1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1996
COMMISSION REGISTRANTS; STATE OF INCORPORATION; I.R.S. EMPLOYER
FILE NUMBER ADDRESS; AND TELEPHONE NUMBER IDENTIFICATION NO.
- ----------- ------------------------------ ------------------
1-11607 DTE Energy Company 38-3217752
(a Michigan corporation)
2000 2nd Avenue
Detroit, Michigan 48226-1279
313-235-4000
1-2198 The Detroit Edison Company 38-0478650
(a Michigan corporation)
2000 2nd Avenue
Detroit, Michigan 48226-1279
313-235-8000
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrants were required to
file such reports), and (2) have been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
At April 30, 1996, 145,119,875 shares of DTE Energy's Common
Stock, substantially all held by non-affiliates, were
outstanding.
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2
DTE ENERGY COMPANY
AND
THE DETROIT EDISON COMPANY
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
This document contains the Quarterly Reports on Form 10-Q for the quarter ended
March 31, 1996 for each of DTE Energy Company and The Detroit Edison Company.
Information contained herein relating to an individual registrant is filed by
such registrant on its own behalf. Accordingly, except for its subsidiaries,
The Detroit Edison Company makes no representation as to information relating
to any other companies affiliated with DTE Energy Company.
TABLE OF CONTENTS
Page
----
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Quarterly Report on Form 10-Q for DTE Energy Company:
Part I - Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 1 - Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . 14
Independent Accountants' Report . . . . . . . . . . . . . . . . . . . . . . . . 16
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . 17
Part II - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Item 1 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Item 5 - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Quarterly Report on Form 10-Q for The Detroit Edison Company:
Part I - Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Item 1 - Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . 29
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . 29
Part II - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Item 1 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Item 5 - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Quarterly Reports on Form 10-Q for DTE Energy Company and The Detroit
Edison Company:
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . 30
Signature Page to DTE Energy Company Quarterly Report on Form 10-Q . . . . . . . . . . . . . . . . . . . 36
Signature Page to The Detroit Edison Company Quarterly Report on Form 10-Q . . . . . . . . . . . . . . . 37
2
3
DEFINITIONS
ALJ . . . . . . . . . . . . . Administrative Law Judge
Annual Report . . . . . . . . 1995 Annual Report to the Securities and Exchange Commission on Form 10-K for
DTE Energy Company or The Detroit Edison Company, as the case may be
Annual Report Notes . . . . . Notes to Consolidated Financial Statements appearing on pages 46 through 57 of
the 1995 Annual Report to the Securities and Exchange Commission on Form 10-K
for DTE Energy Company and The Detroit Edison Company
CERCLA . . . . . . . . . . . Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980
Company . . . . . . . . . . . DTE Energy Company and Subsidiary Companies
Detroit Edison . . . . . . . The Detroit Edison Company (a wholly owned subsidiary of DTE Energy Company) and Subsidiary
Companies
EPA . . . . . . . . . . . . . Environmental Protection Agency
FERC . . . . . . . . . . . . Federal Energy Regulatory Commission
kWh . . . . . . . . . . . . . Kilowatthour
MDEQ . . . . . . . . . . . . Michigan Department of Environmental Quality
MPSC . . . . . . . . . . . . Michigan Public Service Commission
MW . . . . . . . . . . . . . Megawatts
NOPR . . . . . . . . . . . . Notice of Proposed Rulemaking
Note(s) . . . . . . . . . . . Note(s) to Consolidated Financial Statements (Unaudited) appearing herein
NRC . . . . . . . . . . . . . Nuclear Regulatory Commission
PFD . . . . . . . . . . . . . Proposal for Decision
PSCR . . . . . . . . . . . . Power Supply Cost Recovery
QUIDS . . . . . . . . . . . . Quarterly Income Debt Securities
Registrant . . . . . . . . . Company or Detroit Edison, as the case may be
Renaissance . . . . . . . . . Renaissance Energy Company (an unaffiliated company)
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4
QUARTERLY REPORT ON FORM 10-Q FOR DTE ENERGY COMPANY
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED):
DTE ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in Thousands)
Three Months Ended Twelve Months Ended
March 31 March 31
-----------------------------------------------------------
1996 1995 1996 1995
-----------------------------------------------------------
OPERATING REVENUES
Electric - System $887,627 $863,048 $3,585,049 $3,440,893
Electric - Interconnection 11,244 7,339 54,884 33,841
Steam and other 10,708 9,887 24,916 25,292
- -------------------------------------------------------------------------------------------------------------
Total Operating Revenues $909,579 $880,274 $3,664,849 $3,500,026
- -------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Operation
Fuel $175,667 $169,660 $ 721,974 $ 693,845
Purchased power 23,496 35,112 121,941 108,253
Other operation 151,022 137,373 648,946 618,098
Maintenance 73,611 52,471 261,255 258,710
Steam plant impairment loss - - 42,029 -
Depreciation and amortization 132,011 125,044 507,578 485,476
Deferred Fermi 2 amortization (1,120) (1,493) (5,599) (7,092)
Amortization of deferred Fermi 2 depreciation
and return 25,483 23,247 95,226 86,868
Taxes other than income 66,761 62,645 256,057 249,204
Income taxes 76,104 82,051 283,740 282,425
- -------------------------------------------------------------------------------------------------------------
Total Operating Expenses $723,035 $686,110 $2,933,147 $2,775,787
- -------------------------------------------------------------------------------------------------------------
OPERATING INCOME $186,544 $194,164 $ 731,702 $ 724,239
- -------------------------------------------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Allowance for other funds used
during construction $ 388 $ 315 $ 1,481 $1,556
Other income and (deductions) - net (956) (13,335) (17,867) (35,387)
Income taxes 303 4,998 5,094 12,337
Accretion income 2,327 3,014 10,354 13,013
Income taxes - disallowed plant costs and
accretion income (686) (929) (3,112) (4,037)
- -------------------------------------------------------------------------------------------------------------
Net Other Income and (Deductions) $ 1,376 $ (5,937) $ (4,050) $ (12,518)
- -------------------------------------------------------------------------------------------------------------
INTEREST CHARGES
Long-term debt $ 68,360 $ 68,424 $ 275,535 $ 272,242
Amortization of debt discount, premium
and expense 2,955 2,799 11,468 11,015
Other 1,574 3,901 7,339 10,077
Allowance for borrowed funds used during
construction (credit) (702) (387) (2,584) (2,142)
- -------------------------------------------------------------------------------------------------------------
Net Interest Charges $ 72,187 $74,737 $ 291,758 $ 291,192
- -------------------------------------------------------------------------------------------------------------
PREFERRED STOCK DIVIDENDS OF SUBSIDIARY 7,293 7,407 27,623 29,634
- -------------------------------------------------------------------------------------------------------------
NET INCOME $108,440 $106,083 $ 408,271 $ 390,895
=============================================================================================================
COMMON SHARES OUTSTANDING - AVERAGE 145,119,875 144,864,103 144,613,380 145,612,411
EARNINGS PER COMMON SHARE $ 0.75 $ 0.73 $ 2.82 $ 2.68
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK $ 0.515 $ 0.515 $ 2.06 $ 2.06
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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5
DTE ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
Three Months Ended Twelve Months Ended
March 31 March 31
--------------------------------------------
1996 1995 1996 1995
--------------------------------------------
OPERATING ACTIVITIES
Net Income $ 108,440 $106,083 $ 408,271 $ 390,895
Adjustments to reconcile net income to net cash
from operating activities:
Accretion income (2,327) (3,014) (10,354) (13,013)
Depreciation and amortization 132,011 125,044 507,578 485,476
Deferred Fermi 2 amortization and return - net 24,363 21,754 89,627 79,776
Deferred income taxes and investment tax credit - net 17,063 26,276 53,310 107,718
Fermi 2 refueling outage - net 3,258 3,800 12,533 (18,504)
Steam plant impairment loss - - 42,029 -
Other (21,800) (21,889) 5,202 (35,602)
Changes in current assets and liabilities:
Customer accounts receivable and unbilled revenues 1,542 (124,393) (92,644) (157,739)
Other accounts receivable (5,508) 5,282 (14,242) 4,471
Inventories 18,579 (4,876) 4,618 (31,197)
Accounts payable (270) (7,202) 24,981 (3,118)
Taxes payable 51,355 46,136 2,570 (3,125)
Interest payable 14,705 (910) 17,529 (3,447)
Other (85,602) (72,120) 17,773 8,054
- ----------------------------------------------------------------------------------------------------------
Net cash from operating activities $ 255,809 $ 99,971 $1,068,781 $ 810,645
- ----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Plant and equipment expenditures $(115,759) $(85,234) $ (484,369) $(375,243)
Nuclear decommissioning trust funds (13,687) (11,971) (45,067) (38,020)
Non-utility investments (5,584) 1,461 (5,184) (12,213)
Other changes in current assets and liabilities 921 853 5,842 10,697
Other 64 (1,081) (31,696) (13,019)
- ----------------------------------------------------------------------------------------------------------
Net cash used for investing activities $(134,045) $(95,972) $ (560,474) $(427,798)
- ----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of long-term debt $ 185,000 $ - $ 185,000 $200,000
Funds received from Trustees: Installment sales
contracts and loan agreements - - 201,525 50,470
Increase (decrease) in short-term borrowings (36,990) 98,447 (137,936) 5,515
Redemption of long-term debt - (19,214) (201,525) (258,034)
Redemption of preferred stock (185,000) - (185,955) -
Premiums on reacquired long-term debt
and preferred stock (1,850) - (7,796) (11,563)
Purchase of common stock - - - (59,855)
Dividends on common stock (74,737) (74,606) (298,633) (300,681)
Other (7,958) (159) (14,399) (2,675)
- ----------------------------------------------------------------------------------------------------------
Net cash (used for) from financing activities $(121,535) $ 4,468 $ (459,719) $(376,823)
- ----------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS $ 229 $ 8,467 $ 48,588 $ 6,024
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF THE PERIOD 64,948 8,122 16,589 10,565
- ----------------------------------------------------------------------------------------------------------
CASH AND TEMPORARY CASH INVESTMENTS AT END
OF THE PERIOD $ 65,177 $ 16,589 $ 65,177 $ 16,589
==========================================================================================================
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (excluding interest capitalized) $ 54,557 $ 69,793 $ 259,177 $ 281,685
Income taxes paid 618 240 230,915 181,155
New capital lease obligations 297 327 29,356 2,741
Exchange of preferred stock of subsidiary for long-term debt - - 49,878 -
==========================================================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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6
DTE ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
ASSETS
(Dollars in Thousands)
March 31 December 31
1996 1995
------------ -----------
UTILITY PROPERTIES
Plant in service $13,432,705 $13,303,992
Less: Accumulated depreciation and amortization (5,059,724) (4,928,316)
- ---------------------------------------------------------------------------------------------
$ 8,372,981 $ 8,375,676
Construction work in progress 117,566 142,726
- ---------------------------------------------------------------------------------------------
Net utility properties $ 8,490,547 $ 8,518,402
- ---------------------------------------------------------------------------------------------
Property under capital leases (less accumulated amortization
of $100,900 and $99,633, respectively) $ 135,430 $ 137,206
Nuclear fuel under capital lease (less accumulated amortization
of $445,062 and $427,831, respectively) 128,530 145,463
- ---------------------------------------------------------------------------------------------
Net property under capital leases $ 263,960 $ 282,669
- ---------------------------------------------------------------------------------------------
Total owned and leased properties $ 8,754,507 $ 8,801,071
- ---------------------------------------------------------------------------------------------
OTHER PROPERTY AND INVESTMENTS
Non-utility property $ 35,998 $ 21,576
Investments and special funds 34,087 29,058
Nuclear decommissioning trust funds 133,530 119,843
- ---------------------------------------------------------------------------------------------
$ 203,615 $ 170,477
- ---------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash and temporary cash investments $ 65,177 $ 64,948
Customer accounts receivable and unbilled revenues (less allowance
for uncollectible accounts of $21,000 and $22,000, respectively) 412,861 414,403
Other accounts receivable 43,172 37,664
Inventories (at average cost)
Fuel 142,374 162,796
Materials and supplies 145,761 142,782
Prepayments 78,448 12,910
- ---------------------------------------------------------------------------------------------
$ 887,793 $ 835,503
- ---------------------------------------------------------------------------------------------
DEFERRED DEBITS
Regulatory assets $ 1,110,827 $ 1,155,482
Prepaid pensions 95,963 81,865
Unamortized debt expense 46,722 40,936
Other 46,809 45,257
- ---------------------------------------------------------------------------------------------
$ 1,300,321 $ 1,323,540
- ---------------------------------------------------------------------------------------------
TOTAL $11,146,236 $11,130,591
=============================================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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7
DTE ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
LIABILITIES
(Dollars in Thousands)
March 31 December 31
1996 1995
---------- -----------
CAPITALIZATION
Common stock - without par value, 400,000,000 shares
authorized; 145,119,875 shares outstanding $ 1,951,437 $ 1,951,437
Retained earnings used in the business 1,515,773 1,484,871
- -------------------------------------------------------------------------------
Total common shareholders' equity $ 3,467,210 $ 3,436,308
Cumulative preferred stock of subsidiary 144,405 326,604
Long-term debt 3,921,894 3,756,094
- -------------------------------------------------------------------------------
Total Capitalization $ 7,533,509 $ 7,519,006
- -------------------------------------------------------------------------------
OTHER NON-CURRENT LIABILITIES
Obligations under capital leases $ 126,130 $ 128,362
Other postretirement benefits 5,194 24,381
Other 67,404 58,424
- -------------------------------------------------------------------------------
$ 198,728 $ 211,167
- -------------------------------------------------------------------------------
CURRENT LIABILITIES
Short-term borrowings $ - $ 36,990
Amounts due within one year
Long-term debt 138,428 119,214
Obligations under capital leases 137,830 154,307
Accounts payable 164,354 165,148
Property and general taxes 25,821 34,416
Income taxes 59,603 -
Accumulated deferred income taxes 52,916 51,697
Interest payable 76,833 62,128
Dividends payable 77,644 81,102
Payrolls 87,904 72,164
Fermi 2 refueling outage 17,600 14,342
Other 97,813 130,689
- -------------------------------------------------------------------------------
$ 936,746 $ 922,197
- -------------------------------------------------------------------------------
DEFERRED CREDITS
Accumulated deferred income taxes $ 2,058,833 $ 2,052,875
Accumulated deferred investment tax credits 326,322 330,085
Other 92,098 95,261
- -------------------------------------------------------------------------------
$ 2,477,253 $ 2,478,221
- -------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE 2)
- -------------------------------------------------------------------------------
TOTAL $11,146,236 $11,130,591
===============================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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DTE ENERGY COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY (UNAUDITED)
(Dollars in Thousands)
Retained Total
Common Stock Earnings Common
----------------------- Used in the Shareholders'
Shares Amount Business Equity
- -------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995 145,119,875 $1,951,437 $1,484,871 $3,436,308
Expense associated with subsidiary
preferred stock redeemed (2,801) (2,801)
Net income 108,440 108,440
Cash dividends declared on
Common stock - $0.515 per share (74,737) (74,737)
- -------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1996 145,119,875 $1,951,437 $1,515,773 $3,467,210
===========================================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in Thousands)
Three Months Ended Twelve Months Ended
March 31 March 31
--------------------------------------------
1996 1995 1996 1995
--------------------------------------------
OPERATING REVENUES
Electric - System $887,627 $863,048 $3,585,049 $3,440,893
Electric - Interconnection 11,244 7,339 54,884 33,841
Steam 10,020 9,887 24,228 25,292
- --------------------------------------------------------------------------------------------
Total Operating Revenues $908,891 $880,274 $3,664,161 $3,500,026
- --------------------------------------------------------------------------------------------
OPERATING EXPENSES
Operation
Fuel $175,667 $169,660 $ 721,974 $ 693,845
Purchased power 23,496 35,112 121,941 108,253
Other operation 149,211 137,373 647,135 618,098
Maintenance 73,611 52,471 261,255 258,710
Steam plant impairment loss - - 42,029 -
Depreciation and amortization 131,904 125,044 507,471 485,476
Deferred Fermi 2 amortization (1,120) (1,493) (5,599) (7,092)
Amortization of deferred Fermi 2 depreciation
and return 25,483 23,247 95,226 86,868
Taxes other than income 66,761 62,645 256,057 249,204
Income taxes 76,672 82,051 284,308 282,425
- --------------------------------------------------------------------------------------------
Total Operating Expenses $721,685 $686,110 $2,931,797 $2,775,787
- --------------------------------------------------------------------------------------------
OPERATING INCOME $187,206 $194,164 $ 732,364 $ 724,239
- --------------------------------------------------------------------------------------------
OTHER INCOME AND (DEDUCTIONS)
Allowance for other funds used
during construction $ 388 $ 315 $ 1,481 $ 1,556
Other income and (deductions) - net (1,613) (13,335) (18,524) (35,387)
Income taxes 303 4,998 5,094 12,337
Accretion income 2,327 3,014 10,354 13,013
Income taxes - disallowed plant costs and
accretion income (686) (929) (3,112) (4,037)
- --------------------------------------------------------------------------------------------
Net Other Income and (Deductions) $ 719 $ (5,937) $ (4,707) $ (12,518)
- --------------------------------------------------------------------------------------------
INTEREST CHARGES
Long-term debt $ 68,360 $ 68,424 $ 275,535 $ 272,242
Amortization of debt discount, premium
and expense 2,952 2,799 11,465 11,015
Other 1,551 3,901 7,316 10,077
Allowance for borrowed funds used during
construction (credit) (702) (387) (2,584) (2,142)
- --------------------------------------------------------------------------------------------
Net Interest Charges $ 72,161 $ 74,737 $ 291,732 $ 291,192
- --------------------------------------------------------------------------------------------
NET INCOME $115,764 $113,490 $ 435,925 $ 420,529
PREFERRED STOCK DIVIDENDS 7,293 7,407 27,623 29,634
- --------------------------------------------------------------------------------------------
NET INCOME AVAILABLE FOR COMMON STOCK $108,471 $106,083 $ 408,302 $ 390,895
============================================================================================
Note: Detroit Edison's financial statements are presented here for ease of
reference and are not considered to be part of Item 1 of the Company's
report.
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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10
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
ASSETS
(Dollars in Thousands)
March 31 December 31
1996 1995
----------- -----------
UTILITY PROPERTIES
Plant in service $13,432,705 $13,303,992
Less: Accumulated depreciation and amortization (5,059,724) (4,928,316)
- ---------------------------------------------------------------------------------------------
$ 8,372,981 $ 8,375,676
Construction work in progress 117,566 142,726
- ---------------------------------------------------------------------------------------------
Net utility properties $ 8,490,547 $ 8,518,402
- ---------------------------------------------------------------------------------------------
Property under capital leases (less accumulated amortization
of $100,900 and $99,633, respectively) $ 135,430 $ 137,206
Nuclear fuel under capital lease (less accumulated amortization
of $445,062 and $427,831, respectively) 128,530 145,463
- ---------------------------------------------------------------------------------------------
Net property under capital leases $ 263,960 $ 282,669
- ---------------------------------------------------------------------------------------------
Total owned and leased properties $ 8,754,507 $ 8,801,071
- ---------------------------------------------------------------------------------------------
OTHER PROPERTY AND INVESTMENTS
Non-utility property $ 7,723 $ 21,576
Investments and special funds 16,694 29,058
Nuclear decommissioning trust funds 133,530 119,843
- ---------------------------------------------------------------------------------------------
$ 157,947 $ 170,477
- ---------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash and temporary cash investments $ 25,658 $ 64,948
Customer accounts receivable and unbilled revenues (less allowance
for uncollectible accounts of $21,000 and $22,000, respectively) 412,861 414,403
Other accounts receivable 40,936 37,664
Inventories (at average cost)
Fuel 142,374 162,796
Materials and supplies 145,761 142,782
Prepayments 78,300 12,910
- ---------------------------------------------------------------------------------------------
$ 845,890 $ 835,503
- ---------------------------------------------------------------------------------------------
DEFERRED DEBITS
Regulatory assets $ 1,110,827 $ 1,155,482
Prepaid pensions 95,963 81,865
Unamortized debt expense 46,624 40,936
Other 44,133 45,257
- ---------------------------------------------------------------------------------------------
$ 1,297,547 $ 1,323,540
- ---------------------------------------------------------------------------------------------
TOTAL $11,055,891 $11,130,591
=============================================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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11
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
LIABILITIES
(Dollars in Thousands)
March 31 December 31
1996 1995
---------- -----------
CAPITALIZATION
Common stock - $10 par value, 400,000,000 shares authorized;
145,119,875 shares outstanding $ 1,451,199 $ 1,451,199
Premium on common stock 547,799 547,799
Common stock expense (47,561) (47,561)
Retained earnings used in the business 1,427,499 1,484,871
- ---------------------------------------------------------------------------------------
Total common shareholders' equity $ 3,378,936 $ 3,436,308
Cumulative preferred stock 144,405 326,604
Long-term debt 3,921,894 3,756,094
- ---------------------------------------------------------------------------------------
Total Capitalization $ 7,445,235 $ 7,519,006
- ---------------------------------------------------------------------------------------
OTHER NON-CURRENT LIABILITIES
Obligations under capital leases $ 126,130 $ 128,362
Other postretirement benefits 5,194 24,381
Other 67,404 58,424
- ---------------------------------------------------------------------------------------
$ 198,728 $ 211,167
- ---------------------------------------------------------------------------------------
CURRENT LIABILITIES
Short-term borrowings $ - $ 36,990
Amounts due within one year
Long-term debt 138,428 119,214
Obligations under capital leases 137,830 154,307
Accounts payable 157,331 165,148
Property and general taxes 25,821 34,416
Income taxes 60,300 -
Accumulated deferred income taxes 52,916 51,697
Interest payable 76,812 62,128
Dividends payable 82,723 81,102
Payrolls 87,856 72,164
Fermi 2 refueling outage 17,600 14,342
Other 97,809 130,689
- ---------------------------------------------------------------------------------------
$ 935,426 $ 922,197
- ---------------------------------------------------------------------------------------
DEFERRED CREDITS
Accumulated deferred income taxes $ 2,058,183 $ 2,052,875
Accumulated deferred investment tax credits 326,322 330,085
Other 91,997 95,261
- ---------------------------------------------------------------------------------------
$ 2,476,502 $ 2,478,221
- ---------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE 2)
- ---------------------------------------------------------------------------------------
TOTAL $11,055,891 $11,130,591
=======================================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
Three Months Ended Twelve Months Ended
March 31 March 31
---------------------------------------------
1996 1995 1996 1995
---------------------------------------------
OPERATING ACTIVITIES
Net Income $ 115,764 $113,490 $ 435,925 $ 420,529
Adjustments to reconcile net income to net cash
from operating activities:
Accretion income (2,327) (3,014) (10,354) (13,013)
Depreciation and amortization 131,904 125,044 507,471 485,476
Deferred Fermi 2 amortization and return - net 24,363 21,754 89,627 79,776
Deferred income taxes and investment tax credit - net 16,935 26,276 53,182 107,718
Fermi 2 refueling outage - net 3,258 3,800 12,533 (18,504)
Steam plant impairment loss - - 42,029 -
Other (19,125) (21,889) 7,877 (35,602)
Changes in current assets and liabilities:
Customer accounts receivable and unbilled revenues 1,542 (124,393) (92,644) (157,739)
Other accounts receivable (3,272) 5,282 (12,006) 4,471
Inventories 18,579 (4,876) 4,618 (31,197)
Accounts payable (7,293) (7,202) 17,958 (3,118)
Taxes payable 52,052 46,136 3,267 (3,125)
Interest payable 14,684 (910) 17,508 (3,447)
Other (98,395) (72,120) 4,980 8,054
- ----------------------------------------------------------------------------------------------------------
Net cash from operating activities $ 248,669 $107,378 $1,081,971 $ 840,279
- ----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Plant and equipment expenditures $(101,225) $(85,234) $ (469,835) $(375,243)
Nuclear decommissioning trust funds (13,687) (11,971) (45,067) (38,020)
Non-utility investments - 1,461 - (12,213)
Other changes in current assets and liabilities 921 853 5,842 10,697
Other 11,369 (1,081) (19,991) (13,019)
- ----------------------------------------------------------------------------------------------------------
Net cash used for investing activities $(102,622) $(95,972) $ (529,051) $(427,798)
- ----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of long-term debt $ 185,000 $ - $ 185,000 $ 200,000
Funds received from Trustees: Installment sales
contracts and loan agreements - - 201,525 50,470
Increase (decrease) in short-term borrowings (36,990) 98,447 (137,936) 5,515
Redemption of long-term debt - (19,214) (201,525) (258,034)
Redemption of preferred stock (185,000) - (185,955) -
Premiums on reacquired long-term debt and
preferred stock (1,850) - (7,796) (11,563)
Purchase of common stock - - - (59,855)
Dividends on common and preferred stock (85,509) (82,013) (329,735) (330,315)
Cash portion of restructuring dividend to parent (56,510) - (56,510) -
Other (4,478) (159) (10,919) (2,675)
- ----------------------------------------------------------------------------------------------------------
Net cash used for financing activities $(185,337) $(2,939) $ (543,851) $(406,457)
- ----------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS $ (39,290) $ 8,467 $ 9,069 $ 6,024
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF THE PERIOD 64,948 8,122 16,589 10,565
- ----------------------------------------------------------------------------------------------------------
CASH AND TEMPORARY CASH INVESTMENTS AT END
OF THE PERIOD $ 25,658 $16,589 $ 25,658 $ 16,589
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (excluding interest capitalized) $ 54,557 $69,793 $ 259,177 $ 281,685
Income taxes paid 618 240 230,915 181,155
New capital lease obligations 297 327 29,356 2,741
Exchange of preferred stock for long-term debt - - 49,878 -
Non-cash portion of restructuring dividend to parent 26,716 - 26,716 -
==========================================================================================================
See accompanying Notes to Consolidated Financial Statements (Unaudited).
12
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THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY (UNAUDITED)
(Dollars in Thousands)
Common Stock Premium Retained Total
-------------------------- on Common Earnings Common
$10 Par Common Stock Used in the Shareholders'
Shares Value Stock Expense Business Equity
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995 145,119,875 $1,451,199 $547,799 $(47,561) $1,484,871 $3,436,308
Expense associated with preferred
stock redeemed (2,801) (2,801)
Net income 115,764 115,764
Cash dividends declared
Common stock - $0.55 per share (79,816) (79,816)
Cumulative preferred stock* (7,293) (7,293)
Restructuring dividend to parent (83,226) (83,226)
- --------------------------------------------------------------------------------------------------------------------------
BALANCE AT MARCH 31, 1996 145,119,875 $1,451,199 $547,799 $(47,561) $1,427,499 $3,378,936
==========================================================================================================================
*At established rate for each series
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DTE ENERGY COMPANY, THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
NOTE 1 - ANNUAL REPORT NOTES
These consolidated financial statements should be read in conjunction with
the Annual Report Notes. The Notes contained herein update and supplement
matters discussed in the Annual Report Notes.
The preceding consolidated financial statements are unaudited, but, in the
opinion of the Company and Detroit Edison, include all adjustments necessary
for a fair statement of the results for the interim periods. Financial results
for this interim period are not necessarily indicative of results that may be
expected for any other interim period or for the fiscal year.
NOTE 2 - COMMITMENTS AND CONTINGENCIES
As discussed in Note 12 of the Annual Report Notes, in January 1989, the
EPA issued an administrative order under the CERCLA ordering Detroit Edison and
23 other potentially responsible parties to begin removal activities at the
Carter Industrials Superfund site. In March 1996, it was determined that the
site met all applicable cleanup standards. Agreement has been reached with the
EPA on an appropriate remediation for the sewers related to the operation of
the Carter site. It is expected that upon completion of the sewer remediation,
the Carter site will be removed from the National Priorities List.
As discussed in Note 12 of the Annual Report Notes, in January 1996, the
FERC issued an order approving the Ludington Pumped Storage Project Settlement
Agreement. On February 22, 1996, with the MDEQ's issuance of the plant's
National Pollutant Discharge Elimination System permit, all regulatory
approvals are in place. The settlement becomes effective May 1.
NOTE 3 - EMPLOYEE BENEFITS
As discussed in Note 13 of the Annual Report Notes, the expected long-term
rate of return on retirement plan assets for pension cost determination was
9.5% for 1993, 1994 and 1995. The expected long-term rate of return assumption
was changed to 9% for 1996, which will result in an increase in pension cost of
$5.6 million.
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15
This Quarterly Report on Form 10-Q, including the report of Deloitte &
Touche LLP (on page 16) will automatically be incorporated by reference in the
Prospectuses constituting part of the Registration Statements on Form S-3
(Registration Nos. 33-53207 and 33-64296) of The Detroit Edison Company and
Form S-8 (Registration No. 333-00023) and Form S-3 (Registration No. 33-57545)
of DTE Energy Company, filed under the Securities Act of 1933. Such report of
Deloitte & Touche LLP, however, is not a "report" or "part of the Registration
Statement" within the meaning of Sections 7 and 11 of the Securities Act of
1933 and the liability provisions of Section 11(a) of such Act do not apply.
15
16
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of DTE Energy Company and
The Detroit Edison Company
We have reviewed the accompanying consolidated balance sheets of DTE
Energy Company and subsidiary companies and of The Detroit Edison Company and
subsidiary companies as of March 31, 1996, and the related consolidated
statements of income and of cash flows for the three-month and twelve-month
periods ended March 31, 1996 and 1995, and the consolidated statements of
common shareholders' equity for the three-month period ended March 31, 1996.
These financial statements are the responsibility of DTE Energy Company and The
Detroit Edison Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheets of DTE Energy Company and subsidiary
companies and of The Detroit Edison Company and subsidiary companies as of
December 31, 1995, and the related consolidated statements of income, common
shareholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated January 22, 1996 we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying consolidated balance sheets as of
December 31, 1995 is fairly stated, in all material respects, in relation to
the consolidated balance sheets from which it has been derived.
DELOITTE & TOUCHE LLP
Detroit, Michigan
May 7, 1996
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
DTE ENERGY COMPANY, THE DETROIT EDISON COMPANY AND SUBSIDIARY
COMPANIES
This analysis for the three and twelve months ended March 31, 1996, as
compared to the same periods in 1995, should be read in conjunction with the
consolidated financial statements (unaudited), the accompanying Notes and the
Annual Report Notes.
Detroit Edison is the principal subsidiary of the Company and, as such,
this discussion explains material changes in results of operations of both the
Company and Detroit Edison and identifies recent trends and events affecting
both the Company and Detroit Edison. For the periods presented, the Company's
operations and those of Detroit Edison are not materially different.
RESULTS OF OPERATIONS
For the three months ended March 31, 1996, the Company's net income was
$108.4 million, or $0.75 per common share, up 2.2 percent from the $106.1
million, or $0.73 per common share earned in the three months ended March 31,
1995. For the twelve months ended March 31, 1996, the Company's net income was
$408.3 million, or $2.82 per common share, up 4.4 percent from the $390.9
million, or $2.68 per common share earned in the twelve months ended March 31,
1995. The increases in net income were due to increases in electricity sales
and decreases in non-operating expenses, partially offset by higher operating
expenses.
At March 31, 1996, the book value of the Company's common stock was $23.83
per share, an increase of $0.21 per share or 0.9% since December 31, 1995.
Return on average total common shareholders' equity was 11.8% and 11.6% for the
twelve months ended March 31, 1996 and 1995, respectively.
Detroit Edison's ratio of earnings to fixed charges was 3.22 and 3.17 for
the twelve months ended March 31, 1996 and 1995, respectively. Detroit
Edison's ratio of earnings to fixed charges and preferred stock dividends for
the 1996 and 1995 twelve-month periods was 2.83 and 2.76, respectively.
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OPERATING REVENUES
- ------------------------------------------------------------------------
Total operating revenues of the Company increased (decreased) due to the
following factors:
Three Twelve
Months Months
------ ------
(Millions)
Rate Changes
Special Manufacturing Contracts $ (9) $(36)
PSCR Clause (16) (11)
--- ----
(25) (47)
System sales volume and mix 41 177
Interconnection sales 4 21
Fermi 2 capacity factor performance standard reserve 5 9
Other - net 4 5
--- ----
Total $29 $165
=== ====
SPECIAL MANUFACTURING CONTRACTS
In March 1995, the MPSC issued an order approving Detroit Edison's 10-year
special manufacturing contracts with Chrysler Corporation, Ford Motor Company
and General Motors Corporation. In return for their long-term commitment,
these companies receive a reduction in the price paid for electricity. For
additional information, see Management's Discussion and Analysis of Financial
Condition and Results of Operations in the Annual Report.
PSCR CLAUSE
The decreases in PSCR Clause revenues resulted from lower average unit
costs of fuel and purchased power.
kWh SALES
kWh sales increased as follows:
Three Twelve
Months Months
------ ------
Residential 6.0% 8.7%
Commercial 5.0 3.5
Industrial 2.2 3.0
Other (includes primarily sales for resale) 7.9 7.0
Total System 4.6 4.9
Interconnection 74.1 93.5
Total 6.8 8.2
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The increases in residential and commercial sales reflect colder winter
weather and customer growth, and for the twelve-month period, substantially
warmer summer weather. Commercial sales also reflect an improvement in
economic conditions.
Increased industrial sales in the three-month period reflect strong demand
in the automotive and construction sectors. The increases in industrial sales
for the twelve-month period reflect higher sales to automotive, steel and other
customers due to improved economic conditions.
The increased sales to other customers reflect increased load requirements
of wholesale for resale customers.
Interconnection sales increases were due to the improved availability of
energy for sale in meeting the increased demand for energy during these
periods.
FERMI 2 CAPACITY FACTOR PERFORMANCE STANDARD RESERVE
Because of a turbine-generator failure in December 1993, Fermi 2, a
nuclear generating unit, was out of service in 1994 and early 1995. As a
result, under the MPSC capacity factor performance standard, a disallowance of
net incremental replacement power cost will be imposed in each of the years
1994-1998 for the amount by which the Fermi 2 three-year rolling average
capacity factor is less than the greater of either the average of the top 50%
of U. S. boiling water reactors or 50%. Detroit Edison recorded a reserve for
such disallowances of $31 million in 1994 and $32 million in 1995, which
amounts were charged to operating revenues. For additional information, see
Notes 2 and 3 in the Annual Report.
Operating revenues have increased due to the absence of Fermi 2 reserve
charges in the 1996 three-month period and due to a decrease in Fermi 2 reserve
charges in the 1996 twelve-month period.
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20
OPERATING EXPENSES
- ------------------------------------------------------------------------------
FUEL AND PURCHASED POWER
Fuel and purchased power expenses increased (decreased) due to the following
factors:
Three Twelve
Months Months
------ ------
(Millions)
Net system output $ 12 $ 66
Average unit cost (23) (81)
Fermi 2 business interruption insurance 5 59
Other - (2)
---- ----
Total $ (6) $ 42
==== ====
Net system output and average fuel and purchased power unit costs were as
follows:
Three Months Twelve Months
----------------- --------------
1996 1995 1996 1995
------ ------ ------ ------
(Thousands of Megawatthours, "MWh")
Power plant generation
Fossil 10,503 10,331 41,809 42,012
Nuclear 1,785 245 6,630 188
Purchased power 621 1,564 4,480 6,669
------ ------ ------ ------
Net system output 12,909 12,140 52,919 48,869
====== ====== ====== ======
Average unit cost ($/MWh) $14.03 $15.79 $14.88 $16.41
====== ====== ====== ======
Fuel and purchased power expense decreased in the three-month period due
to lower average unit costs resulting from increased usage of lower cost
nuclear generation and lower-cost Western low-sulfur coal, partially offset by
higher net system output.
For the twelve-month period, fuel and purchased power expense increased
due to higher net system output and the prior-period receipt of Fermi 2
business interruption insurance, partially offset by lower average unit costs
resulting from increased usage of lower cost nuclear generation and lower-cost
Western low-sulfur coal. Fermi 2 was out of service in 1994 and early 1995 as
a result of a turbine-generator failure in December 1993.
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21
OTHER OPERATION
Three Months
Other operation expense increased due primarily to higher major storm
($4.0 million), nuclear plant ($3.7 million), fossil plant ($3.5 million),
demand side management ($2.3 million) and employee retirement plan ($1.5
million) expenses. These increases were partially offset by lower
uncollectible ($1.3 million) and injuries and damages ($1.0 million) expenses,
and expenses recorded in the year-earlier period for competitive sales programs
($2.9 million).
Twelve Months
Other operation expense increased due primarily to higher major storm
expenses ($15.9 million), higher incentive award expenses related to a
shareholder value improvement plan ($11.2 million), demand side management
expenses ($9.4 million), an increase in a reserve for the write-off of obsolete
and excess stock material ($9.0 million), expenses related to the settlement of
the Ludington Pumped Storage Plant fish mortality case ($8.4 million) and
Electric Power Research Institute dues ($4.8 million). These increases were
partially offset by lower nuclear plant ($10.5 million) and lower uncollectible
($8.9 million) expenses, and expenses recorded in the year-earlier period for
service quality claims ($8.7 million).
MAINTENANCE
Three Months
Maintenance expense increased due to higher major storm ($7.1 million),
overhead and underground lines ($7.4 million), general property ($2.9 million),
station maintenance ($2.6 million) and nuclear plant ($1.9 million) expenses.
Twelve Months
Maintenance expense increased due primarily to higher major storm ($14.6
million) and overhead and underground lines ($2.3 million) expenses, partially
offset by lower nuclear plant expenses ($13.8 million).
STEAM PLANT IMPAIRMENT LOSS
As the result of continuing losses in the operation of its steam heating
business, upon adoption of Statement of Financial Accounting Standards No. 121
in the fourth quarter of 1995, Detroit Edison wrote off the remaining net book
value of its steam heating plant assets of $42 million.
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DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense increased due primarily to increases
in plant in service, including internally developed software costs.
DEFERRED FERMI 2 AMORTIZATION
Deferred Fermi 2 amortization, a non-cash item of income, was recorded
beginning with Detroit Edison's purchase of the Wolverine Power Supply
Cooperative, Inc.'s ownership interest in Fermi 2 in February 1990. The annual
amount deferred decreases each year through 1999.
AMORTIZATION OF DEFERRED FERMI 2 DEPRECIATION AND RETURN
Deferred Fermi 2 depreciation and return, non-cash items of income, were
recorded beginning with the implementation of the Fermi 2 rate phase-in plan in
January 1988. The annual amounts of deferred depreciation and return decreased
each year through 1992. Beginning in 1993 and continuing through 1998, these
deferred amounts will be amortized to operating expense as the cash recovery is
realized through revenues.
TAXES OTHER THAN INCOME TAXES
Taxes other than income taxes increased due to higher payroll and property
taxes.
INCOME TAXES
Three Months
Income taxes decreased due to lower pretax operating income and lower
prior years' federal income tax accrual.
Twelve Months
Income taxes increased due to higher pretax operating income.
OTHER INCOME AND DEDUCTIONS
OTHER INCOME AND (DEDUCTIONS) - NET
Three Months
Other deductions decreased due to lower promotional practices expenses
($7.8 million) and lower expenses related to the sale of accounts receivable
and unbilled revenues ($2.6 million).
22
23
Twelve Months
Other deductions decreased due to lower expenses related to the sale of
accounts receivable and unbilled revenues ($9.6 million), lower promotional
practices expense ($6.5 million), and a decrease in the write-off of premiums
and expenses related to the portion of Detroit Edison's 1989 Series A General
and Refunding Mortgage Bonds not refinanced ($3.5 million), partially offset by
expenses incurred in the formation of a holding company ($3.1 million).
ACCRETION INCOME
Accretion income, a non-cash item of income, was recorded beginning in
January 1988 to restore to income, over the period 1988-1998, losses recorded
due to discounting indirect disallowances of plant costs. The annual amount of
accretion income recorded decreases each year through 1998.
INTEREST CHARGES
LONG-TERM DEBT
Long-term debt interest charges were higher in the twelve-month period due
to the issuance of QUIDS.
OTHER
Other interest charges were lower due to lower levels of short-term
borrowings.
PREFERRED STOCK DIVIDENDS OF DETROIT EDISON
Preferred stock dividends of Detroit Edison decreased due to the exchange
of a portion of Cumulative Preferred Stock 7.75% Series for QUIDS and the
conversion and redemption of preferred stock.
LIQUIDITY AND CAPITAL RESOURCES
COMPETITION
THE DETROIT EDISON COMPANY
FERC. In March 1995, the FERC issued a NOPR seeking comments on several
proposals for encouraging more competitive wholesale electric power markets.
On April 24, 1996, the FERC issued Orders 888 and 889. Order 888 requires
public utilities to file open access transmission tariffs for wholesale
transmission services in accordance with non-discriminatory terms and
conditions established by the FERC within 60 days of Federal Register
publication (approximately July 1, 1996). By July 1,
23
24
1996, Detroit Edison is required to take transmission service for wholesale
transactions under the terms and conditions of the newly-established tariff.
By December 31, 1996, Detroit Edison is also required to establish a joint
transmission tariff with Consumers Power Company for coordinated joint dispatch
operations. Order 888 permits the recovery of stranded costs.
By November 1, 1996, public utilities are required by Order 889 to obtain
transmission information for wholesale transactions through a system on the
Internet. Public utilities must separate transmission operations and
reliability functions from wholesale marketing functions.
FERC has also issued a NOPR on Capacity Reservation Transmission Tariffs
("CRT"). The NOPR requests comment by August 1, 1996 on whether there are
certain disadvantages inherent in offering transmission service on both a
network and point-to-point basis and whether comparability can be better
accomplished using a single different methodology. The proposed CRT approach
suggests that no later than December 31, 1997, all pro forma point-to-point and
network service be replaced with a single point-to-point tariff that provides
for reservation-based transmission service for all jurisdictional (wholesale
sales and wholesale and retail transmission) service.
Detroit Edison is currently unable to estimate the revenue impact, if any,
of these newly required tariffs and procedures.
MPSC. The MPSC was expected to take action with respect to a report on
economic development recommendations for Michigan electric and gas reform. On
April 12, 1996, the MPSC issued a "Scheduling Order" which requires Detroit
Edison and Consumers Power Company to file "applications" by May 15, 1996.
These applications are to contain proposals that address the recommendation of
Michigan Governor Engler and the Michigan Jobs Commission to "allow new
industrial/commercial electrical load to be negotiated directly from the
generator and wheeled over 'common' transmission." The MPSC emphasizes in its
order "that this is the first step toward consideration of the recommendations
made by the Michigan Jobs Commission. Further proceedings for both electric
and gas utilities may be ordered as necessary for consideration of all relevant
issues."
Detroit Edison is continuing to address its competitive status and the
needs of its customers by entering into long-term (10 years) service contracts
with large commercial and industrial customers. Such contracts must be
approved by the MPSC prior to implementation. In addition, Detroit Edison has
also filed an application with the MPSC requesting ex parte approval of an
industrial process heat rider. This rider will replace two existing riders
that will expire at the end of 1996. Customers who elect this service agree to
retain Detroit Edison as their supplier for 10 years. The new proposed tariff
provides for prices at or below the current rate levels.
NRC. The NRC has issued an advance NOPR on amending its regulations
relating to financial assurance requirements for the decommissioning of nuclear
power plants.
24
25
The NRC believes that potential deregulation of the power generating industry
has created uncertainty with respect to decommissioning funds not contemplated
when the NRC's current financial assurance requirements were promulgated. The
NRC is considering amendments which would:
(1) require that electric utility reactor licensees provide assurance
that the full estimated cost of decommissioning will be available
through an acceptable guarantee mechanism if the licensees are no
longer subject to rate regulation by State public utility commissions
or FERC, and do not have a guaranteed source of income,
(2) allow licensees to assume a positive real rate of return on
decommissioning funds during the safe storage period, and
(3) establish periodic reporting requirements.
Detroit Edison has established external trust funds for decommissioning
costs and believes that current provisions are adequate for decommissioning.
For further information on decommissioning, see Note 2 in the Annual Report.
CASH GENERATION AND CASH REQUIREMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Net cash from operating activities increased due to changes in current
assets and liabilities, primarily as a result of the 1995 repurchase of $150
million of customer accounts receivable and unbilled revenues and higher net
income before non-cash charges.
Net cash used for investing activities was higher due to increased plant
and equipment expenditures.
Net cash used for financing activities was higher due to decreases in
short-term borrowings and the cash portion of a restructuring dividend to the
Company.
ADDITIONAL INFORMATION
On February 13, 1996, Detroit Edison issued $185 million of 7-5/8% QUIDS.
On March 21, 1996, the proceeds of this issue were used to redeem all of the
outstanding Cumulative Preferred Stock, 7.68% Series, 7.45% Series and 7.36%
Series, totaling $185 million, at per share redemption prices of $101 plus
accrued dividends.
On May 6 and 7, 1996, Detroit Edison purchased a total of $34 million of
General and Refunding Mortgage Bonds on the open market, consisting of $16
million of 8.24% 1993 Series C, $1 million of 8.25% 1993 Series C and $17
million of 7.74% 1993 Series J. These bonds will be submitted to the trustee
for cancellation.
25
26
Detroit Edison's 1996 cash requirements for its capital expenditure
program are estimated at $482 million, of which $100 million had been expended
as of March 31, 1996.
Detroit Edison's internal cash generation is expected to be sufficient to
meet cash requirements for capital expenditures as well as scheduled long-term
debt redemptions.
Expenditures for 1996 non-regulated investments are estimated to range
from $100 million to $200 million of which $15 million had been expended as of
March 31, 1996.
The Company had short-term credit arrangements of approximately $662
million at March 31, 1996, under which no borrowings were outstanding. Of the
total amount, $200 million represents a DTE Capital Corporation Revolving
Credit Agreement, backed by a Support Agreement from the Company. The
remaining $462 million results from Detroit Edison arrangements.
CAPITALIZATION
The Company's capital structure as of March 31, 1996 was 46.0% common
shareholders' equity, 1.9% cumulative preferred stock of subsidiary and 52.1%
long-term debt as compared to 45.7%, 4.3% and 50.0%, respectively, at December
31, 1995.
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27
DTE ENERGY COMPANY
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS.
As discussed in Part I, Item 3 - Legal Proceedings of the Annual Report,
the amortized costs of Detroit Edison's abandoned Greenwood Unit Nos. 2 and 3
were the subject of pending appeals. By stipulation of the parties to these
proceedings, all appeals have been dismissed.
ITEM 5 - OTHER INFORMATION.
As discussed in Part 1, Items 1 and 2 - Business and Properties,
"Regulation and Rates - Michigan Public Service Commission" of the Annual
Report, in December 1995, the MPSC approved a partial settlement agreement
resolving most of the issues regarding the 1994 PSCR reconciliation and the
Fermi 2 capacity factor performance standard disallowance for 1994. A final
MPSC order was issued on April 10, 1996 which resolved all outstanding
contested issues. As a result of the order, no additional refunds to customers
will be required.
On March 29, 1996, Detroit Edison submitted its 1995 PSCR reconciliation
filing with the MPSC. Detroit Edison is proposing to carry its 1995 PSCR
under-recovery of approximately $14.8 million forward to its 1996 PSCR
reconciliation rather than collect the under-recovery from customers at this
time. If Detroit Edison's proposal is adopted, the under-recovery would be
banked to offset future Fermi 2 power plant performance standard disallowances.
On April 26, 1996, an MPSC ALJ issued his PFD in the Detroit Edison PSCR
Plan for 1996. The ALJ adopted the adjustment proposed by the Michigan
Attorney General to reduce 1996 PSCR expenses by $8.3 million because of lost
fuel efficiency at Fermi 2 while the unit is operated at a reduced power output
until the installation of major turbine components during a scheduled refueling
and maintenance outage in September 1996.
As discussed in Part I, Items 1 and 2 - Business and Properties,
"Regulation and Rates - Michigan Public Service Commission - Retail Wheeling" of
the Annual Report, the MPSC has been considering the propriety of retail
wheeling programs. Detroit Edison proposed to implement the MPSC's
experimental program in 2004, and the MPSC Staff proposed an implementation
date in 1998. On March 29, 1996, an MPSC ALJ issued a PFD finding a capacity
need and recommending immediate implementation of the retail wheeling
experiment. The PFD did not recommend that competitive capacity solicitation
be undertaken at this time. Exceptions to the PFD have been filed and Detroit
Edison awaits the final order of the MPSC.
As discussed in Part I, Items 1 and 2 - Business and Properties,
"Regulation and Rates - Michigan Public Service Commission - Retail Wheeling"
of the Annual Report, on March 1, 1996, MascoTech Forming Technologies, Inc., a
Detroit Edison industrial
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28
customer currently purchasing approximately 25 MW of electricity annually (with
the potential for an additional 6 MW annually), petitioned the MPSC to
establish a "cost based fair and pro-competitive transportation rate" for its
new and existing electric load. A March 19, 1996 Detroit Edison motion to
dismiss asserting that the MPSC lacks jurisdiction to establish the requested
rate is currently under advisement. The Michigan Attorney General has been
permitted to intervene and another public utility has been denied intervention.
Pending resolution of the motion to dismiss, hearings have been scheduled for
June 24, 1996.
As discussed in Part I - Items 1 and 2 - Business and Properties,
"Environmental Matters - Waste and Toxic Substances" of the Annual Report, the
Michigan Environmental Response Act ("Act 307") gives the MDEQ authority to
list sites of environmental contamination and bring about environmental
clean-ups within the State of Michigan. A portion of the Monroe Power Plant
site was listed on the MDEQ Act 307 list. On April 1, 1996, Detroit Edison
received a request from the MDEQ, acting as an agent for the EPA, for voluntary
access (under section 104(e) of the federal CERCLA) to a portion of the Monroe
Power Plant property which included the former City of Monroe Landfill. The
purpose of the access is to conduct an integrated assessment to determine
whether the property should remain active in the Federal Superfund process
toward possible inclusion on the National Priorities List. Detroit Edison is
presently working with the MDEQ to provide the access based on an appropriate
sampling plan. At this time, it is unknown what impact, if any, this situation
will have upon Detroit Edison.
On April 4, 1996, Detroit Edison received from the EPA a general notice of
potential liability and request for information on its involvement with the
Ramona Park Landfill Site in Utica, Michigan. Detroit Edison is presently
examining its records and it is unknown what impact, if any, this situation
will have.
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QUARTERLY REPORT ON FORM 10-Q FOR
THE DETROIT EDISON COMPANY
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED).
See pages 4 through 15.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
See the Company's and Detroit Edison's "Item 2 - Management's Discussion
and Analysis of Financial Condition and Results of Operations," which is
incorporated herein by this reference.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS.
See the Company's "Item 1 - Legal Proceedings," which is incorporated
herein by this reference.
ITEM 5 - OTHER INFORMATION.
William R. Roller, an employee of Detroit Edison for in excess of five
years, was elected Vice President - Power Generation effective April 22, 1996.
See the Company's "Item 5 - Other Information" which is incorporated
herein by this reference.
29
30
QUARTERLY REPORTS ON FORM 10-Q FOR
DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(i) Exhibits filed herewith.
Exhibit
Number
4-176 - Support Agreement, dated as of March 8, 1996,
between the Company and Detroit Edison.
10-4 - Amended and Restated Savings Reparation Plan.
11-3 - DTE Energy Company and Subsidiary Companies Primary
and Fully Diluted Earnings Per Share of Common Stock.
15-1 - Awareness Letter of Deloitte & Touche LLP regarding
their report dated May 7, 1996.
27-3 - Financial Data Schedule for the period ended March
31, 1996 for the Company.
27-4 - Financial Data Schedule for the period ended March
31, 1996 for Detroit Edison.
99-9 - Credit Agreement, dated as of March 1, 1996 among DTE
Capital Corporation, the Initial Lenders named therein, and
Citibank, N.A., as Agent.
99-10 - Fourth Amendment, dated as of March 8, 1996, to 1988
Amended and Restated Nuclear Fuel Heat Purchase Contract
Agreement, dated as of October 4, 1988, between Detroit Edison
and Renaissance.
99-11 - Third Amendment, dated as of March 8, 1996, to
$200,000,000 364-Day Credit Agreement, dated September 1, 1993,
as amended, among Detroit Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New York Branch, as Agent.
30
31
Exhibit
Number
------
99-12 - Third Amendment, dated as of March 8, 1996, to
$200,000,000 Three-Year Credit Agreement, dated September 1,
1993, as amended among Detroit Edison, Renaissance, the Banks
party thereto and Barclays Bank, PLC, New York Branch, as
Agent.
(ii) Exhibits incorporated herein by reference.
3(a) - Restated Articles of Incorporation of Detroit Edison,
as filed December 10, 1991 with the State of Michigan,
Department of Commerce - Corporation and Securities Bureau
(Exhibit 4-117 to Form 10-Q for quarter ended March 31, 1993).
3(b) - Certificate containing resolution of the Detroit Edison Board
of Directors establishing the Cumulative Preferred Stock,
7.75% Series as filed February 22, 1993 with the State of
Michigan, Department of Commerce - Corporation and Securities
Bureau (Exhibit 4-134 to Form 10-Q for quarter ended March 31,
1993).
3(c) - Certificate containing resolution of the Detroit Edison Board
of Directors establishing the Cumulative Preferred Stock,
7.74% Series, as filed April 21, 1993 with the State of
Michigan, Department of Commerce - Corporation and Securities
Bureau (Exhibit 4-140 to Form 10-Q for quarter ended March 31,
1993).
3(d) - Amended and Restated Articles of Incorporation of DTE Energy
Company, dated December 13, 1995 (Exhibit 3A (3.1) to DTE
Energy Form 8-B filed January 2, 1996, File No. 1-11607).
3(e) - Agreement and Plan of Exchange (Exhibit 1(2) to DTE
Energy Form 8-B filed January 2, 1996, File No. 1-11607).
3(f) - Amended and Restated By-Laws, dated as of February 26, 1996,
of the Company (Exhibit 3-3 to Form 10-K for year ended
December 31, 1995).
3(g) - Amended and Restated By-Laws, dated as of February 26, 1996,
of Detroit Edison (Exhibit 3-4 to Form 10-K for year ended
December 31, 1995).
31
32
Exhibit
Number
4(a) - Mortgage and Deed of Trust, dated as of October 1, 1924,
between Detroit Edison (File No. 1-2198) and Bankers Trust
Company as Trustee (Exhibit B-1 to Registration No. 2-1630) and
indentures supplemental thereto, dated as of dates indicated
below, and filed as exhibits to the filings as set forth below:
September 1, 1947 Exhibit B-20 to Registration No. 2-7136
October 1, 1968 Exhibit 2-B-33 to Registration No. 2-30096
November 15, 1971 Exhibit 2-B-38 to Registration No. 2-42160
January 15, 1973 Exhibit 2-B-39 to Registration No. 2-46595
June 1, 1978 Exhibit 2-B-51 to Registration No. 2-61643
June 30, 1982 Exhibit 4-30 to Registration No. 2-78941
August 15, 1982 Exhibit 4-32 to Registration No. 2-79674
October 15, 1985 Exhibit 4-170 to Form 10-K for year ended
December 31, 1994
November 30, 1987 Exhibit 4-139 to Form 10-K for year ended
December 31, 1992
July 15, 1989 Exhibit 4-171 to Form 10-K for year ended
December 31, 1994
December 1, 1989 Exhibit 4-172 to Form 10-K for year ended
December 31, 1994
February 15, 1990 Exhibit 4-173 to Form 10-K for year ended
December 31, 1994
November 1, 1990 Exhibit 4-110 to Form 10-K for year ended
December 31, 1990
April 1, 1991 Exhibit 4-15 to Form 10-K for year ended
December 31, 1995
May 1, 1991 Exhibit 4-112 to Form 10-Q for quarter ended
June 30, 1991
May 15, 1991 Exhibit 4-113 to Form 10-Q for quarter ended
June 30, 1991
September 1, 1991 Exhibit 4-116 to Form 10-Q for quarter ended
September 30, 1991
November 1, 1991 Exhibit 4-119 to Form 10-K for year ended
December 31, 1991
January 15, 1992 Exhibit 4-120 to Form 10-K for year ended
December 31, 1991
February 29, 1992 Exhibit 4-121 to Form 10-Q for quarter ended
March 31, 1992
April 15, 1992 Exhibit 4-122 to Form 10-Q for quarter ended
June 30, 1992
July 15, 1992 Exhibit 4-123 to Form 10-Q for quarter ended
September 30, 1992
32
33
Exhibit
Number
- -------
July 31, 1992 Exhibit 4-124 to Form 10-Q for quarter ended
September 30, 1992
November 30, 1992 Exhibit 4-130 to Registration No. 33-56496
January 1, 1993 Exhibit 4-131 to Registration No. 33-56496
March 1, 1993 Exhibit 4-141 to Form 10-Q for quarter ended
March 31, 1993
March 15, 1993 Exhibit 4-142 to Form 10-Q for quarter ended
March 31, 1993
April 1, 1993 Exhibit 4-143 to Form 10-Q for quarter ended
March 31, 1993
April 26, 1993 Exhibit 4-144 to Form 10-Q for quarter ended
March 31, 1993
May 31, 1993 Exhibit 4-148 to Registration No. 33-64296
June 30, 1993 Exhibit 4-149 to Form 10-Q for quarter ended
June 30, 1993 (1993 Series AP)
June 30, 1993 Exhibit 4-150 to Form 10-Q for quarter ended
June 30, 1993 (1993 Series H)
September 15, 1993Exhibit 4-158 to Form 10-Q for quarter ended
September 30, 1993
March 1, 1994 Exhibit 4-163 to Registration No. 33-53207
June 15, 1994 Exhibit 4-166 to Form 10-Q for quarter ended
June 30, 1994
August 15, 1994 Exhibit 4-168 to Form 10-Q for quarter ended
September 30, 1994
December 1, 1994 Exhibit 4-169 to Form 10-K for year ended
December 31, 1994
August 1, 1995 Exhibit 4-174 to Form 10-Q for quarter ended
September 30, 1995.
4(b) - Collateral Trust Indenture (notes), dated as of June 30, 1993
(Exhibit 4-152 to Registration No. 33-50325).
4(c) - First Supplemental Note Indenture, dated as of June 30, 1993
(Exhibit 4-153 to Registration No. 33-50325).
4(d) - Second Supplemental Note Indenture, dated as of September 15,
1993 (Exhibit 4-159 to Form 10-Q for quarter ended September 30,
1993).
4(e) - Third Supplemental Note Indenture, dated as of August 15, 1994
(Exhibit 4-169 to Form 10-Q for quarter ended September 30, 1994).
33
34
Exhibit
Number
- -------
4(f) - First Amendment, dated as of December 12, 1995, to Third
Supplemental Note Indenture, dated as of August 15, 1994
(Exhibit 4-12 to Registration No. 333-00023).
4(g) - Fourth Supplemental Note Indenture, dated as of August 15,
1995 (Exhibit 4-175 to Form 10-Q for quarter ended September
30, 1995).
4(h) - Fifth Supplemental Note Indenture, dated as of February 1,
1996 (Exhibit 4-14 to Form 10-K for year ended December 31,
1995).
4(i) - Standby Note Purchase Credit Facility, dated as of August 17,
1994, among The Detroit Edison Company, Barclays Bank PLC, as
Bank and Administrative Agent, Bank of America, The Bank of
New York, The Fuji Bank Limited, The Long-Term Credit Bank of
Japan, LTD, Union Bank and Citicorp Securities, Inc. and First
Chicago Capital Markets, Inc. as Remarketing Agents (Exhibit
99-18 to Form 10-Q for quarter ended September 30, 1994).
99(a) - Belle River Participation Agreement between Detroit Edison and
Michigan Public Power Agency, dated as of December 1, 1982
(Exhibit 28-5 to Registration No. 2-81501).
99(b) - Belle River Transmission Ownership and Operating Agreement
between Detroit Edison and Michigan Public Power Agency, dated
as of December 1, 1982 (Exhibit 28-6 to Registration No.
2-81501).
99(c) - 1988 Amended and Restated Loan Agreement, dated as of October 4,
1988, between Detroit Edison and Renaissance (Exhibit 99-6 to
Registration No. 33-50325).
99(d) - First Amendment to 1988 Amended and Restated Loan Agreement,
dated as of February 1, 1990, between Detroit Edison and
Renaissance (Exhibit 99-7 to Registration No. 33-50325).
99(e) - Second Amendment to 1988 Amended and Restated Loan Agreement,
dated as of September 1, 1993, between Detroit Edison and
Renaissance (Exhibit 99-8 to Registration No. 33-50325).
99(f) - $200,000,000 364-Day Credit Agreement, dated as of September 1,
1993, among Detroit Edison, Renaissance and Barclays Bank PLC,
New York Branch, as Agent (Exhibit 99-12 to Registration No.
33-50325).
34
35
Exhibit
Number
- -------
99(g) - First Amendment, dated as of August 31, 1994, to $200,000,000
364-Day Credit Agreement, dated September 1, 1993, among Detroit
Edison, Renaissance, the Banks party thereto and Barclays Bank,
PLC, New York Branch, as Agent (Exhibit 99-19 to Form 10-Q for
quarter ended September 30, 1994).
99(h) - $200,000,000 Three-Year Credit Agreement, dated September 1,
1993, among Detroit Edison, Renaissance and Barclays Bank PLC,
New York Branch, as Agent (Exhibit 99-13 to Registration No.
33-50325).
99(i) - First Amendment, dated as of September 1, 1994, to $200,000,000
Three-Year Credit Agreement, dated as of September 1, 1993, among
Detroit Edison, Renaissance, the Banks party thereto and Barclays
Bank, PLC, New York Branch, as Agent (Exhibit 99-20 to Form 10-Q
for quarter ended September 30, 1994).
99(j) - 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract,
dated October 4, 1988, between Detroit Edison and Renaissance
(Exhibit 99-9 to Registration No. 33-50325).
99(k) - First Amendment to 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract, dated as of February 1, 1990, between Detroit
Edison and Renaissance (Exhibit 99-10 to Registration No.
33-50325).
99(l) - Second Amendment to 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract dated as of September 1, 1993, between Detroit
Edison and Renaissance (Exhibit 99-11 to Registration No.
33-50325).
99(m) - Third Amendment, dated as of August 31, 1994, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase Contract, dated October 4,
1988, between Detroit Edison and Renaissance (Exhibit 99-21 to
Form 10-Q for quarter ended September 30, 1994).
(b) Reports on Form 8-K
Detroit Edison filed a Current Report on Form 8-K, dated January 1,
1996, disclosing that DTE Energy Company had become the parent holding
company of Detroit Edison.
Registrants filed a Current Report on Form 8-K, dated January 22,
1996, discussing the write-off of the remaining net book value of
Detroit Edison's steam heating plant assets.
35
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DTE ENERGY COMPANY
--------------------------------------
(Registrant)
Date May 7, 1996 /s/ SUSAN M. BEALE
-------------------- --------------------------------------
Susan M. Beale
Vice President and Corporate Secretary
Date May 7, 1996 /s/ RONALD W. GRESENS
-------------------- --------------------------------------
Ronald W. Gresens
Vice President and Controller
36
37
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE DETROIT EDISON COMPANY
---------------------------------------
(Registrant)
Date May 7, 1996 /s/ SUSAN M. BEALE
-------------------- ---------------------------------------
Susan M. Beale
Vice President and Corporate Secretary
Date May 7, 1996 /s/ RONALD W. GRESENS
-------------------- ---------------------------------------
Ronald W. Gresens
Vice President and Controller
37
38
FILE NO.
DTE ENERGY COMPANY 1-11607
THE DETROIT EDISON COMPANY 1-2198
QUARTERLY REPORTS ON FORM 10-Q FOR
DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY
FOR QUARTER ENDED MARCH 31, 1996
Exhibits
Exhibits filed herewith.
Exhibit
Number
-------
4-176 - Support Agreement, dated as of March 8, 1996,
between the Company and Detroit Edison.
10-4 - Amended and Restated Savings Reparation Plan.
11-3 - DTE Energy Company and Subsidiary Companies Primary
and Fully Diluted Earnings Per Share of Common Stock.
15-1 - Awareness Letter of Deloitte & Touche LLP regarding
their report dated May 7, 1996.
27-3 - Financial Data Schedule for the period ended March
31, 1996 for the Company.
27-4 - Financial Data Schedule for the period ended March
31, 1996 for Detroit Edison.
99-9 - Credit Agreement, dated as of March 1, 1996 among DTE
Capital Corporation, the Initial Lenders named therein, and
Citibank, N.A., as Agent.
99-10 - Fourth Amendment, dated as of March 8, 1996, to 1988
Amended and Restated Nuclear Fuel Heat Purchase Contract
Agreement, dated as of October 4, 1988, between Detroit Edison
and Renaissance.
39
99-11 - Third Amendment, dated as of March 8, 1996, to
$200,000,000 364-Day Credit Agreement, dated September 1, 1993,
as amended, among Detroit Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New York Branch, as Agent.
99-12 - Third Amendment, dated as of March 8, 1996, to
$200,000,000 Three-Year Credit Agreement, dated September 1,
1993, as amended among Detroit Edison, Renaissance, the Banks
party thereto and Barclays Bank, PLC, New York Branch, as
Agent.
See Page Nos.
____ thru ____
for location of
Exhibits Incorporated
by Reference
Exhibits incorporated herein by reference.
3(a) - Restated Articles of Incorporation of Detroit Edison,
as filed December 10, 1991 with the State of Michigan,
Department of Commerce - Corporation and Securities Bureau.
3(b) - Certificate containing resolution of the Detroit
Edison Board of Directors establishing the Cumulative Preferred
Stock, 7.75% Series as filed February 22, 1993 with the State of
Michigan, Department of Commerce - Corporation and Securities
Bureau.
3(c) - Certificate containing resolution of the Detroit
Edison Board of Directors establishing the Cumulative Preferred
Stock, 7.74% Series, as filed April 21, 1993 with the State of
Michigan, Department of Commerce - Corporation and Securities
Bureau.
3(d) - Amended and Restated Articles of Incorporation of DTE
Energy Company, dated December 13, 1995.
3(e) - Agreement and Plan of Exchange.
3(f) - Amended and Restated By-Laws, dated as of February
26, 1996, of the Company.
3(g) - Amended and Restated By-Laws, dated as of February
26, 1996, of Detroit Edison.
ii
40
Exhibit
Number
-------
4(a) - Mortgage and Deed of Trust, dated as of October 1,
1924, between Detroit Edison and Bankers Trust Company as
Trustee and indentures supplemental thereto, dated as of dates
indicated below:
September 1, 1947
October 1, 1968
November 15, 1971
January 15, 1973
June 1, 1978
June 30, 1982
August 15, 1982
October 15, 1985
November 30, 1987
July 15, 1989
December 1, 1989
February 15, 1990
November 1, 1990
April 1, 1991
May 1, 1991
May 15, 1991
September 1, 1991
November 1, 1991
January 15, 1992
February 29, 1992
April 15, 1992
July 15, 1992
July 31, 1992
November 30, 1992
January 1, 1993
March 1, 1993
March 15, 1993
April 1, 1993
April 26, 1993
May 31, 1993
June 30, 1993
June 30, 1993
September 15, 1993
March 1, 1994
June 15, 1994
August 15, 1994
December 1, 1994
August 1, 1995
iii
41
Exhibit
Number
-------
4(b) - Collateral Trust Indenture (notes), dated as of June 30, 1993.
4(c) - First Supplemental Note Indenture, dated as of June 30, 1993.
4(d) - Second Supplemental Note Indenture, dated as of September 15, 1993.
4(e) - Third Supplemental Note Indenture, dated as of August 15, 1994.
4(f) - First Amendment, dated as of December 12, 1995, to Third
Supplemental Note Indenture, dated as of August 15, 1994.
4(g) - Fourth Supplemental Note Indenture, dated as of August 15, 1995.
4(h) - Fifth Supplemental Note Indenture, dated as of February 1, 1996.
4(i) - Standby Note Purchase Credit Facility, dated as of August 17, 1994,
among The Detroit Edison Company, Barclays Bank PLC, as Bank and
Administrative Agent, Bank of America, The Bank of New York, The
Fuji Bank Limited, The Long-Term Credit Bank of Japan, LTD, Union
Bank and Citicorp Securities, Inc. and First Chicago Capital
Markets, Inc. as Remarketing Agents.
99(a) - Belle River Participation Agreement between Detroit Edison and
Michigan Public Power Agency, dated as of December 1, 1982.
99(b) - Belle River Transmission Ownership and Operating Agreement
between Detroit Edison and Michigan Public Power Agency, dated as
of December 1, 1982.
99(c) - 1988 Amended and Restated Loan Agreement, dated as of October 4,
1988, between Detroit Edison and Renaissance.
99(d) - First Amendment to 1988 Amended and Restated Loan Agreement,
dated as of February 1, 1990, between Detroit Edison and
Renaissance.
99(e) - Second Amendment to 1988 Amended and Restated Loan Agreement,
dated as of September 1, 1993, between Detroit Edison and
Renaissance.
iv
42
99(f) - $200,000,000 364-Day Credit Agreement, dated as of September 1,
1993, among Detroit Edison, Renaissance and Barclays Bank PLC,
New York Branch, as Agent.
v
43
Exhibit
Number
- -------
99(g) - First Amendment, dated as of August 31, 1994, to $200,000,000
364-Day Credit Agreement, dated September 1, 1993, among Detroit
Edison, Renaissance, the Banks party thereto and Barclays Bank,
PLC, New York Branch, as Agent.
99(h) - $200,000,000 Three-Year Credit Agreement, dated September 1,
1993, among Detroit Edison, Renaissance and Barclays Bank PLC,
New York Branch, as Agent.
99(i) - First Amendment, dated as of September 1, 1994, to $200,000,000
Three-Year Credit Agreement, dated as of September 1, 1993, among
Detroit Edison, Renaissance, the Banks party thereto and Barclays
Bank, PLC, New York Branch, as Agent.
99(j) - 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract,
dated October 4, 1988, between Detroit Edison and Renaissance .
99(k) - First Amendment to 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract, dated as of February 1, 1990, between Detroit
Edison and Renaissance .
99(l) - Second Amendment to 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract dated as of September 1, 1993, between Detroit
Edison and Renaissance.
99(m) - Third Amendment, dated as of August 31, 1994, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase Contract, dated October 4,
1988, between Detroit Edison and Renaissance.
vi