DTE Energy 2010 Annual Report Download - page 28

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Bankruptcies
The Company buys and sells gas and gas storage and transportation services to numerous companies operating in the steel,
automotive, energy, retail and other industries. Certain of its customers have filed for bankruptcy protection under Chapter 11 of the
U.S. Bankruptcy Code. The Company regularly reviews contingent matters relating to these customers and its sale contracts and it
records provisions for amounts considered at risk of probable loss. The Company believes its previously accrued amounts are
adequate for probable losses. The final resolution of these matters is not expected to have a material effect on its consolidated financial
statements.
Other Contingencies
The Company is involved in certain legal, regulatory, administrative and environmental proceedings before various courts, arbitration
panels and governmental agencies concerning claims arising in the ordinary course of business. These proceedings include certain
contract disputes, additional environmental reviews and investigations, audits, inquiries from various regulators, and pending judicial
matters. The Company cannot predict the final disposition of such proceedings. The Company regularly reviews legal matters and
records provisions for claims that it can estimate and are considered probable of loss. The resolution of these pending proceedings is
not expected to have a material effect on its operations or financial statements in the periods they are resolved.
See Note 9 for a discussion of contingencies related to Regulatory Matters.
NOTE 15 — RETIREMENT BENEFITS AND TRUSTEED ASSETS
Measurement Date
In 2008, the Company changed the measurement date of its pension and postretirement benefit plans from November 30 to December
31. As a result, the Company recognized an adjustment of $3 million ($2 million after tax) and $4 million to retained earnings and
regulatory liabilities, respectively, which represents approximately one month of pension and postretirement benefit costs for the
period December 1, 2007 to December 31, 2008.
Pension Plan Benefits
MichCon participates in various plans that provide pension and other postretirement benefits for MichCon and its affiliates. MichCon
is allocated net periodic benefit costs (credits) for its share of the amounts of the combined plans. In prior years, MichCon served as
the plan sponsor for a pension plan for represented employees that changed in 2008 to be sponsored by DTE Energy Corporate
Services, LLC (LLC), a subsidiary of DTE Energy, which also became the plan sponsor for all plans of DTE Energy and its affiliates.
The changes in plan sponsorship did not change the pension cost or contributions allocated to MichCon, or the benefits of plan
participants. Disclosures in the following tables of benefit obligations and plan assets, components of net periodic benefit cost (credit),
and changes in benefit obligations and assets include amounts allocated to MichCon for all plans.
The Company’ s policy is to fund pension costs by contributing amounts consistent with the Pension Protection Act of 2006 provisions
and additional amounts it deems appropriate. The Company does not expect to make a contribution to its pension plans in 2011. At
the discretion of management, consistent with the Pension Protection Act of 2006 and depending on financial market conditions, the
Company anticipates making contributions of up to approximately $80 million over the next five years.
In its April 2005 final rate order, the MPSC approved the deferral of the non-capitalized portion of the Company’ s negative pension
expense. In 2010 and 2009, the Company deferred $(4) million and $23 million, respectively, as a regulatory liability.