þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Michigan | ||
(State or other jurisdiction of incorporation or organization) | 38-3217752 (I.R.S. Employer Identification No.) | |
(Address of principal executive offices) | 48226-1279 (Zip Code) |
Title of | Name of | |
Common Stock, without par value | New York Stock Exchange | |
7.8% Trust Preferred Securities* | New York Stock Exchange | |
7.50% Trust Originated Preferred Securities** | New York Stock Exchange |
* | Issued by DTE Energy Trust I. DTE Energy fully and unconditionally guarantees the payments of all amounts due on these securities to the extent DTE Energy Trust I has funds available for payment of such distributions. | |
** | Issued by DTE Energy Trust II. DTE Energy fully and unconditionally guarantees the payments of all amounts due on these securities to the extent DTE Energy Trust II has funds available for payment of such distributions. |
Large accelerated filerþ | Accelerated filero | Non-accelerated filer o | Smaller |
1
Company | DTE Energy Company and any subsidiary companies | |
CTA | Costs to achieve, consisting of project management, consultant support and employee severance, related to the Performance Excellence Process | |
Customer Choice | Statewide initiatives giving customers in Michigan the option to choose alternative suppliers for electricity and gas. | |
Detroit Edison | The Detroit Edison Company (a direct wholly owned subsidiary of DTE Energy Company) and subsidiary companies | |
DTE Energy | DTE Energy Company, directly or indirectly the parent of Detroit Edison, MichCon and numerous non-utility subsidiaries | |
EPA | United States Environmental Protection Agency | |
FASB | Financial Accounting Standards Board | |
FERC | Federal Energy Regulatory Commission | |
GCR | A gas cost recovery mechanism authorized by the MPSC, permitting MichCon to pass the cost of natural gas to its customers. | |
MDEQ | Michigan Department of Environmental Quality | |
MichCon | Michigan Consolidated Gas Company (an indirect wholly owned subsidiary of DTE Energy) and subsidiary companies | |
MISO | Midwest Independent System Operator, a Regional Transmission Organization | |
MPSC | Michigan Public Service Commission | |
Non-utility | An entity that is not a public utility. Its conditions of service, prices of goods and services and other operating related matters are not directly regulated by the MPSC or the FERC. | |
NRC | Nuclear Regulatory Commission | |
Production tax credits | Tax credits as authorized under Sections 45K and 45 of the Internal Revenue Code that are designed to stimulate investment in and development of alternate fuel sources. The amount of a production tax credit can vary each year as determined by the Internal Revenue Service. | |
Proved | Estimated quantities of natural gas, natural gas liquids and crude oil which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reserves under existing economic and operating conditions. | |
PSCR | A power supply cost recovery mechanism authorized by the MPSC that allows Detroit Edison to recover through rates its fuel, fuel-related and purchased power expenses. | |
Securitization | Detroit Edison financed specific stranded costs at lower interest rates through the sale of rate reduction bonds by a wholly-owned special purpose entity, the Detroit Edison Securitization Funding LLC. | |
SFAS | Statement of Financial Accounting Standards |
1
Subsidiaries | The direct and indirect subsidiaries of DTE Energy Company |
2
Synfuels | The fuel produced through a process involving chemically modifying and binding particles of coal. Synfuels are used for power generation and coke production. Synfuel production through December 31, 2007 generated production tax credits. | |
Unconventional Gas | Includes those oil and gas deposits that originated and are stored in coal bed, tight sandstone and shale formations. |
Bcf | Billion cubic feet of gas | |
Bcfe | Conversion metric of natural gas, the ratio of 6 Mcf of gas to 1 barrel of oil. | |
GWh | Gigawatthour of electricity | |
kWh | Kilowatthour of electricity | |
Mcf | Thousand cubic feet of gas | |
MMcf | Million cubic feet of gas | |
MW | Megawatt of electricity | |
MWh | Megawatthour of electricity |
2
3
• | access to capital markets and capital market conditions and the | ||
• | |||
• | potential for continued loss on cash equivalents and investments, including nuclear decommissioning and benefit plan assets; | ||
• | the length and severity of ongoing economic decline; | ||
• | the timing and extent of changes in interest rates; | ||
• | the level of borrowings; | ||
• | the availability, cost, coverage and terms of insurance and stability of insurance providers; | ||
• | changes in the economic and financial viability of our customers, suppliers, and trading counterparties, and the continued ability of such parties to perform their obligations to the Company; | ||
• | the effects of weather and other natural phenomena on operations and sales to customers, and purchases from suppliers; | ||
• | economic climate and population growth or decline in the geographic areas where we do business; | ||
• | environmental issues, laws, regulations, and the | ||
• | nuclear regulations and operations associated with nuclear facilities; | ||
• | impact of electric and gas utility restructuring in Michigan, including legislative amendments and Customer Choice programs; | ||
• | employee relations and the impact of collective bargaining agreements; | ||
• | unplanned outages; | ||
• | |||
changes in the cost and availability of coal and other raw materials, purchased power and natural gas; | |||
• | the effects of competition; | ||
• | the uncertainties of successful exploration of gas shale resources and inability to estimate gas reserves with certainty; | ||
• | impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and regulations, including any associated impact on rate structures; | ||
• | contributions to earnings by non-utility subsidiaries; | ||
• | changes in and application of federal, state and local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings and audits; | ||
• | the ability to recover costs through rate increases; | ||
• |
3
the cost of protecting assets against, or damage due to, terrorism; | |||
• | changes in and application of accounting standards and financial reporting regulations; |
4
• | changes in federal or state laws and their interpretation with respect to regulation, energy policy and other business issues; | ||
• | amounts of uncollectible accounts receivable; | ||
• |
4
5
• | Consists of Detroit Edison, our electric utility whose operations include the power generation and electric distribution facilities that service approximately 2.2 million residential, commercial, industrial and wholesale customers throughout southeastern Michigan. |
• | Consists of the gas distribution services provided by MichCon, a gas utility that purchases, stores, transports and distributes natural gas throughout Michigan to approximately 1.2 million residential, |
5
6
commercial and industrial customers, and Citizens Gas Fuel Company (Citizens), a gas utility that distributes natural gas in Adrian, Michigan to approximately 17,000 customers. |
• | |||
• | Unconventional Gas Production,primarily consisting of unconventional gas | ||
• | Power and Industrial Projects, primarily consisting ofon-site energy services, steel-related projects, | ||
• | Energy Trading,primarily consisting of energy marketing and trading operations. |
6
7
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Residential | $ | 1,739 | $ | 1,671 | $ | 1,517 | ||||||
Commercial | 1,723 | 1,603 | 1,331 | |||||||||
Industrial | 854 | 835 | 697 | |||||||||
Wholesale | 125 | 109 | 73 | |||||||||
Other | 259 | 350 | 464 | |||||||||
Subtotal | 4,700 | 4,568 | 4,082 | |||||||||
Interconnection sales (1) | 200 | 169 | 380 | |||||||||
Total Revenue | $ | 4,900 | $ | 4,737 | $ | 4,462 | ||||||
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Residential | $ | 1,726 | $ | 1,739 | $ | 1,671 | ||||||
Commercial | 1,753 | 1,723 | 1,603 | |||||||||
Industrial | 894 | 854 | 835 | |||||||||
Wholesale | 119 | 125 | 109 | |||||||||
Other | 170 | 259 | 350 | |||||||||
Subtotal | 4,662 | 4,700 | 4,568 | |||||||||
Interconnection sales(1) | 212 | 200 | 169 | |||||||||
Total Revenue | $ | 4,874 | $ | 4,900 | $ | 4,737 | ||||||
(1) | Represents power that is not distributed by Detroit Edison. |
7
8
Location by | Summer Net | Location by | Summer Net | |||||||||||||||||||||||||
Michigan | Rated Capability (1) (2) | Michigan | Rated Capability(1)(2) | |||||||||||||||||||||||||
Plant Name | County | (MW) | (%) | Year in Service | County | (MW) | (%) | Year in Service | ||||||||||||||||||||
Fossil-fueled Steam-Electric | ||||||||||||||||||||||||||||
Belle River (3) | St. Clair | 1,026 | 9.3 | 1984 and 1985 | ||||||||||||||||||||||||
Belle River(3) | St. Clair | 1,026 | 9.2 | 1984 and 1985 | ||||||||||||||||||||||||
Conners Creek | Wayne | 230 | 2.1 | 1951 | Wayne | 230 | 2.1 | 1951 | ||||||||||||||||||||
Greenwood | St. Clair | 785 | 7.1 | 1979 | St. Clair | 785 | 7.1 | 1979 | ||||||||||||||||||||
Harbor Beach | Huron | 103 | 0.9 | 1968 | Huron | 103 | 0.9 | 1968 | ||||||||||||||||||||
Monroe (4) | Monroe | 3,115 | 28.3 | 1971, 1973 and 1974 | ||||||||||||||||||||||||
Marysville | St. Clair | 84 | 0.8 | 1943 and 1947 | ||||||||||||||||||||||||
Monroe(4) | Monroe | 3,115 | 28.0 | 1971, 1973 and 1974 | ||||||||||||||||||||||||
River Rouge | Wayne | 523 | 4.8 | 1957 and 1958 | Wayne | 523 | 4.7 | 1957 and 1958 | ||||||||||||||||||||
St. Clair | St. Clair | 1,368 | 12.4 | 1953, 1954, 1959, 1961 and 1969 | St. Clair | 1,368 | 12.3 | 1953, 1954, 1959, 1961 and 1969 | ||||||||||||||||||||
Trenton Channel | Wayne | 730 | 6.6 | 1949 and 1968 | Wayne | 730 | 6.6 | 1949 and 1968 | ||||||||||||||||||||
7,880 | 71.5 | 7,964 | 71.7 | |||||||||||||||||||||||||
Oil or Gas-fueled Peaking Units | Various | 1,101 | 10.0 | 1966-1971, 1981 and 1999 | Various | 1,101 | 9.9 | 1966-1971, 1981 and 1999 | ||||||||||||||||||||
Nuclear-fueled Steam-Electric Fermi 2 (5) | Monroe | 1,122 | 10.2 | 1988 | ||||||||||||||||||||||||
Hydroelectric Pumped Storage Ludington (6) | Mason | 917 | 8.3 | 1973 | ||||||||||||||||||||||||
Nuclear-fueled Steam-Electric Fermi 2(5) | Monroe | 1,122 | 10.1 | 1988 | ||||||||||||||||||||||||
Hydroelectric Pumped Storage Ludington(6) | Mason | 917 | 8.3 | 1973 | ||||||||||||||||||||||||
11,020 | 100.0 | 11,104 | 100.0 | |||||||||||||||||||||||||
(1) | Summer net rated capabilities of generating plants in service are based on periodic load tests and are changed depending on operating experience, the physical condition of units, environmental control limitations and customer requirements for steam, which otherwise would be used for electric generation. | |
(2) | Excludes one oil-fueled unit, St. Clair Unit No. 5 (250 MW) | |
(3) | The Belle River capability represents Detroit Edison’s entitlement to 81.39% of the capacity and energy of the plant. See Note 7 of the Notes to the Consolidated Financial Statements in Item 8 of this Report. | |
(4) | The Monroe Power Plant provided | |
(5) | Fermi 2 has a design electrical rating (net) of 1,150 MW. | |
(6) | Represents Detroit Edison’s 49% interest in Ludington with a total capability of 1,872 MW. See Note 7 of the Notes to the Consolidated Financial Statements in Item 8 of this Report. |
9
�� | ||||||||||||||||
Circuit Miles | Circuit Miles | |||||||||||||||
Operating Voltage-Kilovolts (kV) | Overhead | Underground | Overhead | Underground | ||||||||||||
4.8 kV to 13.2 kV | 28,202 | 13,985 | 28,114 | 13,875 | ||||||||||||
24 kV | 99 | 690 | 102 | 690 | ||||||||||||
40 kV | 2,324 | 335 | 2,324 | 335 | ||||||||||||
120 kV | 72 | 13 | 72 | 13 | ||||||||||||
30,697 | 15,023 | 30,612 | 14,913 | |||||||||||||
8
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9
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Gas sales | $ | 1,536 | $ | 1,541 | $ | 1,860 | $ | 1,824 | $ | 1,536 | $ | 1,541 | ||||||||||||
End user transportation | 140 | 135 | 134 | 143 | 140 | 135 | ||||||||||||||||||
Intermediate transportation | 59 | 69 | 58 | 73 | 59 | 69 | ||||||||||||||||||
Storage and other | 140 | 104 | 86 | 112 | 140 | 104 | ||||||||||||||||||
Total Revenue | $ | 1,875 | $ | 1,849 | $ | 2,138 | $ | 2,152 | $ | 1,875 | $ | 1,849 | ||||||||||||
• | Gas sales —Includes the sale and delivery of natural gas primarily to residential and small-volume commercial and industrial customers. | |
• | End user transportation —Gas delivery service provided primarily to large-volume commercial and industrial customers. Additionally, the service is provided to residential customers, and small-volume commercial and industrial customers who have elected to participate in our Customer Choice program. End user transportation customers purchase natural gas directly from producers or brokers and utilize our pipeline network to transport the gas to their facilities or homes. | |
• | Intermediate transportation —Gas delivery service provided to producers, brokers and other gas companies that own the natural gas, but are not the ultimate consumers. Intermediate transportation customers utilize our gathering and high-pressure transmission system to transport the gas to storage fields, processing plants, pipeline interconnections or other locations. | |
• | Storage and other —Includes revenues from gas storage, |
11
10
Availability (MMcf/d) | Contract expiration | Availability(MMcf/d) | Contract Expiration | |||||||||||||
Panhandle Eastern Pipeline Company | 75 | 2009 | ||||||||||||||
Trunkline Gas Company | 10 | 2009 | 10 | 2009 | ||||||||||||
Viking Gas Transmission Company | 51 | 2010 | 51 | 2010 | ||||||||||||
TransCanada PipeLines Limited | 53 | 2010 | 53 | 2010 | ||||||||||||
Great Lakes Gas Transmission L.P. | 30 | 2011 | 30 | 2011 | ||||||||||||
ANR Pipeline Company | 245 | 2011 | 245 | 2011 | ||||||||||||
Vector Pipeline L.P. | 50 | 2012 | 50 | 2012 | ||||||||||||
Panhandle Eastern Pipeline Company | 75 | 2029 |
12
11
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Tons of Coal Shipped (1) | 35 | 34 | 42 |
12
13
Property Classification | % Owned | Description | Location | |||||
Pipelines | ||||||||
Vector Pipeline | 40% | 348-mile pipeline with 1,200 MMcf per day capacity | Midwest | |||||
Millennium Pipeline (in service December 2008) | 26% | |||||||
182-mile pipeline with 525 MMcf per day capacity | New York | |||||||
Storage | ||||||||
100% | 71 Bcf of storage capacity | Macomb Co, MI | ||||||
Washington 28 | 50% | 16 Bcf of storage capacity | ||||||
13
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14
2007 | 2006 | 2005 | ||||||||||||||||||||||
Gross | Net (1) | Gross | Net(1) | Gross | Net (1) | |||||||||||||||||||
Producing Wells and Acreage Producing Wells (2) (6) | ||||||||||||||||||||||||
Barnett shale (3) | 120 | 120 | 83 | 83 | 47 | 47 | ||||||||||||||||||
Core shale held for sale | 53 | 33 | 41 | 27 | 18 | 8 | ||||||||||||||||||
173 | 153 | 124 | 110 | 65 | 55 | |||||||||||||||||||
Developed Lease Acreage (4) (6) | ||||||||||||||||||||||||
Barnett shale (3) | 9,922 | 9,880 | 10,759 | 10,693 | 13,018 | 13,018 | ||||||||||||||||||
Core shale held for sale | 7,379 | 4,987 | 5,679 | 3,977 | 2,506 | 1,349 | ||||||||||||||||||
17,301 | 14,867 | 16,438 | 14,670 | 15,524 | 14,367 | |||||||||||||||||||
Undeveloped Lease Acreage (5) (6) | ||||||||||||||||||||||||
Barnett shale (3) | 38,793 | 38,066 | 30,649 | 27,613 | 13,839 | 13,495 | ||||||||||||||||||
Core shale held for sale | 7,447 | 5,809 | 7,073 | 6,164 | 9,639 | 7,801 | ||||||||||||||||||
46,240 | 43,875 | 37,722 | 33,777 | 23,478 | 21,296 | |||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Gross | Net(1) | Gross | Net(1) | Gross | Net(1) | |||||||||||||||||||
Producing Wells(2) | ||||||||||||||||||||||||
Barnett shale(3) | 156 | 155 | 120 | 120 | 83 | 83 | ||||||||||||||||||
Held for sale | — | — | 53 | 33 | 41 | 27 | ||||||||||||||||||
156 | 155 | 173 | 153 | 124 | 110 | |||||||||||||||||||
Developed Lease Acreage(4) | ||||||||||||||||||||||||
Barnett shale(3) | 14,322 | 14,248 | 9,922 | 9,880 | 10,759 | 10,693 | ||||||||||||||||||
Held for sale | — | — | 7,379 | 4,987 | 5,679 | 3,977 | ||||||||||||||||||
14,322 | 14,248 | 17,301 | 14,867 | 16,438 | 14,670 | |||||||||||||||||||
Undeveloped Lease Acreage(5) | ||||||||||||||||||||||||
Barnett shale(3) | 48,073 | 46,187 | 38,793 | 38,066 | 30,649 | 27,613 | ||||||||||||||||||
Held for sale | — | — | 7,447 | 5,809 | 7,073 | 6,164 | ||||||||||||||||||
48,073 | 46,187 | 46,240 | 43,875 | 37,722 | 33,777 | |||||||||||||||||||
(1) | Excludes the interest of others. | |
(2) | Producing wells are the number of wells that are found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes. | |
(3) | Excludes | |
(4) | Developed lease acreage is the number of acres that are allocated or assignable to productive wells or wells capable of production. | |
(5) | Undeveloped lease acreage is the number of acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of natural gas and oil regardless of whether such acreage contains proved reserves. | |
15
2009 | 2010 | |||||||
Long-term fixed price obligations | ||||||||
Volume- Bcf | 2.0 | 1.2 | ||||||
Price- $/Mcf | $ | 7.42 | $ | 7.16 |
2008 | 2009 | 2010 | ||||||||||
Long-term fixed price obligations | ||||||||||||
Barnett | ||||||||||||
Volume- Bcf | 2.3 | 2.0 | 1.2 | |||||||||
Price- $/Mcf | $ | 7.70 | $ | 7.42 | $ | 7.16 |
15
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Facility | Location | % Owned | Service Type | |||||||||
Steel | ||||||||||||
DTE PCI Enterprises Company | River Rouge, MI | 100 | % | (1 | ) | Pulverized Coal | ||||||
DTE Sparrows Point | Sparrows Point, MD | 100 | % | (1 | ) | Pulverized Coal | ||||||
EES Coke Battery, LLC | River Rouge, MI | 100 | % | (1 | ) | Metallurgical Coke Supply | ||||||
Indiana Harbor Coke Co., LP | East Chicago, IN | 5 | % | (1 | ) | Metallurgical Coke Supply | ||||||
Automotive | ||||||||||||
DTE Energy Center | Various sites in MI, IN, OH | 50 | % | Electric Distribution, Chilled Water, Waste Water, Compressed Air, Mist and Dust Collectors | ||||||||
DTE Northwind | Detroit, MI | 100 | % | (1 | ) | Steam and Chilled Water | ||||||
DTE Moraine | Moraine, OH | 100 | % | (1 | ) | Compressed Air | ||||||
DTE Tonawanda | Tonawanda, NY | 100 | % | (1 | ) | Chilled and Waste Water | ||||||
DTE Defiance | Defiance, OH | 100 | % | (1 | ) | Steam, Cooling Tower Water, Chilled Water, Compressed Air | ||||||
DTE Heritage | Dearborn, MI | 100 | % | (1 | ) | Electric Distribution | ||||||
DTE Dearborn | Dearborn, MI | 100 | % | Steam, Chilled Water, Compressed Air, Waste Water | ||||||||
DTE Pontiac North | Pontiac, MI | 100 | % | (1 | ) | Electric Generation and Steam | ||||||
DTE Lordstown | Lordstown, OH | 100 | % | (1 | ) | Steam, Chilled Water, Compressed Air and Reverse Osmosis Water | ||||||
Pulp and Paper | ||||||||||||
Mobile Energy Services | Mobile, AL | 50 | % | Electric Generation and Steam | ||||||||
Airport | ||||||||||||
Metro Energy | Romulus, MI | 100 | % | (1 | ) | Electricity, Hot and Chilled Water | ||||||
DTE Pittsburgh | Pittsburgh, PA | 100 | % | (1 | ) | Hot and Chilled Water | ||||||
Other Industries | ||||||||||||
DTE PetCoke | Vicksburg, MS | 100 | % | Pulverized Petroleum Coke |
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Production Tax Credits Generated | ||||||||||||
Allocated to DTE Energy | $ | 5 | $ | 6 | $ | 2 | ||||||
17
Capacity | ||||||||||||
Facility (1) | Location | % Owned | (in MW) | |||||||||
| | | | ||||||||||||
DTE East China | East China Twp, MI | 100 | % | 320 | ||||||||
Woodland Biomass | Woodland, CA | 99 | % | 25 | ||||||||
345 | ||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Production Tax Credits Generated | ||||||||||||
Allocated to DTE Energy | $ | 2 | $ | 1 | $ | — | ||||||
(Dollars in Millions) | 2007 | 2006 | 2005 | |||||||||
Landfill Sites | 28 | 26 | 32 | |||||||||
Gas Produced (in Bcf) | 23.5 | 22.9 | 20.2 | |||||||||
Tax Credits Generated (1) | $ | 3 | $ | 5 | $ | 8 |
16
Facility | Location | % Owned | Service Type | |||||
Steel | ||||||||
DTE PCI Enterprises Company | River Rouge, MI | 100% | Pulverized Coal | |||||
DTE Sparrows Point | Sparrows Point, MD | 100% | Pulverized Coal | |||||
EES Coke Battery | River Rouge, MI | 100% | Metallurgical Coke Supply | |||||
DTE Shenango | Pittsburgh, PA | 100% | Metallurgical Coke Supply | |||||
Indiana Harbor Coke Co., | East Chicago, IN | 14.8% | Metallurgical Coke Supply | |||||
Automotive | ||||||||
DTE Energy Center | Various sites in | 50% | Electric Distribution, Chilled | |||||
MI, IN, OH | Water, Waste Water, Compressed Air, Mist and Dust Collectors | |||||||
DTE Northwind | Detroit, MI | 100% | Steam and Chilled Water | |||||
DTE Moraine | Moraine, OH | 100% | Compressed Air | |||||
DTE Tonawanda | Tonawanda, NY | 100% | Chilled and Waste Water | |||||
DTE Defiance | Defiance, OH | 100% | Steam, Cooling Tower Water, Chilled Water, Compressed Air | |||||
DTE Heritage | Dearborn, MI | 100% | Electric Distribution | |||||
DTE Dearborn | Dearborn, MI | 100% | Steam, Chilled Water, Compressed Air, Waste Water | |||||
DTE Pontiac North | Pontiac, MI | 100% | Electric Generation and Steam | |||||
DTE Lordstown | Lordstown, OH | 100% | Steam, Chilled Water, Compressed Air, and Reverse Osmosis Water | |||||
Pulp and Paper | ||||||||
Mobile Energy Services | Mobile, AL | 50% | Electric Generation and Steam | |||||
Airport | ||||||||
Metro Energy | Romulus, MI | 100% | Electricity, Hot and Chilled Water | |||||
DTE Pittsburgh | Pittsburgh, PA | 100% | Hot and Chilled Water | |||||
Other Industries | ||||||||
DTE PetCoke | Vicksburg, MS | 100% | Pulverized Petroleum Coke | |||||
Power Generation | ||||||||
DTE East China (320MW) | East China Twp, MI | 100% | Natural Gas Generating Plant | |||||
Woodland Biomass (25MW) | Woodland, CA | 99% | Wood Fired Power Plant | |||||
DTE Stoneman (40MW) | Cassville, WI | 100% | Biomass Power Plant | |||||
Coal Transportation and Marketing | ||||||||
DTE Chicago Fuels Terminal | Chicago, IL | 100% | Coal Terminal and Blending Plant |
17
2008 | 2007 | 2006 | ||||||||||
Landfill Sites | 23 | 28 | 26 | |||||||||
Gas Produced (in Bcf) | 18.6 | 23.5 | 22.9 |
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Tons of Coal Shipped(1) | 18 | 35 | 34 |
(1) |
Production Tax Credits Generated (Allocated to DTE Energy) | 2008 | 2007 | 2006 | |||||||||||||
(In millions) | ||||||||||||||||
Coke Battery | $ | 5 | $ | 5 | $ | 6 | ||||||||||
Power Generation | 2 | 2 | 1 | |||||||||||||
Landfill Gas Recovery | — | 3 | 5 |
• | Providing operating services to owners of industrial and power plants; and | ||
• | Acquiring and developing solid fuel-fired power plants, | ||
18
19
19
2007 | 2006 | |||||||
(In millions) | ||||||||
Production Tax Credits Generated | ||||||||
Allocated to DTE Energy | $ | 21 | $ | 23 | ||||
Allocated to partners | 186 | 260 | ||||||
$ | 207 | $ | 283 | |||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Production Tax Credits Generated | ||||||||||||
Allocated to DTE Energy | $ | 21 | $ | 23 | $ | 45 | ||||||
Allocated to partners | 186 | 260 | 562 | |||||||||
$ | 207 | $ | 283 | $ | 607 | |||||||
20
(in Millions) | Electric | Gas | Non- Utility | Total | ||||||||||||
Air | $ | 2,441 | $ | — | $ | — | $ | 2,441 | ||||||||
Water | 55 | — | 15 | 70 | ||||||||||||
MGP Sites | 4 | 40 | — | 44 | ||||||||||||
Other Clean Up Sites | 11 | 2 | — | 13 | ||||||||||||
Estimated total future expenditures through 2018 | $ | 2,511 | $ | 42 | $ | 15 | $ | 2,568 | ||||||||
Estimated 2008 expenditures | $ | 288 | $ | 6 | $ | 11 | $ | 305 | ||||||||
Electric | Gas | Non-Utility | Total | |||||||||||||
(In millions) | ||||||||||||||||
Air | $ | 2,800 | $ | — | $ | — | $ | 2,800 | ||||||||
Water | 55 | — | 1 | 53 | ||||||||||||
MGP sites | 3 | 38 | — | 41 | ||||||||||||
Other sites | 9 | 1 | — | 10 | ||||||||||||
Estimated total future expenditures through 2018 | $ | 2,867 | $ | 39 | $ | 1 | $ | 2,904 | ||||||||
Estimated 2009 expenditures | $ | 100 | $ | 3 | $ | 1 | $ | 104 | ||||||||
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Represented | Non-represented | Total | ||||||||||
Detroit Edison | 2,847 | 1,827 | 4,674 | |||||||||
DTE Energy Corporate Services, LLC | 1,064 | 1,921 | 2,985 | |||||||||
MichCon | 1,026 | 377 | 1,403 | |||||||||
Other | 311 | 889 | 1,200 | |||||||||
Total | 5,248 | 5,014 | 10,262 | |||||||||
Present | ||||||||||
Position | ||||||||||
Name | Age(1) | Present Position | Held Since | |||||||
| ||||||||||
Anthony F. Earley, Jr. | 59 | Chairman of the Board and Chief Executive Officer | 8-1-98 | |||||||
Gerard M. | 50 | Chief Operating Officer and | 10-31-05 | |||||||
President | 6-23-04 | |||||||||
David E. Meador(2) | 51 | Executive Vice President and Chief Financial Officer | 6-23-04 | |||||||
57 | Senior Vice President and Chief Information Officer | 12-31-01 | ||||||||
Paul C. Hillegonds(3) | 59 | Senior Vice President | 5-16-05 | |||||||
Steve E. Kurmas(2) | 52 | President and Chief Operating Officer, Detroit Edison | 12-08-08 | |||||||
and Group President, DTE Energy | 12-08-08 | |||||||||
Bruce D. Peterson | 52 | Senior Vice President and General Counsel | 6-25-02 | |||||||
Gerardo Norcia(2) | 45 | President and Chief Operating Officer, MichCon and | 6-28-07 | |||||||
Group President, DTE Energy | ||||||||||
6-28-07 | ||||||||||
Larry E. Steward | 56 | Vice President | 1-15-01 | |||||||
Peter B. | 42 | Vice President and Controller | 2-07-07 | |||||||
Sandra K. | 52 | Corporate Secretary | 8-4-05 |
(1) | As of December 31, | |
(2) | These executive officers held various positions at DTE Energy for at least five or more years. | |
(3) | For eight years prior to joining DTE Energy, Mr. Hillegonds was president of Detroit Renaissance, a private, non-profit executive leadership organization dedicated to the growth of the southeast Michigan economy. |
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Item 1A. | Risk Factors |
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24
25
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Item 1B. | Unresolved Staff Comments |
Item 3. | Legal Proceedings |
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Item 4. | Submission of Matters to a Vote of Security Holders |
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Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Dividends | ||||||||||||||||
Paid | ||||||||||||||||
Year | Quarter | High | Low | Per Share | ||||||||||||
2007 | ||||||||||||||||
First | $ | 49.42 | $ | 45.14 | $ | 0.530 | ||||||||||
Second | $ | 54.74 | $ | 47.22 | $ | 0.530 | ||||||||||
Third | $ | 51.74 | $ | 45.26 | $ | 0.530 | ||||||||||
Fourth | $ | 51.19 | $ | 43.96 | $ | 0.530 | ||||||||||
2006 | ||||||||||||||||
First | $ | 44.23 | $ | 40.00 | $ | 0.515 | ||||||||||
Second | $ | 41.91 | $ | 38.77 | $ | 0.515 | ||||||||||
Third | $ | 43.63 | $ | 40.26 | $ | 0.515 | ||||||||||
Fourth | $ | 49.24 | $ | 41.37 | $ | 0.530 |
Dividends | ||||||||||||||||
Paid | ||||||||||||||||
Year | Quarter | High | Low | Per Share | ||||||||||||
2008 | ||||||||||||||||
First | $ | 45.34 | $ | 37.87 | $ | 0.530 | ||||||||||
Second | $ | 44.82 | $ | 38.95 | $ | 0.530 | ||||||||||
Third | $ | 44.97 | $ | 38.78 | $ | 0.530 | ||||||||||
Fourth | $ | 40.92 | $ | 27.82 | $ | 0.530 | ||||||||||
2007 | ||||||||||||||||
First | $ | 49.42 | $ | 45.14 | $ | 0.530 | ||||||||||
Second | $ | 54.74 | $ | 47.22 | $ | 0.530 | ||||||||||
Third | $ | 51.74 | $ | 45.26 | $ | 0.530 | ||||||||||
Fourth | $ | 51.19 | $ | 43.96 | $ | 0.530 |
Number of securities | Number of securities | |||||||||||
to be issued upon | Weighted-average | remaining available for | ||||||||||
exercise of | exercise price of | future issuance under equity | ||||||||||
outstanding options | outstanding options | compensation plans | ||||||||||
Plans approved by shareholders | 4,394,809 | $ | 42.37 | 6,289,136 |
Number of Securities | Number of Securities | |||||||||||
to be Issued Upon | Weighted-Average | Remaining Available For | ||||||||||
Exercise of | Exercise Price of | Future Issuance Under Equity | ||||||||||
Outstanding Options | Outstanding Options | Compensation Plans | ||||||||||
Plans approved by shareholders | 5,013,699 | $ | 42.45 | 4,822,431 |
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Number | ||||||||||||||||||||
of Shares | Maximum Dollar | |||||||||||||||||||
Purchased as | Value that May | |||||||||||||||||||
Number of | Average | Part of Publicly | Average | Yet Be | ||||||||||||||||
Shares | Price | Announced | Price Paid | Purchased Under | ||||||||||||||||
Purchased | Paid Per | Plans or | Per Share | the Plans or | ||||||||||||||||
Period | (1) | Share (1) | Programs (2) | (2) | Programs (2) | |||||||||||||||
01/01/07 – 01/31/07 | — | — | — | — | $ | 651,506,040 | ||||||||||||||
02/01/07 – 02/28/07 | 20,000 | $ | 47.03 | — | — | 651,506,040 | ||||||||||||||
03/01/07 – 03/31/07 | 168,650 | 46.50 | 989,300 | $ | 46.46 | 605,523,194 | ||||||||||||||
04/01/07 – 04/30/07 | 75,500 | 48.62 | — | — | 605,523,194 | |||||||||||||||
05/01/07 – 05/31/07 | 1,550 | 51.34 | 1,771,000 | 52.23 | 1,362,982,121 | |||||||||||||||
06/01/07 – 06/30/07 | — | — | 4,481,832 | 50.01 | 1,138,745,816 | |||||||||||||||
07/01/07 – 07/31/07 | 1,000 | 48.60 | 3,208,538 | 49.15 | 980,986,679 | |||||||||||||||
08/01/07 – 08/31/07 | 376,250 | 47.89 | 2,474,986 | 47.85 | 862,514,949 | |||||||||||||||
09/01/07 – 09/30/07 | — | — | 380,800 | 47.83 | 844,294,092 | |||||||||||||||
10/01/07 – 10/31/07 | 7,575 | 49.95 | 401,495 | 47.71 | 825,132,252 | |||||||||||||||
11/01/07 – 11/30/07 | 20,000 | 49.09 | 46,689 | 47.88 | 822,895,623 | |||||||||||||||
12/01/07 – 12/31/07 | 15,000 | 45.23 | — | — | 822,895,623 | |||||||||||||||
Total | 685,525 | 13,754,640 | ||||||||||||||||||
Number | ||||||||||||||||||||
of Shares | Maximum Dollar | |||||||||||||||||||
Purchased as | Value that May | |||||||||||||||||||
Number of | Average | Part of Publicly | Average | Yet Be | ||||||||||||||||
Shares | Price | Announced | Price Paid | Purchased Under | ||||||||||||||||
Purchased | Paid Per | Plans or | Per Share | the Plans or | ||||||||||||||||
(1) | Share (1) | Programs (2) | (2) | Programs (2) | ||||||||||||||||
01/01/08 — 01/31/08 | 34,300 | $ | 43.96 | — | — | $ | 822,895,623 | |||||||||||||
02/01/08 — 02/29/08 | 203,670 | 41.24 | — | — | 822,895,623 | |||||||||||||||
03/01/08 — 03/31/08 | 83,760 | 38.92 | — | — | 822,895,623 | |||||||||||||||
04/01/08 — 04/30/08 | 22,220 | 41.46 | — | — | 822,895,623 | |||||||||||||||
05/01/08 — 05/31/08 | 32,000 | 43.13 | — | — | 822,895,623 | |||||||||||||||
06/01/08 — 06/30/08 | 35,000 | 43.72 | — | — | 822,895,623 | |||||||||||||||
07/01/08 — 07/31/08 | 1,200 | 43.07 | — | — | 822,895,623 | |||||||||||||||
08/01/08 — 08/31/08 | 20,000 | 42.25 | — | — | 822,895,623 | |||||||||||||||
09/01/08 — 09/30/08 | — | — | — | — | 822,895,623 | |||||||||||||||
10/01/08 — 10/31/08 | 9,455 | 34.95 | — | — | 822,895,623 | |||||||||||||||
11/01/08 — 11/30/08 | 37,464 | 36.91 | — | — | 822,895,623 | |||||||||||||||
12/01/08 — 12/31/08 | — | — | — | — | 822,895,623 | |||||||||||||||
Total | 479,069 | |||||||||||||||||||
(1) | Represents shares of common stock purchased on the open market to provide shares to participants under various employee compensation and incentive programs. These purchases were not made pursuant to a publicly announced plan or program. | |
(2) | In January 2005, the DTE Energy Board of Directors authorized the repurchase of up to $700 million of common stock through 2008. In May 2007, the DTE Energy Board of Directors authorized the repurchase of up to an additional $850 million of common stock through 2009. Through December 31, |
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Item 6. | Selected Financial Data |
(in Millions, except per share amounts) | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||
Operating Revenues | $ | 8,506 | $ | 8,159 | $ | 8,094 | $ | 6,419 | $ | 6,429 | $ | 9,329 | $ | 8,475 | $ | 8,157 | $ | 8,094 | $ | 6,419 | ||||||||||||||||||||
Net Income (Loss) | ||||||||||||||||||||||||||||||||||||||||
Total from continuing operations (1) | $ | 787 | $ | 389 | $ | 272 | $ | 265 | $ | 275 | ||||||||||||||||||||||||||||||
Income from continuing operations(1) | $ | 526 | $ | 787 | $ | 389 | $ | 272 | $ | 265 | ||||||||||||||||||||||||||||||
Discontinued operations | 184 | 43 | 268 | 166 | 273 | 20 | 184 | 43 | 268 | 166 | ||||||||||||||||||||||||||||||
Cumulative effect of accounting changes | — | 1 | (3 | ) | — | (27 | ) | — | — | 1 | (3 | ) | — | |||||||||||||||||||||||||||
Net Income | $ | 971 | $ | 433 | $ | 537 | $ | 431 | $ | 521 | $ | 546 | $ | 971 | $ | 433 | $ | 537 | $ | 431 | ||||||||||||||||||||
Diluted Earnings Per Share | ||||||||||||||||||||||||||||||||||||||||
Total from continuing operations | $ | 4.62 | $ | 2.18 | $ | 1.55 | $ | 1.53 | $ | 1.63 | ||||||||||||||||||||||||||||||
Diluted Earnings Per Common Share | ||||||||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 3.23 | $ | 4.62 | $ | 2.18 | $ | 1.55 | $ | 1.53 | ||||||||||||||||||||||||||||||
Discontinued operations | 1.08 | .24 | 1.52 | .96 | 1.62 | .13 | 1.08 | .24 | 1.52 | .96 | ||||||||||||||||||||||||||||||
Cumulative effect of accounting changes | — | .01 | (.02 | ) | — | (.16 | ) | — | — | .01 | (.02 | ) | — | |||||||||||||||||||||||||||
Diluted Earnings Per Share | $ | 5.70 | $ | 2.43 | $ | 3.05 | $ | 2.49 | $ | 3.09 | ||||||||||||||||||||||||||||||
Diluted Earnings Per Common Share | $ | 3.36 | $ | 5.70 | $ | 2.43 | $ | 3.05 | $ | 2.49 | ||||||||||||||||||||||||||||||
Financial Information | ||||||||||||||||||||||||||||||||||||||||
Dividends declared per share of common stock | $ | 2.12 | $ | 2.075 | $ | 2.06 | $ | 2.06 | $ | 2.06 | $ | 2.12 | $ | 2.12 | $ | 2.075 | $ | 2.06 | $ | 2.06 | ||||||||||||||||||||
Total assets | $ | 23,754 | $ | 23,785 | $ | 23,335 | $ | 21,297 | $ | 20,753 | $ | 24,590 | $ | 23,742 | $ | 23,785 | $ | 23,335 | $ | 21,297 | ||||||||||||||||||||
Long-term debt, including capital leases | $ | 6,971 | $ | 7,474 | $ | 7,080 | $ | 7,606 | $ | 7,669 | $ | 7,741 | $ | 6,971 | $ | 7,474 | $ | 7,080 | $ | 7,606 | ||||||||||||||||||||
Shareholders’ equity | $ | 5,853 | $ | 5,849 | $ | 5,769 | $ | 5,548 | $ | 5,287 | $ | 5,995 | $ | 5,853 | $ | 5,849 | $ | 5,769 | $ | 5,548 |
(1) | 2007 amounts include $580 million after-tax gain on the Antrim sale transaction and $210 million after-tax losses on hedge contracts associated with the Antrim sale. 2008 amounts include $81 million after-tax gain on the sale of a portion of the Barnett shale properties. See Note 3 of Notes to Consolidated Financial Statements in Item 8 of this Report. |
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
(in Millions, except Earnings per Share) | 2007 | 2006 | 2005 | |||||||||
Income from Continuing Operations | $ | 787 | $ | 389 | $ | 272 | ||||||
Earnings per Diluted Share | $ | 4.62 | $ | 2.18 | $ | 1.55 | ||||||
Net Income | $ | 971 | $ | 433 | $ | 537 | ||||||
Earnings per Diluted Share | $ | 5.70 | $ | 2.43 | $ | 3.05 |
2008 | 2007 | 2006 | ||||||||||
(In millions, except earnings per share) | ||||||||||||
Income from continuing operations | $ | 526 | $ | 787 | $ | 389 | ||||||
Diluted earnings per common share from continuing operations | $ | 3.23 | $ | 4.62 | $ | 2.18 | ||||||
Net income | $ | 546 | $ | 971 | $ | 433 | ||||||
Diluted earnings per common share | $ | 3.36 | $ | 5.70 | $ | 2.43 |
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• | Impacts of national and regional economic conditions on utility operations; | ||
• | Effects of weather | ||
• | Collectibility of accounts receivable on utility operations; | ||
• | Impact of regulatory decisions on | ||
• | Impact of legislation on utility operations; | ||
• | Fluctuations in market demand on coal supply; | ||
• | Challenges associated with nuclear fuel; | ||
• | Monetization of portions of our Unconventional Gas Production business; | ||
• | |||
• | Results in our Energy Trading business; | ||
• | |||
• |
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• | In order to more accurately reflect the actual cost of providing service to business customers, the MPSC adopted an immediate 39% phase out of the residential rate subsidy, with the remaining amount to be eliminated in equal installments over the next five years, every October 1. | |
• | Accepted Detroit Edison’s proposal to reinstate and modify the tracking mechanism on Electric Choice sales (CIM) with a base level of 1,561 GWh. The modified mechanism will not have a cap on the amount recoverable. | |
• | Terminated the Pension Equalization Mechanism. | |
• | Approved an annual reconciliation mechanism to track expenses associated with restoration costs (storm and non-storm related expenses) and line clearance expenses. Annual reconciliations will be required using a base expense level of $110 million and $51 million, respectively. | |
• | Approved Detroit Edison’s proposal to recover a return on $15 million in working capital associated with the preparation of an application for a new nuclear generation facility at its current Fermi 2 site. |
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• | 2008 Public Act (PA) 286 that reforms Michigan’s utility regulatory framework, including the electric Customer Choice program, | |
• | 2008 PA 295 that establishes a renewable portfolio / energy optimization standard and provides a funding mechanism, and | |
• | 2008 PA 287 that provides for an income tax credit for the purchase of energy efficient appliances and a credit to offset a portion of the renewable charge. |
• | Electric Customer Choice reform— The bill establishes a 10 percent limit on participation in the electric Customer Choice program. In general, customers representing 10 percent of a utility’s load may receive electric generation from an electric supplier that is not a utility. After that threshold is met, the remaining customers will remain on full, bundled utility service. As of December 31, 2008, approximately 3 percent of Detroit Edison’s load was on the electric Customer Choice program. The bill also allows continuation of prior MPSC policies for customers to return to full utility service. | |
• | Cost-of-service based electric rates (deskewing)— The bill requires the MPSC to set rates based on cost-of-service for all customer classes, eliminating over a five-year period the current subsidy by businesses of residential customer rates. This provision does not change total revenue for Detroit Edison. It lowers rates for most commercial and industrial customers and increases rates for residential and certain other industrial customers to match the actual cost of service for each customer class. Rate changes will be phased in over five years, with a 2.5% annual cap on residential rate increases due to deskewing beginning January 1, 2009. Rates for schools and other qualified educational institutions will be set at their cost of service sooner. | |
• | File and use ratemaking— The bill establishes a 12 month deadline for the MPSC to complete a rate case and allows a utility to self-implement rate changes six months after a rate filing, subject to certain limitations. If the final case order leads to lower rates than the utility had self-implemented, the utility will refund with interest, the difference. In addition, utility rate cases may be based on a forward test year. The bill also has provisions designed to help the MPSC obtain increased funding for additional staff. | |
• | Certificate of Need process for major capital investments— The bill establishes a certificate of need process for capital projects costing more than $500 million. The process requires the MPSC to review for prudence, prior to construction, proposed investments in new generating assets, acquisitions of existing power plants, major upgrades of power plants, and long-term power purchase agreements. The |
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bill increases the certainty for utilities to recover the cost of projects approved by the MPSC and provides for the utilities to recover interest expenses during construction. |
• | Merger & Acquisition approval— The bill grants the MPSC the authority to review and approve proposed utility mergers and acquisitions in Michigan and sets out evaluation criteria. |
• | The bill requires electric providers to source 10% of electricity sold to retail customers from renewable energy resources by 2015. | |
• | Qualifying renewable energy resources include wind, biomass, solar, hydro, and geothermal, among others. | |
• | Detroit Edison will be required to have a renewable energy capacity portfolio of 300MW by December 31, 2013 and 600MW by December 31, 2015. | |
• | The MPSC will establish a per meter surcharge to fund the renewable energy requirements. The recovery mechanism starts prior to actual construction in order to smooth the rate impact for customers. | |
• | The bill allows for the lowering of compliance if RPS costs exceed the surcharge/cost cap or if other specified factors adversely affect the availability of renewable energy. | |
• | The bill specifies that a utility can build or have others build and later sell to the utility up to 50 percent of the generation required to meet the RPS. The other 50 percent would be contracted through power purchase agreements. | |
• | The bill also provides for a net metering program to be established by MPSC order foron-site customer-owned renewable generation up to 1% of an electric utility’s load. |
• | Requires utilities to create electric and natural gas energy optimization plans for each customer class and includes funding surcharges as well as the potential for incentives for exceeding performance goals. | |
• | For electric sales, the program targets 0.3 percent annual savings in 2009, ramping up to 1 percent annual savings by 2012. Savings percentages are based on prior year retail sales. | |
• | For natural gas sales, the targeted annual savings start at 0.1 percent in 2009 and ramp up to 0.75 percent by 2012. | |
• | The MPSC will allow utilities to capitalize certain costs of their energy optimization program. The costs which can be capitalized include equipment, materials, installation costs and customer incentives. | |
• | Incentives are potentially available for exceeding annual program targets. The financial incentive could be the lesser of 25% of the net cost reduction to our customers or 15% of total program spend, subject to MPSC approval. | |
• | The bill would also allow a natural gas utility that spends at least 0.5 percent of its revenues on energy efficiency programs to implement a symmetrical decouplingtrue-up mechanism that adjusts for sales volumes that are above or below the level reflected in its gas distribution rates. | |
• | By March 2016, the MPSC may suspend the program if it determines the program is no longer cost-effective. |
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2008 | 2007 | 2006 | ||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Net Producing Wells | ||||||||||||||||||||||||
Held for sale | 33 | 27 | 8 | — | 33 | 27 | ||||||||||||||||||
Continuing operations | 120 | 83 | 47 | |||||||||||||||||||||
Held for use | 155 | 120 | 83 | |||||||||||||||||||||
Total | 153 | 110 | 55 | 155 | 153 | 110 | ||||||||||||||||||
Production Volume (Bcfe) | ||||||||||||||||||||||||
Held for sale | 4.7 | 2.8 | 0.4 | — | 4.7 | 2.8 | ||||||||||||||||||
Continuing operations | 3.0 | 1.3 | 0.4 | |||||||||||||||||||||
Held for use | 5.0 | 3.0 | 1.3 | |||||||||||||||||||||
Total | 7.7 | 4.1 | 0.8 | 5.0 | 7.7 | 4.1 | ||||||||||||||||||
Proved Reserves (Bcfe) (1) | ||||||||||||||||||||||||
Proved Reserves (Bcfe)(1) | ||||||||||||||||||||||||
Held for sale | 75 | 60 | 11 | — | 75 | 60 | ||||||||||||||||||
Continuing operations | 144 | 111 | 48 | |||||||||||||||||||||
Held for use | 167 | 144 | 111 | |||||||||||||||||||||
Total | 219 | 171 | 59 | 167 | 219 | 171 | ||||||||||||||||||
Net Developed Acreage (1) | ||||||||||||||||||||||||
Net Developed Acreage(1) | ||||||||||||||||||||||||
Held for sale | 4,987 | 3,977 | 1,349 | — | 4,987 | 3,977 | ||||||||||||||||||
Continuing operations (2) | 9,880 | 10,693 | 13,018 | |||||||||||||||||||||
Held for use(2) | 14,248 | 9,880 | 10,693 | |||||||||||||||||||||
Total | 14,867 | 14,670 | 14,367 | 14,248 | 14,867 | 14,670 | ||||||||||||||||||
Net Undeveloped Acreage (1) | ||||||||||||||||||||||||
Net Undeveloped Acreage(1) | ||||||||||||||||||||||||
Held for sale | 5,809 | 6,164 | 7,801 | — | 5,809 | 6,164 | ||||||||||||||||||
Continuing operations (2) | 38,066 | 27,613 | 13,495 | |||||||||||||||||||||
Held for use(2) | 46,187 | 38,066 | 27,613 | |||||||||||||||||||||
Total | 43,875 | 33,777 | 21,296 | 46,187 | 43,875 | 33,777 | ||||||||||||||||||
Capital Expenditures (in Millions) (3) | ||||||||||||||||||||||||
Capital Expenditures (in Millions)(3) | ||||||||||||||||||||||||
Held for sale | $ | 45 | $ | 67 | $ | 19 | $ | — | $ | 45 | $ | 67 | ||||||||||||
Continuing operations | 95 | 61 | 76 | |||||||||||||||||||||
Held for use | 96 | 95 | 61 | |||||||||||||||||||||
Total | $ | 140 | $ | 128 | $ | 95 | $ | 96 | $ | 140 | $ | 128 | ||||||||||||
Future Undiscounted Net Cash Flows (in Millions) (4) | ||||||||||||||||||||||||
Future Undiscounted Net Cash Flows (in Millions)(4) | ||||||||||||||||||||||||
Held for sale | $ | 282 | $ | 167 | $ | 63 | $ | — | $ | 282 | $ | 167 | ||||||||||||
Continuing operations | 521 | 305 | 266 | |||||||||||||||||||||
Held for use | 324 | 521 | 305 | |||||||||||||||||||||
Total | $ | 803 | $ | 472 | $ | 329 | $ | 324 | $ | 803 | $ | 472 | ||||||||||||
Average gas price (per Mcf) | $ | 6.29 | $ | 5.66 | $ | 9.01 | $ | 8.69 | $ | 6.29 | $ | 5.66 |
(1) | Due to the impairment of acreage and wells in the southern expansion area of the Barnett shale during 2007, the proved reserves and acreage numbers above do not include the southern area. Total net acreage related to impaired leases in the southern expansion area was 23,659 acres |
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2007 and 2006, respectively. In 2008, an impairment was recorded on approximately 5,600 acres within the western expansion of the Barnett Shale. Impaired acreage and | ||
(2) | Developed acreage for continuing operations shows a decrease from | |
(3) | Excludes sold and impaired assets in southern expansion area of the Barnett shale. | |
(4) | Represents the standardized measure of |
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• | continuing to pursue regulatory stability and investment recovery for our utilities; | ||
• | managing the growth of our utility asset base; | ||
• | enhancing our cost structure across all business segments; | ||
• | managing cash, capital and liquidity to maintain or improve our financial strength; | ||
• | improving | ||
• | investing in businesses that integrate our assets and leverage our skills and expertise. |
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(in Millions) | 2007 | 2006 | 2005 | |||||||||
Net Income by Segment: | ||||||||||||
Electric Utility | $ | 317 | $ | 325 | $ | 277 | ||||||
Gas Utility | 70 | 50 | 37 | |||||||||
Non-utility Operations: | ||||||||||||
Coal and Gas Midstream | 53 | 50 | 45 | |||||||||
Unconventional Gas Production (1) | (217 | ) | 9 | 4 | ||||||||
Power and Industrial Projects | 30 | (80 | ) | 4 | ||||||||
Energy Trading | 32 | 96 | (43 | ) | ||||||||
Corporate & Other (1) | 502 | (61 | ) | (52 | ) | |||||||
Income (Loss) from Continuing Operations: | ||||||||||||
Utility | 387 | 375 | 314 | |||||||||
Non-utility | (102 | ) | 75 | 10 | ||||||||
Corporate & Other | 502 | (61 | ) | (52 | ) | |||||||
787 | 389 | 272 | ||||||||||
Discontinued Operations | 184 | 43 | 268 | |||||||||
Cumulative Effect of Accounting Changes | — | 1 | (3 | ) | ||||||||
Net Income | $ | 971 | $ | 433 | $ | 537 | ||||||
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Net Income by Segment: | ||||||||||||
Electric Utility | $ | 331 | $ | 317 | $ | 325 | ||||||
Gas Utility | 85 | 70 | �� | 50 | ||||||||
Non-utility Operations: | ||||||||||||
Gas Midstream | 38 | 34 | 28 | |||||||||
Unconventional Gas Production(1) | 84 | (217 | ) | 9 | ||||||||
Power and Industrial Projects | 40 | 49 | (58 | ) | ||||||||
Energy Trading | 42 | 32 | 96 | |||||||||
Corporate & Other(1) | (94 | ) | 502 | (61 | ) | |||||||
Income (Loss) from Continuing Operations: | ||||||||||||
Utility | 416 | 387 | 375 | |||||||||
Non-utility | 204 | (102 | ) | 75 | ||||||||
Corporate & Other | (94 | ) | 502 | (61 | ) | |||||||
526 | 787 | 389 | ||||||||||
Discontinued Operations | 20 | 184 | 43 | |||||||||
Cumulative Effect of Accounting Changes | — | — | 1 | |||||||||
Net Income | $ | 546 | $ | 971 | $ | 433 | ||||||
(1) |
38
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Revenues | $ | 4,874 | $ | 4,900 | $ | 4,737 | ||||||
Fuel and Purchased Power | 1,778 | 1,686 | 1,566 | |||||||||
Gross Margin | 3,096 | 3,214 | 3,171 | |||||||||
Operation and Maintenance | 1,322 | 1,422 | 1,336 | |||||||||
Depreciation and Amortization | 743 | 764 | 809 | |||||||||
Taxes Other Than Income | 232 | 277 | 252 | |||||||||
Asset (Gains) Losses and Reserves, Net | (1 | ) | 8 | (6 | ) | |||||||
Operating Income | 800 | 743 | 780 | |||||||||
Other (Income) and Deductions | 283 | 277 | 294 | |||||||||
Income Tax Provision | 186 | 149 | 161 | |||||||||
Net Income | $ | 331 | $ | 317 | $ | 325 | ||||||
Operating Income as a Percent of Operating Revenues | 16 | % | 15 | % | 16 | % |
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Operating Revenues | $ | 4,900 | $ | 4,737 | $ | 4,462 | ||||||
Fuel and Purchased Power | 1,686 | 1,566 | 1,590 | |||||||||
Gross Margin | 3,214 | 3,171 | 2,872 | |||||||||
Operation and Maintenance | 1,422 | 1,336 | 1,308 | |||||||||
Depreciation and Amortization | 764 | 809 | 640 | |||||||||
Taxes Other Than Income | 277 | 252 | 241 | |||||||||
Asset (Gains) and Losses, Net | 8 | (6 | ) | (26 | ) | |||||||
Operating Income | 743 | 780 | 709 | |||||||||
Other (Income) and Deductions | 277 | 294 | 283 | |||||||||
Income Tax Provision | 149 | 161 | 149 | |||||||||
Net Income | $ | 317 | $ | 325 | $ | 277 | ||||||
Operating Income as a Percent of Operating Revenues | 15 | % | 16 | % | 16 | % |
40
Increase (Decrease) in Gross Margin Components Compared to Prior Year | 2007 | 2006 | 2008 | 2007 | ||||||||||||
(in Millions) | ||||||||||||||||
Weather-related margin impacts | $ | 31 | $ | (81 | ) | |||||||||||
Removal of residential rate caps effective January 1, 2006 | — | 186 | ||||||||||||||
(In millions) | ||||||||||||||||
Weather-related impacts | $ | (37 | ) | $ | 31 | |||||||||||
Return of customers from electric Customer Choice | 43 | 156 | 35 | 43 | ||||||||||||
Service territory economic performance | 28 | (16 | ) | |||||||||||||
Service territory performance | (100 | ) | 28 | |||||||||||||
Refundable pension cost | (30 | ) | — | |||||||||||||
April 2008 expiration of show cause rate decrease | 46 | — | ||||||||||||||
Impact of 2006 MPSC show cause order | (64 | ) | — | — | (64 | ) | ||||||||||
Impact of 2005 MPSC PSCR reconciliation order | 38 | — | (38 | ) | 38 | |||||||||||
Impact of 2004 MPSC PSCR reconciliation order | (39 | ) | 26 | — | (39 | ) | ||||||||||
Other, net | 6 | 28 | 6 | 6 | ||||||||||||
Increase in gross margin | $ | 43 | $ | 299 | ||||||||||||
Increase (decrease) in gross margin | $ | (118 | ) | $ | 43 | |||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Power Generated and Purchased (in Thousands of MWh) | ||||||||||||||||||||||||
Power Plant Generation | ||||||||||||||||||||||||
Fossil | 42,359 | 72 | % | 39,686 | 70 | % | 40,756 | 73 | % | |||||||||||||||
Nuclear | 8,314 | 14 | 7,477 | 13 | 8,754 | 16 | ||||||||||||||||||
50,673 | 86 | 47,163 | 83 | 49,510 | 89 | |||||||||||||||||||
Purchased Power | 8,422 | 14 | 9,861 | 17 | 6,378 | 11 | ||||||||||||||||||
System Output | 59,095 | 100 | % | 57,024 | 100 | % | 55,888 | 100 | % | |||||||||||||||
Less Line Loss and Internal Use | (3,391 | ) | (3,603 | ) | (3,205 | ) | ||||||||||||||||||
Net System Output | 55,704 | 53,421 | 52,683 | |||||||||||||||||||||
Average Unit Cost ($/MWh) | ||||||||||||||||||||||||
Generation (1) | $ | 15.83 | $ | 15.61 | $ | 15.47 | ||||||||||||||||||
Purchased Power (2) | $ | 62.40 | $ | 53.71 | $ | 89.37 | ||||||||||||||||||
Overall Average Unit Cost | $ | 22.47 | $ | 22.20 | $ | 23.90 | ||||||||||||||||||
39
Power Generated and Purchased | 2008 | 2007 | 2006 | |||||||||||||||||||||
(In thousands of MWh) | ||||||||||||||||||||||||
Power Plant Generation | ||||||||||||||||||||||||
Fossil | 41,254 | 71 | % | 42,359 | 72 | % | 39,686 | 70 | % | |||||||||||||||
Nuclear | 9,613 | 17 | 8,314 | 14 | 7,477 | 13 | ||||||||||||||||||
50,867 | 88 | 50,673 | 86 | 47,163 | 83 | |||||||||||||||||||
Purchased Power | 6,877 | 12 | 8,422 | 14 | 9,861 | 17 | ||||||||||||||||||
System Output | 57,744 | 100 | % | 59,095 | 100 | % | 57,024 | 100 | % | |||||||||||||||
Less Line Loss and Internal Use | (3,445 | ) | (3,391 | ) | (3,603 | ) | ||||||||||||||||||
Net System Output | 54,299 | 55,704 | 53,421 | |||||||||||||||||||||
Average Unit Cost ($/MWh) | ||||||||||||||||||||||||
Generation(1) | $ | 17.93 | $ | 15.83 | $ | 15.61 | ||||||||||||||||||
Purchased Power | $ | 69.50 | $ | 62.40 | $ | 53.71 | ||||||||||||||||||
Overall Average Unit Cost | $ | 24.07 | $ | 22.47 | $ | 22.20 | ||||||||||||||||||
(1) | Represents fuel costs associated with power plants. | |
(in Thousands of MWh) | 2007 | 2006 | 2005 | |||||||||
Electric Sales | ||||||||||||
Residential | 16,147 | 15,769 | 16,812 | |||||||||
Commercial | 19,332 | 17,948 | 15,618 | |||||||||
Industrial | 13,338 | 13,235 | 12,317 | |||||||||
Wholesale | 2,902 | 2,826 | 2,329 | |||||||||
Other | 398 | 402 | 390 | |||||||||
52,117 | 50,180 | 47,466 | ||||||||||
Interconnection sales (1) | 3,587 | 3,241 | 5,217 | |||||||||
Total Electric Sales | 55,704 | 53,421 | 52,683 | |||||||||
Electric Deliveries | ||||||||||||
Retail and Wholesale | 52,117 | 50,180 | 47,466 | |||||||||
Electric Customer Choice | 1,690 | 2,694 | 6,760 | |||||||||
Electric Customer Choice–Self Generators (2) | 549 | 909 | 518 | |||||||||
Total Electric Sales and Deliveries | 54,356 | 53,783 | 54,744 | |||||||||
2008 | 2007 | 2006 | ||||||||||
(In thousands of MWh) | ||||||||||||
Electric Sales | ||||||||||||
Residential | 15,492 | 16,147 | 15,769 | |||||||||
Commercial | 18,920 | 19,332 | 17,948 | |||||||||
Industrial | 13,086 | 13,338 | 13,235 | |||||||||
Wholesale | 2,825 | 2,902 | 2,826 | |||||||||
Other | 393 | 398 | 402 | |||||||||
50,716 | 52,117 | 50,180 | ||||||||||
Interconnection sales(1) | 3,583 | 3,587 | 3,241 | |||||||||
Total Electric Sales | 54,299 | 55,704 | 53,421 | |||||||||
Electric Deliveries | ||||||||||||
Retail and Wholesale | 50,716 | 52,117 | 50,180 | |||||||||
Electric Customer Choice | 1,382 | 1,690 | 2,694 | |||||||||
Electric Customer Choice — Self Generators(2) | 75 | 549 | 909 | |||||||||
Total Electric Sales and Deliveries | 52,173 | 54,356 | 53,783 | |||||||||
(1) | Represents power that is not distributed by Detroit Edison. | |
(2) | Represents deliveries for self generators who have purchased power from alternative energy suppliers to supplement their power requirements. |
41
40
• | Access to capital markets and capital market conditions and the results of other financing efforts which can be affected by credit agency ratings; |
42
41
• | Instability in capital markets which could impact availability of short and long-term financing or the potential for loss on cash equivalents and investments; | ||
• | Economic conditions within Michigan and corresponding impacts on demand for electricity; | ||
• | Collectibility of accounts receivable; | ||
• | Increases in future expense and contributions to pension and other postretirement plans due to declines in value resulting from market conditions; | ||
• | The amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals or new legislation; | ||
• | |||
• | |||
• | |||
• | |||
• | Any potential new federal and state environmental, renewable energy and energy efficiency requirements. |
43
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Operating Revenues | $ | 1,875 | $ | 1,849 | $ | 2,138 | $ | 2,152 | $ | 1,875 | $ | 1,849 | ||||||||||||
Cost of Gas | 1,164 | 1,157 | 1,490 | 1,378 | 1,164 | 1,157 | ||||||||||||||||||
Gross Margin | 711 | 692 | 648 | 774 | 711 | 692 | ||||||||||||||||||
Operation and Maintenance | 429 | 431 | 424 | 464 | 429 | 431 | ||||||||||||||||||
Depreciation and Amortization | 93 | 94 | 95 | 102 | 93 | 94 | ||||||||||||||||||
Taxes Other Than Income | 56 | 53 | 43 | 48 | 56 | 53 | ||||||||||||||||||
Asset (Gains) and Losses, Net | (3 | ) | — | 4 | (26 | ) | (3 | ) | — | |||||||||||||||
Operating Income | 136 | 114 | 82 | 186 | 136 | 114 | ||||||||||||||||||
Other (Income) and Deductions | 43 | 53 | 47 | 60 | 43 | 53 | ||||||||||||||||||
Income Tax Provision (Benefit) | 23 | 11 | (2 | ) | 41 | 23 | 11 | |||||||||||||||||
Net Income | $ | 70 | $ | 50 | $ | 37 | $ | 85 | $ | 70 | $ | 50 | ||||||||||||
Operating Income as a Percent of Operating Revenues | 7 | % | 6 | % | 4 | % | 9 | % | 7 | % | 6 | % |
2007 | 2006 | 2005 | ||||||||||
Gas Markets (in Millions) | ||||||||||||
Gas sales | $ | 1,536 | $ | 1,541 | $ | 1,860 | ||||||
End user transportation | 140 | 135 | 134 | |||||||||
1,676 | 1,676 | 1,994 | ||||||||||
Intermediate transportation | 59 | 69 | 58 | |||||||||
Storage and other | 140 | 104 | 86 | |||||||||
$ | 1,875 | $ | 1,849 | $ | 2,138 | |||||||
Gas Markets (in Bcf) | ||||||||||||
Gas sales | 148 | 138 | 168 | |||||||||
End user transportation | 132 | 136 | 157 | |||||||||
280 | 274 | 325 | ||||||||||
Intermediate transportation | 399 | 373 | 432 | |||||||||
679 | 647 | 757 | ||||||||||
42
2008 | 2007 | 2006 | ||||||||||
Gas Markets (in Millions) | ||||||||||||
Gas sales | $ | 1,824 | $ | 1,536 | $ | 1,541 | ||||||
End user transportation | 143 | 140 | 135 | |||||||||
1,967 | 1,676 | 1,676 | ||||||||||
Intermediate transportation | 73 | 70 | 69 | |||||||||
Storage and other | 112 | 129 | 104 | |||||||||
$ | 2,152 | $ | 1,875 | $ | 1,849 | |||||||
Gas Markets (in Bcf) | ||||||||||||
Gas sales | 148 | 148 | 138 | |||||||||
End user transportation | 123 | 132 | 136 | |||||||||
271 | 280 | 274 | ||||||||||
Intermediate transportation | 438 | 399 | 373 | |||||||||
709 | 679 | 647 | ||||||||||
44
• | Access to capital markets and capital market conditions and the results of other financing efforts which can be affected by credit agency ratings; | |
• | Instability in capital markets which could impact availability of short and long-term financing or the potential for loss on cash equivalents and investments; | |
• | Economic conditions within Michigan and corresponding impacts on demand for gas and levels of lost or stolen gas; | |
• | Collectibility of accounts receivable; | |
• | Increases in future expense and contributions to pension and other postretirement plans due to declines in value resulting from market conditions; | |
• | The amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals or new legislation; |
43
• | Our ability to reduce costs and maximize distribution system performance; | |
• | Variations in market prices of gas; | |
• | Weather; | |
• | Customer conservation; | |
• | Volatility in the short-term storage markets which impact third-party storage revenues; | |
• | Extent and timing of any base gas sales; | |
• | Any potential new federal and state environmental, renewable energy and energy efficiency requirements. |
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Operating Revenues | $ | 837 | $ | 707 | $ | 707 | ||||||
Operation and Maintenance | 747 | 628 | 653 | |||||||||
Depreciation and Amortization | 8 | 4 | 3 | |||||||||
Taxes Other Than Income | 5 | 5 | 4 | |||||||||
Asset (Gains) and Losses, Net | (1 | ) | — | — | ||||||||
Operating Income | 78 | 70 | 47 | |||||||||
Other (Income) and Deductions | (5 | ) | (8 | ) | (20 | ) | ||||||
Income Tax Provision | 30 | 28 | 22 | |||||||||
Net Income | $ | 53 | $ | 50 | $ | 45 | ||||||
45
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Revenues | $ | 71 | $ | 66 | $ | 63 | ||||||
Operation and Maintenance | 12 | 13 | 22 | |||||||||
Depreciation and Amortization | 5 | 6 | 3 | |||||||||
Taxes Other Than Income | 3 | 3 | 4 | |||||||||
Asset (Gains) and Losses, Net | 1 | (1 | ) | (1 | ) | |||||||
Operating Income | 50 | 45 | 35 | |||||||||
Other (Income) and Deductions | (12 | ) | (7 | ) | (8 | ) | ||||||
Income Tax Provision | 24 | 18 | 15 | |||||||||
Net Income | $ | 38 | $ | 34 | $ | 28 | ||||||
44
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Operating Revenues | $ | (228 | ) | $ | 99 | $ | 74 | |||||
Operation and Maintenance | 36 | 37 | 30 | |||||||||
Depreciation, Depletion and Amortization | 22 | 27 | 20 | |||||||||
Taxes Other Than Income | 8 | 11 | 11 | |||||||||
Asset (Gains) and Losses, Net | 27 | (3 | ) | — | ||||||||
Operating Income (Loss) | (321 | ) | 27 | 13 | ||||||||
Other (Income) and Deductions | 13 | 13 | 8 | |||||||||
Income Tax Provision (Benefit) | (117 | ) | 5 | 1 | ||||||||
Net Income (Loss) | $ | (217 | ) | $ | 9 | $ | 4 | |||||
46
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Revenues | $ | 48 | $ | (228 | ) | $ | 99 | |||||
Operation and Maintenance | 22 | 36 | 37 | |||||||||
Depreciation, Depletion and Amortization | 12 | 22 | 27 | |||||||||
Taxes Other Than Income | 1 | 8 | 11 | |||||||||
Asset (Gains) and Losses, Net | (120 | ) | 27 | (3 | ) | |||||||
Operating Income (Loss) | 133 | (321 | ) | 27 | ||||||||
Other (Income) and Deductions | 2 | 13 | 13 | |||||||||
Income Tax Provision (Benefit) | 47 | (117 | ) | 5 | ||||||||
Net Income (Loss) | $ | 84 | $ | (217 | ) | $ | 9 | |||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Operating Revenues | $ | 473 | $ | 409 | $ | 428 | ||||||
Operation and Maintenance | 409 | 366 | 329 | |||||||||
Depreciation and Amortization | 39 | 48 | 48 | |||||||||
Taxes other than Income | 11 | 12 | 14 | |||||||||
Asset (Gains) and Losses, Reserves and Impairments, Net | — | 75 | (1 | ) | ||||||||
Operating Income (Loss) | 14 | (92 | ) | 38 | ||||||||
Other (Income) and Deductions | (13 | ) | 43 | 4 | ||||||||
Minority Interest | 2 | 1 | 37 | |||||||||
Income Taxes | ||||||||||||
Provision (Benefit) | 6 | (44 | ) | 5 | ||||||||
Production Tax Credits | (11 | ) | (12 | ) | (12 | ) | ||||||
(5 | ) | (56 | ) | (7 | ) | |||||||
Net Income (Loss) | $ | 30 | $ | (80 | ) | $ | 4 | |||||
47
45
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Revenues | $ | 987 | $ | 1,244 | $ | 1,053 | ||||||
Operation and Maintenance | 899 | 1,143 | 972 | |||||||||
Depreciation and Amortization | 34 | 41 | 49 | |||||||||
Taxes other than Income | 12 | 13 | 13 | |||||||||
Other Asset (Gains) and Losses, Reserves and Impairments, Net | 6 | — | 76 | |||||||||
Operating Income (Loss) | 36 | 47 | (57 | ) | ||||||||
Other (Income) and Deductions | (20 | ) | (11 | ) | 43 | |||||||
Minority Interest | 5 | 2 | 1 | |||||||||
Income Taxes | ||||||||||||
Provision (Benefit) | 18 | 18 | (31 | ) | ||||||||
Production Tax Credits | (7 | ) | (11 | ) | (12 | ) | ||||||
11 | 7 | (43 | ) | |||||||||
Net Income (Loss) | $ | 40 | $ | 49 | $ | (58 | ) | |||||
46
48
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Revenues | $ | 1,388 | $ | 924 | $ | 828 | ||||||
Fuel, Purchased Power and Gas | 1,235 | 806 | 607 | |||||||||
Gross Margin | 153 | 118 | 221 | |||||||||
Operation and Maintenance | 68 | 58 | 65 | |||||||||
Depreciation and Amortization | 5 | 5 | 6 | |||||||||
Taxes Other Than Income | 2 | 1 | 1 | |||||||||
Operating Income (Loss) | 78 | 54 | 149 | |||||||||
Other (Income) and Deductions | 5 | 5 | 4 | |||||||||
Income Tax Provision (Benefit) | 31 | 17 | 49 | |||||||||
Net Income (Loss) | $ | 42 | $ | 32 | $ | 96 | ||||||
47
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Operating Revenues | $ | 955 | $ | 830 | $ | 977 | ||||||
Fuel, Purchased Power and Gas | 807 | 616 | 984 | |||||||||
Gross Margin | 148 | 214 | (7 | ) | ||||||||
Operation and Maintenance | 58 | 65 | 43 | |||||||||
Depreciation and Amortization | 5 | 6 | 4 | |||||||||
Taxes Other Than Income | 1 | 1 | (1 | ) | ||||||||
Operating Income (Loss) | 84 | 142 | (53 | ) | ||||||||
Other (Income) and Deductions | 35 | (3 | ) | 13 | ||||||||
Income Tax Provision (Benefit) | 17 | 49 | (23 | ) | ||||||||
Net Income (Loss) | $ | 32 | $ | 96 | $ | (43 | ) | |||||
49
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Operating Revenues | $ | 1,069 | $ | 863 | $ | 927 | ||||||
Operation and Maintenance | 1,265 | 1,019 | 1,167 | |||||||||
Depreciation and Amortization | (6 | ) | 24 | 58 | ||||||||
Taxes other than Income | 5 | 12 | 20 | |||||||||
Asset (Gains) and Losses, Reserves and Impairments, Net (1) | (280 | ) | 40 | (367 | ) | |||||||
Operating Income (Loss) | 85 | (232 | ) | 49 | ||||||||
Other (Income) and Deductions | (9 | ) | (20 | ) | (34 | ) | ||||||
Minority Interest | (188 | ) | (251 | ) | (318 | ) | ||||||
Income Taxes | ||||||||||||
Provision (Benefit) | 98 | 14 | 139 | |||||||||
Production Tax Credits | (21 | ) | (23 | ) | (43 | ) | ||||||
77 | (9 | ) | 96 | |||||||||
Net Income (1) | $ | 205 | $ | 48 | $ | 305 | ||||||
48
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Revenues | $ | 7 | $ | 1,069 | $ | 863 | ||||||
Operation and Maintenance | 9 | 1,265 | 1,019 | |||||||||
Depreciation and Amortization | (2 | ) | (6 | ) | 24 | |||||||
Taxes other than Income | (1 | ) | 5 | 12 | ||||||||
Asset (Gains) and Losses, Reserves and Impairments, Net(1) | (31 | ) | (280 | ) | 40 | |||||||
Operating Income (Loss) | 32 | 85 | (232 | ) | ||||||||
Other (Income) and Deductions | (2 | ) | (9 | ) | (20 | ) | ||||||
Minority Interest | 2 | (188 | ) | (251 | ) | |||||||
Income Taxes | ||||||||||||
Provision (Benefit) | 13 | 98 | 14 | |||||||||
Production Tax Credits | (1 | ) | (21 | ) | (23 | ) | ||||||
12 | 77 | (9 | ) | |||||||||
Net Income(1) | $ | 20 | $ | 205 | $ | 48 | ||||||
(1) | Includes intercompany pre-tax gain of $32 million ($21 million after-tax) for 2007. |
50
49
(in Millions) | ||||||||||||
Components of Asset (Gains) Losses, Reserves and | ||||||||||||
Impairments, Net | 2007 | 2006 | 2005 | |||||||||
Gains recognized associated with fixed payments | $ | (172 | ) | $ | (43 | ) | $ | (132 | ) | |||
Gains recognized associated with variable payments | (39 | ) | (14 | ) | (187 | ) | ||||||
Reserves recorded for contractual partners’ obligations | 130 | 79 | — | |||||||||
Other reserves and impairments, including partners’ share (1) | (3 | ) | 78 | — | ||||||||
Hedge (gains) losses: | ||||||||||||
Hedges for 2005 exposure | — | — | (2 | ) | ||||||||
Hedges for 2006 exposure | — | (66 | ) | (40 | ) | |||||||
Hedges for 2007 exposure | (196 | ) | 6 | (6 | ) | |||||||
$ | (280 | ) | $ | 40 | $ | (367 | ) | |||||
Components of Asset (Gains) Losses, Reserves and | ||||||||||||
Impairments, Net | 2008 | 2007 | 2006 | |||||||||
(In millions) | ||||||||||||
Gains recognized associated with fixed payments | $ | — | $ | (172 | ) | $ | (43 | ) | ||||
Gains recognized associated with variable payments | (32 | ) | (39 | ) | (14 | ) | ||||||
Reserves recorded for contractual partners’ obligations | — | 130 | 79 | |||||||||
Other reserves and impairments, including partners’ share(1) | (1 | ) | (3 | ) | 78 | |||||||
Hedge (gains) losses: | ||||||||||||
Hedges for 2006 exposure | — | — | (66 | ) | ||||||||
Hedges for 2007 exposure | (196 | ) | 6 | |||||||||
$ | (33 | ) | $ | (280 | ) | $ | 40 | |||||
(1) | Includes $70 million in 2006, representing our partners’ share of the asset impairment, included in Minority Interest. |
51
52
50
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||||||||||
Cash Flow From (Used For) | ||||||||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net income | $ | 971 | $ | 433 | $ | 537 | $ | 546 | $ | 971 | $ | 433 | ||||||||||||
Depreciation, depletion and amortization | 926 | 1,014 | 872 | 899 | 926 | 1,014 | ||||||||||||||||||
Deferred income taxes | 144 | 28 | 147 | 348 | 144 | 28 | ||||||||||||||||||
Gain on sale of non-utility business | (900 | ) | — | — | (128 | ) | (900 | ) | — | |||||||||||||||
Gain on sale of synfuel and other assets, net and synfuel impairment | (253 | ) | 28 | (405 | ) | (35 | ) | (253 | ) | 28 | ||||||||||||||
Working capital and other | 237 | (47 | ) | (150 | ) | (71 | ) | 237 | (47 | ) | ||||||||||||||
1,125 | 1,456 | 1,001 | 1,559 | 1,125 | 1,456 | |||||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Plant and equipment expenditures – utility | (1,035 | ) | (1,126 | ) | (850 | ) | ||||||||||||||||||
Plant and equipment expenditures – non-utility | (264 | ) | (277 | ) | (215 | ) | ||||||||||||||||||
Plant and equipment expenditures — utility | (1,183 | ) | (1,035 | ) | (1,126 | ) | ||||||||||||||||||
Plant and equipment expenditures — non-utility | (190 | ) | (264 | ) | (277 | ) | ||||||||||||||||||
Acquisitions, net of cash acquired | — | (42 | ) | (50 | ) | — | — | (42 | ) | |||||||||||||||
Proceeds from sale of non-utility business | 1,262 | — | — | 253 | 1,262 | — | ||||||||||||||||||
Proceeds from sale of synfuels and other assets | 417 | 313 | 409 | |||||||||||||||||||||
Proceeds (refunds) from sale of synfuels and other assets | (278 | ) | 417 | 313 | ||||||||||||||||||||
Restricted cash and other investments | (50 | ) | (62 | ) | (96 | ) | (125 | ) | (50 | ) | (62 | ) | ||||||||||||
330 | (1,194 | ) | (802 | ) | (1,523 | ) | 330 | (1,194 | ) | |||||||||||||||
Financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt and common stock | 50 | 629 | 1,041 | 1,310 | 50 | 629 | ||||||||||||||||||
Redemption of long-term debt | (393 | ) | (687 | ) | (1,266 | ) | (446 | ) | (393 | ) | (687 | ) | ||||||||||||
Repurchase of long-term debt | (238 | ) | — | — | ||||||||||||||||||||
Short-term borrowings, net | (47 | ) | 291 | 437 | (340 | ) | (47 | ) | 291 | |||||||||||||||
Repurchase of common stock | (708 | ) | (61 | ) | (13 | ) | (16 | ) | (708 | ) | (61 | ) | ||||||||||||
Dividends on common stock and other | (370 | ) | (375 | ) | (366 | ) | (354 | ) | (370 | ) | (375 | ) | ||||||||||||
(1,468 | ) | (203 | ) | (167 | ) | (84 | ) | (1,468 | ) | (203 | ) | |||||||||||||
Net Increase (Decrease) in Cash and Cash Equivalents | $ | (13 | ) | $ | 59 | $ | 32 | $ | (48 | ) | $ | (13 | ) | $ | 59 | |||||||||
51
53
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52
55
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2014 | ||||||||||||||||||||
Contractual Obligations | Total | 2009 | 2010-2011 | 2012-2013 | and Beyond | |||||||||||||||
(In millions) | ||||||||||||||||||||
Long-term debt: | ||||||||||||||||||||
Mortgage bonds, notes and other | $ | 6,687 | $ | 220 | $ | 1,294 | $ | 671 | $ | 4,502 | ||||||||||
Securitization bonds | 1,064 | 132 | 290 | 341 | 301 | |||||||||||||||
Trust preferred-linked securities | 289 | — | — | — | 289 | |||||||||||||||
Capital lease obligations | 91 | 15 | 26 | 18 | 32 | |||||||||||||||
Interest | 6,104 | 484 | 884 | 722 | 4,014 | |||||||||||||||
Operating leases | 238 | 36 | 57 | 46 | 99 | |||||||||||||||
Electric, gas, fuel, transportation and storage purchase obligations(1) | 5,665 | 2,972 | 1,813 | 160 | 720 | |||||||||||||||
Other long-term obligations(2)(3)(4) | 201 | 41 | 94 | 25 | 41 | |||||||||||||||
Total obligations | $ | 20,339 | $ | 3,900 | $ | 4,458 | $ | 1,983 | $ | 9,998 | ||||||||||
(1) | Excludes amounts associated with full requirements contracts where no stated minimum purchase volume is required. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) | Includes liabilities for | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) | Excludes other long-term | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(4) | At December 31,
|
54
Credit Rating Agency | ||||||||
Standard & | Moody’s | Fitch | ||||||
Entity | Description | Poor’s | Investors Service | Ratings | ||||
DTE Energy | Senior Unsecured Debt | BBB- | Baa2 | BBB | ||||
Commercial Paper | A-2 | P-2 | F2 | |||||
Detroit Edison | Senior Secured Debt | A- | ||||||
A3 | A- | |||||||
Commercial Paper | A-2 | P-2 | F2 | |||||
MichCon | Senior Secured Debt | BBB+ | A3 | BBB+ | ||||
Commercial Paper | A-2 | P-2 | F2 |
56
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58
59
60
61
62
63
55
56
57
58
59
60
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Proprietary | Structured | Economic | ||||||||||||||||||
(in Millions) | Trading | Contracts | Hedges | Other | Total | |||||||||||||||
MTM at December 31, 2006 | $ | (9 | ) | $ | (2 | ) | $ | (36 | ) | $ | (24 | ) | $ | (71 | ) | |||||
Reclassed to realized upon settlement | 22 | 1 | 17 | 16 | 56 | |||||||||||||||
Changes in fair value recorded to income | 4 | (57 | ) | 23 | (220 | )(1) | (250 | ) | ||||||||||||
Amortization of option premiums | (10 | ) | (2 | ) | — | (101 | )(2) | (113 | ) | |||||||||||
Amounts recorded to unrealized income | 16 | (58 | ) | 40 | (305 | ) | (307 | ) | ||||||||||||
Amounts recorded in Other comprehensive Income | — | — | — | (1 | ) | (1 | ) | |||||||||||||
Transfer of contracts | — | (323 | ) | — | 323 | — | ||||||||||||||
Option premiums paid and other | 1 | 37 | — | 9 | 47 | |||||||||||||||
MTM at December 31, 2007 | $ | 8 | $ | (346 | ) | $ | 4 | $ | 2 | $ | (332 | ) | ||||||||
Proprietary | Structured | Economic | Assets | |||||||||||||||||||||
(in Millions) | Trading | Contracts | Hedges | Eliminations | Other | (Liabilities) | ||||||||||||||||||
Current assets | $ | 35 | $ | 135 | $ | 29 | $ | (9 | ) | $ | 5 | $ | 195 | |||||||||||
Noncurrent assets | 9 | 194 | 8 | (4 | ) | — | 207 | |||||||||||||||||
Total MTM assets | 44 | 329 | 37 | (13 | ) | 5 | 402 | |||||||||||||||||
Current liabilities | (34 | ) | (234 | ) | (23 | ) | 9 | — | (282 | ) | ||||||||||||||
Noncurrent liabilities | (2 | ) | (441 | ) | (10 | ) | 4 | (3 | ) | (452 | ) | |||||||||||||
Total MTM liabilities | (36 | ) | (675 | ) | (33 | ) | 13 | (3 | ) | (734 | ) | |||||||||||||
Total MTM net assets (liabilities) | $ | 8 | $ | (346 | ) | $ | 4 | $ | — | $ | 2 | $ | (332 | ) | ||||||||||
64
Economic | Structured | Proprietary | ||||||||||||||||||
Hedges | Contracts | Trading | Other | Total | ||||||||||||||||
(In millions) | ||||||||||||||||||||
MTM at December 31, 2007 | $ | 4 | $ | (365 | ) | $ | 8 | $ | 2 | $ | (351 | ) | ||||||||
Reclassify to realized upon settlement | (17 | ) | 47 | 11 | (2 | ) | 39 | |||||||||||||
Changes in fair value recorded to income | 34 | 89 | 20 | 1 | 144 | |||||||||||||||
Changes in fair value recorded in regulatory liabilities | — | — | — | 2 | 2 | |||||||||||||||
Amortization of option premiums | — | (1 | ) | (1 | ) | — | (2 | ) | ||||||||||||
Amounts recorded to income | 17 | 135 | 30 | 1 | 183 | |||||||||||||||
Cumulative effect adjustment to initially apply SFAS No. 157, pre-tax | — | 7 | — | — | 7 | |||||||||||||||
Amounts recorded in other comprehensive income | — | — | — | 6 | 6 | |||||||||||||||
Change in collateral held by (for) others | (3 | ) | (7 | ) | (6 | ) | — | (16 | ) | |||||||||||
Option premiums paid and other | — | 8 | (10 | ) | — | (2 | ) | |||||||||||||
MTM at December 31, 2008 | $ | 18 | $ | (222 | ) | $ | 22 | $ | 9 | $ | (173 | ) | ||||||||
62
Economic | Structured | Proprietary | Assets | |||||||||||||||||||||
Hedges | Contracts | Trading | Eliminations | Other | (Liabilities) | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Current assets | $ | 36 | $ | 165 | $ | 116 | $ | (9 | ) | $ | 8 | $ | 316 | |||||||||||
Noncurrent assets | 8 | 129 | 3 | (1 | ) | 1 | 140 | |||||||||||||||||
Total MTM assets | 44 | 294 | 119 | (10 | ) | 9 | 456 | |||||||||||||||||
Current liabilities | (15 | ) | (209 | ) | (70 | ) | 9 | — | (285 | ) | ||||||||||||||
Noncurrent liabilities | (11 | ) | (307 | ) | (27 | ) | 1 | — | (344 | ) | ||||||||||||||
Total MTM liabilities | (26 | ) | (516 | ) | (97 | ) | 10 | — | (629 | ) | ||||||||||||||
Total MTM net assets (liabilities) | $ | 18 | $ | (222 | ) | $ | 22 | $ | — | $ | 9 | $ | (173 | ) | ||||||||||
2012 | ||||||||||||||||||||
and | Total Fair | |||||||||||||||||||
Source of Fair Value | 2009 | 2010 | 2011 | Beyond | Value | |||||||||||||||
(In millions) | ||||||||||||||||||||
Economic Hedges | $ | 21 | $ | (7 | ) | $ | (2 | ) | $ | 6 | $ | 18 | ||||||||
Structured Contracts | (45 | ) | (64 | ) | (44 | ) | (69 | ) | (222 | ) | ||||||||||
Proprietary Trading | 46 | (24 | ) | — | — | 22 | ||||||||||||||
Other | 9 | — | — | — | 9 | |||||||||||||||
Total | $ | 31 | $ | (95 | ) | $ | (46 | ) | $ | (63 | ) | $ | (173 | ) | ||||||
2011 | ||||||||||||||||||||
(in Millions) | and | Total Fair | ||||||||||||||||||
Source of Fair Value | 2008 | 2009 | 2010 | Beyond | Value | |||||||||||||||
Proprietary Trading | $ | 1 | $ | 7 | $ | — | $ | — | $ | 8 | ||||||||||
Structured Contracts | (99 | ) | (78 | ) | (52 | ) | (117 | ) | (346 | ) | ||||||||||
Economic Hedges | 6 | — | (2 | ) | — | 4 | ||||||||||||||
Other | 5 | (2 | ) | (1 | ) | — | 2 | |||||||||||||
Total | $ | (87 | ) | $ | (73 | ) | $ | (55 | ) | $ | (117 | ) | $ | (332 | ) | |||||
65
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64
Credit Exposure | ||||||||||||
before Cash | Cash | Net Credit | ||||||||||
Collateral | Collateral | Exposure | ||||||||||
(In millions) | ||||||||||||
Investment Grade(1) | ||||||||||||
A- and Greater | $ | 314 | $ | (14 | ) | $ | 300 | |||||
BBB+ and BBB | 253 | — | 253 | |||||||||
BBB- | 47 | — | 47 | |||||||||
Total Investment Grade | 614 | (14 | ) | 600 | ||||||||
Non-investment grade(2) | 25 | (1 | ) | 24 | ||||||||
Internally Rated — investment grade(3) | 206 | (2 | ) | 204 | ||||||||
Internally Rated — non-investment grade(4) | 28 | (4 | ) | 24 | ||||||||
Total | $ | 873 | $ | (21 | ) | $ | 852 | |||||
(1) | This category includes counterparties with minimum credit ratings of
|
65
Assuming a 10% | Assuming a 10% | |||||||||
Activity | increase in rates | decrease in rates | Change in the fair value of | |||||||
(In millions) | ||||||||||
Coal Contracts | $ | 1 | $ | (1 | ) | Commodity contracts | ||||
Gas Contracts | $ | (13 | ) | $ | 13 | Commodity contracts | ||||
Oil Contracts | $ | 1 | $ | (1 | ) | Commodity contracts | ||||
Power Contracts | $ | 3 | $ | (2 | ) | Commodity contracts | ||||
Interest Rate Risk | $ | (317 | ) | $ | 346 | Long-term debt | ||||
Foreign Currency Risk | $ | 5 | $ | (5 | ) | Forward contracts | ||||
Discount Rates | $ | 1 | $ | (1 | ) | Commodity contracts |
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(b) | Management’s report on internal control over financial reporting |
(c) | Changes in internal control over financial reporting |
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70
Year Ended December 31 | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In millions, Except per share amounts) | ||||||||||||
Operating Revenues | $ | 9,329 | $ | 8,475 | $ | 8,157 | ||||||
Operating Expenses | ||||||||||||
Fuel, purchased power and gas | 4,306 | 3,552 | 3,047 | |||||||||
Operation and maintenance | 2,694 | 2,892 | 2,677 | |||||||||
Depreciation, depletion and amortization | 901 | 932 | 990 | |||||||||
Taxes other than income | 304 | 357 | 309 | |||||||||
Gain on sale of non-utility business | (128 | ) | (900 | ) | — | |||||||
Other asset (gains) and losses, reserves and impairments, net | (11 | ) | 37 | 67 | ||||||||
8,066 | 6,870 | 7,090 | ||||||||||
Operating Income | 1,263 | 1,605 | 1,067 | |||||||||
Other (Income) and Deductions | ||||||||||||
Interest expense | 503 | 533 | 525 | |||||||||
Interest income | (19 | ) | (25 | ) | (26 | ) | ||||||
Other income | (104 | ) | (93 | ) | (61 | ) | ||||||
Other expenses | 64 | 35 | 93 | |||||||||
444 | 450 | 531 | ||||||||||
Income Before Income Taxes and Minority Interest | 819 | 1,155 | 536 | |||||||||
Income Tax Provision | 288 | 364 | 146 | |||||||||
Minority Interest | 5 | 4 | 1 | |||||||||
Income from Continuing Operations | 526 | 787 | 389 | |||||||||
Discontinued Operations | ||||||||||||
Income (Loss) from discontinued operations, net of tax | 22 | (4 | ) | (208 | ) | |||||||
Minority interest in discontinued operations | 2 | (188 | ) | (251 | ) | |||||||
20 | 184 | 43 | ||||||||||
Cumulative Effect of Accounting Changes, net of tax | — | — | 1 | |||||||||
Net Income | $ | 546 | $ | 971 | $ | 433 | ||||||
Basic Earnings per Common Share | ||||||||||||
Income from continuing operations | $ | 3.24 | $ | 4.64 | $ | 2.19 | ||||||
Discontinued operations | .13 | 1.09 | .24 | |||||||||
Cumulative effect of accounting changes | — | — | .01 | |||||||||
Total | $ | 3.37 | $ | 5.73 | $ | 2.44 | ||||||
Diluted Earnings per Common Share | ||||||||||||
Income from continuing operations | $ | 3.23 | $ | 4.62 | $ | 2.18 | ||||||
Discontinued operations | .13 | 1.08 | .24 | |||||||||
Cumulative effect of accounting changes | — | — | .01 | |||||||||
Total | $ | 3.36 | $ | 5.70 | $ | 2.43 | ||||||
Weighted Average Common Shares Outstanding | ||||||||||||
Basic | 162 | 169 | 177 | |||||||||
Diluted | 163 | 170 | 178 | |||||||||
Dividends Declared per Common Share | $ | 2.12 | $ | 2.12 | $ | 2.075 |
71
December 31 | ||||||||
2008 | 2007 | |||||||
(In millions) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 86 | $ | 123 | ||||
Restricted cash | 86 | 140 | ||||||
Accounts receivable (less allowance for doubtful accounts of $265 and $182, respectively) | ||||||||
Customer | 1,666 | 1,658 | ||||||
Other | 166 | 514 | ||||||
Accrued power and gas supply cost recovery revenue | 22 | 76 | ||||||
Inventories | ||||||||
Fuel and gas | 333 | 429 | ||||||
Materials and supplies | 206 | 204 | ||||||
Deferred income taxes | 227 | 387 | ||||||
Derivative assets | 316 | 181 | ||||||
Other | 220 | 196 | ||||||
Current assets held for sale | — | 83 | ||||||
3,328 | 3,991 | |||||||
Investments | ||||||||
Nuclear decommissioning trust funds | 685 | 824 | ||||||
Other | 595 | 446 | ||||||
1,280 | 1,270 | |||||||
Property | ||||||||
Property, plant and equipment | 20,065 | 18,809 | ||||||
Less accumulated depreciation and depletion | (7,834 | ) | (7,401 | ) | ||||
12,231 | 11,408 | |||||||
Other Assets | ||||||||
Goodwill | 2,037 | 2,037 | ||||||
Regulatory assets | 4,231 | 2,786 | ||||||
Securitized regulatory assets | 1,001 | 1,124 | ||||||
Intangible assets | 70 | 25 | ||||||
Notes receivable | 115 | 87 | ||||||
Derivative assets | 140 | 199 | ||||||
Prepaid pension assets | — | 152 | ||||||
Other | 157 | 116 | ||||||
Noncurrent assets held for sale | — | 547 | ||||||
7,751 | 7,073 | |||||||
Total Assets | $ | 24,590 | $ | 23,742 | ||||
72
December 31 | ||||||||
2008 | 2007 | |||||||
(In millions, except shares) | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 899 | $ | 1,189 | ||||
Accrued interest | 119 | 112 | ||||||
Dividends payable | 86 | 87 | ||||||
Short-term borrowings | 744 | 1,084 | ||||||
Current portion long-term debt, including capital leases | 362 | 454 | ||||||
Derivative liabilities | 285 | 281 | ||||||
Deferred gains and reserves | 3 | 400 | ||||||
Other | 515 | 566 | ||||||
Current liabilities associated with assets held for sale | — | 48 | ||||||
3,013 | 4,221 | |||||||
Long-Term Debt (net of current portion) | ||||||||
Mortgage bonds, notes and other | 6,458 | 5,576 | ||||||
Securitization bonds | 932 | 1,065 | ||||||
Trust preferred-linked securities | 289 | 289 | ||||||
Capital lease obligations | 62 | 41 | ||||||
7,741 | 6,971 | |||||||
Other Liabilities | ||||||||
Deferred income taxes | 1,958 | 1,824 | ||||||
Regulatory liabilities | 1,202 | 1,168 | ||||||
Asset retirement obligations | 1,340 | 1,277 | ||||||
Unamortized investment tax credit | 96 | 108 | ||||||
Derivative liabilities | 344 | 450 | ||||||
Liabilities from transportation and storage contracts | 111 | 126 | ||||||
Accrued pension liability | 871 | 68 | ||||||
Accrued postretirement liability | 1,434 | 1,094 | ||||||
Nuclear decommissioning | 114 | 134 | ||||||
Other | 328 | 318 | ||||||
Noncurrent liabilities associated with assets held for sale | — | 82 | ||||||
7,798 | 6,649 | |||||||
Commitments and Contingencies (Notes 5, 6, and 17) | ||||||||
Minority Interest | 43 | 48 | ||||||
Shareholders’ Equity | ||||||||
Common stock, without par value, 400,000,000 shares authorized, 163,019,596 and 163,232,095 shares issued and outstanding, respectively | 3,175 | 3,176 | ||||||
Retained earnings | 2,985 | 2,790 | ||||||
Accumulated other comprehensive loss | (165 | ) | (113 | ) | ||||
5,995 | 5,853 | |||||||
Total Liabilities and Shareholders’ Equity | $ | 24,590 | $ | 23,742 | ||||
73
Year Ended December 31 | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Operating Activities | ||||||||||||
Net income | $ | 546 | $ | 971 | $ | 433 | ||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||
Depreciation, depletion and amortization | 899 | 926 | 1,014 | |||||||||
Deferred income taxes | 348 | 144 | 28 | |||||||||
Gain on sale of non-utility business | (128 | ) | (900 | ) | — | |||||||
Other asset (gains), losses and reserves, net | (4 | ) | (9 | ) | (11 | ) | ||||||
Gain on sale of interests in synfuel projects | (31 | ) | (248 | ) | (38 | ) | ||||||
Impairment of synfuel projects | — | 4 | 77 | |||||||||
Partners’ share of synfuel project gains (losses) | 2 | (188 | ) | (251 | ) | |||||||
Contributions from synfuel partners | 14 | 229 | 197 | |||||||||
Cumulative effect of accounting changes | — | — | (1 | ) | ||||||||
Changes in assets and liabilities, exclusive of changes shown separately (Note 1) | (87 | ) | 196 | 8 | ||||||||
Net cash from operating activities | 1,559 | 1,125 | 1,456 | |||||||||
Investing Activities | ||||||||||||
Plant and equipment expenditures — utility | (1,183 | ) | (1,035 | ) | (1,126 | ) | ||||||
Plant and equipment expenditures — non-utility | (190 | ) | (264 | ) | (277 | ) | ||||||
Acquisitions, net of cash acquired | — | — | (42 | ) | ||||||||
Proceeds from sale of interests in synfuel projects | 84 | 447 | 246 | |||||||||
Refunds to synfuel partners | (387 | ) | (115 | ) | — | |||||||
Proceeds from sale of non-utility business | 253 | 1,262 | — | |||||||||
Proceeds from sale of other assets, net | 25 | 85 | 67 | |||||||||
Restricted cash | 54 | 6 | (21 | ) | ||||||||
Proceeds from sale of nuclear decommissioning trust fund assets | 232 | 286 | 253 | |||||||||
Investment in nuclear decommissioning trust funds | (255 | ) | (323 | ) | (284 | ) | ||||||
Other investments | (156 | ) | (19 | ) | (10 | ) | ||||||
Net cash from (used) for investing activities | (1,523 | ) | 330 | (1,194 | ) | |||||||
Financing Activities | ||||||||||||
Issuance of long-term debt | 1,310 | 50 | 612 | |||||||||
Redemption of long-term debt | (446 | ) | (393 | ) | (687 | ) | ||||||
Repurchase of long-term debt | (238 | ) | — | — | ||||||||
Short-term borrowings, net | (340 | ) | (47 | ) | 291 | |||||||
Issuance of common stock | — | — | 17 | |||||||||
Repurchase of common stock | (16 | ) | (708 | ) | (61 | ) | ||||||
Dividends on common stock | (344 | ) | (364 | ) | (365 | ) | ||||||
Other | (10 | ) | (6 | ) | (10 | ) | ||||||
Net cash used for financing activities | (84 | ) | (1,468 | ) | (203 | ) | ||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (48 | ) | (13 | ) | 59 | |||||||
Cash and Cash Equivalents Reclassified (to) from Assets Held for Sale | 11 | (11 | ) | — | ||||||||
Cash and Cash Equivalents at Beginning of Period | 123 | 147 | 88 | |||||||||
Cash and Cash Equivalents at End of Period | $ | 86 | $ | 123 | $ | 147 | ||||||
74
Accumulated | ||||||||||||||||||||
Common Stock | Retained | Other Comprehensive | ||||||||||||||||||
Shares | Amount | Earnings | Loss | Total | ||||||||||||||||
(Dollars in millions, shares in thousands) | ||||||||||||||||||||
Balance, December 31, 2005 | 177,814 | $ | 3,483 | $ | 2,557 | $ | (271 | ) | $ | 5,769 | ||||||||||
Net income | — | — | 433 | — | 433 | |||||||||||||||
Issuance of new shares | 411 | 17 | — | — | 17 | |||||||||||||||
Dividends declared on common stock | — | — | (368 | ) | — | (368 | ) | |||||||||||||
Repurchase and retirement of common stock | (1,283 | ) | (32 | ) | (29 | ) | — | (61 | ) | |||||||||||
Adjustment to initially apply SFAS No. 158, net of tax | — | — | — | (38 | ) | (38 | ) | |||||||||||||
Benefit obligations, net of tax | — | — | — | 3 | 3 | |||||||||||||||
Net change in unrealized losses on derivatives, net of tax | — | — | — | 102 | 102 | |||||||||||||||
Net change in unrealized losses on investments, net of tax | — | — | — | (7 | ) | (7 | ) | |||||||||||||
Stock-based compensation and other | 196 | (1 | ) | — | — | (1 | ) | |||||||||||||
Balance, December 31, 2006 | 177,138 | 3,467 | 2,593 | (211 | ) | 5,849 | ||||||||||||||
Net income | — | — | 971 | — | 971 | |||||||||||||||
Implementation of FIN 48 | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Dividends declared on common stock | — | — | (358 | ) | — | (358 | ) | |||||||||||||
Repurchase and retirement of common stock | (14,440 | ) | (297 | ) | (411 | ) | — | (708 | ) | |||||||||||
Benefit obligations, net of tax | — | — | — | 6 | 6 | |||||||||||||||
Net change in unrealized losses on derivatives, net of tax | — | — | — | 91 | 91 | |||||||||||||||
Net change in unrealized losses on investments, net of tax | — | — | — | 1 | 1 | |||||||||||||||
Stock-based compensation and other | 534 | 6 | — | — | 6 | |||||||||||||||
Balance, December 31, 2007 | 163,232 | 3,176 | 2,790 | (113 | ) | 5,853 | ||||||||||||||
Net income | — | — | 546 | — | 546 | |||||||||||||||
Implementation of SFAS No. 157, net of tax | — | — | 4 | — | 4 | |||||||||||||||
Implementation of SFAS No. 158 measurement date provision, net of tax | — | — | (9 | ) | — | (9 | ) | |||||||||||||
Dividends declared on common stock | — | — | (346 | ) | — | (346 | ) | |||||||||||||
Repurchase and retirement of common stock | (479 | ) | (16 | ) | — | — | (16 | ) | ||||||||||||
Benefit obligations, net of tax | — | — | — | (22 | ) | (22 | ) | |||||||||||||
Foreign exchange translation, net of tax | — | — | — | (2 | ) | (2 | ) | |||||||||||||
Net change in unrealized losses on derivatives, net of tax | — | — | — | 6 | 6 | |||||||||||||||
Net change in unrealized losses on investments, net of tax | — | — | — | (34 | ) | (34 | ) | |||||||||||||
Stock-based compensation and other | 267 | 15 | — | — | 15 | |||||||||||||||
Balance, December 31, 2008 | 163,020 | $ | 3,175 | $ | 2,985 | $ | (165 | ) | $ | 5,995 | ||||||||||
75
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Net income | $ | 546 | $ | 971 | $ | 433 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Foreign currency translation, net of taxes of $(1), $- and $- | (2 | ) | — | — | ||||||||
Benefit obligations, net of taxes of $(12), $3 and $2 | (22 | ) | 6 | 3 | ||||||||
Net unrealized gains (losses) on derivatives: | ||||||||||||
Gains (losses) arising during the period, net of taxes of $2, $(76) and $3 | 4 | (141 | ) | 6 | ||||||||
Amounts reclassified to income, net of taxes of $1, $125 and $52 | 2 | 232 | 96 | |||||||||
6 | 91 | 102 | ||||||||||
Net unrealized gains (losses) on investments: | ||||||||||||
Gains (losses) arising during the period, net of taxes of $(19), $2 and $(4) | (34 | ) | 4 | (7 | ) | |||||||
Amounts reclassified to income, net of taxes of $-, $(2)and $- | — | (3 | ) | — | ||||||||
(34 | ) | 1 | (7 | ) | ||||||||
Comprehensive income | $ | 494 | $ | 1,069 | $ | 531 | ||||||
76
Note 1
|
|
• | Detroit Edison, an electric utility engaged in the generation, purchase, distribution and sale of electric energy to approximately 2.2 million customers in southeast Michigan; | ||
• | MichCon, a natural gas utility engaged in the purchase, storage, transmission, distribution and sale | ||
79
Net | Net | Accumulated | ||||||||||||||
Unrealized | Unrealized | Other | ||||||||||||||
Losses on | Gains on | Benefit | Comprehensive | |||||||||||||
(in Millions) | Derivatives | Investments | Obligations | Loss | ||||||||||||
Beginning balances | $ | (104 | ) | $ | 15 | $ | (122 | ) | $ | (211 | ) | |||||
Current period change | 91 | 1 | 6 | 98 | ||||||||||||
Ending balance | $ | (13 | ) | $ | 16 | $ | (116 | ) | $ | (113 | ) | |||||
80
77
2008 | 2007 | |||||||
(In millions) | ||||||||
Variable Interest Entities — Consolidated | ||||||||
Total Assets | $ | 47 | $ | 113 | ||||
Total Liabilities | 39 | 81 | ||||||
Shareholders’ Equity | (4 | ) | 51 | |||||
Variable Interest Entities — Non-consolidated | ||||||||
Other Investments | $ | 191 | $ | 54 | ||||
Trust preferred — linked securities | 289 | 289 |
78
Net | Net | Accumulated | ||||||||||||||||||
Unrealized | Unrealized | Other | ||||||||||||||||||
Gains on | Losses on | Benefit | Foreign Currency | Comprehensive | ||||||||||||||||
Derivatives | Investments | Obligations | Translation | Loss | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Beginning balances | $ | (13 | ) | $ | 16 | $ | (116 | ) | $ | — | $ | (113 | ) | |||||||
Current period change | 6 | (34 | ) | (22 | ) | (2 | ) | (52 | ) | |||||||||||
Ending balance | $ | (7 | ) | $ | (18 | ) | $ | (138 | ) | $ | (2 | ) | $ | (165 | ) | |||||
79
2008 | 2007 | |||||||
(In millions) | ||||||||
Property, Plant and Equipment | ||||||||
Electric Utility | ||||||||
Generation | $ | 8,544 | $ | 8,100 | ||||
Distribution | 6,433 | 6,272 | ||||||
Total Electric Utility | 14,977 | 14,372 | ||||||
Gas Utility | ||||||||
Distribution | 2,327 | 2,392 | ||||||
Storage | 378 | 273 | ||||||
Other | 1,090 | 953 | ||||||
Total Gas Utility | 3,795 | 3,618 | ||||||
Non-utility and other | 1,293 | 1,423 | ||||||
Assets held for sale | — | (604 | ) | |||||
Total Property, Plant and Equipment | 20,065 | 18,809 | ||||||
Less Accumulated Depreciation and Depletion | ||||||||
Electric Utility | ||||||||
Generation | (3,690 | ) | (3,539 | ) | ||||
Distribution | (2,138 | ) | (2,101 | ) | ||||
Total Electric Utility | (5,828 | ) | (5,640 | ) | ||||
Gas Utility | ||||||||
Distribution | (955 | ) | (970 | ) | ||||
Storage | (107 | ) | (100 | ) | ||||
Other | (603 | ) | (538 | ) | ||||
Total Gas Utility | (1,665 | ) | (1,608 | ) | ||||
Non-utility and other | (341 | ) | (350 | ) | ||||
Assets held for sale | — | 197 | ||||||
Total Accumulated Depreciation and Depletion | (7,834 | ) | (7,401 | ) | ||||
Net Property, Plant and Equipment | $ | 12,231 | $ | 11,408 | ||||
80
Estimated Useful Lives in Years | ||||||||||||
Utility | Generation | Distribution | Transmission | |||||||||
Electric | 40 | 37 | N/A | |||||||||
Gas | N/A | 40 | 38 |
(in Millions) | 2007 | 2006 | ||||||
Property, Plant and Equipment | ||||||||
Electric Utility | ||||||||
Generation | $ | 8,100 | $ | 7,667 | ||||
Distribution | 6,272 | 6,249 | ||||||
Total Electric Utility | 14,372 | 13,916 | ||||||
Gas Utility | ||||||||
Distribution | 2,392 | 2,175 | ||||||
Storage | 241 | 245 | ||||||
Other | 985 | 985 | ||||||
Total Gas Utility | 3,618 | 3,405 | ||||||
Non-utility and other | 1,423 | 1,903 | ||||||
Assets held for sale | (604 | ) | — | |||||
Total Property, Plant and Equipment | 18,809 | 19,224 | ||||||
Less Accumulated Depreciation and Depletion | ||||||||
Electric Utility | ||||||||
Generation | (3,539 | ) | (3,410 | ) | ||||
Distribution | (2,101 | ) | (2,170 | ) | ||||
Total Electric Utility | (5,640 | ) | (5,580 | ) | ||||
Gas Utility | ||||||||
Distribution | (970 | ) | (926 | ) | ||||
Storage | (100 | ) | (108 | ) | ||||
Other | (538 | ) | (513 | ) | ||||
Total Gas Utility | (1,608 | ) | (1,547 | ) | ||||
Non-utility and other | (350 | ) | (646 | ) | ||||
Assets held for sale | 197 | — | ||||||
Total Accumulated Depreciation and Depletion | (7,401 | ) | (7,773 | ) | ||||
Net Property, Plant and Equipment | $ | 11,408 | $ | 11,451 | ||||
81
Estimated Useful Lives in Years | ||||||||||||
Utility | Generation | Distribution | Transmission | |||||||||
Electric | 40 | 37 | N/A | |||||||||
Gas | N/A | 40 | 37 |
81
82
(in Millions) | ||||||||
Asset retirement obligations at January 1, 2007 | $ | 1,221 | ||||||
(In millions) | ||||||||
Asset retirement obligations at January 1, 2008 | $ | 1,293 | ||||||
Accretion | 78 | 84 | ||||||
Liabilities incurred | 4 | 2 | ||||||
Liabilities settled | (21 | ) | (18 | ) | ||||
Assets held for sale | (16 | ) | ||||||
Transfers from Assets held for sale | 14 | |||||||
Revision in estimated cash flows | 27 | (14 | ) | |||||
Asset retirement obligations at December 31, 2007 | 1,293 | |||||||
Asset retirement obligations at December 31, 2008 | 1,361 | |||||||
Less amount included in current liabilities | (16 | ) | (21 | ) | ||||
$ | 1,277 | $ | 1,340 | |||||
83
82
Total | ||||
(In millions) | ||||
Balance at December 31, 2006 | $ | 2,057 | ||
Synthetic fuels impairment | (4 | ) | ||
Sale of non-utility businesses and other | (16 | ) | ||
Balance at December 31, 2007 | $ | 2,037 | ||
Balance at December 31, 2008 | $ | 2,037 | ||
83
84
84
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Changes in Assets and Liabilities, Exclusive of Changes Shown Separately | ||||||||||||||||||||||||
Accounts receivable, net | $ | (102 | ) | $ | 441 | $ | (633 | ) | $ | 328 | $ | (163 | ) | $ | 385 | |||||||||
Accrued GCR revenue | (10 | ) | 120 | (16 | ) | (71 | ) | (10 | ) | 120 | ||||||||||||||
Inventories | 80 | (49 | ) | (6 | ) | 96 | 80 | (49 | ) | |||||||||||||||
Recoverable pension and postretirement costs | 738 | (1,184 | ) | 61 | (1,324 | ) | 738 | (1,184 | ) | |||||||||||||||
Accrued/prepaid pensions | (401 | ) | 218 | 17 | 944 | (401 | ) | 218 | ||||||||||||||||
Accounts payable | 6 | (68 | ) | 290 | (286 | ) | 5 | (10 | ) | |||||||||||||||
Accrued PSCR refund | 41 | (101 | ) | (127 | ) | 82 | 41 | (101 | ) | |||||||||||||||
Income taxes payable | (19 | ) | 46 | (38 | ) | (22 | ) | (19 | ) | 46 | ||||||||||||||
Risk management and trading activities | 160 | (518 | ) | 353 | ||||||||||||||||||||
Derivative assets and liabilities | (178 | ) | 222 | (520 | ) | |||||||||||||||||||
Postretirement obligation | (320 | ) | 1,008 | 132 | 340 | (320 | ) | 1,008 | ||||||||||||||||
Other assets | (430 | ) | (134 | ) | (9 | ) | (51 | ) | (430 | ) | (134 | ) | ||||||||||||
Other liabilities | 453 | 229 | (102 | ) | 55 | 453 | 229 | |||||||||||||||||
$ | 196 | $ | 8 | $ | (78 | ) | $ | (87 | ) | $ | 196 | $ | 8 | |||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Cash paid for: | ||||||||||||
Interest (net of interest capitalized) | $ | 537 | $ | 526 | $ | 516 | ||||||
Income taxes | $ | 326 | $ | 89 | $ | 80 | ||||||
Noncash investing and financing activities | ||||||||||||
Notes received from sale of synfuel projects | $ | — | $ | — | $ | 20 | ||||||
Sale of assets | ||||||||||||
Note receivable | $ | — | $ | — | $ | 47 | ||||||
Other assets | $ | — | $ | — | $ | 45 |
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Cash paid (received) for: | ||||||||||||
Interest (net of interest capitalized) | $ | 496 | $ | 537 | $ | 526 | ||||||
Income taxes | $ | (59 | ) | $ | 326 | $ | 89 |
85
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Electric utility | $ | 8 | $ | (6 | ) | $ | (26 | ) | ||||
Non-utility: | ||||||||||||
Barnett shale | 27 | (4 | ) | — | ||||||||
Waste coal recovery | — | 19 | — | |||||||||
Landfill gas recovery | — | 14 | — | |||||||||
Power generation | — | 42 | — | |||||||||
27 | 71 | — | ||||||||||
Other | 2 | 2 | 3 | |||||||||
$ | 37 | $ | 67 | $ | (23 | ) | ||||||
Note | Title | |||
2 | New Accounting Pronouncements | |||
5 | Regulatory Matters | |||
8 | Income Taxes | |||
15 | Fair Value | |||
16 | Financial and Other Derivative Instruments | |||
Retirement Benefits and Trusteed Assets | ||||
Stock-based Compensation |
85
NOTE 2 — | NEW ACCOUNTING PRONOUNCEMENTS |
86
86
87
As Previously | FSP FIN 39-1 | |||||||||||
Reported | Adjustments | As Adjusted | ||||||||||
(In millions) | ||||||||||||
Current Assets | ||||||||||||
Accounts receivable-other | $ | 504 | $ | 10 | $ | 514 | ||||||
Derivative assets | 195 | (14 | ) | 181 | ||||||||
Other Assets | ||||||||||||
Derivative assets | 207 | (8 | ) | 199 | ||||||||
Current Liabilities | ||||||||||||
Accounts payable | 1,198 | (9 | ) | 1,189 | ||||||||
Derivative liabilities | 282 | (1 | ) | 281 | ||||||||
Other Liabilities | ||||||||||||
Derivative liabilities | 452 | (2 | ) | 450 |
87
88
NOTE 3 — | DISPOSALS AND DISCONTINUED OPERATIONS |
88
89
(in Millions) | ||||||||
(In millions) | ||||||||
Cash and cash equivalents | $ | 11 | $ | 11 | ||||
Accounts receivable (less allowance for doubtful accounts of $4) | 65 | 65 | ||||||
Inventories | 4 | 4 | ||||||
Other current assets | 3 | 3 | ||||||
Total current assets held for sale | 83 | 83 | ||||||
Investments | 55 | 55 | ||||||
Property, plant and equipment, net of accumulated depreciation of $183 | 285 | 285 | ||||||
Intangible assets | 38 | 38 | ||||||
Long-term notes receivable | 46 | 46 | ||||||
Other noncurrent assets | 1 | 1 | ||||||
Total noncurrent assets held for sale | 425 | 425 | ||||||
Total assets held for sale | $ | 508 | $ | 508 | ||||
Accounts payable | $ | 38 | $ | 38 | ||||
Other current liabilities | 10 | 10 | ||||||
Total current liabilities associated with assets held for sale | 48 | 48 | ||||||
Long-term debt (including capital lease obligations of $31) | 53 | 53 | ||||||
Asset retirement obligations | 16 | 16 | ||||||
Other liabilities | 13 | 13 | ||||||
Total noncurrent liabilities associated with assets held for sale | 82 | 82 | ||||||
Total liabilities related to assets held for sale | $ | 130 | $ | 130 | ||||
89
90
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Operating Revenues | $ | 1,069 | $ | 863 | $ | 927 | $ | 7 | $ | 1,069 | $ | 863 | ||||||||||||
Operation and Maintenance | 1,265 | 1,019 | 1,167 | 9 | 1,265 | 1,019 | ||||||||||||||||||
Depreciation and Amortization | (6 | ) | 24 | 58 | (2 | ) | (6 | ) | 24 | |||||||||||||||
Taxes other than Income | 5 | 12 | 20 | (1 | ) | 5 | 12 | |||||||||||||||||
Asset (Gains) and Losses, Reserves and Impairments, Net (1) | (280 | ) | 40 | (367 | ) | |||||||||||||||||||
Asset (Gains) and Losses, Reserves and Impairments, Net(1) | (31 | ) | (280 | ) | 40 | |||||||||||||||||||
Operating Income (Loss) | 85 | (232 | ) | 49 | 32 | 85 | (232 | ) | ||||||||||||||||
Other (Income) and Deductions | (9 | ) | (20 | ) | (34 | ) | (2 | ) | (9 | ) | (20 | ) | ||||||||||||
Minority Interest | (188 | ) | (251 | ) | (318 | ) | 2 | (188 | ) | (251 | ) | |||||||||||||
Income Taxes | ||||||||||||||||||||||||
Provision | 98 | 14 | 139 | 13 | 98 | 14 | ||||||||||||||||||
Production Tax Credits | (21 | ) | (23 | ) | (43 | ) | (1 | ) | (21 | ) | (23 | ) | ||||||||||||
77 | (9 | ) | 96 | 12 | 77 | (9 | ) | |||||||||||||||||
Net Income (1) | $ | 205 | $ | 48 | $ | 305 | ||||||||||||||||||
Net Income(1) | $ | 20 | $ | 205 | $ | 48 | ||||||||||||||||||
(1) | Includes intercompany pre-tax gain of $32 million ($21 million after-tax) for 2007. |
90
Year Ended December 31 | ||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Revenues (1) | $ | — | $ | 1 | $ | 1 | ||||||
Expenses | — | 3 | 2 | |||||||||
Loss before income taxes | — | (2 | ) | (1 | ) | |||||||
Income tax benefit | — | — | — | |||||||||
Loss from discontinued operations | $ | — | $ | (2 | ) | $ | (1 | ) | ||||
Year Ended December 31 | ||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Revenues (1) | $ | — | $ | 1 | $ | 18 | ||||||
Expenses | — | 6 | 67 | |||||||||
Loss before income taxes | — | (5 | ) | (49 | ) | |||||||
Income tax benefit | — | (2 | ) | (14 | ) | |||||||
Loss from discontinued operations | $ | — | $ | (3 | ) | $ | (35 | ) | ||||
91
91
92
Note 5.92
Employee Severance Costs | Other Costs | Total Cost | Employee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in Millions) | 2007 | 2006 | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance Costs | Other Costs | Total Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | 2008 | 2007 | 2006 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs incurred: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric Utility | $ | 15 | $ | 51 | $ | 50 | $ | 56 | $ | 65 | $ | 107 | $ | — | $ | 15 | $ | 51 | $ | 26 | $ | 50 | $ | 56 | $ | 26 | $ | 65 | $ | 107 | ||||||||||||||||||||||||||||||
Gas Utility | 3 | 17 | 6 | 7 | 9 | 24 | — | 3 | 17 | 7 | 6 | 7 | 7 | 9 | 24 | |||||||||||||||||||||||||||||||||||||||||||||
Other | 1 | 2 | 1 | 1 | 2 | 3 | — | 1 | 2 | 3 | 1 | 1 | 3 | 2 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
Total costs | 19 | 70 | 57 | 64 | 76 | 134 | — | 19 | 70 | 36 | 57 | 64 | 36 | 76 | 134 | |||||||||||||||||||||||||||||||||||||||||||||
Less amounts deferred or capitalized: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric Utility | 15 | 51 | 50 | 56 | 65 | 107 | — | 15 | 51 | 26 | 50 | 56 | 26 | 65 | 107 | |||||||||||||||||||||||||||||||||||||||||||||
Amount expensed | $ | 4 | $ | 19 | $ | 7 | $ | 8 | $ | 11 | $ | 27 | $ | — | $ | 4 | $ | 19 | $ | 10 | 7 | $ | 8 | $ | 10 | $ | 11 | $ | 27 | |||||||||||||||||||||||||||||||
NOTE 5 — | REGULATORY MATTERS |
93
93
(in Millions) | 2007 | 2006 | ||||||||||||||
2008 | 2007 | |||||||||||||||
(In millions) | ||||||||||||||||
Assets | ||||||||||||||||
Securitized regulatory assets | $ | 1,124 | $ | 1,235 | $ | 1,001 | $ | 1,124 | ||||||||
Recoverable income taxes related to securitized regulatory assets | $ | 616 | $ | 677 | $ | 549 | $ | 616 | ||||||||
Recoverable pension and postretirement costs | 991 | 1,728 | ||||||||||||||
Pension | 1,505 | 495 | ||||||||||||||
Postretirement costs | 787 | 496 | ||||||||||||||
Asset retirement obligation | 266 | 236 | 452 | 266 | ||||||||||||
Other recoverable income taxes | 94 | 100 | 89 | 94 | ||||||||||||
Recoverable costs under PA 141 | ||||||||||||||||
Excess capital expenditures | 11 | 22 | 4 | 11 | ||||||||||||
Deferred Clean Air Act expenditures | 28 | 67 | 10 | 28 | ||||||||||||
Midwest Independent System Operator charges | 23 | 48 | 8 | 23 | ||||||||||||
Electric Customer Choice implementation costs | 58 | 78 | 37 | 58 | ||||||||||||
Enhanced security costs | 10 | 13 | 6 | 10 | ||||||||||||
Unamortized loss on reacquired debt | 67 | 69 | 73 | 67 | ||||||||||||
Deferred environmental costs | 41 | 40 | 43 | 41 | ||||||||||||
Accrued PSCR/GCR revenue | 76 | 117 | 22 | 76 | ||||||||||||
Recoverable uncollectibles expense | 42 | 45 | 122 | 42 | ||||||||||||
Cost to achieve Performance Excellence Process | 146 | 102 | 154 | 146 | ||||||||||||
Enterprise Business Systems costs | 26 | 9 | 26 | 26 | ||||||||||||
Deferred income taxes — Michigan Business Tax | 364 | — | 394 | 364 | ||||||||||||
Other | 3 | 3 | 2 | 3 | ||||||||||||
2,862 | 3,354 | 4,283 | 2,862 | |||||||||||||
Less amount included in current assets | (76 | ) | (128 | ) | (52 | ) | (76 | ) | ||||||||
$ | 2,786 | $ | 3,226 | $ | 4,231 | $ | 2,786 | |||||||||
Liabilities | ||||||||||||||||
Asset removal costs | $ | 581 | $ | 576 | ||||||||||||
Accrued pension | 115 | 72 | ||||||||||||||
Safety and training cost refund | — | 3 | ||||||||||||||
Accrued PSCR/GCR refund | 70 | 81 | ||||||||||||||
Refundable income taxes | 104 | 114 | ||||||||||||||
Fermi 2 refueling outage | 4 | 16 | ||||||||||||||
Deferred income taxes — Michigan Business Tax | 364 | — | ||||||||||||||
Other | 5 | 2 | ||||||||||||||
1,243 | 864 | |||||||||||||||
Less amount included in current liabilities | (75 | ) | (99 | ) | ||||||||||||
$ | 1,168 | $ | 765 | |||||||||||||
94
2008 | 2007 | |||||||
(In millions) | ||||||||
Liabilities | ||||||||
Asset removal costs | $ | 534 | $ | 581 | ||||
Accrued pension | ||||||||
Pension equalization mechanism | 72 | 44 | ||||||
Negative pension offset | 110 | 71 | ||||||
Accrued PSCR/GCR refund | 11 | 70 | ||||||
Refundable costs under PA 141 | 16 | — | ||||||
Refundable income taxes | 93 | 104 | ||||||
Fermi 2 refueling outage | 25 | 4 | ||||||
Deferred income taxes — Michigan Business Tax | 388 | 364 | ||||||
Other | 5 | 5 | ||||||
1,254 | 1,243 | |||||||
Less amount included in current liabilities | (52 | ) | (75 | ) | ||||
$ | 1,202 | $ | 1,168 | |||||
• | Securitized regulatory assets— The net book balance of the Fermi 2 nuclear plant was written off in 1998 and an equivalent regulatory asset was established. In 2001, the Fermi 2 regulatory asset and certain other regulatory assets were securitized pursuant to PA 142 and an MPSC order. A non-bypassable securitization bond surcharge recovers the securitized regulatory asset over a fourteen-year period ending in 2015. | |
• | Recoverable income taxes related to securitized regulatory assets— Receivable for the recovery of income taxes to be paid on the non-bypassable securitization bond surcharge. A non-bypassable securitization tax surcharge recovers the income tax over a fourteen-year period ending 2015. | |
• | Recoverable pension and postretirement costs— In 2007, the Company adopted SFAS No. 158 which required, among other things, the recognition in other comprehensive income of the actuarial gains or losses and the prior service costs that arise during the period but that are not immediately recognized as components of net periodic benefit costs. The Company received approval from the MPSC to record the charge related to the additional liability as a regulatory asset since the traditional rate setting process allows for the recovery of pension and postretirement |
94
• | Asset retirement obligation— Asset retirement obligations were recorded pursuant to adoption of SFAS No. 143 and FIN 47. These obligations are primarily for Fermi 2 decommissioning |
95
• | Other recoverable income taxes— Income taxes receivable from Detroit Edison’s customers representing the difference in property-related deferred income taxes receivable and amounts previously reflected in Detroit Edison’s rates. This asset will reverse over the remaining life of the related plant. (1) | |
• | Excess capital expenditures— PA 141 permits, after MPSC authorization, the recovery of and a return on capital expenditures that exceed a base level of depreciation expense. | |
• | Deferred Clean Air Act expenditures— PA 141 permits, after MPSC authorization, the recovery of and a return on Clean Air Act expenditures. | |
• | Midwest Independent System Operator charges— PA 141 permits, after MPSC authorization, the recovery of and a return on charges from a regional transmission operator such as the Midwest Independent System Operator. | |
• | Electric Customer Choice implementation costs— PA 141 permits, after MPSC authorization, the recovery of and a return on costs incurred associated with the implementation of the electric Customer Choice program. | |
• | Enhanced security costs — | |
• | Unamortized loss on reacquired debt— The unamortized discount, premium and expense related to debt redeemed with a refinancing are deferred, amortized and recovered over the life of the replacement issue. | |
• | Deferred environmental costs— The MPSC approved the deferral and recovery of investigation and remediation costs associated with Gas Utility’s former MGP sites. This asset is offset in working capital by an environmental liability reserve. The amortization of the regulatory asset is not included in MichCon’s current rates because it is offset by the recognition of insurance proceeds. MichCon will request recovery of the remaining asset balance in future rate filings after the recognition of insurance proceeds is complete. (1) | |
• | Accrued PSCR revenue— Receivable for the temporary under-recovery of and a return on fuel and purchased power costs incurred by Detroit Edison which are recoverable through the PSCR mechanism. | |
• | Accrued GCR revenue— Receivable for the temporary under-recovery of and a return on gas costs incurred by MichCon which are recoverable through the GCR mechanism. | |
• | Recoverable uncollectibles expense— MichCon receivable for the MPSC approved uncollectible expensetrue-up mechanism that tracks the difference in the fluctuation in uncollectible accounts and amounts recognized pursuant to the MPSC authorization. | |
• | Cost to achieve Performance Excellence Process (PEP)— The MPSC authorized the deferral of costs to implement the PEP. These costs consist of employee severance, project management and consultant support. These costs will be amortized over a ten-year period beginning with the year subsequent to the year the costs were deferred. | |
• | Enterprise Business Systems (EBS) costs— | |
• | Deferred income taxes — Michigan Business Tax (MBT)- In July 2007, the MBT was enacted by the State of Michigan. State deferred tax liabilities were established for the Company’s utilities, and offsetting regulatory assets were recorded as the impacts of the deferred tax liabilities will be reflected in |
96
(1) | Regulatory assets not earning a return. |
• | Asset removal costs— The amount collected from customers for the funding of future asset removal activities. | |
• | ||
• | ||
• | Accrued PSCR refund— Payable for the temporary over-recovery of and a return on power supply costs and transmission costs incurred by Detroit Edison which are recoverable through the PSCR mechanism. |
95
• | Accrued GCR | |
• | Refundable costs under PA 141 —Detroit Edison’s 2007 Choice Incentive Mechanism (CIM) reconciliation and allocation resulted in the elimination of Regulatory Asset Recovery Surcharge (RARS) balances for commercial and industrial customers. RARS revenues received in 2008 that exceed the regulatory asset balances are required to be refunded to the affected classes. | |
• | Refundable income taxes— Income taxes refundable to MichCon’s customers representing the difference in property-related deferred income taxes payable and amounts recognized pursuant to MPSC authorization. | |
• | Fermi 2 refueling outage— Accrued liability for refueling outage at Fermi 2 pursuant to MPSC authorization. | |
• | Deferred income taxes — Michigan Business Tax —In July 2007, the MBT was enacted by the State of Michigan. State deferred tax assets were established for the Company’s utilities, and offsetting regulatory liabilities were recorded as the impacts of the deferred tax assets will be reflected in rates. |
97
• | In order to more accurately reflect the actual cost of providing service to business customers, the MPSC adopted an immediate 39% phase out of the residential rate subsidy, with the remaining amount to be eliminated in equal installments over the next five years, every October 1. | |
• | Accepted Detroit Edison’s proposal to reinstate and modify the tracking mechanism on Electric Choice sales (CIM) with a base level of 1,561 GWh. The modified mechanism will not have a cap on the amount recoverable. | |
• | Accepted Detroit Edison’s proposal to terminate the Pension Equalization Mechanism. | |
• | Approved an annual reconciliation mechanism to track expenses associated with restoration costs (storm and non-storm related expenses) and line clearance expenses. Annual reconciliations will be required using a base expense level of $110 million and $51 million, respectively. | |
• | Approved Detroit Edison’s proposal to recover a return on $15 million of costs in working capital associated with expenses associated with preparation of an application for a new nuclear generation facility at its current Fermi 2 site. |
98
• | |||
• |
96
• | |||
• | |||
• |
97
99
98
99
100
101
100
102
101
103
NOTE 6 — | NUCLEAR OPERATIONS |
102
104
103
As of December 31 2008 2007 (In millions) Fermi 2 $ 649 $ 778 Fermi 1 3 13 Low level radioactive waste 33 33 Total $ 685 $ 824
As of December 31 | ||||||||
(in Millions) | 2007 | 2006 | ||||||
Fermi 2 | $ | 778 | $ | 694 | ||||
Fermi 1 | 13 | 15 | ||||||
Low level radioactive waste | 33 | 31 | ||||||
Total | $ | 824 | $ | 740 | ||||
105
Year Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(in Millions) | ||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Realized gains | $ | 25 | $ | 21 | $ | 11 | $ | 34 | $ | 25 | $ | 21 | ||||||||||||
Realized losses | $ | (17 | ) | $ | (9 | ) | $ | (8 | ) | $ | (49 | ) | $ | (17 | ) | $ | (9 | ) | ||||||
Proceeds from sales of securities | $ | 286 | $ | 253 | $ | 201 | $ | 232 | $ | 286 | $ | 253 |
Fair | Unrealized | |||||||
Value | Gains | |||||||
(In millions) | ||||||||
As of December 31, 2008 | ||||||||
Equity Securities | $ | 288 | $ | 65 | ||||
Debt Securities | 388 | 17 | ||||||
Cash and Cash Equivalents | 9 | — | ||||||
$ | 685 | $ | 82 | |||||
As of December 31, 2007 | ||||||||
Equity Securities | $ | 443 | $ | 170 | ||||
Debt Securities | 373 | 9 | ||||||
Cash and Cash Equivalents | 8 | — | ||||||
$ | 824 | $ | 179 | |||||
Total | ||||||||
Fair | Unrealized | |||||||
(in Millions) | Value | Gains | ||||||
As of December 31, 2007 | ||||||||
Equity Securities | $ | 443 | $ | 170 | ||||
Debt Securities | 373 | 9 | ||||||
Cash and Cash Equivalents | 8 | — | ||||||
$ | 824 | $ | 179 | |||||
As of December 31, 2006 | ||||||||
Equity Securities | $ | 399 | $ | 140 | ||||
Debt Securities | 316 | 4 | ||||||
Cash and Cash Equivalents | 25 | — | ||||||
$ | 740 | $ | 144 | |||||
104
106
NOTE 7 — | JOINTLY OWNED UTILITY PLANT |
Ludington | ||||||||||||||||
Ludington | Hydroelectric | |||||||||||||||
Hydroelectric | Belle River | Pumped Storage | ||||||||||||||
Belle River | Pumped Storage | |||||||||||||||
In-service date | 1984-1985 | 1973 | 1984-1985 | 1973 | ||||||||||||
Total plant capacity | 1,026 | MW | 1,872 | MW | 1,260MW | 1,872MW | ||||||||||
Ownership interest | * | 49 | % | * | 49 | % | ||||||||||
Investment (in Millions) | $ | 1,575 | $ | 164 | $ | 1,588 | $ | 165 | ||||||||
Accumulated depreciation (in Millions) | $ | 847 | $ | 101 | $ | 853 | $ | 106 |
* | Detroit Edison’s ownership interest is 63% in Unit No. 1, 81% of the facilities applicable to Belle River used jointly by the Belle River and St. Clair Power Plants and 75% in common facilities used at Unit No. 2. |
105
107
NOTE 8 — | INCOME TAXES |
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Income before income taxes and minority interest | $ | 1,155 | $ | 536 | $ | 415 | $ | 819 | $ | 1,155 | $ | 536 | ||||||||||||
Less minority interest | 4 | 1 | 37 | 5 | 4 | 1 | ||||||||||||||||||
Income from continuing operations before tax | $ | 1,151 | $ | 535 | $ | 378 | $ | 814 | $ | 1,151 | $ | 535 | ||||||||||||
Income tax expense at 35% statutory rate | $ | 403 | $ | 187 | $ | 132 | $ | 285 | $ | 403 | $ | 187 | ||||||||||||
Production tax credits | (11 | ) | (12 | ) | (10 | ) | (7 | ) | (11 | ) | (12 | ) | ||||||||||||
Investment tax credits | (8 | ) | (8 | ) | (8 | ) | (7 | ) | (8 | ) | (8 | ) | ||||||||||||
Depreciation | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (4 | ) | ||||||||||||
Employee Stock Ownership Plan dividends | (5 | ) | (5 | ) | (5 | ) | (4 | ) | (5 | ) | (5 | ) | ||||||||||||
Medicare part D subsidy | (6 | ) | (6 | ) | (7 | ) | (5 | ) | (6 | ) | (6 | ) | ||||||||||||
State and local income taxes, net of federal benefit | 23 | 2 | 5 | |||||||||||||||||||||
Other, net | (5 | ) | (6 | ) | 8 | 7 | (7 | ) | (11 | ) | ||||||||||||||
Income tax expense from continuing operations | $ | 364 | $ | 146 | $ | 106 | $ | 288 | $ | 364 | $ | 146 | ||||||||||||
Effective federal income tax rate | 31.6 | % | 27.3 | % | 28.0 | % | ||||||||||||||||||
Effective income tax rate | 35.4 | % | 31.6 | % | 27.3 | % | ||||||||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
Continuing operations | ||||||||||||||||||||||||
Current federal and other income tax expense | $ | 277 | $ | 88 | $ | 78 | ||||||||||||||||||
Deferred federal income tax expense | 87 | 58 | 28 | |||||||||||||||||||||
364 | 146 | 106 | 2008 | 2007 | 2006 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Continuing operations | ||||||||||||||||||||||||
Current income taxes | ||||||||||||||||||||||||
Federal | $ | 130 | $ | 276 | $ | 90 | ||||||||||||||||||
State and other income tax expense | 17 | 1 | (2 | ) | ||||||||||||||||||||
Total current income taxes | 147 | 277 | 88 | |||||||||||||||||||||
Deferred income taxes | ||||||||||||||||||||||||
Federal | 121 | 85 | 48 | |||||||||||||||||||||
State and other income tax expense | 20 | 2 | 10 | |||||||||||||||||||||
Total deferred income taxes | 141 | 87 | 58 | |||||||||||||||||||||
Total income taxes from continuing operations | 288 | 364 | 146 | |||||||||||||||||||||
Discontinued operations | 66 | (11 | ) | 83 | 12 | 66 | (11 | ) | ||||||||||||||||
Cumulative effect of accounting changes | — | 1 | (2 | ) | — | — | 1 | |||||||||||||||||
Total | $ | 430 | $ | 136 | $ | 187 | $ | 300 | $ | 430 | $ | 136 | ||||||||||||
108
106
(in Millions) | 2007 | 2006 | ||||||||||||||
2008 | 2007 | |||||||||||||||
(In millions) | ||||||||||||||||
Property, plant and equipment | $ | (1,384 | ) | $ | (1,358 | ) | $ | (1,734 | ) | $ | (1,384 | ) | ||||
Securitized regulatory assets | (621 | ) | (670 | ) | (545 | ) | (621 | ) | ||||||||
Alternative minimum tax credit carryforward | 186 | 438 | ||||||||||||||
Alternative minimum tax credit carry-forwards | 224 | 186 | ||||||||||||||
Merger basis differences | 57 | 60 | 51 | 57 | ||||||||||||
Pension and benefits | 28 | 16 | 33 | 28 | ||||||||||||
Other comprehensive income | 62 | 113 | 81 | 62 | ||||||||||||
Risk management assets and liabilities | 142 | 62 | ||||||||||||||
Net operating loss carryforward | 28 | 51 | ||||||||||||||
Derivative assets and liabilities | 109 | 142 | ||||||||||||||
State net operating loss and credit carry-forwards | 42 | 28 | ||||||||||||||
Other | 93 | 88 | 50 | 93 | ||||||||||||
(1,409 | ) | (1,200 | ) | (1,689 | ) | (1,409 | ) | |||||||||
Less valuation allowance | (28 | ) | (20 | ) | (42 | ) | (28 | ) | ||||||||
$ | (1,437 | ) | $ | (1,220 | ) | |||||||||||
$ | (1,731 | ) | $ | (1,437 | ) | |||||||||||
Current deferred income tax assets | $ | 387 | $ | 245 | $ | 227 | $ | 387 | ||||||||
Long-term deferred income tax liabilities | (1,824 | ) | (1,465 | ) | (1,958 | ) | (1,824 | ) | ||||||||
$ | (1,437 | ) | $ | (1,220 | ) | $ | (1,731 | ) | $ | (1,437 | ) | |||||
Deferred income tax assets | $ | 1,771 | $ | 1,834 | $ | 1,406 | $ | 1,771 | ||||||||
Deferred income tax liabilities | (3,208 | ) | (3,054 | ) | (3,137 | ) | (3,208 | ) | ||||||||
$ | (1,437 | ) | $ | (1,220 | ) | $ | (1,731 | ) | $ | (1,437 | ) | |||||
109
107
(in Millions) | ||||||||||||
Balance at January 1, 2007 | $ | 45 | ||||||||||
2008 | 2007 | |||||||||||
(In millions) | ||||||||||||
Balance at January 1 | $ | 22 | $ | 45 | ||||||||
Additions for tax positions of prior years | 4 | 12 | 4 | |||||||||
Reductions for tax positions of prior years | (8 | ) | (5 | ) | (8 | ) | ||||||
Additions for tax positions related to the current year | 47 | — | ||||||||||
Settlements | (15 | ) | (1 | ) | (15 | ) | ||||||
Lapse of statute of limitations | (4 | ) | (3 | ) | (4 | ) | ||||||
Balance at December 31, 2007 | $ | 22 | ||||||||||
Balance at December 31 | $ | 72 | $ | 22 | ||||||||
110
108
NOTE 9 — |
111
NOTE 10 — | EARNINGS PER SHARE |
(in Millions, except per share amounts) | 2007 | 2006 | 2005 | |||||||||
Basic Earnings per Share | ||||||||||||
Income from continuing operations | $ | 787 | $ | 389 | $ | 272 | ||||||
Average number of common shares outstanding | 169 | 177 | 175 | |||||||||
Income per share of common stock based on weighted average number of shares outstanding | $ | 4.64 | $ | 2.19 | $ | 1.56 | ||||||
Diluted Earnings per Share | ||||||||||||
Income from continuing operations | $ | 787 | $ | 389 | $ | 272 | ||||||
Average number of common shares outstanding | 169 | 177 | 175 | |||||||||
Incremental shares from stock-based awards | 1 | 1 | 1 | |||||||||
Average number of dilutive shares outstanding | 170 | 178 | 176 | |||||||||
Income per share of common stock assuming issuance of incremental shares | $ | 4.62 | $ | 2.18 | $ | 1.55 | ||||||
109
2008 | 2007 | 2006 | ||||||||||
(In millions, except per share amounts) | ||||||||||||
Basic Earnings per Share | ||||||||||||
Income from continuing operations | $ | 526 | $ | 787 | $ | 389 | ||||||
Average number of common shares outstanding | 162 | 169 | 177 | |||||||||
Income per share of common stock based on weighted average number of shares outstanding | $ | 3.24 | $ | 4.64 | $ | 2.19 | ||||||
Diluted Earnings per Share | ||||||||||||
Income from continuing operations | $ | 526 | $ | 787 | $ | 389 | ||||||
Average number of common shares outstanding | 162 | 169 | 177 | |||||||||
Incremental shares from stock-based awards | 1 | 1 | 1 | |||||||||
Average number of dilutive shares outstanding | 163 | 170 | 178 | |||||||||
Income per share of common stock assuming issuance of incremental shares | $ | 3.23 | $ | 4.62 | $ | 2.18 | ||||||
112
NOTE 11 — | LONG-TERM DEBT |
(in Millions) | 2007 | 2006 | ||||||||||||||
2008 | 2007 | |||||||||||||||
(In millions) | ||||||||||||||||
Mortgage bonds, notes, and other | ||||||||||||||||
DTE Energy Debt, Unsecured | ||||||||||||||||
6.7% due 2009 to 2033 | $ | 1,496 | $ | 1,669 | $ | 1,497 | $ | 1,496 | ||||||||
Detroit Edison Taxable Debt, Principally Secured | ||||||||||||||||
5.9% due 2010 to 2038 | 2,305 | 2,267 | 2,841 | 2,305 | ||||||||||||
Detroit Edison Tax Exempt Revenue Bonds (2) | ||||||||||||||||
5.3% due 2008 to 2036 | 1,213 | 1,213 | ||||||||||||||
Detroit Edison Tax-Exempt Revenue Bonds(2) | ||||||||||||||||
5.2% due 2011 to 2036 | 1,263 | 1,213 | ||||||||||||||
MichCon Taxable Debt, Principally Secured | ||||||||||||||||
6.1% due 2008 to 2033 | 715 | 745 | ||||||||||||||
6.1% due 2012 to 2033 | 889 | 715 | ||||||||||||||
Other Long-Term Debt, Including Non-Recourse Debt | 196 | 259 | 188 | 196 | ||||||||||||
$ | 5,925 | $ | 6,153 | 6,678 | 5,925 | |||||||||||
Less debt associated with assets held for sale | (22 | ) | — | — | (22 | ) | ||||||||||
Less amount due within one year | (327 | ) | (235 | ) | (220 | ) | (327 | ) | ||||||||
$ | 5,576 | $ | 5,918 | $ | 6,458 | $ | 5,576 | |||||||||
Securitization bonds | ||||||||||||||||
6.4% due 2008 to 2015 | $ | 1,185 | $ | 1,295 | ||||||||||||
6.4% due 2009 to 2015 | $ | 1,064 | $ | 1,185 | ||||||||||||
Less amount due within one year | (120 | ) | (110 | ) | (132 | ) | (120 | ) | ||||||||
$ | 1,065 | $ | 1,185 | |||||||||||||
$ | 932 | $ | 1,065 | |||||||||||||
Trust preferred — linked securities | ||||||||||||||||
7.8% due 2032 | $ | 186 | $ | 186 | $ | 186 | $ | 186 | ||||||||
7.5% due 2044 | 103 | 103 | 103 | 103 | ||||||||||||
$ | 289 | $ | 289 | $ | 289 | $ | 289 | |||||||||
(1) | Weighted average interest rates as of December 31, | |
(2) | Detroit Edison Tax Exempt Revenue Bonds are issued by a public body that loans the proceeds to Detroit Edison on terms substantially mirroring the Revenue Bonds. |
113
(in Millions) | Month | |||||||||||||||||||||||||
Company | Issued | Type | Interest Rate | Maturity | Amount | Month Issued | Type | Interest Rate | Maturity | Amount | ||||||||||||||||
(In millions) | (In millions) | |||||||||||||||||||||||||
MichCon | April | Senior Notes(1) | 5.26% | 2013 | $ | 60 | ||||||||||||||||||||
MichCon | April | Senior Notes(1) | 6.04% | 2018 | 100 | |||||||||||||||||||||
MichCon | April | Senior Notes(1) | 6.44% | 2023 | 25 | |||||||||||||||||||||
Detroit Edison | December | Senior Notes (1) | 6.47 | % | March 2038 | $ | 50 | April | Tax-Exempt Revenue Bonds(2) | Variable | 2036 | 69 | ||||||||||||||
Detroit Edison | May | Tax-Exempt Revenue Bonds(2) | Variable | 2029 | 118 | |||||||||||||||||||||
Detroit Edison | May | Tax-Exempt Revenue Bonds(3) | 5.30% | 2030 | 51 | |||||||||||||||||||||
MichCon | June | Senior Notes(4) | 6.78% | 2028 | 75 | |||||||||||||||||||||
Detroit Edison | June | Senior Notes(1) | 5.60% | 2018 | 300 | |||||||||||||||||||||
Detroit Edison | July | Tax-Exempt Revenue Bonds(5) | Variable | 2020 | 32 | |||||||||||||||||||||
MichCon | August | Senior Notes(6) | 5.94% | 2015 | 140 | |||||||||||||||||||||
MichCon | August | Senior Notes(6) | 6.36% | 2020 | 50 | |||||||||||||||||||||
Detroit Edison | October | Senior Notes(1) | 6.40% | 2013 | 250 | |||||||||||||||||||||
Detroit Edison | December | Tax-Exempt Revenue Bonds(7) | 6.75% | 2038 | 50 | |||||||||||||||||||||
$ | 1,320 | |||||||||||||||||||||||||
(1) | ||
(2) | Proceeds were used to refinance auction rate Tax-Exempt Revenue Bonds. | |
(3) | These Tax-Exempt Revenue Bonds were converted from an auction rate mode and remarketed in a fixed rate mode to maturity. | |
(4) | Proceeds were used to repay the 6.45% Remarketable Securities due 2038 subject to mandatory or optional tender on June 30, 2008. | |
(5) | Proceeds were used to refinance Tax-Exempt Revenue Bonds that matured July 2008. | |
(6) | Proceeds were used to repay a portion of the $200 million MichCon 6.125% Senior Notes due September 2008. | |
(7) | Proceeds to be used to finance the construction, acquisition, improvement and installation of certain solid waste disposal facilities at Detroit Edison’s Monroe Power Plant. |
110
(in Millions) | Month | |||||||||||||||||||||||||
Company | Retired | Type | Interest Rate | Maturity | Amount | Month Retired | Type | Interest Rate | Maturity | Amount | ||||||||||||||||
(In millions) | (In millions) | |||||||||||||||||||||||||
Detroit Edison | April | Tax-Exempt Revenue Bonds(1) | Variable | 2036 | $ | 69 | ||||||||||||||||||||
Detroit Edison | May | Tax-Exempt Revenue Bonds(1) | Variable | 2029 | 118 | |||||||||||||||||||||
MichCon | May | First mortgage bonds | 7.21 | % | May 2007 | $ | 30 | June | Remarketable Securities(2) | 6.45% | 2038 | 75 | ||||||||||||||
DTE Energy | August | Senior notes | 5.63 | % | August 2007 | 173 | ||||||||||||||||||||
Detroit Edison | December | Other long term debt | 7.61 | % | June 2011 | 47 | July | Tax-Exempt Revenue Bonds(3) | 7.00% | 2008 | 32 | |||||||||||||||
MichCon | September | Senior Notes(4) | 6.125% | 2008 | 200 | |||||||||||||||||||||
Total Retirements | $ | 250 | ||||||||||||||||||||||||
$ | 494 | |||||||||||||||||||||||||
114
(1) | These Tax-Exempt Revenue Bonds were converted from auction rate mode and subsequently redeemed with proceeds from the issuance of new Detroit Edison Tax-Exempt Revenue Bonds. | |
(2) | These Remarketable Securities were optionally redeemed by MichCon with proceeds from the issuance of new MichCon Senior Notes. | |
(3) | These Tax-Exempt Revenue Bonds were redeemed with the proceeds from the issuance of new Detroit Edison Tax-Exempt Revenue Bonds. | |
(4) | These Senior Notes were redeemed with the proceeds from the issuance of new MichCon Senior Notes and short-term debt. |
2014 and | ||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Amount to mature | $ | 352 | $ | 670 | $ | 914 | $ | 452 | $ | 560 | $ | 5,092 | $ | 8,040 |
2013 and | ||||||||||||||||||||||||||||
(in Millions) | 2008 | 2009 | 2010 | 2011 | 2012 | thereafter | Total | |||||||||||||||||||||
Amount to mature | $ | 447 | $ | 352 | $ | 670 | $ | 914 | $ | 453 | $ | 4,571 | $ | 7,407 |
111
NOTE 12 — | PREFERRED SECURITIES |
Company | Type of Stock | Par Value | Shares Authorized | Type of Stock | Par Value | Shares Authorized | ||||||||||||||
DTE Energy | Preferred | None | 5,000,000 | Preferred | None | 5,000,000 | ||||||||||||||
Detroit Edison | Preferred | $ | 100 | 6,747,484 | Preferred | $100 | 6,747,484 | |||||||||||||
Detroit Edison | Preference | $ | 1 | 30,000,000 | Preference | $1 | 30,000,000 | |||||||||||||
MichCon | Preferred | $ | 1 | 7,000,000 | Preferred | $1 | 7,000,000 | |||||||||||||
MichCon | Preference | $ | 1 | 4,000,000 | Preference | $1 | 4,000,000 |
115
NOTE 13 — | SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS |
(in Millions) | DTE Energy | Detroit Edison | MichCon | Total | ||||||||||||
Five-year unsecured revolving facility, dated October 2005 | $ | 675 | $ | 69 | $ | 181 | $ | 925 | ||||||||
Five-year unsecured revolving facility, dated October 2004 | 525 | 206 | 244 | 975 | ||||||||||||
Aggregate availability | $ | 1,200 | $ | 275 | $ | 425 | $ | 1,900 | ||||||||
112
DTE Energy | Detroit Edison | MichCon | Total | |||||||||||||
(In millions) | ||||||||||||||||
Five-year unsecured revolving facility, expiring October 2010 | $ | 675 | $ | 69 | $ | 181 | $ | 925 | ||||||||
Five-year unsecured revolving facility, expiring October 2009 | 525 | 206 | 244 | 975 | ||||||||||||
Unsecured bank loan facility, expiring July 2009 | — | 75 | — | 75 | ||||||||||||
Unsecured bank loan facility, expiring June 2009 | — | — | 50 | 50 | ||||||||||||
Secured floating rate note, maturing September 2009 | — | — | 20 | 20 | ||||||||||||
One-year unsecured letter of credit facility, expiring November 2009 | 30 | — | — | 30 | ||||||||||||
One-year unsecured letter of credit facility, expiring December 2009 | 30 | — | — | 30 | ||||||||||||
Total credit facilities at December 31, 2008 | 1,260 | 350 | 495 | 2,105 | ||||||||||||
Amounts outstanding at December 31, 2008: | ||||||||||||||||
Commercial paper issuances | (77 | ) | — | (272 | ) | (349 | ) | |||||||||
Borrowings | (100 | ) | (75 | ) | (220 | ) | (395 | ) | ||||||||
Letters of credit | (275 | ) | — | — | (275 | ) | ||||||||||
(452 | ) | (75 | ) | (492 | ) | (1,019 | ) | |||||||||
Net availability at December 31, 2008 | $ | 808 | $ | 275 | $ | 3 | $ | 1,086 | ||||||||
116
113
NOTE 14 — |
Capital | Operating | Capital | Operating | |||||||||||||
(in Millions) | Leases | Leases | ||||||||||||||
2008 | $ | 15 | $ | 44 | ||||||||||||
Leases | Leases | |||||||||||||||
(In millions) | ||||||||||||||||
2009 | 15 | 36 | $ | 15 | $ | 36 | ||||||||||
2010 | 14 | 28 | 14 | 30 | ||||||||||||
2011 | 12 | 22 | 12 | 27 | ||||||||||||
2012 | 9 | 21 | 9 | 25 | ||||||||||||
2013 | 9 | 21 | ||||||||||||||
Thereafter | 41 | 82 | 32 | 99 | ||||||||||||
Total minimum lease payments (1) | 106 | $ | 233 | |||||||||||||
Total minimum lease payments | 91 | $ | 238 | |||||||||||||
Less imputed interest | (24 | ) | 19 | |||||||||||||
Present value of net minimum lease payments | 82 | 72 | ||||||||||||||
Less Assets held for sale | (33 | ) | ||||||||||||||
Less current portion | (8 | ) | 10 | |||||||||||||
Non-current portion | $ | 41 | $ | 62 | ||||||||||||
(in Millions) | ||||||||
2008 | $ | 9 | ||||||
(In millions) | ||||||||
2009 | 9 | $ | 9 | |||||
2010 | 9 | 9 | ||||||
2011 | 9 | 9 | ||||||
2012 | 9 | 9 | ||||||
2013 | 9 | |||||||
Thereafter | 71 | 62 | ||||||
Total minimum future lease receipts | 116 | 107 | ||||||
Residual value of leased pipeline | 40 | 40 | ||||||
Less unearned income | (78 | ) | (70 | ) | ||||
Net investment in capital lease | 78 | 77 | ||||||
Less current portion | (2 | ) | 2 | |||||
$ | 76 | $ | 75 | |||||
117
NOTE 15 — | FAIR VALUE |
• | Level 1 — Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date. | |
• | Level 2 — Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. | |
• | Level 3 — Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints. |
118
Net Balance at | ||||||||||||||||||||
Netting | December 31, | |||||||||||||||||||
Level 1 | Level 2 | Level 3 | Adjustments(2) | 2008 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash equivalents | $ | 36 | $ | — | $ | — | $ | — | $ | 36 | ||||||||||
Nuclear decommissioning trusts and Other investments(1) | 492 | $ | 310 | $ | 1 | $ | — | $ | 803 | |||||||||||
Derivative assets | 2,051 | 1,118 | 677 | (3,390 | ) | 456 | ||||||||||||||
Total | $ | 2,579 | $ | 1,428 | $ | 678 | $ | (3,390 | ) | $ | 1,295 | |||||||||
Liabilities: | ||||||||||||||||||||
Derivative liabilities | (2,026 | ) | (1,118 | ) | (861 | ) | 3,376 | (629 | ) | |||||||||||
Total | $ | (2,026 | ) | $ | (1,118 | ) | $ | (861 | ) | $ | 3,376 | $ | (629 | ) | ||||||
Net assets (liabilities) at December 31, 2008 | $ | 553 | $ | 310 | $ | (183 | ) | $ | (14 | ) | $ | 666 | ||||||||
(1) | Excludes cash surrender value of life insurance investments. | |
(2) | Amounts represent the impact of master netting agreements that allow the Company to net gain and loss positions and cash collateral held or placed with the same counterparties. |
(In millions) | ||||
Liability balance as of January 1, 2008(1) | $ | (366 | ) | |
Changes in fair value recorded in income | (10 | ) | ||
Changes in fair value recorded in regulatory liabilities | 2 | |||
Changes in fair value recorded in other comprehensive income | 6 | |||
Purchases, issuances and settlements | 195 | |||
Transfers in/out of Level 3 | (10 | ) | ||
Liability balance as of December 31, 2008 | $ | (183 | ) | |
The amount of total gains included in net income attributed to the change in unrealized gains (losses) related to assets and liabilities held at December 31, 2008 | $ | 129 | ||
(1) | Balance as of January 1, 2008 includes a cumulative effect adjustment which represents an increase to beginning retained earnings related to Level 3 derivatives upon adoption of SFAS No. 157. |
119
120
2008 | 2007 | |||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
Long-Term Debt | $ | 7.7 billion | $ | 8.0 billion | $ | 7.6 billion | $ | 7.4 billion |
NOTE 16 — | FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS |
114
121
115
122
116
NOTE 17 — | COMMITMENTS AND CONTINGENCIES |
2007 | 2006 | |||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
Long-Term Debt | $7.6 billion | $7.4 billion | $8.0 billion | $7.7 billion |
117
123
118
124
125
119
126
NOTE 18 — | RETIREMENT BENEFITS AND TRUSTEED ASSETS |
120
127
Qualified Pension Plans | Nonqualified Pension Plans | Pension Plans | ||||||||||||||||||||||||||||||||||
(in Millions) | 2007 | 2006 | 2005 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
Service cost | $ | 60 | $ | 62 | $ | 64 | $ | 2 | $ | 2 | $ | 2 | $ | 55 | $ | 62 | $ | 64 | ||||||||||||||||||
Interest cost | 174 | 172 | 169 | 4 | 4 | 3 | 190 | 178 | 176 | |||||||||||||||||||||||||||
Expected return on plan assets | (237 | ) | (222 | ) | (218 | ) | — | — | — | (259 | ) | (237 | ) | (222 | ) | |||||||||||||||||||||
Amortization of: | ||||||||||||||||||||||||||||||||||||
Net actuarial loss | 57 | 57 | 67 | 2 | 2 | 1 | 32 | 59 | 59 | |||||||||||||||||||||||||||
Prior service cost | 5 | 7 | 8 | 1 | 1 | — | 6 | 6 | 8 | |||||||||||||||||||||||||||
Special termination benefits | 8 | 49 | — | — | — | — | — | 8 | 49 | |||||||||||||||||||||||||||
Net pension cost | $ | 67 | $ | 125 | $ | 90 | $ | 9 | $ | 9 | $ | 6 | $ | 24 | $ | 76 | $ | 134 | ||||||||||||||||||
Pension Plans | ||||||||
2008 | 2007 | |||||||
(In millions) | ||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets | ||||||||
Net actuarial loss (gain) | $ | 1,061 | $ | (255 | ) | |||
Amortization of net actuarial gain | (32 | ) | (59 | ) | ||||
Prior service cost | 13 | 1 | ||||||
Amortization of prior service cost | (6 | ) | (6 | ) | ||||
Total recognized in other comprehensive income and regulatory assets | $ | 1,036 | $ | (319 | ) | |||
Total recognized in net periodic pension cost, Other comprehensive income and regulatory assets | $ | 1,060 | $ | (243 | ) | |||
Estimated amounts to be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost during next fiscal year | ||||||||
Net actuarial loss | $ | 52 | $ | 34 | ||||
Prior service cost | 5 | 6 |
121
128
Qualified Pension Plans | Nonqualified Pension Plans | |||||||||||||||
(in Millions) | 2007 | 2006 | 2007 | 2006 | ||||||||||||
Other changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets | ||||||||||||||||
Net actuarial (gain) | $ | (255 | ) | $ | N/A | $ | — | $ | N/A | |||||||
Amortization of net actuarial (gain) | (57 | ) | N/A | (2 | ) | N/A | ||||||||||
Prior service cost | 1 | N/A | — | N/A | ||||||||||||
Amortization of prior service (credit) | (5 | ) | N/A | (1 | ) | N/A | ||||||||||
Total recognized in other comprehensive income and regulatory assets | $ | (316 | ) | $ | N/A | $ | (3 | ) | $ | N/A | ||||||
Total recognized in net periodic pension cost and other comprehensive income and regulatory assets | $ | (249 | ) | $ | N/A | $ | 6 | $ | N/A | |||||||
Estimated amounts to be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost during next fiscal year | ||||||||||||||||
Net actuarial loss | $ | 32 | $ | 56 | $ | 2 | $ | 2 | ||||||||
Prior service cost | 5 | 5 | 1 | 1 |
122
Qualified Pension Plans | Nonqualified Pension Plans | Pension Plans | ||||||||||||||||||||||
(in Millions) | 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||
2008 | 2007 | |||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Accumulated benefit obligation, end of year | $ | 2,767 | $ | 2,934 | $ | 69 | $ | 73 | $ | 2,828 | $ | 2,836 | ||||||||||||
Change in projected benefit obligation | ||||||||||||||||||||||||
Projected benefit obligation, beginning of year | $ | 3,171 | $ | 3,013 | $ | 75 | $ | 67 | $ | 3,050 | $ | 3,246 | ||||||||||||
December 2007 benefit payments | (19 | ) | — | |||||||||||||||||||||
Service cost | 60 | 62 | 2 | 2 | 55 | 62 | ||||||||||||||||||
Interest cost | 174 | 172 | 4 | 4 | 191 | 178 | ||||||||||||||||||
Actuarial (gain) loss | (212 | ) | 78 | — | 7 | (79 | ) | (212 | ) | |||||||||||||||
Benefits paid | (224 | ) | (197 | ) | (9 | ) | (5 | ) | (201 | ) | (233 | ) | ||||||||||||
Measurement date change | 22 | — | ||||||||||||||||||||||
Special termination benefits | 8 | 49 | — | — | — | 8 | ||||||||||||||||||
Plan amendments | 1 | (6 | ) | — | — | 13 | 1 | |||||||||||||||||
Projected benefit obligation, end of year | $ | 2,978 | $ | 3,171 | $ | 72 | $ | 75 | $ | 3,032 | $ | 3,050 | ||||||||||||
Change in plan assets | ||||||||||||||||||||||||
Plan assets at fair value, beginning of year | $ | 2,744 | $ | 2,617 | $ | — | $ | — | $ | 2,980 | $ | 2,744 | ||||||||||||
December 2007 contributions | 150 | — | ||||||||||||||||||||||
December 2007 payments | (18 | ) | — | |||||||||||||||||||||
Actual return on plan assets | 280 | 324 | — | — | (884 | ) | 280 | |||||||||||||||||
Company contributions | 180 | — | 9 | 5 | 106 | 189 | ||||||||||||||||||
Measurement date change | 22 | — | ||||||||||||||||||||||
Benefits paid | (224 | ) | (197 | ) | (9 | ) | (5 | ) | (201 | ) | (233 | ) | ||||||||||||
Plan assets at fair value, end of year | $ | 2,980 | $ | 2,744 | $ | — | $ | — | $ | 2,155 | $ | 2,980 | ||||||||||||
Funded status of the plans | $ | 2 | $ | (427 | ) | $ | (72 | ) | $ | (75 | ) | $ | (877 | ) | $ | (70 | ) | |||||||
December contribution | 150 | 180 | 1 | — | — | 151 | ||||||||||||||||||
Funded status, end of year | $ | 152 | $ | (247 | ) | $ | (71 | ) | $ | (75 | ) | $ | (877 | ) | $ | 81 | ||||||||
Amount recorded as: | ||||||||||||||||||||||||
Noncurrent assets | $ | 152 | $ | 71 | $ | — | $ | — | $ | — | $ | 152 | ||||||||||||
Current liabilities | — | — | (4 | ) | (5 | ) | (6 | ) | (4 | ) | ||||||||||||||
Noncurrent liabilities | — | (318 | ) | (67 | ) | (70 | ) | (871 | ) | (67 | ) | |||||||||||||
$ | 152 | $ | (247 | ) | $ | (71 | ) | $ | (75 | ) | $ | (877 | ) | $ | 81 | |||||||||
Amounts recognized in accumulated other comprehensive loss, pre-tax | ||||||||||||||||||||||||
Net actuarial loss | $ | 175 | $ | 186 | $ | 5 | $ | 7 | ||||||||||||||||
Prior service (credit) | (8 | ) | (10 | ) | — | — | ||||||||||||||||||
Amounts recognized in regulatory assets | ||||||||||||||||||||||||
Net actuarial loss | $ | 456 | $ | 756 | $ | 21 | $ | 21 | ||||||||||||||||
Prior service cost | 17 | 24 | 1 | 1 |
129
Pension Plans | ||||||||
2008 | 2007 | |||||||
(In millions) | ||||||||
Amounts recognized in Accumulated other comprehensive loss, pre-tax | ||||||||
Net actuarial loss | $ | 204 | $ | 180 | ||||
Prior service (credit) | (6 | ) | (8 | ) | ||||
$ | 198 | $ | 172 | |||||
Amounts recognized in regulatory assets | ||||||||
Net actuarial loss | $ | 1,482 | $ | 477 | ||||
Prior service cost | 23 | 18 | ||||||
$ | 1,505 | $ | 495 | |||||
2007 | 2006 | 2005 | ||||||||||
Projected benefit obligation | ||||||||||||
Discount rate | 6.5 | % | 5.7 | % | 5.9 | % | ||||||
Rate of compensation increase | 4.0 | % | 4.0 | % | 4.0 | % | ||||||
Net pension costs | ||||||||||||
Discount rate | 5.7 | % | 5.9 | % | 6.0 | % | ||||||
Rate of compensation increase | 4.0 | % | 4.0 | % | 4.0 | % | ||||||
Expected long-term rate of return on plan assets | 8.75 | % | 8.75 | % | 9.0 | % |
123
2008 | 2007 | 2006 | ||||||||||
Projected benefit obligation | ||||||||||||
Discount rate | 6.9% | 6.5% | 5.7% | |||||||||
Rate of compensation increase | 4.0% | 4.0% | 4.0% | |||||||||
Net pension costs | ||||||||||||
Discount rate | 6.5% | 5.7% | 5.9% | |||||||||
Rate of compensation increase | 4.0% | 4.0% | 4.0% | |||||||||
Expected long-term rate of return on plan assets | 8.75% | 8.75% | 8.75% |
(in Millions) | ||||||||
2008 | $ | 189 | ||||||
(In millions) | ||||||||
2009 | 194 | $ | 199 | |||||
2010 | 200 | 202 | ||||||
2011 | 204 | 206 | ||||||
2012 | 212 | 213 | ||||||
2013 - 2017 | 1,179 | |||||||
2013 | 217 | |||||||
2014 - 2018 | 1,186 | |||||||
Total | $ | 2,178 | $ | 2,223 | ||||
130
2007 | 2006 | |||||||
Equity securities | 66 | % | 68 | % | ||||
Debt securities | 19 | 23 | ||||||
Other | 15 | 9 | ||||||
100 | % | 100 | % | |||||
124
2008 | 2007 | |||||||
U.S. Equity securities | 31 | % | 48 | % | ||||
Non U.S. Equity securities | 16 | 18 | ||||||
Debt securities | 24 | 19 | ||||||
Hedge Funds and Similar Investments | 22 | 12 | ||||||
Private Equity and Other | 7 | 3 | ||||||
100 | % | 100 | % | |||||
U.S. Equity securities | % | |||
Non U.S. Equity securities | 20 | |||
Debt securities | 20 | |||
Hedge Funds and Similar Investments | 20 | |||
Private Equity and Other | ||||
100 | % | |||
131
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Service cost | $ | 62 | $ | 59 | $ | 55 | $ | 62 | $ | 62 | $ | 59 | ||||||||||||
Interest cost | 118 | 115 | 105 | 121 | 118 | 115 | ||||||||||||||||||
Expected return on plan assets | (67 | ) | (61 | ) | (70 | ) | (75 | ) | (67 | ) | (61 | ) | ||||||||||||
Amortization of | ||||||||||||||||||||||||
Net loss | 69 | 72 | 60 | 38 | 69 | 72 | ||||||||||||||||||
Prior service (credit) | (3 | ) | (3 | ) | (2 | ) | (6 | ) | (3 | ) | (3 | ) | ||||||||||||
Net transition obligation | 7 | 7 | 7 | 2 | 7 | 7 | ||||||||||||||||||
Special termination benefits | 2 | 8 | — | — | 2 | 8 | ||||||||||||||||||
Net postretirement cost | $ | 188 | $ | 197 | $ | 155 | $ | 142 | $ | 188 | $ | 197 | ||||||||||||
2008 | 2007 | |||||||
(In millions) | ||||||||
Other changes in plan assets and APBO recognized in other comprehensive income and regulatory assets | ||||||||
Net actuarial loss (gain) | $ | 334 | $ | (299 | ) | |||
Amortization of net actuarial (gain) | (39 | ) | (69 | ) | ||||
Prior service (credit) | (1 | ) | (55 | ) | ||||
Amortization of prior service credit | 6 | 2 | ||||||
Amortization of transition (asset) | (2 | ) | (6 | ) | ||||
Total recognized in other comprehensive income and regulatory assets | $ | 298 | $ | (427 | ) | |||
Total recognized in net periodic pension cost, other comprehensive income and regulatory assets | $ | 440 | $ | (239 | ) | |||
(In millions) | ||||||||
Estimated amounts to be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost during next fiscal year | ||||||||
Net actuarial loss | $ | 69 | $ | 38 | ||||
Prior service (credit) | $ | (6 | ) | $ | (6 | ) | ||
Net transition obligation | $ | 2 | $ | 2 |
125
132
(in Millions) | 2007 | 2006 | ||||||
Other changes in plan assets and APBO recognized in other comprehensive income and regulatory assets | ||||||||
Net actuarial (gain) | $ | (299 | ) | $ | N/A | |||
Amortization of net actuarial (gain) | (69 | ) | N/A | |||||
Prior service (credit) | (55 | ) | N/A | |||||
Amortization of prior service cost | 2 | N/A | ||||||
Amortization of transition (asset) | (6 | ) | N/A | |||||
Total recognized in other comprehensive income and regulatory assets | $ | (427 | ) | $ | N/A | |||
Total recognized in net periodic pension cost, other comprehensive income and regulatory assets | $ | (239 | ) | $ | N/A | |||
Estimated amounts to be amortized from accumulated other comprehensive income and regulatory assets into net periodic benefit cost during next fiscal year | ||||||||
Net actuarial loss | $ | 38 | $ | 66 | ||||
Prior service (credit) | $ | (6 | ) | $ | (2 | ) | ||
Net transition obligation | $ | 2 | $ | 7 |
126
(in Millions) | 2007 | 2006 | ||||||||||||||
2008 | 2007 | |||||||||||||||
(In millions) | ||||||||||||||||
Change in accumulated postretirement benefit obligation | ||||||||||||||||
Accumulated postretirement benefit obligation, beginning of year | $ | 2,184 | $ | 1,991 | $ | 1,922 | $ | 2,184 | ||||||||
December 2007 cash flow | (6 | ) | — | |||||||||||||
Service cost | 62 | 59 | 62 | 62 | ||||||||||||
Interest cost | 118 | 115 | 121 | 118 | ||||||||||||
Actuarial (gain) loss | (297 | ) | 101 | 10 | (297 | ) | ||||||||||
Plan amendments | (55 | ) | 2 | (1 | ) | (55 | ) | |||||||||
Medicare Part D subsidy | 7 | 1 | 7 | 7 | ||||||||||||
Special termination benefits | 2 | 8 | — | 2 | ||||||||||||
Measurement date change | 15 | — | ||||||||||||||
Benefits paid | (99 | ) | (93 | ) | (98 | ) | (99 | ) | ||||||||
Accumulated postretirement benefit obligation, end of year | $ | 1,922 | $ | 2,184 | $ | 2,032 | $ | 1,922 | ||||||||
Change in plan assets | ||||||||||||||||
Plan assets at fair value, beginning of year | $ | 794 | $ | 713 | $ | 835 | $ | 794 | ||||||||
December 2007 VEBA cash flow | (13 | ) | — | |||||||||||||
Actual return on plan assets | 69 | 86 | (251 | ) | 69 | |||||||||||
Measurement date change | 6 | — | ||||||||||||||
Company contributions | 56 | 60 | 116 | 56 | ||||||||||||
Benefits paid | (84 | ) | (65 | ) | (95 | ) | (84 | ) | ||||||||
Plan assets at fair value, end of year | $ | 835 | $ | 794 | $ | 598 | $ | 835 | ||||||||
Funded status of the plans, as of November 30 | $ | (1,087 | ) | $ | (1,390 | ) | $ | — | $ | (1,087 | ) | |||||
December adjustment | (7 | ) | (24 | ) | — | (7 | ) | |||||||||
Funded status, as of December 31 | $ | (1,094 | ) | $ | (1,414 | ) | $ | (1,434 | ) | $ | (1,094 | ) | ||||
Noncurrent liabilities | $ | (1,094 | ) | $ | (1,414 | ) | $ | (1,434 | ) | $ | (1,094 | ) | ||||
Amounts recognized in accumulated other comprehensive loss, pre-tax | ||||||||||||||||
Amounts recognized in Accumulated other comprehensive loss, pre-tax | ||||||||||||||||
Net actuarial loss | $ | 75 | $ | 85 | $ | 68 | $ | 75 | ||||||||
Prior service (credit) | $ | (48 | ) | $ | (44 | ) | (36 | ) | (48 | ) | ||||||
Net transition (asset) | $ | (18 | ) | $ | (35 | ) | (15 | ) | (18 | ) | ||||||
$ | 17 | $ | 9 | |||||||||||||
Amounts recognized in regulatory assets | ||||||||||||||||
Net actuarial loss | $ | 458 | $ | 816 | $ | 760 | $ | 458 | ||||||||
Prior service cost | $ | 9 | $ | 36 | 3 | 9 | ||||||||||
Net transition obligation | $ | 29 | $ | 74 | 24 | 29 | ||||||||||
$ | 787 | $ | 496 | |||||||||||||
133
2007 | 2006 | 2005 | ||||||||||
Projected benefit obligation | ||||||||||||
Discount rate | 6.50 | % | 5.70 | % | 5.90 | % | ||||||
Net benefit costs | ||||||||||||
Discount rate | 5.70 | % | 5.90 | % | 6.00 | % | ||||||
Expected long-term rate of return on plan assets | 8.75 | % | 8.75 | % | 9.00 | % | ||||||
Health care trend rate pre-65 | 8.00 | % | 9.00 | % | 9.00 | % | ||||||
Health care trend rate post-65 | 7.00 | % | 8.00 | % | 8.00 | % | ||||||
Ultimate health care trend rate | 5.00 | % | 5.00 | % | 5.00 | % | ||||||
Year in which ultimate reached | 2011 | 2011 | 2011 |
127
2008 | 2007 | 2006 | ||||||||||
Projected benefit obligation | ||||||||||||
Discount rate | 6.90% | 6.50% | 5.70% | |||||||||
Net benefit costs | ||||||||||||
Discount rate | 6.50% | 5.70% | 5.90% | |||||||||
Expected long-term rate of return on plan assets | 8.75% | 8.75% | 8.75% | |||||||||
Health care trend rate pre-65 | 7.00% | 8.00% | 9.00% | |||||||||
Health care trend rate post-65 | 6.00% | 7.00% | 8.00% | |||||||||
Ultimate health care trend rate | 5.00% | 5.00% | 5.00% | |||||||||
Year in which ultimate reached | 2011 | 2011 | 2011 |
(in Millions) | ||||||||
2008 | $ | 121 | ||||||
(In millions) | ||||||||
2009 | 130 | $ | 127 | |||||
2010 | 135 | 133 | ||||||
2011 | 141 | 138 | ||||||
2012 | 145 | 140 | ||||||
2013 - 2017 | 780 | |||||||
2013 | 144 | |||||||
2014 - 2018 | 769 | |||||||
Total | $ | 1,452 | $ | 1,451 | ||||
2007 | 2006 | |||||||
Equity securities | 68 | % | 68 | % | ||||
Debt securities | 20 | 25 | ||||||
Other | 12 | 7 | ||||||
100 | % | 100 | % | |||||
128
(in Millions) | ||||||||
2008 | $ | 5 | ||||||
(In millions) | ||||||||
2009 | 5 | $ | 5 | |||||
2010 | 5 | 4 | ||||||
2011 | 6 | 6 | ||||||
2012 | 6 | 7 | ||||||
2013 - 2017 | 34 | |||||||
2013 | 7 | |||||||
2014 - 2018 | 35 | |||||||
Total | $ | 61 | $ | 64 | ||||
134
2008 | 2007 | |||||||
U.S. Equity securities | 39 | % | 50 | % | ||||
Non U.S. Equity securities | 17 | 18 | ||||||
Debt securities | 26 | 20 | ||||||
Hedge Funds and Similar Investments | 13 | 11 | ||||||
Private Equity and Other | 5 | 1 | ||||||
100 | % | 100 | % | |||||
U.S. Equity securities | 27 | % | ||
Non U.S. Equity securities | 24 | |||
Debt securities | 16 | |||
Hedge Funds and Similar Investments | 28 | |||
Private Equity and Other | 5 | |||
100 | % | |||
NOTE 19 — |
• | Authorized limit is 9,000,000 shares of common stock; | ||
• | Prohibits the grant of a stock option with an exercise price that is less than the fair market value of the Company’s stock on the date of the grant; and | ||
• | Imposes the following award limits to a single participant in a single calendar year, (1) options for more than 500,000 shares of common stock; (2) stock awards for more than 150,000 shares of common stock; (3) performance share awards for more than 300,000 shares of common stock (based on the maximum payout under the award); or (4) more than 1,000,000 performance units, which have a face amount of $1.00 each. |
135
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Stock-based compensation expense | $ | 28 | $ | 24 | $ | 13 | ||||||
Tax benefit of compensation expense | $ | 10 | $ | 8 | $ | 5 |
129
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Stock-based compensation expense | $ | 38 | $ | 28 | $ | 24 | ||||||
Tax benefit of compensation expense | $ | 13 | $ | 10 | $ | 8 |
(in Millions) | Weighted | Aggregate | ||||||||||||||||||||||
Weighted | Aggregate | Number of | Average | Intrinsic | ||||||||||||||||||||
Number of | Average | Intrinsic | Options | Exercise Price | Value | |||||||||||||||||||
Options | Exercise Price | Value | (In millions) | |||||||||||||||||||||
Options outstanding at January 1, 2007 | 5,667,197 | $ | 41.60 | |||||||||||||||||||||
Options outstanding at January 1, 2008 | 4,394,809 | $ | 42.37 | |||||||||||||||||||||
Granted | 419,400 | $ | 47.57 | 811,300 | $ | 41.77 | ||||||||||||||||||
Exercised | (1,654,148 | ) | $ | 41.07 | (104,261 | ) | $ | 32.13 | ||||||||||||||||
Forfeited or expired | (37,640 | ) | $ | 43.45 | (88,149 | ) | $ | 44.02 | ||||||||||||||||
Options outstanding at December 31, 2007 | 4,394,809 | $ | 42.37 | $ | 26 | |||||||||||||||||||
Options outstanding at December 31, 2008 | 5,013,699 | $ | 42.45 | $ | — | |||||||||||||||||||
Options exercisable at December 31, 2008 | 3,766,477 | $ | 42.17 | $ | — | |||||||||||||||||||
Options exercisable at December 31, 2007 | 3,306,313 | $ | 41.36 | $ | 23 | |||||||||||||||||||
136
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Range of | Number of | Average | Remaining | |||||||||||||
Exercise Prices | Options | Exercise Price | Contractual Life (years) | |||||||||||||
$ | 27.00 - $38.00 | 188,531 | $ | 30.89 | 1.88 | |||||||||||
$ | 38.01 - $42.00 | 1,997,431 | $ | 40.64 | 4.83 | |||||||||||
$ | 42.01 - $45.00 | 1,446,534 | $ | 43.91 | 7.00 | |||||||||||
$ | 45.01 - $50.00 | 762,313 | $ | 46.77 | 6.72 | |||||||||||
4,394,809 | $ | 42.37 | 5.74 | |||||||||||||
130
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Range of | Number of | Average | Remaining | |||||||||
Exercise Prices | Options | Exercise Price | Contractual Life (Years) | |||||||||
$27.00-$38.00 | 108,117 | $ | 31.75 | 1.07 | ||||||||
$38.01-$42.00 | 2,759,759 | $ | 40.97 | 5.35 | ||||||||
$42.01-$45.00 | 1,398,488 | $ | 43.91 | 5.98 | ||||||||
$45.01-$50.00 | 747,335 | $ | 46.76 | 5.69 | ||||||||
5,013,699 | $ | 42.45 | 5.49 | |||||||||
December 31 | December 31 | December 31 | ||||||||||||||||||||||
December 31 | December 31 | December 31 | 2008 | 2007 | 2006 | |||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Risk-free interest rate | 4.71 | % | 4.58 | % | 3.93 | % | 3.05% | 4.71% | 4.58% | |||||||||||||||
Dividend yield | 4.38 | % | 4.75 | % | 4.60 | % | 5.20% | 4.38% | 4.75% | |||||||||||||||
Expected volatility | 17.99 | % | 19.79 | % | 19.56 | % | 20.45% | 17.99% | 19.79% | |||||||||||||||
Expected life | 6 years | 6 years | 6 years | 6 years | 6 years | 6 years |
December 31 | ||||
(in Millions, except per share amounts) | 2005 | |||
Net income as reported | $ | 537 | ||
Less: total stock-based expense | (4 | ) | ||
Pro forma net income | $ | 533 | ||
Earnings per share | ||||
Basic — as reported | $ | 3.07 | ||
Basic — pro forma | $ | 3.05 | ||
Diluted — as reported | $ | 3.05 | ||
Diluted — pro forma | $ | 3.03 | ||
131
2008 | 2007 | 2006 | ||||||||||||||||||||||
2007 | 2006 | 2005 | ||||||||||||||||||||||
Fair value of awards vested (in Millions) | $ | 10 | $ | 5 | $ | 4 | $ | 18 | $ | 10 | $ | 5 | ||||||||||||
Restricted common shares awarded | 620,125 | 282,555 | 288,360 | 389,055 | 620,125 | 282,555 | ||||||||||||||||||
Weighted average market price of shares awarded | $ | 49.48 | $ | 43.64 | $ | 44.95 | $ | 41.96 | $ | 49.48 | $ | 43.64 | ||||||||||||
Compensation cost charged against income (in Millions) | $ | 16 | $ | 10 | $ | 8 | $ | 20 | $ | 16 | $ | 10 |
137
Restricted | Weighted Average Grant Date | Weighted Average | ||||||||||||||
Stock | Fair Value | Restricted | Grant Date | |||||||||||||
Balance at January 1, 2007 | 666,136 | $ | 43.20 | |||||||||||||
Stock | Fair Value | |||||||||||||||
Balance at January 1, 2008 | 984,310 | $ | 47.36 | |||||||||||||
Grants | 620,125 | $ | 49.48 | 389,055 | $ | 41.96 | ||||||||||
Forfeitures | (62,139 | ) | $ | 46.55 | (67,165 | ) | $ | 45.45 | ||||||||
Vested | (239,812 | ) | $ | 41.53 | (374,478 | ) | $ | 46.90 | ||||||||
Balance at December 31, 2007 | 984,310 | $ | 47.36 | |||||||||||||
Balance at December 31, 2008 | 931,722 | $ | 45.31 | |||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Compensation expense | $ | 7 | $ | 8 | $ | 5 | ||||||
Cash settlements (1) | $ | 5 | $ | 4 | $ | 5 |
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Compensation expense | $ | 15 | $ | 7 | $ | 8 | ||||||
Cash settlements(1) | $ | 3 | $ | 5 | $ | 4 |
(1) | Approximates the intrinsic value of the liability. |
132
Performance Shares | ||||
Balance at January 1, | ||||
Grants | ||||
Forfeitures | ( | ) | ||
Payouts | ( | ) | ||
Balance at December 31, | ||||
(In Millions) | ||||||||
Unrecognized | ||||||||
Compensation | (in years) | |||||||
Cost | Weighted Average to be Recognized | |||||||
Stock awards | $ | 22 | 1.16 | |||||
Performance shares | 13 | 1.48 | ||||||
Options | 2 | 1.26 | ||||||
$ | 37 | 1.28 | ||||||
138
Unrecognized | ||||||||
Compensation | Weighted Average | |||||||
Cost | to be Recognized | |||||||
(In millions) | (In Years) | |||||||
Stock awards | $ | 16 | 1.10 | |||||
Performance shares | 15 | 1.53 | ||||||
Options | 2 | 1.62 | ||||||
$ | 33 | 1.33 | ||||||
NOTE 20 — | SEGMENT AND RELATED INFORMATION |
133
• | The Company’s Electric Utility segment consists of Detroit Edison, which is engaged in the generation, purchase, distribution and sale of electricity to approximately 2.2 million residential, commercial and industrial customers in southeastern Michigan. |
The Gas Utility segment consists of MichCon and Citizens. MichCon is engaged in the purchase, storage, transmission, distribution and sale of natural gas to approximately 1.2 million residential, commercial and industrial customers throughout Michigan. MichCon also has subsidiaries involved in the gathering, processing and transmission of natural gas in northern Michigan. Citizens distributes natural gas in Adrian, Michigan to approximately 17,000 customers. |
• | Gas Midstream | ||
• | Unconventional Gas Production | ||
• | Power and Industrial Projects | ||
• | Energy Tradingprimarily |
139
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Electric Utility | $ | 36 | $ | 59 | $ | 207 | ||||||
Gas Utility | 5 | 16 | 13 | |||||||||
Coal and Gas Midstream | 191 | 180 | 152 | |||||||||
Unconventional Gas Production | 64 | 134 | 154 | |||||||||
Power and Industrial Projects | 23 | 6 | 6 | |||||||||
Energy Trading | 7 | 75 | 116 | |||||||||
Corporate & Other | (35 | ) | 7 | 54 | ||||||||
$ | 291 | $ | 477 | $ | 702 | |||||||
134
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Electric Utility | $ | 16 | $ | 36 | $ | 59 | ||||||
Gas Utility | 7 | 5 | 16 | |||||||||
Gas Midstream | 10 | 17 | 17 | |||||||||
Unconventional Gas Production | — | 64 | 134 | |||||||||
Power and Industrial Projects | 80 | 197 | 169 | |||||||||
Energy Trading | 145 | 7 | 75 | |||||||||
Corporate & Other | (80 | ) | (35 | ) | 7 | |||||||
$ | 178 | $ | 291 | $ | 477 | |||||||
Depreciation, | Depreciation, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating | Depletion & | Interest | Interest | Income | Net | Total | Capital | Operating | Depletion & | Interest | Interest | Income | Net | Total | Capital | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in Millions) | Revenue | Amortization | Income | Expense | Taxes | Income | Assets | Goodwill | Expenditures | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Amortization | Income | Expense | Taxes | Income | Assets | Goodwill | Expenditures | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Electric Utility | $ | 4,900 | $ | 764 | $ | (7 | ) | $ | 294 | $ | 149 | $ | 317 | $ | 14,854 | $ | 1,206 | $ | 809 | $ | 4,874 | $ | 743 | $ | (6 | ) | $ | 293 | $ | 186 | $ | 331 | $ | 15,798 | $ | 1,206 | $ | 944 | ||||||||||||||||||||||||||||||||||
Gas Utility | 1,875 | 93 | (10 | ) | 61 | 23 | 70 | 3,266 | 772 | 226 | 2,152 | 102 | (8 | ) | 66 | 41 | 85 | 3,884 | 772 | 239 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-utility Operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Coal and Gas Midstream | 837 | 8 | (2 | ) | 14 | 30 | 53 | 540 | 13 | 53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unconventional Gas Production (1) | (228 | ) | 22 | — | 13 | (117 | ) | (217 | ) | 355 | 2 | 161 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gas Midstream | 71 | 5 | (1 | ) | 7 | 24 | 38 | 316 | 9 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unconventional Gas Production(1) | 48 | 12 | — | 2 | 47 | 84 | 314 | 2 | 101 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Power and Industrial Projects | 473 | 39 | (9 | ) | 25 | (5 | ) | 30 | 471 | 27 | 48 | 987 | 34 | (7 | ) | 20 | 11 | 40 | 1,126 | 31 | 65 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Energy Trading | 955 | 5 | (5 | ) | 11 | 17 | 32 | 1,125 | 17 | 2 | 1,388 | 5 | (5 | ) | 10 | 31 | 42 | 787 | 17 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2,037 | 74 | (16 | ) | 63 | (75 | ) | (102 | ) | 2,491 | 59 | 264 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2,494 | 56 | (13 | ) | 39 | 113 | 204 | 2,543 | 59 | 190 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate & Other | (15 | ) | 1 | (51 | ) | 174 | 267 | 502 | 2,369 | — | — | (13 | ) | — | (41 | ) | 154 | (52 | ) | (94 | ) | 2,365 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation and Eliminations | (291 | ) | — | 59 | (59 | ) | — | — | — | — | — | (178 | ) | — | 49 | (49 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total from Continuing Operations | $ | 8,506 | $ | 932 | $ | (25 | ) | $ | 533 | $ | 364 | 787 | 22,980 | 2,037 | 1,299 | $ | 9,329 | $ | 901 | $ | (19 | ) | $ | 503 | $ | 288 | 526 | 24,590 | 2,037 | 1,373 | ||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations (Note 3) | 205 | 774 | — | — | 20 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation and Eliminations | (21 | ) | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from Discontinued Operations | 184 | 774 | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 971 | $ | 23,754 | $ | 2,037 | $ | 1,299 | $ | 546 | $ | 24,590 | $ | 2,037 | $ | 1,373 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
140
Depreciation, | ||||||||||||||||||||||||||||||||||||
Operating | Depletion & | Interest | Interest | Income | Net | Total | Capital | |||||||||||||||||||||||||||||
Revenue | Amortization | Income | Expense | Taxes | Income | Assets | Goodwill | Expenditures | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||||||||||
Electric Utility | $ | 4,900 | $ | 764 | $ | (7 | ) | $ | 294 | $ | 149 | $ | 317 | $ | 14,854 | $ | 1,206 | $ | 809 | |||||||||||||||||
Gas Utility | 1,875 | 93 | (10 | ) | 61 | 23 | 70 | 3,266 | 772 | 226 | ||||||||||||||||||||||||||
Non-utility Operations: | ||||||||||||||||||||||||||||||||||||
Gas Midstream | 66 | 6 | (2 | ) | 11 | 18 | 34 | 258 | 9 | 35 | ||||||||||||||||||||||||||
Unconventional Gas Production(1) | (228 | ) | 22 | — | 13 | (117 | ) | (217 | ) | 355 | 2 | 161 | ||||||||||||||||||||||||
Power and Industrial Projects | 1,244 | 41 | (9 | ) | 28 | 7 | 49 | 753 | 31 | 66 | ||||||||||||||||||||||||||
Energy Trading | 924 | 5 | (5 | ) | 11 | 17 | 32 | 1,113 | 17 | 2 | ||||||||||||||||||||||||||
2,006 | 74 | (16 | ) | 63 | (75 | ) | (102 | ) | 2,479 | 59 | 264 | |||||||||||||||||||||||||
Corporate & Other(1) | (15 | ) | 1 | (51 | ) | 174 | 267 | 502 | 2,369 | — | — | |||||||||||||||||||||||||
Reconciliation and Eliminations | (291 | ) | — | 59 | (59 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Total from Continuing Operations | $ | 8,475 | $ | 932 | $ | (25 | ) | $ | 533 | $ | 364 | 787 | 22,968 | 2,037 | 1,299 | |||||||||||||||||||||
Discontinued Operations (Note 3) | 205 | 774 | — | — | ||||||||||||||||||||||||||||||||
Reconciliation and Eliminations | (21 | ) | — | — | — | |||||||||||||||||||||||||||||||
Total from Discontinued Operations | 184 | 774 | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 971 | $ | 23,742 | $ | 2,037 | $ | 1,299 | ||||||||||||||||||||||||||||
(1) | Net income of the Unconventional Gas production segment in 2008 reflects the gain recognized on the sale of Barnett shale properties. Operating |
Depreciation, | ||||||||||||||||||||||||||||||||||||
Operating | Depletion & | Interest | Interest | Income | Net | Total | Capital | |||||||||||||||||||||||||||||
(in Millions) | Revenue | Amortization | Income | Expense | Taxes | Income | Assets | Goodwill | Expenditures | |||||||||||||||||||||||||||
2006 | ||||||||||||||||||||||||||||||||||||
Electric Utility | $ | 4,737 | $ | 809 | $ | (4 | ) | $ | 278 | $ | 161 | $ | 325 | $ | 14,540 | $ | 1,206 | $ | 972 | |||||||||||||||||
Gas Utility | 1,849 | 94 | (9 | ) | 67 | 11 | 50 | 3,123 | 773 | 155 | ||||||||||||||||||||||||||
Non-utility Operations: | ||||||||||||||||||||||||||||||||||||
Coal and Gas Midstream | 707 | 4 | (3 | ) | 10 | 28 | 50 | 435 | 13 | 53 | ||||||||||||||||||||||||||
Unconventional Gas Production | 99 | 27 | — | 13 | 5 | 9 | 611 | 8 | 186 | |||||||||||||||||||||||||||
Power and Industrial Projects | 409 | 48 | (8 | ) | 29 | (56 | ) | (80 | ) | 864 | 36 | 35 | ||||||||||||||||||||||||
Energy Trading | 830 | 6 | (12 | ) | 15 | 49 | 96 | 1,220 | 17 | 2 | ||||||||||||||||||||||||||
2,045 | 85 | (23 | ) | 67 | 26 | 75 | 3,130 | 74 | 276 | |||||||||||||||||||||||||||
Corporate & Other | 5 | 2 | (52 | ) | 174 | (52 | ) | (61 | ) | 2,307 | — | — | ||||||||||||||||||||||||
Reconciliation and Eliminations | (477 | ) | — | 62 | (61 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Total from Continuing Operations | $ | 8,159 | $ | 990 | $ | (26 | ) | $ | 525 | $ | 146 | 389 | 23,100 | 2,053 | 1,403 | |||||||||||||||||||||
Discontinued Operations (Note 3) | 43 | 685 | 4 | — | ||||||||||||||||||||||||||||||||
Cumulative Effect of Accounting Change | 1 | — | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 433 | $ | 23,785 | $ | 2,057 | $ | 1,403 | ||||||||||||||||||||||||||||
135141
Depreciation, | ||||||||||||||||||||||||||||||||||||
Operating | Depletion & | Interest | Interest | Income | Net | Total | Capital | |||||||||||||||||||||||||||||
(in Millions) | Revenue | Amortization | Income | Expense | Taxes | Income | Assets | Goodwill | Expenditures | |||||||||||||||||||||||||||
2005 | ||||||||||||||||||||||||||||||||||||
Electric Utility | $ | 4,462 | $ | 640 | $ | (3 | ) | $ | 267 | $ | 149 | $ | 277 | $ | 13,112 | $ | 1,207 | $ | 722 | |||||||||||||||||
Gas Utility | 2,138 | 95 | (10 | ) | 58 | (2 | ) | 37 | 3,101 | 772 | 128 | |||||||||||||||||||||||||
Non-utility Operations: | ||||||||||||||||||||||||||||||||||||
Coal and Gas Midstream | 707 | 3 | (3 | ) | 4 | 22 | 45 | 373 | 12 | 28 | ||||||||||||||||||||||||||
Unconventional Gas Production | 74 | 20 | — | 8 | 1 | 4 | 434 | 8 | 144 | |||||||||||||||||||||||||||
Power and Industrial Projects | 428 | 48 | (5 | ) | 20 | (7 | ) | 4 | 1,043 | 37 | 29 | |||||||||||||||||||||||||
Energy Trading | 977 | 4 | (3 | ) | 17 | (23 | ) | (43 | ) | 1,834 | 17 | 8 | ||||||||||||||||||||||||
2,186 | 75 | (11 | ) | 49 | (7 | ) | 10 | 3,684 | 74 | 209 | ||||||||||||||||||||||||||
Corporate & Other | 10 | — | (40 | ) | 187 | (34 | ) | (52 | ) | 2,358 | — | 4 | ||||||||||||||||||||||||
Reconciliation and Eliminations | (702 | ) | — | 42 | (43 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Total from Continuing Operations | $ | 8,094 | $ | 810 | $ | (22 | ) | $ | 518 | $ | 106 | 272 | 22,255 | 2,053 | 1,063 | |||||||||||||||||||||
Discontinued Operations (Note 3) | 268 | 1,080 | 4 | 2 | ||||||||||||||||||||||||||||||||
Cumulative Effect of Accounting Change | (3 | ) | — | — | — | |||||||||||||||||||||||||||||||
Total | $ | 537 | $ | 23,335 | $ | 2,057 | $ | 1,065 | ||||||||||||||||||||||||||||
136
Depreciation, | ||||||||||||||||||||||||||||||||||||
Operating | Depletion & | Interest | Interest | Income | Net | Total | Capital | |||||||||||||||||||||||||||||
Revenue | Amortization | Income | Expense | Taxes | Income | Assets | Goodwill | Expenditures | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||||||||||
2006 | ||||||||||||||||||||||||||||||||||||
Electric Utility | $ | 4,737 | $ | 809 | $ | (4 | ) | $ | 278 | $ | 161 | $ | 325 | $ | 14,540 | $ | 1,206 | $ | 972 | |||||||||||||||||
Gas Utility | 1,849 | 94 | (9 | ) | 67 | 11 | 50 | 3,123 | 773 | 155 | ||||||||||||||||||||||||||
Non-utility Operations: | ||||||||||||||||||||||||||||||||||||
Gas Midstream | 63 | 3 | (2 | ) | 8 | 15 | 28 | 290 | 9 | 37 | ||||||||||||||||||||||||||
Unconventional Gas Production | 99 | 27 | — | 13 | 5 | 9 | 611 | 8 | 186 | |||||||||||||||||||||||||||
Power and Industrial Projects | 1,053 | 49 | (9 | ) | 31 | (43 | ) | (58 | ) | 1,009 | 40 | 51 | ||||||||||||||||||||||||
Energy Trading | 828 | 6 | (12 | ) | 15 | 49 | 96 | 1,114 | 17 | 2 | ||||||||||||||||||||||||||
2,043 | 85 | (23 | ) | 67 | 26 | 75 | 3,024 | 74 | 276 | |||||||||||||||||||||||||||
Corporate & Other | 5 | 2 | (52 | ) | 174 | (52 | ) | (61 | ) | 2,307 | — | — | ||||||||||||||||||||||||
Reconciliation and Eliminations | (477 | ) | — | 62 | (61 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Total from Continuing Operations | $ | 8,157 | $ | 990 | $ | (26 | ) | $ | 525 | $ | 146 | 389 | 22,994 | 2,053 | 1,403 | |||||||||||||||||||||
Discontinued Operations (Note 3) | 43 | 685 | 4 | — | ||||||||||||||||||||||||||||||||
Cumulative Effect of Accounting Change | 1 | — | — | — | ||||||||||||||||||||||||||||||||
Total | $ | 433 | $ | 23,679 | $ | 2,057 | $ | 1,403 | ||||||||||||||||||||||||||||
NOTE 21 — | SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED) |
First | Second | Third | Fourth | |||||||||||||||||
(in Millions, except per share amounts) | Quarter | Quarter(1) | Quarter | Quarter(2) | Year | |||||||||||||||
2007 | ||||||||||||||||||||
Operating Revenues | $ | 2,463 | $ | 1,692 | $ | 2,140 | $ | 2,211 | $ | 8,506 | ||||||||||
Operating Income | $ | 270 | $ | 736 | $ | 298 | $ | 331 | $ | 1,635 | ||||||||||
Net Income | ||||||||||||||||||||
From continuing operations | $ | 96 | $ | 348 | $ | 152 | $ | 191 | $ | 787 | ||||||||||
Discontinued operations | 38 | 37 | 45 | 64 | 184 | |||||||||||||||
Total | $ | 134 | $ | 385 | $ | 197 | $ | 255 | $ | 971 | ||||||||||
Basic Earnings per Share | ||||||||||||||||||||
From continuing operations | $ | .54 | $ | 2.00 | $ | .93 | $ | 1.17 | $ | 4.64 | ||||||||||
Discontinued operations | .22 | .21 | .27 | .40 | 1.09 | |||||||||||||||
Total | $ | .76 | $ | 2.21 | $ | 1.20 | $ | 1.57 | $ | 5.73 | ||||||||||
Diluted Earnings per Share | ||||||||||||||||||||
From continuing operations | $ | .54 | $ | 1.99 | $ | .92 | $ | 1.17 | $ | 4.62 | ||||||||||
Discontinued operations | .22 | .21 | .27 | .39 | 1.08 | |||||||||||||||
Total | $ | .76 | $ | 2.20 | $ | 1.19 | $ | 1.56 | $ | 5.70 | ||||||||||
2006 | ||||||||||||||||||||
Operating Revenues | $ | 2,361 | $ | 1,706 | $ | 2,054 | $ | 2,038 | $ | 8,159 | ||||||||||
Operating Income | $ | 295 | $ | 138 | $ | 335 | $ | 292 | $ | 1,060 | ||||||||||
Net Income (Loss) | ||||||||||||||||||||
From continuing operations | $ | 115 | $ | 2 | $ | 146 | $ | 126 | $ | 389 | ||||||||||
Discontinued operations | 20 | (35 | ) | 42 | 16 | 43 | ||||||||||||||
Cumulative effect of accounting change | 1 | — | — | — | 1 | |||||||||||||||
Total | $ | 136 | $ | (33 | ) | $ | 188 | $ | 142 | $ | 433 | |||||||||
Basic Earnings (Loss) per Share | ||||||||||||||||||||
From continuing operations | $ | .64 | $ | .01 | $ | .83 | $ | .71 | $ | 2.19 | ||||||||||
Discontinued operations | .12 | (.20 | ) | .23 | .09 | .24 | ||||||||||||||
Cumulative effect of accounting change | .01 | — | — | — | .01 | |||||||||||||||
Total | $ | .77 | $ | (.19 | ) | $ | 1.06 | $ | .80 | $ | 2.44 | |||||||||
Diluted Earnings (Loss) per Share | ||||||||||||||||||||
From continuing operations | $ | .64 | $ | .01 | $ | .83 | $ | .71 | $ | 2.18 | ||||||||||
Discontinued operations | .12 | (.20 | ) | .23 | .09 | .24 | ||||||||||||||
Cumulative effect of accounting change | — | — | — | — | .01 | |||||||||||||||
Total | $ | .76 | $ | (.19 | ) | $ | 1.06 | $ | .80 | $ | 2.43 | |||||||||
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First | Second | Third | Fourth | |||||||||||||||||
Quarter | Quarter(1) | Quarter | Quarter(2) | Year | ||||||||||||||||
(In millions, except per share amounts) | ||||||||||||||||||||
2008 | ||||||||||||||||||||
Operating Revenues | $ | 2,570 | $ | 2,251 | $ | 2,338 | $ | 2,170 | $ | 9,329 | ||||||||||
Operating Income | $ | 429 | $ | 157 | $ | 375 | $ | 302 | $ | 1,263 | ||||||||||
Net Income | ||||||||||||||||||||
From continuing operations | $ | 200 | $ | 28 | $ | 169 | $ | 129 | $ | 526 | ||||||||||
Discontinued operations | 12 | — | 8 | — | 20 | |||||||||||||||
Total | $ | 212 | $ | 28 | $ | 177 | $ | 129 | $ | 546 | ||||||||||
Basic Earnings per Share | ||||||||||||||||||||
From continuing operations | $ | 1.23 | $ | .17 | $ | 1.04 | $ | .80 | $ | 3.24 | ||||||||||
Discontinued operations | .08 | — | .05 | — | .13 | |||||||||||||||
Total | $ | 1.31 | $ | .17 | $ | 1.09 | $ | .80 | $ | 3.37 | ||||||||||
Diluted Earnings per Share | ||||||||||||||||||||
From continuing operations | $ | 1.23 | $ | .17 | $ | 1.03 | $ | .80 | $ | 3.23 | ||||||||||
Discontinued operations | .07 | — | .05 | — | .13 | |||||||||||||||
Total | $ | 1.30 | $ | .17 | $ | 1.08 | $ | .80 | $ | 3.36 | ||||||||||
2007 | ||||||||||||||||||||
Operating Revenues | $ | 2,462 | $ | 1,676 | $ | 2,127 | $ | 2,210 | $ | 8,475 | ||||||||||
Operating Income | $ | 269 | $ | 721 | $ | 286 | $ | 329 | $ | 1,605 | ||||||||||
Net Income (Loss) | ||||||||||||||||||||
From continuing operations | $ | 96 | $ | 348 | $ | 152 | $ | 191 | $ | 787 | ||||||||||
Discontinued operations | 38 | 37 | 45 | 64 | 184 | |||||||||||||||
Total | $ | 134 | $ | 385 | $ | 197 | $ | 255 | $ | 971 | ||||||||||
Basic Earnings (Loss) per Share | ||||||||||||||||||||
From continuing operations | $ | .54 | $ | 2.00 | $ | .93 | $ | 1.17 | $ | 4.64 | ||||||||||
Discontinued operations | .22 | .21 | .27 | .40 | 1.09 | |||||||||||||||
Total | $ | .76 | $ | 2.21 | $ | 1.20 | $ | 1.57 | $ | 5.73 | ||||||||||
Diluted Earnings (Loss) per Share | ||||||||||||||||||||
From continuing operations | $ | .54 | $ | 1.99 | $ | .92 | $ | 1.17 | $ | 4.62 | ||||||||||
Discontinued operations | .22 | .21 | .27 | .39 | 1.08 | |||||||||||||||
Total | $ | .76 | $ | 2.20 | $ | 1.19 | $ | 1.56 | $ | 5.70 | ||||||||||
(1) | In the second quarter of 2007, the Company recorded a $900 million ($580 million after-tax) gain on the Antrim sale transaction and $323 million ($210 million after-tax) of losses on hedge contracts associated with the Antrim sale. | |
(2) | In the fourth quarter of 2007, the Company recorded adjustments that increased operating income by $20 million ($13 million after-tax) to correct prior amounts. These adjustments were primarily to record property, plant and equipment and deferred CTA costs at Detroit Edison for expenditures that had been expensed in earlier quarters of 2007. |
137143
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
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Item 15. | Exhibits and Financial Statement Schedules |
(a) | The following documents are filed as part of this Annual Report onForm 10-K. |
(1) | Consolidated financial statements. See “Item 8 | ||
(2) | Financial statement schedules. See “Item 8 | ||
(3) | Exhibits. | ||
(i) Exhibits filed herewith. | |||
4-252 | Ninth Supplemental Indenture, dated as of December 1, 2008 to Supplemental to Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., Trustee, establishing the Floating Rate Senior Notes, 2008 Series M due 2009. | ||
4-253 | Forty-second Supplemental Indenture, dated as of December 1, 2008 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., Trustee establishing the 2008 Series M Collateral Bonds. | ||
10-75 | DTE Energy Company Executive Supplemental Retirement Plan as Amended and Restated, effective as of January 1, 2005. | ||
10-76 | DTE Energy Company Supplemental Retirement Plan as Amended and Restated, effective as of January 1, 2005. | ||
10-77 | DTE Energy Company Supplemental Savings Plan as Amended and Restated, effective as of January 1, 2005. |
144
10-79 | ||
10-80 | DTE Energy Company Deferred Stock Compensation Plan for Non-Employee Directors as Amended and Restated, effective January 1, 2005. | |
Computation of Ratio of Earnings to Fixed Charges. | ||
Subsidiaries of the | ||
Consent of Deloitte & Touche LLP. | ||
Chief Executive Officer Section 302Form 10-K Certification of Periodic Report. | ||
Chief Financial Officer Section 302Form 10-K Certification of Periodic Report. | ||
99-48 | ||
(ii) | Exhibits incorporated herein by reference. | |
3(a) | Amended and Restated Articles of Incorporation of DTE Energy Company, dated December 13, 1995 | |
3(b) | Certificate of Designation of Series A Junior Participating Preferred Stock of DTE Energy Company, dated September 23, 1997 | |
3(c) | Bylaws of DTE Energy Company, as amended through February 24, 2005 (Exhibit 3.1 toForm 8-K dated February 24, 2005). | |
4(a) | Amended and Restated Indenture, dated as of April 9, 2001, between DTE Energy Company and Bank of New York, as trustee (Exhibit 4.1 to Registration Statement onForm S-3 (FileNo. 333-58834)). | |
4(b) | Supplemental Indenture, dated as of May 30, 2001, between DTE Energy Company and Bank of New York, as trustee | |
4(c) | Supplemental Indenture, dated as of April 5, 2002 between DTE Energy Company and Bank of New York, as trustee |
139
4(d) | Supplemental Indenture, dated as of April 1, 2003, between DTE Energy Company and Bank of New York, as trustee, creating 2003 Series A 6 | |
4(e) | Supplemental Indenture, dated as of May 15, 2006, between DTE Energy Company and Bank of New York, as trustee | |
4(f) | Amended and Restated Trust Agreement of DTE Energy Trust I, dated as of January 15, 2002 | |
4(g) | Amended and Restated Trust Agreement of DTE Energy Trust II, dated as of June 1, 2004 (Exhibit 4(q) toForm 10-Q for the quarter ended June 30, 2004). | |
4(h) | Trust Agreement of DTE Energy Trust III | |
4(i) | Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit B-1 to Detroit Edison’s Registration Statement onForm A-2 (FileNo. 2-1630)) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below: | |
Supplemental Indenture, dated as of December 1, 1940, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit B-14 to Detroit Edison’s Registration Statement onForm A-2 (FileNo. 2-4609)). (amendment) | ||
Supplemental Indenture, dated as of September 1, 1947, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit B-20 to Detroit Edison’s Registration Statement onForm S-1 (FileNo. 2-7136)). (amendment) |
145
Supplemental Indenture, dated as of March 1, 1950, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit B-22 to Detroit Edison’s Registration Statement onForm S-1 (FileNo. 2-8290)). (amendment) | ||
Supplemental Indenture, dated as of November 15, 1951, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit B-23 to Detroit Edison’s Registration Statement onForm S-1 (FileNo. 2-9226)). (amendment) | ||
Supplemental Indenture, dated as of August 15, 1957, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 3-B-30 to Detroit Edison’sForm 8-K dated September 11, 1957). (amendment) | ||
Supplemental Indenture, dated as of December 1, 1966, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 2-B-32 to Detroit Edison’s Registration Statement onForm S-9 (FileNo. 2-25664)). (amendment) | ||
Supplemental Indenture, dated as of February 15, 1990, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-212 to Detroit Edison’sForm 10-K for the year ended December 31, 2000). (1990 Series B, C, E and F) | ||
Supplemental Indenture, dated as of May 1, 1991, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-178 to Detroit Edison’sForm 10-K for the year ended December 31, 1996). (1991 Series BP and CP) | ||
Supplemental Indenture, dated as of May 15, 1991, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-179 to Detroit Edison’sForm 10-K for the year ended December 31, 1996). (1991 Series DP) | ||
Supplemental Indenture, dated as of February 29, 1992, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-187 to Detroit Edison’sForm 10-Q for the quarter ended March 31, 1998). (1992 Series AP) | ||
Supplemental Indenture, dated as of April 26, 1993, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-215 to Detroit Edison’sForm 10-K for the year ended December 31, 2000). (amendment) | ||
Supplemental Indenture, dated as of June 30, 1993, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-216 to Detroit Edison’sForm 10-K for the year ended December 31, 2000). (1993 Series AP) | ||
Supplemental Indenture, dated as of August 1, 1999, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-204 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 1999). (1999 Series AP, BP and CP) | ||
Supplemental Indenture, dated as of August 1, 2000, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-210 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2000). (2000 Series BP) | ||
Supplemental Indenture, dated as of March 15, 2001, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-222 to Detroit Edison’sForm 10-Q for the quarter ended March 31, 2001). (2001 Series AP) |
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Supplemental Indenture, dated as of May 1, 2001, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-226 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2001). (2001 Series BP) | ||
Supplemental Indenture, dated as of August 15, 2001, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-227 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2001). (2001 Series CP) | ||
Supplemental Indenture, dated as of September 15, 2001, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-228 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2001). (2001 Series D and E) | ||
Supplemental Indenture, dated as of September 17, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Detroit Edison’s Registration Statement onForm S-3 (FileNo. 333-100000)). (amendment and successor trustee) | ||
Supplemental Indenture, dated as of October 15, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-230 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2002). (2002 Series A and B) | ||
Supplemental Indenture, dated as of December 1, 2002, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-232 to Detroit Edison’sForm 10-K for the year ended December 31, 2002). (2002 Series C and D) | ||
Supplemental Indenture, dated as of August 1, 2003, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-235 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2003). (2003 Series A) | ||
Supplemental Indenture, dated as of March 15, 2004, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-238 to Detroit Edison’sForm 10-Q for the quarter ended March 31, 2004). (2004 Series A and B) | ||
Supplemental Indenture, dated as of July 1, 2004, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-240 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2004). (2004 Series D) | ||
Supplemental Indenture, dated as of April 1, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.3 to Detroit Edison’s Registration Statement onForm S-4 (FileNo. 333-123926)). (2005 Series AR and BR) | ||
Supplemental Indenture, dated as of September 15, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.2 to Detroit Edison’sForm 8-K dated September 29, 2005). (2005 Series C) | ||
Supplemental Indenture, dated as of September 30, 2005, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-248 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2005). (2005 Series E) | ||
Supplemental Indenture, dated as of May 15, 2006, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-250 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2006). (2006 Series A) |
147
Supplemental Indenture, dated as of December 1, 2007, to the Mortgage and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.2 to Detroit Edison’sForm 8-K dated December 18, 2007). (2007 Series A) | ||
Supplemental Indenture, dated as of April 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between the Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-251 to the Detroit Edison’sForm 10-Q for the quarter ended March 31, 2008). (2008 Series DT) | ||
Supplemental Indenture, dated as of May 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-253 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2008). (2008 Series ET) | ||
Supplemental Indenture, dated as of June 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-255 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2008). (2008 Series G) | ||
Supplemental Indenture, dated as of July 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-257 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2008). (2008 Series KT) | ||
Supplemental Indenture, dated as of October 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company N.A. as successor trustee(Exhibit 4-259 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2008). (2008 Series J) | ||
Supplemental Indenture, dated as of December 1, 2008 to Mortgage and Deed of Trust dated as of October 1, 1924 between The Detroit Edison Company and The Bank of New York Mellon Trust Company N.A., as successor trustee(Exhibit 4-261 to Detroit Edison’sForm 10-K for the year ended December 31, 2008). (2008 Series LT) | ||
4(j) | Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-152 to Detroit Edison’s Registration Statement (FileNo. 33-50325)) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below: | |
Ninth Supplemental Indenture, dated as of October 10, 2001, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-229 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2001). (6.125% Senior Notes due 2010) | ||
Tenth Supplemental Indenture, dated as of October 23, 2002, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-231 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2002). (5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032) | ||
Eleventh Supplemental Indenture, dated as of December 1, 2002, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-233 to Detroit Edison’sForm 10-Q for the quarter ended March 31, 2003). (5.45% Senior Notes due 2032 and 5.25% Senior Notes due 2032) | ||
Twelfth Supplemental Indenture, dated as of August 1, 2003, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-236 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2003). (51/2% Senior Notes due 2030) | ||
Thirteenth Supplemental Indenture, dated as of April 1, 2004, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-237 to Detroit Edison’sForm 10-Q for the quarter ended March 31, 2004). (4.875% Senior Notes Due 2029 and 4.65% Senior Notes due 2028) |
148
Fourteenth Supplemental Indenture, dated as of July 15, 2004, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-239 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2004). (2004 Series D 5.40% Senior Notes due 2014) | ||
Sixteenth Supplemental Indenture, dated as of April 1, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Detroit Edison’s Registration Statement onForm S-4 (FileNo. 333-123926)). (2005 Series AR 4.80% Senior Notes due 2015 and 2005 Series BR 5.45% Senior Notes due 2035) | ||
Eighteenth Supplemental Indenture, dated as of September 15, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Detroit Edison’sForm 8-K dated September 29, 2005). (2005 Series C 5.19% Senior Notes due October 1, 2023) | ||
Nineteenth Supplemental Indenture, dated as of September 30, 2005, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-247 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2005). (2005 Series E 5.70% Senior Notes due 2037) | ||
Twentieth Supplemental Indenture, dated as of May 15, 2006, to the Collateral Trust Indenture dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-249 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2006). (2006 Series A Senior Notes due 2036) | ||
Twenty-second Supplemental Indenture, dated as of December 1, 2007, to the Collateral Trust Indenture, dated as of June 30, 1993, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4.1 to Detroit Edison’sForm 8-K dated December 18, 2007). (2007 Series A Senior Notes due 2038) | ||
Twenty-third Supplemental Indenture, dated as of April 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-252 to Detroit Edison’sForm 10-Q for the quarter ended March 31, 2008). (2008 Series DT Variable Rate Senior Notes due 2036) | ||
Twenty-fourth Supplemental Indenture, dated as of May 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-254 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2008). (2008 Series ET Variable Rate Senior Notes due 2029) | ||
Twenty-fifth Supplemental Indenture, dated as of June 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-256 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2008). (2008 Series G 5.60% Senior Notes due 2018) | ||
Twenty-sixth Supplemental Indenture, dated as of July 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-258 to Detroit Edison’sForm 10-Q for the quarter ended June 30, 2008). (2008 Series KT Variable Rate Senior Notes due 2020) | ||
Twenty-seventh Supplemental Indenture, dated as of October 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-260 to Detroit Edison’sForm 10-Q for the quarter ended September 30, 2008). (2008 Series J 6.40% Senior Notes due 2013) | ||
Twenty-eighth Supplemental Indenture, dated as of December 1, 2008 to the Collateral Trust Indenture, dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee(Exhibit 4-262 to Detroit Edison’sForm 10-K for the year ended December 31, 2008). (2008 Series LT 6.75% Senior Notes due 2038) | ||
4(k) | Trust Agreement of Detroit Edison Trust I. (Exhibit 4.9 to Registration Statement onForm S-3 (FileNo. 333-100000)) | |
4(l) | Trust Agreement of Detroit Edison Trust II. (Exhibit 4.10 to Registration Statement onForm S-3 (FileNo. 333-100000)) |
149
4(m) | Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., as trustee, related to Senior Debt Securities(Exhibit 4-1 to Michigan Consolidated Gas Company Registration Statement onForm S-3 (FileNo. 333-63370)) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below: | |
Fourth Supplemental Indenture dated as of February 15, 2003, to the Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-3 to Michigan Consolidated Gas CompanyForm 10-Q for the quarter ended March 31, 2003). (5.70% Senior Notes, 2003 Series A due 2033) | ||
Fifth Supplemental Indenture dated as of October 1, 2004, to the Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-6 to Michigan Consolidated Gas CompanyForm 10-Q for the quarter ended September 31, 2004). (5.00% Senior Notes, 2004 Series E due 2019) | ||
Sixth Supplemental Indenture dated as of April 1, 2008, to the Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-241 toForm 10-Q for the quarter ended March 31, 2008). (5.26% Senior Notes, 2008 Series ‘A’ due 2013, 6.04% Senior Notes, 2008 Series ‘B’ due 2018 and 6.44% Senior Notes, 2008 Series ‘C’ due 2023) | ||
Seventh Supplemental Indenture, dated as of June 1, 2008 to Supplement to Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-243 toForm 10-Q for the quarter ended June 30, 2008). (6.78% Senior Notes, 2008 Series F due 2028) | ||
Eighth Supplemental Indenture, dated as of August 1, 2008 to Supplemental to Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-251 toForm 10-Q for the quarter ended September 30, 2008). (5.94% Senior Notes, 2008 Series H due 2015 and 6.36% Senior Notes, 2008 Series I due 2020) | ||
4(n) | Indenture of Mortgage and Deed of Trust dated as of March 1, 1944(Exhibit 7-D to Michigan Consolidated Gas Company Registration StatementNo. 2-5252) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings set forth below: | |
Twenty-ninth Supplemental Indenture dated as of July 15, 1989, among Michigan Consolidated Gas Company and Citibank, N.A. and Robert T. Kirchner, as trustees, creating an issue of first mortgage bonds and providing for the modification and restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944(Exhibit 4-2 to Michigan Consolidated Gas Company Registration Statement onForm S-3 (FileNo. 333-63370)) | ||
Thirty-second Supplemental Indenture dated as of January 5, 1993 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-1 to Michigan Consolidated Gas CompanyForm 10-K for the year ended December 31, 1992). (First Mortgage Bonds Designated Secured Term Notes, Series B) | ||
Thirty-third Supplemental Indenture dated as of May 1, 1995 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-2 to Michigan Consolidated Gas Company Registration Statement onForm S-3 (FileNo. 33-59093)). (First Mortgage Bonds Designated Secured Medium Term Notes, Series B) | ||
Thirty-fourth Supplemental Indenture dated as of November 1, 1996 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-2 to Michigan Consolidated Gas Company Registration Statement onForm S-3 (FileNo. 333-16285)). (First Mortgage Bonds Designated Secured Medium Term Notes, Series C) | ||
Thirty-fifth Supplemental Indenture dated as of June 18, 1998 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee, creating an issue of first mortgage bonds designated as collateral bonds(Exhibit 4-2 to Michigan Consolidated Gas CompanyForm 8-K dated June 18, 1998) | ||
Thirty-seventh Supplemental Indenture dated as of February 15, 2003 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-4 to Michigan Consolidated Gas CompanyForm 10-Q for the quarter ended March 31, 2003). (5.70% collateral bonds due 2033) |
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Thirty-eighth Supplemental Indenture dated as of October 1, 2004 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-5 to Michigan Consolidated Gas CompanyForm 10-Q for the quarter ended September 31, 2004). (2004 Series E collateral bonds) | ||
Thirty-ninth Supplemental Indenture, dated as of April 1, 2008 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-240 toForm 10-Q for the quarter ended March 31, 2008). (2008 Series A, B and C Collateral Bonds) | ||
Fortieth Supplemental Indenture, dated as of June 1, 2008 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-242 toForm 10-Q for the quarter ended June 30, 2008). (2008 Series F Collateral Bonds) | ||
Forty-first Supplemental Indenture, dated as of August 1, 2008 to Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between Michigan Consolidated Gas Company and Citibank, N.A., trustee(Exhibit 4-250 toForm 10-Q for the quarter ended September 30, 2008). (2008 Series H and I Collateral Bonds) | ||
10(a) | Form of | |
Certain arrangements pertaining to the employment of Anthony F. Earley, Jr. with The Detroit Edison Company, dated April 25, 1994 | ||
Certain arrangements pertaining to the employment of Gerard M. Anderson with The Detroit Edison Company, dated October 6, 1993 | ||
Certain arrangements pertaining to the employment of David E. Meador with The Detroit Edison Company, dated January 14, 1997 | ||
Certain arrangements pertaining to the employment of Bruce D. Peterson, dated May 22, 2002 | ||
Termination and Consulting Agreement, dated as of October 4, 1999, among DTE Energy Company, MCN Energy Group Inc., DTE Enterprises Inc. and A.R. Glancy, III | ||
Amended and Restated Post-Employment Income Agreement, dated March 23, 1998, between The Detroit Edison Company and Anthony F. Earley, Jr. | ||
DTE Energy Company Annual Incentive Plan | ||
DTE Energy Company 2001 Stock Incentive Plan | ||
DTE Energy Company 2006 Long-Term Incentive Plan (Annex A to DTE Energy’s Definitive Proxy Statement dated March 24, 2006). | ||
10(k) | ||
First Amendment, dated February 8, 2007 to the DTE Energy Company |
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10(l) | ||
DTE Energy Company Retirement Plan for Non-Employee Directors’ Fees (as amended and restated effective as of December 31, 1998) | ||
141
The Detroit Edison Company Supplemental Long-Term Disability Plan, dated January 27, 1997 | ||
Description of Executive Life Insurance Plan | ||
Executive Vehicle Plan of The Detroit Edison Company, dated as of September 1, 1999 |
151
DTE Energy Affiliates Nonqualified Plans Master Trust, effective as of May 1, 2003 | ||
Form of DTE Energy Five-Year Credit Agreement, dated as of October 17, 2005, by and among DTE Energy, the lenders party thereto, Citibank, N.A., as Administrative Agent, and Barclays Bank PLC and JPMorgan Chase Bank, N. A., as Co-Syndication Agents (Exhibit 10.1 toForm 8-K dated October 17, 2005). | ||
10(s) | Form of Amendment No. 1 to The Detroit Edison Company’s Five-Year Credit Agreement, dated as of January 10, 2007, by and among The Detroit Edison Company, the lenders party thereto, Barclays Bank PLC, as Administrative Agent, and Citibank, N.A. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.1 toForm 8-K dated January 10, 2007). | |
Amendment No. 1 to Five-Year Credit Agreement, dated as of January 10, 2007, by and among, DTE Energy Company, the lenders party thereto, Citibank, N.A., as Administrative Agent, and Barclays Bank PLC and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.1 toForm 8-K dated January 10, 2007). | ||
Form of Second Amended and Restated Five-Year Credit Agreement, dated as of October 17, 2005, by and among DTE Energy, the lenders party thereto, Citibank, N.A., as Administrative Agent, and Barclays Bank PLC and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.2 toForm 8-K dated October 17, 2005). | ||
Amendment No. 1 to Second Amended and Restated Five-Year Credit Agreement, dated as of January 10, 2007 by and among DTE Energy Company, the lenders party thereto, and Citibank, N.A., as Administrative Agent and Barclays Bank PLC and JP Morgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.2 toForm 8-K dated January 10, 2007). | ||
Form of Director Restricted Stock Agreement (Exhibit 10.1 toForm 8-K dated June 23, 2005). | ||
Form of Director Restricted Stock Agreement pursuant to the DTE Energy Company Long-Term Incentive Plan (Exhibit 10.1 toForm 8-K dated June 29, 2006). | ||
Form ofChange-in-Control Severance Agreement, dated as of November 8, 2007, between DTE Energy Company and each of Anthony F Earley, Jr., Gerard M. Anderson, Robert J. Buckler, | ||
10(z) | Form of The Detroit Edison Company’s Five-Year Credit Agreement, dated as of October 17, 2005, by and among The Detroit Edison Company, the lenders party thereto, Barclays Bank PLC, as Administrative Agent, and Citibank, N.A. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.1 toForm 8-K dated October 17, 2005). | |
10(aa) | Form of Second Amended and Restated Five-Year Credit Agreement, dated as of October 17, 2005, by and among The Detroit Edison Company, the lenders party thereto, Barclays Bank PLC, as Administrative Agent, and Citibank, N.A. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.2 toForm 8-K dated October 17, 2005). | |
10(bb) | Form of Amendment No. 1 to Second Amended and Restated Five-Year Credit Agreement dated as of January 10, 2007, by and among The Detroit Edison Company, the lenders party thereto, Barclays Bank PLC, as Administrative Agent, and Citibank, N.A. and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (Exhibit 10.2 toForm 8-K dated January 10, 2007). | |
10(cc) | Form of Second Amended and Restated Five-Year Credit Agreement dated as of October 17, 2005, by and among Michigan Consolidated Gas Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Barclays Bank PLC and Citibank, N.A. as Co-Syndication Agents (Exhibit 10.2 toForm 8-K dated October 17, 2005). | |
10(dd) | Form of Amendment No. 1 to Five-Year Credit Agreement dated as of January 10, 2007, by and among Michigan Consolidated Gas Company, the lenders party thereto, JPMorgan Chase Bank, N. A., as Administrative Agent, and Barclays Bank PLC and Citibank, N.A., as Co-Syndication Agents (Exhibit 10.1 toForm 8-K dated January 10, 2007). | |
10(ff) | Form of Five-Year Credit Agreement dated as of October 17, 2005, by and among Michigan Consolidated Gas Company, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and Barclays Bank PLC and Citibank, N.A., as Co-Syndication Agents (Exhibit 10.1 toForm 8-K dated October 17, 2005). |
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10(ee) | Form of Amendment No. 1 to Second Amended and Restated Five-Year Credit Arrangement dated as of January 10, 2007, by and among Michigan Consolidated Gas Company, the lenders party thereto JPMorgan Chase Bank, N.A., as Administrative Agent, and Barclays Bank PLC and Citibank, N.A., as Co-Syndication Agents (Exhibit 10.2 toForm 8-K dated January 10, 2007). | |
99(a) | Master Trust Agreement (“Master Trust”), dated as of June 30, 1994, between DTE Energy Company, as successor, and Fidelity Management Trust Company relating to the Savings and Investment Plans | |
99(b) | First Amendment, dated as of February 1, 1995, to Master Trust | |
99(c) | Second Amendment, dated as of February 1, 1995, to Master Trust | |
99(d) | Third Amendment, effective January 1, 1996, to Master Trust | |
99(e) | Fourth Amendment, dated as of August 1, 1996, to Master Trust | |
99(f) | Fifth Amendment, dated as of January 1, 1998, to Master Trust |
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99(g) | Sixth Amendment, dated as of September 1, 1998, to Master Trust | |
99(h) | Seventh Amendment, dated as of December 15, 1999, to Master Trust | |
99(i) | Eighth Amendment, dated as of February 1, 2000, to Master Trust | |
99(j) | Ninth Amendment, dated as of April 1, 2000, to Master Trust | |
99(k) | Tenth Amendment, dated as of May 1, 2000, to Master Trust | |
99(l) | Eleventh Amendment, dated as of July 1, 2000, to Master Trust | |
99(m) | Twelfth Amendment, dated as of August 1, 2000, to Master Trust | |
99(n) | Thirteenth Amendment, dated as of December 21, 2001, to Master Trust | |
99(o) | Fourteenth Amendment, dated as of March 1, 2002, to Master Trust | |
99(p) | Fifteenth Amendment, dated as of January 1, 2002, to Master Trust | |
99(q) | Sixteenth Amendment, to Master Trust, dated as of July 30, 2004, to Master Trust(Exhibit 99-25 toForm 10-K for the year ended December 31, 2007). | |
99(s) | Nineteenth Amendment, dated as of July 31, 2007, to Master Trust(Exhibit 99-27 toForm 10-K for the year ended December 31, 2007). | |
(iii) Exhibits furnished herewith: | ||
Chief Executive Officer Section 906Form 10-K Certification of Periodic Report. | ||
Chief Financial Officer Section 906Form 10-K Certification of Periodic Report. |
143153
Year Ending December 31, | ||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||
Allowance for Doubtful Accounts (shown as deduction from Accounts Receivable in the Consolidated Statement of Financial Position) | ||||||||||||
Balance at Beginning of Period | $ | 170 | $ | 136 | $ | 129 | ||||||
Additions: | ||||||||||||
Charged to costs and expenses | 133 | 120 | 106 | |||||||||
Charged to other accounts (1) | 12 | 7 | 9 | |||||||||
Deductions (2) | (133 | ) | (93 | ) | (108 | ) | ||||||
Balance At End of Period | $ | 182 | $ | 170 | $ | 136 | ||||||
Year Ending December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In millions) | ||||||||||||
Allowance for Doubtful Accounts (shown as deduction from Accounts Receivable in the Consolidated Statement of Financial Position) | ||||||||||||
Balance at Beginning of Period | $ | 182 | $ | 170 | $ | 136 | ||||||
Additions: | ||||||||||||
Charged to costs and expenses | 198 | 133 | 120 | |||||||||
Charged to other accounts(1) | 18 | 12 | 7 | |||||||||
Deductions(2) | (133 | ) | (133 | ) | (93 | ) | ||||||
Balance at End of Period | $ | 265 | $ | 182 | $ | 170 | ||||||
(1) | Collection of accounts previously written | |
(2) | Uncollectible accounts written off. |
Year Ending December 31, | Year Ending December 31, | |||||||||||||||||||||||
(in Millions) | 2007 | 2006 | 2005 | |||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Note Receivable Reserve | ||||||||||||||||||||||||
Balance at Beginning of Period | $ | 65 | $ | — | $ | — | $ | 4 | $ | 65 | $ | — | ||||||||||||
Additions: | ||||||||||||||||||||||||
Charged to costs and expenses — shown as deduction in the Consolidated Statement of Financial Position from: | ||||||||||||||||||||||||
Other Current Assets | — | 50 | — | — | — | 50 | ||||||||||||||||||
Notes Receivable | — | 15 | — | — | — | 15 | ||||||||||||||||||
Deductions | (61 | ) | — | — | (4 | ) | (61 | ) | — | |||||||||||||||
Balance At End of Period | $ | 4 | $ | 65 | $ | — | ||||||||||||||||||
Balance at End of Period | $ | — | $ | 4 | $ | 65 | ||||||||||||||||||
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By | /s/ ANTHONY F. EARLEY, JR. |
By | /s/ ANTHONY F. EARLEY, JR. Chairman of the Board and Chief Executive Officer | ||
By | /s/ PETER B. OLEKSIAK Vice President and Controller, and Chief Accounting Officer | ||
By | /s/ LILLIAN BAUDER | ||
By | /s/ W. FRANK FOUNTAIN, JR. | ||
By | /s/ ALLAN D. GILMOUR | ||
By | /s/ ALFRED R. GLANCY III | ||
By | /s/ FRANK M. HENNESSEY |
By | /s/ | |||||
By | /s/ | |||||
By | /s/ | |||||
By | /s/ ALLAN D. GILMOUR | |||||
By | /s/ | |||||
By | /s/ ALFRED R. GLANCY III | |||||
By | /s/ | |||||
By | /s/ | |||||
By | /s/ JAMES H. VANDENBERGHE | |||||
145
155