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") from DTE Energy.

In connection with the Separation, on January 13, 2021, DTE Gas Enterprises, LLC converted into a Delaware corporation pursuant to a statutory conversion and changed its name to DT Midstream, Inc. 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, 2021, Consolidated Statements of Changes in Stockholders' Equity/Member's Equity are presented as of December 31, 2021 and 2020. In June 2021, the DT Midstream Board of Directors authorized the issuance of an additional 96,731,466 common shares to DTE Energy 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 at December 31, 2021.

In June 2021, in order to facilitate the Separation and settle short-term borrowings due to DTE Energy, DT Midstream 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, DT Midstream made the following cash payments:

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.

•Separation and Distribution Agreement – sets forth the principal actions to be taken in connection with the Separation, including the transfer of assets and assumption of liabilities, among others, and sets forth other agreements governing aspects of the relationship between DTE Energy and DT Midstream.

•Transition Services Agreement ("TSA") – allows for DTE Energy to provide DT Midstream with specified services for a limited time and no longer than 24 months following the Separation, including support for accounting, tax, legal, human resources, informational technology, and various other administrative and operational services. Prior to the termination of the TSA, DT Midstream will establish standalone functions to provide services received from DTE Energy or will obtain such services from unaffiliated third parties.

Operation and maintenance for the years ended December 31, 2021 and 2020 include approximately $20 million and $6 million, respectively, of Separation related transaction costs for legal, accounting, auditing and other professional services.

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 primary segments: (i) Pipeline, which includes interstate pipelines, intrastate pipelines, storage systems, lateral pipelines and related treatment plants and compression and surface facilities, and (ii) Gathering, which includes gathering systems and related treatment plants and compression and surface facilities. DT Midstream's pipeline segment also includes interests in equity method investees which own and operate interstate pipelines, many of which have connectivity to DT Midstream’s assets.

DT Midstream’s 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 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.

Prior to the Separation DT Midstream received monthly allocations of general corporate expenses of DTE Energy which were classified within the appropriate Consolidated Statements of Operations line item. Corporate allocations from DTE Energy included expenses related to labor and benefits, professional fees, shared assets and other expenses related to DTE Energy's corporate functions that provided support to DT Midstream. The allocation methodology utilized was consistent with the legacy allocation process, which allocates costs based on cost drivers. Cost drivers represent units of work that best reflect the consumption of resources within a specific corporate support function for a business group, and include time studies, activity-based metrics, headcount, and other allocation methods. DT Midstream believes this combination of cost drivers appropriately allocated costs attributable to its business. Effective July 1, 2021, with the completion of the Separation, DT Midstream no longer receives corporate allocations from DTE Energy. DTE Energy support services are provided through the TSA.

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 ("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. As a subsidiary of DTE Energy, DT Midstream’s bank accounts were set up as zero balance accounts held by DTE Energy. Cash was swept in and out of the bank’s accounts daily in order to achieve a zero balance at the close of each workday. Net DT Midstream cash inflows or outflows were settled daily against the notes receivable or borrowings, as applicable, with DTE Energy.

Cash and cash equivalents held by DTE Energy at the corporate level were not attributed to DT Midstream for any of the periods presented. Only cash amounts specifically attributable to DT Midstream are reflected in the accompanying Consolidated Statements of Financial Position. For the periods presented, these amounts included cash held by consolidated entities with noncontrolling interests, which were not managed as part of the cash management program.

Notes receivable and borrowings with DTE Energy arising from the working capital loan agreement have been presented as assets and liabilities, respectively, on the Consolidated Statements of Financial Position. The classification of these items as current or noncurrent is dependent on the due date of the asset or obligation.

DT Midstream had $3,175 million in Short-term borrowings due to DTE Energy and $263 million in Notes receivable due from DTE Energy at December 31, 2020. In the second quarter 2021, DTE Energy and DT Midstream amended the working capital loan agreements to combine all outstanding notes receivable and borrowings with DTE Energy into a single agreement with a net Short-term borrowing due to DTE Energy. Upon issuance of the senior notes and Term Loan Facility in June 2021, DT Midstream repaid the Short-term borrowing due to DTE Energy. See Note 11, "Debt" to the Consolidated Financial Statements for further information regarding the external debt issuances. Effective July 1, 2021, DT Midstream no longer participates in the cash management program and the working capital loan agreement was terminated.

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. For non-consolidated VIEs, the maximum risk exposure of DT Midstream is generally limited to its investment, notes receivable, future funding commitments, and amounts which it has guaranteed.

DT Midstream owns an 85% interest in the Stonewall Gas Gathering VIE, which owns and operates midstream natural gas assets. Stonewall Gas Gathering has contracts in which certain construction risk was designed to pass-through to customers, with DT Midstream retaining operational and customer default risk. DT Midstream is the primary beneficiary of Stonewall Gas Gathering, 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 items in the Consolidated Statements of Financial Position for consolidated VIEs as of December 31, 2021 and 2020. 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. VIEs, in which DT Midstream holds a majority voting interest and is the primary beneficiary, that meet the definition of a business and whose assets can be used for purposes other than the settlement of the VIE's obligations have been excluded from the table below.

Amounts for consolidated VIEs are as follows:


	December 31,
	2021		2020

	(millions)
ASSETS (a)
Cash	$	23	$	34
Accounts receivable — third party	8		8
Other current assets	3		2
Intangible assets, net	513		527
Property, plant and equipment, net	408		411
Goodwill	25		25
	$	980	$	1,007

LIABILITIES (a)
Accounts payable and other current liabilities	$	5	$	2
Other noncurrent liabilities	4		5
	$	9	$	7

Prior to the third quarter 2021, NEXUS was classified as a VIE. NEXUS was not consolidated as DT Midstream was not the primary beneficiary, and DT Midstream accounted for its ownership interest in NEXUS under the equity method of accounting. In the third quarter 2021, it was determined NEXUS is capable of financing its own operations without additional subordinated financial support. As a result, it was concluded that NEXUS was no longer a VIE due to sufficient equity at risk to finance its activities. DT Midstream will continue to account for its ownership interest in NEXUS under the equity method of accounting.

DT Midstream has a variable interest in an investment in certain assets in the Utica shale region that is accounted for as a Note receivable — Third party. DT Midstream does not have an ownership interest in the entity and is not the primary beneficiary. The maximum risk exposure is limited to amounts DT Midstream has funded, which are accounted for as a note receivable, or committed to fund for joint development activities. See Note 2, "Significant Accounting Policies – Financing Receivables" to the Consolidated Financial Statements for additional discussion.

Amounts for non-consolidated VIEs are as follows:


	December 31,
	2021		2020

	(millions)
Investments in equity method investees	$	—	$	1,349
Notes receivable — current	5		11
Notes receivable — noncurrent	2		15
Future funding commitments	$	—	$	21

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 16, "Related Party Transactions" to the Consolidated Financial Statements.

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, 2021 and 2020, DT Midstream’s share of the underlying equity in the net assets of the investees exceeded the carrying amounts of investments in equity method investees by $32 million and $13 million, respectively. The difference will be amortized over the life of the underlying assets. As of December 31, 2021 and December 31, 2020, DT Midstream's consolidated retained earnings balance includes undistributed earnings from equity method investments of $84 million and $94 million, respectively.

Equity method investees are described below:


	Investments As of				% Owned As of
	December 31,				December 31,
Equity Method Investee	2021		2020		2021	2020


	(millions)
NEXUS	$	1,348	$	1,349	50%	50%
Vector Pipeline	136		134		40%	40%
Millennium Pipeline	207		208		26%	26%
Total investments in equity method investees	$	1,691	$	1,691

The following table presents summarized financial information of non-consolidated equity method investees in which DT Midstream owns 50% or less. The amounts included below represent 100% of the results of continuing operations of such entities.

In February 2022, an equity method investee signed an agreement to settle a property tax appeal (subject to customary approvals). DT Midstream's portion of the revised estimate has been recorded in earnings from equity method investees of the Consolidated Statement of Operations for the year ended December 31, 2021. The agreement did not result in a material adjustment.