DTE Energy 2007 Annual Report Download - page 22

have delinquent debt obligations of at least $50 million to any creditor, such delinquency will be considered a default under our credit
agreements.
In December of 2007, we initiated a $100 million short-term unsecured bank loan in the fourth quarter of 2007. The purpose of this
loan was to enhance liquidity and reduce reliance on the commercial paper market. The loans have covenants identical to those
specified under our back-up credit facilities. We were in compliance with those covenants at December 31, 2007. We had $100
million outstanding under these loans at December 31, 2007.
At December 31, 2007, we had outstanding commercial paper of $354 million and other short-term borrowings of $100 million. At
December 31, 2006, we had outstanding commercial paper of $330 million and other short-term borrowings from affiliates of $12
million.
The weighted average interest rates for short-term borrowings were 5.4% at December 31, 2007 and 2006.
NOTE 8 – CAPITAL AND OPERATING LEASES
Lessee – We lease certain property under operating lease arrangements expiring at various dates through 2023. Some leases contain
renewal options.
(in Millions)
Operating
Leases
2008 $ 1
2009 1
2010 1
2011 —
2012 —
Thereafter 2
Total minimum lease payments $ 5
Rental expense for operating leases was $1 million in 2007, $1 million in 2006, and $2 million in 2005.
Lessor – We lease a portion of our pipeline system to the Vector Pipeline Partnership through a capital lease contract that expires in
2020, with renewal options extending for five years.
The components of the net investment in the capital lease at December 31, 2007 were as follows:
(in Millions)
2008 $ 9
2009 9
2010 9
2011 9
2012 9
Thereafter 71
Total minimum future lease receipts 116
Residual value of leased pipeline 40
Less unearned income (78)
Net investment in direct financing lease 78
Less current portion (2)
$ 76
NOTE 9 – FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS
We comply with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended and interpreted. Under
SFAS No. 133, all derivatives are recognized on the Consolidated Statements of Financial Position at their fair value unless they
qualify for certain scope exceptions, including normal purchases and normal sales exception. Further, derivatives that qualify and are
designated for hedge accounting are classified as either hedges of a forecasted transaction or the variability of cash flows to be
received or paid related to a recognized asset or liability (cash flow hedge), or as hedges of the fair value of a recognized asset or
liability or of an unrecognized firm commitment (fair value hedge). For cash flow hedges, the portion of the derivative gain or loss
that is effective in offsetting the change in the value of the underlying exposure is deferred in Accumulated other comprehensive
income and later reclassified into earnings when the underlying transaction occurs. For fair value hedges, changes in fair values for
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