DTE Energy Company
Consolidated Statements of Financial Position (unaudited)
| | | | | | | | |
| | September 30 | | | December 31 | |
| | 2007 | | | 2006 | |
| | (in Millions) | |
ASSETS | | | | | | | | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | $ | 156 | | | $ | 147 | |
Restricted cash | | | 93 | | | | 146 | |
Accounts receivable (less allowance for doubtful accounts of $180 and $170, respectively) | | | | | | | | |
Customer | | | 1,192 | | | | 1,427 | |
Collateral held by others | | | 73 | | | | 68 | |
Other | | | 292 | | | | 442 | |
Accrued power and gas supply cost recovery revenue | | | 116 | | | | 117 | |
Inventories | | | | | | | | |
Fuel and gas | | | 570 | | | | 562 | |
Materials and supplies | | | 186 | | | | 153 | |
Deferred income taxes | | | 366 | | | | 245 | |
Assets from risk management and trading activities | | | 372 | | | | 461 | |
Other | | | 239 | | | | 193 | |
Current assets held for sale | | | 74 | | | | — | |
| | | | | | |
| | | 3,729 | | | | 3,961 | |
| | | | | | |
| | | | | | | | |
Investments | | | | | | | | |
Nuclear decommissioning trust funds | | | 826 | | | | 740 | |
Other | | | 453 | | | | 505 | |
| | | | | | |
| | | 1,279 | | | | 1,245 | |
| | | | | | |
| | | | | | | | |
Property | | | | | | | | |
Property, plant and equipment | | | 18,834 | | | | 19,224 | |
Less accumulated depreciation and depletion | | | (7,496 | ) | | | (7,773 | ) |
| | | | | | |
| | | 11,338 | | | | 11,451 | |
| | | | | | |
| | | | | | | | |
Other Assets | | | | | | | | |
Goodwill | | | 2,042 | | | | 2,057 | |
Regulatory assets | | | 3,389 | | | | 3,226 | |
Securitized regulatory assets | | | 1,154 | | | | 1,235 | |
Intangible assets | | | 28 | | | | 72 | |
Notes receivable | | | 107 | | | | 164 | |
Assets from risk management and trading activities | | | 156 | | | | 164 | |
Prepaid pension assets | | | 77 | | | | 71 | |
Other | | | 116 | | | | 139 | |
Noncurrent assets held for sale | | | 411 | | | | — | |
| | | | | | |
| | | 7,480 | | | | 7,128 | |
| | | | | | |
Total Assets | | $ | 23,826 | | | $ | 23,785 | |
| | | | | | |
The Consolidated Statements of Financial Position (Unaudited) should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in the Forms 10-K and 10-Q.
DTE Energy Company
Consolidated Statements of Financial Position (unaudited)
| | | | | | | | |
| | September 30 | | | December 31 | |
| | 2007 | | | 2006 | |
| | (in Millions, Except Shares) | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | $ | 952 | | | $ | 1,145 | |
Accrued interest | | | 126 | | | | 115 | |
Dividends payable | | | 87 | | | | 94 | |
Short-term borrowings | | | 1,069 | | | | 1,131 | |
Current portion of long-term debt, including capital leases | | | 466 | | | | 354 | |
Liabilities from risk management and trading activities | | | 267 | | | | 437 | |
Deferred gains and reserves | | | 347 | | | | 208 | |
Other | | | 602 | | | | 680 | |
Current liabilities associated with assets held for sale | | | 49 | | | | — | |
| | | | | | |
| | | 3,965 | | | | 4,164 | |
| | | | | | |
| | | | | | | | |
Long-Term Debt (net of current portion) | | | | | | | | |
Mortgage bonds, notes and other | | | 5,563 | | | | 5,918 | |
Securitization bonds | | | 1,065 | | | | 1,185 | |
Trust preferred-linked securities | | | 289 | | | | 289 | |
Capital lease obligations | | | 44 | | | | 82 | |
| | | | | | |
| | | 6,961 | | | | 7,474 | |
| | | | | | |
| | | | | | | | |
Other Liabilities | | | | | | | | |
Deferred income taxes | | | 1,739 | | | | 1,465 | |
Regulatory liabilities | | | 1,185 | | | | 765 | |
Asset retirement obligations | | | 1,225 | | | | 1,221 | |
Unamortized investment tax credit | | | 111 | | | | 120 | |
Liabilities from risk management and trading activities | | | 414 | | | | 259 | |
Liabilities from transportation and storage contracts | | | 131 | | | | 157 | |
Accrued pension liability | | | 397 | | | | 388 | |
Accrued postretirement liability | | | 1,424 | | | | 1,414 | |
Deferred gains from asset sales | | | 15 | | | | 36 | |
Nuclear decommissioning | | | 129 | | | | 119 | |
Other | | | 324 | | | | 312 | |
Noncurrent liabilities associated with assets held for sale | | | 71 | | | | — | |
| | | | | | |
| | | 7,165 | | | | 6,256 | |
| | | | | | |
| | | | | | | | |
Commitments and Contingencies | | | | | | | | |
| | | | | | | | |
Minority Interest | | | 38 | | | | 42 | |
| | | | | | |
| | | | | | | | |
Shareholders’ Equity | | | | | | | | |
Common stock, without par value, 400,000,000 shares authorized, 163,713,691 and 177,138,060 shares issued and outstanding, respectively | | | 3,181 | | | | 3,467 | |
Retained earnings (less FIN 48 cumulative effect adjustment of $5 in 2007) | | | 2,634 | | | | 2,593 | |
Accumulated other comprehensive loss | | | (118 | ) | | | (211 | ) |
| | | | | | |
| | | 5,697 | | | | 5,849 | |
| | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 23,826 | | | $ | 23,785 | |
| | | | | | |
The Consolidated Statements of Financial Position (Unaudited) should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in the Forms 10-K and 10-Q.
DTE Energy Company
Consolidated Statements of Cash Flows (Unaudited)
| | | | | | | | |
| | Nine Months Ended | |
| | September 30 | |
| | 2007 | | | 2006 | |
| | (in Millions) | |
Operating Activities | | | | | | | | |
Net Income | | $ | 716 | | | $ | 291 | |
Adjustments to reconcile net income to net cash from operating activities: | | | | | | | | |
Depreciation, depletion and amortization | | | 716 | | | | 801 | |
Deferred income taxes | | | 90 | | | | 24 | |
Gain on sale of interests in synfuel projects | | | (144 | ) | | | (72 | ) |
Gain on sale of non-utility business | | | (897 | ) | | | — | |
Other asset (gains), losses and reserves, net | | | 14 | | | | (1 | ) |
Impairment of synfuel projects | | | — | | | | 124 | |
Partners’ share of synfuel project losses | | | (161 | ) | | | (191 | ) |
Contributions from synfuel partners | | | 177 | | | | 155 | |
Cumulative effect of accounting change | | | — | | | | (1 | ) |
Changes in assets and liabilities, exclusive of changes shown separately | | | 281 | | | | 53 | |
| | | | | | |
Net cash from operating activities | | | 792 | | | | 1,183 | |
| | | | | | |
| | | | | | | | |
Investing Activities | | | | | | | | |
Plant and equipment expenditures — utility | | | (750 | ) | | | (830 | ) |
Plant and equipment expenditures — non-utility | | | (206 | ) | | | (214 | ) |
Acquisitions, net of cash acquired | | | — | | | | (27 | ) |
Proceeds from sale of interests in synfuel projects | | | 329 | | | | 203 | |
Refunds to synfuel partners | | | (81 | ) | | | — | |
Proceeds from sale of non-utility business | | | 1,258 | | | | — | |
Proceeds from sale of other assets, net | | | 39 | | | | 44 | |
Restricted cash for debt redemptions | | | 52 | | | | 29 | |
Proceeds from sale of nuclear decommissioning trust fund assets | | | 227 | | | | 136 | |
Investment in nuclear decommissioning trust funds | | | (254 | ) | | | (163 | ) |
Other investments | | | (22 | ) | | | (18 | ) |
| | | | | | |
Net cash from (used for) investing activities | | | 592 | | | | (840 | ) |
| | | | | | |
| | | | | | | | |
Financing Activities | | | | | | | | |
Issuance of long-term debt | | | — | | | | 545 | |
Redemption of long-term debt | | | (340 | ) | | | (672 | ) |
Short-term borrowings, net | | | (62 | ) | | | 44 | |
Issuance of common stock | | | — | | | | 9 | |
Repurchase of common stock | | | (686 | ) | | | (10 | ) |
Dividends on common stock | | | (278 | ) | | | (274 | ) |
Other | | | (2 | ) | | | (8 | ) |
| | | | | | |
Net cash used for financing activities | | | (1,386 | ) | | | (366 | ) |
| | | | | | |
| | | | | | | | |
Net Increase (Decrease) in Cash and Cash Equivalents | | | 16 | | | | (23 | ) |
Cash and Cash Equivalents Reclassified to Assets Held for Sale | | | (7 | ) | | | — | |
Cash and Cash Equivalents at Beginning of the Period | | | 147 | | | | 88 | |
| | | | | | |
Cash and Cash Equivalents at End of the Period | | $ | 156 | | | $ | 65 | |
| | | | | | |
The Consolidated Statements of Cash Flows (Unaudited) should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in Forms 10-K and 10-Q.
The Detroit Edison Company
Consolidated Statements of Operations (unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months | | | Nine Months | |
| | Ended | | | Ended | |
| | September 30 | | | September 30 | |
| | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| | (in Millions) | |
Operating Revenues | | $ | 1,403 | | | $ | 1,460 | | | $ | 3,707 | | | $ | 3,685 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Fuel and purchased power | | | 518 | | | | 539 | | | | 1,274 | | | | 1,257 | |
Operation and maintenance | | | 386 | | | | 277 | | | | 1,114 | | | | 991 | |
Depreciation and amortization | | | 203 | | | | 311 | | | | 583 | | | | 646 | |
Taxes other than income | | | 63 | | | | 64 | | | | 204 | | | | 198 | |
Asset (gains) and reserves, net | | | 6 | | | | (1 | ) | | | 12 | | | | (1 | ) |
| | | | | | | | | | | | |
| | | 1,176 | | | | 1,190 | | | | 3,187 | | | | 3,091 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Operating Income | | | 227 | | | | 270 | | | | 520 | | | | 594 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Other (Income) and Deductions | | | | | | | | | | | | | | | | |
Interest expense | | | 73 | | | | 60 | | | | 222 | | | | 208 | |
Interest income | | | (2 | ) | | | (1 | ) | | | (5 | ) | | | (2 | ) |
Other income | | | (8 | ) | | | (9 | ) | | | (26 | ) | | | (22 | ) |
Other expenses | | | 7 | | | | 9 | | | | 22 | | | | 29 | |
| | | | | | | | | | | | |
| | | 70 | | | | 59 | | | | 213 | | | | 213 | |
| | | | | | | | | | | | |
Income Before Income Taxes | | | 157 | | | | 211 | | | | 307 | | | | 381 | |
Income Tax Provision | | | 50 | | | | 73 | | | | 100 | | | | 128 | |
| | | | | | | | | | | | |
Income Before Accounting Change | | | 107 | | | | 138 | | | | 207 | | | | 253 | |
Cumulative Effect of Accounting Change | | | — | | | | — | | | | — | | | | 1 | |
| | | | | | | | | | | | |
Reported Earnings | | | 107 | | | | 138 | | | | 207 | | | | 254 | |
| | | | | | | | | | | | | | | | |
Adjustments | | | | | | | | | | | | | | | | |
Effective tax rate normalization | | | (1 | ) | | | (3 | ) | | | 1 | | | | (2 | ) |
Detroit Thermal reserve | | | 8 | | | | — | | | | 14 | | | | — | |
Regulatory asset surcharge | | | — | | | | — | | | | 6 | | | | — | |
Performance Excellence Process | | | — | | | | (31 | ) | | | — | | | | — | |
September 2006 MPSC electric | | | — | | | | 38 | | | | — | | | | 38 | |
| | | | | | | | | | | | |
| | | 7 | | | | 4 | | | | 21 | | | | 36 | |
| | | | | | | | | | | | |
Operating Earnings | | $ | 114 | | | $ | 142 | | | $ | 228 | | | $ | 290 | |
| | | | | | | | | | | | |
The Consolidated Statement of Operations (Unaudited) should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in Forms 10-K and 10-Q.
Michigan Consolidated Gas Company
Consolidated Statements of Operations (unaudited)
| | | | | | | | | | | | | | | | |
| | Three Months | | | Nine Months | |
| | Ended | | | Ended | |
| | September 30 | | | September 30 | |
| | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| | (in Millions) | |
Operating Revenues | | $ | 169 | | | $ | 167 | | | $ | 1,335 | | | $ | 1,259 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Cost of gas | | | 56 | | | | 56 | | | | 827 | | | | 768 | |
Operation and maintenance | | | 104 | | | | 91 | | | | 324 | | | | 320 | |
Depreciation and amortization | | | 25 | | | | 24 | | | | 70 | | | | 71 | |
Taxes other than income | | | 13 | | | | 13 | | | | 42 | | | | 41 | |
Asset (gains) and losses, net | | | (1 | ) | | | (3 | ) | | | 2 | | | | — | |
| | | | | | | | | | | | |
| | | 197 | | | | 181 | | | | 1,265 | | | | 1,200 | |
| | | | | | | | | | | | |
Operating Income (Loss) | | | (28 | ) | | | (14 | ) | | | 70 | | | | 59 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Other (Income) and Deductions | | | | | | | | | | | | | | | | |
Interest expense | | | 16 | | | | 17 | | | | 43 | | | | 49 | |
Interest income | | | (5 | ) | | | (2 | ) | | | (12 | ) | | | (6 | ) |
Other income | | | (2 | ) | | | (2 | ) | | | (7 | ) | | | (6 | ) |
Other expenses | | | 1 | | | | — | | | | 3 | | | | 1 | |
| | | | | | | | | | | | |
| | | 10 | | | | 13 | | | | 27 | | | | 38 | |
| | | | | | | | | | | | |
Income (Loss) Before Income Taxes | | | (38 | ) | | | (27 | ) | | | 43 | | | | 21 | |
Income Tax Provision (Benefit) | | | (10 | ) | | | (8 | ) | | | 11 | | | | 3 | |
| | | | | | | | | | | | |
Reported Earnings (Loss) | | | (28 | ) | | | (19 | ) | | | 32 | | | | 18 | |
| | | | | | | | | | | | | | | | |
Adjustments | | | | | | | | | | | | | | | | |
Effective tax rate normalization | | | 6 | | | | 5 | | | | 4 | | | | 3 | |
Performance Excellence Process | | | 1 | | | | 7 | | | | 3 | | | | 11 | |
| | | | | | | | | | | | |
| | | 7 | | | | 12 | | | | 7 | | | | 14 | |
| | | | | | | | | | | | |
Operating Earnings (Loss) | | $ | (21 | ) | | $ | (7 | ) | | $ | 39 | | | $ | 32 | |
| | | | | | | | | | | | |
The Consolidated Statements of Operations (Unaudited) should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in Forms 10-K and 10-Q.
DTE Energy Debt/Equity Calculation
As of September 30, 2007
($ millions)
| | | | |
Short-term borrowings | | $ | 1,069 | |
Current portion of long-term debt, including capital leases | | | 469 | |
Mortgage bonds, notes and other | | | 5,584 | |
Securitization bonds | | | 1,065 | |
Capital lease obligations | | | 74 | |
less MichCon short-term debt | | | (318 | ) |
less Securitization bonds, including current portion | | | (1,185 | ) |
| | | |
Total debt | | | 6,759 | |
Trust preferred-linked securities | | | 289 | |
| | | |
Total preferred/ other | | | 289 | |
Equity | | | 5,697 | |
| | | |
Total capitalization | | $ | 12,744 | |
| | | |
| | | | |
Debt | | | 53.0 | % |
Preferred | | | 2.3 | % |
Common shareholders’ equity | | | 44.7 | % |
| | | |
Total | | | 100.0 | % |
| | | |
Sales Analysis — Q3 2007
Electric Sales — Detroit Edison Service Area (GWh)
| | | | | | | | | | | | |
| | Q3 2007 | | | Q3 2006 | | | % Change | |
Residential | | | 4,836 | | | | 4,883 | | | | -1 | % |
Commercial | | | 5,166 | | | | 4,927 | | | | 5 | % |
Industrial | | | 3,278 | | | | 3,695 | | | | -11 | % |
Other | | | 812 | | | | 814 | | | | 0 | % |
| | | | | | | | | |
| | | 14,092 | | | | 14,319 | | | | -2 | % |
Choice* | | | 569 | | | | 534 | | | | 7 | % |
| | | | | | | | | |
TOTAL SALES | | | 14,661 | | | | 14,853 | | | | -1 | % |
| | | | | | | | | |
| | |
* | | Includes Dearborn Industrial Group sales |
Gas Sales — MichCon Service Area (Mcf)
| | | | | | | | | | | | |
| | Q3 2007 | | | Q3 2006 | | | % Change | |
Residential | | | 8,620,009 | | | | 7,814,094 | | | | 10 | % |
Commercial | | | 2,302,481 | | | | 2,171,363 | | | | 6 | % |
Industrial | | | 185,436 | | | | 230,837 | | | | -20 | % |
| | | | | | | | | |
| | | 11,107,926 | | | | 10,216,294 | | | | 9 | % |
| | | | | | | | | | | | |
End User Transportation* | | | 25,189,350 | | | | 27,815,723 | | | | -9 | % |
| | | | | | | | | |
TOTAL SALES | | | 36,297,276 | | | | 38,032,017 | | | | -5 | % |
| | | | | | | | | |
| | |
* | | Includes choice customers |
Electric Revenue — Detroit Edison Service Area ($000s)
| | | | | | | | | | | | |
| | Q3 2007 | | | Q3 2006 | | | % Change | |
Residential | | | 522,327 | | | | 529,454 | | | | -1 | % |
Commercial | | | 445,809 | | | | 444,828 | | | | 0 | % |
Industrial | | | 214,994 | | | | 240,019 | | | | -10 | % |
Other | | | 44,822 | | | | 44,448 | | | | 1 | % |
| | | | | | | | | |
| | | 1,227,952 | | | | 1,258,749 | | | | -2 | % |
| | | | | | | | | | | | |
Choice* | | | 11,595 | | | | 15,355 | | | | -24 | % |
| | | | | | | | | |
TOTAL REVENUES | | | 1,239,547 | | | | 1,274,104 | | | | -3 | % |
| | | | | | | | | |
| | |
* | | Distribution charge, includes Dearborn Industrial Group revenues |
Gas Revenue — MichCon Service Area ($000s)
| | | | | | | | | | | | |
| | Q3 2007 | | | Q3 2006 | | | % Change | |
Residential | | | 109,477 | | | | 104,066 | | | | 5 | % |
Commercial | | | 27,198 | | | | 26,294 | | | | 3 | % |
Industrial | | | 1,867 | | | | 2,322 | | | | -20 | % |
| | | | | | | | | |
| | | 138,542 | | | | 132,682 | | | | 4 | % |
| | | | | | | | | | | | |
End User Transportation* | | | 21,308 | | | | 24,149 | | | | -12 | % |
| | | | | | | | | |
TOTAL REVENUES | | | 159,850 | | | | 156,831 | | | | 2 | % |
| | | | | | | | | |
| | |
* | | Includes choice customers |
Weather
Cooling Degree Days
Detroit Edison service territory
| | | | | | | | | | | | |
| | Q3 2007 | | | Q3 2006 | | | % Change | |
Actuals | | | 613 | | | | 640 | | | | -4 | % |
Normal | | | 537 | | | | 537 | | | | n/m | |
| | | | | | | | | | |
Deviation from normal | | | 14 | % | | | 19 | % | | | | |
Heating Degree Days
MichCon service territory
| | | | | | | | | | | | |
| | Q3 2007 | | | Q3 2006 | | | % Change | |
Actuals | | | 107 | | | | 148 | | | | -28 | % |
Normal | | | 181 | | | | 177 | | | | | |
| | | | | | | | | | |
Deviation from normal | | | -41 | % | | | -16 | % | | | | |
| | | | | | | | | | | | | | | | |
| | 2007 Common Shares Outstanding | |
| | | | | | | | | | | | | | Projected | |
| | Q1 | | | Q2 | | | Q3 | | | FYE 2007 | |
| | (millions) | |
Weighted Average Shares Outstanding For The Period | | | 177 | | | | 175 | | | | 166 | | | | 171 | |
Outstanding Shares At End Of Period | | | 176 | | | | 171 | | | | 164 | | | | 160 | |