Financial information

DT MIDSTREAM, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

The following discussion of our results of operations and financial condition
should be read in conjunction with our Consolidated Financial Statements and the
Notes to Consolidated Financial Statements, which are included under Part I,
Item 1 of this quarterly report, and the historical consolidated financial
statements and notes thereto, which are included in the DT Midstream 2021 Annual
Report on Form 10-K. 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 Pipeline segment, which includes interstate pipelines,
intrastate pipelines, storage systems, and lateral pipelines, and through our
Gathering segment. 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 strategically connect key 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.

On July 1, 2021, DT Midstream completed the Separation from DTE Energy and
became an independent public company. See Note 1, "Description of the Business
and Basis of Presentation" to the Consolidated Financial Statements under Part
I, Item 1 of this Form 10-Q.
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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 discuss the operating performance and future outlook of our
segments. Segment information includes intercompany revenues and expenses, as
well as other income and deductions that are eliminated in the Consolidated
Financial Statements.

In November 2020, the SEC issued a final rule to modernize and simplify
Management's Discussion and Analysis and certain financial disclosure
requirements in SEC Regulation S-K. As permitted by this final rule, the
analysis below reflects the optional approach to discuss results of operations
on a sequential-quarter basis, which we believe will provide the most useful
information to investors in assessing our quarterly results of operations going
forward. In addition, as required by the final rule, we have continued to
provide a comparison of the current year-to-date period to the prior
year-to-date period.

For purposes of the following discussion, any increases or decreases refer to
the comparison of the three months ended June 30, 2022 to the three months ended
March 31, 2022, and the six months ended June 30, 2022 to the six months ended
June 30, 2021, as applicable.

The following table summarizes our consolidated financial results:

                                                        Three Months Ended                    Six Months Ended
                                                June 30,              March 31,                 June 30,            June 30,
                                                  2022                  2022                      2022                2021
                                                         (millions, except per share amounts)
Operating revenues                         $      227               $      215                $      442          $      405
Net Income Attributable to DT Midstream            91                       81                       172                 146
Diluted Earnings per Common Share          $     0.93               $     0.84                $     1.77          $     1.51


                                                       Three Months Ended                   Six Months Ended
                                               June 30,            March 31,                   June 30,            June 30,
                                                 2022                 2022                       2022                2021
                                                                      (millions)
Net Income Attributable to DT Midstream by Segment
Pipeline                                    $        52          $        48                 $      100          $       86
Gathering                                            39                   33                         72                  60
Total                                       $        91          $        81                 $      172          $      146



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Pipeline

The Pipeline segment consists of our interstate pipelines, intrastate pipelines,
storage systems, lateral pipelines including related treatment plants and
compression and surface facilities. This segment also includes our equity method
investments. Pipeline results and outlook are discussed below:
                                                      Three Months Ended                   Six Months Ended
                                              June 30,            March 31,                   June 30,            June 30,
                                                2022                 2022                       2022                2021
                                                                     (millions)
Operating revenues                         $        83          $        77                 $      160          $      150
Operation and maintenance                           12                   13                         25                  32
Depreciation and amortization                       15                   16                         31                  31
Taxes other than income                              4                    4                          8                   7
Asset (gains) losses and impairments, net           (6)                   -                         (6)                  -
Operating Income                                    58                   44                        102                  80
Interest expense                                    13                   13                         26                  22
Interest income                                      -                    -                          -                  (1)
Earnings from equity method investees              (35)                 (36)                       (71)                (60)
Loss from financing activities                       6                    -                          6                   -
Other (income) and expense                           -                    -                          -                  (2)
Income Tax Expense                                  19                   16                         35                  29
Net Income                                          55                   51                        106                  92
Less: Net Income Attributable to
Noncontrolling Interests                             3                    3                          6                   6

Net income attributable to Intermediate DT $52 $48

                 $      100          $       86


Operating revenues increased $6 million for the three months ended June 30, 2022
primarily due to higher volumes on Stonewall Gas Gathering and higher volumes
and rates on LEAP. Operating revenues increased $10 million for the six months
ended June 30, 2022 primarily due to higher volumes and rates from new and
existing customers on LEAP of $12 million, partially offset by decreased storage
revenues.

Operation and maintenance expense decreased $7 million for the six months ended
June 30, 2022 primarily due to lower Separation related transaction costs of $10
million, partially offset by increased LEAP and storage expenses.

(Gains) losses and impairments of assets, net increase $6 million for the three and six month periods ended June 30, 2022 due to a one-time gain realized following a legal settlement with a supplier.

Interest expense increased $4 million for the six months ended June 30, 2022
primarily due to higher interest rates on our external debt compared to interest rates on borrowings from DTE Energy.

Earnings from equity method investees increased $11 million for the six months
ended June 30, 2022 primarily due to higher revenue at NEXUS and Vector Pipeline
as a result of improved contracting.

Loss from financing activities increased $6 million for both the three and six
months ended June 30, 2022 due to the partial repayment of our Term Loan
Facility. See Note 8 - "Debt" to the Consolidated Financial Statements under
Part I, Item 1 of this Form 10-Q for further details.

Income tax expense increased $3 million and $6 million for the three and six months ended June 30, 2022respectively, mainly due to higher pre-tax profit.

Outlook

We believe our long-term agreements with customers and the location and
connectivity of our pipeline assets 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) and additional
growth related to our equity method investments.
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Gathering

The Gathering segment consists of our gathering systems including related
treatment plants and compression and surface facilities. Gathering results and
outlook are discussed below:

                                                    Three Months Ended                  Six Months Ended
                                            June 30,            March 31,                  June 30,            June 30,
                                              2022                2022                       2022                2021
                                                                   (millions)
Operating revenues                        $      144          $      138                 $      282          $      255
Operation and maintenance                         51                  48                         99                  75
Depreciation and amortization                     27                  26                         53                  51
Taxes other than income                            4                   4                          8                   6
Asset (gains) losses and impairments, net        (17)                  -                        (17)                 17
Operating Income                                  79                  60                        139                 106
Interest expense                                  20                  18                         38                  28
Interest income                                   (1)                  -                         (1)                 (3)
Loss from financing activities                     7                   -                          7                   -

Income Tax Expense                                14                   9                         23                  21

Net income attributable to Intermediate DT $39 $33

              $       72          $       60


Operating revenues increased $6 million for the three months ended June 30, 2022
due to higher revenues on Blue Union and the Appalachia Gathering System.
Operating revenues increased $27 million for the six months ended June 30, 2022
primarily due to higher Blue Union production-related revenue of $26 million and
higher revenues on the Appalachia Gathering System.

Operation and maintenance expense increased $24 million for the six months ended
June 30, 2022 primarily due to higher Blue Union and Susquehanna Gathering
System expenses of $39 million and $4 million, respectively, partially offset by
lower Separation related transaction costs of $9 million, Appalachia Gathering
System expenses of $5 million, and other general cost savings. Higher Blue Union
expenses were driven by higher gathered volumes and associated variable costs to
operate facilities and planned maintenance.

Asset (gains) losses and impairments, net increased $17 million for the three
months ended June 30, 2022 due to a gain on sale of certain assets in the Utica
shale region. Asset (gains) losses and impairments, net increased $34 million
for the six months ended June 30, 2022. The increase was due to the 2022 gain of
$17 million mentioned above as compared to the 2021 loss on notes receivable for
an investment in certain assets in the Utica shale region of $19 million,
partially offset by a $2 million gain on sale of Michigan gathering assets. See
Note 2 - "Significant Accounting Policies" to the Consolidated Financial
Statements under Part I, Item 1 of this Form 10-Q for further details.

Interest expense increased $10 million for the six months ended June 30, 2022
primarily due to higher interest rates on our external debt compared to interest rates on borrowings from DTE Energy.

Loss from financing activities increased $7 million for both the three and six
months ended June 30, 2022 due to the partial repayment of our Term Loan
Facility. See Note 8 - "Debt" to the Consolidated Financial Statements under
Part I, Item 1 of this Form 10-Q for further details.

Income tax expense increased $5 million for the three months ended June 30, 2022
mainly due to an increase in earnings 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
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 a future Haynesville
system expansion (Blue Union) and expansion opportunities at the Appalachia
Gathering System.
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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 deployment of capital in assets supported by solid fundamentals;

• capitalize on opportunities for integration and use of assets;

•pursue economically attractive opportunities;

•growth in cash flow 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 ISSUES

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 unplanned expenditures for environmental
equipment, such as pollution control equipment, 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 9, "Commitments and
Contingencies" to the Consolidated Financial Statements under Part I, Item 1 of
this Form 10-Q.
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CAPITAL AND LIQUIDITY RESOURCES

Cash needs

Our principal liquidity requirements are to finance our operations, fund capital
expenditures, satisfy our indebtedness obligations, and pay approved dividends.
We believe we will have sufficient internal and external capital resources to
fund anticipated capital and operating requirements. We expect that cash from
operating activities in 2022 will be approximately $605 million to $655 million.
                                                                          Six Months Ended
                                                                              June 30,
                                                                      2022                2021
                                                                             (millions)
Cash and Cash Equivalents at Beginning of Period                  $      132          $       42
Net cash and cash equivalents from operating activities                  379                 328

Net cash and cash equivalents (used for) from investing activities

                                                               (31)                201
Net cash and cash equivalents used for financing activities             (135)               (534)
Net Increase (Decrease) in Cash and Cash Equivalents                     213                  (5)
Cash and Cash Equivalents at End of Period                        $      345          $       37


Operating Activities

Cash flows from our operating activities can be impacted in the short term by
the natural gas volumes gathered or transported through our systems, changing
commodity prices, seasonality, weather fluctuations, dividends received from
equity method investees and the financial condition of our customers. Our
preference to enter into firm service revenue contracts 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 increased $51 million
for the six months ended June 30, 2022 primarily due to net changes in working
capital, an increase in dividends received from equity method investees, and 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 assets (gains) losses and impairments. These increases
were partially offset by an increase in interest expense and an increase in cash
income tax expense.

Investing Activities

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

Net cash and cash equivalents from investing activities decreased $232 million
to represent net cash and cash equivalents used for investing activities for the
six months ended June 30, 2022, primarily due to the 2021 cash collection of the
Notes receivable from DTE Energy, partially offset by proceeds from the sale of
notes receivable.

Financing Activities

Prior to the Separation we relied on short-term borrowings and contributions
from DTE Energy. In June 2021, we issued Senior Notes in an aggregate principal
amount of $2.1 billion 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.

In April 2022, we issued Senior Secured Notes in an aggregate principal amount
of $600 million. We used the net proceeds from the sale of the Senior Secured
Notes of $593 million to partially repay indebtedness under our Term Loan
Facility. See Note 8, "Debt" to the Consolidated Financial Statements under Part
I, Item 1 of this Form 10-Q.
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Net cash and cash equivalents used for financing activities decreased $399
million for the six months ended June 30, 2022 primarily due to the 2021
Separation-related repayment of short-term borrowings and special dividend to
DTE Energy, partially offset by contributions from DTE Energy that did not recur
in 2022. Additionally, the decrease was partially offset by lower proceeds from
the issuance of long-term debt, higher repayment of long-term debt, and higher
dividends paid on common stock.

During the six months ended June 30, 2022, DT Midstream paid cash dividends on
common stock. See Note 5, "Earnings per Share and Dividends" to the Consolidated
Financial Statements under Part I, Item 1 of this Form 10-Q.

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 items discussed below on
our debt and equity capitalization, we are not aware of any trends, other
demands, commitments, events or uncertainties that are reasonably likely to
materially impact our liquidity position.

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

Historically, our sources of liquidity have included cash generated from operations and, prior to the Separation, loans obtained from DTE Energy. After the separation, our sources of liquidity include cash generated from operating activities and borrowings available under our revolving credit facility. We started 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. 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. In April 2022,
we issued the 2032 Notes in an aggregate principal amount of $600 million. We
used the net proceeds from the sale of the Senior Secured Notes of $593 million
to partially repay indebtedness under our Term Loan Facility. The Credit
Agreement covering the Term Loan Facility and Revolving Credit Facility includes
financial covenants that DT Midstream must maintain. See Note 8, "Debt" to the
Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for
additional discussion on the financial covenants.

From June 30, 2022we have had $31 million outstanding letters of credit and no outstanding borrowings under our revolving credit facility. We have about $1.1 billion cash available at June 30, 2022consisting 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.

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 requirements. 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, "Description of the Business and Basis of Presentation", Note 8,
"Debt" and Note 9, "Commitments and Contingencies" to the Consolidated Financial
Statements under Part I, Item 1 of this Form 10-Q.
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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 area described below requires 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.

Good will

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 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.

We have noted an increase in our weighted average cost of capital resulting from
interest rate increases since our last annual goodwill impairment test. We have
determined that an interim impairment test is not required as there are no
triggering events or changes in circumstances indicating that it is more likely
than not that the goodwill for either of our two reporting units is impaired. We
will continue to monitor our estimates and assumptions on a quarterly basis as
market conditions continue to evolve.

See Part I, Item 3, "Quantitative and Qualitative Disclosures About Market
Risk", in this Quarterly Report for more information on our exposure to market
risk. See also "Critical Accounting Estimates" included in DT Midstream's 2021
Annual Report on Form 10-K.

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,
"Description of the Business and Basis of Presentation" to the Consolidated
Financial Statements under Part I, Item 1 of this Form 10-Q 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 9, "Commitments and
Contingencies" to the Consolidated Financial Statements under Part I, Item 1 of
this Form 10-Q.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 3, “New Accounting Pronouncements” to the Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.

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