DTE Energy 2008 Annual Report Download - page 23

NOTE 7 — SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
MichCon has a $244 million, five-year unsecured revolving credit facility expiring in October 2009 and a $181 million, five-year unsecured
revolving credit agreement expiring in October 2010. The five-year credit facilities are with a syndicate of banks and may be utilized for
general corporate borrowings, but are intended to provide liquidity support for our commercial paper program. Borrowings under the facilities
are available at prevailing short-term interest rates. In addition, MichCon has a $50 million short-term unsecured bank loan facility expiring in
June 2009. The agreements require us to maintain a debt to total capitalization ratio of no more than 0.65 to 1. Should we have delinquent
obligations of at least $50 million to any creditor, such delinquency will be considered a default under our credit agreements. We are currently
in compliance with our covenants. Additionally, in December 2008, we issued a $20 million secured short-term note due in September 2009.
At December 31, 2008, we had outstanding commercial paper of $272 million and other short-term borrowings of $220 million, resulting in net
availability under the combined facilities of $3 million. At December 31, 2007, we had outstanding commercial paper of $354 million and
other short-term borrowings of $100 million.
At February 28, 2009, amounts outstanding totaled $338 million, resulting in net availability under the combined facilities of $157 million.
The weighted average interest rates for short-term borrowings was 4.3% and 5.4% at December 31, 2008 and 2007, respectively.
NOTE 8 — OPERATING LEASES
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essee — We lease certain property under operating lease arrangements expiring at various dates through 2023. Some leases contain renewal
options. Future minimum lease payments under non-cancelable leases at December 31, 2008 were:
Rental expense for operating leases was $1 million in 2008, 2007 and 2006.
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essor — 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, 2008 were as follows:
NOTE 9 — FAIR VALUE
Effective January 1, 2008, the Company adopted SFAS No. 157. This Statement defines fair value, establishes a framework for measuring fair
value and expands the disclosures about fair value measurements. The Company has elected the option to defer the effective date of SFAS
No. 157 as it pertains to non-financial assets and liabilities to January 1, 2009.
SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement
that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing
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Operating
(in Millions) Leases
2009 $ 1
2010 1
Total minimum lease payments $ 2
(in Millions)
2009 $ 9
2010 9
2011 9
2012 9
2013 9
Thereafter 62
Total minimum future lease receipts 107
Residual value of leased pipeline 40
Less unearned income (70)
Net investment in direct financing lease 77
Less current portion (2)
$75