dtm-20210630

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 June 30, 2021

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

Commission File Number: 1-40392

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: One Energy Plaza, 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(s)

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 June 30, 2021:


Description						Shares
Common stock, par value $0.01						96,732,466

TABLE OF CONTENTS


		Page
	Definitions	1
	Filing Format	2
	Forward-Looking Statements	2
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	DT Midstream Con solidated Financial Stateme nts (U nau dited)	4
	Notes to Consolidated Financial Statements (Unaudited)	10
	Note 1 — Separation, Description of the Business , and Basis of Presentation	10
	Note 2 — Significant Accounting Policies	15
	Note 3 — New Accounting Pronouncements	18
	Note 4 — Revenue	19
	Note 5 — Fair Value	20
	Note 6 — Debt	22
	Note 7 — Commitments and Contingencies	23
	Note 8 — Segment and Related Information	24
	Note 9 — S u bsequent Event	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
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 6.	Exhibits	35
	Signatures	36

DEFINITIONS

Unless the context otherwise requires, references to "we," "us," "our," "Registrant", or the "Company" and words of similar import 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:


AGS						Appalachia Gathering System, a natural gas asset located in Pennsylvania and West Virginia, which DT Midstream owns 100%

ASU						Accounting Standards Update issued by the FASB

Bcf						Billion cubic feet of natural gas

Blue Union						Blue Union Gathering System, a 343-mile gathering system delivering shale gas production from the Haynesville formation of Louisiana to markets in the Gulf Coast region

BTU						British thermal unit, heat value (energy content) of fuel

COVID-19						Coronavirus disease of 2019

Distribution						Pro rata distribution to DTE Energy shareholders of all of 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						Accounting principles generally accepted in the United States

Generation Pipeline						Generation Pipeline, a 25-mile pipeline located in northern Ohio and owned by NEXUS

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

LIBOR						London Inter-Bank Offered Rates

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

MMBtu						One million BTU

NYSE						New York Stock Exchange

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

SEC						U.S. Securities and Exchange Commission

SGG						Stonewall Gas Gathering Lateral Pipeline, a 68-mile gas gathering pipeline located in West Virginia, in which DT Midstream owns an 85% interest

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

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

USD						United States Dollar ($)

Vector Pipeline						A 348-mile pipeline 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 as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and 2018 and with the Management's Discussion and Analysis included in the DT Midstream Registration Statement on Form 10 (File No. 001-40392) as filed with the SEC on May 26, 2021.

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 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;

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

•changes in expected production from Indigo Minerals, LLC and/or its affiliates, Southwestern Energy Company and/or its affiliates, Antero Resources Corporation and/or its affiliates 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;

•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;

•interest rates;

•labor relations;

•large customer defaults;

•changes in the availability and cost of capital;

•changes in tax status;

•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;

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

•our dependence on DTE Energy to provide us with certain services following the Separation.

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(millions, except shares outstanding and per share amounts)
Revenues
Operating revenues	$	208	$	174	$	405	$	343
Operating Expenses
Operation and maintenance	57		33		107		66
Depreciation and amortization	41		37		82		73
Taxes other than income	6		4		13		8
Asset (gains) losses and impairments, net	18		—		17		—
Operating Income	86		100		186		196
Other (Income) and Deductions
Interest expense	24		26		50		53
Interest income	(1)		(1)		(4)		(2)
Earnings from equity method investees	(28)		(24)		(60)		(54)
Other (income) and expense	(1)		—		(2)		—
Income Before Income Taxes	92		99		202		199
Income Tax Expense	21		26		50		52
Net Income	71		73		152		147
Less: Net Income Attributable to Noncontrolling Interests	3		2		6		5
Net Income Attributable to DT Midstream	$	68	$	71	$	146	$	142

Basic and Diluted Earnings per Common Share	$	0.70	$	0.73	$	1.51	$	1.47
Weighted Average Common Shares Outstanding
Basic and Diluted	96,732,466		96,732,466		96,732,466		96,732,466

See Notes to Consolidated Financial Statements (Unaudited)

DT Midstream, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(millions)
Net Income	$	71	$	73	$	152	$	147
Foreign currency translation and unrealized gain on derivatives, net of tax	—		1		1		—
Other Comprehensive Income	—		1		1		—
Comprehensive Income	71		74		153		147
Less: Comprehensive Income Attributable to Noncontrolling Interests	3		2		6