DT MIDSTREAM, INC.

(DTM)
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DT MIDSTREAM, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

02/25/2022 | 12:15pm EDT
This discussion contains forward-looking statements that involve risks and
uncertainties. The forward-looking statements are not historical facts, but
rather are based on current expectations, estimates, assumptions and projections
about the midstream industry and our business and financial results. Our actual
results could differ materially from the results contemplated by these
forward-looking statements due to a number of factors, including those discussed
in the sections entitled "Forward-Looking Statements" and "Risk Factors."

OVERVIEW

Our Business


We are an owner, operator, and developer of an integrated portfolio of natural
gas midstream assets. We provide multiple, integrated natural gas services to
customers through our interstate pipelines, intrastate pipelines, storage
systems, lateral pipelines and related treatment plants and compression and
surface facilities, and gathering systems and related treatment plants and
compression and surface facilities. We also own joint venture interests in
equity method investees which own and operate interstate pipelines, many of
which have connectivity to our wholly owned assets.

Our core assets connect demand centers in the Midwestern U.S., Eastern Canada,
Northeastern U.S. and Gulf Coast regions to production areas of the Haynesville
and Marcellus/Utica dry natural gas formations in the Gulf Coast and Appalachian
Basins, respectively.

The Separation

On October 27, 2020, DTE Energy announced that its Board of Directors had
authorized the separation of the DTE midstream business, formerly known as DTE
Gas Enterprises, LLC, and its consolidated subsidiaries ("DT Midstream", "we",
"our", "us") from DTE Energy.

In June 2021, in order to facilitate the Separation and settle short-term borrowings due to DTE Energy, we issued long-term debt in the form of $2.1 billion senior notes and a $1.0 billion term loan facility. Using the debt proceeds, net of discount and issuance costs of $53 million, we made the following cash payments:

•Settled Short-term borrowings due to DTE Energy as of June 30, 2021 of $2,537 million;

•Settled Accounts Receivable due from DTE Energy and Accounts Payable due to DTE Energy as of June 30, 2021 for net cash of $9 million; and

•Provided a one-time special dividend to DTE Energy of $501 million.


On July 1, 2021, DTE Energy completed the Separation through the distribution of
96,732,466 shares of DT Midstream common stock to DTE Energy shareholders of
record as of 5:00 p.m. ET on June 18, 2021 (the "record date"). DTE Energy
shareholders received one share of DT Midstream common stock for every two
shares of DTE Energy common stock held at the close of business on the record
date, with certain shareholders receiving cash in lieu of fractional shares of
DT Midstream common stock.

Following the Separation on July 1, 2021, we became an independent public company listed under the symbol "DTM" on the NYSE. DTE Energy no longer retains any ownership in our company.

See Note 1, "Separation, Description of the Business, and Basis of Presentation" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

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RESULTS OF OPERATIONS


Management's Discussion and Analysis of Financial Condition and Results of
Operations includes financial information prepared in accordance with GAAP. The
following sections provide a detailed discussion of the operating performance
and future outlook of our segments. Segment information, described below,
includes intercompany revenues and expenses, as well as other income and
deductions that are eliminated in the Consolidated Financial Statements.

For purposes of the following discussion, any increases or decreases refer to the comparison of the year ended December 31, 2021 to the year ended December 31, 2020, or the year ended December 31, 2020 to the year ended December 31, 2019.

The following table summarizes our consolidated financial results:

                                                                                                                        Year Ended December 31,

                                                                                                                2021                2020              2019
                                                           (millions, except per share amounts)
Operating revenues                                                                                        $     840              $    754          $    504
Net Income Attributable to DT Midstream                                                                         307                   312               

204

Diluted Earnings per Common Share                                                                         $    3.16              $   3.23          $   

2.11

Operating revenues increased in the years ended December 31, 2021 and December 31, 2020 in both our Pipeline and Gathering segments.

                                                                     Year Ended December 31,

                                                                                      2021              2020              2019
                                                              (millions)
Net Income Attributable to DT Midstream by
Segment
Pipeline                                                                           $    178          $    155          $    116
Gathering                                                                               129               157                88
Total                                                                              $    307          $    312          $    204


Net income attributable to DT Midstream decreased $5 million in the year ended
December 31, 2021 due to lower earnings at our Gathering segment, partially
offset by higher earnings at our Pipeline segment. Net income attributable to DT
Midstream increased in the year ended December 31, 2020 primarily due to the
first full year of operations of Blue Union and a partial year of operations for
LEAP.

See Note 4, "Acquisitions" to the Consolidated Financial Statements under Part
II, Item 8 of this Form 10-K, for discussion of the acquisition of Blue Union
and LEAP in December 2019. See detailed explanations of segment performance in
the sections below.
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Pipeline


The Pipeline segment consists of our interstate pipelines, intrastate pipelines,
storage systems, lateral pipelines and related treatment plants and compression
and surface facilities. This segment also includes our equity method
investments. Pipeline results and outlook are discussed below:
                                                                   Year Ended December 31,
                                                                                    2021              2020              2019
                                                            (millions)
Operating revenues                                                               $    307          $    266          $    234
Operation and maintenance                                                              59                53                64
Depreciation and amortization                                                          63                52                46
Taxes other than income                                                                13                 7                 6
Asset (gains) losses and impairments, net                                               -                 -                 1
Operating Income                                                                      172               154               117
Interest expense                                                                       51                43                56
Interest income                                                                        (1)               (4)              (11)
Earnings from equity method investees                                                (126)             (108)              (98)
Other (income) and expense                                                             (3)               (2)                -
Income Tax Expense                                                                     62                58                38
Net Income                                                                            189               167               132
Less: Net Income Attributable to Noncontrolling
Interests                                                                              11                12                16
Net Income Attributable to DT Midstream                                     

$ 178 $ 155 $ 116



Operating revenues increased $41 million in the year ended December 31, 2021
primarily due to higher LEAP revenues of $51 million as a result of a full year
of LEAP operations in 2021. LEAP was placed into service in the third quarter
2020. This increase was partially offset by lower storage revenues at the
Washington 10 Storage Complex of $8 million due to lower market rates. Operating
revenues increased $32 million in the year ended December 31, 2020 primarily due
to the LEAP partial year of operations and higher storage and Stonewall Gas
Gathering revenues, partially offset by lower services provided to our equity
method investees and lower Bluestone volumes.

Operation and maintenance expense increased $6 million in the year ended
December 31, 2021 primarily due to higher Separation related transaction costs,
higher public company costs, and higher LEAP operating costs after it was placed
into service in the third quarter 2020, partially offset by cost savings
initiatives. Operation and maintenance expense decreased $11 million in the year
ended December 31, 2020 primarily due to lower reserves for uncollectible
accounts and cost savings initiatives.

Depreciation and amortization expense increased $11 million in the year ended
December 31, 2021 primarily due to higher depreciation related to LEAP of $12
million after it was placed into service in the third quarter 2020, partially
offset by lower depreciation of storage assets. Depreciation and amortization
expense increased $6 million in the year ended December 31, 2020 primarily due
to depreciation related to LEAP after it was placed in service, partially offset
by increased useful lives of certain storage assets.

Taxes other than income expense increased $6 million in the year ended December 31, 2021 primarily due to LEAP after it was placed into service in the third quarter 2020.


Interest expense increased $8 million in the year ended December 31, 2021
primarily due to higher capitalized interest during 2020 related to LEAP
construction, partially offset by lower interest on borrowings from DTE Energy
in 2021. Interest expense decreased $13 million in the year ended December 31,
2020 primarily due to lower interest on borrowings from DTE Energy in 2020.

Earnings from equity method investees increased $18 million in the year ended
December 31, 2021 primarily due to higher operating earnings of $12 million from
NEXUS, $3 million from the Vector Pipeline and $2 million from the Millennium
Pipeline. Earnings from equity method investees increased $10 million in the
year ended December 31, 2020 primarily due to higher NEXUS earnings, including
the first full year of operations of the Generation Pipeline.
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Income tax expense increased $4 million in the year ended December 31, 2021
primarily due to an increase in Income before income taxes. Income tax expense
increased $20 million in the year ended December 31, 2020 primarily due to an
increase in Income before income taxes.

Net income attributable to noncontrolling interests decreased $4 million in the year ended December 31, 2020 primarily due to the May 2019 purchase of an additional 30% ownership interest in Stonewall Gas Gathering.

Outlook


We believe our long-term agreements with customers and the location and
connectivity of our pipeline assets soundly position the business for future
growth. We will continue to pursue economically attractive expansion
opportunities that leverage our current asset footprint and strategic
relationships. These growth opportunities include future Haynesville system
expansion (LEAP), completion of a new customer interconnection at Stonewall Gas
Gathering, and additional growth related to our equity method investees.

Gathering


The Gathering segment consists of our gathering systems and related treatment
plants and compression and surface facilities. Gathering results and outlook are
discussed below:
                                                                  Year Ended December 31,
                                                                                   2021              2020              2019
                                                           (millions)
Operating revenues                                                              $    534          $    489          $    273
Operation and maintenance                                                            173               123                80
Depreciation and amortization                                                        103               100                47
Taxes other than income                                                               11                 8                 2
Asset (gains) losses and impairments, net                                             17                (2)                -
Operating Income                                                                     230               260               144
Interest expense                                                                      61                70                22
Interest income                                                                       (3)               (5)                -
Other (income) and expense                                                             1               (20)                -
Income Tax Expense                                                                    42                58                34
Net Income Attributable to DT Midstream                                     

$ 129 $ 157 $ 88



Operating revenues increased $45 million in the year ended December 31, 2021
primarily due to higher gathering revenues on Blue Union of $33 million and the
Appalachia Gathering System of $17 million, partially offset by lower volumes on
Susquehanna Gathering System of $4 million. Operating revenues increased
$216 million in the year ended December 31, 2020 primarily due to the first full
year of Blue Union operations.

Operation and maintenance expense increased $50 million in the year ended
December 31, 2021 primarily due to an increase of $30 million related to
increased Blue Union operations, higher activity on the Appalachia Gathering
System, higher Separation related transaction costs, and higher public company
costs. Operation and maintenance expense increased $43 million in the year ended
December 31, 2020 primarily due to the first full year of Blue Union operations,
partially offset by no direct acquisition costs in 2020, cost savings
initiatives and lower physical purchases of gas from Appalachia Gathering System
customers.

Depreciation and amortization expense increased $53 million in the year ended December 31, 2020 primarily due to the first full year of Blue Union operations.

Taxes other than income expense increased $6 million in the year ended December 31, 2020 primarily due to placing the Blue Union assets in service.

Asset (gains) losses and impairments, net increased $19 million in the year ended December 31, 2021 primarily due to the 2021 loss on notes receivable for an investment in certain assets in the Utica shale region.

Interest expense decreased $9 million in the year ended December 31, 2021, primarily due to a lower interest rate on outstanding borrowings from DTE Energy. Interest expense increased $48 million in the year ended December 31, 2020 primarily due to the first full year of financing Blue Union.

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Other (income) and expense increased $21 million in the year ended December 31,
2021 and decreased $20 million in the year ended December 31, 2020. The
variances were primarily due to a post Blue Union acquisition income settlement
of $20 million in 2020.

Income tax expense decreased $16 million in the year ended December 31, 2021
primarily due to a decrease in Income before income taxes. Income tax expense
increased $24 million in the year ended December 31, 2020 primarily due to an
increase in Income before income taxes.

Outlook


We believe our long-term agreements with producers and the quality of the
natural gas reserves in the Marcellus/Utica and Haynesville shale regions
soundly position the business for future growth. We will continue to pursue
economically attractive expansion opportunities that leverage our current asset
footprint and strategic relationships. These growth opportunities include future
Haynesville system expansion (Blue Union) and expansion opportunities at the
Appalachia Gathering System.

STRATEGY

Our principal business objective is to safely and reliably operate and develop
natural gas assets across our premier footprint. Our proven leadership and
highly engaged employees have an excellent track record. Prospectively, we
intend to continue this track record by executing on our natural gas-centric
business strategy focused on disciplined capital deployment and supported by a
flexible, well capitalized balance sheet. Additionally, we intend to develop low
carbon business opportunities and deploy greenhouse gas reducing technologies as
part of our goal of being leading environmental stewards in the midstream
industry and have announced a net zero carbon emissions goal by 2050. Our
strategy is premised on the following principles:

•disciplined capital deployment in assets supported by strong fundamentals;

•capitalize on asset integration and utilization opportunities;

•pursue economically attractive opportunities;

•grow cash flows supported by long-term firm revenue contracts; and

•provide exceptional service to our customers.

CAPITAL INVESTMENTS


Capital spending within our company is primarily for ongoing maintenance and
expansion of our existing assets, and if identified, attractive growth
opportunities. We have been disciplined in our capital deployment and make
growth investments that meet our criteria in terms of strategy, management
skills, and identified risks and expected returns. All potential investments are
analyzed for their rates of return and cash payback on a risk adjusted basis. We
anticipate total capital expenditures, inclusive of contributions to equity
method investees, in 2022 of approximately $350 million to $400 million.

ENVIRONMENTAL MATTERS


We are subject to extensive U.S. federal, state, and local environmental
regulations. Additional compliance costs may result as the effects of various
substances on the environment are studied and governmental regulations are
developed and implemented. Actual costs to comply with such regulation could
vary substantially from our expectations. Pending or future legislation or
regulation could have a material impact on our operations and financial
position. Potential impacts include expenditures for environmental equipment,
such as pollution control equipment, beyond what is currently planned, financing
costs related to additional capital expenditures and the replacement costs of
aging pipelines and other facilities.

For further discussion of environmental matters, see Note 13, "Commitments and
Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of
this Form 10-K.
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CLIMATE CHANGE


We believe we have a responsibility to address climate change and have made
consistent, effective environmental policies a priority. Our Board of Directors
includes a committee focused on environmental, social and governance
initiatives. Our strategy will focus on targeted growth from carbon-reducing
technologies associated with our current platforms. We have announced our intent
to employ carbon-reducing technologies as part of our goal of being leading
environmental stewards in the midstream industry and have committed to a net
zero carbon emissions goal by 2050. We expect to achieve a 30% reduction in the
next decade.

During 2022, we will continue our exploration of early-stage development opportunities for energy transition advancements leveraging our existing assets, competencies and partnerships. These opportunities include the following:

•Our efforts to advance carbon capture projects across our geographic regions;

•Our "wellhead to water" expansion proposal of the Haynesville system which offers a carbon neutral pathway for supply to reach LNG markets;

•Our strategic joint development agreement with Mitsubishi Power Americas, Inc. to advance hydrogen development projects across the United States; and

•Our new partnership with Project Canary to monitor methane emissions.

Capital expenditure investments for these projects have been contemplated in our forecasted capital expenditures discussed in Capital Investments section.


DT Midstream plans to publish its inaugural Sustainability Report in the second
quarter 2022. The information in our Sustainability Report is not incorporated
by reference into this Form 10-K.

For discussion of various risks associated with climate change related laws and
regulations, reputational risks of climate change, and the physical risks of
climate change, see Part I, Item 1A. "Risk Factors" of this Form 10-K. For
discussion of recent climate change related laws and regulations, see Part I,
Item 1. and 2. "Business and Properties - Regulatory Environment" of this Form
10-K.

COVID-19 PANDEMIC

During the first quarter 2020, the COVID-19 pandemic began impacting the states
in which we operate. We are actively monitoring the impact of the COVID-19
pandemic on supply chains, markets, counterparties and customers and any related
impacts on operating costs, customer demand and recoverability of assets that
could materially impact our financial results. To date, impacts from the
COVID-19 pandemic have not had a material effect on our financial results.

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CAPITAL RESOURCES AND LIQUIDITY

Cash Requirements


Our principal liquidity requirements are to finance our operations, fund capital
expenditures, satisfy our indebtedness obligations, and pay dividends, as deemed
appropriate. We believe we will have sufficient internal and external capital
resources to fund anticipated capital and operating requirements. We expect that
cash from operations in 2022 will be approximately $605 million to $655 million.
                                                                   Year Ended December 31,
                                                                      2021               2020                2019
                                                                         (millions)
Cash and Cash Equivalents at Beginning of Period                  $      42          $       46          $       26
Net cash and cash equivalents from operating
activities                                                              572                 597                 390
Net cash and cash equivalents from (used for)
investing activities                                                    123                (714)             (2,561)
Net cash and cash equivalents (used for) from
financing activities                                                   (605)                113               2,191
Net Increase (Decrease) in Cash and Cash Equivalents                     90                  (4)                 20
Cash and Cash Equivalents at End of Period                        $     132          $       42          $       46


Operating Activities

Cash flows from our operations can be impacted in the short term by the volumes
gathered or transported through our systems, changing commodity prices,
seasonality, weather fluctuations, dividends from equity method investees and
the financial condition of our customers. Our preference to enter into firm
service contracts with firm reservation fees helps minimize our long-term
exposure to commodity prices and its impact on the financial condition of our
customers and provides us more stable operating performance and cash flows.

Net cash and cash equivalents from operating activities decreased $25 million in
the year ended December 31, 2021 primarily due to net changes in working
capital, and a decrease in other income driven by proceeds received from a
nonrecurring settlement in 2020. These decreases were partially offset by an
increase in operating income after adjustment for non-cash items including
depreciation and amortization expense, amortization of operating lease
right-of-use assets, and asset (gains) losses and impairments.

Net cash and cash equivalents from operating activities increased $207 million
in the year ended December 31, 2020 primarily due to an increase in net income;
adjusted for non-cash items, including depreciation and amortization expense and
deferred income taxes; and a change in working capital items. The change in
working capital items in 2020 compared to 2019 primarily related to other
current and noncurrent assets and liabilities. These increases were partially
offset by an increase in earnings from equity method investees and a decrease in
dividends from equity method investees.

Investing Activities


Cash outflows associated with investing activities are primarily the result of
plant and equipment expenditures, acquisitions, and contributions to equity
method investees. Cash inflows from investing activities are generated from
collection of notes receivable, distributions from equity method investees, and
proceeds from asset sales.

Net cash and cash equivalents from investing activities increased $837 million
in the year ended December 31, 2021 primarily due to the Separation related cash
settlement of the Notes receivable due from DTE Energy, a decrease in cash used
for plant and equipment expenditures, and a reduction in contributions to equity
method investees.

Net cash and cash equivalents used for investing activities decreased
$1.8 billion in the year ended December 31, 2020 primarily due to a decrease in
acquisitions, net of cash acquired, which was driven by our acquisition of Blue
Union and LEAP in 2019, and a reduction in contributions to equity method
investees in 2020. These decreases were partially offset by an increase in cash
used for plant and equipment expenditures and an increase in notes receivable
due from DTE Energy.
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Financing Activities


Prior to the Separation we relied on short-term borrowings and contributions
from DTE Energy as a source of funding for capital requirements not satisfied by
our operations. In June 2021, we issued senior notes in an aggregate principal
amount of $2.1 billion and entered into a Credit Agreement providing for a $1.0
billion Term Loan Facility and a $750 million Revolving Credit Facility. See
Note 11, "Debt" to the Consolidated Financial Statements under Part II, Item 8
of this Form 10-K.

Net cash and cash equivalents used for financing activities increased $718
million in the year ended December 31, 2021 primarily due to the Separation
related repayment of short-term borrowings due to DTE Energy and payment of a
one-time special dividend to DTE Energy, a decrease in contributions from DTE
Energy, and dividends paid on common stock in 2021. These increases were
partially offset by net proceeds received from the issuance of long-term debt in
June 2021 and decreased acquisition-related deferred payments.

Net cash and cash equivalents from financing activities decreased by $2.1
billion in the year ended December 31, 2020 primarily due to reduced
contributions from DTE Energy, lower cash from short-term borrowings due to DTE
Energy and the Blue Union and LEAP acquisition related deferred payment. The
decrease was partially offset by the purchase of noncontrolling interests in
2019.

During 2021, DT Midstream paid cash dividends on common stock of $0.60 per share
related to the quarter ended September 30, 2021. See Note 9, "Earnings per Share
and Dividends" to the Consolidated Financial Statements under Part II, Item 8 of
this Form 10-K.

Outlook

We expect to continue executing on our natural gas-centric business strategy
focused on disciplined capital deployment and supported by a flexible, well
capitalized balance sheet. Other than the impact of the Separation on our debt
and equity capitalization, described further below, we are not aware of any
trends or other demands, commitments, events or uncertainties that will result
in or that are reasonably likely to result in our liquidity increasing or
decreasing materially.

Our working capital requirements will be primarily driven by changes in accounts receivable and accounts payable. We continue our efforts to identify opportunities to improve cash flows through working capital initiatives and obtaining additional long-term firm commitments from customers.


Historically, our sources of liquidity included cash generated from operations
and, prior to the Separation, loans obtained through DTE Energy's corporate-wide
cash management program. After the Separation, our sources of liquidity include
cash generated from operating activities and available borrowings under our
Revolving Credit Facility. We began investing in money market cash equivalents
in August 2021.

In June 2021, we issued long-term debt in the form of $2.1 billion Senior Notes
and a $1.0 billion Term Loan Facility. Proceeds were used for the repayment of
the Short-term borrowings due to DTE Energy as well as a one-time special
dividend provided to DTE Energy. We also entered into a $750 million secured
Revolving Credit Facility for general corporate purposes and letter of credit
issuances to support our future operations and liquidity. The Credit Agreement
covering the Term Loan Facility and Revolving Credit Facility includes financial
covenants that DT Midstream must maintain. See Note 11, "Debt" to the
Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for
additional discussion on the financial covenants.

As of December 31, 2021, we had $8 million of letters of credit outstanding and no borrowings outstanding under our Revolving Credit Facility. We have approximately $874 million of available liquidity as of December 31, 2021, consisting of cash and cash equivalents and amounts available under our Revolving Credit Facility.


We expect to pay regular cash dividends to DT Midstream common stockholders in
the future. Any payment of future dividends is subject to approval by the Board
of Directors and may depend on our future earnings, cash flows, capital
requirements, financial condition, and the effect a dividend payment would have
on our compliance with relevant financial covenants. Over the long-term, we
expect to grow our dividend consistent with cash flow growth and are targeting a
payout ratio consistent with pure-play midstream companies.


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We believe we will have sufficient operating flexibility, cash resources and
funding sources to maintain adequate amounts of liquidity and to meet future
operating cash, capital expenditure and debt servicing needs. However, virtually
all of our businesses are capital intensive, or require access to capital, and
the inability to access adequate capital could adversely impact future earnings
and cash flows.

See Note 1, "Separation, Description of the Business, and Basis of Presentation", Note 11, "Debt" and Note 13, "Commitments and Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

Credit Ratings


Credit ratings are intended to provide banks and capital market participants
with a framework for comparing the credit quality of securities and are not a
recommendation to buy, sell, or hold securities. Our credit ratings affect our
cost of capital and other terms of financing, as well as our ability to access
the credit and commercial paper markets. Our management believes that the
current credit ratings provide sufficient access to capital markets. However,
disruptions in the banking and capital markets not specifically related to us
may affect our ability to access these funding sources or cause an increase in
the return required by investors.

Contractual Obligations


The following table details our contractual obligations due by year as of
December 31, 2021:
                              2022       2023       2024       2025       2026 and Thereafter
                                                         (millions)
Long-Term Debt:
Term Loan Facility (a)       $  10      $  10      $  10      $  10      $                955
Senior Notes (b)                 -          -          -          -                     2,100
Letters of credit                -          -          -          -                         8
  Interest Expense (c)         114        114        114        114                       459
Operating Leases                17         11          3          1                         7

Other Purchase Obligations 4 4 2 1

                1
Total Obligations            $ 145      $ 139      $ 129      $ 126      $              3,530

_____________________________

(a) Excludes $4 million of unamortized debt discount and $15 million of
unamortized debt issuance costs
(b) Excludes $30 million of unamortized debt issuance costs
(c) Interest Expense calculation related to the Term Loan Facility assumes the
variable rate of LIBOR is 0.50% plus 2.00%

OFF-BALANCE SHEET ARRANGEMENTS


We are party to off-balance sheet arrangements, which include our equity method
investments. See the section entitled "Principles of Consolidation" in Note 1,
"Separation, Description of the Business, and Basis of Presentation" to the
Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for
further discussion of the nature, purpose and other details of such agreements.

Other off-balance sheet arrangements include the Vector Pipeline Line of Credit
and our guarantees, which are discussed further in Note 13, "Commitments and
Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of
this Form 10-K.

INDEMNIFICATION OBLIGATIONS

We could have an indemnification obligation to DTE Energy pursuant to the Tax
Matters Agreement and the Separation and Distribution Agreement. See the section
titled "We could have an indemnification obligation to DTE Energy in accordance
with the terms of the Tax Matters Agreement if the Distribution were determined
not to qualify for non-recognition treatment for U.S. federal tax purposes,
which could materially adversely affect our business, financial condition and
results of operations" in Part I, Item 1A. "Risk Factors" of this Form 10-K.


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CRITICAL ACCOUNTING ESTIMATES


The preparation of our Consolidated Financial Statements in conformity with GAAP
requires that management applies accounting policies and makes estimates and
assumptions that affect results of operations and the amounts of assets and
liabilities reported in the Consolidated Financial Statements. Management
believes that the areas described below require significant judgment in the
application of the accounting policy or in making estimates and assumptions in
matters that are inherently uncertain and that may change in subsequent periods.
Additional discussion of our accounting policies can be found in the Notes to
the Consolidated Financial Statements in Item 8 of this Form 10-K.

Goodwill

We have goodwill that resulted from business combinations. An impairment test for goodwill is performed annually as of October 1st, or whenever events or circumstances indicate that the value of goodwill may be impaired.


In performing the impairment test, we compare the fair value of each reporting
unit to its carrying value including goodwill. If the carrying value including
goodwill exceeds the fair value of a reporting unit, an impairment loss would be
recognized. A goodwill impairment loss is measured as the amount by which a
reporting unit's carrying value exceeds its fair value, not to exceed the
carrying amount of goodwill.

We estimate each reporting unit's fair value using standard valuation
techniques, including techniques which use estimates of projected future results
and cash flows to be generated by the reporting unit. The fair values for the
reporting units were calculated using a weighted combination of the income
approach, which estimates fair value based on discounted cash flows, and the
market approach, which estimates fair value based on market comparables within
the Midstream industry.

The income approach includes a terminal value that utilizes an assumed long-term
growth rate approach, which incorporates management's assumptions regarding
sustainable long-term growth of the reporting units. The income approach's cash
flow valuations involve a number of estimates that require broad assumptions and
significant judgment by management regarding future performance.

One of the most significant assumptions utilized in determining the fair value
of reporting units under the market approach is implied market multiples for
certain peer companies. Management selects comparable peers based on each peer's
primary business mix, operations, and market capitalization compared to the
applicable reporting unit and calculates implied market multiples based on
available projected earnings guidance and peer company market values as of the
test date. Management also compared the fair value of the reporting units to DT
Midstream's market capitalization including an estimated control premium.

In between annual impairment tests, we monitor our estimates and assumptions
regarding estimated future cash flows, including the impact of movements in
market indicators in future quarters, and will update the impairment analyses if
a triggering event occurs. While we believe the assumptions are reasonable,
actual results may differ from projections. To the extent projected results or
cash flows are revised downward, the reporting unit may be required to write
down all or a portion of its goodwill, which would adversely impact our
earnings.


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We performed our annual impairment test as of October 1, 2021 and determined that the estimated fair value of each reporting unit exceeded its carrying value, and no impairment existed.

The results of the test and key estimates that were incorporated are as follows as of the October 1, 2021 valuation date:

                                                                                          Fair Value
      Reporting Unit                 Goodwill               Discount Rate              Reduction % (a)              Valuation Methodology(b)
                                    (millions)
Pipeline                          $        53                           6.3  %                      53  %       DCF and market multiples analysis
Gathering                                 420                           7.5  %                      23  %       DCF and market multiples analysis
                                  $       473

__________________________________

(a) Percentage by which the fair value of equity of the reporting unit would
need to decline to equal its carrying value, including goodwill. The fair value
reduction percentage improved as compared to the October 1, 2020 annual
impairment test, principally due to improvement in market multiples.

(b) Discounted cash flows (DCF) incorporated 2021-2025 projected cash flows plus
a calculated terminal value. For each of the reporting units, DT Midstream
capitalized the terminal year cash flows at the weighted average costs of
capital (WACC) less an assumed long-term growth rate of 2.0%. Management applied
equal weighting to the DCF and market multiples analysis to determine the fair
value of the respective reporting units.

Assessment of Long-Lived Assets for Impairment


We evaluate the carrying value of long-lived assets, excluding goodwill, when
circumstances indicate that the carrying value of those assets may not be
recoverable. Conditions that could have an adverse impact on the cash flows and
fair value of the long-lived assets are a deteriorating business climate,
condition of the asset, or plans to dispose of or abandon the asset before the
end of its useful life, which could result from the loss of or reduction in
volume from our customers. The review of long-lived assets for impairment
requires significant assumptions about operating strategies and estimates of
future cash flows, which require assessments of current and projected market
conditions and anticipated customer revenues. An impairment evaluation is based
on an undiscounted cash flow analysis at the lowest level for which independent
cash flows of long-lived assets can be identified from other groups of assets
and liabilities. Impairment may occur when the carrying value of the asset
exceeds the future undiscounted cash flows. When the undiscounted cash flow
analysis indicates a long-lived asset is not recoverable, the amount of the
impairment loss is determined by measuring the excess of the long-lived asset
over its fair value. An impairment would require us to reduce both the
long-lived asset and current period earnings by the amount of the impairment,
which would adversely impact our earnings.

As part of our ongoing reviews of business operations and associated long-lived
assets, we did not identify any indicators of impairment that existed during
2021.

Assessment of Equity Method Investments for Impairment


We assess at each balance sheet date whether there is objective evidence that
the equity method investment is impaired by completing a quantitative or
qualitative analysis of factors impacting the investment. If there is objective
evidence of impairment, we determine whether the decline below carrying value is
other than temporary. If the decline is determined to be other than temporary,
an impairment charge is recorded in earnings with an offsetting reduction to the
carrying value of the investment.

As part of our ongoing reviews of equity method investment operations, we did not identify any indicators of impairment that existed during 2021.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 3, "New Accounting Pronouncements" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.

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