Description of the Business and Basis of Presentation | DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Description of the Business DT Midstream is an owner, operator, and developer of an integrated portfolio of natural gas midstream assets. The Company provides multiple, integrated natural gas services to customers through two segments: (i) Pipeline, which includes interstate pipelines, intrastate pipelines, storage systems, lateral pipelines including related treatment plants and compression and surface facilities, and (ii) Gathering, which includes gathering systems, related treatment plants, and compression and surface facilities. DT Midstream's Pipeline segment also includes joint venture interests in equity method investees which own and operate interstate pipelines that connect to DT Midstream’s wholly owned assets. DT Midstream’s core assets strategically connect key demand centers in the Midwestern U.S., Eastern Canada and Northeastern U.S. regions to the premium production areas of the Marcellus/Utica natural gas formation in the Appalachian Basin, and connect key demand centers and LNG export terminals in the Gulf Coast region to premium production areas of the Haynesville natural gas formation. In connection with the Separation from DTE Energy, on January 13, 2021, DTE Gas Enterprises, LLC, and its consolidated subsidiaries converted into a Delaware corporation pursuant to a statutory conversion and changed its name to DT Midstream, Inc. ("DT Midstream"). At the conversion, DT Midstream issued 1,000 shares of common stock at $0.01 par value to its parent, a subsidiary of DTE Energy. As DT Midstream was a single member LLC as of December 31, 2020, and a corporation with stockholders' equity as of December 31, 2022 and 2021, Consolidated Statements of Changes in Stockholders' Equity/Member's Equity are presented as of December 31, 2022, 2021, and 2020. In June 2021, the DT Midstream Board of Directors authorized the issuance of an additional 96,731,466 common shares in anticipation of the Separation, for a total of 96,732,466 common shares issued and outstanding. DT Midstream is authorized to issue 50,000,000 shares of preferred stock at $0.01 par value. No preferred stock was issued or outstanding as of December 31, 2022 and 2021. 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. Following the Separation on July 1, 2021, DT Midstream became an independent public company listed under the symbol "DTM" on the NYSE. DTE Energy did not retain ownership in DT Midstream. Basis of Presentation The Consolidated Financial Statements and Notes to Consolidated Financial Statements as of and for periods subsequent to July 1, 2021, the date of the Separation, reflect the consolidated financial position, results of operations and cash flows for DT Midstream as an independent company. Prior to the Separation, DT Midstream operated as a consolidated entity of DTE Energy and not as a standalone company. For the periods prior to the Separation, the Consolidated Financial Statements and Notes to Consolidated Financial Statements were prepared on a carve-out basis using the consolidated financial statements and accounting records of DTE Energy. The carve-out basis financial statements represent the historical financial position, results of operations, and cash flows of DT Midstream as they were historically managed in accordance with GAAP and reflect significant assumptions and allocations. The carve-out financial statements may not include all expenses that would have been incurred had DT Midstream existed as a standalone entity. Certain prior-period amounts have been reclassified to conform to current-year presentation. GAAP requires management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from DT Midstream’s estimates. DT Midstream believes the assumptions underlying these financial statements are reasonable. Cost Allocations Prior to the Separation, DT Midstream received monthly allocations of general corporate expenses from DTE Energy which were classified within the appropriate Consolidated Statements of Operations line item. Operation and maintenance for the year ended December 31, 2021 included approximately $20 million of Separation-related transaction costs for legal, accounting, auditing and other professional services. Effective July 1, 2021, with the completion of the Separation, DT Midstream no longer received corporate allocations from DTE Energy. Corporate allocation amounts from DTE Energy were as follows: Year Ended December 31, 2021 2020 (millions) Operation and maintenance $ 32 $ 29 Other expense — 1 Total DTE Energy corporate allocations $ 32 $ 30 Cash Management DT Midstream's sources of liquidity include cash generated from operations and available borrowings under our Revolving Credit Facility. Prior to the Separation, DT Midstream’s sources of liquidity included cash generated from operations and loans obtained through DTE Energy’s corporate-wide cash management program, including a working capital loan agreement. Cash was managed centrally, with certain net earnings reinvested in, and working capital requirements met from, existing liquid funds. Effective July 1, 2021, DT Midstream no longer participated in the cash management program and the working capital loan was terminated. Principles of Consolidation DT Midstream consolidates all majority-owned subsidiaries and investments in entities in which we have a controlling influence. Non-majority owned investments are accounted for using the equity method of accounting when DT Midstream is able to significantly influence the operating policies of the investee. When DT Midstream does not influence the operating policies of an investee, the equity investment is measured at fair value, if readily determinable, or if not readily determinable, at cost less impairment, if applicable. DT Midstream eliminates all intercompany balances and transactions. DT Midstream evaluates whether an entity is a VIE whenever reconsideration events occur. DT Midstream consolidates VIEs for which we are the primary beneficiary. If DT Midstream is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, DT Midstream considers all relevant facts and circumstances, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. DT Midstream performs ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed. The maximum risk exposure for consolidated VIEs is reflected on DT Midstream’s Consolidated Statements of Financial Position. DT Midstream owns an 85% interest in the Stonewall Gas Gathering VIE and is the primary beneficiary, therefore Stonewall Gas Gathering is consolidated. DT Midstream owns a 50% interest in the South Romeo VIE and is the primary beneficiary, therefore South Romeo is consolidated. The following table summarizes the major line items in the Consolidated Statements of Financial Position for consolidated VIEs as of December 31, 2022 and 2021. All assets and liabilities of a consolidated VIE are presented where it has been determined that a consolidated VIE has either (1) assets that can be used only to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary. The assets and liabilities of consolidated VIEs that meet the definition of a business and whose assets can be used for purposes other than the settlement of the VIEs' obligations have been excluded from the table below. Amounts for consolidated VIEs are as follows: December 31, 2022 2021 (millions) ASSETS (a) Cash $ 27 $ 23 Accounts receivable — third party 9 8 Other current assets 3 3 Intangible assets, net 498 513 Property, plant and equipment, net 403 408 Goodwill 25 25 $ 965 $ 980 LIABILITIES (a) Accounts payable and other current liabilities $ 4 $ 5 Other noncurrent liabilities 4 4 $ 8 $ 9 _____________________________________ (a) Amounts shown are 100% of the consolidated VIEs' assets and liabilities. DT Midstream had a variable interest in an investment in certain assets in the Utica shale region that was accounted for as a Note receivable — third party. DT Midstream did not have an ownership interest in the entity and was not the primary beneficiary. This investment was sold during the second quarter 2022. See Note 2, "Significant Accounting Policies – Financing Receivables " to the Consolidated Financial Statements for additional discussion. Amounts for the non-consolidated VIE were as follows: December 31, 2022 2021 (millions) Notes receivable — current $ — $ 5 Notes receivable — noncurrent — 2 Related Parties Transactions between DT Midstream and DTE Energy prior to the Separation, as well as all transactions between DT Midstream and its equity method investees, have been presented as related party transactions in the accompanying Consolidated Financial Statements. See Note 15, "Related Party Transactions" to the Consolidated Financial Statements. Equity Method Investments Investments in non-consolidated affiliates that are not controlled by DT Midstream, but over which we have significant influence, are accounted for using the equity method of accounting. Under the equity method, investments are recorded at historical cost as an asset and adjusted for capital contributions, dividends and distributions received, and the Company's share of the investee's earnings or losses, which are recorded as earnings from equity method investees on the Consolidated Statements of Operations. DT Midstream's equity method investments are periodically evaluated for certain factors that may be indicative of other-than-temporary impairment. As of December 31, 2022 and 2021, DT Midstream’s carrying amounts of investments in equity method investees exceeded our share of the underlying equity in the net assets of the investees by $368 million and $32 million, respectively. The difference will be amortized over the life of the underlying assets. As of December 31, 2022 and 2021, DT Midstream's consolidated retained earnings balance includes undistributed earnings from equity method investments of $43 million and $84 million, respectively. Equity method investees are described below: Investments As of % Owned As of December 31, December 31, Equity Method Investee 2022 2021 2022 2021 (millions) NEXUS $ 1,313 $ 1,348 50% 50% Vector Pipeline 135 136 40% 40% Millennium Pipeline 752 207 52.5% 26.25% Total investments in equity method investees $ 2,200 $ 1,691 On October 7, 2022, DT Midstream closed on the $552 million purchase of an additional 26.25% ownership interest in Millennium Pipeline from National Grid. The transaction was financed with cash on hand and available capacity under the Company's Revolving Credit Facility. The purchase constituted National Grid's full ownership interests in Millennium Pipeline, and brought DT Midstream's total ownership interest in Millennium Pipeline to 52.50%. DT Midstream accounts for its ownership interest in Millennium Pipeline under the equity method of accounting. Millennium is not a VIE and DT Midstream does not have a controlling interest due to shared control with its partner over all of Millennium's significant business activities. DT Midstream’s carrying amount of the Millennium Pipeline investment exceeded our share of the underlying equity in the net assets of the Millennium Pipeline by $343 million on the acquisition date. The following tables present summarized financial information of DT Midstream's non-consolidated equity method investees. The amounts included below represent 100% of the results of continuing operations of such entities, including the portion owned by other parties. Summarized balance sheet data is as follows: December 31, 2022 2021 (millions) Current assets $ 198 $ 201 Non-current assets 4,160 4,300 Current liabilities 206 225 Non-current liabilities $ 476 $ 521 Summarized income statement data is as follows: Year Ended December 31, 2022 2021 2020 (millions) Operating revenues $ 800 $ 738 $ 708 Operating expenses 396 371 381 Net Income $ 372 $ 333 $ 294 |