investment reflects the continued modernization opportunities we see across our interstate pipelines. With the first phases of Guardian and Western advancing as planned, including the recent FERC approval of the filing for Guardian Phase I. During the quarter, we also executed a new long-term gathering agreement supporting a 100 MMcf per day expansion of our Appalachic gathering system, which will be in service in Q4 2027, delivering supply into NEXUS and Texas Eastern. This is a demand-based contract reflecting growing producer activity in the region.

Finally, we commercialized another new interconnect on NEXUS this quarter, which will have a capacity of 380 MMcf per day and will provide supply for a natural gas fired power generation facility to power a new data center in Ohio. Combined with the interconnect we announced on the first quarter call, we are adding over 0.5 Bcf of demand pool to the main line of NEXUS.

Taken together, these new projects highlight the breadth of organic opportunities we continue to see across our footprint and our ability to commercialize these all of which are supported by long-term contracts and durable customer demand. Looking beyond today's announcements, we continue to see a robust set of future expansion opportunities across our footprint. Projects such as the miss expansion on our Midwestern pipeline and Vector 2030 expansion are advancing through the commercialization process and we remain encouraged by ongoing customer discussions and the demand outlook supporting these opportunities.

On [ Miss ] specifically, we see the project likely coming in multiple phases with cell-bound and northbound expansions. We are advanced in the process of commercializing binding agreements with the next milestone being a binding open season. Overall, these opportunities reinforce our confidence in the long-term growth potential around our assets reflected in our capital project backlog, and we will keep you updated as we continue to move them forward.

Turning to our construction projects. We successfully filed the FERC 7C application for our Guardian G3 expansion project in June and all of our other in-flight growth investments remain on track and on budget. Finally, operationally, for the quarter, total gathering volumes for the Haynesville averaged 2.2 Bcf per day, an all-time record throughput on our system for a quarter. In the Northeast, volumes averaged 1.38 Bcf per day.

Looking ahead to the third quarter, we expect Haynesville volumes to be in line with the second quarter and Northeast volumes to be lower due to timing of producer activity.

I'll now pass it over to Jeff to walk you through our quarterly financials and outlook.

Thanks, Chris, and good morning, everyone. In the second quarter, we delivered adjusted EBITDA of $305 million representing a $3 million decrease from the prior quarter.

Our Pipeline segment results were $14 million lower than the prior quarter, driven by seasonally lower revenues from our joint venture pipelines and higher revenue on Stonewall. Gathering segment results were $11 million greater than the prior quarter, reflecting higher volumes on Blue Union. Growth capital investment for the second quarter was $86 million, which is in line with our plan and we expect a ramp in growth capital over the balance of this year.

As you look to the second half of the year, we expect the third quarter to be in line with our full year guidance, but to be lower than the strong second quarter driven by maintenance across our gathering network. And as Chris noted, Northeast volumes are expected to be lower due to timing of producer activity. We are confident in our full year outlook and thus, are reaffirming our 2026 adjusted EBITDA guidance range and our 2027 adjusted EBITDA early outlook. The new investments that reached FID this quarter will increase our 2026 and 2027 committed capital to approximately $425 million in 2026 and approximately $560 million in 2027.

Our balance sheet is very healthy and in a strong position with two of the rating agencies recently raising our leverage downgrade thresholds, Moody's from 4.0 to 4.25x on a proportionate basis, and Fitch from 4.0 to 4.5 or an on balance sheet. Finally, today, we also announced that our Board of Directors approved our second quarter dividend of $0.88 per share unchanged from the prior quarter, and we remain committed to grow the dividend in line with adjusted EBITDA.

I'll now pass it back over to David for closing remarks.

Thanks, Jeff so in summary, we remain confident in delivering on our guidance, continuing our strong track record of disciplined execution, while advancing organic growth opportunities across our footprint.

Our team is executing well, focusing on our customers' growing needs, which are high-quality pure-play natural gas pipeline portfolio is positioned to serve. The long-term outlook for natural gas infrastructure in North America remains highly constructive, supported by growing LNG and power demand and the increasing need for reliable, affordable and secure energy.

And with that, we can now open up the line for questions.

[Operator Instructions] And your first question comes from the line of Theresa Chen.

Would you elaborate on the commercialization progress and process for Mist at this point? specifically on the size and scope of the phasing approach and how you see the competitive landscape evolving over the next few months?

This is David. And good to hear from you. And I'll start, and Chris, maybe you can jump in and fill it in a bit. But I'd say I'm just going to elevate the conversation for a second and just remind everybody we're focused on the customer need and the customer need is the ultimate driver. So that demand growth and the timing of that demand growth is the driver behind the commercialization time line for [ Mist ]. I think as Chris alluded, and I think as we've discussed in the past, the project seems to be phasing into a southernly and northerly type expansion.

In terms of size, scale, Chris, maybe you want to add a little color to that?

Sure, David. I would say that it's a bit early here for us to really disclose anything related to the size and scope of that. I mean as David mentioned, we're really focused on the customer needs. And I think in our view, remains the first phase could be in service as early as end of 2029. But again, that's all going to be dictated by what the customer needs are. And the commercialization process, we are working on the binding precedent agreements and that's going well.

I'll just say that given the amount of demand in the area, we remain very encouraged by what we're seeing in the conversations that are ongoing. So I think that's kind of where we sit today.

Yes, Theresa, I think we said in the past, and maybe I'll just reiterate it here is that from a size and scale perspective, I think we've always compared this to G3 is something similar in size and scale as G3. But like Chris said, this is very fluid. And is it crystallizes or as the [indiscernible] rises, we'll give you more detail. So stay tuned.

Understood. And maybe on the supply options for this project. What factors are influencing your decisions and development process here. Can you just help lay out the different options between in REX, Borealis or the alternatives and what you're seeing there? And then maybe specific to the Borealis relative to [indiscernible] in particular, given this potential role as a supply source, but at that the same time, there's good debate on future TGT lateral expansions that could also expand it to some of the similar markets targeted by [indiscernible] So can you just help clarify to what extent do you see Mist and Borealis as complementary versus competitive over the long term?

Yes. I think. Here's how to think about it, Theresa, is that Midwestern is the last mile to the load center. And the one benefit or positioning that Midwestern has in the market is as multiple supply sources into that pipe, right? It's a north-south pipe, Chicago to Nashville. It can be fed by Vector, it can be fed by Alliance. It can be fed by REX. It can be fed by Texas Gas and it can also be fed in the south by Tennessee Gas. So we've got a very diverse supply path optionality that's embedded in the pipeline. That's one of the features that makes this asset very attractive from a customer perspective, a lot of supply optionality and flexibility.

So that's how the pipe operates today. That's how I expect that we'll continue to operate in the future. So we're somewhat agnostic to the supply pathway. So if Borealis commercializes, that's great. We would expect that, that would add additional supply to the southern end of the system. REX does an expansion, that's great, too. It will put supply right in the middle of the system. And obviously, we're working on a vector expansion that put supply on the north end of the system. So -- that's a feature that I think puts us in good standing with the customers in terms of as they look at developing and as the demand grows, obviously, customers want to have multiple supply optionality to serve their demand, and Midwestern offers that.

Your next question comes from the line of Jean Ann Salisbury.

If Emerge project begin to expand Algonquin into New England moves forward, does that materially increase the need for Millennium Pro or maybe another third-party pipeline option that sources gas from Appalachia?

Great question. Beacon is sourcing its supply from Millennium, a point called Ramapo on Millennium. So we're very supportive of the Beacon project. as that project commercializes, those shippers are speaking directly with Millennium to bring incremental supply to the receipt point on that project. So you can almost think of the 2 projects as tandem projects. They're very complementary to each other. So I think the short answer is yes. As Beacon commercializes, that's going to drive incremental opportunity on Millennium.

Very clear. And then as the gas pipelines in the Permian come online over the next couple of years, there could be a lot more Permian gas coming to the LNG corridor. Is there some risk that you see that may be less Haynesville gas will need to go to the LNG than was previously thought and more will kind of go towards the Southeast? And does that change your outlook for getting to the full 4 Bcfd on LEAP over time?

I think our view on the Permian is supported by some of our actions here over the last couple of years, where we've been really intentional about enhancing our connectivity to Carthage. We believe Carthage will be one of the landing zones for Permian gas as it pushes easterly. And the Permian gas is chasing both LNG demand, but it's also chasing domestic demand as well. So that -- the expansion that Chris talked about this morning is going to enhance our connectivity to Carthage, kind of for the reason that you just described.

In terms of the demand growth over the next 5 to 10 years, it's incredibly robust. And it's going to need all of that Permian gas and it's going to need significant incremental Haynesville gas. So we're in a robust demand environment right now where all basins will need to grow. And I believe that will drive opportunities across the entire pipeline ecosystem?

Your next question comes from the line of Spiro Dounis.

I wanted to start with 27 CapEx quickly. The slide seems to point to maybe a step change there, realize no numbers are involved, but it seems like a nice gap up. So I'm curious what's changed since your last update? How much of that is an acceleration of projects into '27 versus maybe new opportunities you're potentially seeking here?

Are. I think it's as simple as the projects that we FIDed. We give 2 years forward detailed view of the CapEx and what you're seeing here on that slide is really the portion of CapEx related to those projects that we announced today and how much of that falls in '26 and '27.

Understood. Second question, hoping to not get you to repeat yourself, but just wanted to go back to your competitive advantage in and around [indiscernible] in that region. A lot of inflight projects from competitors kind of announced the net neck of the woods. So I'm just curious on like you're not to in some cases, but could you maybe just put a finer point on how you see your competitive advantage there? And maybe what more of a blue Scott scenario is for DTM. Is this in a situation where everybody wins? Or is this not really sort of more of a net zero game?

Yes. That's an interesting question. I mean I'm probably going to repeat what I said earlier is that for existing infrastructure, it's kind of like real estate, location, location, location, right? So where the demand manifests if you were the asset in the ground that's nearest to that demand, you're going to have an advantage. And -- so again, I view Midwestern as sort of the last mile to the demand, where the demand is manifesting. How the supply navigates to Midwestern is to be determined. And as I said earlier, the big advantage that Midwestern has is that it's not married to one supply pathway.

So you don't have to sign up for the big ticket for lack of a better word. You can take out the last mile, you have lots of supply optionality and then you can sort of diversify your supply sourcing strategy. So that's the way I would think about it. and how things evolve upstream of Midwestern back into the various basins, I think those dominoes are yet to fall.

Your next question comes from the line of Keith Stanley.

First, I wanted to clarify on Mist. David, when you say you expect it to be comparable to G3 in size and scale, are you referring to the capacity of the project or more the amount of capital investment.

Yes. And yes. I think that's how I framed it probably 2 quarters ago. It's size and scale similar to G3 on a lot of different metrics.

Okay. Second question. Any early conversations you could point to with utilities on the need for a Guardian G4. I think [indiscernible] said they they plan to update next quarter on some of their plans around the nuclear plant and the like. Do you think, I guess, G4 could start to get commercialized later this year once the utilities update their plans? Or is that more likely a 2027 event?

Yes. I think if you -- if we talk about kind of at Wisconsin, that greater Wisconsin market, they're following a very rigorous regulatory process right now. I think I would point investors to that regulatory process. And I think you're saying it correctly that we're somewhat of a derivative of that regulatory process.

So Yes. I mean, I think you said it well. And that's a fairly true statement across our footprint. When I look at Slide 8 in our deck, our entire asset footprint is kind of lit up like a Christmas tree right now. And we've never seen that before, while we've owned these assets. It's just such a strong demand pull market environment right now and the regulatory processes that are unfolding across all these states across our entire footprint are very foundational to to our assets and all these expansion opportunities, whether it be what's happening in New England and New York or our conversation here about Wisconsin, what's going on in Michigan, Ohio. It's all being kind of framed and driven around the regulatory processes because the vast majority of our demand pull interest is coming from regulated entities. So it's a very exciting time. Those investments, once they move through the regulatory framework are incredibly durable and we're very excited about what's unfolding right now around our footprint.

Your next question comes from the line of Julian Dumolin Smith.

This is Alex [indiscernible] on for [indiscernible] Just a question on the Haynesville and where Henry Hub is currently. Are you guys seeing anything in the way of price-related curtailments in Haynesville? Or are you mostly insulated through MVCs? And then maybe just like generally, how are conversations trending post Iran? And could you see a potential for LEAP expansions beyond these kind of that you've historically done?

Alex, Chris here. Yes, I'll take that one. So let me start with -- do I see potential for incremental LEAP expansions? And I'd say, absolutely. I think -- I would say, based on the project here, we just announced on the expansion on the Haynesville system, it's pretty clear that the optionality that we have from the supply side in the Gulf Coast market access with LEAP in the ability to expand that in these buy size increments, right? I don't need huge obligations here to incrementally expand that is very attractive to the market.

And I expect that's going to continue going forward as well. I will say this on the volume side, again, we see and run volumes of our Haynesville system, there'll be some producers will decline, but there's a lot of other producers that are going to keep their volumes high and actually achieve a little bit of growth. So we're going to be flat going into I don't see that changing right now. Again, we've got all of our customers' forecast baked into our guidance here. And I don't see any material changes to that.

Got it. That's helpful. And then just switching gears to Guardian. You guys have talked about Iowa being a state to watch for data center demand and how that could be beneficial for Guardian -- do you see that as a potential avenue to necessitate an expansion that's sort of separate to G4? And from your perspective, what do you think you would need to get more constructive on the Iowa backdrop generally?

Yes. I think when we say the greater Wisconsin area, maybe we should say Iowa and Wisconsin. But that's what we're referring to when we make those comments. So I would just mirror the comments that maybe had the Wisconsin [indiscernible]. That's really Wisconsin and Iowa. We need to monitor and observe the regulatory process there with the utilities. I think, like I said earlier, we are a derivative of that activity.

Your next question comes from the line of Jeremy Tonet.

Maybe picking up on Guardian and I appreciate there's a lot of uncertainties as you outlined there. But if I'm thinking the possibility of order of magnitude of what this could look like. Would G4 -- I'm thinking about scope CapEx, EBITDA and so on, could that look like G3? Or how should we think about the realm of possibility here?

Yes, you're asking me to look in the crystal ball again, Jeremy. I mean we are very bullish what's happening in that part of the country right now, but I don't want to get ahead of it. I think if you observe, and I know you do, you observe the utility conversations very closely. I'd say the market share that we were able to acquire through this round of expansions.

I would expect we would be able to hold a similar market share in the next round of expansions. Maybe that's the way I'll describe it. But I don't want to get too far over the horizon to try to predict the exact numbers or size and scale. I can tell you that the capital costs of projects are going up over time, not down. But we'll let the demand crystallize first in those geographies? And then we'll [indiscernible] capacity out of the Appalachia basin that's available to be contracted for longer term. NEXUS sits on probably the vast majority of that. So it's in a pretty attractive spot. So we've been sort of working that Northwestern Ohio market, bringing demand to the mainline. That's step #1 is get it connected to the mainline. Step #2 is then provide service to that demand center off the main line.

So it's, again, that domino effect where you just do the first step, get the last mile connected and then that demand comes on the network. And then over time, you're going to generate opportunities on the network to service that demand. So that's really been the strategy. in terms of Nexus in particular, we can expand NEXUS quite easily with compression. Just to remind the audience, I think when we built the asset 8 years ago, we did not construct one of the compressor stations, but the yards there, the headers are sitting there.

So we're in a really good position to drop incremental compression on the asset to expand it. And we would hope that as we monetize the existing capacity that's available to be monetized long term that, that would be step 1, step 2 would be triggering expansion. So -- the market is ripening, I'll say it that way. And I think we want to just be strategic and patient as we address the market demand that's materializing.

Your next question comes from the line of Sami Jan.

So following the prior recontracting of the Midwestern pipeline capacity, what percentage of the remaining portfolio is up for renewal over the next 12 to 24 months? And how do the pricing dynamics look for that?

I'm going to pass everyone over to Chris because I don't know the answer to that.

Yes. No, good question. I know our current capacity, we believe we described, but I'd have to go back on and look and see what's coming up in the next 24 months. I don't have that in front of me here. But I would tell you this, in our last renewal period, we had a lot of contracts that were year-to-year, very short term. We did some tariff modificated modernized our tariff on Midwestern. And subsequently to that, we were basically 5- to 25-year extensions. And so I'll say this, my expectation is that the market completely understands the value of that capacity longer term, and I expect my renewal tender to continue to increase in term. And I think that's the way that I would look at it.

Yes. Midwestern is a great example of the value of assets in the ground and the fact we had one customer in particular on a 25-year renewal on their contract capacity is a strong indication of what's evolving in the market area and how some of these assets, they truly are irreplaceable. And if you did replace it, the cost would be 3, 4x versus the asset that's in the ground today. So the market is acknowledging that and recognizing that. And it's -- like I said earlier in the call, it's just this incredible demand pull opportunity that's manifesting across the entire footprint.

And again, we just need to be thoughtful and strategic about how we contract into that strong demand pool.

Okay. Great. And then your recent Guardian expansion filing noted the project serving 5 local utility shippers -- is there any more color you can provide on the customers? And would you likely pursue similar customers and also 20-year contracts [indiscernible]

Sure. So I would say on G3, I mean, our customers, we're pretty much set on that customer base for G3. But absolutely, I think G4, a lot of the market support and the market need is going to be, again, utility-based. So I would view -- I think we expect G4 [indiscernible] to look very similar to G3 as well I would put it.

Your next question comes from the line of John Mackey.

David, you mentioned a lot of the kind of supply for the Midwest projects. It's still TBD. But I'd love to hear your thoughts on whether there's an opportunity for you to see some of that with Haynesville supply and/or maybe helping to reroute some supply coming from further west?

Yes, that's a really perceptive question, John, and that's the question strategically that we spend a lot of time thinking about. So number one, thanks for asking it. And I'm going to maybe elevate that question a little bit to kind of make the point is that if the forecasters are even close to right, there's like 30 to 40 Bcf of demand that's going to manifest in North America over the next 20 years.

And that's going to cause all the current basins to have to dispatch and lift the production rate. So that's Appalachia, that's Haynesville, that's Permian. That's probably other basins as well. So how do you get that supply from those basins to where the demand is that's a material uplift in demand that and it sort of goes to my opening remarks on the Inga Foundation study, that was the purpose of that study was to try to understand that at the macro level and understand the magnitude of the investment required to achieve that and serve that demand reliably.

So it will drive expansions on major interstate pipe freeways out of these basins. We obviously want to participate in that either directly with our assets or potentially with other new projects. So that's very much strategically on our mind and on the agenda. It's very early days to talk about that. But I can assure you that, that is one of my top priorities.

And Chris is smiling right now. So the understand that usually means as I'm talking to him a lot about this. So we're super excited about that. I mean, that is probably the footprint is lit up right now, like I said earlier, with opportunities all over the place. What we aren't showing is what you're asking, which is how do you get that 30 Bcf of incremental production from where it's going to be produced to where it's going to be consumed.

That obviously is going to drive some very large incremental investments, potentially drive incremental new pipelines in addition to expanding existing pipelines. So super exciting time. We're just still really early in the game on that, John. So I'll just leave my comments there. We're very focused on that, but it's still very early and that is an opportunity set that is yet to be eliminated.

David makes a lot of sense. Maybe my quick follow-up and second question will just be understanding it's early days it is effectively a problem that you're pointing to that needs to be resolved and your mind from this kind of top-down macro perspective, so not necessarily think DTM projects, like when do you need to see the market coming out with these solutions? 2030 in-service type of things. Maybe just frame that piece up for us.

Yes. I think you're correct, is that those projects likely are going to be large FERC projects that require significant contractual support and commitment and are going to run through the full-blown regulatory process. And if we look back to the last to a decade ago, the last time we we did this like with NEXUS or with Rover or with Mountain Valley, well, maybe we don't want to talk about Mountain Valley. But it's a multiyear journey to go from concept to commercialization to actually construction and turning the valve.

I always remind everybody that NEXUS was conceived in 2011 on a napkin and we didn't turn the Valve, it was 7 or 8 years later when the Valve turned. So these projects can take a long time to percolate and mature -- but the demand is showing up. The market is real. And as the demand shows up, the forces of supply and demand kick in. And these projects are going to start to percolate and going to start to become real. And it's probably quickest just 3 to 4 years is the way I would say it. So your estimate is pretty much spot on that the earliest these projects could click in is early 2030s.

Your final question comes to the line of Theresa Chen.

I just wanted to go back to the Haynesville quickly. Given recent consolidation-related headlines across the Haynesville to Gulf Coast Corridor, how do you view the strategic merits and probability of further consolidation in the region in general? How do you view the market evolving from here? And how would this potentially impact future expansions on existing assets, including your own?

Yes. That's an interesting question, Teresa. And it's only because you are a favorite analyst that we let you back on. I'm just kidding. Let's say, yes, if there is additional consolidation, what do I think about that, the highest level that shrinks the competitive landscape. We're very confident in our competitive position, and we're not afraid of competition. And I guess if the landscape shrinks, that's one less competitor that's on the playing field. But we're in an environment right now where everything is growing, right? So -- it just feels like we're not in like a consolidation M&A environment right now.

Right now, we're -- I'll speak maybe for DTM. Like I said, the the opportunity set, the organic opportunity set that's presenting in front of us is as robust as I've ever seen in my entire career. So we're super focused on commercializing that. That adds a lot of value to the equity very quickly.

So M&A in this environment is just -- it's a higher bar, I'll just say it that way. It's a much higher bar to do M&A in this environment. So I guess those are my thoughts on consolidation at the highest level.

I will now turn the call back over to David Slater for closing remarks.

Well, thanks so much for joining us today. These were just a series of great questions, some really good macro strategic questions. I think the message here is that we continue to experience an incredibly robust market and we so much appreciate our investors and your interest and the support that you've had for us over the years.

So thank you very much, and have a good day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Welcome to the DT Midstream First Quarter 2026 Earnings Call. My name is Rebecca, and I will be your conference operator today. [Operator Instructions] I will now turn it over to our speaker, Todd Lohrmann, Director of Investor Relations. Please go ahead.

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, Executive Chairman and CEO; Chris Zona, President and COO; and Jeff Jewell, Executive Vice President and CFO. So with that, I'll go ahead and turn the call over to David.

Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll touch on our financial results and provide an update on the latest commercial activity and our growth projects. I'll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook. So turning to our financial results. We're off to a strong start in 2026, fueled by a strong demand and cold winter, giving us confidence in our full-year plan. We continue to advance organic opportunities from our $3.4 billion project backlog in a very strong market environment that supports our future growth.

We are announcing today that DTM has approved investment in two new projects in our Pipeline segment. The first is a mainline expansion of Vector Pipeline, which increases the total capacity of Vector by approximately 400 million cubic feet per day and is anchored by investment-grade utility customers under 20-year negotiated rate contracts with a Q4 2028 expected in service.

The next project DTM has approved investment in is Millennium R2R, which is supported by long-term contracts with two utilities and an existing power plant for 70 million cubic feet per day of capacity and is expected to be fully in service in Q1 2027. These investments are supported by strong market fundamentals backed by utility and power-generation customers and will serve the growing demand in the Upper Midwest and New York and New England markets.

In addition, we have entered into an agreement to build a pipeline lateral to serve a new utility-scale power development located just off Midwestern pipeline in Indiana, where the developer plans to construct a 900-megawatt power plant, which we expect to serve under a 20-year demand-based contract for approximately 265 million cubic feet per day of capacity. This project is subject to a customer reaching FID in the power plant, which we expect to occur in 2026. Our expected lateral pipeline in-service date is in the first half of 2028.

Also, on Midwestern, we recently recontracted approximately 30% of the system's capacity with term extensions ranging from 5 to 25 years, reflecting the importance of this critical capacity and how the market values it. Finally, we commercialized a new interconnect on NEXUS this quarter, which will have a capacity of 250 million cubic feet per day and will provide supply for our behind-the-meter natural gas-fired power generation facility to power a new data center in Ohio. Adding this load to the mainline of NEXUS strengthens the asset over the long term.

We are also seeing strong market interest for additional pipeline projects in the Midwest and Northeast and are advancing these potential opportunities towards commercialization. Midwestern Pipeline closed a successful nonbinding open season at the beginning of April for both northbound and southbound expansions to increase capacity by up to 1.5 billion cubic feet per day, and I'm pleased to report that the open season was oversubscribed. Vector Pipeline also recently closed a nonbinding open season for the 2030 expansion project to increase westbound capacity into Chicago by 300 million to 500 million cubic feet per day, which received very strong customer interest and was also oversubscribed.

Our next steps with these two projects are to optimize the pipeline and facility design based on the customer requests and then to work with our customers to reach binding commitments. We will keep you updated as we continue to progress these opportunities. Turning to our construction activity. Our Midwestern gas transmission power plant lateral to serve AES Indiana's gas-fired power plant was placed in service on time and under budget, with commercial operations expected to begin in Q2 this year. All of our other in-flight growth investments remain on track and on budget.

Finally, I'd like to take a moment to address the recent market movements and the global geopolitical situation. The first quarter of 2026 was a volatile period for the market with significant cold weather in January, driving extreme prices across the country, highlighting capacity constraints in the North American market driven by demand growth, followed by geopolitical developments in the Middle East that are contributing to the broader energy market instability. These events have renewed both domestic and global focus on reliability and security of supply.

Internationally, the discussion has largely centered on oil, yet curtailed and constrained LNG volumes from the Middle East region have underscored the value of U.S. LNG as a stable and dependable supply source. We believe this dynamic will favor increased LNG exports from the U.S. Gulf Coast and create additional expansion opportunities for U.S.-based supply, which our Haynesville system is very well positioned to serve with its high degree of both receipt and delivery connectivity.

Our LEAP pipeline is currently running full at its design capacity of 2.1 billion cubic feet per day and has the ability to expand to 4 billion cubic feet per day. Turning to the domestic front. We are seeing growing energy reliability and affordability concerns across many regions with much of the pipeline infrastructure operating at maximum capacity. Many regions cannot access low-cost supplies of natural gas produced domestically in our prolific production basins, which highlights the need for incremental natural gas pipeline and storage investments to unlock these low-cost supplies.

In the Midwest and Northeast, power demand fundamentals continue to strengthen, driven by data centers and other large load customers. Utilities in these regions are converting potential opportunities into signed load more quickly than previously expected, with multiple gigawatts of contracted demand now backed by binding agreements and capital plans that materially increase peak load projected through the end of the decade with large load tariff frameworks in place to protect affordability. This level of growth is evolving rapidly as construction is underway, energy is flowing to some projects, such as Phase 1 of Microsoft's Mount Pleasant data center in Wisconsin, reinforcing our growth outlook for increased gas-fired generation and natural gas demand.

Our interstate gas pipeline footprint is strategically located in this region to serve this growth and the strong response to the recent open seasons on Midwestern and Vector pipelines support these fundamentals. I'll now pass it over to Jeff to walk you through our quarterly financials and outlook.

Thanks, David, and good morning, everyone. In the first quarter, we delivered adjusted EBITDA of $308 million, representing a $15 million increase from the prior quarter. Our Pipeline segment results were $14 million higher than the prior quarter, driven by seasonally higher EBITDA from our joint venture and interstate pipelines and higher revenue on Stonewall and LEAP. Gathering segment results were $1 million greater than the prior quarter, reflecting higher volumes on Blue Union and Appalachia gathering.

Growth capital investment for the first quarter was $72 million, which is in line with our plan, and we expect a ramp in growth capital weighted towards the second half of this year. Operationally, total gathering volumes increased in both regions from the fourth quarter. Haynesville volumes averaged 2.09 Bcf per day, driven by new volumes and recovery from upstream maintenance completed in the fourth quarter. In the Northeast, volumes averaged 1.42 Bcf per day, driven primarily by the Stonewall Mountain Valley pipeline expansion that was placed into service at the beginning of February.

As we look at the balance of the year, we expect the second quarter to be in line with our full-year guidance, but to be lower than the strong first quarter, driven by seasonality across our interstate pipelines, including JVs, a rate step-down on Guardian Pipeline and typical seasonal planned maintenance. We remain confident in our full-year outlook and reaffirm our 2026 adjusted EBITDA guidance range and our 2027 adjusted EBITDA early outlook. As David mentioned, DTM has approved investment in the Vector 2028 pipeline expansion, and we expect total DTM investment of $80 million to $100 million for the project.

DTM has also approved investment in the Millennium R2R project, which will be completed under our existing regulatory authorization. We've increased our committed capital in 2026 and 2027 to reflect these new investments. 2026 is approximately $400 million and 2027 is approximately $440 million. Finally, today, we also announced that our Board of Directors approved our first quarter dividend of $0.88 per share, unchanged from the prior quarter, and we remain committed to grow the dividend in line with adjusted EBITDA. I'll now pass it back over to David for closing remarks.

Thanks, Jeff. So in summary, we remain confident in delivering on our guidance, continuing our track record of strong performance we've maintained since we spun the company in 2021. Our high-quality pure-play natural gas pipeline asset portfolio is very well positioned to take advantage of growth opportunities across our network as we execute on our large organic project backlog. The fundamentals supporting natural gas infrastructure remains stronger than ever with a broader realization of the key role U.S. LNG will need to play as a reliable and stable global energy supply and accelerating power generation needs in the Midwest and Northeast, including data center-driven load. And with that, we can now open up the line for questions.

[Operator Instructions] Your first question comes from the line of Michael Blum with Wells Fargo.

I wanted to start with the MIST project. I wonder if you can just give us a little more detail in terms of where you see progress to FID. Anything you can say in terms of the size of the project, how it's scoping in terms of capital? And then would you expect this project to be expanded in phases? Or do you think it's going to be one big expansion?

Good morning, Michael, great question. I'd say let me start at the highest level, and then I'm going to pass it over to Chris for a few of the details. Really strong market interest in that open season. We were offering both northerly pathways and southerly pathways. I think as we've talked in the past, Midwestern follows a corridor of power generation between Chicago and Nashville. So there's tremendous power generation assets and infrastructure in that corridor. We can talk about what we announced today on the power generation side on Midwestern.

I think a big takeaway is that we've attached 565 million a day of power generation load to Midwestern in the last 12 months, which is material. So really strong market interest, very consistent with our thesis, our fundamentals thesis that we've been sharing with the investors. And maybe I'll pass it over to Chris Zona to talk a little more detail around what I'll call the nuts and bolts of the project.

Yes, sure. Thanks, David. Yes. And so it's early. I'll start with that, Michael. Right now, we are in the process of, okay, we've got the fantastic response here to the open season. Again, electric and gas utility, data center development, generation, power generation, all of the above. And recall, really this MIST expansion is really trying to put a box around the needs in the early cycle here, the '29, '30 time frame and how do we help kind of quantify what that really looks like for those customers and then go through the detailed engineering, get through kind of the solution and then progressing those conversations to FID or binding PAs that can lead to FID. And that's a process that we'll be in here in the next few months here with the shippers.

We've already started those conversations. We've already had our customership, our meeting started this week, and I expect over the next few months, we're going to be going through that in more detail. But again, as David mentioned, really exciting demand on both the northbound path and the southbound path.

Great. Appreciate it. And then an interesting comment on this interconnect on NEXUS to serve behind-the-meter project. We're starting to see some pushback from the data center development from both politicians and some local communities. So curious to get your latest thoughts in terms of how you think the behind-the-meter opportunity set is shaping up. I know that was something you talked about a long time ago, and it sort of went quiet a bit, but maybe it is picking back up.

Yes. I think our view on the, what I'll call, the aggregate power demand load growth, generally speaking, the utilities are winning more than the independent developers. I'll just start there. We're seeing that across the footprint. Ohio, this particular project in Ohio is well into construction and will go commercial very shortly. And that's just an example of, I think, what we've talked about in the past, where we weren't particularly interested in building the lateral to this facility, but bringing the demand to the mainline of NEXUS, it adds 250 million a day of demand onto the mainline of NEXUS, which obviously fundamentally strengthens that asset over time.

So we're very excited to have that demand on the mainline. And the whole dialogue around these data centers has really been around the affordability as it relates to what I'll call the retail power customers in each one of the states that we serve. And we're watching a lot of the developers being very sensitive to that reality and making sure that it's very clear that these investments are going to actually lower cost to the retail customers and not increase cost to the retail customers. And you're seeing that playing out in many of the state regulatory forums.

It's a very positive development from our perspective because it's helping to frame these investments in these growth opportunities in a constructive positive light for these states and these communities and ultimately, the retail customers. So I think they're doing them in the proper way right now. They're articulating the value that's created for all the stakeholders, including the local retail stakeholders. I think that's the proper way to approach these growth stories here.

Your next question comes from the line of Theresa Chen with Barclays.

Going back to Midwestern following the strong demand post the nonbinding open season, are you seeing enough demand for up to 1.5 Bcf of capacity going both north and south the entire way through? And given the competition from other pipelines in the northern part of Midwestern, just from a market dynamics perspective, do you think there's enough demand to absorb multiple large-scale expansions? And if not, what do you think are the key competitive advantages of MIST?

Yes, Theresa. Great question. So we're not going to get into the granular details of where the demand is on the line for, I guess, obvious reasons. Do I think the market is robust to absorb a lot of expansions? Yes. I think we've laid out that our view is that there's a 5 to 8 Bcf a day addressable growth opportunity in this region. So yes, there is room for multiple pipeline expansions. I think the competitive dynamics is somewhat like real estate, it's location. Existing pipelines that are in the right location adjacent to these demand centers, the growing demand centers are going to have an advantage.

Expanding an asset in your existing footprint where you have -- you're not greenfielding a brand-new line, you will have an advantage. So these are some of the criteria that I think will, over time, kind of play out as this market expansion unfolds over the next -- the back end of the decade here. We feel really positive about our asset footprint, the connectivity that we have in the portfolio to provide not only the lateral to the demand center, but as we've talked about in the past, the domino effect across the portfolio where we can provide transportation capacity back towards the basin, the supply basin, augment that with storage out of our Michigan facilities.

So there's a whole value-chain proposition here with some of these customers. So we're really excited about the opportunity. Like I said on the year-end call, this is very fluid. It's progressing the way we expected, probably progressing faster and stronger than we expected. And we're just very encouraged. I think our job now is to just unpack all this interest that we've received, like Chris described, engineer out the optimal solutions and then progress and commercialize that. So hopefully, I answered your question.

That's great color. And turning to your Haynesville footprint. Clearly, there is a pull for U.S. LNG highlighted by the war in the Middle East, echoing the point you made in your prepared remarks. Can you talk about your visibility in commercializing incremental expansions on LEAP, also following very recent positive upstream data points from one of your key customers. Can you talk about the strategic positioning here, visibility you have on additional expansions at this point, but also keeping in mind that the area is fiercely competitive.

Yes. I mean I think the fundamentals, that's the gravity that's going to drive incremental activity. And the fundamentals are extremely strong, like I stated in my prepared remarks. LEAP is running like absolutely full, so at its designed conditions. So that also is a strong indication that the asset is valued and highly utilized. I'm going to hand over to Chris for some commentary on what I'll call sort of the to and fros of the competitive nature in the basin and maybe he can provide some comments on that.

Sure. Sure, David. Yes. So I think one of the things, Theresa, that I'll say is recognized widely by the market when you look at DTM's assets is the connectivity in the basin, right? So when you compare the amount of outlet capacity that we have through our Blue Union system, the ability to reach other outlet markets through LEAP, that's, I'll call it, a distinctive advantage that we do have in the basin, and that optionality provides a lot of value for our customers. So I'll start with that.

I think the other piece, too, is when you look at our ability, our capability here to expand LEAP in, I'll call it, bite-sized expansions, a couple of hundred million a day, we can do that. And I would say we have extremely competitive pricing in the basin and in a timely manner as we have done here for the last few LEAP expansions. And again, I think that is an advantage that we will also hold here in the region, and there's a lot of activity around that as well.

And maybe I'd add to that, that from my perspective, we're seeing a very active commercial dialogue occurring right now around the assets, Chris. And that is usually a good signal that we're kind of approaching the next wave, I'll call it, the next wave of expansion opportunity.

Your next question comes from the line of Jeremy Tonet with JPMorgan Chase.

Wanted to come back to MIST, if I could, and kind of come at a slightly different maybe simpler angle. I'm just wondering, there's still items to be settled, as you said, a number of things coming together here. But just at a very high level, if we think about the scope of the project, would we think of this somewhat similar to if Guardian is around half a B and this is 1.5 B, this is 3x the scale? Can we make a high-level thought around that? Or just any color there would be great.

Yes, Jeremy, I mean, I'd say it was a very strong signal we received from the market given that we were oversubscribed on a very large expansion that we kind of went out there with. 1.5 Bcf a day effectively is the capacity of the existing system. So the fact that we saw an oversubscription is just a strong indication of the depth of the demand growth that's occurring in that corridor. So I'll start there.

Obviously, there's a lot of work to do between here and FID-ing a project. We have to engineer out, like Chris said, all the details. Customers gave us all the details of what they're interested in locationally, where the supply is coming from, where the demand is on the system. So there's work to do here. But it's certainly -- we're starting in a very positive situation. I mean, that is just a really strong demand signal, very consistent with the fundamentals that we've been talking about.

Size and scale, I think it's a little early for us to try to put size and scale to it. But let's just make it up. If we're 50% successful, yes, it would be north of what Guardian -- the current G3 expansion in terms of size and scale. So like I said, really positive position right now. Our job is to do the work that needs to be done and reel it in and commercialize it. But it's very consistent with what we've been saying at the highest level about what we're observing in the whole region, just very strong demand growth.

Got it. That makes sense. No, twice the size, we'll take that. That works well. Just curious, I guess, and the answer might be it's too early in the year. But if I look at your results and I annualize it, you'd already be over the high end of the guide and granted there was some help maybe in the quarter, but it doesn't seem like there's necessarily a ton of seasonality in the business. And so just wondering if there's some other headwinds developing across the balance of the year we should be contemplating here?

Yes. Maybe I'll start at the high level, Jeremy, and then I'm going to ask Jeff to kind of fill in the details for you. But at the highest level, if we think we were going north of the high end of our guidance, we would tell you that. So let's start there. The winter was very strong. And I somewhat alluded to it in my opening remarks. I mean, we had a really cold winter that illuminated capacity constraints across the entire country for our assets, we broke all-time high utilization like daily flows across almost every one of our assets in the first quarter, which is unprecedented.

I haven't seen that in my -- really my entire career. So that is a really strong signal of how demand has crept into the network. And then you had all this extreme price volatility all over our footprint, which was also highly unusual. So what does that mean in terms of our Q1 results? Our commercial team was doing what they're hired to do, which is eking out every opportunity across the asset footprint in a very volatile basis environment. So some of the results of Q1 are a derivative of that phenomenon that played out across the network. So that's very seasonal, and you shouldn't expect that to repeat. And Jeff, maybe you want to just touch on some of the additional details as to why we don't think that quarter is going to repeat for three more quarters.

Sure. Well, and good morning, Jeremy. Yes. So Jeremy, like David said, we are -- again, when we provide you our view on our guidance for the year, I take that -- we're providing you that guidance what the range is. And if it's different than that, we'll adjust accordingly. So that's probably the first thing. You're right. First quarter was very strong. And then we do have that seasonality across the interstate pipelines and the JVs. That's always going to be there. You've got a little bit of that. There's a step-down on the Guardian, that was baked in from the last rate case. So that happens here in the second quarter.

And then also then you're going to have planned maintenance and those types of things that you wouldn't have had in the first quarter. So combination of those things and David's comments, again, we're feeling very good about the guidance range we provided you guys for the full year.

Got it. Still see some conservatism there, but I understand the gives and takes.

Your next question comes from the line of Keith Stanley with Wolfe Research.

I want to follow up on this just on the disclosure you provided this morning of customer interest above the 1.5 Bcf a day. Is that on a cumulative basis, so adding the North and South legs? Or was the statement meant to express that there's above 1.5 Bcf of demand kind of across each segment?

The 1.5 Bcf was the cumulative amount of capacity we offered, Keith. So we're not unpacking it between North and South. We're just telling you the total. And the total interest was north of the total capacity we offered.

Okay. Great. Given the high level of demand, could MIST be upsized even above 1.5 Bcf a day given it was oversubscribed? Or does that make it less competitive from a cost perspective and so less likely?

We would love it to be above 1.5 Bcf. And Keith, that's the work that Chris was describing and his team is working on as we're engineering out based on the customer specifics. And yes, typically, more volume is more economic. So we will aim high.

Your next question comes from the line of Jean Ann Salisbury with Bank of America.

I just wanted to follow up on the discussion about the LEAP potential expansion to 4 Bcfd and make sure I understood the comments in an answer to another question. Is going from the 2.1 Bcfd to 4 Bcfd basically laying a second parallel pipe? And can you kind of talk about, I guess, whether that is indeed like a bite-sized offering, as I think I heard earlier? Or is that more like a large add that you would have to fill out kind of altogether?

Chris, do you want to take that?

Yes. No, I can take that. Yes. So it's -- so our expansion up from where we are today to 4 Bcf would be a combination of pipe and compression. It's not necessarily that entire line is not required. I mean this was built as a high-pressure gathering pipeline here, gathering lateral when we first built this. So it's got a very economic and I'll say, ratable expansion path ahead of it to the 4 Bcf. And I'm sorry, I didn't hear the second part of your question.

I think that answers that. So I appreciate it. And then I believe that NEXUS, the expansion, the long-awaited expansion had been waiting on some incremental demand. I guess it kind of depends on where in Ohio, the data center connection is and whether it's in Appalachia kind of far enough into the market. But is this new data center connection enough to potentially help drive that expansion forward?

Well, I'd say it's helpful, right? It's adding another 0.25 Bcf a day of demand onto the mainline. And locationally, it's in the Northwest section of Ohio. So it's going to be constructive and helpful. Step #1 is to connect it. Step #2 is to provide contract capacity on the mainline. So stay tuned as it evolves. But yes, I mean, we're -- I think as we've talked, NEXUS is one of the few pipelines in the region that has available capacity where we've got a couple of hundred million a day that we didn't term out long term when we built the asset. So clearly, that capacity is in play right now to be termed out. So that would be step 1. And then step 2 would be then an expansion on the mainline. So that's kind of how we think about it, Jean Ann. Hopefully, that helps.

Yes that helps.

Your next question comes from the line of Julien Dumoulin-Smith with Jefferies.

This is Rob Mosca on for Julien. So you touched on affordability in your prepared remarks and capacity constraints in certain regions. Could you perhaps give us some updated thoughts on Millennium Pro and whether you need to see a downstream expansion into New England or whether that project can make sense on a stand-alone basis, acknowledging that the regulatory backdrop is kind of a key constraint here?

Yes, Rob, great question. So maybe we'll start off with R2R, right? Getting R2R commercialized and over the goal line is demonstrating that there is a market need, an incremental market need. That project percolated for a number of years, as you know, and we just stayed at it. And the market is evolving, and there's that recognition of need. I think you're seeing something similar with Algonquin, where they're looking at potential expansion opportunities as well. So we're beginning to see the market unthaw, for lack of a better word, which I think is encouraging, but we're going to have to be patient.

For us, for Pro, there's a few critical ingredients that are really important for that project. Number one is New York-specific support. So that would be number one, from customers in New York. Number two is regional governmental support or lack of opposition to a project like that. So those are pretty critical to us before we would consider deploying capital into that region. I think it's very clear at this stage in the game that the demand need is real and there.

I mean, you can just look at the prices that people are paying in that region, and they're paying that price because the infrastructure is constrained. So we're optimistic that we're going to be able to move forward, but we're going to be very careful and patient with that particular project.

Got it. That's helpful, David. And then maybe switching gears to the recent PJM backstop auction. It seems like we could see some more gas demand around your gathering footprint in the Northeast and some of that may be reflected in the opportunities you're pursuing in the way of laterals. But can you frame how much of an incremental benefit this could provide and how risk-adjusted those opportunities are in the current five-year backlog?

Yes. I think the historical conundrum in PJM has constrained and limited what I'll call utility scale generation in that region. I think there's been a number of ways that they're trying to address that and fix that. You just mentioned the most recent. It feels like that's going to unlock some of these projects and allow capital to come in. I still think we need to see some projects FID to get more comfortable with that, but it's definitely a positive step. It furthers and strengthens the fundamentals in that region that we've talked a lot about to the investor group. So yes, it's a positive -- again, it goes back to my year-end conversation that this is a very fluid dynamic market right now that we're observing. And I put an up arrow on the fundamentals and the fundamentals continue to strengthen, but it is very fluid. And there's -- as you pointed out, we need some of this regulatory modifications and adjustments to enable capital to pour in. And it feels like we're pointed in the right direction. So I'm encouraged by it.

Your next question comes from the line of Spiro Dounis with Citi.

I want to start with the capital plan. David, last call, you suggested that the gross backlog of projects was multiples of that $3.4 billion. And today, from what I'm hearing, it sounds like things are accelerating. So I guess I'm just curious to the extent you're successful in commercializing a lot of these additional projects, how are you thinking about the upper bound of growth capital in any given year that the balance sheet can handle? If you just convert that $3.4 billion at 2x, that's over $1 billion a year. I don't think we're there yet to be clear, but just curious how you're thinking about funding that growth and pacing it for the balance sheet.

Yes. Great question, Spiro. I'd say let's start with the $3.4 billion. We're just derisking the $3.4 billion. As we announce projects and deploy capital and as the year unfolds, I fully expect we're going to continue to announce more and continue to derisk that $3.4 billion. In a market backdrop where there is probably more opportunity today than there was four months ago. And if the fundamentals continue to play out, that probably continues to evolve over the course of the year. So that's a very encouraging market backdrop to operate a company in. So we'll start there.

In terms of our capability to address that market reality, the good news, Jeff, Jeff is smiling right now. We've got a really strong balance sheet, investment grade. We have a lot of dry powder on the balance sheet that could be deployed above and beyond that $3.4 billion. So I think we're in a good position with the asset and the footprint that we have to compete in this evolving market. We have the balance sheet that can allow us to grow that investment agenda.

So I don't see the balance sheet or our funding capability today as a constraint. And then I would maybe add one more detail that when you look at what we've FID-ed recently, they would be characterized by investment-grade customers, 20-year demand-based contracts. So if we ever did get to the edge of the balance sheet, those projects will be able to attract additional capital without a lot of anxiety or concern, I'll say it that way. Just the nature of those investments are very solid, strong investments that could attract capital. So I just do not see right now a capital constraint in our investment agenda. And Jeff, I don't know if you have anything to add to that.

Yes. That also spreads. Again, we're deleveraging as we continue to grow. So that obviously adds more open capacity. Also, just as a reminder, our on-balance-sheet top threshold is at ceiling, it was at 4x, and Moody's just moved us up for the off-balance sheet up to 4.25. So that just added even more headroom to what David is talking about. So again, I'm -- we're feeling very confident we can handle all the projects and all the things we've got coming at us and more. So we're feeling very good about that.

Great. That's great to hear. Second question, maybe just regarding Guardian. Just curious how you think about the total expansion potential of that pipeline. It seems like there's already some downstream utility interest to pursue maybe even a Phase 4. And if you look beyond 2030, there's some nuclear contracts that are expiring that maybe result in new gas-fired generation, which may underwrite to Phase 5. So apologies for getting ahead of it. But at what point does Guardian need to maybe be twinned? Do you feel like there's a long runway here before you have to do something more greenfield?

Yes. Great question, Spiro. We actually are looping Guardian. So G3 is beginning a loop. So I think G4 and G5, you're really getting ahead of us on G5. But I think it's -- from an engineering perspective, it's pretty simple is that we will just continue to extend the loops deeper into Wisconsin. The beauty of Guardian is that it's a modern high-pressure system, which gives it a tremendous advantage in a market like this, an expanding market like this, where we can run modern high-pressure system that makes it very efficient and cost effective to expand.

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

Maybe just one on the macro. We have seen, kind of, hub a lot lower recently. I'd love just to hear kind of your view on maybe the kind of gas price backdrop overall, but kind of more specifically, just what you're hearing from your Haynesville gathering customers.

John, good question. We watched that very closely, as you would expect. I think the Haynesville lines were pretty robust in Q1. I expect they're going to be similar in Q2. But typically, where you see producer recalibrating their production is in Q3, if we roll into the summer here and perhaps don't get the short-term weather that they want. Typically, Q3 is where you get some price dislocations. So we're very mindful of that, both in Haynesville and in Appalachia and watch that closely. We're not seeing or hearing anything imminent from any of the producers. But I think that's always a reality or a situation that can play out in the short term, John. And that's something that we have seen historically, and we factor into our guidance as we lay out our guidance.

All right. That's clear. Appreciate that. Maybe just staying kind of down in the Haynesville, but going back to some of your LNG comments earlier. I guess I'd just like to put a finer point on that. Are you guys starting to have kind of explicit conversations with new potential LNG customers that are thinking about adding incremental capacity on the back of what's happened in the last two months or so? And maybe just speaking broadly, if someone is talking about FID-ing a new facility next year, a year from now for early 30s in service, when would you be having the kind of pipeline supply agreement conversations with them? Would it be too early for them to come in and underwrite something on LEAP? Or could that happen now ahead of, again, an early 30s in service?

Yes. And there's a couple of questions in there, John. I'll try to tackle them. I'd say the first question is, are we seeing active conversations in the Haynesville? I'm going to -- Chris is smiling, so I'm going to let him answer that question.

Yes. Yes. So, John, absolutely. I mean there's a lot of activity going on around that right now, a lot of conversations, especially given the geopolitical issues that we've had here, and I'll say the reliance and the recognition of the importance of North American LNG supply on a global basis, that's certainly, I'll say, a tailwind. I think that's probably going to drive additional LNG development FID sooner than later. So I think that's kind of the trend I'd say, that we're seeing in the market.

Your next question comes from the line of Samya Jain with UBS.

Can you provide more color on the Blue Union gathering well pad expansions and build-out? So with a greater number of pipelines going from Waha Eastward, how would you consider future expansion opportunities at Blue Union given its location in the Carthage Hub? And if you could speak to any data center discussions you're seeing in that area that are new?

Yes. Maybe I'll start at a higher level. I'd say the Blue Union system is really the wellhead gathering and treating system that we operate in the Haynesville. And Chris kind of alluded to it in the last question, we are seeing renewed interest on the -- what I'll call the producer side, incremental drilling, where they're looking for incremental gathering and treating. So that's been very positive. The volumes, as we disclosed, are strong on that network right now. So we're encouraged by that.

I think the fundamentals, the high-level fundamentals of the attention that the U.S. LNG complex is getting is causing, I think, some international players to be more attentive or attuned to vertical integration into the basin to serve those facilities. So I think those are all strong fundamentals that are driving additional activity in the region, which we will benefit from over time. So that's a positive fundamental driver for our existing asset, the utilization of the existing asset, but also incremental expansion opportunities. And then I'd say Carthage, Carthage is becoming a landing zone for a lot of Permian. And we're connected to Carthage. We can pull gas from Carthage. So the network is very well connected there, and we will benefit from incremental Permian supply working its way over to the Carthage Hub.

Okay. Great. And then in regard to the Vector open season, could you elaborate on the supply you're seeing coming out of Dawn and how the Washington storage complex is especially set to benefit from that? And given the open season, how would you consider any new opportunities and potentially even expanding that storage complex?

Yes. So I think I'm going to go back to my dominos illustration that we've used over the quarters here with how we're seeing the expansions kind of domino across our footprint -- so as the Guardian expansion -- as the Vector expansion is moving forward, it's feeding the Guardian expansion. It will create opportunity for more supply to come into Vector on NEXUS, also on Rover, also out of the Dawn hub. It also will create and those shippers are very interested in the -- what I'll call the broad storage complex in Michigan and at Dawn.

So both us and our partner are large storage operators in that region. So that domino effect or that synergy that the other assets will realize over time is real. And I think, will play out over time. Like I said, the dominos fall one at a time typically. So more to come on that. Stay tuned on that, but I would fully expect that the storage business will be a beneficiary of the existing vector expansion and potentially additional expansions down the road. Like our NEXUS asset, we fully expect that, that will be also a beneficiary of these expansions over time. And like I said, it's just -- it's a domino effect that comes in stages and in waves.

Your final question comes from the line of Van Everen with TPH.

Maybe another one on Midwestern. I understand that you guys don't want to get into the specifics on capacity, but that pipeline does connect to various other pipes that head all the way down to the Gulf. I was curious on the demand you're seeing. Is it mostly around the pipeline? Or are you also seeing interest from whether it's LNG or utilities all the way in the Gulf?

Zach, that's a great question. And yes, you are correct that we -- on the Southern pathway, we connect to other pipelines that traverse all the way down to the Gulf and connect to other markets. So we just had a really diverse group of shippers respond to the open season. So that's very positive. And we're not going to get into the details on the call here because it's just too early to talk about that. But yes, it was more than just everybody in the neighborhood, I'll say it that way, which, again, is just a strong indication of the macro fundamentals that are unfolding right now across our footprint.

Got you. That's super helpful. And then maybe one just broad-based contracting. It seems the capacity -- existing capacity on these pipes is becoming more and more valuable. And I know you have a lot of long-term contracts across the pipelines. But as these existing contracts roll, do you see operating leverage to charge higher rates? Or are most of your pipes close to that max tariff rate?

Yes. Great observation, Zach. I mean we're really pleased with how that wave of renewals on Midwestern unfolded, which is why we shared it with the investor base. I mean it just creates durability to the existing asset. And it also demonstrates, and it's another proof point to the fundamentals that we talk about is that not only are we seeing these fundamentals play out, but the existing shippers are seeing the same fundamentals play out and want to make sure that they maintain control of that valuable capacity in a market area where the demand continues to grow.

So the question is how do we do we maximize that opportunity? Number one is by terming it out, right? That would be step #1 is you term it out and we don't have to sell anything unless we're selling it at the maximum tariff rate. So terming it out and terming it out at the maximum allowable tariff rate would be the playbook in a market environment like we're in right now, which is exactly what the team did on Midwestern. And you should expect us to do that on all of our assets across the region over time.

I will now turn the call back over to David Slater for closing remarks.

Well, thank you, everybody, for joining us today. We certainly appreciate your interest in DTM. Thank you for the great questions today, and look forward to seeing everybody in person at the next event. Have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Welcome, everyone, to the DT Midstream Fourth Quarter and Year-end 2025 Earnings Call. I will now turn the call over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead, sir.

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, Executive Chairman and CEO; and Jeff Jewell, Executive Vice President and CFO.

With that, I'll go ahead and turn the call over to David.

Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll discuss our 2025 accomplishments, recap the strategic milestones DTM has achieved since our spin-off approximately 5 years ago and provide an update on our organic growth project backlog and our outlook for 2026 and beyond. I'll then close with some observations on the current natural gas market fundamentals before turning it over to Jeff to review our financial performance and guidance.

So with that, 2025 was another record year for DTM. Our adjusted EBITDA exceeded our increased guidance midpoint and represents a 17% increase from the prior year, driven by significant growth in the Pipeline segment, which has been a strategic focus for the company since we spun. The end of 2025 also marked 1 year since our Midwestp pipeline acquisition, and I'm very pleased to report that we have successfully completed the integration of these assets. And I'd like to take a moment to recognize and thank the team for their hard work on this effort.

From a commercial perspective, last year, we advanced more than $1 billion of organic opportunities from our backlog, of which 80% is for pipeline projects. On the construction front, we continued our successful track record of project execution. Most notably, our construction team placed the LEAP Phase 4 expansion into service early and on budget, increasing the capacity of LEAP to 2.1 Bcf per day. Additionally, we placed several gathering projects into service across our footprint, which enabled us to achieve record high throughput in 2025. We also continued our disciplined financial management, prioritizing a strong balance sheet and achieved investment-grade credit ratings across all 3 rating agencies.

So I am very pleased with our overall performance last year, which reflects the continued focused execution of our core strategy, pure-play natural gas, leading contribution from the pipeline segment long-term demand-based contracts and a high-quality portfolio of strategically located assets. Since we spun the company nearly 5 years ago, DTM has consistently outperformed the broader market and our midstream peers, delivering total shareholder return of approximately 280%, including 12% compounded annual adjusted EBITDA growth and a consistently growing and durable dividend. Our high-quality natural gas pipeline segment has driven this growth, increasing from 50% of our business to 70% today, the highest among our peer group.

Our portfolio continues to be well contracted with 95% demand-based agreements and an average contract tenure of 8 years, which reflects how the market values these assets and our ability to continually replenish the contract tenor.

We have also successfully executed focused, strategic bolt-on acquisitions that have increased our ownership in regulated pipeline assets. All of these great accomplishments could not have been achieved without the hard work and dedication from our team to whom I am forever grateful and who continue to be the foundation of our success. Their commitment to safety, performance excellence and customer service are core elements of our exceptional results, and I'm excited for the future and our ability to deliver on the tremendous opportunities ahead.

Turning to 2026 and beyond. We are very well positioned within the natural gas ecosystem to serve the increasing demand across our footprint, and continue our track record of premium, high-quality natural gas pipeline growth. Supported by strong fundamentals, we are embarking upon a window of generational investment opportunities and have updated our overall organic project backlog to reflect this, increasing it by approximately 50% to $3.4 billion over the next 5 years, with pipeline projects leading the way, comprising approximately 75% of the backlog. Our growth backlog represents our FID projects and probability-adjusted future organic opportunities that we are committing to execute on and can be fully funded with our strong cash flows and healthy balance sheet.

The gross backlog is much larger, which is an indicator of the extraordinary opportunity set that exists. We will continue our prudent capital allocation through this investment cycle and expect to deliver growth above our long-term growth rate guidance in the later part of the decade, driven by sizable projects being placed in service.

With that, I'm pleased that 2026 is already off to a great start, and we are announcing that we've reached FID on 2 new projects in our Pipeline segment. The first is an expansion of Viking to serve low growth in Grand Forks, North Dakota, and is anchored by an investment-grade utility customer under a long-term negotiated rate contract and is expected to go into service in Q4 2027. The second is our next phase of Interstate Pipelines modernization program, which will be focused on Midwestern pipeline, and will improve the reliability of this critical capacity serving the market corridor between Chicago and Nashville.

With these projects commercialized, we have approximately $1.6 billion committed out of our $3.4 billion backlog. We are also advancing additional pipeline projects towards FID. Vector Pipeline closed a successful binding open season for an expansion to increase westbound capacity into Chicago by approximately 400 million cubic feet per day and has a contractual support needed to move forward subject to final approvals from both owners and is expected to be in service in Q4 2028.

Millennium Pipeline has obtained contractual support for the R2R project as the long-term agreements have been executed with 2 utilities and an existing power plant. Subject to final approvals from both owners, the project is expected to be fully in service in Q1 2027. We will provide more updates once these projects are formally approved.

Turning to project construction. We placed the Stonewall Mountain Valley pipeline expansion into service early and on budget at the beginning of February, and deliveries are being made to Mountain Valley for multiple customers. In addition, our Phase III Appalachia gathering system expansion has now reached full in service, also early and on budget. All other previously announced growth investment projects remain on track and on budget.

Finally, I'd like to take a moment to provide our view on the natural gas market fundamentals. Natural gas has firmly established itself as a core North American fuel, offering unmatched affordability and reliability, lower emissions and the security of a domestic resource base. It underpins the onshoring of manufacturing, rapid data center development and the continued build-out of LNG exports, all key drivers of long-term demand and foundational to America's global competitive posture.

With these tailwinds, the stage is set for specific opportunities driving our strategy, and we are seeing these strong structural demand signals across our operating footprint. Demand for natural gas to serve power continues to accelerate across the Upper Midwest with approximately 35 gigawatts of coal plant generation expected to retire in the next 10 to 15 years, and increasing announcements of new large loads and data centers being cited. This demand is largely going to land with utilities in these states who have announced contracted and potential large load opportunities of approximately 50 gigawatts and are planning to invest close to $150 billion in new generation over the next 5 years to keep pace below growth.

These are large numbers. And while not all power demand will be served by natural gas, we see an addressable opportunity set of up to 13 Bcf per day and a pathway that could easily result in 5 to 8 Bcf per day of potential incremental gas demand in the upper Midwest. DTM's extensive interstate gas pipeline network is uniquely located across this region and is already serving many of the utilities that will experience this low growth, positioning us to fuel many of these opportunities.

On the LNG front, we saw 4 terminals reach FID in 2025 as well as international companies vertically integrating in the Haynesville to extend their natural gas value chain, both of which will support strong and sustained export demand. We expect LNG demand to grow by 11 Bcf through 2030, with 2/3 being served by the Haynesville. In our integrated system with its leading connectivity to both supply and demand markets is exceptionally well positioned to capitalize on the strengthening trends.

I'd also like to address the recent cold weather. It has illuminated the tightness that exists today in the North American market, resulting in extreme price volatility across our entire footprint, a signal of capacity constraints driven by demand growth. The natural gas pipeline and storage network performed very well during the cold, demonstrating its reliability to serve its existing firm customers. However, the price volatility is a strong signal that we need to build and expand the pipeline network to bring more natural gas to serve the growing demand. For DTM, this winter, our storage complex recorded all-time high withdrawals, and many of our pipelines experienced record high peak day throughputs. Pulling this all together, today's natural gas market fundamentals makes DTM's natural gas infrastructure critically important and positioned for growth.

And with that, I'll pass it over to Jeff to walk you through our financial results and outlook.

Thanks, David, and good morning, everyone. For 2025, DTM's adjusted EBITDA was $1.138 billion, an increase of 17% over the prior year, supported by our Pipeline segment's 27% growth, which was driven by the Midwest Pipeline acquisition and higher LEAP and storage revenue. For the fourth quarter, we delivered overall adjusted EBITDA of $293 million, a $5 million increase from the prior quarter, which was driven by increased seasonal demand on our JV pipelines and higher LEAP revenue. Our Gathering segment results were in line with the third quarter.

Operationally, for the quarter, we achieved a record high in total gathering volumes with the Haynesville averaging above 1.9 Bcf per day, slightly down from the third quarter due to upstream maintenance. Average volumes in the Northeast ramped in the fourth quarter to approximately 1.3 Bcf per day, in line with our expectations of flat entry to exit for the year.

In 2026, winter storm Fern drove some production curtailments, which is contemplated in our 2026 guidance range.

Moving forward to our financial outlook for 2026 and beyond, as we have done in the past, we are providing the current year guidance as well as an early outlook for the following year. For 2026, our adjusted EBITDA guidance range is $1.155 million to $1.225 billion, with the midpoint representing 6% growth over our 2025 original guidance midpoint.

Our 2027 early outlook range for adjusted EBITDA is $1.225 billion to $1.295 billion, with the midpoint representing a 6% increase over the 2026 guidance midpoint. Our adjusted EBITDA guidance for '26 and for '27 is supported by the incremental contribution from our organic growth investments as well as expected activity from our major producer customers.

Our 2026 growth capital guidance is $420 million to $480 million, and we've increased our committed capital to reflect the new FID growth projects with approximately $390 million now committed. For 2027, we expect the level of growth investments to be above 2026. And we already have approximately $430 million committed. As David mentioned, we have reached FID on a Viking pipeline expansion, and we expect to invest a total of $30 million to $40 million for the project. We have also FID-ed Phase 2 of our Interstate modernization program, which has a planned investment range of $140 million to $160 million at an expected first half 2028 in service debt.

The capital associated with this project will be included in the next rate case. From a balance sheet perspective, we are very pleased with obtaining investment-grade credit rating in 2025, which we are committed to preserving as evidenced by our 2026 year-end forecast for on-balance sheet leverage of 2.9x and proportional leverage of 3.5x.

With our cash flows being strong and our healthy balance sheet, we will fully fund our project backlog with significant headroom for additional future growth opportunities. And finally, our Board has declared a quarterly dividend of $0.88 per share, which represents a 7.3% increase from the prior year and continues our track record of providing leading dividend growth.

Our approach to delivering a secured dividend has not changed as we plan to grow it in line with adjusted EBITDA and are committed to maintaining a strong coverage ratio above our 2x floor, which was 2.6x for 2025. And with that, I will now pass it back over to David for closing remarks.

Thanks, Jeff. So in summary, we're highly confident in delivering on our guidance, continuing our track record of strong performance. Looking ahead, the fundamentals supporting our business are exceptionally strong, and our integrated footprint sits in the most advantaged corridors to benefit from this generational investment opportunity. Our sizable organic project backlog with potential for additional opportunities reflects our disciplined focus capital allocation to high-quality natural gas pipeline projects. We will continue our consistent execution of this strategy, which has delivered dependable best-in-class growth and will continue to create significant value for years to come. And with that, we can now open up the line for questions.

[Operator Instructions] We will go first to Theresa Chen from Barclays.

It's encouraging to see such a robust project backlog, the breadth and depth of the opportunities is impressive. Can you discuss the expected pace and cadence of commercialization from here, the key drivers behind that trajectory? And how it informs your outlook for capital spending beyond 2027?

Theresa, thanks for the question. And yes, we're extremely excited about the opportunity set that's presenting in our footprint right now. I'll say this. It's a very fluid market. And as we laid out all these utility announcements that have been happening over the last couple of weeks as they talked about their year-end and their outlook, the opportunity set continues to grow. So it's a very fluid market, opportunity-rich market. All of our assets, especially our Upper Midwest assets, these utilities are our current customers. So we're in detailed conversations with them about their growth trajectory and their needs. So again, I think these will move forward in a very disciplined, rational way. Many of these demands are anchored in a state regulatory framework, so they'll go through a very disciplined process with utilities as they go through their approval process. But I think it results in a very strong and durable opportunity set for us to contract into.

Very -- I'd say our Guardian project last year is a really good indication of what we expect this to look like going forward. The Vector expansion into Chicago, again, anchored -- utility anchored. So we're just seeing this theme kind of rolling through our asset footprint. And if I turn to the south and talk LNG briefly, again, a really clear line of sight on LNG growth. 2/3 of the hay is expected to meet that growth. And we continue to see that demand pull, and we're in a really good position to participate in that demand growth with LEAP.

And maybe specifically turning to Midwestern Gas Transmission. The potential expansion of that pipeline, how are conversations progressing at this point? What scale or scope could this ultimately reach, and how are you thinking about the opportunity generally at this stage, knowing that multiple sources of demand as well as optionality for supply connectivity here?

Yes. That's a really exciting one, Theresa. We're in deep conversations with our existing customers on Midwestern for both a northern expansion and a southern expansion and just if you can visualize the asset, REX cuts right across the [indiscernible] asset. So supply can come in from Appalachia and it can come in from the Rockies. So there's supply diversity through the REX connection and strong demand signals to bring more gas north into the Greater Chicago, Upper Midwest, but we're also seeing strong demand signals to push gas south into, what I'll call that greater Nashville region. It is also experiencing tremendous power demand growth.

Up next, we'll take a question from Julian Dumolin Smith from Jefferies.

It is Rob Mosca on for Julian. So pick up big update here with the 5-year growth CapEx outlook. But hopefully you could dive into how you arrive at that number, maybe how you're risk adjusting that outlook for the uncommitted CapEx. And how do you characterize the texture, the geography within that uncommitted capital outlook? I'm just hoping you could dig into that gross number a little bit more?

Sure. I mean it's really increased from our last outlook a year ago. And I think we've talked about that as the year has progressed, and that's the fluidity of the market. The backlog continues to grow. We're highly confident in the increase that we laid out for the investors. About half of that is FID already. The other half is highly probable. We look at our gross backlog, which, by the way, is multiples of this committed backlog that we're committing to execute on. So it's probability adjusted based on our kind of our historical success ratio. So we're highly confident in deploying $3.4 billion. And as I said earlier, this is an extremely fluid market with incremental ways of demand that seems to be showing up every time we talk to our customers. So we're very bullish right now. We're also very disciplined and we tend to have a conservative view on running the business, which delivers these very consistent results. So we're just really in a sweet spot right now in the market. The assets are in the right location, both in the north and in the south, and the fundamentals around our assets are very strong. So our job here is to commercialize this and do it in a really rational and prudent manner. And I expect we're going to continue to deliver great returns for the investors.

I appreciate that commentary, David. And there's -- it seems like there's a large open season for pipeline right now. I would serve some of that growing Midwest demand, I think you alluded to in your prepared remarks. Just wondering how that expansion or other third-party expansions in the region could impact your ability to execute some of those planned pipeline expansions that you guys have or seeking to have FID-ed? Or should we not think about it as being mutually exclusive?

Yes, Rob, we're not afraid of competition. The projects that we FID-ed last year also had competitive tension around them, Guardian, Vector. So that's not an issue for us. I think locasionally, our assets are in the right location. It's somewhat like real estate, location matters, connectivity matters, track record matters. The other thing I'd say, in my opening remarks, I kind of laid out the addressable opportunity set of 5 to 8 Bcf a day, which is sizable in the Upper Midwest. There's plenty of room for others to participate in that and for us to have outstanding results. We don't need to get all 5 to 8 Bcf, I mean we get 1 or 2, and that's going to be outstanding results for the company.

So I'm not concerned about competition. We're focused on the market right now and on those relationships and working sort of customer by customer to provide the right answer, the right solution for their growth. And talking to these utilities, they're experiencing generational growth as well. And I think that's going to -- the domino effect is going to fall across our assets. And what I'm really excited about with our assets is the connectivity that we have across multiple assets. So you sort of -- you can see it with Vector. Guardian was FID-ed last year. We're on the doorstep of FID-ing Vector. That domino effect is playing out across our asset footprint right now, and I expect that to continue.

Michael Blum from Wells Fargo has the next question.

I wanted to ask on the backlog again. So you mentioned the gross backlog is much larger than the risk-adjusted backlog number that you provided. I'm wondering if you're willing to give us that gross number or some way to size what that is with some of your pipeline competitor peers would call the shadow backlog, so we can get a sense of the total magnitude of the opportunity set?

Michael, I was expecting someone would ask that question. I'll say it's multiples, and I'm going to leave it at that, and you guys can infer a number or a range. But it's, I use the word generational investment opportunity. It truly is. And I think for us, when I think about the sector and we're focused on -- we're just super focused on our core business right now on our pipelines in our core region and deploying capital in a really -- in a proper fashion so that the returns show up on the other side of these large capital outlays. Certainly, I recall what happened a decade ago in the sector. That didn't end well. we're committed that we will be deploying capital in a very prudent rational way as we approach another super cycle or a generational cycle of capital investment opportunity. So we're super focused on it. The -- a very robust opportunity set is a healthy backdrop for us to work within. It's going to allow us to be selective and very focused and do the right thing for the investors.

Got it. I appreciate that. And then just wanted to ask a question on the growth CapEx. You came in a little light versus your own guidance for '25. And I think you would even reduced that number during this past in 2025 last year. So can you just speak to what's going on there? And is that just capital efficiency on your part? Or is it timing and that CapEx is just going to show up in 2026?

Yes. Yes, you're bang on. It's performance, capital efficiency, I call it, performance, and it's timing. So it's no more complicated than that.

From Goldman Sachs, John Mackay has the next question.

David, you've talked a lot in the past about wanting to stay kind of front to meter with the utilities. We have seen kind of behind the meter pick up some momentum again recently. I'd be curious just to hear a little bit on your view there where it sits now, particularly in the context of a broader focus on affordability for the utilities?

Yes, John, we're seeing some of the Energy Island load knocking on the pipeline store, so to speak, -- and we're very happy to contract with that on the main lines, long-term contracts on the main lines. So we are seeing some of that demand manifesting across the footprint. The utilities have done an exceptional job here reeling in this market. They're doing it through a regulatory construct. When you monitor their filings. They're being very particular about explaining how it's -- it lowers the cost to their -- the rest of their customers. So there's an all-pro subsidization occurring.

And these large load customers data centers really like the fact that the utilities are counterparty because they get a lot of comfort in that. They're connected to the grid. There's diversity, really strong counterparty. So there's a lot of features that the utilities are offering to this segment of the market that seems to be very attractive. And we're very happy to work closely with our existing utility customers to participate in bringing the fuel to these projects.

So we like how it's playing out. It's sort of been -- we've been observing this for the last 12 months the utilities being more successful than in the past, and we really like the fact that it's going into a regulated construct, which I believe provides long-term durability to the demand.

That's clear. Second one for me is, when you -- a lot of the projects you've been announcing are effectively brownfield expansions of existing assets. I'd be curious your view on the opportunity for anything on the greenfield side, and/or opportunities for you to do incremental kind of bolt-on M&A and try to repeat what you did with the [indiscernible] assets?

Yes. We are focusing predominantly on what I'll call in the footprint expansions. They're easier. They're typically more economic because he can scale it. and their lower risk from a execution/regulatory perspective. So I think there's a lot of features to addressing this demand through that mechanism, if you can, versus a brand new greenfield. When we did Nexus 10 years ago, that was a heavy, heavy lift to get that through. And then if you remember, there was a 1-year delay or regulatory delay on that project. So it's super big capital that, if you get any delays, can have a pretty material impact on you pretty quickly. So we like the risk profile of the brownfield.

In terms of greenfield, where we are seeing greenfield, we continue to pursue greenfield storage opportunities. Some of the fundamentals that we laid out in the deck, where you see the extreme price volatility across our footprint, it's really screaming for more capacity, both pipeline and storage capacity. So that's probably where we see more of a greenfield opportunity in the near term, John?

Next question comes from Jeremy Tonet from JPMorgan.

Just want to come to Slide 10, if we could. And there's been a lot of discussion on the capital side. But just wonder if you could dial in a little bit more in the translation to EBITDA growth. The slide here says elevated organic growth and it points post 2027. I was just wondering if you could expand a bit more on what that looks like, what the quantity of this elevated growth looks like?

Sure, Jeremy. The -- well, I'll start with the backlog update, right? That's the fuel that goes into the equation that drives the EBITDA growth. And most of that capital, 75% of capital is deploying into the Pipeline segment, which is Bert regulated, which has a longer capital invest EBITDA generation cycle. It's a 2.5- to 3-year cycle, right? So it's really going to supercharge the back end of our 5-year plan.

I didn't want to put a number on that. I don't want to cap that because the market is so fluid right now. The opportunity set is robust. And every time we take a fresh look at it, it seems to get more robust. So we're early in the cycle, and I think we want to let it run for a lot this before we start to try to stick the landing, so to speak, at the back of our 5-year plan. But it's green. The arrow is up. We're very bullish on the fundamentals. We laid out what those fundamentals are here in the deck for you. And I think this will be a conversation we can have as the year unfolds, Jeremy as to how we're feeling about this and how this starts to commercialize and sort of the picture will take takes shape for lack of a better word.

Got it. That makes sense. I don't want to put a ceiling on it given all the opportunities there. I was wondering not push too much here, but could we put a floor on it? I mean, if it's 5% to 7%, you say now, and I would assume that, that elevated growth is at least 7% plus or any other way to think about what a floor might look like?

I think you just said it really well, Jeremy. I won't add anything to your comment there.

Next question will come from Jean Salisbury from Bank of America.

It looks like the gathering and the new backlog is up by a couple of hundred million even though several 2025 gathering projects came online. So I guess my question is versus a year ago, is this an increase in expected gathering spend? Is it primarily driven by the Haynesville or Appalachia or both?

That's a good question. I'd start with just reminding everybody that our gathering assets are all interconnected to our pipelines, right? So they feed our pipelines. The gathering -- I'm going to -- can we get back to you on that, Jean Ann because. I'm not 100% sure of the answer to your question. I don't want to guess at it. But we'll follow up with you. How does that sound to you?

Yes, no problem. I'll circle back to what Todd. And then as my follow-up, there's a comment in the deck about future LEAP expansions likely being tied to the next wave of LNG in 2028 to 2030, I kind of wanted to clarify what that meant. I guess my understanding was that most of the LNG projects under construction had already kind of tied up their gas supply. I guess, maybe that's wrong or if you -- basically, if you are expecting a whole wave of new contracting to come as these projects under construction start to come online?

Yes. I think you've got 2 projects that just came online in the second half of last year, and that's getting absorbed into the market. And I think this next wave is going to be the wave that drives the next round of incremental expansion. We're in detailed conversations with numerous shippers on this topic right now. So it feels very ripe for us. So I would stay tuned. And as we commercialize these, we'll be sharing them.

Keith Stanley from Wolfe Research is up.

And I'd like to circle back on Slide 10. So David, no, you don't want to put a cap on the 2030 outlook, but that green bar, you can kind of figure out where it's going, if you just extrapolate the chart? I guess I'm curious in that 2030 figure, we're getting to like a 7% to 8% CAGR through 2030. Is that directionally right over a 5-year period? And when you show that green bar, is that only baking in sanctioned projects to date? Or is that including a fair amount of executing on the unsanctioned projects that you've identified as well?

Keith, that green bar boxes out to the updated backlog, the $3.4 billion. So that's kind of the way to think about it. And what I'll say is exceeding the high end of our -- and again, we're -- at this point, we're just too early in the game, and there's too much fluidity in the market right now in terms of putting a number on it. As I said, I don't want to cap it. I want to let the market unfold a little bit. And we'll be the first people to give you better clarity on that once we're confident in our execution.

Got it. So just to clarify on that. The green bar is effectively the $3.4 billion divided by EBITDA build multiples that you're assuming in that outlook?

That would be the back of the envelope math, Keith, what you just said.

Okay. Great. Second question, just following up on the Midwestern expansion potential any better sense of timing? You said you're in deep conversations. I assume you need an open season there. Just any sense of when you're hoping to get more clarity on that project? Is it next 6 months? Is it beyond that? Just how would you put that?

Yes, it's definitely in front of us right now, Keith, like right in front of us. So there's clearly a need for more volumes into Chicago. We commercialized the vector piece. We've turned our attention now to Midwestern. We'll turn our attention back to Vector as well for another round there. But Yes, it's front and center, and it's on everyone's mind right now. All of our customers are looking closely at all of this. As I kind of alluded to, we're in deep discussions with a lot of the shippers predominantly the regulated entities on those lines. And we're going to move at their pace. And that's what I'll say right now, but it's a hot topic right now so...

Your next question is from Samantha Banergy from UBS.

I was just curious about the additional modernization opportunities that you mentioned in the deck? And is it great to see the Phase 2 interstate pipeline modernization feed. So just curious about that.

Yes. Thanks for the question. Yes, that Phase 2 is going to be focused on the Western and it's going to be focused on reliability, predominantly compression, replacing some aging end-of-life compression. And yes, that will roll through the next rate case on Midwestern. So really feel good about those investments. They're very much needed. And yes, I think it will be a pretty standard play for us to make those investments and roll them through the next rate case.

Got it. That's really helpful. And then the second question I had was just a general one on capital allocation priorities going forward, and how you're looking at balancing dividend growth versus keeping leverage maintained?

Yes. I mean, we're very focused on capital allocation. If you look at the backlog the majority of the backlog is going to be allocated into our pipeline segment, predominantly the regulated pipeline segment, so those tend to be backed by long-term 10-, 20-year contracts, again, predominantly with utilities, so investment-grade counterparties. So very strong cash flows, security of those cash flows over the long term. We've committed since we spun the company to grow the dividend in line with EBITDA growth. And I think over the last 5 years, you can see us doing that consistently.

Our plan is to continue to do that going forward and maybe, Jeff, you can talk about the balance sheet and how our thoughts on managing the balance sheet and the dividend...

Sure can. Yes. So what our plan is, again, we've been talking about this since the spin as we fund our internal capital allocation plan with our free cash flow, we're going to naturally and have been naturally deleveraging. And so with that, we're able to fund all the projects and everything that David has been talking about and the growing dividend inside of our capital capacity or credit capacity.

And I'd say we work pretty hard to get to investment grade. And now that we've crossed that rectal, we're firmly staying on that side of the line.

Yes, we've got plenty of room between -- on the credit metric. So again, we're very confident in our capacity to be able to fund any and everything that we're seeing coming at us.

Moving on to Zach Van Everon from TPH and Co.

Maybe first on the Haynesville. We've continued to see the rig count step up into the beginning of '26. Curious on conversations with producers and just views on overall capacity needs in the basin.

Sure. Let me tackle that, Zack. So you've seen -- we saw a nice ramp in the Haynesville in Q3 and Q4. We're expecting to see those robust volumes going into this year. Our biggest customer is public, and I think they've just recently shared their thoughts on their ville growth for the year. So that's probably a good yardstick to measure our activity against. We do have a number of other producers that are also under experiencing growth or growing their portfolio. And we certainly are going to participate and see some activity there that will be helpful to the cause as well. But the big shipper the big anchor is [indiscernible]. So I'll point you to [indiscernible] public disclosures.

Perfect. Appreciate that. And then maybe 1 in the Northeast. With the open season on vector and some producers up in the Northeast, talking about more growth coming into the next few years, could you maybe give an update on NEXUS and the ability to expand that? What size that could look like in any conversations going on currently around that pipe?

Sure. So it's somewhat that domino effect that I spoke of earlier. We're seeing this play out across our portfolio as what I'll call we expand the last-mile pipe. And you got to look at an expansion upstream and it keeps going upstream and eventually falls its way back to where the production is. So as we see Vector expanding pulling 400 million a day of incremental supply out of Michigan, that's going to have to get made up some ways on that. We're obviously working closely with potential shippers to utilize Nexus to do that. Nexus is easily expandable with compression and blocks of a couple of hundred million a day with compression.

So that is forefront in our minds right now as this market evolves and the demand grows in the upper Midwest is how do we unlock additional, what I'll call, egress freeways out of Appalachia to sort of ramp up and bring incremental supply into this region. And again, if our fundamental assessment is accurate that there's 5 to 8 Bcf a day that is in-flight -- growth that's in-flight over the next 5 years, that's going to demand some pipelines or multiple pipelines to expand into this region -- out of the supply basins. And Appalachia is the closest basin. Rockies is right there that can come back into the Midwest. So we're really excited to work on these projects, and I really like the domino effect across the portfolio as we work our way back into the basin.

[Operator Instructions] And everyone, at this time, there are no further questions. I'll hand the conference back to the company for any additional or closing remarks.

Well, thank you. I just want to thank everyone for joining us today. Thank you for your interest and support of the company, and I look forward to seeing everybody in person at one of the next conferences. Have a great day.

And once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.

Welcome to the DT Midstream Third Quarter 2025 Earnings Call. As a reminder, today's call is being recorded. I will now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead.

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. So with that, I'll go ahead and turn the call over to David.

Thanks, Todd, and good morning, everyone, and thank you for joining. During today's call, I'll touch on our financial results, share details on the latest commercial activity and provide a status update on our key growth initiatives. I'll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook.

So with that, we had another strong quarter financially. Our year-to-date performance is enabling us to increase the midpoint of our 2025 adjusted EBITDA guidance range to $1.13 billion, an 18% increase from the prior year adjusted EBITDA guidance. We are also reaffirming our 2026 adjusted EBITDA early outlook range. The third quarter was another active quarter for us commercially and the team continues to advance incremental organic opportunities that support our future growth.

We are announcing today that we've reached FID on a larger G3+ expansion on Guardian pipeline. The subsize expansion increases the total capacity of Guardian by approximately 537 million cubic feet per day, which is a 40% increase in the total capacity of the pipeline and the overall project is anchored by 5 investment-grade utilities under 20-year negotiated rate contracts.

This investment is supported by strong fundamentals, as there is robust gas and power demand growth throughout the region. We are also advancing potential upstream network opportunities, given the connectivity to DTM's broader portfolio, including pathways from vector and Midwestern pipelines as well as supply options from our natural gas storage facility and NEXUS. In order to offer our customers greater flexibility and reliability to meet their growing demand.

Turning to our construction activity. Our LEAP Phase 4 expansion facilities were placed into service early and on budget, increasing the capacity from 1.9 to 2.1 Bcf per day and providing reliable, timely access to rapidly growing Gulf Coast LNG markets. This expansion is underpinned by long-term demand-based contracts that will start in the first quarter of 2026. and I'd like to take a moment to recognize and thank our construction team for delivering another project early and on budget.

During the quarter, we also placed our Clean Fuels gathering project into service. and initial volumes are ramping as planned. I'd also like to address our Louisiana CCS project that remains pre-FID, as we've disclosed in prior quarters, we have progressed this project to be shovel ready while minimizing capital investment. The Louisiana department responsible for reviewing permit applications has recently reorganized and a moratorium has been announced on accepting new applications.

Our project remains under formal technical review and is not subject to the moratorium. But at this point, the permit time line is too uncertain to provide an updated date when we expect to reach FID. It remains an attractive project economically and strategically, leveraging our existing Haynesville assets and expertise. We will keep you updated as our application advances through the review process.

Finally, I'd like to take a moment to address the current natural gas market fundamentals and why I feel DTM is so well positioned. We have seen a positive shift in the Haynesville over the last few quarters and the record high throughput on our Haynesville system this quarter demonstrates the ability of producers to respond quickly to LNG demand signals.

With the recent commercial announcements of multiple LNG terminals, we certainly see opportunity for future expansions of our Haynesville network, including LEAP, which is in a strong competitive position given our connectivity to both basin supply and downstream demand markets. In addition to the growing momentum in the LNG market, we continue to have a very constructive view on gas and power demand growth in the country, fueled by increasing power generation needs from AI computing and data centers, along with industrial demand growth from onshore and manufacturing.

Moving to the regulatory framework. The recent Senate confirmation of 2 new FERC members was an encouraging sign and continued government agency initiatives that streamline approval processes while maintaining high-quality reviews give us increased confidence in a constructive permitting process for our key interstate growth projects.

I'll now pass over to Jeff to walk you through our quarterly financials and outlook.

Thanks, David, and good morning, everyone. In the third quarter, we delivered adjusted EBITDA of $288 million, representing an $11 million increase from the prior quarter. Our Pipeline segment results were in line with the second quarter. Gathering segment results were $10 million higher than the second quarter, driven by higher volumes on our Haynesville system, where production ramped faster than expected. Operationally, total gathering volumes for the Haynesville averaged 2.04 Bcf per day, setting an all-time record throughput for a quarter and a 35% increase over the third quarter 2024.

In the Northeast, volumes averaged 1.09 Bcf per day, driven by the timing of maintenance and producer activity, primarily on our Appalachia gathering system. As expected, we are seeing Northeast volumes ramp higher into the fourth quarter, with September averaging 1.17 Bcf per day, driven by incremental production on our Tioga system. And we continue to expect average fourth quarter volumes to be in line with the first quarter.

As David stated in his opening remarks, following our strong year-to-date performance and considering our expectations for the fourth quarter, we are raising our 2025 adjusted EBITDA guidance midpoint billion to $1.13 billion confirming our 2026 adjusted EBITDA [indiscernible] million. We are reducing our [Audio Gap] presents a $30 million reduction to the midpoint of our range. With the improvements in our distributable cash flow and capital expenditures, we expect lower year-end leverage of approximately 3.1x for on balance sheet and approximately 3.8x for proportionally consolidated.

For 2026, we are increasing our committed capital to $280 million, which reflects the upsized Guardian G3 expansion reaching FID. For our upsized Guardian expansion project, we expect to invest a total of $850 million to $930 million at a 5 to 6x build multiple with the project expected to be in service in the fourth quarter of 2028.

So overall, our committed capital has increased for the '25 to '29 time period to $1.6 billion, which reflects 70% of our $2.3 billion backlog, advancing to execution within just 9 months. We will provide an updated look at our overall backlog on our year-end call.

Finally, today, we also announced that our Board of Directors approved our third quarter dividend of $0.82 per share, unchanged from the prior quarter and we remain committed to grow the dividend 5% to 7% per year, in line with our long-term adjusted EBITDA growth.

I'll now pass it back over to David for closing remarks.

Thanks, Jeff. So in summary, we are very pleased with how the year is continuing to progress and are confident in our increased guidance for 2025, early [indiscernible] range for 2026 and long-term organic growth target of 5% to 7%. We are excited about the future opportunities ahead for the company as we remain focused on execution of our pure-play natural gas pipeline strategy and are well positioned with a strong balance sheet to fund incremental investments in this favorable market environment.

And with that, we can now open up the line for questions.

[Operator Instructions] We'll go first to Jeremy Tonet at JPMorgan.

I wanted to kind of maybe dive into the details a little bit more if we could. Louisiana has been a hotbed for data center activity. And just wanted to know if you could expand a bit, I guess, on the potential for your network to support some of this demand as it comes together for gas fired gen in the upcoming years?

Yes. Thanks for the question, Jeremy. There's a lot of demand materializing in Louisiana right now. I think the data center is one piece. The LNG demand is manifesting and lots of announcements this past quarter with incremental LNG demand. So we just see a robust market in that region. And we're aggressively pursuing that right now.

Got it. That's helpful. And I was just wondering if you could provide maybe a little bit more color on Haynesville and growth trajectory there, the volume jump. Just do you expect that to continue? What could that mean for LEAP expansions and particularly, I guess, West Haynesville potential?

Yes. There's lots of development happening there. We're really excited to see some of our customers getting excited about Western Haynesville. So that's an emerging play that's going to add our view, it will add significant runway to the Haynesville basin, which I think is strategically important for long-term LNG sourcing, supply sourcing. So we're excited about that.

It's very new, Jeremy. So I think that's going to be an area of focus over the next 12 to 18 months as we start to get a better sense of how those producers plan to develop that acreage and how the existing infrastructure fits into that plan. So more to come on that.

In terms of our volume ramp, I think we had been foreshadowing to our investors that we were expecting volume ramps in the second half of the year. To be honest with you, I was expecting it to come maybe a month or two later than it came, but I think it's a good example of the producer's nimbleness to respond to physical market realities on the ground. And we certainly saw that response in the third quarter.

I expect the fourth quarter to have a similar volume as the third quarter. But, yes, the nimbleness and quickness of the response, I think it's just a reflection of the new era that we're in and how producers have readjusted their business to be very responsive to demand signals.

Got it. That's very helpful. And one last one, if I could. As you speak to upstream Chicago opportunities, are you -- is this more of a vector or NEXUS or Midwestern? Just wondering, I guess, if you could provide a bit more color on what that would look like and what type of time line scope this would be? And just lastly, Gas Storage, if you can expand more on what that looks like is that Gulf Coast or Ohio?

Yes. So there's just lots of positive fundamentals unfolding in the upper Midwest right now. I'll just start there. Certainly, the upsized Guardian expansion has moved a significant amount of demand into that Chicago hub region. And I think that's going to draw incremental supply to that location. So we're obviously looking at Midwestern Vector and NEXUS, like I said in my opening remarks, as potential freeways to bring in incremental supply to that market.

As you may know, Vector is actively communicating an expansion of 400 million a day expansion westerly to Chicago out of the, what I'll call, the Greater Michigan area. So that's been shared with the shippers. That is under active discussions with potential shippers. The vector program, we expect that will go to open season probably measured in weeks, sometime probably in the next month. So that's just probably the most advanced.

We are on those 3 different pathways, but we're clearly looking at what can Midwestern do to bring more volumes into Chicago. And then how does our storage business fold into that demand, and in addition to that, looking at NEXUS as well. So we can offer our customers here kind of a wellhead to market solution, and that's really what I'll call the next phase of that growing demand in the upper Wisconsin region.

So very excited about it. But I don't want, Jeremy, to think that there isn't a whole plethora of other opportunities outside of what I'll call Wisconsin that are also percolating around the assets. There were some announcements this morning that I think are favorable. So there's just a lot going on right now. We're extremely vocal [indiscernible] execution here. The market is offering sort of a generational opportunity for expansion. And we [indiscernible].

You want to pick up on some of those comments. Just around Wisconsin, David. It seems like there could be some more opportunities there just with some utility announcements. And so Curious if you're thinking about Guardian's ability maybe you can push further north in into Wisconsin. And are you sort of separately seeing any sort of increased interest to connect Guardian with [indiscernible]

[indiscernible] positive that we have right now is that Guardian is very expandable. So there's incremental ability for us to continue to expand Guardian. So again, this is just that a very positive demand fundamentals that we're observing [indiscernible] disciplined and looking to expand these pipelines beyond where we've announced again in a very disciplined fashion. So.

Great. I appreciate that. Curious [indiscernible] on is that mostly pipeline gathering mix in between. So curious to get some color on what's left me thinking here.

Yes. Good question. I'll start with the highest-level message, which is we're incredibly [indiscernible] fortunate that backlog is in the pipeline segment, the FERC pipeline segment, which as we all know, is the most valued backlog. We won't get into all the unannounced projects. But the fact that we're this deep into FID-ing that backlog this quicker, than expected. And again, I'll just -- I'll [indiscernible] and the fundamentals.

[Audio Gap]

I wanted to ask about the change in CapEx for the year, I think both on growth and maintenance, we should be assuming a lower run rate going forward because the pattern every year seems to be that you put a number out in guidance that [indiscernible] at the bottom of that range or even below in this case. So I just wanted to understand what's going on there.

Yes, I'll start and Jeff can chime in as well. But at the highest level, generally speaking, across all of our projects including our maintenance projects, the team has had an exemplary performance this year. and [indiscernible] in early, right, and [indiscernible] some of that we thought was going to come through in Q1 of next year. So both timing and timing usually also [Audio Gap]

For Millennium and Pro is going to be a heavier bigger lift and will involve what I'll call the regulatory complexities of New York and New England and we talked about that in the past, so I won't repeat all that on the call here. But yes, it's still moving, but it will move at a very patient pace. And again, when I talk about disciplined execution, this is a good example of we have to have all the boxes checked and all your ducks in a row here before we would be comfortable FID-ing these projects given the history with New York. So stay tuned and be patient and we'll keep the investors apprised as we hit significant milestones here. .

Our next question comes from Theresa Chen at Barclays.

David, going back to your comments on the extremely robust demand growth is generational opportunity, especially related to the gas to power them as a tailwind for your Northeast and Upper Midwest pipeline assets. Across these regions, your customers do have other transmission options. For the incremental expansion opportunities under development across your regions right now, how do you think your assets and projects compare versus your competitors' assets? What will it take to win these projects? Is it the well-headed market solution? And how do you plan to sustain the strong returns and keep the new multiple low? How much economically efficient expansion opportunities are there within your assets?

Theresa, that's a big question. I'll try to unpack it and answer it. So let's just start with, yes, there is competition in this region. There's many other pipes. But again, I think the opportunity set is significant, and there'll be plenty to go around, I'll say it that way. In terms of our competitive posture for these markets, a lot of it is geographical. A lot of it is going to be a function of the proximity that our assets have to the demand. And that, in some cases, will favor us, in some cases, may favor some of our competition. But again, I think the market opportunity set is so robust, there'll be plenty to go around. .

So when I look at all the opportunities we're pursuing, it's a really strong, robust, deep opportunity set. In terms of returns, again, these are all FERC-regulated assets. Let's just remind ourselves of that. The returns have to be at a level that it attracts the capital and competes with other opportunities in the portfolio. So I think the markets understand that. We've been very happy with the return profile of what we've announced to date and maybe I'll just leave it at that because, again, this is a competitive market situation that we're in right now.

So we're obviously going to be looking to find the right projects with the right return profiles and contract structure profiles that hit with our strategy. And I think you understand that we are very particular about that and very disciplined around that. So that's not going to change going forward. And I think I'm going to stop there. I think I answered most of that question, but if I didn't give me a follow-up. So...

Understood. Maybe pivoting to Nexus specifically on the heels of some of the recent developments out of Northwest Ohio, for example, what is your appetite and outlook for additional DTM opportunities off of NEXUS?

Yes. NEXUS is in a great spot for that Northwestern Ohio corridor. There's lots of activity there. There may have been some announcements recently that may have just come out. But yes, I feel really confident that NEXUS is going to pick up some market share on the data center power demand side and it's concentrated in that area of the state, and we're very well positioned in that area of the state. Just reminding everybody, it's a new pipeline, it's a high-pressure pipeline. All these power demand facilities want high-pressure gas and they want a corridor back into the basin, which, obviously, NEXUS provides. So I think NEXUS is in a really strong position to compete for that business. .

We'll go next to Manav Gupta at UBS.

My question here is that you -- in your prepared comments that you're looking to raise the dividend somewhere in that 5% to 7%. And I'm just trying to understand what could be the blue sky scenario where that number comes in closer to 7% than 5%?If you could talk about it, what could drive the dividend growth closer to 7% for the next couple of years?

Well, I'll start, and Jeff, you can chime in if I miss some of the details here, but -- so maybe we'll start by looking in the rearview mirror. So when we did the acquisition, we bumped up that dividend, right? So when we went through a period of growth year-over-year that was significantly in excess of our long-term targeted growth rate of 5% to 7%, we adjusted the dividend accordingly.

So when you ask the question, what would take us to the high end of that range. I think what would take us to the high end of that range is if we had a year where we had really strong growth and busted through the top end of that range. I think it would be reasonable to expect that we would -- that, that would reflect in the dividend growth rate. And Jeff, I think you would agree with that.

Yes. David, you're spot on, right? Our guidance has been we're going to grow the dividend in line with our cash flows, EBITDA growth. The other statement we've made is that we want to make sure that we maintain a very strong coverage above the 2x which we are. So I think that's the guidance is really look at our EBITDA growth and what we've communicated there the 5% to 7% long term, that's how we'll drive the dividend.

And last year, we had really exceptional growth, right, between the combination of the acquisition and the organic growth. I mean delivering that 18% growth that was a big year for us. So stay tuned, and we'll see what the future holds. But we obviously hunt for the high end of our range and beyond, as we've demonstrated in the past.

My quick follow-up here is you have been involved with data center providers for both front of the meter and behind the meter. I think at points of time, you indicated given the quality of the customer to a slight reference for front of the meter solutions. But we're seeing this massive explosive growth from behind the meter solutions now in fuel cells coming in. And I'm just trying to understand for the right customer and the right guarantees, would you be more open to behind the meter solutions also. And I'll turn it over.

Yes. The short answer is yes. And the art of that transaction is and how it's structured and the quality of the counterparty and having the right commercial structure. And yes, we are open to both in front of and behind the meter opportunities. And I am sure that we are going to bring home some behind-the-meter opportunities in addition to what we've done to date, which is predominantly in front of the meter.

Our next question comes from Keith Stanley at Wolfe Research.

Wanted to ask on Vector, David, I think you alluded to discussing a 400 million cubic feet a day expansion opportunity with customers. Would that primarily go to serve Guardian? Or how much of that might be needed to serve Indiana power demand? And then separately, how much could you ultimately increase capacity by on Vector?

Yes. Thanks for the question, Keith. So yes, that Vector has revealed that project to its customer base in the last couple of weeks. it's generic. I'm going to use the word generic, it can serve a number of egress options in the greater Chicago area. So yes, it can serve directly to Guardian. It can directly serve Midwestern and it can directly touch all the big utility loads in that greater Chicago area and it can touch some of our competitor interstate pipelines in the Chicago area that can project that supply across the state for your question. .

So we're testing the entire market in the greater Chicago area. Keith would be the best way to say it. There's obviously customers that are interested in this capacity. And I think the team will progress through what I'll call a standard process here where they communicate the project to customers. There'll obviously be discussions about rates and terms and tenure and all that good stuff. And the goal will be fairly quickly to get out with a binding open season.

Okay. Great. Second one, just a quick one with Haynesville volumes up so much in the quarter. Is it fair to say at this point, we're now past the MVC levels completely. And so incremental volume growth on your Haynesville system should boost EBITDA on a one-for-one basis.

Yes, Keith, we don't disclose the MVC levels anywhere in our Gathering business. But I think if you look back over the last 4 or 5 quarters, we tell you the volumes and you can see the Gathering segment EBITDA, you can probably answer that question closely just by doing the math.

We'll take our next question from Jean Ann Salisbury of Bank of America. .

I wanted to zoom in on Midwestern pipeline. You mentioned, obviously, that it could be 1 option for a feeder to Guardian going northbound. I believe you've also mentioned before that it could theoretically support a southbound expansion of a third-party Appalachia pipeline. Can you just talk about if those opportunities could potentially both happen, which would obviously be amazing or if they would be mutually exclusive, I guess, based on how much gas you could source..

Gene, that's a good question. So Midwestern is somewhat of a bidirectional pipe depending on the time of the year and where the demand manifests on the system that can move northernly or southernly and we've announced already that we're building a lateral to a new power plant often in Western. There's lots of power plant activity occurring right now on and around Midwestern.

So it's in a very unique situation where it can -- we can expand that northernly into Chicago and potentially to be expanding it southernly down towards the Nashville neighborhood where a lot of this power load is manifesting. So the short answer to your question is both, it can go in both directions. So like I said in my opening remarks, there's just lots of market presenting across the footprint right now. So we're pursuing all of these. And, yes, I think we're really excited about the opportunity set. It's our -- we have to go commercialize it now.

That's great. And then I guess, sorry, one more just about the Haynesville volumes. I wanted to follow up on your comment earlier that Haynesville volume in the 4Q would probably be similar to 3Q. I guess was the massive outpacing of your Haynesville volumes versus the basin over the last year, like mainly leg pull through, but that would kind of -- like that's happened now and you wouldn't expect to outpace the basin unless you built more leg, I guess.

I think the outpacing of the basin is really a reflection of our underlying customers and the quality of the resource that were attached to. That's probably the way I would describe it. That's probably -- yes, so we kind of -- we outpaced the basin and it's just a function of the resource was some of the best resource in the basin. So it was the first resource to be drilled. And we had this combination of private and public companies. And I think like I've said earlier, that the privates moved fairly quickly in the year and then the public pivoted on a dime quickly between the second and third quarter, as you see in our numbers, so just -- it's that new behavior that I alluded to earlier that all the producers are much more disciplined monitoring physical demand much more closely and are building capability to be very nimble. And I think that's reflecting in our numbers.

We'll take our next question from John Mackay at Goldman Sachs.

I want to spend some more time talking about some of the projects up in the Upper Midwest. One of them you guys have been kind of alluding to a little bit as a broader answer, maybe via NEXUS, a couple of other pipes to get gas down to the Gulf Coast. It looked like a Wave 3 LNG project or a couple of projects have needed to be kind of the anchors on something like that. I'd love to hear any color from you on if you're seeing that kind of shipper engaging with you in that market right now.

Yes, that's a good question. That's kind of what I'll call the over-the-horizon question, where in 5 years, where is that incremental 15 to 20 Bcf coming from and getting down to the coast. So there's a couple of people that have put their ore in the water to try to run up the flag pull some big projects. I'm not sensing at the moment, John, that they're getting traction.

The one thing that I think is changing kind of in the moment is this demand manifesting itself in the Midwest proper. And that demand is going to want to grab incremental Appalachian gas first. It's going to be cheaper, I think, to build and serve that demand than it is to try to pull that Appalachian gas all the way to the Gulf at least in the near term.

So I do expect we will continue to be testing the market on this longer-term Gulf demand that is going to need to be served I just don't think the market is ready yet, John. That's just my opinion at the moment, but it is being actively discussed. As you'd expect, we're part of those discussions. But it feels like it's a ways off yet before people get really serious about that.

That's clear. That makes sense. My second one is just a quick follow-up. I think it was to Mohan's second question. When you guys are talking about getting involved in the behind the meter side makes sense, it's in line with what you guys have talked about before. Are you exploring any potential projects where you'd be providing the power there as well? Or is your line still is we want to provide the gas and the pipe to get it there?

Yes, John, we're not going to change our strategic focus, right? I think we're really focused on our core business right now, and we have this generational opportunity in our core business, and I want to be 100% focused on that right now. And I want the entire organization focused on it, and I don't want to distract the organization with a similar but different line of business that we would embark into. My whole organization is very familiar with that business, John, given that we spun out of DTE. As you know, DTE, we built lots of generation, utility and behind-the-fence generation. .

So we're resisting the temptation to go there because we have such a robust opportunity set in our core business. And we're going to stay focused on that right now. So yes, we will go to a behind-the-meter opportunity, but our role will be expanding the freeway to that location or building the pipeline lateral from our big freeway pipes to the site. But we won't go behind the meter into the power generation component of that.

Next, we'll go to Gabe Moreen at Mizuho

I just had a quick question on the next potential LEAP expansion here. And to the extent that you view the recent egress project completion, including LEAP 4 is maybe satisfying this next round of LNG projects that are basically going into service or do you think there's still more that needs to be gas and needs to be down south? And then also strategically speaking, there's been some consolidation, I guess, with gathering systems. Do you think there may be need to be some inorganic growth to drive volumes in order for another expansion to occur?

Dave, yes, there's more egress required to go down to the Gulf than exist in the network today. So even with [indiscernible] LNG 3 coming into service, and they're ramping as we speak. Once those systems are full, and I expect they're going to be full very quickly here, more capacity is required down there. And that's part of the reason why we're proactively expanding our connectivity to the future loads. So if you thumb through the deck, you'll see what I'm referring to here, expanding into the Woodside header system and additional expansion to Cameron for their additional expansions.

So we're just repositioning ourselves to be the preferred freeway down into these load centers. And again, there'll be some competitive tension in the process of chasing the new load, but like I've said in the past, and I think we've demonstrated, we'll win our fair share. I think we've disproportionately won our fair share to date. And we'll continue to win. And I'm sure some of our colleagues around us will win some incremental demand as well, but it's such a large growth area that there's -- it's just a really strong opportunity set right now.

So like most things, it's just a matter of timing and when those facilities feel comfortable making those commitments and then the Domino's kind of fall back up into the basin and people line up capacity.

Great. And then maybe if I could just follow up with a small one on the MVP expansion, which itself just got upsized. I was wondering if there's any implications for your Stonewall expansion.

Yes. We view that very -- as a very positive fundamental event for the Stonewall expansion. And that's -- we view that as a strategic independent supply source into Mountain Valley for all the shippers. And we're in flight right now under construction on that project. So we view that as a very positive outlet and what we view will be a valuable outlet for the long term for all those Mountain Valley shippers. .

Our next question comes from Zackery Van Everen at TPH.

Maybe shifting over to the Tioga flows. Maybe a quick reminder. That system after the expansion is 210 MMcf a day, correct? And then is the expansion connecting to a new gathering system/customer, and that's where these volumes are coming from?

Zach. So we'll level set here with Tioga. Tioga is anchored by Seneca. Seneca is the customer of ours and this ramp was really Seneca getting in and drilling in the third quarter. So in terms of who their customers are, I don't know the answer to that, Zach. That would be a good question maybe for them. But they're our customer, our gathering customer. And yes, we're really happy with the expansion. And I'm not sure you had the right number there on the expansion and that may be something that you may want to follow up with Todd after the call on.

Okay. Sounds good. Appreciate the color there. And then maybe a quick one. I know we talked a little bit about the AI demand in Louisiana, but we've also seen a few upstream names as well as midstream talk about the industrial demand that's showing up there. Do you guys have connectivity? Or is that an opportunity you guys would also pursue if industrial demand was able to connect into your system?

Yes. The industrial demand doesn't get talked about a lot, Zach. So I'm glad that you're bringing it up on the call. There's significant domestic industrial demand in that corridor, that Louisiana corridor that is now sort of competing or battling for the molecules with the LNG terminals. So that's also become a pretty attractive market.

I think one of our customers may have talked about that on their recent call. So yes, the short answer to your question is yes, we are very aware of that. One of our previous expansions was sending gas to the system that predominantly serves those industrial markets. So yes, doesn't get talked about. I'm glad you're bringing it up. That's a good load for LEAP. And I'm glad you've asked the question.

I'd say the other thing, and I'm going to maybe deviate from your question and add in a little more color here is that some of those markets are interested in, what I'll call, lower carbon molecules. So whether it's our clean fuels project that is ramping up or whether it's our Louisiana carbon capture project, sort of the strategic rationale for those investments is fundamentally driven by this emerging market here domestically and internationally. Customers desiring a lower carbon footprint molecule. And those are long-term strategic fundamental value plays. I'll say it that way. And that's another benefit of our network with the carbon capture module that will eventually turn on once we get through the process with the state of Louisiana.

It's going to position LEAP, as we, I think, discussed years ago. We want to position LEAP to be -- have a low-carbon pathway wellhead to water, so I'll stop there, but the same holds true for industrials. There's industrials in the country that are beginning to become more sensitive to that topic and are expressing a desire for that lower carbon molecule as well.

Our final question comes from Julian DeMillanSmith at Jefferies.

This is Rob Moskow on for Julian. Just 1 for me, maybe revisiting the Haynesville outlook in terms of your market share and serving that downstream LNG demand in the Louisiana corridor. Can you maybe talk through how you see that market share trending over time given the pipelines that are coming online and some of the new announcements in Louisiana and East Texas. And this connectivity into Carthage allow you to maybe maintain or even grow that market share. It just seems like even maintaining with the amount of growth that allow you to reach the upper bound of that expansion potential on LEAP.

Yes. Rob, and thanks for the question. And I think you might be batting cleanup right now. So it's always an enviable position to be in on the call. I think our market share I think I've been really pleased with the commercial team's ability to compete. And if you kind of look at how things have evolved over the last 2 or 3 years, we've gotten more than our fair share of the market.

So our market share is actually, I think, grown from, if you roll the clock back 2 or 3 years ago to where we are today. So that's encouraging. I expect, at a minimum, maintain that market share going forward. So I think that's the math that you were alluding to is that if the market grows by x, our goal is to hold the same percentage of that incremental that we currently hold today.

So that's going to require some work and confident that the team is positioned and you alluded to Carthage, and that's why those moves we made a year ago to create that connectivity to Carthage, I think was so important strategically for where we think this market is going in the next 2-5 years as we wanted to have really strong connectivity across the basin and likewise, have really strong connections across the markets on the southern end of the network so that we can compete effectively for that incremental growth. But I'll stop there.

And that concludes our Q&A session. I will now turn the conference back over to David for closing remarks.

Well, thanks, everybody. We certainly appreciate all the questions today. I appreciate your interest in the company and look forward to seeing everybody at the next conference. Take care.

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