EX-99.2 2 a8-kdtediscopsproformaex.htm EX-99.2 Document

Exhibit 99.2
DTE Energy Company
Unaudited Pro Forma Consolidated Financial Statements



Separation Transaction
On July 1, 2021, DTE Energy (the "Company" or "DTE") completed the previously announced separation of its natural gas pipeline, storage and gathering non-utility business (the "Separation"). Separation of the new company, DT Midstream, Inc. ("DT Midstream"), was accomplished by the distribution of 96,732,466 shares of DT Midstream common stock to DTE shareholders (the "Distribution"). The Distribution reflected 100% of the outstanding common stock of DT Midstream as of 5:00 p.m. ET on the record date of June 18, 2021. DTE shareholders received one share of DT Midstream common stock for every two shares of DTE Energy common stock held at the close of business on the record date, with certain shareholders receiving cash in lieu of fractional shares of DT Midstream common stock. DT Midstream is now an independent public company under the symbol "DTM" on the New York Stock Exchange (NYSE). DTE Energy retains no ownership in DT Midstream.
For U.S. federal income tax purposes, DTE's U.S. shareholders generally should not recognize gain or loss as a result of the Distribution, except with respect to cash received in lieu of fractional shares.
Basis of Presentation
The following Unaudited Pro Forma Consolidated Statements of Operations of DTE Energy for the three months ended March 31, 2021 and for each of the three fiscal years ended December 31, 2020, 2019, and 2018 reflect DTE's results of operations as if the Separation had occurred on January 1, 2018. The following Unaudited Pro Forma Consolidated Statement of Financial Position of DTE Energy as of March 31, 2021 assumes that the Separation had occurred on that date. The unaudited pro forma consolidated financial information should be read in conjunction with the Consolidated Financial Statements, Combined Notes to Consolidated Financial Statements, and Management's Discussion and Analysis in the combined DTE Energy and DTE Electric Annual Report on Form 10-K for the fiscal year ended December 31, 2020 and Quarterly Report on Form 10 -Q for the period ended March 31, 2021, which can be accessed through the Investor Relations SEC Filings page of DTE Energy's website at www.dteenergy.com. Beginning on July 1, 2021, DT Midstream's historical financial results for the periods prior to the Separation will be reflected in DTE's Consolidated Financial Statements as discontinued operations.
The Unaudited Pro Forma Consolidated Financial Statements are presented on information currently available and assumptions that we believe are reasonable. They are intended for illustrative purposes only, are not necessarily indicative of the operating results or financial position that would have been achieved had the Separation occurred on the dates indicated above, and do not reflect all actions that may be undertaken by us after the Separation of DT Midstream. In addition, the Unaudited Pro Forma Consolidated Financial Statements are not necessarily indicative of our results of operations and financial position for any future period.
The "Historical DTE Energy" column in the Unaudited Pro Forma Consolidated Financial Statements reflects our historical Consolidated Financial Statements for the periods presented, prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), and does not reflect any adjustments to the Separation and Distribution and related transactions.
The adjustments included within the "Separation of DT Midstream" column of the Unaudited Pro Forma Consolidated Financial Statements are consistent with the guidance for discontinued operations, ASC 205, Presentation of Financial Statements - Discontinued Operations ("ASC 205"), under GAAP. This information was derived from our Consolidated Financial Statements and related accounting records for the three months ended March 31, 2021 and for each of the three fiscal years ended December 31, 2020, 2019, and 2018. The Company's current estimates on a discontinued operations basis are preliminary and could change as the Company finalizes discontinued operations accounting to be reported in the Company's Quarterly Report on Form 10-Q for the period ending September 30, 2021.
The unaudited pro forma consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by final rule, Release No. 33-10786 "Amendments to Financial Disclosures about Acquired and Disposed Businesses".



Article 11 of Regulation S-X requires that pro forma financial information include the following pro forma adjustments to the historical financial information of the registrant as follows:
Transaction Accounting Adjustments - Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction.
Autonomous Entity Adjustments - Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity.
In addition, Regulation S-X permits registrants to reflect adjustments that depict synergies and dis-synergies of the acquisitions and dispositions for which pro forma effect is being given in our disclosures as management adjustments. We have determined not to disclose such adjustments because we do not believe presenting such adjustments would enhance an understanding of the pro forma effects of the transaction.
There are no autonomous entity adjustments included in the pro forma financial information.
The transaction accounting adjustments to reflect the Separation of DT Midstream in the Unaudited Pro Forma Consolidated Financial Statements include:
Adjustments to revenue, expenses, assets, liabilities, and equity attributable to DT Midstream which were included in the Company's historical financial statements required to present it on a discontinued operations basis in accordance with ASC 205. Corporate expenses that were not specifically related to DT Midstream have been excluded, as such general corporate expenses do not meet the requirement to be presented in discontinued operations.
Adjustments for intercompany activity between DTE Energy and DT Midstream to support the Separation.
Adjustments to deferred income taxes representing the tax effect of temporary differences between the tax basis of assets and liabilities and the reported amounts to be transferred to DT Midstream.



DTE Energy Company
Pro Forma Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, 2021
Historical
DTE Energy
Separation of DT Midstream (A)Transaction Accounting AdjustmentsNotePro Forma DTE Energy
(In millions, except per share amounts)
Operating Revenues
Utility operations$1,953 $ $ $1,953 
Non-utility operations1,825 (197) 1,628 
3,778 (197) 3,581 
Operating Expenses
Fuel, purchased power, and gas — utility544   544 
Fuel, purchased power, gas, and other — non-utility1,600 (5) 1,595 
Operation and maintenance608 (41)39 (B)606 
Depreciation and amortization368 (41) 327 
Taxes other than income122 (7) 115 
Asset (gains) losses and impairments, net(1)1   
3,241 (93)39 3,187 
Operating Income537 (104)(39)394 
Other (Income) and Deductions
Interest expense181 (26) 155 
Interest income(7)3  (4)
Non-operating retirement benefits, net4   4 
Other income(76)33  (43)
Other expenses10   10 
112 10  122 
Income Before Income Taxes425 (114)(39)272 
Income Tax Expense28 (34) (6)
Net Income397 (80)(39)278 
Less: Net Income Attributable to Noncontrolling Interests (3) (3)
Net Income Attributable to DTE Energy Company$397 $(77)$(39)$281 
Basic Earnings per Common Share
Net Income Attributable to DTE Energy Company$2.05 $1.45 
Diluted Earnings per Common Share
Net Income Attributable to DTE Energy Company$2.05 $1.45 
Weighted Average Common Shares Outstanding
Basic194 194 
Diluted194 194 




DTE Energy Company
Pro Forma Consolidated Statements of Operations (Unaudited)
Year Ended December 31, 2020
Historical
DTE Energy
Separation of DT Midstream (A)Transaction Accounting AdjustmentsNotePro Forma DTE Energy
(In millions, except per share amounts)
Operating Revenues
Utility operations$6,845 $ $ $6,845 
Non-utility operations5,332 (754) 4,578 
12,177 (754) 11,423 
Operating Expenses
Fuel, purchased power, and gas — utility1,719   1,719 
Fuel, purchased power, gas, and other — non-utility4,141 (21) 4,120 
Operation and maintenance2,443 (135) 2,308 
Depreciation and amortization1,443 (151) 1,292 
Taxes other than income410 (15) 395 
Asset (gains) losses and impairments, net35 2  37 
10,191 (320) 9,871 
Operating Income1,986 (434) 1,552 
Other (Income) and Deductions
Interest expense720 (113) 607 
Interest income(38)9  (29)
Non-operating retirement benefits, net50   50 
Other income(388)129  (259)
Other expenses104   104 
448 25  473 
Income Before Income Taxes1,538 (459) 1,079 
Income Tax Expense167 (130) 37 
Net Income1,371 (329) 1,042 
Less: Net Income Attributable to Noncontrolling Interests3 (12) (9)
Net Income Attributable to DTE Energy Company$1,368 $(317)$ $1,051 
Basic Earnings per Common Share
Net Income Attributable to DTE Energy Company$7.09 $5.44 
Diluted Earnings per Common Share
Net Income Attributable to DTE Energy Company$7.08 $5.44 
Weighted Average Common Shares Outstanding
Basic193 193 
Diluted193 193 




DTE Energy Company
Pro Forma Consolidated Statements of Operations (Unaudited)
Year Ended December 31, 2019
Historical
DTE Energy
Separation of DT Midstream (A)Transaction Accounting AdjustmentsNotePro Forma DTE Energy
(In millions, except per share amounts)
Operating Revenues
Utility operations$6,638 $ $ $6,638 
Non-utility operations6,031 (501) 5,530 
12,669 (501) 12,168 
Operating Expenses
Fuel, purchased power, and gas — utility1,798   1,798 
Fuel, purchased power, gas, and other — non-utility5,053 (18) 5,035 
Operation and maintenance2,419 (102) 2,317 
Depreciation and amortization1,263 (94) 1,169 
Taxes other than income414 (8) 406 
Asset (gains) losses and impairments, net15 (1) 14 
10,962 (223) 10,739 
Operating Income1,707 (278) 1,429 
Other (Income) and Deductions
Interest expense641 (73) 568 
Interest income(17)8  (9)
Non-operating retirement benefits, net39   39 
Other income(350)99  (251)
Other expenses70   70 
383 34  417 
Income Before Income Taxes1,324 (312) 1,012 
Income Tax Expense152 (82) 70 
Net Income1,172 (230) 942 
Less: Net Income Attributable to Noncontrolling Interests3 (16) (13)
Net Income Attributable to DTE Energy Company$1,169 $(214)$ $955 
Basic Earnings per Common Share
Net Income Attributable to DTE Energy Company$6.32 $5.16 
Diluted Earnings per Common Share
Net Income Attributable to DTE Energy Company$6.31 $5.15 
Weighted Average Common Shares Outstanding
Basic185 185 
Diluted185 185 




DTE Energy Company
Pro Forma Consolidated Statements of Operations (Unaudited)
Year Ended December 31, 2018
Historical
DTE Energy
Separation of DT Midstream (A)Transaction Accounting AdjustmentsNotePro Forma DTE Energy
(In millions, except per share amounts)
Operating Revenues
Utility operations$6,670 $ $ $6,670 
Non-utility operations7,542 (485) 7,057 
14,212 (485) 13,727 
Operating Expenses
Fuel, purchased power, and gas — utility1,981   1,981 
Fuel, purchased power, gas, and other — non-utility6,630 (22) 6,608 
Operation and maintenance2,451 (89) 2,362 
Depreciation and amortization1,124 (82) 1,042 
Taxes other than income405 (8) 397 
Asset (gains) losses and impairments, net27   27 
12,618 (201) 12,417 
Operating Income1,594 (284) 1,310 
Other (Income) and Deductions
Interest expense559 (68) 491 
Interest income(12)9  (3)
Non-operating retirement benefits, net37   37 
Other income(333)127  (206)
Other expenses127 (7) 120 
378 61  439 
Income Before Income Taxes1,216 (345) 871 
Income Tax Expense98 (76) 22 
Net Income1,118 (269) 849 
Less: Net Income Attributable to Noncontrolling Interests(2)(28) (30)
Net Income Attributable to DTE Energy Company$1,120 $(241)$ $879 
Basic Earnings per Common Share
Net Income Attributable to DTE Energy Company$6.18 $4.84 
Diluted Earnings per Common Share
Net Income Attributable to DTE Energy Company$6.17 $4.84 
Weighted Average Common Shares Outstanding
Basic181 181 
Diluted181 181 



DTE Energy Company
Pro Forma Consolidated Statements of Financial Position (Unaudited)
Three Months Ended March 31, 2021
Historical
DTE Energy
Separation of DT Midstream (A)Transaction Accounting AdjustmentsNotePro Forma DTE Energy
(In millions)
ASSETS
Current Assets
Cash and cash equivalents$1,568 $(29)$5 (C)$1,544 
Restricted cash2   2 
Accounts receivable, net
Customer1,553 (107) 1,446 
Affiliates - due from DTE Energy (6)6 (C) 
Other132 132 
Inventories
Fuel and gas204   204 
Materials, supplies, and other460 (8) 452 
Derivative assets73   73 
Regulatory assets117   117 
Other267 (40) 227 
4,376 (190)11 4,197 
Investments
Nuclear decommissioning trust funds1,924   1,924 
Investments in equity method investees1,856 (1,683) 173 
Other197   197 
3,977 (1,683) 2,294 
Property
Property, plant, and equipment38,430 (4,000) 34,430 
Accumulated depreciation and amortization(10,158)538  (9,620)
28,272 (3,462) 24,810 
Other Assets
Goodwill2,466 (473) 1,993 
Regulatory assets4,070 (3) 4,067 
Intangible assets2,318 (2,125) 193 
Notes receivable304 (18) 286 
Derivative assets37   37 
Prepaid postretirement costs576   576 
Operating lease right-of-use assets145 (40) 105 
Other158 (19) 139 
10,074 (2,678) 7,396 
Total Assets$46,699 $(8,013)$11 $38,697 




DTE Energy Company

Pro Forma Consolidated Statements of Financial Position (Unaudited) — (Continued)
Three Months Ended March 31, 2021
Historical
DTE Energy
Separation of DT Midstream (A)Transaction Accounting AdjustmentsNotePro Forma DTE Energy
(In millions, except shares)
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable
Affiliates - due to DTE Energy$ $(11)$11 (C)$ 
Other955 (19) 936 
Short-term borrowings due to DTE Energy (2,770)2,770 (D) 
Accrued interest169   169 
Dividends payable210   210 
Short-term borrowings52   52 
Current portion long-term debt, including finance leases469   469 
Derivative liabilities89   89 
Gas inventory equalization68   68 
Regulatory liabilities29   29 
Operating lease liabilities33 (18) 15 
Other521 (43)39 (B)517 
2,595 (2,861)2,820 2,554 
Long-Term Debt (net of current portion)
Mortgage bonds, notes, and other18,796  (3,047)(D)15,749 
Junior subordinated debentures1,175   1,175 
Finance lease liabilities22   22 
19,993  (3,047)16,946 
Other Liabilities  
Deferred income taxes2,894 (777) 2,117 
Regulatory liabilities3,416   3,416 
Asset retirement obligations2,879 (10) 2,869 
Unamortized investment tax credit160   160 
Derivative liabilities119   119 
Accrued pension liability773   773 
Accrued postretirement liability404   404 
Nuclear decommissioning295   295 
Operating lease liabilities105 (24) 81 
Other352 (43) 309 
11,397 (854) 10,543 
Commitments and Contingencies (Notes 6 and 13)
Equity
Common stock5,344   5,344 
Retained earnings7,342 (4,157)277 (D)3,423 
(39)(B)
Accumulated other comprehensive loss(134)10  (124)
Total DTE Energy Company Equity12,552 (4,147)238 8,643 
Noncontrolling interests162 (151) 11 
Total Equity12,714 (4,298)238 8,654 
Total Liabilities and Equity$46,699 $(8,013)$11 $38,697 



NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
A.Reflects the discontinued operations, including associated assets, liabilities, and equity and results of operations attributable to DT Midstream which were included in the Company's historical financial statements. In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, the amounts included adjustments for the following:
i.Exclusion of general corporate overhead costs which were historically allocated to DT Midstream that do not meet the requirements to be presented in discontinued operations. Such allocations included expenses related to labor and benefits, professional fees, shared assets and other expenses related to DTE Energy's corporate functions that historically provided support to DT Midstream
ii.Income tax related adjustments representing the Company's current estimates on a discontinued operations basis, which could materially change as the Company finalizes its discontinued operations accounting to be reported in the Quarterly Report on Form 10-Q for the three months ended September 30, 2021 and the Annual Report on Form 10-K for the year ended December 31, 2021
B.Subsequent to March 31, 2021, DTE Energy anticipates it will incur additional non-recurring costs of approximately $39 million to complete the Separation. These costs primarily relate to transaction advisory and professional fees associated with the Separation. The Unaudited Pro Forma Consolidated Statement of Financial Position as of March 31, 2021 has been adjusted to record estimated separation costs of $39 million in Other current liabilities with a corresponding decrease to Retained earnings. The Unaudited Pro Forma Consolidated Statement of Operations for the three months ended March 31, 2021 has been adjusted to record estimated separation costs of $39 million in Operation & maintenance expenses.
C.Adjustments represent the settlement of intercompany Accounts Receivable and Accounts Payable between DTE Energy and DT Midstream in conjunction with the Separation.
D.Pursuant to the Separation and Distribution Agreement between DTE Energy and DT Midstream, DT Midstream incurred indebtedness in June 2021 in the form of senior notes and a term loan for net proceeds of $3,047 million in order to settle DT Midstream's short-term borrowings due to DTE Energy. The settlement has been reflected through the following adjustments:
i.the repayment of DT Midstream's short-term borrowings due to DTE Energy as of March 31, 2021 of $2,770 million
ii.estimated dividend for the remainder of DT Midstream debt proceeds to DTE Energy of $277 million
iii.assumed repayment of certain DTE Energy long-term debt with the proceeds received from DT Midstream as described in i) and ii) above