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What changed in DT Midstream, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of DT Midstream, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+269 added−281 removedSource: 10-K (2024-02-16) vs 10-K (2023-02-16)

Top changes in DT Midstream, Inc.'s 2023 10-K

269 paragraphs added · 281 removed · 225 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

130 edited+22 added−27 removed88 unchanged
Biggest changeWe continue to assess the impact of the COVID-19 pandemic on an ongoing basis. 37 Risks Relating to the Separation We could have an indemnification obligation to DTE Energy in accordance with the terms of the Tax Matters Agreement if the Distribution were determined not to qualify for non-recognition treatment for U.S. federal tax purposes, which could materially adversely affect our business, financial condition and results of operations If it were determined that the Distribution did not qualify as a distribution to which Section 355(a), Section 355(c) and Section 361 of the Code apply, we could, under certain circumstances, be required to indemnify DTE Energy for the resulting taxes and related expenses.
Biggest changeIf it were determined that the Distribution did not qualify as a distribution to which Section 355(a), Section 355(c) and Section 361 of the Internal Revenue Code apply, we could, under certain circumstances, be required to indemnify DTE Energy for the resulting taxes and related expenses.
To maintain or increase the contracted capacity or the volume of natural gas transported, stored and gathered on our systems and cash flows associated therewith, our customers must continually obtain adequate supplies of natural gas.
To maintain or increase the contracted capacity or the volume of natural gas gathered, transported and stored on our systems and cash flows associated therewith, our customers must continually obtain adequate supplies of natural gas.
We do not own the majority of the land on which assets are located, which could disrupt our current and future operations.
We do not own the majority of the land on which our assets are located, which could disrupt our current and future operations.
Our ability to comply with laws and avoid or mitigate physical and transition risks related to climate change may be limited, insufficient, or dependent on technological developments (such as lower-emission equipment) that we do not control or that require substantial additional investments that increase our cost of doing business.
Our ability to comply with laws and avoid or mitigate physical and transition risks related to climate change may be limited, insufficient, or dependent on technological developments (such as lower-emission equipment) that we do not control or that require substantial additional investments and increase our cost of doing business.
While the FERC may exercise jurisdiction over the rates and terms of service for certain of the services provided by our intrastate pipelines providing service in interstate commerce, such assets are not subject to the FERC’s certification and construction authority.
While FERC may exercise jurisdiction over the rates and terms of service for certain of the services provided by our intrastate pipelines providing service in interstate commerce, such assets are not subject to FERC’s certification and construction authority.
Prior to commencing construction of new or expanded existing interstate pipelines and storage facilities, an interstate pipeline must obtain a certificate from the FERC authorizing the construction, either by filing a new certificate application or filing to amend its existing certificate.
Prior to commencing construction of new or expanded existing interstate pipelines and storage facilities, an interstate pipeline must obtain a certificate from FERC authorizing the construction, either by filing a new certificate application or filing to amend its existing certificate.
In the event that the FERC finds that an agreement is materially non-conforming, in whole or in part, it could reject or require us to seek modification of the agreement, or alternatively require us to modify our tariff so that the non-conforming provisions are generally available to all customers or similarly-situated customers.
In the event that FERC finds that an agreement is materially non-conforming, in whole or in part, it could reject or require us to seek modification of the agreement, or alternatively require us to modify our tariff so that the non-conforming provisions are generally available to all customers or similarly-situated customers.
Furthermore, should the FERC or state regulatory authorities find that we have failed to comply with all applicable FERC or state-administered statutes, rules, regulations and orders, or the terms of our tariffs on file with the FERC, we could be subject to administrative and criminal remedies and substantial civil penalties and fines.
Furthermore, should FERC or state regulatory authorities find that we have failed to comply with all applicable FERC or state-administered statutes, rules, regulations and orders, or the terms of our tariffs on file with FERC, we could be subject to administrative and criminal remedies and substantial civil penalties and fines.
Any changes to the policies of the FERC or state regulatory authorities regarding the natural gas industry may have an impact on us, including the FERC’s approach as it considers policies affecting the establishment and modification of interstate pipeline rates and terms and conditions of service, policies that may affect rights of access to natural gas transmission capacity and policies that govern the FERC's authorization of new or expanded pipeline and storage infrastructure.
Any changes to the policies of FERC or state regulatory authorities regarding the natural gas industry may have an impact on us, including FERC’s approach as it considers policies affecting the establishment and modification of interstate pipeline rates and terms and conditions of service, policies that may affect rights of access to natural gas transmission capacity and policies that govern FERC's authorization of new or expanded pipeline and storage infrastructure.
The FERC is currently considering modifications to its long-standing Certificate Policy Statement that currently governs its granting of certificate authority for the construction of proposed interstate natural gas infrastructure, whether new or expanded.
FERC is currently considering modifications to its long-standing Certificate Policy Statement that currently governs its granting of certificate authority for the construction of proposed interstate natural gas infrastructure, whether new or expanded.
The FERC’s policies and practices across the range of its gas regulatory activities, including, for example, its policies on certification of new interstate natural gas facilities, open access transportation, rate making, terms and conditions of service, capacity release and market center promotion, indirectly affect intrastate markets.
FERC’s policies and practices across the range of its gas regulatory activities, including, for example, its policies on certification of new interstate natural gas facilities, open access transportation, rate making, terms and conditions of service, capacity release and market center promotion, indirectly affect intrastate markets.
Certain portions of our pipelines, storage and gathering infrastructure are aging, which could materially adversely affect our business, financial condition and results of operations. Certain portions of our systems, particularly our gathering assets in Northern Michigan and our storage assets, have been in operation for many years, with some portions being more than 40 years old.
Certain portions of our pipelines, storage and gathering infrastructure are aging, which could materially adversely affect our business, financial condition and results of operations. Certain portions of our systems, particularly our Northern Michigan assets and our storage assets, have been in operation for many years, with some portions being more than 40 years old.
Other Business Risks Customers’, legislators’ and regulators’ perceptions of us are affected by many factors, including environmental and safety concerns, pipeline reliability, protection of customer information, media coverage and public sentiment. Customers’, legislators’ or regulators’ negative opinion of us could materially adversely affect our business, financial condition and results of operations.
Other Business Risks Customers’, legislators’ or regulators’ perceptions of us are affected by many factors, including environmental and safety concerns, pipeline reliability, protection of customer information, media coverage, and public sentiment. Customers’, legislators’ or regulators’ negative opinion of us could materially adversely affect our business, financial condition and results of operations.
If the Distribution were taxable to DTE Energy due to such a 50% or greater change in ownership of our stock, DTE Energy would recognize gain equal to the excess of the fair market value of our common stock distributed to DTE Energy shareholders over DTE Energy’s tax basis in our common stock and we generally would be required to indemnify DTE Energy for the tax on such gain and related expenses.
If the Distribution were taxable to DTE Energy due to such a 50% or greater change in ownership of our stock, DTE Energy would recognize a gain equal to the excess of the fair market value of our common stock distributed to DTE Energy shareholders over DTE Energy’s tax basis in our common stock, and we generally would be required to indemnify DTE Energy for the tax on such gain and related expenses.
Congress has from time to time considered the adoption of legislation to provide for U.S. federal regulation of hydraulic fracturing, while a growing number of states, including some of those in which we operate, have adopted, and other states are considering adopting, regulations that could impose more stringent disclosure and well construction requirements on hydraulic fracturing operations.
Congress has from time to time considered the adoption of legislation to provide for U.S. federal regulation of hydraulic fracturing, while a growing number of states, including some of those in which we operate, have adopted, and other states are considering adopting, regulations that could impose more stringent disclosure and/or well construction requirements on hydraulic fracturing operations.
If these pipeline connections were to become unavailable for current or future volumes of natural gas due to testing, turnarounds, repairs, maintenance, damage, reduced operating pressure, lack of capacity, regulatory requirements or any other reason, our ability to operate efficiently and continue shipping natural gas to end markets could be restricted, thereby reducing our revenues.
If these pipeline connections become unavailable for current or future volumes of natural gas due to testing, turnarounds, repairs, maintenance, damage, reduced operating pressure, lack of capacity, regulatory requirements or any other reason, our ability to operate efficiently and continue shipping natural gas to end markets could be restricted, thereby reducing our revenues.
We believe providing more expansive disclosure on these topics in our Corporate Sustainability Report increases our level of transparency to our stakeholders and complements the disclosures regarding our contributions to sustainable development in this Form 10-K. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption.
We believe providing more expansive disclosure on these topics in our Corporate Sustainability Report increases our transparency to our stakeholders and complements the disclosures regarding our contributions to sustainable development in this Form 10-K. It is possible that stakeholders may not be satisfied with our ESG practices or the speed of their adoption.
Unfavorable ESG ratings may lead to increased negative investor and bank financing sentiment toward us and our industry and to the diversion of investment to other companies or industries, which could adversely affect our stock price and our access to and costs of capital and could adversely impact the demand for our services and, in turn, materially adversely affect our business, financial condition and results of operations.
Unfavorable ESG ratings may lead to increased negative investor and bank financing sentiment toward us and our industry and to the diversion of investment to other companies or industries, which could adversely affect the demand for our services, our stock price, our access to and costs of capital and, in turn, materially adversely affect our business, financial condition and results of operations.
Also, destructive forms of protests and opposition by extremists and other disruptions, including acts of sabotage or eco-terrorism, against oil and natural gas development and production or midstream treating or transportation activities could potentially result in damage or injury to persons, property or the environment or lead to extended interruptions of our or our customers’ operations.
Destructive forms of protests and opposition by extremists, and other disruptions, including acts of sabotage or eco-terrorism, against oil and natural gas development and production or midstream treating or transportation activities could potentially result in damage or injury to persons, property or the environment or lead to extended interruptions of our or our customers’ operations.
Fraudulent conveyances or transfers are defined to include transfers made or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors or transfers made or obligations incurred for less than reasonably equivalent value when the debtor was insolvent, or that rendered the debtor insolvent, inadequately capitalized or unable to pay its debts as they become due.
Fraudulent conveyances or transfers are defined to include transfers made or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors, or transfers made or obligations incurred for less than a reasonably equivalent value when the debtor was insolvent, or that rendered the debtor insolvent, inadequately capitalized or unable to pay its debts as they become due.
Investor advocacy groups, proxy advisory firms, certain institutional investors and lenders, investment funds and other influential investors and rating agencies are also increasingly focused on climate change, societal expectations on companies to address climate change, investor and societal expectations regarding voluntary ESG disclosures, and consumer demand for alternative forms of energy.
Investor advocacy groups, proxy advisory firms, certain institutional investors and lenders, investment funds and other influential investors and rating agencies are increasingly focused on climate change, societal expectations on companies to address climate change, investor and societal expectations regarding voluntary ESG disclosures, and consumer demand for alternative forms of energy.
Additionally, we may be subject to restrictions or limitations on our ability to sell or transfer our interests in the jointly owned assets, and we may be required to 25 offer business opportunities to the joint venture, or rights of participation to other joint venture partners or participants in certain areas of mutual interest.
Additionally, we may be subject to restrictions or limitations on our ability to sell or transfer our interests in the jointly owned assets, and we may be required to offer business opportunities to the joint venture, or rights of participation to other joint venture partners or participants in certain areas of mutual interest.
We may not be able to effect any of these actions on satisfactory terms, or at all. 28 Increases in interest rates could increase our interest expense and may adversely affect our cash flows, our ability to service our indebtedness and our ability to pay dividends to our shareholders.
We may not be able to effect any of these actions on satisfactory terms, or at all. Increases in interest rates could increase our interest expense and may adversely affect our cash flows, our ability to service our indebtedness and our ability to pay dividends to our shareholders.
We have no assurance that the FERC will continue its current policies as it considers matters such as certification of new interstate natural gas facilities, pipeline rates and rules and policies that may affect rights of access to natural gas transportation capacity.
We have no assurance that FERC will continue its current policies as it considers matters such as certification of new interstate natural gas facilities, pipeline rates and rules and policies that may affect rights of access to natural gas transportation capacity.
Our existing credit facilities and the indenture governing our senior notes limit our ability to, and any future credit facility or indenture we may enter into might limit our ability to, among other things: (i) incur additional indebtedness or guarantee other indebtedness; (ii) grant liens or make certain negative pledges; (iii) make certain dividends or investments; (iv) engage in transactions with affiliates; (v) transfer, sell or otherwise dispose of all or substantially all of our assets; or (vi) enter into a merger, consolidate, liquidate, wind up or dissolve.
Our existing Revolving Credit Facility and the indenture governing our senior notes limit our ability to, and any future credit facility or indenture we may enter into might limit our ability to, among other things: (i) incur additional indebtedness or guarantee other indebtedness; (ii) grant liens or make certain negative pledges; (iii) make certain dividends or investments; (iv) engage in transactions with affiliates; (v) transfer, sell or otherwise dispose of all or substantially all of our assets; or (vi) enter into a merger, consolidate, liquidate, wind up or dissolve.
While we may participate in various voluntary frameworks and certification programs to improve the ESG profile of our operations and products, we cannot guarantee that such participation or certification will have the intended results on our or our products’ ESG profile.
While we may participate in various voluntary frameworks and certification programs to improve the ESG profile of our operations and products, we cannot guarantee that such participation or certification will have the intended results on our ESG profile.
Our natural gas transportation and storage operations are subject to extensive regulation by the FERC and state regulatory authorities and changes in FERC or state regulation could materially adversely affect our business, financial condition and results of operations. Our business operations are subject to extensive regulation by the FERC, and state regulatory authorities.
Our natural gas transportation and storage operations are subject to extensive regulation by FERC and state regulatory authorities and changes in FERC or state regulation could materially adversely affect our business, financial condition and results of operations. Our business operations are subject to extensive regulation by FERC, and state regulatory authorities.
We also could be dependent on third parties to fund their required share of capital expenditures and be exposed to third party credit risk through our contractual arrangements with our joint venture partners.
We also could be dependent on our joint venture partners to fund their required share of capital expenditures and be exposed to third party credit risk through our contractual arrangements with our joint venture partners.
Our operations, our customers’ operations and other interconnected pipelines and facilities are subject to many hazards, including (i) damage to pipelines, facilities, equipment, environmenta l controls and s urrounding properties, including damage resulting from slippage; (ii) leaks, migrations or losses of natural gas and other hydrocarbons, water, brine, other fluids and hazardous chemicals that we handle in our treating and other operations; (iii) inadvertent damage from third parties, including from construction, farm and utility equipment; (iv) uncontrolled releases of natural gas and other hydrocarbons; (v) ruptures, fires and explosions; (vi) product and waste spills and unauthorized discharges of products, wastes and other pollutants; (vii) pipeline freeze-offs due to cold weather; (viii) operator error; (ix) aging infrastructure, mechanical or other performance problems; (x) damages to and loss of availability of interconnecting third-party pipelines, railroads and terminals; (xi) disruption or failure of information technology systems and network infrastructure; (xii) floods; (xiii) severe weather; (xiv) lightning and (xv) terrorism.
Our operations, our customers’ operations and other interconnected pipelines and facilities are subject to many operational hazards, including (i) damage to pipelines, facilities, equipment, environmenta l controls and s urrounding properties, including damage resulting from landslide and ground movement slippage; (ii) leaks, migrations or losses of natural gas and other hydrocarbons, water, brine, other fluids and hazardous chemicals that we handle in our treating and other operations; (iii) inadvertent damage from third parties, including from construction, farm and utility equipment; (iv) uncontrolled releases of natural gas and other hydrocarbons; (v) ruptures, fires and explosions; (vi) product and waste spills and unauthorized discharges of products, wastes and other pollutants; (vii) pipeline freeze-offs due to cold weather; (viii) operator error; (ix) aging infrastructure, mechanical or other performance problems; (x) damages to and loss of availability of interconnecting third-party pipelines, railroads and terminals; (xi) disruption or failure of information technology systems and network infrastructure; (xii) floods; (xiii) severe weather; (xiv) lightning and (xv) terrorism.
If we are unable to implement business strategies that address the physical risks of climate change and that meet the changing expectations of regulators or investors concerning climate change, we may experience a material adverse effect on our business. 30 Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities and changes in these laws and regulations could materially adversely affect our business, financial condition and results of operations.
If we are unable to implement business strategies that address the physical risks of climate change and that meet the changing expectations of regulators or investors concerning climate change, we may experience a material adverse effect on our business. 29 Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities and changes in these laws and regulations could materially adversely affect our business, financial condition and results of operations.
In practice, states can adopt stricter standards for intrastate pipelines than those imposed by PHMSA for interstate lines, and states vary considerably in their authority and capacity to address pipeline safety.
In practice, states can adopt stricter standards for intrastate pipelines than those imposed by PHMSA for interstate pipelines, and states vary considerably in their authority and capacity to address pipeline safety.
Army Corps sought public comment on the potential to revise NWP 12 in response to objections to the use of NWP 12 related, primarily, to environmental justice, public participation, and climate change.
Army Corps of Engineers sought public comment on the potential to revise NWP 12 in response to objections to the use of NWP 12 related, primarily, to environmental justice, public participation, and climate change.
The majority of our contracts are firm service revenue contracts. Firm service revenue contracts are typically long-term and structured using fixed demand charges or MVCs with fixed deficiency fee rates.
The majority of our customer contracts are firm service revenue contracts. Firm service revenue contracts are typically long-term and structured using fixed demand charges or MVCs with fixed deficiency fee rates.
If reductions are significant for those or other reasons, the reductions could materially adversely affect our business, financial condition and results of operations. 29 The U.S.
If reductions are significant for those or other reasons, the reductions could materially adversely affect our business, financial condition and results of operations. The U.S.
This regulatory oversight can result in longer lead times to develop and complete any future project than competitors that are not subject to the FERC’s regulations.
This regulatory oversight can result in longer lead times to develop and complete any future project than competitors that are not subject to FERC’s regulations.
Any such indemnification obligation could materially adversely affect our business, financial condition and results of operations. We agreed to numerous restrictions to preserve the non-recognition treatment of the Distribution, which may reduce our strategic and operating flexibility. We agreed in the Tax Matters Agreement to covenants and indemnification obligations that address compliance with Section 355(e) of the Code.
Any such indemnification obligation could materially adversely affect our business, financial condition and results of operations. We agreed to numerous restrictions to preserve the non-recognition treatment of the Distribution, which may reduce our strategic and operating flexibility. We agreed in the Tax Matters Agreement to covenants and indemnification obligations that address compliance with Section 355(e) of the Internal Revenue Code.
Moreover, a number of state and regional legal initiatives, including climate change laws, have emerged in recent years that seek to reduce GHGs emissions and the EPA, based on its findings that emissions of greenhouse gases present a danger to public health and the environment, has adopted regulations under existing provisions of the U.S. federal Clean Air Act that, among other things, restrict emissions of GHGs and require the monitoring and reporting of GHG emissions from specified onshore and offshore production sources and onshore treating sources in the U.S. on an annual basis.
Moreover, a number of state and regional legal initiatives, including climate change laws, have emerged in recent years that 30 seek to reduce GHGs emissions and the EPA, based on its findings that emissions of GHGs present a danger to public health and the environment, has adopted regulations under existing provisions of the U.S. federal Clean Air Act that, among other things, restrict emissions of GHGs and require the monitoring and reporting of GHG emissions from specified onshore and offshore production sources and onshore treating sources in the U.S. on an annual basis.
For example, on January 27, 2021 President Biden issued an Executive Order ("Tackling the Climate Crisis at Home and Abroad") that included provisions directing the Secretary of the Interior to pause approval of new oil and natural gas leases on public lands pending completion of a comprehensive review and reconsideration of U.S. federal oil and gas permitting and leasing practices and directing the heads of U.S. federal agencies to take steps to ensure that, to the extent consistent with applicable law, federal funding is not directly subsidizing fossil fuels.
For example, an Executive Order was issued on January 27, 2021 ("Tackling the Climate Crisis at Home and Abroad") that included provisions directing the Secretary of the Interior to pause approval of new oil and natural gas leases on public lands pending completion of a comprehensive review and reconsideration of U.S. federal oil and gas permitting and leasing practices and directing the heads of U.S. federal agencies to take steps to ensure that, to the extent consistent with applicable law, federal funding is not directly subsidizing fossil fuels.
These physical risks may arise from more frequent or severe weather events such as floods, landslides, storms, rising water levels, and changes in established weather patterns that cause damage to our assets or to portions of the country’s gas infrastructure upon which we or our customers rely.
Physical risks may arise from more frequent or severe weather events such as floods, landslides, storms, rising water levels, and changes in established weather patterns that cause damage to our assets or to portions of the country’s natural gas infrastructure upon which we or our customers rely.
In addition, Section 355(e) of the Code generally creates a presumption that the Distribution would be taxable to DTE Energy, but not to shareholders, if we or our shareholders were to engage in transactions that result in a 50% or greater change by vote or value in the ownership of our stock during the four-year period beginning on the date that begins two years before the date of the Distribution, unless it were established that such transactions and the Distribution were not part of a plan or series of related transactions giving effect to such a change in ownership.
In addition, Section 355(e) of the Internal Revenue Code generally creates a presumption that the Distribution would be taxable to DTE Energy, but not to shareholders, if we or our shareholders were to engage in transactions that result in a 50% or greater change by vote or value in the ownership of our common stock during the four-year period beginning on the date that begins two years before the date of the Distribution, unless it were established that such transactions and the Distribution were not part of a plan or series of related transactions giving effect to such a change in ownership.
As with the industry generally, compliance with current and anticipated environmental laws and regulations increases our overall cost of business, including our capital costs to construct, maintain and upgrade pipelines and other facilities, or even cause us not to pursue a project.
As with the industry generally, compliance with current and anticipated environmental laws and regulations increases our overall cost of conducting business, including our capital costs to construct, maintain and upgrade pipelines and other facilities, or may even cause us not to pursue a project.
Any disruption in our ability to obtain coverage under NWP 12 or other general permits may result in increased costs and project delays if we are forced to seek individual permits from the U.S. Army Corps.
Any disruption in our ability to obtain coverage under NWP 12 or other general permits may result in increased costs and project delays if we are forced to seek individual permits from the U.S. Army Corps of Engineers.
Generally, the FERC’s authority extends to rates and charges for interstate pipelines and storage facilities as well as intrastate pipelines and storage facilities providing service in interstate commerce; certification and construction of new interstate pipelines and storage services and facilities and expansion of such facilities; abandonment of interstate pipelines and storage services and facilities; maintenance of accounts and records; relationships between pipelines and certain affiliates; terms and conditions of services and service contracts with customers; depreciation and amortization rates and policies; facility replacements and upgrades; and acquisitions and dispositions of interstate pipelines and storage facilities or assets.
Generally, FERC’s authority extends to rates and charges for interstate pipelines and storage facilities as well as intrastate pipelines and storage facilities providing service in interstate commerce; terms and conditions of services and service contracts with customers; certification and construction of new interstate pipelines and storage services and facilities and expansion of such facilities; abandonment of interstate pipelines and storage services and facilities; maintenance of accounts and records; relationships between pipelines and certain affiliates; depreciation and amortization rates and policies; facility replacements and upgrades; and acquisitions and dispositions of interstate pipelines and storage facilities.
These risks could result in loss of human life, personal injuries, significant damage to property, environmental pollution, impairment of our operations, regulatory investigations and penalties and substantial losses to us. The location of certain segments of our systems in or near populated areas, including residential areas, commercial business centers and industrial sites, could increase the damages resulting from these risks.
These risks could result in loss of human life, personal injuries, significant property damage, environmental pollution, impairment of our operations, regulatory investigations and penalties and substantial financial losses. The location of certain segments of our systems in or near populated areas, including residential areas, commercial business centers and industrial sites, could increase the damages resulting from these risks.
We might not have, or be able to obtain, sufficient funds to make these accelerated payments. Any subsequent replacement of our credit facilities or any new indebtedness could have similar or greater restrictions. For more information, see the section entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity".
We might not have, or be able to obtain, sufficient funds to make these accelerated payments. Any subsequent replacement of our Revolving Credit Facility or any new indebtedness could have similar or greater restrictions. For more information, see the section entitled "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity".
A certain amount of natural gas is inherently lost and unaccounted-for in connection with meter differences and movement across a pipeline or storage system, and under our contractual arrangements with our customers we are entitled to retain a specified volume of natural gas in order to compensate us for such volumes as well as the natural gas used to run our compressor stations, which we refer to as "fuel usage." The level of fuel usage and lost and unaccounted-for volumes on our transportation, storage and gathering systems may exceed the natural gas volumes retained from our customers as compensation for our fuel usage and lost and unaccounted-for volumes pursuant to our contractual agreements.
A certain amount of natural gas is inherently lost and unaccounted-for in connection with meter differences and movement across a pipeline or storage system, and under our contractual arrangements with our customers we are entitled to retain a specified volume of natural gas in order to compensate us for such volumes as well as the natural gas used to operate our compressor stations, which we refer to as "fuel usage." The level of fuel usage and lost and unaccounted-for volumes on our transportation, storage and gathering systems may exceed the natural gas volumes retained from our customers as compensation for such volumes.
In addition to physical risks, our business is subject to transition risks arising from efforts to address climate change through laws and policies and through market preferences that disfavor fossil fuels and related businesses.
In addition to physical risks, our business is subject to transition risks arising from efforts to address climate change through legislation and policies and through market preferences that disfavor fossil fuels and related businesses.
We may be unable to renew or replace expiring contracts at favorable rates or on a long-term basis. One of our exposures to market risk occurs at the time our existing contracts, including both our contracts with existing customers and our contracts with our suppliers and other counterparties, expire and are subject to renegotiation and renewal.
We may be unable to renew or replace expiring contracts at favorable rates or on a long-term basis. One of our exposures to market risk occurs when our existing contracts, including both our contracts with customers and our contracts with suppliers and other counterparties, expire and are subject to renegotiation and renewal.
Increasing attention to climate change and environmental conservation may result in increased costs, reduced access to insurance at reasonable rates, reduced demand for our products, reduced profits, negative impacts on our stock price, reduced access to capital markets, and additional governmental investigations and private litigation against us or our customers.
Increasing attention to climate change and environmental conservation may result in increased costs, reduced access to insurance at reasonable rates, reduced demand for our services, reduced profits, negative impacts on our stock price, reduced access to capital markets, and governmental investigations and private litigation against us or our customers.
For instance, we may be required to obtain and maintain permits and other approvals issued by various U.S. federal, state and local governmental authorities; monitor for, limit or prevent releases of materials from our operations in accordance with these permits and approvals; install pollution control equipment or replace aging pipelines and other facilities; limit or refrain from construction activities in sensitive areas such as wetlands, wilderness or urban areas or areas inhabited by endangered or threatened species; incur potentially substantial new obligations or liabilities for any pollution or contamination that may result from our operations; and apply health and safety criteria addressing worker protections.
For instance, we may be required to obtain and maintain permits and other approvals issued by various U.S. federal, state and local governmental authorities; monitor for, limit or prevent releases of materials from our operations in accordance with these permits and approvals; install pollution control equipment or replace aging pipelines and other facilities; limit or prohibit construction activities in sensitive areas such as wetlands, wilderness or areas that provide habitat for endangered or threatened species; incur potentially substantial new obligations or liabilities for any pollution or contamination that may result from our operations; and apply health and safety criteria addressing worker protections.
In certain cases, we could have limited ability to influence or control certain day-to-day activities affecting the operations, the amount of capital expenditures that we are required to fund with respect to these operations and the amount of cash we will receive from the joint venture.
In certain cases, we could have limited ability to influence or control certain day-to-day activities affecting the operations, the amount of capital expenditures that we may be required to fund with respect to these operations and the amount of cash we will receive from the joint venture.
While lease sales continue to some extent, they have been scaled back and are subject to challenge by environmental groups. Also, on November 26, 2021 the Department of the Interior 31 issued a report calling for an increase in royalty payments for new oil and gas leases on federal lands and other measures.
While lease sales continue to some extent, they have been scaled back and are subject to challenge by environmental groups. On November 26, 2021 the Department of the Interior issued a report calling for an increase in royalty payments for new oil and gas leases on federal lands and other measures. Royalty rates have been increased for new leases.
PHMSA regulations also require assessment and repairs outside of HCAs in what are referred to as moderate consequence areas or “MCAs.” Additionally, while states are largely preempted by U.S. federal law from regulating pipeline safety for interstate lines, most are certified by PHMSA to assume responsibility for enforcing U.S. federal intrastate pipeline regulations and inspection of intrastate pipelines.
PHMSA regulations also require assessment and repairs outside of HCAs in what are referred to as moderate consequence areas or MCAs. Additionally, while states are preempted by U.S. federal law from regulating pipeline safety for interstate lines, most are certified by PHMSA to assume responsibility for enforcing U.S. federal intrastate pipeline regulations and inspection of intrastate pipelines.
We believe that our non-jurisdictional natural gas gathering facilities, including those which we refer to as "lateral pipelines," meet the traditional tests the FERC has used to establish a pipeline’s status as an exempt gathering facility not subject to FERC regulation as a jurisdictional natural gas company under the Natural Gas Act, although the FERC has not made a formal determination with respect to the jurisdictional status of those facilities.
We believe that our non-jurisdictional natural gas gathering facilities, including those which we refer to as "lateral pipelines," meet the traditional tests FERC has used to establish a pipeline’s status as an exempt gatherer not subject to regulation as a FERC-jurisdictional natural gas company under the NGA, although FERC has not made a formal determination with respect to the jurisdictional status of those facilities.
These covenants and indemnification obligations may limit our ability to pursue strategic transactions or engage in new businesses or other transactions that may otherwise maximize the value of our business and might discourage or delay a strategic transaction that our shareholders may consider favorable.
These covenants and indemnification obligations may limit our ability to pursue strategic transactions or engage in new businesses that may otherwise maximize the value of our Company and might discourage or delay a strategic transaction that our shareholders may consider favorable.
The loss of all or even a portion of the contracted volumes of this or other customers, the failure to extend or replace these contracts or the extension or replacement of these contracts on less favorable terms, as a result of competition, creditworthiness, reduced production or otherwise, could materially adversely affect our business, financial condition and results of operations.
The loss of all or even a portion of the contracted volumes of this or other customers, the failure to extend or replace customer contracts, or the extension or replacement of customer contracts on less favorable terms, as a result of competition, creditworthiness, reduced natural gas production or otherwise, could materially adversely affect our business, financial condition and results of operations.
Our existing and future level of debt may limit our flexibility to obtain additional financing and to pursue other business opportunities. As of December 31, 2022, we had outstanding approximately $2.1 billion of senior notes, $600 million of senior secured notes, $399 million of indebtedness under our Term Loan Facility and $330 million of borrowings under our Revolving Credit Facility.
Our existing and future level of debt may limit our flexibility to obtain additional financing and to pursue other business opportunities. As of December 31, 2023, we had outstanding approximately $2.1 billion of senior notes, $600 million of senior secured notes, $399 million of indebtedness under our Term Loan Facility and $165 million of borrowings under our Revolving Credit Facility.
We incur significant costs associated with our compliance with existing PHMSA and state pipeline safety regulations, but we do not believe such costs of compliance will materially adversely affect our business, financial condition and results of operations.
We incur significant costs in complying with existing PHMSA and state pipeline safety regulations, but we do not believe such costs of compliance will materially adversely affect our business, financial condition and results of operations.
Furthermore, the tax laws, rules and regulations that affect our customers are subject to change. For example, Pennsylvania’s governor has in recent legislative sessions proposed legislation to impose a state severance tax on the extraction of natural resources, including natural gas produced from the Marcellus/Utica formations, either in replacement of or in addition to the existing state impact fee.
Furthermore, the tax laws, rules and regulations that affect our customers are subject to change. For example, Pennsylvania’s former governor has historically proposed legislation to impose a state severance tax on the extraction of natural resources, including natural gas produced from the Marcellus/Utica formations, either in replacement of or in addition to the existing state impact fee.
Furthermore, our existing credit facilities contain, or any future credit facility or indenture we may enter into may also contain, covenants requiring us to maintain certain financial ratios and tests.
Furthermore, our existing Revolving Credit Facility contains, or any future credit facility or indenture we may enter into may also contain, covenants requiring us to maintain certain financial ratios and tests.
If a significant accident or event occurs that results in a business interruption or damage to our pipelines, storage and gathering systems, the facilities of our customers or other interconnected pipelines and facilities, our business, financial condition and results of operations could be materially adversely affected.
If a significant accident or event occurs that results in a business interruption or damage to our pipelines, storage and gathering systems, the facilities of our customers or other interconnected pipelines and facilities, it could materially adversely affect our business, financial condition and results of operations.
We published our first Corporate Sustainability Report in the second quarter 2022, which detailed how we seek to manage our operations responsibly and ethically, as well as strategies and goals associated with reducing our environmental impact.
We published our second annual Corporate Sustainability Report in the second quarter 2023, which detailed how we seek to manage our operations responsibly and ethically, as well as strategies and goals associated with reducing our environmental impact.
We may incur significant costs associated with repair, remediation, preventive and mitigation measures associated with our integrity management programs for pipelines that are not currently subject to regulation by PHMSA and may be required to comply with new safety regulations and make additional maintenance capital expenditures in the future for similar regulatory compliance initiatives that are not reflected in our forecasted maintenance capital expenditures.
We may incur significant costs associated with repair, remediation, preventive and mitigation measures associated with our integrity management programs and may be required to comply with new safety regulations and make additional maintenance capital expenditures in the future for similar regulatory compliance initiatives that are not reflected in our forecasted maintenance capital expenditures.
Any expansion project or acquisition involves potential risks, including, among other things: (i) service interruptions or increased downtime associated with our projects; (ii) a decrease in our liquidity; (iii) an inability to complete expansion projects or acquisitions on schedule or within the budgeted cost; (iv) the assumption of unknown liabilities when making acquisitions for which we are not indemnified or for which our indemnity is inadequate; (v) the diversion of our management’s attention from other business concerns; (vi) mistaken assumptions about the overall costs of equity or debt, demand for our services, supply volumes, reserves, revenues and costs, including synergies and potential growth; (vii) an inability to secure adequate customer commitments to use the expanded or acquired systems or facilities; (viii) an inability to successfully integrate the businesses we build or acquire; (ix) an inability to receive cash flows from a newly built asset until it is operational; and (x) unforeseen difficulties operating in new product areas or new geographic areas.
Any expansion project or acquisition involves potential risks, including, among other things: (i) service interruptions or increased downtime associated with our projects; (ii) a decrease in our liquidity; (iii) an inability to complete expansion projects or acquisitions on schedule or within the budgeted cost; (iv) the assumption of unknown liabilities when making acquisitions for which we are not indemnified or for which our indemnity is inadequate; (v) the diversion of our management’s attention from other business concerns; (vi) mistaken assumptions about the overall costs of equity or debt, demand for our services, supply volumes, reserves, revenues and costs, synergies and potential growth; (vii) an inability to secure adequate customer commitments to use the expanded or acquired systems or facilities; (viii) an inability to successfully integrate the businesses we build or acquire; (ix) an inability to receive cash flows from a newly built asset until it is operational; and (x) unforeseen difficulties operating in new service areas or new geographic areas. 24 We have entered into joint ventures, and may in the future enter into additional or modify existing joint ventures, which might restrict our operational and corporate flexibility.
Moreover, the NWP 12 reissuance is among the agency actions listed for review in accordance with President Biden’s January 20, 2021 Executive Order ("Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis"); and, in 2022 the U.S.
The NWP 12 reissuance was among the agency actions listed for review in accordance with the January 20, 2021 Executive Order ("Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis"); and, in 2022 the U.S.
Accordingly, midstream operators of pipeline and associated storage facilities may be required to make operational changes or modifications at their facilities to meet standards beyond current federal requirements, where such changes or modifications may result in additional capital costs, possible operational delays and increased costs of operation that, in some instances, may be significant.
Accordingly, midstream operators of pipeline and associated storage facilities may be required to make operational changes or modifications at their facilities to meet standards beyond current federal requirements, where such changes or modifications may result in additional capital costs, possible operational delays and potentially significant increased costs of operations.
Common purchaser statutes generally require gatherers to gather or provide services without undue discrimination as to source of supply or producer; as a result, these statutes restrict our right to decide whose production we gather or transport. U.S. federal law leaves any economic regulation of natural gas gathering to the states.
State and municipal regulations also impact our business. Common purchaser statutes generally require gatherers to gather or provide services without undue discrimination as to source of supply or producer; as a result, these statutes restrict our right to decide whose production we gather or transport. U.S. federal law leaves any economic regulation of natural gas gathering to the states.
Southwestern Energy accounted for approximately 65% of our operating revenues for the year ended December 31, 2022. Our operating revenues do not include revenues of unconsolidated joint ventures accounted for as equity method investments.
Southwestern Energy accounted for approximately 60% of our operating revenues for the year ended December 31, 2023. Our operating revenues do not include revenues of unconsolidated joint ventures accounted for as equity method investments.
In addition, the distinction between FERC-regulated transmission services and gathering services not regulated by FERC has regularly been the subject of substantial litigation in the industry. Consequently, the classification and regulation of some of our gathering operations could change based on future determinations by the FERC, the courts or the U.S. Congress.
In addition, the distinction between FERC-regulated transmission services and federally unregulated gathering services is regularly the subject of substantial litigation in the industry. Consequently, the classification and regulation of some of our gathering operations could change based on future determinations by FERC, the courts or the U.S. Congress.
In addition, our gathering systems have contracts that provide for specified levels of fuel retainage. As such, we may find it necessary to purchase natural gas in the market to make up for any of these differences, which exposes us to commodity price risk.
In addition, our gathering systems have contracts that provide for specified levels of fuel retainage. As such, we need to purchase natural gas in the market to make up for any of these differences, which exposes us to natural gas price risk.
The occurrence of any of these events, including an attack or threat targeted at our pipelines and other assets could cause a substantial decrease in revenues; increased costs or other financial losses; exposure or loss of customer information; damage to our reputation or business relationships; increased regulation or litigation; disruption of our operations; and inaccurate information reported from our operations.
The threat or occurrence of any of these events could cause a substantial decrease in revenues; increased costs or other financial losses; 34 exposure or loss of customer information; damage to our reputation or business relationships; increased regulation or litigation; disruption of our operations; and inaccurate information reported from our operations.
Risks related to climate change could be material and adverse to our business, financial condition, results of operations, cash flow, access to and cost of capital or insurance, reputation, and business strategies. Our business is subject to physical risks and transition risks related to climate change.
Risks related to climate change could materially adversely affect our business, financial condition, results of operations, cash flow, access to and cost of capital or insurance, reputation, and business strategies. Our business is subject to physical risks and transition risks related to climate change.
Our existing and future level of debt could have important consequences to us, including the following (i) our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may not be available on favorable terms; (ii) the funds that we have available for operations and payment of dividends to shareholders will be reduced by that portion of our cash flow required to make principal and interest payments on outstanding debt; and (iii) our debt level could make us more vulnerable to competitive pressures than competitors with less debt or to a downturn in our business or the economy generally.
Our existing and future level of debt could have important consequences to us, including the following: (i) our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may not be available on favorable terms; (ii) the funds that we have available for operations and payment of dividends to shareholders will be reduced by that portion of our cash flow required to make principal and interest payments on outstanding debt; and (iii) our debt level could make us more vulnerable to competitive pressures than competitors with less debt or to a downturn in our business or the economy generally. 27 Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control.
In addition, our operations require engineers, operational and field technicians and other highly skilled employees. The competition for talent has become increasingly intense, and we may experience increased employee turnover, increased wage inflation or an impediment of our ability to execute certain key strategic initiatives due to a tightening labor market and skilled labor shortages.
The competition for talent has become increasingly intense, and we may experience increased employee turnover, increased wage inflation or an impediment of our ability to execute certain key strategic initiatives due to a tightening labor market and skilled labor shortages.
If our gathering operations become subject to FERC jurisdiction, the result may adversely affect 33 the rates we are able to charge and the services we currently provide and may include the potential for a termination of certain gathering agreements, which could materially adversely affect our business, financial condition and results of operations.
If our gathering operations become subject to FERC jurisdiction, the result may adversely affect the rates we are able to charge and the services we currently provide and may include the potential for a termination of certain gathering agreements, which could materially adversely affect our business, financial condition and results of operations. 32 State and local legislative and regulatory initiatives relating to gas operations could adversely affect our services and customers’ production and therefore, materially adversely affect our business, financial condition and results of operations.
Any temporary or permanent interruption at any key pipeline interconnect or other downstream facility utilized to move our customers’ product to their end destination that causes a material reduction in volumes transported on our pipelines could materially adversely affect our business, financial condition and results of operations. 24 In addition, the rates charged by treating plants, pipelines and other facilities interconnected to our assets affect the utilization and value of our services.
Any temporary or permanent interruption at any key pipeline interconnect or other downstream facility utilized to move our customers’ product to their end destination that causes a material reduction in volumes transported on our pipelines could materially adversely affect our business, financial condition and results of operations.
We conduct a meaningful portion of our operations through joint ventures with third parties, including through our interests in the Vector Pipeline, Millennium Pipeline, NEXUS and Generation Pipeline, and we may enter into additional joint venture arrangements in the future.
In addition, these joint ventures are subject to most of the same operational risks to which we are subject. We conduct a meaningful portion of our operations through joint ventures with third parties, including through our interests in Vector, Millennium, NEXUS and Generation, and we may enter into additional joint venture arrangements in the future.
Some factors from the COVID-19 pandemic that could materially adversely affect our business, financial condition and results of operations include: third-party effects, including contractual and counterparty risk; litigation risk and possible loss contingencies related to COVID-19, employee matters and insurance arrangements; supply/demand market and macroeconomic forces; lower commodity prices; unavailable storage capacity and operational effects; decreased utilization and rates for our assets and services; impact on liquidity and access to capital markets; our ability to comply with our covenants and other restrictions in agreements governing our debt; workforce reductions and furloughs; cyber security threats; operational, health or safety-related incidents; global supply chain disruptions; and U.S. federal, state and local actions.
Some factors from a health crisis that could materially adversely affect our business, financial condition and results of operations include: third-party effects, including contractual and counterparty risk; litigation risk and possible loss contingencies; employee matters and insurance arrangements; supply/demand market and macroeconomic forces; lower commodity prices; unavailable storage capacity and operational effects; decreased utilization and rates for our assets and services; impact on liquidity and access to capital markets; our ability to comply with our covenants and other restrictions in agreements governing our debt; workforce reductions and furloughs; cybersecurity threats; operational, health or safety-related incidents; global supply chain disruptions; and U.S. federal, state and local actions. 36 Risks Related to the Separation We could have an indemnification obligation to DTE Energy in accordance with the terms of the Tax Matters Agreement if the Distribution were determined not to qualify for non-recognition treatment for U.S. federal tax purposes.
Compliance with these requirements can be time-consuming, costly and burdensome and FERC action in any of these areas could adversely affect our ability to compete for business, construct new facilities, offer new services or recover the full cost of operating our pipelines.
Vector, Millennium, Birdsboro, NEXUS, and the Washington 10 Storage Complex provide interstate services in accordance with their FERC-approved tariffs. 31 Compliance with these requirements can be time-consuming, costly and burdensome and FERC action in any of these areas could adversely affect our ability to compete for business, construct new facilities, offer new services or recover the full cost of operating our pipelines.
Due to our lack of diversification in assets and geographic location, an adverse development in these businesses or our areas of operations, including adverse developments due to catastrophic events, weather, regulatory action, state and local political activities, availability of equipment and personnel, local prices, producer liquidity and decreases in demand for natural gas could have a more significant impact on our business, financial condition and results of operations than if we maintained more diverse assets and locations.
Due to our lack of diversification in assets and geographic location, an adverse development in these businesses or our areas of operations, including adverse developments due to catastrophic events, weather, regulatory action, state and local political activities, availability of equipment and personnel, local prices, producer liquidity and decreases in demand for natural gas could have a more significant impact on our business, financial condition and results of operations than if we maintained more diverse assets and locations. 26 Liquidity, Credit and Financial Risks We may not have access to additional financing sources on favorable terms, or at all, which could materially adversely affect our business, financial condition and results of operations, and independent third parties determine our credit ratings outside of our control.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeInformation concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Annual Report on Form 10-K. 39 PART II
Biggest changeInformation concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is filed as Exhibit 95.1 to this Annual Report on Form 10-K. 38 PART II
Item 4. Mine Safety Disclosures Our sand mining facility in Louisiana is subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.
Item 4. Mine Safety Disclosures Our sand mining facility in Louisiana is subject to regulation by the Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOver 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. For information on DT Midstream's dividend restrictions, see Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
Biggest changeFor information on DT Midstream's dividend restrictions, see Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. There were no sales of unregistered equity securities during the past three years.
See the following table for information as of December 31, 2022: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans DT Midstream, Inc.
See the following table for information as of December 31, 2023: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans DT Midstream, Inc.
These shares were held by a total of 41,083 shareholders of record. We expect to pay regular cash dividends to DT Midstream common stockholders in the future.
These shares were held by a total of 39,293 shareholders of record. We expect to pay regular cash dividends to DT Midstream common stockholders in the future.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities DT Midstream's common stock is listed under the ticker symbol "DTM" on the NYSE, which is the principal market for such stock. At December 31, 2022, there were 96,754,549 shares of DT Midstream common stock issued and outstanding.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities DT Midstream's common stock is listed under the ticker symbol "DTM" on the NYSE, which is the principal market for such stock. As of December 31, 2023, there were 96,971,021 shares of DT Midstream common stock issued and outstanding.
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.
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 5% to 7% annually.
Long-Term Incentive Plan 901,894 $ — 3,768,578 _____________________________________ (a) Includes 492,554 Restricted Stock Units and 409,340 Performance Shares 40 COMPARISON OF CUMULATIVE TOTAL RETURN Total Return to DT Midstream Investors The graph below shows the cumulative total shareholder return assuming the investment of $100, including the reinvestment of dividends, on July 1, 2021, the date of the Separation, in our common stock, the Standard & Poor’s 500 (“S&P 500”) Index, and the Alerian Midstream Energy (“AMNA”) Index.
Long-Term Incentive Plan 974,733 $ — 5,229,267 _____________________________________ (a) Includes 417,294 Restricted Stock Units and 557,439 Performance Share Awards 39 COMPARISON OF CUMULATIVE TOTAL RETURN Total Return to DT Midstream Investors The graph below shows the cumulative total shareholder return assuming the investment of $100, including the reinvestment of dividends, on July 1, 2021 in our common stock, the Standard & Poor’s 500 (“S&P 500”) Index, and the Alerian Midstream Energy (“AMNA”) Index.
For additional detail, see Note 13, "Stock-Based Compensation and Defined Contribution Plans" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
Securities Authorized for Issuance Under Equity Compensation Plans DT Midstream's Long-Term Incentive Plan was approved by shareholders as an equity compensation plan that provides for the annual awarding of stock-based compensation. For additional detail, see Note 13, "Stock-Based Compensation and Defined Contribution Plans" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
Base Period Indexed Returns Company/Index July 1, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 DT Midstream 100.00 111.51 117.18 134.10 122.74 131.41 141.56 S&P 500 Index 100.00 100.05 111.07 105.96 88.90 84.56 90.94 Alerian Midstream Energy Index 100.00 98.00 97.63 120.99 110.52 109.41 118.56 41
Base Period Indexed Returns Company/Index July 1, 2021 December 31, 2021 December 31, 2022 December 31, 2023 DT Midstream 100.00 117.18 141.56 148.29 S&P 500 Index 100.00 111.07 90.94 114.82 Alerian Midstream Energy Index 100.00 97.63 118.56 136.19 40
Removed
There were no sales of unregistered equity securities during the past three years. Securities Authorized for Issuance Under Equity Compensation Plans DT Midstream's Long-Term Incentive Plan was approved by shareholders as an equity compensation plan that provides for the annual awarding of stock-based compensation.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, 2022 2021 2020 (millions) Cash and Cash Equivalents at Beginning of Period $ 132 $ 42 $ 46 Net cash and cash equivalents from operating activities 725 572 597 Net cash and cash equivalents from (used for) investing activities (854) 123 (714) Net cash and cash equivalents from (used for) financing activities 58 (605) 113 Net Increase (Decrease) in Cash and Cash Equivalents (71) 90 (4) Cash and Cash Equivalents at End of Period $ 61 $ 132 $ 42 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 under interruptible service revenue contracts, changing commodity prices, seasonality, weather fluctuations, dividends received from equity method investees and the financial condition of our customers.
Biggest changeOperating 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 under interruptible service revenue contracts, changing natural gas prices, seasonality, weather fluctuations, dividends received from equity method investees and the financial condition of our customers.
Net cash and cash equivalents from operating activities increased $153 million in the year ended December 31, 2022, primarily due to net changes in working capital, 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, and an increase in dividends received from equity method investees.
Net cash and cash equivalents from operating activities increased $153 million for the year ended December 31, 2022 primarily due to net changes in working capital, 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, and an increase in dividends received from equity method investees.
On October 7, 2022, DT Midstream closed on the $552 million purchase of an additional 26.25% ownership interest in Millennium Pipeline from National Grid. See Note 1, "Description of the Business and Basis of Presentation" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
On October 7, 2022, DT Midstream closed on the $552 million purchase of an additional 26.25% ownership interest in Millennium from National Grid. See Note 1, "Description of the Business and Basis of Presentation" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
The increase was primarily due to the acquisition of an additional 26.25% ownership interest in the Millennium Pipeline from National Grid in 2022, cash collection of the Notes receivable from DTE Energy in 2021, and an increase in cash used for plant and equipment expenditures in 2022, partially offset by proceeds from the sale of notes receivable in 2022.
The increase was primarily due to the acquisition of an additional 26.25% ownership interest in the Millennium from National Grid in 2022, cash collection of the Notes receivable from DTE Energy in 2021, and an increase in cash used for plant and equipment expenditures in 2022, partially offset by proceeds from the sale of notes receivable in 2022.
Net cash and cash equivalents used for investing activities of $854 million in the year ended December 31, 2022 increased as compared to net cash and cash equivalents from investing activities of $123 million in the year ended December 31, 2021.
Net cash and cash equivalents used for investing activities of $854 million for the year ended December 31, 2022 increased as compared to net cash and cash equivalents from investing activities of $123 million for the year ended December 31, 2021.
Net cash and cash equivalents from financing activities of $58 million in the year ended December 31, 2022 increased as compared to net cash and cash equivalents used for financing activities of $605 million in the year ended December 31, 2021.
Net cash and cash equivalents from financing activities of $58 million for the year ended December 31, 2022 increased as compared to net cash and cash equivalents used for financing activities of $605 million for the year ended December 31, 2021.
In April 2022, we issued the 2032 Notes in aggregate principal amount of $600 million. We used the net proceeds from the sale of the 2032 Notes of $593 million to partially repay indebtedness under our Term Loan Facility. See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
Financing Activities In April 2022, we issued the 2032 Notes in aggregate principal amount of $600 million. We used the net proceeds from the sale of the 2032 Notes of $593 million to partially repay indebtedness under our Term Loan Facility. See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
During the years ended December 31, 2022 and 2021, DT Midstream paid cash dividends on common stock of $244 million and $58 million, respectively. See Note 8, "Earnings Per Share and Dividends" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
DT Midstream paid cash dividends on common stock of $263 million, $244 million, and $58 million during the years ended December 31, 2023, 2022 and 2021, respectively. See Note 8, "Earnings Per Share and Dividends" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
If the decline is determined to be other than temporary, an impairment charge is recorded in earnings with an offsetting reduction to the carrying value of the investment. As part of our ongoing reviews of equity method investment operations, we did not identify any indicators of impairment that existed during 2022.
If the decline is determined to be other than temporary, an impairment charge is recorded in earnings with an offsetting reduction to the carrying value of the investment. As part of our ongoing reviews of equity method investment operations, we did not identify any indicators of impairment that existed during 2023.
We continue our efforts to identify opportunities to improve cash flows through working capital initiatives and obtaining additional long-term firm service revenue contracts from customers. Our sources of liquidity include cash generated from operating activities and available borrowings under our Revolving Credit Facility.
We continue our efforts to identify opportunities to improve cash flows through working capital initiatives and obtaining long-term firm service revenue contracts from customers. Our sources of liquidity include cash and cash equivalents generated from operating activities and available borrowings under our Revolving Credit Facility.
Operation and maintenance expense decreased $5 million in the year ended December 31, 2022, primarily due to lower Separation-related transaction costs of $10 million, partially offset by increased maintenance and labor costs at the Washington 10 Storage Complex of $3 million.
Operation and maintenance expense decreased $5 million for the year ended December 31, 2022 primarily due to lower Separation-related transaction costs of $10 million, partially offset by increased maintenance and labor costs at the Washington 10 Storage Complex of $3 million.
Interest expense increased $19 million in the year ended December 31, 2022, primarily due to higher outstanding borrowings and higher interest rates on our external debt as compared to interest rates on borrowings from DTE Energy prior to the Separation.
Interest expense increased $19 million for the year ended December 31, 2022 primarily due to higher outstanding borrowings and higher interest rates on our external debt as compared to interest rates on borrowings from DTE Energy prior to the Separation.
As part of our ongoing reviews of business operations and associated long-lived assets, we did not identify any indicators of impairment that existed during 2022.
As part of our ongoing reviews of business operations and associated long-lived assets, we did not identify any indicators of impairment that existed during 2023.
Management believes that the areas described below require 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. Additional discussion of our accounting policies can be found in the Notes to the Consolidated Financial Statements in Item 8 of this Form 10-K.
Management believes that the areas described below require 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. See additional discussion of our accounting policies in the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K.
For purposes of the following discussion, any increases or decreases refer to the comparison of the year ended December 31, 2022 to the year ended December 31, 2021, or the year ended December 31, 2021 to the year ended December 31, 2020, as applicable.
For purposes of the following discussion, any increases or decreases refer to the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, or the year ended December 31, 2022 to the year ended December 31, 2021, as applicable.
NEW ACCOUNTING PRONOUNCEMENTS See Note 3, "New Accounting Pronouncements" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. 51
NEW ACCOUNTING PRONOUNCEMENTS See Note 3, "New Accounting Pronouncements" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. 50
Asset gains of $17 million in the year ended December 31, 2022 increased as compared to Asset losses and impairments, net of $17 million in the year ended December 31, 2021.
Asset gains of $17 million for the year ended December 31, 2022 increased as compared to Asset losses and impairments, net of $17 million for the year ended December 31, 2021.
Our management believes that the current credit ratings provide sufficient access to capital markets. However, disruptions in the banking and capital markets not specifically related to us may affect our ability to access these funding sources or cause an increase in the return required by investors.
We believe that the current credit ratings provide sufficient access to capital markets. However, disruptions in the banking and capital markets not specifically related to us may affect our ability to access these funding sources or cause an increase in the return required by investors.
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.
In between annual impairment tests, we monitor our estimates and assumptions regarding estimated future cash flows, including the impact of movements in market indicators, and will update the impairment analysis if a triggering event occurs. While we believe the estimates and assumptions in the fair value are reasonable, the actual results may differ from projections.
The increase was due to a one-time gain on sale of certain assets in the Utica shale region of $17 million that occurred during 2022 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.
The increase was due to the 2022 one-time gain on sale of certain assets in the Utica Shale region of $17 million as compared to the 2021 one-time 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 System assets.
"Risk Factors—Regulatory Risks— Risks related to climate change could be material and adverse to our business, financial condition, results of operations, cash flow, access to and cost of capital or insurance, reputation, and business strategies ." of this Form 10-K. For discussion of recent climate change related laws and regulations, see Part I, Items 1. and 2.
"Risk Factors—Regulatory Risks— Risks related to climate change could materially adversely affect our business, financial condition, results of operations, cash flow, access to and cost of capital or insurance, reputation, and business strategies ." of this Form 10-K. For discussion of recent climate change related laws and regulations, see Part I, Items 1. and 2.
We have announced our intent to employ carbon-reducing technologies as part of our goal of being leading environmental stewards in the midstream industry and we are executing on a plan to achieve net zero carbon emissions by 2050. We expect to achieve a 30% reduction by 2030.
We have announced our intent to employ carbon-reducing technologies as part of our goal of being leading environmental stewards in the midstream industry, and we are executing on a plan to achieve net zero carbon emissions by 2050. We established our baseline Scope 1 carbon emissions in 2021 and expect to achieve a 30% reduction from this baseline by 2030.
Capital expenditure investments for these projects have been contemplated in our forecasted capital expenditures discussed in the Capital Investments section above. DT Midstream published its inaugural Corporate Sustainability Report in the second quarter 2022. The information in our Corporate Sustainability Report is not incorporated by reference into this Form 10-K.
Capital expenditure investments for these projects have been contemplated in our forecasted capital expenditures discussed in the Capital Investments section below. DT Midstream published our second annual Corporate Sustainability Report in the second quarter 2023. The information in our Corporate Sustainability Report is not incorporated by reference into this Form 10-K.
These opportunities include the following: • Our efforts to advance carbon capture projects across our geographic regions; • Our "wellhead to water" expansion proposal of the Haynesville System which offers a carbon neutral pathway for supply to reach LNG markets; • Our strategic joint development agreement with Mitsubishi Power Americas, Inc. to advance hydrogen development projects across the United States; and • Our partnership with Project Canary to monitor methane emissions.
These opportunities include the following: • Our efforts to advance our Louisiana carbon capture project, as well as other potential carbon capture projects across our geographic regions; • Our "wellhead to water" expansion proposal of the Haynesville System which offers a carbon neutral pathway for supply to reach LNG markets; and • Our strategic joint development agreement with Mitsubishi Power Americas, Inc. to advance hydrogen development projects across the United States.
The following table summarizes our consolidated financial results: Year Ended December 31, 2022 2021 2020 (millions, except per share amounts) Operating revenues $ 920 $ 840 $ 754 Net Income Attributable to DT Midstream 370 307 312 Diluted Earnings per Common Share $ 3.81 $ 3.16 $ 3.23 Year Ended December 31, 2022 2021 2020 (millions) Net Income Attributable to DT Midstream by Segment Pipeline $ 228 $ 178 $ 155 Gathering 142 129 157 Total $ 370 $ 307 $ 312 42 Pipeline The Pipeline segment consists of our interstate pipelines, intrastate pipelines, storage systems, lateral pipelines including related treatment plants and compression and surface facilities.
The following table summarizes our consolidated financial results: Year Ended December 31, 2023 2022 2021 (millions, except per share amounts) Operating revenues $ 922 $ 920 $ 840 Net Income Attributable to DT Midstream 384 370 307 Diluted Earnings per Common Share $ 3.94 $ 3.81 $ 3.16 Year Ended December 31, 2023 2022 2021 (millions) Net Income Attributable to DT Midstream by Segment Pipeline $ 278 $ 228 $ 178 Gathering 106 142 129 Total $ 384 $ 370 $ 307 41 Pipeline The Pipeline segment consists of our interstate pipelines, intrastate pipelines, storage systems, lateral pipelines including related treatment plants and compression and surface facilities.
We had approximately $692 million of available liquidity as of December 31, 2022, consisting of amounts available under our Revolving Credit Facility and cash and cash equivalents. We expect to pay regular cash dividends to DT Midstream common stockholders in the future.
We had approximately $875 million of available liquidity as of December 31, 2023, consisting of cash and cash equivalents and available borrowings under our Revolving Credit Facility. 47 We expect to pay regular cash dividends to DT Midstream common stockholders in the future.
The results of the test are as follows as of the October 1, 2022 valuation date: Reporting Unit Goodwill Weighted Average Costs of Capital Fair Value Reduction % (a) Valuation Methodology (b) (millions) Pipeline $ 53 9.0 % 52 % DCF Gathering 420 9.2 % 8 % DCF $ 473 __________________________________ (a) Percentage by which the estimated fair value of the reporting unit would need to decline to equal its carrying value including goodwill.
The results of the impairment test are as follows as of the October 1, 2023 valuation date: Reporting Unit Goodwill Weighted Average Costs of Capital Fair Value Reduction % (a) Valuation Methodology (b) (millions) Pipeline $ 53 9.4 % 42 % DCF Gathering 420 9.6 % 9 % DCF $ 473 _________________________________ (a) Percentage by which the estimated fair value of the reporting unit would need to decline to equal its carrying value including goodwill.
See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details. Income tax expense increased $4 million in the year ended December 31, 2021, primarily due to an increase in Income before income taxes.
See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details. Income tax expense increased $13 million for the year ended December 31, 2023 primarily due to higher income before income taxes in 2023.
See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details. Income tax expense decreased $16 million in the year ended December 31, 2021, primarily due to a decrease in Income before income taxes.
See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details. Income tax expense decreased $9 million for the year ended December 31, 2023 primarily due to lower income before income taxes in 2023.
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.
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 5% to 7% annually.
Asset (gains) losses and impairments, net decreased $6 million in the year ended December 31, 2022 due to a one-time gain realized from a legal settlement with a supplier that occurred during the three months ended June 30, 2022.
Asset (gains) losses and impairments, net increased $6 million for the year ended December 31, 2022 due to a one-time gain realized from a legal settlement with a supplier that occurred in 2022.
"Business and Properties — Regulatory Environment—Environmental and Occupational Health and Safety Regulations—Climate Change" of this Form 10-K. 46 CAPITAL RESOURCES AND LIQUIDITY Cash Requirements Our principal liquidity requirements are to finance our operations, fund capital expenditures, satisfy our indebtedness obligations, and pay approved dividends.
"Business and Properties—Regulatory Environment—Environmental and Occupational Health and Safety Regulations—Climate Change" of this Form 10-K. 45 CAPITAL RESOURCES AND LIQUIDITY Cash Requirements 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.
Contractual Obligations The following table details our contractual obligations due by year as of December 31, 2022: 2023 2024 2025 2026 2027 and Thereafter (millions) Short-term borrowings (a) $ 330 $ — $ — $ — $ — Long-Term Debt: Senior Notes (b) — — — — 2,100 Senior Secured Notes (c) — — — — 600 Term Loan Facility (d) — — — — 399 Letters of Credit — — — — 39 Interest Expense (e) 127 125 125 125 467 Operating Leases 16 9 3 1 8 Other Purchase Commitments 11 13 12 11 56 Total Obligations $ 484 $ 147 $ 140 $ 137 $ 3,669 _____________________________ (a) Short-term borrowings under our Revolving Credit Facility can be extended up to the October 2027 expiration date.
Contractual Obligations The following table details our contractual obligations due by year as of December 31, 2023: 2024 2025 2026 2027 2028 and Thereafter (millions) Short-term borrowings (a) $ 165 $ — $ — $ — $ — Long-Term Debt: Senior Notes (b) — — — — 2,100 Senior Secured Notes (c) — — — — 600 Term Loan Facility (d) — — — — 399 Letters of credit — — — — 16 Interest expense (e) 127 125 125 126 342 Operating lease payments 15 9 7 7 6 Purchase commitments 14 13 12 11 53 Total Contractual Obligations $ 321 $ 147 $ 144 $ 144 $ 3,516 _____________________________ (a) Short-term borrowings under our Revolving Credit Facility can be extended up to the October 2027 expiration date.
Net cash and cash equivalents used for financing activities of $605 million in the year ended December 31, 2021 increased as compared to net cash and cash equivalents from financing activities of $113 million in the year ended December 31, 2021.
Net cash and cash equivalents used for financing activities of $452 million for the year ended December 31, 2023 increased as compared to net cash and cash equivalents from financing activities of $58 million for the year ended December 31, 2022.
"Risk Factors—Risks Relating to the Separation— We could have an indemnification obligation to DTE Energy in accordance with the terms of the Tax Matters Agreement if the Distribution were determined not to qualify for non-recognition treatment for U.S. federal tax purposes, which could materially adversely affect our business, financial condition and results of operations " of this Form 10-K for additional information.
"Risk Factors—Risks Related to the Separation— We could have an indemnification obligation to DTE Energy in accordance with the terms of the Tax Matters Agreement if the Distribution were determined not to qualify for non-recognition treatment for U.S. federal tax purposes. " of this Form 10-K for further details.
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 Part I, Items 1. and 2.
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 Part I, Items 1. and 2.
Interest expense increased $8 million in the year ended December 31, 2021 primarily due to higher capitalized interest during 2020 related to LEAP construction, partially offset by lower interest on borrowings from DTE Energy in 2021. 43 Earnings from equity method investees increased $24 million in the year ended December 31, 2022, primarily due to the Millennium acquisition of $9 million, higher revenues from increased contract rates and additional customers at NEXUS of $15 million and higher westbound contracted volumes at Vector Pipeline of $4 million, partially offset by a goodwill impairment at Generation Pipeline of $7 million.
Earnings from equity method investees increased $24 million for the year ended December 31, 2022 primarily due to the Millennium acquisition of $9 million, higher revenues from increased contract rates and additional customers at NEXUS of $15 million and higher westbound contracted volumes at Vector of $4 million, partially offset by a goodwill impairment at Generation of $7 million.
Treasury Rates, this may lead to a goodwill impairment in the future. Our goodwill impairment analysis included a comparison of the estimated fair value of the Company as a whole to our market capitalization.
Our annual goodwill impairment analysis included a comparison of the estimated fair value of the Company as a whole to our market capitalization.
See Note 1, "Description of the Business and Basis of Presentation", Note 10, "Debt" and Note 12, "Commitments and Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
See Note 1, "Description of the Business and Basis of Presentation" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. Our Strategy See discussion of our strategy under Part I, Items 1. and 2. "Business and Properties—Our Strategy" of this Form 10-K.
See Note 1, "Description of the Business and Basis of Presentation" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for additional discussion on the Millennium Pipeline acquisition. The Credit Agreement covering the Term Loan Facility and Revolving Credit Facility includes financial covenants that DT Midstream must maintain.
The Credit Agreement covering the Term Loan Facility and Revolving Credit Facility includes financial covenants that DT Midstream must maintain. See Note 10, "Debt" and Note 12, "Commitments and Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
These increases were partially offset by an increase in interest expense and an increase in cash paid for income taxes.
These increases were partially offset by an increase in interest expense.
Interest expense decreased $9 million in the year ended December 31, 2021 primarily due to a lower interest rate on outstanding borrowings from DTE Energy. Loss from financing activities increased $7 million in the year ended December 31, 2022 due to the partial repayment of our Term Loan Facility that occurred during the three months ended June 30, 2022.
Loss from financing activities decreased $7 million for the year ended December 31, 2023 and increased $7 million for the year ended December 31, 2022 due to the partial repayment of our Term Loan Facility that occurred during the three months ended June 30, 2022.
Higher Blue Union revenues were driven by recovery of production-related operating expenses of $25 million and increased gathering volumes primarily from new contracts of $17 million.
Operating revenues increased $47 million for the year ended December 31, 2022 primarily due to higher Blue Union Gathering revenues of $42 million and higher volumes on Appalachia Gathering of $5 million. Higher Blue Union Gathering revenues were driven by recovery of production-related operating expenses of $25 million and increased gathering volumes primarily from new contracts of $17 million.
Pipeline results and outlook are discussed below: Year Ended December 31, 2022 2021 2020 (millions) Operating revenues $ 339 $ 307 $ 266 Operation and maintenance 54 59 53 Depreciation and amortization 63 63 52 Taxes other than income 14 13 7 Asset (gains) losses and impairments, net (6) — — Operating Income 214 172 154 Interest expense 57 51 43 Interest income (1) (1) (4) Earnings from equity method investees (150) (126) (108) Loss from financing activities 6 — — Other (income) and expense — (3) (2) Income Tax Expense 62 62 58 Net Income 240 189 167 Less: Net Income Attributable to Noncontrolling Interests 12 11 12 Net Income Attributable to DT Midstream $ 228 $ 178 $ 155 Operating revenues increased $32 million in the year ended December 31, 2022, primarily due to higher volumes and rates on LEAP of $21 million, a new customer on Stonewall Gas Gathering of $7 million, and higher volumes and rates on Washington 10 Storage Complex of $4 million.
Pipeline results and outlook are discussed below: Year Ended December 31, 2023 2022 2021 (millions) Operating revenues $ 377 $ 339 $ 307 Operation and maintenance 55 54 59 Depreciation and amortization 69 63 63 Taxes other than income 15 14 13 Asset (gains) losses and impairments, net (4) (6) — Operating Income 242 214 172 Interest expense 55 57 51 Interest income (1) (1) (1) Earnings from equity method investees (177) (150) (126) Loss from financing activities — 6 — Other (income) and expense — — (3) Income Tax Expense 75 62 62 Net Income 290 240 189 Less: Net Income Attributable to Noncontrolling Interests 12 12 11 Net Income Attributable to DT Midstream $ 278 $ 228 $ 178 Operating revenues increased $38 million for the year ended December 31, 2023 primarily due to higher long-term and short-term storage contracting rates at the Washington 10 Storage Complex of $18 million, new transmission service contracts at the Michigan System of $16 million, and new LEAP long-term firm service revenue contracts of $10 million, partially offset by lower volumes at Bluestone of $2 million.
Gathering results and outlook are discussed below: Year Ended December 31, 2022 2021 2020 (millions) Operating revenues $ 581 $ 534 $ 489 Operation and maintenance 213 173 123 Depreciation and amortization 107 103 100 Taxes other than income 14 11 8 Asset (gains) losses and impairments, net (17) 17 (2) Operating Income 264 230 260 Interest expense 80 61 70 Interest income (2) (3) (5) Loss from financing activities 7 — — Other (income) and expense (1) 1 (20) Income Tax Expense 38 42 58 Net Income Attributable to DT Midstream $ 142 $ 129 $ 157 Operating revenues increased $47 million in the year ended December 31, 2022, primarily due to higher Blue Union revenues of $42 million and higher volumes on the Appalachia Gathering System of $5 million.
Gathering results and outlook are discussed below: Year Ended December 31, 2023 2022 2021 (millions) Operating revenues $ 545 $ 581 $ 534 Operation and maintenance 190 213 173 Depreciation and amortization 113 107 103 Taxes other than income 13 14 11 Asset (gains) losses and impairments, net — (17) 17 Operating Income 229 264 230 Interest expense 95 80 61 Interest income — (2) (3) Loss from financing activities — 7 — Other (income) and expense (1) (1) 1 Income Tax Expense 29 38 42 Net Income Attributable to DT Midstream $ 106 $ 142 $ 129 43 Operating revenues decreased $36 million for the year ended December 31, 2023 primarily due to lower Haynesville System (Blue Union Gathering) revenues of $50 million, lower Michigan System gathering services of $6 million, and lower Susquehanna Gathering volumes of $3 million, partially offset by higher Appalachia Gathering volumes of $21 million driven primarily by new contracts resulting from the expansion in 2023.
Goodwill 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 performing the impairment test, we compare the fair value of each reporting unit to its carrying value including goodwill.
Goodwill We have goodwill that resulted from business combinations. Annually as of October 1st, an impairment test for goodwill is performed which compares the fair value of each reporting unit to its carrying value including goodwill. If the carrying value including goodwill exceeds the fair value of a reporting unit, an impairment loss would be recognized.
Operating revenues increased $45 million in the year ended December 31, 2021, primarily due to higher gathering revenues on Blue Union of $33 million and the Appalachia Gathering System of $17 million, partially offset by lower volumes on Susquehanna Gathering System of $4 million. 44 Operation and maintenance expense increased $40 million in the year ended December 31, 2022, primarily due to higher Blue Union and Susquehanna Gathering System expenses of $46 million and $2 million, respectively, partially offset by lower Appalachia Gathering System expenses of $7 million.
Operation and maintenance expense increased $40 million for the year ended December 31, 2022 primarily due to higher Blue Union Gathering and Susquehanna Gathering expenses of $46 million and $2 million, respectively, partially offset by lower Appalachia Gathering expenses of $7 million. Higher Blue Union Gathering expenses were driven by planned maintenance and increased production-related operating expenses recovered from customers.
Interest expense increased $6 million in the year ended December 31, 2022, primarily due to higher outstanding borrowings and higher interest rates on our external debt as compared to interest rates on borrowings from DTE Energy prior to the Separation.
Interest expense increased $6 million for the year ended December 31, 2022 primarily due to higher outstanding borrowings and higher interest rates on our external debt as compared to interest rates on borrowings from DTE Energy prior to the Separation. 42 Earnings from equity method investees increased $27 million for the year ended December 31, 2023 primarily due to higher earnings from Millennium of $19 million from our higher ownership percentage and a goodwill impairment at Generation of $7 million in 2022.
To the 50 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.
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. If current expectations of future long-term growth are not met or market factors outside of our control change, such as U.S.
These decreases were partially offset by 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 asset (gains) losses and impairments. 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.
These increases were partially offset by an increase in interest expense and an increase in cash paid for income taxes. 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.
Other off-balance sheet arrangements include the Vector Pipeline Line of Credit, which is discussed further in Note 12, "Commitments and Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. INDEMNIFICATION OBLIGATIONS We could have an indemnification obligation to DTE Energy pursuant to the Tax Matters Agreement and the Separation and Distribution Agreement.
Other off-balance sheet arrangements include the Vector line of credit and our surety bonds, which are discussed further in Note 12, "Commitments and Contingencies" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K.
ENVIRONMENTAL MATTERS 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.
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.
Loss from financing activities increased $6 million in the year ended December 31, 2022, due to the partial repayment of our Term Loan Facility that occurred during the three months ended June 30, 2022. See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details.
Loss from financing activities decreased $6 million for the year ended December 31, 2023 and increased $6 million for the year ended December 31, 2022 due to the partial repayment of our Term Loan Facility that occurred during the three months ended June 30, 2022.
If the carrying value including goodwill exceeds the fair value of a reporting unit, an impairment loss would be recognized. A goodwill impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.
A goodwill impairment loss is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The October 1, 2023 fair values for the reporting units were calculated using an income approach.
During 2023, we expect to continue our exploration of early-stage development opportunities for energy transition advancements leveraging our existing assets, competencies and partnerships.
During 2024, we plan to continue to make progress on opportunities for energy transition advancements leveraging our existing assets, competencies and partnerships.
Our total capital expenditures, inclusive of $5 million in contributions to equity method investees and the Millennium Pipeline acquisition discussed above, were $895 million for the year ended December 31, 2022. We anticipate total capital expenditures, inclusive of contributions to equity method investees, in 2023 of approximately $605 million to $690 million.
Our total capital expenditures, inclusive of $7 million in contributions to equity method investees, were $779 million for the year ended December 31, 2023.
We performed our annual impairment test as of October 1, 2022 and determined that the estimated fair value of each reporting unit exceeded its carrying value, and no impairment existed.
Management also compared the implied market multiple of the estimated fair value of each reporting unit to midstream industry transaction multiples and considered other market indicators to support the appropriateness of the fair value estimates. 49 We performed our annual impairment test as of October 1, 2023 and determined that the estimated fair value of each reporting unit exceeded its carrying value, and no impairment existed.
"Business and Properties—Our Strategy" of this Form 10-K. 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.
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.
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.
The increase 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 in 2022. 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.
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.
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. In May 2023, NEXUS closed on the sale of $750 million of senior unsecured notes with a weighted-average coupon rate of 5.52%.
Depreciation and amortization expense increased $4 million in the year ended December 31, 2022, primarily due to additional depreciation and amortization expense related to new Blue Union and Susquehanna Gathering System assets placed into service.
Depreciation and amortization expense increased $4 million for the year ended December 31, 2022 primarily due to new Blue Union Gathering and Susquehanna Gathering assets placed into service. Asset (gains) losses and impairments, net decreased $17 million for the year ended December 31, 2023 due to the 2022 one-time gain on sale of certain assets in the Utica Shale region.
One such significant assumption is a terminal value that utilizes an assumed long-term growth rate, which incorporates management’s judgment regarding sustainable long-term growth of the reporting units. Another significant assumption includes the weighted average cost of capital (WACC) which is used to discount estimates of projected future results and cash flows to be generated by each reporting unit.
The estimated fair value in our annual goodwill impairment analysis utilizes significant assumptions that require judgement by management. One such significant assumption is the weighted average cost of capital (WACC) which is used to discount estimates of projected future results and cash flows to be generated by each reporting unit.
DT Midstream calculated the terminal year cash flows using an estimated long-term growth rate of 2.0%, discounted at the WACC for each of the reporting units. Assessment of Long-Lived Assets for Impairment We evaluate the carrying value of long-lived assets, excluding goodwill, when circumstances indicate that the carrying value of those assets may not be recoverable.
Assessment of Long-Lived Assets for Impairment We evaluate the carrying value of long-lived assets, excluding goodwill, when circumstances indicate that the carrying value of those assets may not be recoverable.
The increase was primarily due to the 2021 Separation-related repayment of short-term borrowings and special dividend to DTE Energy, a decrease in contributions from DTE Energy, and dividends paid on common stock in 2021. These increases were partially offset by net proceeds received from the issuance of long-term debt in June 2021 and decreased acquisition-related deferred payments.
The increase was primarily due to higher net repayments of borrowings under the Revolving Credit Facility, higher dividends paid on common stock, and lower proceeds from the issuance of long-term debt. The increase was partially offset by lower repayments of long-term debt. Prior to the Separation, we relied on short-term borrowings and contributions from DTE Energy.
Income tax expense decreased $4 million in the year ended December 31, 2022, primarily due to a decrease in Pennsylvania income tax rates, which resulted in a $10 million benefit from remeasuring our deferred tax balances. The decrease was partially offset by an increase in Income before income taxes.
Income tax expense for the years ended December 31, 2023 and 2022 include the impacts of net tax benefits related to state tax rate changes. Income tax expense decreased $4 million for the year ended December 31, 2022 primarily due to state tax rate changes. The decrease was partially offset by an increase in Income before income taxes.
(b) Excludes $26 million of unamortized debt issuance costs. (c) Excludes $1 million of unamortized debt discount and $6 million of unamortized debt issuance costs. (d) Excludes $2 million of unamortized debt discount and $5 million of unamortized debt issuance costs.
(b) Excludes $23 million of unamortized debt issuance costs. (c) Excludes $1 million of unamortized debt discount and $5 million of unamortized debt issuance costs. (d) Excludes $1 million of unamortized debt discount and $4 million of unamortized debt issuance costs. (e) Represents interest expense related to all Long-Term Debt.
These growth opportunities include further expansion at the Haynesville System (LEAP) and Stonewall Gas Gathering, new contracts with higher rates on the Washington 10 Storage Complex, and additional growth related to our equity method investments. Gathering The Gathering segment includes gathering systems, related treatment plants and compression and surface facilities.
We will continue to pursue economically attractive expansion opportunities that leverage our current asset footprint and strategic relationships. These growth opportunities include further expansion at the Haynesville System (LEAP) and Stonewall, new contracts at the Washington 10 Storage Complex, and additional growth related to our equity method investments.
These growth opportunities include further expansion at the Haynesville System (Blue Union) and the Appalachia Gathering System. 45 CAPITAL INVESTMENTS Capital spending within our company is primarily for ongoing maintenance and expansion of our existing assets, and if identified, attractive growth opportunities.
The interest expense related to the Term Loan Facility assumes the variable rate is 2.614%. CAPITAL INVESTMENTS Capital spending within our Company is primarily for ongoing maintenance and expansion of our existing assets, and if identified, attractive growth opportunities.
See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details.
See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details. Pipeline Outlook We believe our long-term agreements with customers and the location and connectivity of our pipeline assets position the business for future growth.
The WACC is based on our cost of debt, which includes U.S. industrial bond spreads, and cost of equity, which consists of U.S. Treasury Rates plus an equity risk premium. If current expectations of future long-term growth are not met or market factors outside of our control change, such as U.S.
The WACC is based on our cost of debt, which includes U.S. industrial bond spreads, and cost of equity, which consists of U.S. Treasury Rates plus an equity risk premium. Another significant assumption is the terminal value that utilizes an assumed long-term growth rate, which incorporates management’s judgment regarding sustainable long-term growth of the reporting units.
Operation and maintenance expense increased $50 million in the year ended December 31, 2021, primarily due to an increase of $30 million related to increased Blue Union operations, higher activity on the Appalachia Gathering System, higher Separation-related transaction costs, and higher public company costs.
Higher public company costs were mostly offset by lower Separation-related transaction costs of $10 million . Depreciation and amortization expense increased $6 million for the year ended December 31, 2023 primarily due to new Blue Union Gathering and Appalachia Gathering assets placed into service.
Gathering Outlook We believe our long-term agreements with producers and the quality of the natural gas reserves in the Marcellus/Utica and Haynesville formations position the business for future growth. We will continue to pursue economically attractive expansion opportunities that leverage our current asset footprint and strategic relationships.
See Note 7, "Income Taxes" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K for further details. Gathering Outlook We believe our long-term agreements with producers and the quality of the natural gas reserves in the Marcellus/Utica and Haynesville formations position the business for future growth.
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.
We believe we will have sufficient operating flexibility, cash resources and funding sources to maintain adequate liquidity amounts and to meet future operating cash, capital expenditure and debt servicing requirements. However, our business is capital intensive, and the inability to access adequate capital could adversely impact future earnings and cash flows.
Depreciation and amortization expense increased $11 million in the year ended December 31, 2021, primarily due to higher depreciation related to LEAP of $12 million after it was placed into service in the third quarter 2020, partially offset by lower depreciation of storage assets.
Depreciation and amortization expense increased $6 million for the year ended December 31, 2023 primarily due to new transmission service assets at the Michigan System and new Haynesville System (LEAP) assets placed into service.
Income tax expense was unchanged in the year ended December 31, 2022, due to increased Income before income taxes, fully offset by a decrease in Pennsylvania income tax rates which resulted in a $15 million benefit from remeasuring our deferred tax balances.
Income tax expense for the years ended December 31, 2023 and 2022 include the impacts of net tax benefits related to state tax rate changes. Income tax expense was unchanged for the year ended December 31, 2022 due to increased Income before income taxes, fully offset by state tax rate changes.
Net cash and cash equivalents from operating activities decreased $25 million in the year ended December 31, 2021, primarily due to net changes in working capital, and a decrease in other income driven by proceeds received from a nonrecurring settlement in 2020.
Net cash and cash equivalents from operating activities increased $73 million for the year ended December 31, 2023 primarily due to a decrease in cash paid for taxes, net changes in working capital, an increase in operating income after adjustment for non-cash items including depreciation and amortization expense, stock-based compensation, amortization of operating lease right-of-use assets, and assets (gains) losses and impairments, and an increase in dividends received from equity method investees.
Removed
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 II, Item 8 of this Form 10-K. Our Strategy See discussion of DT Midstream's strategy under Part I, Items 1. and 2.
Added
We have an established history of stable, long-term growth with contractual cash flows from customers that include natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. On July 1, 2021, DT Midstream completed the Separation from DTE Energy and became an independent public company.
Removed
Segment information includes intercompany revenues and expenses, as well as other income and deductions that are eliminated in the Consolidated Financial Statements.
Added
This segment also includes our equity method investments. During the three months ended March 31, 2023, we completed the conversion of the Michigan System from gathering to dry gas transmission service and began providing services under a new long-term dry gas transmission contract.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur exposure to interest rate risk arises primarily from changes in LIBOR and SOFR. As of December 31, 2022, we had floating rate debt of $729 million and a floating rate debt-to-total debt ratio of 21% related to the variable rate Term Loan Facility entered into June 2021.
Biggest changeOur exposure to interest rate risk arises primarily from changes in SOFR. As of December 31, 2023, we had floating rate debt of $564 million related to the variable rate Term Loan Facility and borrowings outstanding under our Revolving Credit Facility, and a floating rate debt-to-total debt ratio of 17%.
Low prices for natural gas, including those resulting from regional basis differentials, could adversely affect development of additional reserves and future production that is accessible by our pipeline and storage assets. We manage our exposure through the use of short, medium, and long-term storage, gathering, and transportation contracts.
Low prices for natural gas, including those resulting from regional basis differentials, could adversely affect development of additional reserves and future natural gas production that is accessible by our pipeline and storage assets. We manage our exposure through the use of short, medium, and long-term transportation, gathering, and storage contracts.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Price Risk Our business is dependent on the continued availability of natural gas production and reserves in our areas of operation.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Price Risk Our business is dependent on the continued availability of natural gas production and reserves in our geographical areas of operation.
These customers are otherwise considered creditworthy or are required to make prepayments or provide security to satisfy credit concerns. We regularly monitor for bankruptcy proceedings that may impact our customers and had no bankruptcy proceedings during the year ended December 31, 2022. Interest Rate Risk We are subject to interest rate risk in connection with the issuance of debt.
These customers are otherwise considered creditworthy or are required to make prepayments or provide security to satisfy credit concerns. We regularly monitor for bankruptcy proceedings that may impact our customers and had no bankruptcy proceedings during the year ended December 31, 2023. Interest Rate Risk We are subject to interest rate risk in connection with the issuance of debt.
Consequently, our existing operations and cash flows have limited direct exposure to commodity price risk. Credit Risk We are exposed to credit risk, which is the risk of loss resulting from nonpayment or nonperformance under a contract. We manage our exposure to credit risk associated with customers through credit analysis, credit approval, credit limits and monitoring procedures.
Consequently, our existing operations and cash flows have limited direct exposure to natural gas price risk. Credit Risk We are exposed to credit risk, which is the risk of loss resulting from nonpayment or nonperformance under a contract. We manage our exposure to credit risk associated with customers through credit analysis, credit approval, credit limits and monitoring procedures.
For some long-term contracts associated with system expansions, we have entered into negotiated credit agreements that provide for enhanced forms of credit support if certain credit standards are not met.
For some long-term contracts associated with gathering system construction or expansion, we have entered into negotiated credit agreements that provide for enhanced forms of credit support if certain customer credit standards are not met.
The results of the sensitivity analysis are as follows: Assuming a 10% Increase in Rates Assuming a 10% Decrease in Rates Change in the Fair Value of Activity As of December 31, 2022 (millions) Interest rate risk $ (96) $ 102 Long-term debt 52
The results of the sensitivity analysis are as follows: Assuming a 10% Increase in Rates Assuming a 10% Decrease in Rates Change in the Fair Value of Activity As of December 31, 2023 (millions) Interest rate risk $ (82) $ 85 Long-term debt 51
See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. We are subject to interest rate risk in connection with our goodwill impairment assessment. See the section entitled "—Critical Accounting Estimates" for more information. Summary of Sensitivity Analysis A sensitivity analysis was performed on the fair values of our long-term debt obligations.
See Note 10, "Debt" to the Consolidated Financial Statements under Part II, Item 8 of this Form 10-K. We are subject to interest rate risk in connection with our goodwill impairment assessment. See "Critical Accounting Estimates" under Part II, Item 7 of this Form 10-K.
The sensitivity analysis involved increasing and decreasing rates at December 31, 2022 by a hypothetical 10% and calculating the resulting change in the fair values. The hypothetical losses related to long-term debt would be realized only if we transferred all of our fixed-rate long-term debt to other creditors.
The hypothetical losses related to long-term debt would be realized only if we transferred all of our fixed-rate long-term debt to other creditors.
Added
Summary of Sensitivity Analysis A sensitivity analysis was performed on the fair values of our long-term debt obligations. The sensitivity analysis involved increasing and decreasing interest rates as of December 31, 2023 by a hypothetical 10% and calculating the resulting change in the fair values.

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