XML 52 R20.htm IDEA: XBRL DOCUMENT v3.22.0.1
Dispositions and Impairments
 12 Months Ended
Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Dispositions and Impairments DISPOSITIONS AND IMPAIRMENTS
Separation of DT Midstream
On October 27, 2020, DTE Energy announced that its Board of Directors had authorized management to pursue a plan to spin-off its natural gas pipeline, storage and gathering non-utility business. On July 1, 2021, DTE Energy completed the separation of the new company, DT Midstream, through the distribution of 96,732,466 shares of DT Midstream common stock to DTE Energy shareholders. The distribution reflected 100% of the outstanding common stock of DT Midstream as of 5:00 p.m. ET on June 18, 2021 (the “record date”). DTE Energy shareholders received one share of DT Midstream common stock for every two shares of DTE Energy common stock held at the close of business on the record date, with certain shareholders receiving cash in lieu of fractional shares of DT Midstream common stock. For U.S. federal income tax purposes, DTE Energy’s U.S. shareholders generally should not recognize gain or loss as a result of the distribution of DT Midstream stock, except with respect to cash received in lieu of fractional shares.
In June 2021, in order to facilitate the separation and settle intercompany balances with DTE Energy, DT Midstream issued long-term debt in the form of $2.1 billion senior notes and a $1.0 billion term loan. Using the debt proceeds, net of discount and issuance costs of $53 million, DT Midstream made the following cash payments:
•Settled Short-term borrowings due to DTE Energy as of June 30, 2021 of $2,537 million
•Settled affiliate Accounts receivable due from DTE Energy and affiliate Accounts payable due to DTE Energy as of June 30, 2021 for net cash paid to DTE Energy of $9 million
•Provided a one-time special dividend to DTE Energy of $501 million
These payments eliminated in consolidation and had no direct impact on DTE Energy’s Consolidated Financial Statements of Financial Position. During the third quarter 2021, DTE Energy used the proceeds received from DT Midstream to optionally redeem $2.6 billion of long-term debt. Refer to Note 10 to the Consolidated Financial Statements, “Long-term Debt,” for additional information.
Continuing Involvement
Following the separation on July 1, 2021, DT Midstream became an independent public company listed under the symbol “DTM” on the New York Stock Exchange (NYSE) and DTE Energy no longer retains any ownership in DT Midstream. In order to govern the ongoing relationships between DT Midstream and DTE Energy after the separation and to facilitate an orderly transition, the parties entered into a series of agreements including the following:
•Separation and Distribution Agreement – sets forth the principal actions to be taken in connection with the separation, including the transfer of assets and assumption of liabilities, among others, and sets forth other agreements governing aspects of the relationship between DTE Energy and DT Midstream
•Transition Services Agreement – allows for DTE Energy to provide DT Midstream with specified services for a limited time and no longer than 24 months following the separation, with related costs to be paid by DT Midstream. Services include support for gas operations, information technology, accounting, tax, legal, human resources, and various other administrative services
•Tax Matters Agreement – governs the respective rights, responsibilities and obligations of DTE Energy and DT Midstream after the separation with respect to all tax matters
•Employee Matters Agreement – addresses certain employment, compensation and benefits matters, including the allocation and treatment of certain assets and liabilities relating to DT Midstream employees
In addition, DTE Energy and its subsidiaries have various commercial agreements that are continuing after the separation. These agreements include certain pipeline, gathering, and storage services and operating and maintenance agreements, and are not considered material to the Consolidated Financial Statements.
Discontinued Operations
The table below reflects the financial results of DT Midstream that have been reclassified from continuing operations and included in discontinued operations within the Consolidated Statements of Operations. These results include the impact of tax-related adjustments and all transaction costs related to the separation. General corporate overhead costs have been excluded and no portion of corporate interest costs were allocated to discontinued operations.
Year Ended December 31,
202120202019
Operating Revenues — Non-utility operations$405 $754 $501 
Operating Expenses
Cost of gas and other — non-utility15 21 18 
Operation and maintenance(a)
123 138 103 
Depreciation and amortization82 151 94 
Taxes other than income13 15 8 
Asset (gains) losses and impairments, net17 (2)1 
250 323 224 
Operating Income155 431 277 
Other (Income) and Deductions
Interest expense50 113 73 
Interest income(4)(9)(8)
Other income(62)(129)(100)
Other expenses— — 1 
(16)(25)(34)
Income from Discontinued Operations Before Income Taxes171 456 311 
Income Tax Expense54 130 81 
Net Income from Discontinued Operations, Net of Taxes117 326 230 
Less: Net Income Attributable to Noncontrolling Interests6 12 16 
Net Income from Discontinued Operations$111 $314 $214 
_______________________________________
(a)Includes separation transaction costs of $59 million and $8 million for the years ended December 31, 2021 and 2020, respectively, for various legal, accounting and other professional services fees.
The table below reflects the major assets and liabilities that were transferred to DT Midstream and presented as discontinued operations in the Consolidated Statements of Financial Position as of December 31, 2020.
December 31, 2020
(In millions)
Total Assets of Discontinued Operations
Cash$42 
Accounts receivable126 
Inventories8 
Other44 
Current assets of DT Midstream220 
Less: Previously affiliated amounts eliminated at DTE Energy3 
Current assets of discontinued operations for DTE Energy217 
Investments in equity method investees1,691 
Net property, plant, and equipment3,470 
Goodwill473 
Intangible assets2,140 
Notes receivable19 
Operating lease right-of-use assets45 
Other21 
Noncurrent assets of discontinued operations for DTE Energy7,859 
Total Assets of Discontinued Operations for DTE Energy$8,076 
Total Liabilities of Discontinued Operations
Accounts payable$39 
Operating lease liabilities17 
Short-term borrowings due to DTE Energy2,913 
Other53 
Current liabilities of DT Midstream3,022 
Less: Previously affiliated amounts eliminated at DTE Energy2,923 
Current liabilities of discontinued operations for DTE Energy99 
Deferred income taxes753 
Asset retirement obligations10 
Operating lease liabilities28 
Other45 
Noncurrent liabilities of discontinued operations for DTE Energy836 
Total Liabilities of Discontinued Operations for DTE Energy$935 
There were no assets or liabilities from discontinued operations as of December 31, 2021. DT Midstream had net assets of $4.0 billion that separated on July 1, 2021 that resulted in a reduction to DTE Energy's equity. Refer to the Separation of DT Midstream line within DTE Energy's Consolidated Statements of Changes in Equity for further details.
The following table is a summary of significant non-cash items, capital expenditures, and significant financing activities of discontinued operations included in DTE Energy's Consolidated Statements of Cash Flows:
Year Ended December 31,
202120202019
(In millions)
Operating Activities
Depreciation and amortization$82 $151 $94 
Deferred income taxes53 125 78 
Equity earnings of equity method investees(59)(106)(97)
Asset (gains) losses and impairments, net19 (2)1 
Investing Activities
Plant and equipment expenditures — non-utility$(60)$(517)$(214)
Acquisitions related to business combinations, net of cash acquired— — (2,296)
Financing Activities
Purchase of noncontrolling interest$— $— $(297)
Acquisition related deferred payment, excluding accretion— (380)— 
DTE Vantage Segment Impairment
DTE Vantage owns a pulverized coal facility located at DTE Electric’s River Rouge power plant. The facility provides pulverized coal to a steel industry customer through a supply agreement expiring in 2028. The River Rouge plant provides operation and maintenance services to the facility through an agreement which also expires in 2028.
During the second quarter 2021, DTE Electric retired the River Rouge plant and provided an early termination notice of the operation and maintenance services agreement with the pulverized coal facility. The termination became effective December 31, 2021 and DTE Vantage has ceased operations at the facility.
In connection with these events, DTE Energy performed an impairment analysis of the pulverized coal facility long-lived assets in accordance with ASC 360, Property, Plant and Equipment. Based on its undiscounted cash flow projections, DTE Energy determined that the carrying value of the pulverized coal facility asset group is not recoverable. As a result, DTE Energy recorded a non-cash impairment charge of $27 million, which is included in Asset (gains) losses and impairments, net on DTE Energy’s Consolidated Statements of Operations for the year ended December 31, 2021. The charge included $18 million to fully impair the long-lived assets recorded to Property, plant and equipment and a $9 million write-down of Other noncurrent assets to fair value. Fair value of the assets was determined using an income approach, which utilized assumptions including management’s best estimates of the expected future cash flows, the estimated useful life of the asset group and discount rate.
During the fourth quarter 2021, DTE Energy terminated the supply agreement with the steel industry customer and settled all outstanding claims. As a result, DTE Energy reversed $17 million of deferred revenues that were previously recorded, which increased Operating Revenues - Non-utility operations for the year ended December 31, 2021.