EXHIBIT 99.2
3Q 2005 Supplemental Financial Information November 2, 2005 |
DTE Energy Company
Historical Operating Net Income
(Preliminary/Unaudited)
Historical Operating Net Income
(Preliminary/Unaudited)
(in millions, except per share amounts) |
2004 | 2005 | |||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Total | Q1 | Q2 | Q3 | |||||||||||||||||||||||||
Electric Utility | $ | 38 | $ | 10 | $ | 62 | $ | 68 | $ | 178 | $ | 57 | $ | 46 | $ | 97 | ||||||||||||||||
Gas Utility | 57 | (28 | ) | (31 | ) | 26 | 24 | 47 | (2 | ) | (18 | ) | ||||||||||||||||||||
Total Utilities | $ | 95 | $ | (18 | ) | $ | 31 | $ | 94 | $ | 202 | $ | 104 | $ | 44 | $ | 79 | |||||||||||||||
Power & Industrial Projects | ||||||||||||||||||||||||||||||||
Synfuels | $ | 41 | $ | 54 | $ | 51 | $ | 47 | $ | 193 | $ | 65 | $ | 18 | $ | 47 | ||||||||||||||||
Power Generation | (4 | ) | (4 | ) | (6 | ) | (3 | ) | (17 | ) | (4 | ) | (3 | ) | (1 | ) | ||||||||||||||||
All Other Projects | 1 | 6 | 6 | (1 | ) | 12 | 5 | 8 | 3 | |||||||||||||||||||||||
Corporate Overheads | (2 | ) | (3 | ) | (2 | ) | (2 | ) | (9 | ) | — | (3 | ) | (2 | ) | |||||||||||||||||
Total Power & Industrial Projects | $ | 36 | $ | 53 | $ | 49 | $ | 41 | $ | 179 | $ | 66 | $ | 20 | $ | 47 | ||||||||||||||||
Unconventional Gas Production | $ | 1 | $ | 2 | $ | 1 | $ | 1 | $ | 5 | $ | 1 | $ | 0 | $ | 2 | ||||||||||||||||
Fuel Transportation & Marketing | ||||||||||||||||||||||||||||||||
Coal Services | $ | 3 | $ | 5 | $ | 5 | $ | 7 | $ | 20 | $ | 5 | $ | 6 | $ | 5 | ||||||||||||||||
Midstream | 3 | 4 | 4 | 6 | 17 | 8 | 5 | 9 | ||||||||||||||||||||||||
Energy Trading and CoEnergy Portfolio | 9 | (7 | ) | 12 | 30 | 44 | (22 | ) | (7 | ) | (140 | ) | ||||||||||||||||||||
Corporate Overheads | (3 | ) | (3 | ) | (3 | ) | (3 | ) | (12 | ) | (1 | ) | (4 | ) | (3 | ) | ||||||||||||||||
Total Fuel Transportation & Marketing | $ | 12 | $ | (1 | ) | $ | 18 | $ | 40 | $ | 69 | $ | (10 | ) | $ | 0 | $ | (129 | ) | |||||||||||||
Corporate & Other | (7 | ) | 23 | (2 | ) | (25 | ) | (11 | ) | (7 | ) | (24 | ) | 6 | ||||||||||||||||||
Total Net Income | $ | 137 | $ | 59 | $ | 97 | $ | 151 | $ | 444 | $ | 154 | $ | 40 | $ | 5 | ||||||||||||||||
Earnings Per Diluted Share | $ | 0.80 | $ | 0.34 | $ | 0.56 | $ | 0.86 | $ | 2.56 | $ | 0.88 | $ | 0.23 | $ | 0.03 | ||||||||||||||||
Average Diluted Shares Outstanding | 170 | 174 | 174 | 175 | 173 | 175 | 175 | 177 |
1
DTE ENERGY COMPANY AND SUBSIDIARY COMPANIES
Earnings Variance Analysis (Preliminary/Unaudited)
Earnings Variance Analysis (Preliminary/Unaudited)
Q3 2004 Reported Earnings per Share | $ | 0.54 | ||||||
SAP/DTE2 Implementation project costs | 0.02 | |||||||
Effective tax rate normalization | (0.02 | ) | ||||||
Impairment charge / discontinued operations | 0.02 | |||||||
Q3 2004 Operating Earnings per Share | $ | 0.56 | ||||||
Electric Utility | $ | 0.19 | ||||||
Higher gross margin | ||||||||
Weather | 0.37 | |||||||
Rate order | 0.10 | |||||||
Residential usage | 0.08 | |||||||
Choice | 0.07 | |||||||
Impacts of residential rate cap | (0.24 | ) | ||||||
Lower regulatory deferrals | (0.12 | ) | ||||||
Higher storm expense | (0.10 | ) | ||||||
Merger interest | 0.05 | |||||||
Other | (0.02 | ) | ||||||
Gas Utility | $ | 0.07 | ||||||
Rate order | 0.03 | |||||||
Gas margins | 0.02 | |||||||
Merger interest | 0.03 | |||||||
Other | (0.01 | ) | ||||||
Non-Utility(excluding timing-related items) | $ | 0.14 | ||||||
Power & Industrial Projects (excluding Timing-Related Items) — primarily higher synfuel production | 0.15 | |||||||
Unconventional Gas Production | 0.01 | |||||||
Fuel Transportation & Marketing (excluding Timing-Related Items) | (0.02 | ) | ||||||
Holding Company | $ | 0.04 | ||||||
Timing-Related Impacts: | ||||||||
Power & Industrial Projects | ||||||||
Deferred recognition of synfuel revenue | (0.21 | ) | ||||||
Mark-to-market on 2005 synfuel oil hedges | 0.05 | |||||||
Fuel Transportation & Marketing | ||||||||
Unrealized mark-to-market impact at Energy Trading — Q3 2004 | 0.09 | |||||||
Unrealized mark-to-market impact at Energy Trading — Q3 2005 | (0.90 | ) | ||||||
Q3 2005 Operating Earnings per Share | $ | 0.03 | ||||||
SAP/DTE2 implementation project costs | (0.02 | ) | ||||||
Effective tax rate normalization | (0.06 | ) | ||||||
Gain on sale of land | 0.10 | |||||||
Mark-to-market on 2006 synfuel oil hedges | 0.12 | |||||||
Impairment charge / discontinued operations (DTE Energy Technologies) | (0.15 | ) | ||||||
Q3 2005 Reported Earnings per Share | $ | 0.02 |
2
DTE Energy Company
Consolidated Statement of Financial Position (Unaudited)
Consolidated Statement of Financial Position (Unaudited)
(Unaudited) | ||||||||
September 30 | December 31 | |||||||
2005 | 2004 | |||||||
(in Millions) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 91 | $ | 56 | ||||
Restricted cash | 96 | 126 | ||||||
Accounts receivable | ||||||||
Customer (less allowance for doubtful accounts of $140 and $129, respectively) | 1,372 | 880 | ||||||
Accrued unbilled revenues | 225 | 378 | ||||||
Other | 851 | 383 | ||||||
Inventories | ||||||||
Fuel and gas | 700 | 509 | ||||||
Materials and supplies | 150 | 159 | ||||||
Assets from risk management and trading activities | 1,090 | 296 | ||||||
Other | 411 | 209 | ||||||
4,986 | 2,996 | |||||||
Investments | ||||||||
Nuclear decommissioning trust funds | 634 | 590 | ||||||
Other | 565 | 558 | ||||||
1,199 | 1,148 | |||||||
Property | ||||||||
Property, plant and equipment | 18,298 | 18,011 | ||||||
Less accumulated depreciation and depletion | (7,705 | ) | (7,520 | ) | ||||
10,593 | 10,491 | |||||||
Other Assets | ||||||||
Goodwill | 2,049 | 2,067 | ||||||
Regulatory assets | 2,127 | 2,119 | ||||||
Securitized regulatory assets | 1,367 | 1,438 | ||||||
Notes receivable | 454 | 529 | ||||||
Assets from risk management and trading activities | 524 | 125 | ||||||
Prepaid pension assets | 185 | 184 | ||||||
Other | 230 | 200 | ||||||
6,936 | 6,662 | |||||||
Total Assets | $ | 23,714 | $ | 21,297 | ||||
3
DTE Energy Company
Consolidated Statement of Financial Position (Unaudited)
Consolidated Statement of Financial Position (Unaudited)
(Unaudited) | ||||||||
September 30 | December 31 | |||||||
2005 | 2004 | |||||||
(in Millions, Except Shares) | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 1,280 | $ | 892 | ||||
Accrued interest | 114 | 111 | ||||||
Dividends payable | 92 | 90 | ||||||
Accrued payroll | 46 | 33 | ||||||
Income taxes | — | 16 | ||||||
Short-term borrowings | 875 | 403 | ||||||
Current portion of long-term debt, including capital leases | 888 | 514 | ||||||
Liabilities from risk management and trading activities | 1,566 | 369 | ||||||
Other | 915 | 581 | ||||||
5,776 | 3,009 | |||||||
Other Liabilities | ||||||||
Deferred income taxes | 1,282 | 1,124 | ||||||
Regulatory liabilities | 825 | 817 | ||||||
Asset retirement obligations | 952 | 916 | ||||||
Unamortized investment tax credit | 134 | 143 | ||||||
Liabilities from risk management and trading activities | 743 | 224 | ||||||
Liabilities from transportation and storage contracts | 359 | 387 | ||||||
Accrued pension liability | 336 | 265 | ||||||
Deferred gains from asset sales | 227 | 414 | ||||||
Minority interest | 94 | 132 | ||||||
Nuclear decommissioning | 83 | 77 | ||||||
Other | 675 | 635 | ||||||
5,710 | 5,134 | |||||||
Long-Term Debt (net of current portion) | ||||||||
Mortgage bonds, notes and other | 4,979 | 5,673 | ||||||
Securitization bonds | 1,295 | 1,400 | ||||||
Equity-linked securities | 175 | 178 | ||||||
Trust preferred-linked securities | 289 | 289 | ||||||
Capital lease obligations | 59 | 66 | ||||||
6,797 | 7,606 | |||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Common stock, without par value, 400,000,000 shares authorized, 177,825,796 and 174,209,034 shares issued and outstanding, respectively | 3,481 | 3,323 | ||||||
Retained earnings | 2,267 | 2,383 | ||||||
Accumulated other comprehensive loss | (317 | ) | (158 | ) | ||||
5,431 | 5,548 | |||||||
Total Liabilities and Shareholders’ Equity | $ | 23,714 | $ | 21,297 | ||||
4
DTE Energy Company
Consolidated Statement of Cash Flows (Unaudited)
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended | ||||||||
September 30 | ||||||||
2005 | 2004 | |||||||
(in Millions) | ||||||||
Operating Activities | ||||||||
Net Income | $ | 155 | $ | 318 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation, depletion and amortization | 663 | 536 | ||||||
Deferred income taxes | 121 | 104 | ||||||
Gain on sale of interests in synfuel projects | (180 | ) | (166 | ) | ||||
Gain on sale of assets, net | (31 | ) | (27 | ) | ||||
Partners’ share of synfuel project losses | (241 | ) | (158 | ) | ||||
Restructuring charges | 31 | — | ||||||
Contributions from synfuel partners | 177 | 71 | ||||||
Changes in assets and liabilities, exclusive of changes shown separately | (102 | ) | (88 | ) | ||||
Net cash from operating activities | 593 | 590 | ||||||
Investing Activities | ||||||||
Plant and equipment expenditures — utility | (564 | ) | (555 | ) | ||||
Plant and equipment expenditures — non-utility | (145 | ) | (52 | ) | ||||
Proceeds from sale of interests in synfuel projects | 251 | 151 | ||||||
Proceeds from sale of other assets, net of cash divested | 56 | 62 | ||||||
Restricted cash for debt redemptions | 30 | 55 | ||||||
Other investments | (109 | ) | (95 | ) | ||||
Net cash used for investing activities | (481 | ) | (434 | ) | ||||
Financing Activities | ||||||||
Issuance of long-term debt | 623 | 617 | ||||||
Redemption of long-term debt | (1,059 | ) | (620 | ) | ||||
Short-term borrowings, net | 472 | 106 | ||||||
Issuance of common stock | 172 | 31 | ||||||
Repurchase of common stock | (12 | ) | — | |||||
Dividends on common stock | (268 | ) | (265 | ) | ||||
Other | (5 | ) | (5 | ) | ||||
Net cash used for financing activities | (77 | ) | (136 | ) | ||||
Net Increase in Cash and Cash Equivalents | 35 | 20 | ||||||
Cash and Cash Equivalents at Beginning of the Period | 56 | 54 | ||||||
Cash and Cash Equivalents at End of the Period | $ | 91 | $ | 74 | ||||
5
The Detroit Edison Company
Consolidated Statement of Operations (unaudited)
Consolidated Statement of Operations (unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
(in Millions) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Operating Revenues | $ | 1,409 | $ | 958 | $ | 3,434 | $ | 2,679 | ||||||||
Operating Expenses | ||||||||||||||||
Fuel and purchased power | 604 | 238 | 1,248 | 654 | ||||||||||||
Operation and maintenance | 325 | 361 | 976 | 1,064 | ||||||||||||
Depreciation and amortization | 174 | 128 | 484 | 364 | ||||||||||||
Taxes other than income | 68 | 62 | 200 | 192 | ||||||||||||
Asset gains and losses, net | (26 | ) | — | (26 | ) | (1 | ) | |||||||||
1,145 | 789 | 2,882 | 2,273 | |||||||||||||
Operating Income | 264 | 169 | 552 | 406 | ||||||||||||
Other (Income) and Deductions | ||||||||||||||||
Interest expense | 68 | 72 | 201 | 215 | ||||||||||||
Interest income | (1 | ) | — | (2 | ) | — | ||||||||||
Other income | (17 | ) | (13 | ) | (47 | ) | (43 | ) | ||||||||
Other expenses | 20 | 16 | 62 | 61 | ||||||||||||
70 | 75 | 214 | 233 | |||||||||||||
Income Before Income Taxes | 194 | 94 | 338 | 173 | ||||||||||||
Income Tax Provision | 80 | 32 | 126 | 59 | ||||||||||||
Reported Earnings | 114 | 62 | 212 | 114 | ||||||||||||
Adjustments | ||||||||||||||||
Incremental non-recurring DTE2 project costs | 3 | 1 | 8 | 6 | ||||||||||||
Effective tax rate normalization | (3 | ) | (1 | ) | (3 | ) | (2 | ) | ||||||||
Gain on sale of assets to MGM | (17 | ) | — | (17 | ) | — | ||||||||||
Stranded Cost adjustment | — | — | — | (7 | ) | |||||||||||
Operating Earnings | $ | 97 | $ | 62 | $ | 200 | $ | 111 | ||||||||
The Consolidated Statement of Operations (Unaudited) should be read in conjunction with the Notes to
Consolidated Financial Statements appearing in the Annual Report to Shareholders, Form 10K and 10Q.
Consolidated Financial Statements appearing in the Annual Report to Shareholders, Form 10K and 10Q.
6
Michigan Consolidated Gas Company
Consolidated Statement of Operations (unaudited)
Consolidated Statement of Operations (unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30 | September 30 | |||||||||||||||
(in Millions) | 2005 | 2004 | 2005 | 2004 | ||||||||||||
Operating Revenues | $ | 206 | $ | 155 | $ | 1,301 | $ | 1,141 | ||||||||
Operating Expenses | ||||||||||||||||
Cost of gas | 100 | 64 | 858 | 713 | ||||||||||||
Operation and maintenance | 93 | 90 | 308 | 295 | ||||||||||||
Depreciation, depletion and amortization | 23 | 28 | 73 | 81 | ||||||||||||
Taxes other than income | 9 | 12 | 35 | 37 | ||||||||||||
Asset (gains) and losses, net | — | — | 48 | (2 | ) | |||||||||||
225 | 194 | 1,322 | 1,124 | |||||||||||||
Operating Income (Loss) | (19 | ) | (39 | ) | (21 | ) | 17 | |||||||||
Other (Income) and Deductions | ||||||||||||||||
Interest expense | 14 | 14 | 42 | 41 | ||||||||||||
Interest income | (3 | ) | (2 | ) | (8 | ) | (7 | ) | ||||||||
Other | — | — | — | 1 | ||||||||||||
11 | 12 | 34 | 35 | |||||||||||||
Income (Loss) Before Income Taxes | (30 | ) | (51 | ) | (55 | ) | (18 | ) | ||||||||
Income Tax Provision (Benefit) | (189 | ) | 2 | (151 | ) | 2 | ||||||||||
Reported Earnings | 159 | (53 | ) | 96 | (20 | ) | ||||||||||
Adjustments | ||||||||||||||||
Incremental non-recurring DTE2 project costs. | 2 | 1 | 4 | 4 | ||||||||||||
April 2005 MPSC gas orders | — | — | 57 | — | ||||||||||||
Effective tax rate normalization | (181 | ) | 23 | (130 | ) | 15 | ||||||||||
Operating Earnings | $ | (20 | ) | $ | (29 | ) | $ | 27 | $ | (1 | ) | |||||
The Consolidated Statement of Operations (Unaudited) should be read in conjunction with the Notes to Consolidated Financial Statements appearing in the Annual Report to Shareholders, Form 10K and 10Q.
7
DTE Energy Debt/Equity Calculation
As of September 30, 2005
($ millions)
As of September 30, 2005
($ millions)
Short-term borrowings | 875 | |||
Current portion long-term debt, including capital leases | 888 | |||
Mortgage bonds, notes and other | 4,979 | |||
Securitization bonds | 1,295 | |||
Capital lease obligations | 59 | |||
Equity-linked securities | 175 | |||
less MichCon short-term debt | (166 | ) | ||
less securitization debt, including current portion | (1,399 | ) | ||
Total debt | 6,706 | |||
Trust preferred | 289 | |||
Total preferred/ other | 289 | |||
Equity | 5,431 | |||
Total capitalization | 12,426 | |||
Debt | 54.0 | % | ||
Preferred stock | 2.3 | % | ||
Common shareholders’ equity | 43.7 | % | ||
Total | 100.0 | % | ||
8
Sales Analysis — Q3 2005
Electric Sales — Detroit Edison Service Area (GWh)
Q3 2005 | Q3 2004 | % Change | ||||||||||
Residential | 5,554,576 | 4,113,927 | 35 | % | ||||||||
Commercial | 4,461,908 | 3,557,384 | 25 | % | ||||||||
Industrial | 3,197,271 | 2,854,400 | 12 | % | ||||||||
Other | 691,397 | 628,397 | 10 | % | ||||||||
13,905,152 | 11,154,108 | 25 | % | |||||||||
Interconnection | 1,110,357 | 1,442,501 | -23 | % | ||||||||
Choice* | 1,697,176 | 2,654,802 | -36 | % | ||||||||
TOTAL SALES | 16,712,685 | 15,251,411 | 10 | % | ||||||||
* | Includes Dearborn Industrial Group sales |
Electric Revenue — Detroit Edison Service Area ($000s)
Q3 2005 | Q3 2004 | % Change | ||||||||||
Residential | 508,444 | 369,059 | 38 | % | ||||||||
Commercial | 376,134 | 294,301 | 28 | % | ||||||||
Industrial | 187,559 | 137,412 | 36 | % | ||||||||
Other | 34,172 | 29,209 | 17 | % | ||||||||
1,106,309 | 829,981 | 33 | % | |||||||||
Interconnection | 139,351 | 58,090 | 140 | % | ||||||||
Choice* | 32,915 | 50,506 | -35 | % | ||||||||
TOTAL REVENUES | 1,278,575 | 938,577 | 36 | % | ||||||||
* | Distribution charge, includes Dearborn Industrial Group revenues |
Gas Sales — MichCon Service Area (Mcf)
Q3 2005 | Q3 2004 | % Change | ||||||||||
Residential | 7,262,523 | 9,180,323 | -21 | % | ||||||||
Commercial | 2,413,047 | 2,695,926 | -10 | % | ||||||||
Industrial | 201,249 | 188,258 | 7 | % | ||||||||
9,876,819 | 12,064,507 | -18 | % | |||||||||
End User | ||||||||||||
Transportation* | 34,491,497 | 27,441,684 | 26 | % | ||||||||
TOTAL SALES | 44,368,316 | 39,506,191 | 12 | % | ||||||||
* | Includes choice customers |
Gas Revenue — MichCon Service Area ($000s)
Q3 2005 | Q3 2004 | % Change | ||||||||||
Residential | 102,002 | 96,522 | 6 | % | ||||||||
Commercial | 30,857 | 26,379 | 17 | % | ||||||||
Industrial | 2,188 | 1,652 | 32 | % | ||||||||
135,047 | 124,553 | 8 | % | |||||||||
End User Transportation* | 24,268 | 20,819 | 17 | % | ||||||||
TOTAL REVENUES | 159,315 | 145,372 | 10 | % | ||||||||
* | Includes choice customers |
Weather
Cooling Degree Days
Detroit Edison service territory
Q3 2005 | Q3 2004 | % Change | ||||||||||
Actuals | 775 | 470 | 65 | % | ||||||||
Normal | 537 | 537 | ||||||||||
Deviation from normal | 44 | % | -12 | % |
Heating Degree Days
MichCon service territory
Q3 2005 | Q3 2004 | % Change | ||||||||||
Actuals | 58 | 134 | -57 | % | ||||||||
Normal* | 182 | 147 | ||||||||||
Deviation from normal | -68 | % | -9 | % |
* | 2005 data based on 30-year average, 2004 data based on 10-year average |
9