DT Midstream, Inc.DTM
DT Midstream, Inc. Revenue Disclosure
REVENUE
Significant Accounting Policy – Revenue
Pipeline revenues consist of services related to the gathering, transportation and/or storage of natural gas. Gathering revenues consist of services related to the gathering, processing, and/or treating of natural gas. Revenue is measured based upon the pricing or consideration for such services specified in the contract with a customer. Consideration may consist of both fixed components including fixed demand charges and fixed deficiency fee rates for MVCs, and variable components including fixed rates for the actual volumes flowed under interruptible services and other associated fees.
Our contracts with customers generally contain a single performance obligation, which is a promise to deliver either a distinct service or a series of distinct services to the customer. When multiple performance obligations exist, the contract consideration is allocated between the performance obligations based on the relative standalone selling price, which is determined by prices charged to customers or the adjusted market assessment approach. The adjusted market assessment approach involves evaluating the market in which we sell services and estimating the price that a customer in that market would be willing to pay.
Revenue is recognized when performance obligations are satisfied by delivering a service to a customer, which occurs when the service is provided to the customer. When a customer simultaneously receives and consumes the service provided, revenue is recognized over time. Alternatively, if it is determined that the criteria for recognition of revenue over time is not met, the revenue is considered to be recognized at a point in time. Our revenues, including estimated unbilled amounts, are generally recognized over time as actual services are provided, or ratably over time when providing a stand-ready service. Unbilled amounts are generally determined using preliminary meter data volumes and contracted pricing, and typically result in minor adjustments. Generally, uncertainties in the variable consideration components are resolved and revenue amounts are known at the time of recognition. We have determined that the above methods represent a faithful depiction of delivering a service to the customer. Revenues are typically billed and consideration received monthly, however, certain deficiency fees related to MVCs are billed quarterly or annually.
Disaggregation of Revenue
The following is a summary of revenues disaggregated by segment:
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| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (millions) | |||||||||||||||||
Pipeline (a) | $ | 687 | $ | 443 | $ | 377 | |||||||||||
| Gathering | 556 | 538 | 545 | ||||||||||||||
| Total operating revenues | $ | 1,243 | $ | 981 | $ | 922 | |||||||||||
(a) Includes revenues outside the scope of ASC 606 primarily related to contracts accounted for as leases of $78 million, $9 million and $7 million for the years ended December 31, 2025, 2024 and 2023, respectively. The lease income increased for the year ended December 31, 2025 from the operating lease obtained as part of the Midwest Pipeline Acquisition.
Nature of Services
We primarily provide two types of revenue services: firm service and interruptible service. Firm service revenue contracts provide for fixed revenue commitments regardless of actual volumes of natural gas that flow, which leads to more stable operating performance, revenues and cash flows and limits our exposure to natural gas price fluctuations. Firm service revenue contracts are typically long-term and structured using fixed demand charges or MVCs with fixed deficiency fee rates. Contracts structured using fixed demand charges contain a performance obligation of a stand-ready series of distinct services that are substantially the same with the same pattern of transfer to the customer, therefore revenue is recognized ratably over time. Contracts structured using MVCs with fixed deficiency fee rates require customers to transport or store a minimum volume of natural gas over a specified time period. If a customer fails to meet its MVCs for the specified time period, the contract consideration includes a fixed rate for the actual volumes gathered, transported or stored, and a deficiency fee for the shortfall between the MVCs and the actual volumes gathered, transported, or stored. If a customer exceeds its MVC for the specified time period, the contract consideration is based on fixed rates for the actual volumes gathered, transported, or stored. The contract consideration is allocated to each distinct monthly performance obligation, consistent with the allocation objective and based upon the level of effort required to satisfy the service obligation. Revenues are generally recognized over time based on the output measure of natural gas volumes gathered, transported, or stored, with the recognition of the deficiency fee revenue in the period when it is known the customer cannot make up the deficient volumes in the specified time period. Interruptible service revenue contracts typically contain fixed rates, with total consideration dependent on actual natural gas volumes that flow. Interruptible service revenues are recognized over time based on the output measure of natural gas volumes gathered, transported, or stored. Certain of our contracts allow for the recovery of production-related operating expenses, which are offsetting in revenue and operating expense. Recovery of production-related operating expenses were $61 million, $51 million and $53 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Contract Liabilities
The following is a summary of contract liability activity:
| 2025 | 2024 | ||||||||||
| (millions) | |||||||||||
| Balance as of January 1 | $ | 153 | $ | 129 | |||||||
Increases due to cash received or receivable, excluding amounts recognized as revenue during the period (a) | 69 | 47 | |||||||||
| Revenue recognized that was included in the balance at the beginning of the period | (37) | (23) | |||||||||
Balance as of December 31 | $ | 185 | $ | 153 | |||||||
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(a) During the year ended December 31, 2025 and 2024, we collected prepayment amounts from customers under various long-term revenue contracts on Ohio Utica Gathering, Appalachia Gathering, Blue Union Gathering and LEAP.
Contract liabilities generally represent amounts paid by or receivable from customers for which the associated performance obligation has not yet been satisfied. Contract liabilities associated with these services are recognized upon delivery of the service to the customer.
The following table presents contract liability amounts as of December 31, 2025 that are expected to be recognized as revenue in future periods:
| (millions) | |||||
| 2026 | $ | 25 | |||
| 2027 | 24 | ||||
| 2028 | 22 | ||||
| 2029 | 22 | ||||
| 2030 | 22 | ||||
| 2031 and thereafter | 70 | ||||
| Total | $ | 185 | |||
Transaction Price Allocated to the Remaining Performance Obligations
In accordance with optional exemptions available under ASC 606, we do not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which the amount of revenue recognized depends upon our invoices for actual volumes gathered, transported, or stored, and (3) contracts for which variable consideration relates entirely to an unsatisfied performance obligation.
Such contracts consist of various types of performance obligations, including providing midstream services. Contracts with variable volumes and/or variable pricing, including those with pricing provisions tied to a consumer price or other index, have also been excluded as the related contract consideration is variable at the contract inception. Contract lengths vary from cancellable to multi-year.
The following table presents revenue amounts related to fixed consideration associated with unsatisfied performance obligations as of December 31, 2025 that are expected to be recognized as revenue in future periods:
| (millions) | |||||
| 2026 | $ | 259 | |||
| 2027 | 209 | ||||
| 2028 | 154 | ||||
| 2029 | 126 | ||||
| 2030 | 106 | ||||
| 2031 and thereafter | 287 | ||||
| Total | $ | 1,141 | |||
Costs to Obtain or Fulfill a Contract
We recognize an asset from the costs incurred to obtain a revenue contract only if we expect to recover those costs. In addition, the costs to fulfill a revenue contract are capitalized if the costs are specifically identifiable to a revenue contract, would result in enhancing resources that will be used in satisfying performance obligations in the future, and are expected to be recovered. These capitalized costs are amortized on a systematic basis consistent with the pattern of transfer of the services to which such costs relate.
As of December 31, 2025 and December 31, 2024, we had capitalized costs to obtain or fulfill a contract of $17 million and $18 million, respectively, which are included in other current assets and other noncurrent assets in the accompanying Consolidated Statements of Financial Position. During the years ended December 31, 2025, 2024 and 2023 we recognized $1 million of amortization expense related to such capitalized costs.
Major Customers
The following table summarizes customers which represent 10% or more of our total revenue for the years ended December 31, 2025, 2024 and 2023. Both Pipeline and Gathering segments provide services to these customers.
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Customer | Percentage | Customer | Percentage | Customer | Percentage | ||||||||||||||||||||||||||||||
| Revenue | of Total | Revenue | of Total | Revenue | of Total | ||||||||||||||||||||||||||||||
| Customer: | (millions, except percentages) | ||||||||||||||||||||||||||||||||||
| Expand Energy | $ | 560 | 45 | % | $ | 555 | 56 | % | $ | 560 | 60 | % | |||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 25, 2022 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.