DTE Energy 2011 Annual Report Download - page 14

Download and view the complete annual report

Please find page 14 of the 2011 DTE Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 38

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38

12
Gas Customer Choice Deferred Asset
Gas customer choice deferred asset represents gas provided to MichCon by suppliers of gas for customers that participate in the
Customer Choice program. As the gas is sold and billed to Customer Choice customers, primarily in the December through
March heating season, this asset is reduced. At the end of an April through March cycle each year, any balance is reconciled
and settled with the various suppliers.
Property, Retirement and Maintenance, and Depreciation, Depletion and Amortization
Property is stated at cost and includes construction-related labor, materials, overheads and an allowance for funds used during
construction (AFUDC). The cost of properties retired, including the cost of removal, less salvage value, is charged to
accumulated depreciation. Expenditures for maintenance and repairs are charged to expense when incurred.
Property is depreciated over its estimated useful life using straight-line rates approved by the MPSC.
Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an
asset may not be recoverable. If the carrying amount of the asset exceeds the expected future cash flows generated by the asset,
an impairment loss is recognized resulting in the asset being written down to its estimated fair value. Assets to be disposed of
are reported at the lower of the carrying amount or fair value, less costs to sell.
Excise and Sales Taxes
The Company records the billing of excise and sales taxes as a receivable with an offsetting payable to the applicable taxing
authority, with no net impact on the Consolidated Statements of Operations.
Deferred Debt Costs
The costs related to the issuance of long-term debt are deferred and amortized over the life of each debt issue. In accordance
with MPSC regulations, the unamortized discount, premium and expense related to debt redeemed with a refinancing are
amortized over the life of the replacement issue.
Investments in Debt and Equity Securities
The Company generally classifies investments in debt and equity securities as trading and has recorded such investments at
market value with unrealized gains or losses included in earnings.
Stock-Based Compensation
The Company received an allocation of costs from DTE Energy associated with stock-based compensation. Our allocation for
stock-based compensation expense was approximately $9 million in 2011 and $7 million in 2010 and 2009.
Asset Gains, net
In 2009, MichCon sold certain gathering and processing assets resulting in a gain of $21 million. Additionally, MichCon
recognized a gain of $9 million on the sale of base gas in 2009.
Subsequent Events
The Company has evaluated subsequent events through March 19, 2012, the date that these financial statements were available
to be issued.