dtm-20220331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-40392

DT Midstream, Inc.


Delaware						38-2663964
(State or other jurisdiction of incorporation or organization)						(I.R.S Employer Identification No.)

Registrant's address of principal executive offices: 500 Woodward Ave., Suite 2900, Detroit, Michigan 48226-1279

Registrant's telephone number, including area code: (313) 402-8532

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Exchange on which Registered

Common stock, par value $0.01

DTM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☐

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding at March 31, 2022:


Description						Shares
Common stock, par value $0.01						96,734,024

TABLE OF CONTENTS


		Page
	Definitions	1
	Filing Format	3
	Forward-Looking Statements	3
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	DT Midstream Con solidated Financial Stateme nts (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	11
	Note 1 — Separation, Description of the Business, and Basis of Presentation	11
	Note 2 — Significant Accounting Policies	15
	Note 3 — New Accounting Pronouncements	16
	Note 4 — Revenue	16
	Note 5 — Earnings Per Share and Dividends	18
	Note 6 — In come Taxes	19
	Note 7 — Fa ir Value	19
	Note 8 — Debt	20
	Note 9 — Commitments and Contingencies	22
	Note 10 — Segment and Related I nformation	23

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Purchases of DTM Equity Securities by the Issuer and Affiliated Purchasers	34
Item 6.	Exhibits	35
	Signatures	36

DEFINITIONS

Unless the context otherwise requires, references to "we," "us," "our," "Registrant," or the "Company" and words of similar importance refer to DT Midstream and, unless otherwise specified, its consolidated subsidiaries and its unconsolidated joint ventures. As used in this Form 10-Q, the terms and definitions below have the following meanings:


Antero						Antero Resources Corporation and/or its affiliates

Appalachia Gathering System						A 137-mile pipeline delivering Marcellus shale gas to the Texas Eastern Pipeline and Stonewall Gas Gathering

ASU						Accounting Standards Update issued by the FASB

Bcf						Billion cubic feet of natural gas

Blue Union						Blue Union Gathering System, a 358-mile gathering system delivering shale gas production from the Haynesville formation of Louisiana to markets in the Gulf Coast region

Bluestone						Bluestone Gathering Lateral Pipeline, a 65-mile lateral pipeline gathering Marcellus shale gas to the Millennium Pipeline and the Tennessee Pipeline

Columbia Pipeline						Columbia Gas Transmission, LLC, owned by TC Energy Corporation

COVID-19						Coronavirus disease of 2019

Distribution						Pro rata distribution to DTE Energy shareholders of all the outstanding common stock of DT Midstream upon the Separation

DT Midstream						DT Midstream, Inc., formerly known as DTE Gas Enterprises, LLC, and its consolidated subsidiaries

DTE Energy						DTE Energy Company, the consolidating entity of DT Midstream prior to the Separation


FASB						Financial Accounting Standards Board

FERC						Federal Energy Regulatory Commission

GAAP						Generally Accepted Accounting Principles in the United States

Generation Pipeline						A 25-mile intrastate pipeline located in northern Ohio and owned by NEXUS

Haynesville system						System is comprised of LEAP, Blue Union and associated facilities

LEAP						Louisiana Energy Access Project gathering lateral pipeline, a 155-mile pipeline gathering Haynesville shale gas to markets in the Gulf Coast region

LIBOR						London Inter-Bank Offered Rates

Millennium Pipeline						A 263-mile interstate pipeline and compression facilities owned by Millennium Pipeline Company, LLC serving markets in the northeast Marcellus region, in which DT Midstream owns an approximate 26% interest

NYSE						New York Stock Exchange

NEXUS						NEXUS Gas Transmission, LLC, a joint venture which owns (i) a 256-mile interstate pipeline and three compression facilities transporting Utica and Marcellus shale gas to Ohio, Michigan and Ontario market centers and (ii) Generation Pipeline, in which DT Midstream owns a 50% interest

SEC						U.S. Securities and Exchange Commission

Separation						The separation or Spin-Off of DT Midstream from DTE Energy, effective July 1, 2021

South Romeo						South Romeo Gas Storage Corporation, a joint venture which owns the Washington 28 Storage Complex, in which DT Midstream owns a 50% interest and is the operator

Southwestern						Southwestern Energy Company and/or its affiliates (including Indigo Minerals, LLC)

Stonewall Gas Gathering						Stonewall Gas Gathering Lateral Pipeline, a 68-mile pipeline in which DT Midstream owns an 85% interest, gathering gas from Appalachia Gathering System for delivery to the Columbia Pipeline

Susquehanna Gathering System						A 198-mile pipeline delivering Marcellus shale gas production to Bluestone

Tax Matters Agreement						The agreement that governs the respective rights, responsibilities and obligations of DTE Energy and DT Midstream after the Separation with respect to all tax matters

DEFINITIONS



Tennessee Pipeline						Tennessee Gas Pipeline Company, LLC, owned by Kinder Morgan, Inc.

Texas Eastern Pipeline						Texas Eastern Transmission, LP, owned by Enbridge Inc.

Topic 606						FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended

U.S.						Unites States of America

USD						United States Dollar ($)

Vector Pipeline						A 348-mile interstate pipeline and five compression facilities connecting Illinois, Michigan, and Ontario market centers, in which DT Midstream owns a 40% interest

VIE						Variable Interest Entity

FILING FORMAT

This Form 10-Q should be read in its entirety. This Form 10-Q should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements and with Management's Discussion and Analysis included in DT Midstream's 2021 Annual Report on Form 10-K.

FORWARD-LOOKING STATEMENTS

Certain information presented herein includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, and businesses of DT Midstream. Words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident," and other words of similar meaning in connection with a discussion of future operating or financial performance may signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to numerous assumptions, risks, and uncertainties that may cause actual future results to be materially different from those contemplated, projected, estimated, or budgeted. Many factors may impact forward-looking statements of DT Midstream including, but not limited to, the following:

•risks related to the Separation, including dependence on DTE Energy and the risk that transition services provided by DTE Energy could adversely affect our business and that the transaction may not achieve some or all of the anticipated benefits;

•changes in general economic conditions;

•competitive conditions in our industry;

•global supply chain disruptions;

•actions taken by third-party operators, processors, transporters and gatherers;

•changes in expected production from Southwestern, Antero and other third parties in our areas of operation;

•demand for natural gas gathering, transmission, storage, transportation and water services;

•the availability and price of natural gas to the consumer compared to the price of alternative and competing fuels;

•competition from the same and alternative energy sources;

•our ability to successfully implement our business plan;

•our ability to complete organic growth projects on time and on budget;

•our ability to complete acquisitions;

•the price and availability of debt and equity financing;

•restrictions in our existing and any future credit facilities and indentures;

•energy efficiency and technology trends;

•changing laws regarding cyber security and data privacy and any cyber security threat or event;

•operating hazards, environmental risks and other risks incidental to gathering, storing and transporting natural gas;

•changes in environmental laws, regulations or enforcement policies, including laws and regulations relating to climate change and greenhouse gas emissions;

•natural disasters, adverse weather conditions, casualty losses and other matters beyond our control;

•the impact of outbreaks of illnesses, epidemics and pandemics, including the COVID-19 pandemic and the economic effects of the pandemic;

•the ongoing conflict between Ukraine and Russia;

•interest rates;

•the impact of inflation on our business;

•labor relations;

•large customer defaults;

•changes in tax status, as well as changes in tax rates and regulations;

•intent to develop low carbon business opportunities and deploy greenhouse gas reducing technologies;

•the effects of existing and future laws and governmental regulations;

•changes in insurance markets impacting costs and the level and types of coverage available;

•the timing and extent of changes in commodity prices;

•the suspension, reduction or termination of our customers’ obligations under our commercial agreements;

•disruptions due to equipment interruption or failure at our facilities, or third-party facilities on which our business is dependent;

•the effects of future litigation;

•the qualification of the Separation as a tax-free Distribution;

•the allocation of tax attributes from DTE Energy in accordance with the Tax Matters Agreement; and

•our ability to achieve the benefits that we expect to achieve as an independent publicly traded company.

The above list of factors is not exhaustive. New factors emerge from time to time. DT Midstream cannot predict what factors may arise or how such factors may cause actual results to vary materially from those stated in forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

DT Midstream, Inc.

Consolidated Statements of Operations

(Unaudited)


	Three Months Ended
	March 31,
	2022		2021
	(millions, except per share amounts)
Revenues
Operating revenues	$	215	$	197
Operating Expenses
Operation and maintenance	61		50
Depreciation and amortization	42		41
Taxes other than income	8		7
Asset (gains) losses and impairments, net	—		(1)
Operating Income	104		100
Other (Income) and Deductions
Interest expense	31		26
Interest income	—		(3)
Earnings from equity method investees	(36)		(32)
Other (income) and expense	—		(1)
Income Before Income Taxes	109		110
Income Tax Expense	25		29
Net Income	84		81
Less: Net Income Attributable to Noncontrolling Interests	3		3
Net Income Attributable to DT Midstream	$	81	$	78

Basic Earnings per Common Share
Net Income Attributable to DT Midstream	$	0.84	$	0.80

Diluted Earnings per Common Share
Net Income Attributable to DT Midstream	$	0.84	$	0.80

Weighted Average Common Shares Outstanding
Basic	96.7		96.7
Diluted	97.0		96.7

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended
	March 31,
	2022		2021
	(millions)
Net Income	$	84	$	81
Foreign currency translation and unrealized gain on derivatives, net of tax	—		1
Other Comprehensive Income	—		1
Comprehensive Income	84		82
Less: Comprehensive Income Attributable to Noncontrolling Interests	3		3
Comprehensive Income Attributable to DT Midstream	$	81	$	79

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Financial Position

(Unaudited)


	March 31,		December 31,

	2022		2021
	(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	281	$	132
Accounts receivable (net of $— allowance for expected credit loss for each period end)
Third party	119		169
Notes receivable
Third party	5		5
Related party	—		4
Deferred property taxes	19		25
Other	18		25
	442		360
Investments
Investments in equity method investees	1,679		1,691

Property
Property, plant, and equipment	4,129		4,109
Accumulated depreciation	(647)		(619)
	3,482		3,490
Other Assets
Goodwill	473		473
Long-term notes receivable
Third party	1		2
Related party	4		—
Operating lease right-of-use assets	32		36
Intangible assets, net	2,068		2,082
Other	30		32
	2,608		2,625
Total Assets	$	8,211	$	8,166

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Financial Position

(Unaudited)


	March 31,		December 31,

	2022		2021
	(millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable
Third party	$	21	$	22
Current portion of long-term debt	10		10
Operating lease liabilities	15		16

Dividends payable	62		58
Interest payable	26		4
Property taxes payable	23		24
Other	31		43
	188		177

Long-Term Debt (net of current portion)	3,033		3,036

Other Liabilities
Deferred income taxes	878		856
Operating lease liabilities	20		21
Other	54		55
	952		932
Total Liabilities	4,173		4,145

Commitments and Contingencies (Note 9)

Stockholders' Equity/Member's Equity
Preferred stock ($0.01 par value, 50,000,000 shares authorized and no shares issued or outstanding at March 31, 2022 and December 31, 2021)	—		—
Common stock ($0.01 par value, 550,000,000 shares authorized, and 96,734,024 and 96,734,010 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively)	1		1
Additional paid in capital	3,453		3,450
Retained earnings	446		431
Accumulated other comprehensive income (loss)	(10)		(10)
Total DT Midstream Equity	3,890		3,872
Noncontrolling interests	148		149
Total Equity	4,038		4,021
Total Liabilities and Equity	$	8,211	$	8,166

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended
	March 31,
	2022		2021
	(millions)
Operating Activities
Net Income	$	84

SEC Form 10-Q filed by DT Midstream Inc.