DTE Energy 2009 Annual Report Download - page 5

3
Operation and maintenance expense decreased $53 million in 2009 and increased $42 million in 2008. The decrease in 2009 was
primarily due to $33 million of reduced uncollectible expenses, $15 million of lower employee benefit-related expenses, $14 million
from continuous improvement initiatives and other cost reductions resulting in lower contract labor and outside services expense,
information technology and other staff expenses, partially offset by higher health care expenses of $8 million and $4 million of energy
optimization expenses. The 2008 increase is primarily attributable to $56 million of higher uncollectible expenses, partially offset by
$14 million from continuous improvement initiatives resulting in lower contract labor and outside services expense, information
technology and other staff expenses and $14 million of reduced pension and health care expenses. Uncollectible expense was higher in
2008 due to an analysis of our greater than ninety day receivables that indicated a change in the mix of customers in that group and
therefore an increased risk of collection. The changes in uncollectible expenses are substantially offset by changes in revenues from
the uncollectible tracking mechanism included in the gross margin discussion.
Asset gains, net increased $4 million primarily due to a gain on the sale of certain gathering and processing assets of $21 million
partially offset by a lower gain on the sale of base gas of $15 million. The 2008 increase of $23 million was due primarily to the sale
of base gas.
Outlook — Unfavorable national and regional economic trends have resulted in a decrease in the number of customers in our service
territory, customer conservation and continued high levels of theft and uncollectible accounts receivable. The magnitude of these
trends will be driven by the impacts of the challenges in the domestic automotive industry and the timing and level of recovery in the
national and regional economies. The uncollectible tracking mechanism provided by the MPSC assists in mitigating the continued
pressure on accounts receivable.
To address the challenges of the national and regional economies, we continue to move forward in our efforts to improve our
operating performance and cash flow. We continue to resolve outstanding regulatory issues. Looking forward, we face additional
issues, such as volatility in gas prices, investment returns and changes in discount rate assumptions in benefit plans and health care
costs. We expect to continue an intense focus on our continuous improvement efforts to improve productivity, minimize lost and
stolen gas, remove waste and decrease our costs while improving customer satisfaction.