DTE Energy 2010 Annual Report Download - page 25

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23
The Company recognizes interest and penalties pertaining to income taxes in Interest expense and Other expenses, respectively, on our
Consolidated Statements of Operations. The Company had $0.1 million and $1 million of accrued interest at December 31, 2010 and
December 31, 2009, respectively. The Company had no accrued penalties pertaining to income taxes at December 31, 2010 and
December 31, 2009. We had $(1) million interest benefit in relation to income tax for the year ended December 31, 2010 and $1
million interest expense in relation to income tax for the years ended December 31, 2009.
In 2010, DTE Energy and its subsidiaries settled a federal tax audit for the 2007 and 2008 tax years, which resulted in the recognition
of $9 million of unrecognized tax benefits by MichCon. In 2009, DTE Energy and its subsidiaries settled a federal tax audit for the
2004 through 2006 tax years. The resulting change to unrecognized tax benefits was not significant.
Michigan Business Tax
In July 2007, the Michigan Business Tax (MBT) was enacted by the State of Michigan to replace the Michigan Single Business Tax
effective January 1, 2008. The MBT is comprised of an apportioned modified gross receipts tax of 0.8 percent and an apportioned
business income tax of 4.95 percent. The MBT provides credits for Michigan business investment, compensation, and research and
development. Legislation was also enacted, in 2007, by the State of Michigan creating a deduction for businesses that realize an
increase in their deferred tax liability due to the enactment of the MBT. The MBT is accounted for as an income tax.
The MBT consolidated deferred tax liability balance is $74 million as of December 31, 2010 and is reported net of the related federal
tax benefit. The MBT deferred tax asset balance is $56 million as of December 31, 2010 and is reported net of the related federal
deferred tax liability. The regulated asset balance is $64 million and the regulated liability balance is $56 million as of December 31,
2010 and is further discussed in Note 9.
NOTE 11 — LONG-TERM DEBT AND PREFERRED SECURITIES
Long-Term Debt
Our long-term debt outstanding and interest rates of debt outstanding at December 31 were:
(in Millions)
2010
2009
First Mortgage Bonds, interest payable semi-annually
7.06% series due 2012
$ 40
$ 40
8.25% series due 2014
80
80
Senior notes, interest payable semi-annually
5.26% series due 2013
60
60
5.94% series due 2015
140
140
6.04% series due 2018
100
100
5.00% series due 2019
120
120
6.36% series due 2020
50
50
6.44% series due 2023
25
25
6.78% series due 2028
75
75
5.70% series due 2033
200
200
890
890
Less: unamortized discount
(1)
(1)
Total
$ 889
$ 889
Substantially all of the net properties of MichCon are subject to the lien of its mortgage. Should MichCon fail to timely pay its
indebtedness under the mortgage, such failure may create cross defaults in the indebtedness of DTE Energy.