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 interstate pipelines, intrastate pipelines, storage
systems, lateral pipelines and related treatment plants and compression and
surface facilities, and gathering systems and related treatment plants and
compression and surface facilities. 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 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 Separation

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, we became an independent public
company listed under the symbol "DTM" on the NYSE. DTE Energy no longer retains
any ownership in our company. See Note 1, "Separation, 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 provide a detailed discussion of the operating performance
and future outlook of our segments. Segment information, described below,
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
in a sequential-quarter basis, which we believe will provide the most useful
information to investors in assessing our quarterly results of operations going
forward. Also, as required by the final rule, we have included the comparison of
the current quarter to the prior-year quarter for this filing only, and we will
cease to provide this comparison in future filings.

For the purposes of the following discussion, any increase or decrease relates to the comparison of the three months ended March 31, 2022 at the end of three months December 31, 2021or at the end of three months March 31, 2021depending on the case.

The following table summarizes our consolidated financial results:

                                                           Three Months Ended
                                              March 31,          December 31,      March 31,
                                                 2022                2021             2021
                                                  (millions, except per share amounts)
Operating revenues                        $        215          $        223      $      197
Net Income Attributable to DT Midstream             81                    87              78

Diluted earnings per common share $0.84 $0.89 $0.80


Operating revenues decreased compared to the three months ended December 31,
2021 in both our Pipeline and Gathering segments. Operating revenues increased
compared to the three months ended March 31, 2021 in both our Pipeline and
Gathering segments.

                                                       Three Months Ended
                                           March 31,        December 31,      March 31,
                                             2022               2021             2021
                                                           (millions)
Net Income Attributable to DT Midstream by Segment
Pipeline                                $    48            $         51      $       42
Gathering                                    33                      36              36
Total                                   $    81            $         87      $       78


Net income attributable to DT Midstream decreased $6 million compared to the
three months ended December 31, 2021 due to lower earnings at both our Pipeline
and Gathering segments. Net income attributable to DT Midstream increased
$3 million compared to the three months ended March 31, 2021 due to higher
earnings at our Pipeline segment, partially offset by lower earnings at our
Gathering segment.


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Pipeline

The Pipeline segment consists of our interstate pipelines, intrastate pipelines,
storage systems, lateral pipelines and 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
                                                           March 31,             December 31,           March 31,
                                                              2022                   2021                  2021
                                                                                (millions)
Operating revenues                                     $       77               $         80          $        75
Operation and maintenance                                      13                         15                   19
Depreciation and amortization                                  16                         16                   16
Taxes other than income                                         4                          3                    4

Operating Income                                               44                         46                   36
Interest expense                                               13                         14                   11
Interest income                                                 -                          -                   (1)
Earnings from equity method investees                         (36)                       (36)                 (32)
Other (income) and expense                                      -                          -                   (2)
Income Tax Expense                                             16                         15                   15
Net Income                                                     51                         53                   45
Less: Net Income Attributable to Noncontrolling
Interests                                                       3                          2                    3
Net Income Attributable to DT Midstream                $       48           

$51 $42

Operating revenue decreased $3 million compared to the three months ended
December 31, 2021 primarily due to lower revenue from Stonewall Gas Gathering due to fewer short-term contracts.

Operating and maintenance expenses decreased $6 million compared to the three months ended March 31, 2021 mainly due to lower transaction costs related to the separation of $5 million.

Earnings from equity-accounted companies increased $4 million compared to the three months ended March 31, 2021 primarily due to higher revenues from NEXUS and Millennium Pipeline due to improved contracts.

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), completion of
a new customer interconnection at Stonewall Gas Gathering, and additional growth
related to our equity method investments.
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Gathering

The Gathering segment consists of our gathering systems and related treatment
plants and compression and surface facilities. Gathering results and outlook are
discussed below:
                                                            Three Months Ended
                                               March 31,       December 31,       March 31,
                                                  2022             2021              2021
                                                                (millions)
Operating revenues                            $   138         $         143      $      122
Operation and maintenance                          48                    51              31
Depreciation and amortization                      26                    26              25
Taxes other than income                             4                     2               3
Asset (gains) losses and impairments, net           -                     -              (1)
Operating Income                                   60                    64              64
Interest expense                                   18                    17              15
Interest income                                     -                     -              (2)
Other (income) and expense                          -                     1               1
Income Tax Expense                                  9                    10              14

Net income attributable to Intermediate DT $33 $36

$36

Operating revenue decreased $5 million compared to the three months ended
December 31, 2021 mainly due to the decline blue union income and revenue related to the production of the Susquehanna Gathering System. Operating revenue increased $16 million compared to the three months ended March 31, 2021 mainly due to the increase blue union income related to the production of $14 million and increased revenue related to the production of the Appalachian collection system from $3 million.

Operation and maintenance expense decreased $3 million compared to the three
months ended December 31, 2021 primarily due to lower employee-related expenses.
Operation and maintenance expense increased $17 million compared to the three
months ended March 31, 2021 primarily due to higher Blue Union expenses of $21
million, partially offset by lower Separation related transaction costs of $5
million. Higher Blue Union expenses were driven by higher gathered volumes and
associated variable costs to operate facilities and planned maintenance.

Interest expense increased $3 million compared to the three months ended
March 31, 2021 primarily due to higher interest rates on our external debt compared to interest rates on borrowings from DTE Energy.

Income tax expense decreased $5 million compared to the three months ended
March 31, 2021 mainly due to a decrease 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 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 expenditures for environmental equipment,
such as pollution control equipment, beyond what is currently planned, 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 requirements

Our principal liquidity requirements are to finance our operations, fund capital
expenditures, satisfy our indebtedness obligations, and pay dividends, as deemed
appropriate. We believe we will have sufficient internal and external capital
resources to fund anticipated capital and operating requirements. We expect that
cash from operations in 2022 will be approximately $605 million to $655 million.
                                                                         Three Months Ended
                                                                              March 31,
                                                                      2022                2021
                                                                             (millions)
Cash and Cash Equivalents at Beginning of Period                  $      132          $       42
Net cash and cash equivalents from operating activities                  234                 163
Net cash and cash equivalents used for investing activities              (17)                (17)
Net cash and cash equivalents used for financing activities              (68)               (159)
Net Increase (Decrease) in Cash and Cash Equivalents                     149                 (13)
Cash and Cash Equivalents at End of Period                        $      281          $       29


Operating Activities

Cash flows from our operations can be impacted in the short term by the volumes
gathered or transported through our systems, changing commodity prices,
seasonality, weather fluctuations, dividends from equity method investees and
the financial condition of our customers. Our preference to enter into firm
service contracts with firm reservation fees 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 $71 million in
the three months ended March 31, 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 a decrease in
interest income.

Investing activities

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

Net cash and cash equivalents used for investing activities was unchanged in the
three months ended March 31, 2022. During the three months ended March 31, 2022,
a decrease in notes receivable repaid by DTE Energy was mostly offset by a
decrease in DT Midstream's plant and equipment expenditures.

Fundraising activities

Prior to the Separation we relied on short-term borrowings and contributions
from DTE Energy as a source of funding for capital requirements not satisfied by
our operations. In June 2021, we issued senior notes in an aggregate principal
amount of $2.1 billion and entered into a Credit Agreement providing for a $1.0
billion Term Loan Facility and a $750 million Revolving Credit Facility. See
Note 8, "Debt" to the Consolidated Financial Statements under Part I, Item 1 of
this Form 10-Q.

Net cash and cash equivalents used for financing activities decreased $91 million within three months March 31, 2022primarily due to the absence of loan repayments from DTE Energy, partially offset by dividends paid on common stock to shareholders, repayment of long-term debt and repurchase of common stock.

During the three months ended March 31, 2022, DT Midstream paid cash dividends
on common stock of $0.60 per share related to the quarter ended December 31,
2021. See Note 5, "Earnings per Share and Dividends" to the Consolidated
Financial Statements under Part I, Item 1 of this Form 10-Q.
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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 or other
demands, commitments, events or uncertainties that will result in or that are
reasonably likely to result in our liquidity increasing or decreasing
materially.

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 included cash generated from operations
and, prior to the Separation, loans obtained through DTE Energy's corporate-wide
cash management program. After the Separation, our sources of liquidity include
cash generated from operating activities and available borrowings under our
Revolving Credit Facility. We began 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. 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. 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. 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.

As of March 31, 2022, we had $8 million of letters of credit outstanding and no
borrowings outstanding under our Revolving Credit Facility. We have
approximately $1 billion of available liquidity as of March 31, 2022, consisting
of cash and cash equivalents and amounts available under our Revolving Credit
Facility.

In April 2022, we issued long-term debt in the form of $600 million Senior
Secured Notes. We used the net proceeds from the sale of the Senior Secured
Notes to partially repay existing 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.

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 needs. 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, “Separation, description of business and method of presentation”, Note 8, “Payables” and Note 9, “Commitments and contingencies” of the consolidated financial statements under Part I, point 1 of this form 10-Q. .

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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,
"Separation, 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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