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Filed by DTE Energy Company
Subject Company - MCN Energy Group Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Commission File No 001-10070
DTE ENERGY
&
MCN Energy Group
Merger Financial Review
March 7, 2001
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DISCLOSURE PAGE
================================================================================
DTE will be filing a post-effective amendment to its registration statement
filed on Form S-4, which was filed with the SEC on November 12, 1999 and
contains a proxy statement/prospectus for DTE and MCN, and other documents with
the Securities and Exchange Commission. Investors and security holders are urged
to read the post effective amendment containing the proxy statement/prospectus
and any other relevant documents filed with the SEC when they become available
because they will contain important information. Investors and security holders
will be able to receive the post effective amendment containing the proxy
statement/prospectus and other documents free of charge at the SEC's web site,
www.sec.gov, from DTE Investor Relations at 2000 2nd Avenue, Detroit, Michigan
48226-1279 or from MCN Investor Relations at 500 Griswold Street, Detroit,
Michigan 48226. Information concerning the identity of the participants in the
solicitation of proxies by the MCN board of directors and their direct or
indirect interests, by security holdings or otherwise, may be obtained from the
Secretary of MCN at the address listed above. This presentation will be filed
with the SEC on March 7, 2001.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based
upon the company's current estimates. Actual results may differ materially.
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WELCOME AND INTRODUCTIONS
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DTE ENERGY
- Dave Meador Senior Vice President - Finance
- Dan Brudzynski Vice President & Controller
- Nick Khouri Vice President & Treasurer
- Lisa Muschong Director - Investor Relations
MCN ENERGY GROUP
- Lee Dow Chief Financial Officer
- Stewart Lawrence Director - Investor Relations
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AGENDA
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- - DTE Energy Investment Profile
- - Securitization
- - Merger Update
- - 2001 and 2002 Earnings Guidance
- - Non-Regulated Growth and Tax Credits
- - Summary and Questions/Answers
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NEW DTE ENERGY - ATTRACTIVE INVESTMENT PROFILE
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- - Continued EPS Growth
- - Non Regulated Earnings Growth
- - Regulatory Certainty
- - Merger Certainty and Improved Economics
- - Continued Technology Investments
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EARNINGS PER SHARE GROWTH
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[BAR GRAPH]
6% CAGR
1997 1998 1999 2000
---- ---- ---- ----
$2.88 $3.05 $3.33 $3.39
MERGER COSTS(*)
NON-UTILITY
UTILITY
(*) ONE-TIME MERGER COSTS OF $0.12 / SHARE
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SECURITIZATION
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- - DTE Energy is issuing Securitization Bonds to fully, and immediately, recover
100% of stranded costs.
- - On Friday, March 2, Detroit Edison priced $1.75 billion of securitization
bonds with an average interest rate of 6.1%. Settlement date is set for March
9, 2001.
- - Between the passage of legislation and the issuing of bonds, DTE Energy
achieved the shortest time interval of any utility nationwide.
- - Securitization proceeds will be used to strengthen DTE Energy's balance sheet
and increase shareholder value. Proceeds will be used to retire existing debt
($1.3 billion) and repurchase outstanding shares ($0.4 billion).
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MERGER CLOSING - ILLUSTRATIVE
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Revised S-4
Revised U1-A/SEC
MCN Proxy
FTC
Integration/Synergies
Close
- --------------------------------------------------------------------------------
MARCH APRIL MAY JUNE JULY AUGUST
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2001 EARNINGS GUIDANCE
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(ASSUMES JULY CLOSE)
DTE ENERGY ADJUSTED 2000 FOR MERGER COSTS $3.39
Base Business 0.06
New Growth (Excluding Synfuels) 0.15
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STAND ALONE DTE ENERGY 2001 $3.60
Share Dilution (0.35)
Interest (0.20) 1/2 YEAR
Incremental Earnings (Including Synfuels) 0.15-0.25 IMPACT
Cost Synergies 0.20
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COMBINED 2001 $3.40-$3.50
Merger Costs (0.60)
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REPORTED 2001 $2.80-$2.90
Goodwill Amortization 0.10
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2001 EXCLUDING GOODWILL $2.90-$3.00
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2002 EARNINGS GUIDANCE
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STAND ALONE DTE ENERGY 2001 $ 3.60
Base DTE Growth 0.20-0.30
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STAND ALONE DTE ENERGY 2002 $3.80-$3.90
Share Dilution (0.70)
Interest (0.40)
Incremental Earnings (Including Synfuels) 0.80
Cost Synergies 0.40
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COMBINED 2002 $3.90-$4.00
Goodwill Amortization 0.20
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2002 EXCLUDING GOODWILL $4.10-$4.20
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EARNINGS SUMMARY
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[BAR GRAPH]
2000
- ----
ADJUSTED FOR MERGER COSTS $3.39
REPORTED $3.27
2001 EST.
- ---------
DTE STAND ALONE $3.60
REPORTED $2.90-$3.00
2002 COMBINED EST.
- ------------------
$4.10-$4.20
GOODWILL AMORTIZATION
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2002 DISTRIBUTION OF EARNINGS
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[PIE CHART]
1998
- ----
NON-UTILITY 7%
DETROIT EDISON 93%
$3.05/SHARE
2002
- ----
NON-UTILITY 25%
MICHCON 16%
DETROIT EDISON 59%
$4.10-$4.20/SHARE
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TAX CREDIT OVERVIEW - ILLUSTRATIVE
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{BAR GRAPH]
2000 2001 2002 2003 2004 2005 2006 2007 2008
---- ---- ---- ---- ---- ---- ---- ---- ----
SYNFUEL (*) (*)
COKE BATTERY (*) (*)
BIOMASS
LIMIT ON CREDIT USE
(*) MONETIZATION
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SUSTAINED NON-REGULATED GROWTH
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[BAR GRAPH]
1997 1998 1999 2000 2001E
---- ---- ---- ---- -----
NET INCOME BEFORE MCN (MILLIONS) $14 $42 $69 $100 $125
- - Continued Growth in Energy Services, Energy Trading and Coal Services.
- - Non Regulated Merchant Operations enhanced through joint venture and GE
turbine order.
- - Investments In DTE Technology's D.G. business continues
- - 2005 Earnings Goal = $300 million
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Summary
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- - DTE is an attractive investment
- - We have regulatory and merger certainty
- - Non-Regulated Earnings Growth Continues
- - 2-Day Analyst Meeting Late Spring
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