EXHIBIT 99.1
FEB. 5, 2004
DTE ENERGY 2003 EARNINGS FALL 18 PERCENT
DRIVEN BY WEAK RESULTS AT UTILITY SUBSIDIARIES
DETROIT - DTE Energy (NYSE:DTE) today announced 2003 reported and
operating earnings of $521 million, or $3.09 per diluted share, down 18 percent
from 2002 reported earnings of $632 million, or $3.83 per diluted share.
Operating earnings for 2002 were $586 million, or $3.55 per diluted share.
Detroit Edison, the wholly owned electric subsidiary of DTE Energy,
reported 2003 earnings of $246 million earlier this week.
A reconciliation of reported to operating earnings for both the fourth
quarter and 12 months ended 2002 and 2003 is at the end of this release.
"2003 was a year in which several factors negatively impacted DTE
Energy's financial results," said Anthony F. Earley Jr., DTE Energy chairman and
CEO. "We had an ice storm, two major windstorms, mild summer weather and the
August blackout."
"Another significant factor that hurt the financial performance of our
electric utility, Detroit Edison, was Michigan's Electric Choice program. The
Michigan Public Service Commission (MPSC) has not addressed the structural
issues with the program and has failed to implement the program consistent with
Michigan's electric restructuring legislation passed in 2000."
Michigan's Electric Choice program is unique in that it is the only
state that has opened its market to Choice while the utility remains fully
regulated. Under the current structure of the program, the MPSC has provided
incentive credits and has not authorized transition charges. These policies
create misleading pricing signals for customers considering the Electric Choice
program.
"To date, the considerable cash costs to implement the program and its
associated lost revenue have not been recovered," Earley said. "The combination
of the Electric Choice program, escalating pension and healthcare costs,
increasing operating costs, mild weather and storm restoration costs caused
Detroit Edison's reported earnings to drop from $356 million to $246 million, a
31 percent decline from last year."
"The same mounting cost pressures from healthcare and pension," Earley
continued, "as well as increased operating and uncollectable expenses, drove
MichCon's 2003 operation and maintenance expenses up 26 percent over last year.
We are in need of rate relief at both MichCon and Detroit Edison, and look
forward to an expeditious resolution of our rate requests filed last year with
the MPSC. We are also working aggressively at the MPSC and in the Michigan
legislature to reshape the Electric Choice program in a manner that is fair to
all customers, while maintaining financially healthy Michigan utilities."
Operating earnings results for 2003, by business unit, were as follows:
- - DTE ENERGY RESOURCES operating earnings were $2.84 per diluted share versus
$2.76 per diluted share in 2002. The regulated operations of this business
unit, which are the power generation services of Detroit Edison, increased
$0.04 per diluted share over last year. The increase was driven by
increased regulatory deferrals for Electric Choice and environmental costs,
and
aggressive cost cutting efforts. This was partially offset by decreased
cooling demand due to mild summer weather, lost margins from customers
choosing to purchase power from alternative suppliers under the Electric
Choice program, and continued pressure from higher pension and healthcare
benefit costs.
The non-regulated operations of this business unit include the
company's energy services, energy marketing and trading (comprising DTE
Energy Trading and CoEnergy), coal services and biomass businesses.
Earnings at these non-regulated operations increased $0.04 over last year.
The increase was attributable to higher production of synthetic fuel and
increased short-term power sales at DTE Energy Trading. These operating
earnings were partially offset by lower mark-to-market gains at CoEnergy,
decreased coal tolling revenue and lower tax credits from coke battery
production, most of which expired at the end of 2002.
- - DTE ENERGY DISTRIBUTION posted operating earnings of $0.09 per diluted
share versus earnings of $0.57 per diluted share last year. The regulated
operations of this business unit are the electric distribution services of
Detroit Edison. These regulated operations experienced a year-over-year
decline of $0.49 per diluted share, driven by reduced revenues due to mild
summer weather, restoration costs from ice and wind storms, higher pension
and healthcare costs, increased uncollectable accounts expenses and costs
associated with customer service process improvements.
The non-regulated operations of this business unit consist primarily of
DTE Energy Technologies, which markets and distributes a portfolio of
distributed generation products and services. Year-over-year performance at
this business improved by $0.01 per diluted share, driven by increased
sales and cost-reduction initiatives.
- - DTE ENERGY GAS had operating earnings of $0.44 per diluted share versus
$0.56 per diluted share last year. The regulated operations include the gas
distribution services provided by MichCon. Regulated operations were down
$0.13 per diluted share, due largely to increased operating expenses,
including higher pension and healthcare benefit costs, significant
uncollectable accounts expenses and costs associated with customer service
initiatives. This was partially offset by increased sales due to colder
winter weather in early 2003.
Non-regulated operations include the production of gas in northern
Michigan and the gathering, transporting, processing and storage of gas.
Operating earnings from these operations increased by $0.01 per diluted
share year-over-year, reflecting a gain from the sale of our minority
interest in the Portland Natural Gas Transmission System.
- - CORPORATE & OTHER includes interest costs, as well as certain non-regulated
investments, including assets held for sale and investments in emerging
energy technologies. Corporate & Other operating losses were $0.28 per
diluted share, compared to an operating loss of $0.34 per diluted share in
2002.
For the fourth quarter 2003, DTE Energy reported earnings were $229
million, or $1.36 per diluted share, up from 2002 reported earnings of $203
million, or $1.21 per diluted share. Operating earnings for the fourth quarter
2003 were $159 million, or $0.94 per diluted share, down from 2002 operating
earnings of $199 million, or $1.19 per diluted share.
2
Fourth quarter earnings results by business unit were:
- - DTE ENERGY RESOURCES operating earnings were down $0.13 per diluted share
versus the fourth quarter 2002. Earnings from the regulated operations
increased $0.19 per diluted share, driven primarily by increased regulatory
deferrals for Electric Choice and environmental costs, territory sales
growth and cost cutting efforts. Earnings at the non-regulated operations
declined $0.32 per diluted share versus 2002, due mostly to lower synthetic
fuel production in the energy services operations, the absence of tax
credits from coke battery production and lower inventory valuation gains at
CoEnergy.
- - DTE ENERGY DISTRIBUTION operating earnings were down $0.06 per diluted
share versus the fourth quarter 2002. Regulated operations decreased $0.07
per diluted share, driven by reduced revenues due to mild weather, higher
pension and healthcare costs, and increased uncollectable expenses. The
non-regulated operations improved by $0.01 per diluted share over 2002, due
to cost reduction initiatives.
- - DTE ENERGY GAS operating earnings decreased by $0.10 per diluted share
compared to the fourth quarter of 2002. Regulated operations declined by
$0.09 per diluted share, due to reduced revenues due to mild winter weather
while non-regulated earnings were down $0.01 per diluted share.
- - CORPORATE & OTHER operating losses were $0.05 per diluted share versus a
$0.09 per diluted share loss in the fourth quarter last year. The
improvement was due to a reserve established in 2002 for the possible loss
associated with direct loans to and a guarantee of debt of a technology
investment. Reported earnings for Corporate & Other in the fourth quarter
2003 were $61 million, which included a negative $70 million ($0.42 per
diluted share) effective tax rate adjustment. This quarterly adjustment is
required by Generally Accepted Accounting Principles to maintain a
quarterly effective tax rate consistent with the estimated annual rate and
does not impact total year earnings. This adjustment is primarily necessary
because the company's pre-tax income and Section 29 tax credits earned from
its synthetic fuels business have different quarterly profiles.
- - USE OF OPERATING EARNINGS INFORMATION - DTE Energy management believes that
operating earnings provide a more meaningful representation of the
company's earnings from ongoing operations and uses operating earnings as
the primary performance measurement for external communications with
analysts and investors. Internally, DTE Energy uses operating earnings to
measure performance against budget and to report to the Board of Directors.
"Despite the financial challenges of 2003, DTE Energy also had many
successes throughout the year," Earley said, noting the exceptional effort of
DTE Energy employees in restoring electric service during the August blackout,
an excellent operational year at the company's Fermi 2 nuclear plant and the
successful sale of the company's transmission business."
"Looking ahead, 2004 will be another difficult year for DTE Energy,"
Earley continued. "Our financial picture at Detroit Edison and MichCon depends
on the timing and level of rate relief we've requested from the MPSC. In
addition, the longer the flaws of the Electric Choice program are not addressed,
the greater the earnings and cash erosion at Detroit Edison. Given the
significant financial impact of these ongoing regulatory proceedings, we are not
providing 2004 earnings guidance at this time."
David E. Meador, DTE Energy senior vice president and chief financial
officer, added, "Although our regulated businesses are under financial pressure,
our non-regulated business portfolio continues to demonstrate stable growth.
3
"Our operating earnings from these businesses (excluding Corporate &
Other) increased 7 percent year-over-year and we continue to make progress in
developing new growth opportunities, such as waste coal recovery - a process in
which we transform the waste coal found in coal slurry ponds into a useful fuel
source," Meador said. "DTE Energy's balance sheet and liquidity remain strong,
and we have been able to maintain a stable dividend, which is providing an
attractive 5.3 percent yield to our shareholders. We have a dedicated employee
base that is focused on working through these regulatory issues so that our
company is back on track in the next year or so."
This earnings announcement, as well as a package of detailed financial
information, is available on the company's website at www.dteenergy.com on the
"Investors" page.
DTE Energy will conduct a webcast meeting with the investment community
at 8:30 a.m. EST Friday, Feb. 6, to discuss fourth quarter and full year 2003
earnings results. Investors, the news media and the public may listen to a live
Internet broadcast of the meeting at www.dteenergy.com.
DTE Energy is a Detroit-based diversified energy company involved in
the development and management of energy-related businesses and services
nationwide. DTE Energy's largest operating subsidiaries are Detroit Edison, an
electric utility serving 2.1 million customers in Southeastern Michigan, and
MichCon, a natural gas utility serving 1.2 million customers in Michigan.
Information about DTE Energy is available at www.dteenergy.com.
The information contained in this document is as of the date of this
news release. DTE Energy expressly disclaims any current intention to update any
forward-looking statements contained in this document as a result of new
information or future events or developments. Words such as "anticipate,"
"believe," "expect," "projected" and "goals" signify forward-looking statements.
Forward-looking statements are not guarantees of future results and conditions
but rather are subject to various assumptions, risks and uncertainties. This
news release contains forward-looking statements about DTE Energy's financial
results and estimates of future prospects, and actual results may differ
materially. Factors that may impact forward-looking statements include, but are
not limited to, timing and extent of changes in interest rates; access to the
capital markets and capital market conditions and other financing efforts which
can be affected by credit agency ratings requirements; ability to utilize
Section 29 tax credits or sell interest in facilities producing such credits;
the level of borrowings; the effects of weather and other natural phenomena on
operations and actual sales; economic climate and growth in the geographic areas
in which DTE Energy does business; unplanned outages; the cost of protecting
assets against or damage due to terrorism; nuclear regulations and risks
associated with nuclear operations; the grant of rate relief by the MPSC for the
utilities; changes in the cost of fuel, purchased power and natural gas; the
effects of competition; the implementation of electric and gas customer choice
programs; the implementation of electric and gas utility restructuring in
Michigan; environmental issues, including changes in the climate, and
regulations, and the contributions to earnings by non-regulated businesses. This
news release should also be read in conjunction with the forward-looking
statements in DTE Energy's, MichCon's and Detroit Edison's 2002 Form 10-K Item
1, and in conjunction with other SEC reports filed by DTE Energy, MichCon and
Detroit Edison.
Members of the Media - For Further Information:
Lorie N. Kessler Scott Simons
(313) 235-8807 (313) 235-8808
Analysts - For Further Information:
Investor Relations
(313) 235-8030
4
DTE ENERGY COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS
PRELIMINARY/(UNAUDITED)
YEAR ENDED DECEMBER 31
-----------------------
(in Millions, Except per Share Amounts) ................ 2003 2002
------- -------
OPERATING REVENUES ..................................... $ 7,041 $ 6,729
------- -------
OPERATING EXPENSES
Fuel, purchased power and gas ....................... 2,241 2,099
Operation and maintenance ........................... 3,032 2,547
Depreciation, depletion and amortization ............ 687 737
Taxes other than income ............................. 334 352
------- -------
6,294 5,735
------- -------
OPERATING INCOME ....................................... 747 994
------- -------
OTHER (INCOME) AND DEDUCTIONS
Interest expense .................................... 546 569
Interest income ..................................... (37) (29)
Minority interest ................................... (91) (37)
Other income ........................................ (138) (62)
Other expenses ...................................... 110 51
------- -------
390 492
------- -------
INCOME BEFORE INCOME TAXES ............................. 357 502
INCOME TAX BENEFIT ..................................... (123) (84)
------- -------
INCOME FROM CONTINUING OPERATIONS ...................... 480 586
INCOME FROM DISCONTINUED OPERATIONS OF ITC, NET OF TAX.. 68 46
CUMULATIVE EFFECT OF ACCOUNTING CHANGES, NET OF TAX .... (27) --
------- -------
NET INCOME ............................................. $ 521 $ 632
======= =======
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations .................. $ 2.87 $ 3.57
Discontinued operations ............................ .41 .28
Cumulative effect of accounting changes ............ (.17) --
------- -------
Total ............................................. $ 3.11 $ 3.85
======= =======
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations .................. $ 2.85 $ 3.55
Discontinued operations ............................ .40 .28
Cumulative effect of accounting changes ............ (.16) --
------- -------
Total ............................................. $ 3.09 $ 3.83
======= =======
AVERAGE COMMON SHARES
Basic ............................................... 168 164
Diluted ............................................. 168 165
DIVIDENDS DECLARED PER COMMON SHARE .................... $ 2.06 $ 2.06
5
DTE ENERGY COMPANY
SEGMENT NET INCOME (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31
------------------------------------------------------------------------------------------
2003 2002
----------------------------------------------- ----------------------------------------
REPORTED OPERATING Reported Operating
(IN MILLIONS) EARNINGS ADJUSTMENTS EARNINGS Earnings Adjustments Earnings
-------------- ------------- ------------ ------------ ------------ ----------
ENERGY RESOURCES
Regulated - Power Generation.......... $ 235 16 A 251 241 - 241
Non-regulated
Energy Services..................... 199 - 199 182 - 182
Energy Marketing & Trading.......... 45 (16) B 29 25 - 25
Other............................... (2) - (2) 7 - 7
---------- ------- -------- -------- ----- --------
Total Non-regulated................. 242 (16) B 226 214 - 214
---------- ------- -------- -------- ----- --------
477 - 477 455 - 455
---------- ------- -------- -------- ----- --------
ENERGY DISTRIBUTION
Regulated - Power Distribution........ 17 14 C 31 111 - 111
Non-regulated......................... (15) - (15) (16) - (16)
---------- ------- -------- -------- ----- --------
2 14 16 95 - 95
---------- ------- -------- -------- ----- --------
ENERGY GAS
Regulated - Gas Distribution.......... 29 17 D 46 66 - 66
Non-regulated......................... 29 - 29 26 - 26
---------- ------- -------- -------- ----- --------
58 17 75 92 - 92
---------- ------- -------- -------- ----- --------
CORPORATE AND OTHER..................... (57) 10 E (47) (56) - (56)
---------- ------- -------- -------- ----- --------
(57) 10 (47) (56) - (56)
---------- ------- -------- -------- ----- --------
INCOME FROM CONTINUING OPERATIONS
Regulated............................. 281 47 328 418 - 418
Non-regulated......................... 199 (6) 193 168 - 168
---------- ------- -------- -------- ----- --------
480 41 521 586 - 586
---------- ------- -------- -------- ----- --------
DISCONTINUED OPERATIONS - ITC
Income from operations................ 5 (5) G - 46 (46) G -
Gain on sale.......................... 63 (63) H - - - -
---------- ------- -------- -------- ----- --------
68 (68) - 46 (46) -
---------- ------- -------- -------- ----- --------
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
Asset retirement obligations.......... (11) 11 I - - - -
Energy trading activities............. (16) 16 J - - - -
---------- ------- -------- -------- ----- --------
(27) 27 - - - -
---------- ------- -------- -------- ----- --------
NET INCOME.............................. $ 521 - 521 632 (46) 586
========== ======= ======== ======== ===== ========
ADJUSTMENTS KEY
A) Blackout costs...............................................Costs associated with the August 2003 blackout
B) Adjustment of EITF 98-10 accounting change...................Flowback of the cumulative effect of a change in accounting
principle from rescission of EITF Issue No. 98-10
C) Loss on sale of steam heating business.......................Sold Detroit Edison steam heating business
D) Disallowance of gas costs....................................Reserve for the potential disallowance of MichCon 2002 gas
procurement costs
E) Contribution to DTE Energy Foundation........................Used portion of ITC sale proceeds to fund the DTE Energy Foundation
F) Tax credit driven normalization..............................Quarterly adjustment at DTE Energy to normalize its effective tax
rate. Annual results not impacted
G) Adjust for discontinued operations of ITC....................Sold International Transmission Company
H) Gain on sale of ITC..........................................Sold International Transmission Company
I) Asset retirement obligations.................................Cumulative effect of a change in accounting principle from adoption
of SFAS 143
J) Adjustment of EITF 98-10 accounting change...................Cumulative effect of a change in accounting principle from
rescission of EITF Issue No. 98-10
6
DTE ENERGY COMPANY
SEGMENT DILUTED EARNINGS PER SHARE (UNAUDITED)
TWELVE MONTHS ENDED DECEMBER 31
----------------------------------------------------------------------------------------
2003 2002
------------------------------------------ ------------------------------------------
REPORTED OPERATING Reported Operating
EARNINGS ADJUSTMENTS EARNINGS Earnings Adjustments Earnings
------------ ------------ ------------ ------------ ------------ ------------
ENERGY RESOURCES
Regulated - Power Generation.......... $ 1.40 0.10 A $ 1.50 1.46 - 1.46
Non-regulated
Energy Services..................... 1.18 - 1.18 1.10 - 1.10
Energy Marketing & Trading.......... 0.27 (0.10) B 0.17 0.15 - 0.15
Other............................... (0.01) - (0.01) 0.05 - 0.05
--------- -------- ---------- ---------- -------- ----------
Total Non-regulated................. 1.44 (0.10 ) 1.34 1.30 - 1.30
======================================================================================
2.84 - 2.84 2.76 - 2.76
--------- -------- ---------- ---------- -------- ----------
ENERGY DISTRIBUTION
Regulated - Power Distribution........ 0.10 0.08 C 0.18 0.67 - 0.67
Non-regulated......................... (0.09 ) - (0.09 ) (0.10 ) - (0.10 )
- -------- - ------ -- ------- - -------- - ------ - --------
- -------- - ------ -- ------- - -------- - ------ - --------
0.01 0.08 0.09 0.57 - 0.57
--------- -------- ---------- ---------- -------- ----------
Regulated - Gas Distribution.......... 0.17 0.10 D 0.27 0.40 - 0.40
Non-regulated......................... 0.17 - 0.17 0.16 - 0.16
- -------- - ------ -- ------- - -------- - ------ - --------
0.34 0.10 0.44 0.56 - 0.56
--------- -------- ---------- ---------- -------- ----------
CORPORATE AND OTHER..................... (0.34 ) 0.06 E (0.28 ) (0.34 ) - (0.34 )
- -------- - ------ -- ------- - -------- - ------ - --------
(0.34 ) 0.06 (0.28 ) (0.34 ) - (0.34 )
--------- -------- ---------- ---------- -------- ----------
INCOME FROM CONTINUING OPERATIONS
Regulated............................. 1.67 0.28 1.95 2.53 - 2.53
Non-regulated......................... 1.18 (0.04 ) 1.14 1.02 - 1.02
- -------- - ------ -- ------- - -------- - ------ - --------
2.85 0.24 3.09 3.55 - 3.55
- -------- - ------ -- ------- - -------- - ------ - --------
DISCONTINUED OPERATIONS - ITC
Income from operations................ 0.03 (0.03 ) - 0.28 (0.28 ) -
G G
Gain on sale.......................... 0.37 (0.37 ) - - - -
H
- -------- - ------ -- ------- - -------- - ------ - --------
0.40 (0.40 ) - 0.28 (0.28 ) -
--------- -------- ---------- ---------- -------- ----------
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
Asset retirement obligations.......... (0.07 ) 0.07 I - - - -
Energy trading activities............. (0.09 ) 0.09 J - - - -
- -------- - ------ -- ------- - -------- - ------ - --------
(0.16 ) 0.16 - - - -
--------- -------- ---------- ---------- -------- ----------.
NET INCOME.............................. 3.09 - $ 3.09 3.83 (0.28 ) 3.55
= ======== = ====== == ======= = ======== = ====== = ========
ADJUSTMENTS KEY
A) Blackout costs...............................................Costs associated with the August 2003 blackout
B) Adjustment of EITF 98-10 accounting change...................Flowback of the cumulative effect of a change in accounting
principle from rescission of EITF Issue No. 98-10
C) Loss on sale of steam heating business.......................Sold Detroit Edison steam heating business
D) Disallowance of gas costs....................................Reserve for the potential disallowance of MichCon 2002 gas
procurement costs
E) Contribution to DTE Energy Foundation........................Used portion of ITC sale proceeds to fund the DTE Energy Foundation
F) Tax credit driven normalization..............................Quarterly adjustment at DTE Energy to normalize its effective tax
rate. Annual results not impacted
G) Adjust for discontinued operations of ITC....................Sold International Transmission Company
H) Gain on sale of ITC..........................................Sold International Transmission Company
I) Asset retirement obligations.................................Cumulative effect of a change in accounting principle from adoption
of SFAS 143
J) Adjustment of EITF 98-10 accounting change...................Cumulative effect of a change in accounting principle from
rescission of EITF Issue No. 98-10
7
DTE ENERGY COMPANY
SEGMENT NET INCOME (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED DECEMBER 31
------------------------------------------- ------------------------------------------
2003 2002
------------------------------------------- ------------------------------------------
REPORTED OPERATING Reported Operating
(IN MILLIONS) EARNINGS ADJUSTMENTS EARNINGS Earnings Adjustments Earnings
------------ ------------ ------------ ------------ ------------ ------------
ENERGY RESOURCES
Regulated - Power Generation....... 103 - 103 71 - 71
Non-regulated
Energy Services.................. 48 - 48 75 - 75
Energy Marketing & Trading....... (7) - (7) 13 - 13
Other............................ (1) - (1) 7 - 7
---------- --------- ---------- ---------- ------- ----------
Total Non-regulated.............. 40 - 40 95 - 95
143 - 143 166 - 166
---------- --------- ---------- ---------- ------- ----------
ENERGY DISTRIBUTION
Regulated - Power Distribution..... 2 - 2 14 - 14
Non-regulated...................... (3) - (3) (5) - (5)
---------- --------- ---------- ---------- ------- ----------
(1 ) - (1 ) 9 - 9
ENERGY GAS
Regulated - Gas Distribution....... 22 - 22 36 - 36
Non-regulated...................... 4 - 4 5 - 5
---------- --------- ---------- ---------- ------- ----------
26 - 26 41 - 41
CORPORATE AND OTHER.................. 61 (70) (9) (22) 5 F (17)
F
---------- --------- ---------- ---------- ------- ----------
61 (70) (9) (22) 5 (17)
INCOME FROM CONTINUING OPERATIONS
Regulated.......................... 127 - 127 121 - 121
Non-regulated...................... 102 (70) 32 73 5 78
---------- --------- ---------- ---------- ------- ----------
229 (70) 159 194 5 199
DISCONTINUED OPERATIONS - ITC
Income from operations............. - - - 9 (9) G -
Gain on sale....................... - - - - - -
---------- --------- ---------- ---------- ------- ----------
- - - 9 (9) -
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
Asset retirement obligations....... - - - - - -
Energy trading activities.......... - - - - - -
---------- --------- ---------- ---------- ------- ----------
- - - - - -
---------- --------- ---------- ---------- ------- ----------
NET INCOME........................... 229 $ (70) 159 203 (4) 199
========== ======== ========== ========== ====== ==========
ADJUSTMENTS KEY
A) Blackout costs...............................................Costs associated with the August 2003 blackout
B) Adjustment of EITF 98-10 accounting change...................Flowback of the cumulative effect of a change in accounting
principle from rescission of EITF Issue No. 98-10
C) Loss on sale of steam heating business.......................Sold Detroit Edison steam heating business
D) Disallowance of gas costs....................................Reserve for the potential disallowance of MichCon 2002 gas
procurement costs
E) Contribution to DTE Energy Foundation........................Used portion of ITC sale proceeds to fund the DTE Energy Foundation
F) Tax credit driven normalization..............................Quarterly adjustment at DTE Energy to normalize its effective tax
rate. Annual results not impacted
G) Adjust for discontinued operations of ITC....................Sold International Transmission Company
H) Gain on sale of ITC..........................................Sold International Transmission Company
I) Asset retirement obligations.................................Cumulative effect of a change in accounting principle from adoption
of SFAS 143
J) Adjustment of EITF 98-10 accounting change...................Cumulative effect of a change in accounting principle from
rescission of EITF Issue No. 98-10
8
DTE ENERGY COMPANY
SEGMENT DILUTED EARNINGS PER SHARE (UNAUDITED)
THREE MONTHS ENDED DECEMBER 31
----------------------------------------------------------------------------------------
2003 2002
------------------------------------------- ------------------------------------------
REPORTED OPERATING Reported Operating
EARNINGS ADJUSTMENTS EARNINGS Earnings Adjustments Earnings
------------ ------------ ------------ ------------ ----------- ------------
ENERGY RESOURCES
Regulated - Power Generation....... 0.61 - 0.61 0.42 - 0.42
Non-regulated
Energy Services.................. 0.29 - 0.29 0.44 - 0.44
Energy Marketing & Trading....... (0.04) - (0.04) 0.08 - 0.08
Other............................ (0.01) - (0.01) 0.04 - 0.04
--------- -------- --------- --------- ------- ----------
Total Non-regulated.............. 0.24 - 0.24 0.56 - 0.56
--------- -------- --------- --------- ------- ----------
0.85 - 0.85 0.98 - 0.98
--------- -------- --------- --------- ------- ----------
ENERGY DISTRIBUTION
Regulated - Power Distribution..... 0.01 - 0.01 0.08 - 0.08
Non-regulated...................... (0.02) - (0.02) (0.03) - (0.03)
--------- -------- --------- --------- ------- ----------
(0.01) - (0.01) 0.05 - 0.05
--------- -------- --------- --------- ------- ----------
ENERGY GAS
Regulated - Gas Distribution....... 0.13 - 0.13 0.22 - 0.22
Non-regulated...................... 0.02 - 0.02 0.03 - 0.03
--------- -------- --------- --------- ------- ----------
0.15 - 0.15 0.25 - 0.25
--------- -------- --------- --------- ------- ----------
CORPORATE AND OTHER.................. 0.37 (0.42) (0.05) (0.12) 0.03 F (0.09)
F
--------- -------- --------- --------- ------- ----------
0.37 (0.42) (0.05) (0.12) 0.03 (0.09)
--------- -------- --------- --------- ------- ----------
INCOME FROM CONTINUING OPERATIONS
Regulated.......................... 0.75 - 0.75 0.72 - 0.72
Non-regulated...................... 0.61 (0.42) 0.19 0.44 0.03 0.47
--------- -------- --------- --------- ------- ----------
1.36 (0.42) 0.94 1.16 0.03 1.19
--------- -------- --------- --------- ------- ----------
DISCONTINUED OPERATIONS - ITC
Income from operations............. - - - 0.05 (0.05) -
G
Gain on sale....................... - - - - - -
--------- -------- --------- --------- ------- ----------
- - - 0.05 (0.05) -
--------- -------- --------- --------- ------- ----------
CUMULATIVE EFFECT OF ACCOUNTING CHANGES
Asset retirement obligations....... - - - - - -
Energy trading activities.......... - - - - - -
--------- -------- --------- --------- ------- ----------
- - - - - -
--------- -------- --------- --------- ------- ----------
NET INCOME........................... 1.36 $ (0.42) 0.94 1.21 (0.02) 1.19
========= ======== ========= ========= ======= ==========
ADJUSTMENTS KEY
A) Blackout costs...............................................Costs associated with the August 2003 blackout
B) Adjustment of EITF 98-10 accounting change...................Flowback of the cumulative effect of a change in accounting
principle from rescission of EITF Issue No. 98-10
C) Loss on sale of steam heating business.......................Sold Detroit Edison steam heating business
D) Disallowance of gas costs....................................Reserve for the potential disallowance of MichCon 2002 gas
procurement costs
E) Contribution to DTE Energy Foundation........................Used portion of ITC sale proceeds to fund the DTE Energy Foundation
F) Tax credit driven normalization..............................Quarterly adjustment at DTE Energy to normalize its effective tax
rate. Annual results not impacted
G) Adjust for discontinued operations of ITC....................Sold International Transmission Company
H) Gain on sale of ITC..........................................Sold International Transmission Company
I) Asset retirement obligations.................................Cumulative effect of a change in accounting principle from adoption
of SFAS 143
J) Adjustment of EITF 98-10 accounting change...................Cumulative effect of a change in accounting principle from
rescission of EITF Issue No. 98-10
9