2. DTE ENERGY COMPANY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited)
December 31
June 30
2005
2006
(in Millions)
ASSETS
Current Assets
Cash and cash equivalents..................................................................................... $ $ 88
76
Restricted cash ...................................................................................................... 122
127
Accounts receivable
Customer (less allowance for doubtful accounts of $169 and $136, respectively) 1,746
1,203
Collateral held by others ...................................................................................... 286
102
Other ................................................................................................................... 363
295
Accrued power and gas supply cost recovery revenue .......................................... 186
214
Inventories
Fuel and gas ........................................................................................................ 522
516
Materials and supplies......................................................................................... 146
149
Deferred income taxes ..................................................................................... 257
70
Assets from risk management and trading activities............................................. 806
618
Other ..................................................................................................................... 160
156
4,682
3,526
Investments
Nuclear decommissioning trust funds................................................................... 646
679
Other .......................................................................................................................... 530
537
1,176
1,216
Property
Property, plant and equipment .............................................................................. 18,660
18,661
(7,830 )
(7,603 )
Less accumulated depreciation and depletion ......................................................
10,830
11,058
Other Assets
Goodwill ............................................................................................................... 2,057
2,057
Regulatory assets ................................................................................................. 2,074
2,063
Securitized regulatory assets ................................................................................. 1,340
1,289
Notes receivable.................................................................................................... 409
241
Assets from risk management and trading activities............................................. 316
327
Prepaid pension assets........................................................................................... 186
187
Other ..................................................................................................................... 265
256
6,647
6,420
$ 23,335
Total Assets............................................................................................................. $ 22,220
3. DTE ENERGY COMPANY
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited)
December 31
June 30
2005
2006
(in Millions, Except Shares)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable ............................................................................................. $ 1,187
$ 1,004
Accrued interest................................................................................................ 115
114
Dividends payable ............................................................................................ 92
92
Short-term borrowings...................................................................................... 943
790
Gas inventory equalization ............................................................................... -
52
Current portion of long-term debt, including capital leases ............................. 691
183
Liabilities from risk management and trading activities ...................................... 1,089
539
Other................................................................................................................. 803
880
4,920
3,654
Other Liabilities
Deferred income taxes...................................................................................... 1,396
1,293
Regulatory liabilities ........................................................................................ 715
741
Asset retirement obligations ............................................................................ 1,091
1,129
Unamortized investment tax credit................................................................... 131
125
Liabilities from risk management and trading activities................................... 527
477
Liabilities from transportation and storage contracts ....................................... 317
297
Accrued pension liability.................................................................................. 284
342
Deferred gains from asset sales ........................................................................ 188
82
Minority interest ............................................................................................... 92
43
Nuclear decommissioning ................................................................................ 85
90
Other................................................................................................................. 740
717
5,566
5,336
Long-Term Debt (net of current portion)
Mortgage bonds, notes and other..................................................................... 5,234
5,728
Securitization bonds......................................................................................... 1,295
1,238
Equity-linked securities ................................................................................... 175
175
Trust preferred-linked securities ...................................................................... 289
289
Capital lease obligations .................................................................................. 87
85
7,080
7,515
Shareholders’ Equity
Common stock, without par value, 400,000,000 shares
authorized, 177,761,367 and 177,814,429 shares issued
and outstanding, respectively ......................................................................... 3,483
3,468
Retained earnings ............................................................................................. 2,557
2,478
Accumulated other comprehensive loss ........................................................... (271 )
(231 )
5,769
5,715
$ 23,335
Total Liabilities and Shareholders’ Equity ..................................................... $ 22,220
4. DTE ENERGY COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30
2005
2006
(in Millions)
Operating Activities
Net Income ..................................................................................................... $ 151
$ 103
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion and amortization .................................................. 424
446
Deferred income taxes ............................................................................... 65
53
Gain on sale of interests in synfuel projects .............................................. (100 )
(20 )
Loss on sale of assets, net .......................................................................... 3
2
Impairment of synfuel projects.................................................................. -
122
Partners’ share of synfuel project losses.................................................... (149 )
(180 )
Contributions from synfuel partners .......................................................... 113
129
Changes in assets and liabilities, exclusive of changes
shown separately .................................................................................... 172
219
Net cash from operating activities .................................................................. 679
874
Investing Activities
Plant and equipment expenditures – utility..................................................... (372 )
(552 )
Plant and equipment expenditures – non-utility ............................................. (58 )
(145 )
Acquisitions, net of cash acquired .................................................................. -
(27 )
Proceeds from sale of interests in synfuel projects......................................... 145
182
Proceeds from sale of other assets .................................................................. 18
34
Restricted cash for debt redemptions.............................................................. 19
(5 )
Proceeds from sale of nuclear decommissioning trust fund assets ................. 112
99
Investment in nuclear decommissioning trust funds....................................... (130 )
(118 )
Other investments........................................................................................... (38 )
(31 )
Net cash used for investing activities ............................................................. (304 )
(563 )
Financing Activities
Issuance of long-term debt ............................................................................. 395
545
Redemption of long-term debt........................................................................ (639 )
(620 )
Short-term borrowings, net ............................................................................. 91
(50 )
Repurchase of common stock......................................................................... (11 )
(10 )
Dividends on common stock .......................................................................... (179 )
(182 )
Other............................................................................................................... (2 )
(6 )
Net cash used for financing activities ............................................................. (345 )
(323 )
30
Net Increase (Decrease) in Cash and Cash Equivalents............................... (12 )
56
Cash and Cash Equivalents at Beginning of the Period............................... 88
$ 86
Cash and Cash Equivalents at End of the Period ......................................... $ 76
5. THE DETROIT EDISON COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
(in Millions) 2005 2005
2006 2006
$ 1,035 $ 2,025
Operating Revenues................................................................. $ 1,175 $ 2,225
Operating Expenses
Fuel and purchased power ...................................................... 343 644
409 718
Operation and maintenance..................................................... 330 651
369 713
Depreciation and amortization................................................ 160 310
168 335
Taxes other than income ......................................................... 63 132
65 134
896 1,737
1,011 1,900
139 288
Operating Income .................................................................... 164 325
Other (Income) and Deductions
Interest expense....................................................................... 69 133
76 148
Interest income........................................................................ - (1 )
(1 ) (1 )
Other income .......................................................................... (7 ) (13 )
(6 ) (13 )
Other expenses........................................................................ 13 25
10 20
75 144
79 154
64 144
Income Before Income Taxes.................................................. 85 171
21 46
Income Tax Provision.............................................................. 28 55
$ 43 $ 98
Reported Earnings................................................................... $ 57 $ 116
Adjustments
Performance Excellence Process ............................................ - -
23 31
Incremental non-recurring DTE2 project costs....................... 3 5
- -
Effective tax rate normalization.............................................. - -
1 1
3 5
24 32
$ 46 $ 103
Operating Earnings ................................................................. $ 81 $ 148
The Consolidated Statement of Operations (Unaudited) should be read in conjunction with the Notes to
Consolidated Financial Statements appearing in the Annual Report to Shareholders, Form 10K and 10Q.
6. MICHIGAN CONSOLIDATED GAS COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
(in Millions) 2005 2005
2006 2006
$ 261 $ 1,095
Operating Revenues ..................................................... $ 229 $ 1,092
Operating Expenses
Cost of gas................................................................... 131 758
88 712
Operation and maintenance ......................................... 96 215
110 229
Depreciation and amortization .................................... 24 50
24 47
Taxes other than income.............................................. 13 26
13 28
Asset (gains) and losses, net........................................ - 48
3 3
264 1,097
238 1,019
Operating Income (Loss) ............................................ (3) (2)
(9) 73
Other (Income) and Deductions
Interest expense ........................................................... 13 28
15 32
Interest income ............................................................ (3) (5)
(2) (4)
Other income ............................................................... - (2)
(2) (4)
Other expenses ............................................................ - 2
- 1
10 23
11 25
(13) (25)
Income (Loss) Before Income Taxes ........................... (20) 48
37 38
Income Tax Provision (Benefit)................................... (7) 11
$ (50) $ (63)
Reported Earnings (Loss) ............................................ $ (13) $ 37
Adjustments
Effective tax rate normalization ................................... 43 51
2 (2)
Performance Excellence Process .................................. - -
2 4
Incremental non-recurring DTE2 project costs ........... 2 2
- -
April 2005 MPSC gas orders........................................ 4 57
- -
49 110
4 2
$ (1) $ 47
Operating Earnings (Loss)........................................... $ (9) $ 39
The Consolidated Statement of Operations (Unaudited) should be read in conjunction with the Notes to
Consolidated Financial Statements appearing in the Annual Report to Shareholders, Form 10K and 10Q.
7. DTE Energy Debt/Equity Calculation
As of June 30, 2006
($ millions)
Short-term borrowings 790
Current portion of long-term debt, including capital leases 183
Mortgage bonds, notes and other 5,728
Securitization bonds 1,238
Capital lease obligations 85
Equity-linked securities 175
less MichCon short-term debt (122)
less Securitization bonds, including current portion (1,345)
Total debt 6,732
Trust preferred-linked securities 289
Total preferred/ other 289
Equity 5,715
Total capitalization 12,736
Debt 52.9%
Preferred 2.3%
Common shareholders' equity 44.9%
Total 100.0%
8. Sales Analysis - Q2 2006
Electric Sales - Detroit Edison Service Area (GWh) Electric Revenue - Detroit Edison Service Area ($000s)
Q2 2006 Q2 2005 Q2 2006 Q2 2005
% Change % Change
Residential 3,514 3,766 -7% Residential 380,178 338,297 12%
Commercial 4,506 3,820 18% Commercial 411,570 326,309 26%
Industrial 3,209 3,024 6% Industrial 207,966 166,384 25%
Other 792 646 23% Other 42,830 30,730 39%
12,021 11,256 7% 1,042,544 861,720 21%
Interconnection Interconnection
570 1,141 -50% 34,487 76,490 -55%
Choice* Choice*
984 1,996 -51% 22,967 39,180 -41%
TOTAL SALES 13,575 14,393 -6% TOTAL REVENUES 1,099,998 977,390 13%
* Includes Dearborn Industrial Group sales * Distribution charge, includes Dearborn Industrial Group revenues
Gas Sales - MichCon Service Area (Mcf) Gas Revenue - MichCon Service Area ($000s)
Q2 2006 Q2 2005 Q2 2006 Q2 2005
% Change % Change
Residential 13,361,179 16,509,131 -19% Residential 167,355 185,175 -10%
Commercial 3,747,549 5,017,774 -25% Commercial 45,044 54,235 -17%
Industrial 160,681 306,601 -48% Industrial 1,785 3,082 -42%
17,269,409 21,833,506 -21% 214,184 242,492 -12%
End User End User
Transportation* Transportation*
27,338,128 32,628,790 -16% 26,837 27,861 -4%
TOTAL SALES 44,607,537 54,462,296 -18% TOTAL REVENUES 241,021 270,353 -11%
* Includes choice customers * Includes choice customers
Weather
Cooling Degree Days Heating Degree Days
Detroit Edison service territory MichCon service territory
Q2 2006 Q2 2005 Q2 2006 Q2 2005
% Change % Change
Actuals 225 301 -25% Actuals 683 757 -10%
Normal 193 193 Normal 853 860
17% 56% -20% -12%
Deviation from normal Deviation from normal
