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Table of Contents


_____________________________________________



¨ 


(Exact name of registrant as specified in its charter)
 
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code)

 
Common Stock, without par value New York Stock Exchange
2011 Series I 6.5% Junior Subordinated Debentures due 2061
New York Stock Exchange
2012 Series C 5.25% Junior Subordinated Debentures due 2062
New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to
submit and post such files). Yes No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the
registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of
“large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer o
Non-accelerated filer o
(Do not check if a smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No
On June 30, 2012, the aggregate market value of the Registrant’s voting and non-voting common equity held by non-affiliates was approximately $10.2 billion (based on the
New York Stock Exchange closing price on such date). There were 172,545,941shares of common stock outstanding at January 31, 2013.
Certain information in DTE Energy Company’s definitive Proxy Statement for its 2013 Annual Meeting of Common Shareholders to be held May 2, 2013, which will be
filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the end of the registrant’s fiscal year covered by this report on
Form 10-K, is incorporated herein by reference to Part III (Items 10, 11, 12, 13 and 14) of this Form
10-K.

Table of contents

  • Page 1
    ... Energy Plaza, Detroit, Michigan (Address of principal executive offices) 48226-1279 (Zip Code) 313-235-4000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Tct: Title of Each Class Name of Each Exchange on Which Registered Common Stock...

  • Page 2
    ... About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information PTRT III Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership...

  • Page 3
    ... payments related to costs incurred for congestion on the transmission grid. GCR A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs. Michigan Corporate Income Tax MCIT MDEQ MISO Michigan Department of Environmental Quality...

  • Page 4
    ... DTE Electric financed specific stranded costs at lower interest rates through the sale of rate reduction bonds by a wholly-owned special purpose entity, The Detroit Edison Securitization Funding LLC. Subsidiaries VIE The direct and indirect subsidiaries of DTE Energy Company Variable...

  • Page 5
    ... local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings and audits; the effects of weather and other natural phenomena on operations and sales to customers, and purchases from suppliers; unplanned outages; the cost of protecting assets...

  • Page 6
    ...storage; 2) power and industrial projects ; and 3) energy marketing and trading operations. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and all amendments to such reports are available free of charge through the Investors - Reports...

  • Page 7
    ... and electricity prices affect sales levels to customers. Our peak load and highest total system sales generally occur during the third quarter of the year, driven by air conditioning and other cooling-related demands. Our operations are not dependent upon a limited number of customers, and...

  • Page 8
    ... subject to the lien of a mortgage. Generating plants owned and in service as of December 31, 2012 are as follows: Location by Michigan Plant Name Summer Net Rated Capability (a) (MW) County (%) Year in Service Fossil-fueled Steam-Electric Belle River (b) Greenwood St. Clair St. Clair Huron...

  • Page 9
    ... assets, conditions of service, accounting and operating-related matters. DTE Electric's MPSC-approved rates charged to customers have historically been designed to allow for the recovery of costs, plus an authorized rate of return on our investments. The FERC regulates DTE Electric with respect...

  • Page 10
    ... Gas partial rate case settlement agreement approved by the MPSC in December 2012 creates a new RDM effective November 1, 2013 which decouples weather normalized distribution revenue inside caps. The caps are tied to expected customer conservation attributable to DTE Gas' energy efficiency program...

  • Page 11
    ...assets, conditions of service, accounting and operating-related matters. DTE Gas' MPSC-approved rates charged to customers have historically been designed to allow for the recovery of costs, plus an authorized rate of return on our investments. DTE Gas operates natural gas storage and transportation...

  • Page 12
    ...to the Consolidated Financial Statements in Item 8 of this Report. Energy Assistance Program Energy assistance programs, funded by the federal government and the State of Michigan, remain critical to DTE Gas' ability to control its uncollectible accounts receivable and collections expenses. DTE Gas...

  • Page 13
    ... system to transport gas to Bluestone Lateral Gathers production gas in northern Michigan 75 Bcf of storage capacity 16 Bcf of storage capacity MI MI MI Storage Washington 10 100% Washington 28 50% The assets of these businesses are well integrated with other DTE Energy operations. Pursuant to...

  • Page 14
    ... air supply to industrial customers. We provide utility-type services using project assets usually located on or near the customers' premises in the automotive, airport, chemical and other industries. Wholesale Power and Renewables: We own and operate four biomass-fired electric generating plants...

  • Page 15
    ... Landfill Gas Recovery AL Electric Generation and Steam Electric Generation CA, MN & WI Various U.S. sites Electric Generation and Landfill Gas Other Industries REF MI, OK, IL REF Supply 2012 Production Tax Credits Generated (Tllocated to DTE Energy) 2011 (In millions) 2010 REF Power...

  • Page 16
    ...2013 and future years; • Acquiring and developing landfill gas recovery facilities, renewable energy projects, and other energy projects which may qualify for tax credits; and • Providing operating services to owners of industrial and power plants. ENERGY TRTDING Description Energy Trading...

  • Page 17
    ... an engineered ash storage facility, electrical distribution substations, gas pipelines, electric generating power plants, and underground and aboveground storage tank locations. Cleanup activities associated with these sites will be conducted over the next several years. Any significant change in...

  • Page 18
    ... Choice program. Electric Customer Choice migration is sensitive to market price and full service electric price changes. Environmental laws and liability may be costly. We are subject to and affected by numerous environmental regulations. These regulations govern air emissions, water quality...

  • Page 19
    ... our energy transportation business, are also dependent upon supplies and prices of energy commodities and services. Price fluctuations, fuel supply disruptions and changes in transportation costs could have a negative impact on the amounts we charge our utility customers for electricity and gas and...

  • Page 20
    ... tax credits from coke production, landfill gas recovery, biomass fired electric generation, reduced emission fuel, renewable energy generation, steel industry fuel and gas production operations. All production tax credits taken after 2010 are subject to audit by the Internal Revenue Service...

  • Page 21
    ... businesses follow the economic cycles of the customers we serve and credit risk of counterparties we do business with. Should national or regional economic conditions deteriorate, reduced volumes of electricity and gas, and demand for energy services we supply, collections of accounts receivable...

  • Page 22
    Table of Contents unforeseen events that could impact our operations. Economic losses might not be covered in full by insurance or our insurers may be unable to meet contractual obligations . 20

  • Page 23
    ... related to a recent project and outage at Unit 2 of the Monroe Power Plant. In August 2010, the United States Department of Justice, at the request of EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and DTE Electric, related to the June...

  • Page 24
    ...we anticipate paying dividends for the foreseeable future. See Note 13 of the Notes to Consolidated Financial Statements in Item 8 of this Report for information on dividend restrictions. All of our equity compensation plans that provide for the annual awarding of stock-based compensation have been...

  • Page 25
    ... income tax obligations upon the vesting of restricted stock. COMPTRISON OF CUMULTTIVE FIVE YETR TOTTL RETURN Total Return To Shareholders (Includes reinvestment of dividends) Tnnual Return Percentage Year Ended December 31 Company/Index 2008 2009 2010 2011 2012 14.90 16.00 DTE Energy Company...

  • Page 26
    Table of Contents 24

  • Page 27
    ...with the accompanying Management's Discussion and Analysis in Item 7 of this Report and Notes to the Consolidated Financial Statements in Item 8 of this Report. 2012 Operating Revenues Net Income Tttributable to DTE Energy Company Income from continuing operations (a) $ 666 $ 2011 2010 2009 2008...

  • Page 28
    ...in 2013. DTE Electric and DTE Gas both plan to seek regulatory approval in general rate case filings to include these capital expenditures within our regulatory rate base consistent with prior general rate case filing treatment. DTE Electric is implementing a 20-year renewable energy plan to address...

  • Page 29
    ... and future outlook of our segments. 2012 Net Income Tttributable to DTE Energy by Segment: Electric $ 2011 (In millions) 2010 483 115 $ 434 110 $ 441 127 51 Gas Gas Storage and Pipelines 61 42 57 38 52 23 714 Power and Industrial Projects Energy Trading 85 6 (72) 12 (47) 666...

  • Page 30
    ... prior period: 2012 (In millions) 2011 2011 rate case increase and weather effect, net of 2011 RDM Restoration tracker, discontinued in October 2011 $ 79 $ 29 27 (39) (47) 25 Securitization bond and tax surcharge Renewable energy program Energy optimization performance incentive 35...

  • Page 31
    ... purchased power costs through the PSCR process. The plant is scheduled to be brought down in the first quarter of 2013 to complete the repair. GAS Our Gas segment consists of DTE Gas and Citizens. Gas results are discussed below: 2012 2011 (In millions) 2010 Operating Revenues $ 1,315...

  • Page 32
    ...6 Energy optimization revenue Midstream storage and transportation revenues Subsidiaries transferred to Gas Storage and Pipelines segment Lower average consumption Other (12) (17) - (6) (4) $ 4 - (4) Increase (decrease) in gross margin $ (17) 2012 Gas Markets (in Bcf) 2011 2010 Gas sales...

  • Page 33
    ... investment opportunities. Millennium Pipeline has secured customers for its Phase 1 & 2 expansions, which are scheduled to be in service in 2013. Millennium's total capacity with the Phase 1 & 2 expansion will increase from 525,000 dth/d to over 800,000 dth/d. In addition, the Company has executed...

  • Page 34
    ... Income Taxes 13 Expense Production Tax Credits Net Income Noncontrolling interest - (44) (44) 17 36 (33) (6) 11 3 90 47 5 $ 45 7 $ 38 $ 5 85 Net Income Attributable to DTE Energy Company 42 Operating revenues increased $694 million in 2012 and decreased $15 million in 2011. The 2012...

  • Page 35
    ... customers for 2013. Substantially all of the metallurgical coke margin is maintained under long-term contracts. We have four biomass-fired power generation facilities that were in operation in 2012, and we are converting an additional facility to be placed in service in 2013. Our on-site energy...

  • Page 36
    ...natural gas, power and related services, and the supply or purchase of renewable energy credits to various customers which may include the management of associated storage and transportation contracts on the customers' behalf. Energy Trading results are discussed below: 2012 2011 (In millions) 2010...

  • Page 37
    ... income tax benefit of $87 million related to the enactment of the MCIT in the second quarter of 2011 and lower interest costs. See Note 12 of the Notes to Consolidated Financial Statements in Item 8 of this report. DISCONTINUED OPERATIONS Unconventional Gas Production In December 2012, the Company...

  • Page 38
    ... such as weather, electric Customer Choice, regulatory deferrals, regulatory outcomes, economic conditions and operating costs. Cash from operations totaling $2.2 billion in 2012 was $201 million higher than the comparable 2011 period. The operating cash flow comparison primarily reflects cash...

  • Page 39
    ...-term debt. DTE Energy has approximately $1.6 billion of available liquidity at December 31, 2012, consisting of cash and amounts available under unsecured revolving credit agreements. We expect to issue equity of approximately $300 million in 2013 through our dividend reinvestment plan and pension...

  • Page 40
    ... the credit quality of securities and are not a recommendation to buy, sell or hold securities. The Company's credit ratings affect our cost of capital and other terms of financing as well as our ability to access the credit and commercial paper markets. Management believes that our current credit...

  • Page 41
    ... grade, we could have restricted access to the commercial paper market and if DTE Energy is downgraded below investment grade our non-utility businesses, especially the Energy Trading and Power and Industrial Projects segments, could be required to restrict operations due to a lack of available...

  • Page 42
    ... annual and interim goodwill impairments tests for fiscal years beginning after December 15, 2011. We did not apply step zero for the 2012 goodwill impairment test and proceeded directly to step one of the test. In performing Step 1 of the impairment test, we compare the fair value of the reporting...

  • Page 43
    ... DCF, assuming stock sale 10.5x DCF, assuming stock sale 10.0x Gas Power and Industrial Projects (d) Gas Storage and Pipelines DCF, assuming asset sale (e) 82 % 33 % n/a 11.0x DCF, assuming asset sale Energy Trading Unconventional Gas Production (f) n/a DCF, assuming asset sale n/a Sales Price...

  • Page 44
    ... million in 2012 primarily due to plan design changes and favorable retiree medical utilization, partially offset by a lower discount rate, higher amortization of net actuarial losses and updated assumed long-term retiree medical inflation. Our health care trend rate assumes 7.00% for 2013 through...

  • Page 45
    ... exchange contracts. Items we do not generally account for as derivatives include natural gas inventory, pipeline transportation, renewable energy credits and storage assets. See Notes 3 and 4 of the Notes to Consolidated Financial Statements in Item 8 of this Report. The tables below do not include...

  • Page 46
    ... to Consolidated Financial Statements in Item 8 of this Report. The following tables provide details on changes in our MTM net asset (or liability) position during 2012: Total (In millions) MTM at December 31, 2011 Reclassify to realized upon settlement Changes in fair value recorded to income...

  • Page 47
    ... and Pipelines business segment has exposure to natural gas price fluctuations which impact the pricing for natural gas storage and transportation. The Company manages its exposure through the use of short, medium and long-term storage and transportation contracts. Our Power and Industrial Projects...

  • Page 48
    ... and foreign currency exchange risk listed below principally relate to our energy marketing and trading activities. The sensitivity analysis involved increasing and decreasing forward rates at December 31, 2012 and 2011 by a hypothetical 10% and calculating the resulting change in the fair values...

  • Page 49
    ... (260) (6) Interest rate risk Foreign currency exchange risk (247) 260 276 - - Long-term debt - - - - - - Forward contracts Commodity contracts Discount rates For further discussion of market risk, see Note 4 of the Notes to Consolidated Financial Statements in Item 8 of this Report. 47

  • Page 50
    ... Preferred and Preference Securities Note 17. Short-Term Credit Arrangements and Borrowings Note 18. Capital and Operating Leases Note 19. Commitments and Contingencies Note 20. Retirement Benefits and Trusteed Assets Note 21. Stock-based Compensation Note 22. Supplemental Cash Flow Information Note...

  • Page 51
    ...participation of DTE Energy's Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2012 , which is the end of...

  • Page 52
    ...To the Board of Directors and Shareholders of DTE Energy Company In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of DTE Energy Company and its subsidiaries at December 31, 2012 and 2011, and the...

  • Page 53
    Table of Contents DTE Energy Company Consolidated Statements of Operations Year Ended December 31 2012 Operating Revenues Operating Expenses $ 2011 (In millions, except per share amounts) 2010 8,791 $ 8,858 3,537 2,612 977 310 1 $ 8,525 3,190 Fuel, purchased power and gas Operation and ...

  • Page 54
    Table of Contents DTE Energy Company Consolidated Statements of Comprehensive Income 2012 Net income 2011 (In millions) 2010 $ 618 $ 720 $ 639 Other comprehensive income (loss), net of tax: Benefit obligations: Benefit obligations, net of taxes of $(1), $(5) and $3 Amounts reclassified ...

  • Page 55
    ... DTE Energy Company Consolidated Statements of Financial Position December 31 2012 (In millions) 2011 TSSETS Current Tssets Cash and cash equivalents Restricted cash, principally Securitization Accounts receivable (less allowance for doubtful accounts of $62 and $162, respectively) Customer...

  • Page 56
    Table of Contents DTE Energy Company Consolidated Statements of Financial Position - (Continued) December 31 2012 2011 (In millions, except shares) LITBILITIES TND EQUITY Current Liabilities Accounts payable $ 848 $ 782 95 99 419 Accrued interest Dividends payable Short-term borrowings 93 ...

  • Page 57
    Table of Contents DTE Energy Company Consolidated Statements of Cash Flows Year Ended December 31 2012 2011 (In millions) 2010 Operating Tctivities Net income $ 618 $ 720 $ 639 1,027 Adjustments to reconcile net income to net cash from operating activities: Depreciation, depletion and ...

  • Page 58
    ...common stock to pension plan Foreign currency translation, net of tax Benefit obligations, net of tax (2) 1 (2) 1 Net change in unrealized losses on investments, net of tax Stock-based compensation, distributions to noncontrolling interests and other - $ 35 $ Balance, December 31, 2012 3,587...

  • Page 59
    ... 1.2 million customers throughout Michigan and the sale of storage and transportation capacity; and Other businesses involved in 1) natural gas pipelines, gathering and storage; 2) power and industrial projects; and 3) energy marketing and trading operations. • DTE Electric and DTE Gas are...

  • Page 60
    ... assets through the sale of rate reduction bonds by a wholly-owned special purpose entity, Securitization. DTE Electric performs servicing activities including billing and collecting surcharge revenue for Securitization. This entity is a VIE, and is consolidated by the Company. The maximum risk...

  • Page 61
    ... day-ahead, real-time and FTR markets and net transactions across all MISO energy market locations. In any single hour DTE Electric records net purchases in Fuel, purchased power and gas and net sales in Operating revenues on the Consolidated Statements of Operations. DTE Electric records net sale...

  • Page 62
    ... programs may delay aggressive action. We assess late payment fees on trade receivables based on past-due terms with customers. Customer accounts are written off when collection efforts have been exhausted. The time period for write-off was changed in 2012 from 365 days to 150 days after service...

  • Page 63
    ... DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Natural gas inventory of $ 37 million and $52 million as of December 31, 2012 and 2011, respectively, at DTE Gas is determined using the last-in, first-out (LIFO) method. At December 31, 2012 , the replacement cost of gas...

  • Page 64
    ... $14 million for the years ended December 31, 2012, 2011 and 2010, respectively. The DTE Energy Foundation is a non-consolidated not-for-profit private foundation, the purpose of which is to contribute and assist charitable organizations and does not serve a direct business or political purpose of...

  • Page 65
    ...11 Regulatory Matters Income Taxes 12 20 21 Retirement Benefits and Trusteed Assets Stock-based Compensation NOTE 3 - FTIR VTLUE Fair value is defined 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...

  • Page 66
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) The following table presents assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2012 and 2011: December 31, 2012 December 31, 2011 Netting (a) Level 1 Tssets...

  • Page 67
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Nuclear Decommissioning Trusts and Other Investments The nuclear decommissioning trusts and other investments hold debt and equity securities directly and indirectly through commingled funds and institutional...

  • Page 68
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) period. The following table shows transfers between the levels of the fair value hierarchy for the years ended December 31, 2012 and 2011: Year Ended December 31, 2012 Year Ended December 31, 2011 Level 1 (In...

  • Page 69
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) See Note 4 for further fair value information on financial and derivative instruments. Nuclear Decommissioning Trust Funds DTE Electric has a legal obligation to decommission its nuclear power plants following...

  • Page 70
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Available-for-sale Securities At December 31, 2012 and 2011, these securities are comprised primarily of money-market and equity securities. During the year ended December 31, 2012 and December 31, 2011 no...

  • Page 71
    ..., producers, end users, utilities, retail aggregators and alternative energy suppliers. • Fundamentals Based Trading - Represents derivative activity transacted with the intent of taking a view, capturing market price changes, or putting capital at risk. This activity is speculative in nature as...

  • Page 72
    ... 64 5 $ (2) Natural Gas Natural Gas Electricity 58 (21) 115 Fuel, purchased power and gas Operating Revenue Operating Revenue $ Other Total 9 $ 159 65 Revenues and energy costs related to trading contracts are presented on a net basis in the Consolidated Statements of Operations. Commodity...

  • Page 73
    ... attributable to sale of Unconventional Gas Production business Balance at December 31 $ 2,020 $ $ 2,020 (2) $ - 2,020 2,018 NOTE 6 - TCQUISITION In July 2012, the Company executed an agreement to purchase a portfolio of fourteen on-site energy projects, primarily located in the Midwest...

  • Page 74
    ... years. The Company's 2012 results of operations include revenue of $ 30 million and net income of $ 2 million associated with the acquired project companies for the approximate three-month period following the closing date. The pro forma results of operations have not been presented for DTE Energy...

  • Page 75
    ... DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Year Ended December 31 2012 2011 (In millions) 2010 Operating Revenues Operation and Maintenance Depreciation, Depletion and Amortization $ 55 24 23 4 83 134 $ 39 16 $ 32 11 18 3 - 37 2 6 (4) (1) 15 Taxes...

  • Page 76
    ...in two power plants, Belle River and Ludington Hydroelectric Pumped Storage. DTE Electric's share of direct expenses of the jointly owned plants are included in Fuel, purchased power and gas and Operation and maintenance expenses in the Consolidated Statements of Operations. Ownership information of...

  • Page 77
    ...service. Fair value is measured using expected future cash outflows discounted at our credit-adjusted risk-free rate. In its regulated operations, the Company recognizes regulatory assets or liabilities for timing differences in expense recognition for legal asset retirement costs that are currently...

  • Page 78
    ... DTE Electric and DTE Gas are subject to the regulatory jurisdiction of the MPSC, which issues orders pertaining to rates, recovery of certain costs, including the costs of generating facilities and regulatory assets, conditions of service, accounting and operating-related matters. DTE Electric...

  • Page 79
    ... DTE Energy Company Notes to Consolidated Financial Statements - (Continued) 2012 (In millions) 2011 Liabilities Asset removal costs $ 439 $ 419 192 127 120 Renewable energy 230 127 105 56 54 Refundable revenue decoupling/deferred gain Negative pension offset Refundable income taxes...

  • Page 80
    ... from DTE Gas customers for the change in revenue resulting from the difference in weather-adjusted average sales per customer compared to the base level of average sales per customer established by the MPSC. The December 2012 order in DTE Gas' rate case requires the RDM be discontinued effective...

  • Page 81
    .... Low Income Energy Efficiency Fund (LIEEF) - Escrow of LIEEF funds collected by DTE Electric and DTE Gas as ordered by the MPSC pursuant to July 2011 Michigan Court of Appeals decision. • • 2009 Electric Rate Case Filing - Court of Appeals Decision/Refundable Deferred Gain On April 10, 2012...

  • Page 82
    ... a credit of $ 10.5 million related to the expiration of a wholesale power sales contract. 2013 Plan Year - In September 2012, DTE Electric filed its 2013 PSCR plan case seeking approval of a levelized PSCR factor of 4.74 mills/kWh above the amount included in base rates for all PSCR customers. The...

  • Page 83
    ... the period July 1, 2011 through June 30, 2012. The application requests authority to adjust existing retail gas rates so as to collect a net amount of $ 8.6 million , plus interest. An order is expected in the first quarter of 2013. The December 2012 order in DTE Gas' rate case requires the RDM be...

  • Page 84
    ... 347 (6) (6) (4) (4) (7) Investment tax credits Depreciation (6) (4) (4) Employee Stock Ownership Plan dividends Domestic production activities deduction (14) Settlement of Federal tax audit State and local income taxes, net of federal benefit Enactment of Michigan Corporate Income Tax, net of...

  • Page 85
    Table of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) 2012 (In millions) 2011 Property, plant and equipment Securitized regulatory assets Alternative minimum tax credit carry-forwards $ (3,389) (256) 254 $ (3,131) (360) 294 50 Merger basis ...

  • Page 86
    ... Consolidated Statements of Cash Flows. NOTE 13 - COMMON STOCK Common Stock On June 18, 2012, the Company contributed $ 80 million of DTE Energy common stock to the DTE Energy Company Affiliates Employee Benefit Plans Master Trust. The common stock was valued using the closing market price of DTE...

  • Page 87
    Table of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Certain of the Company's credit facilities contain a provision requiring the Company to maintain a total funded debt to capitalization ratio, as defined in the agreements, of no more than 0.65 to 1, which ...

  • Page 88
    ... from the exercise of stock options. A reconciliation of both calculations is presented in the following table as of December 31: 2012 Basic Earnings per Share 2011 (In millions, expect per share amounts) 2010 Net income attributable to DTE Energy Company Average number of common shares outstanding...

  • Page 89
    ... rates (a) of debt outstanding at December 31 were: 2012 (In millions) 2011 Mortgage bonds, notes, and other DTE Energy Debt, Unsecured 5.4% due 2013 to 2033 DTE Electric Taxable Debt, Principally Secured $ 1,298 $ 1,298 3,515 893 889 165 5.0% due 2013 to 2042 DTE Electric Tax-Exempt Revenue...

  • Page 90
    ... DTE Energy and its wholly owned subsidiaries, DTE Electric and DTE Gas, have unsecured revolving credit agreements with a syndicate of 20 banks that may be used for general corporate borrowings, but are intended to provide liquidity support for each of the companies' commercial paper programs...

  • Page 91
    ...certain equity-linked securities and, except for calculations at the end of the second quarter, certain DTE Gas short-term debt. "Capitalization" means the sum of (a) total funded debt plus (b) "consolidated net worth," which is equal to consolidated total stockholders' equity of the Company and its...

  • Page 92
    ... pipeline Less unearned income Net investment in capital lease Less current portion (48) 83 (4) $ 79 NOTE 19 - COMMITMENTS TND CONTINGENCIES Environmental Electric Air - DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant...

  • Page 93
    ... a recent project and outage at Unit 2 of the Monroe Power Plant. On August 5, 2010, the U. S. Department of Justice, at the request of the EPA, brought a civil suit in the U.S. District Court for the Eastern District of Michigan against DTE Energy and DTE Electric, related to the June 2010 NOV/FOV...

  • Page 94
    Table of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) DTE Electric owns and operates a permitted engineered ash storage facility at the Monroe Power Plant to dispose of fly ash from the coal fired power plant. The EPA has published proposed rules to regulate...

  • Page 95
    ... area includes DTE Energy facilities in southwest Detroit and areas of Wayne County. Preliminary modeling runs by the MDEQ suggest that emission reductions may be required by significant sources of sulfur dioxide emissions in these areas, including DTE Electric power plants and our Michigan coke...

  • Page 96
    ...Mountain Nuclear Waste Repository program for the acceptance and disposal of spent nuclear fuel was terminated in 2011. DTE Electric currently employs a spent nuclear fuel storage strategy utilizing a fuel pool. The Company continues to develop its on-site dry cask storage facility and has postponed...

  • Page 97
    ... benefits on annual employer contributions and interest credits. The Company also maintains supplemental nonqualified, noncontributory, retirement benefit plans for selected management employees. These plans provide for benefits that supplement those provided by DTE Energy's other retirement plans...

  • Page 98
    Table of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Effective January 1, 2012, the Company discontinued offering future non-represented employees a cash balance retirement plan benefit. In its place, the Company will annually contribute an amount equivalent...

  • Page 99
    ... DTE Energy Company Notes to Consolidated Financial Statements - (Continued) 2012 (In millions) 2011 Tccumulated benefit obligation, end of year Change in projected benefit obligation $ 4,349 $ $ 3,881 3,785 69 202 Projected benefit obligation, beginning of year $ 4,195 Service cost...

  • Page 100
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) The Company employs a formal process in determining the long-term rate of return for various asset classes. Management reviews historic financial market risks and returns and long-term historic relationships...

  • Page 101
    ... rate and, in some cases, years of credited service. The cost of these plans was $ 37 million, $35 million, and $34 million in each of the years 2012, 2011, and 2010, respectively. Other Postretirement Benefits The Company provides certain postretirement health care and life insurance benefits...

  • Page 102
    ... of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Effective January 1, 2012, in lieu of offering future non-represented employees post-employment health care and life insurance benefits, the Company will allocate $ 4,000 per year to an account in a tax-exempt...

  • Page 103
    ... DTE Energy Company Notes to Consolidated Financial Statements - (Continued) The following table reconciles the obligations, assets and funded status of the plans including amounts recorded as accrued postretirement cost in the Consolidated Statements of Financial Position at December 31: 2012...

  • Page 104
    Table of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Assumptions used in determining the projected benefit obligation and net benefit costs are listed below: 2012 Projected benefit obligation 2011 2010 Discount rate 4.15% 7.00% 5.00% 5.00% 7.00% 5.00% ...

  • Page 105
    ... net periodic postretirement benefit costs by $ 6 million in 2012, $6 million in 2011 and $7 million in 2010. Grantor Trust DTE Gas maintains a Grantor Trust to fund other postretirement benefit obligations that invests in life insurance contracts and income securities. Employees and retirees...

  • Page 106
    Table of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) 104

  • Page 107
    ... for all awards it grants. Stock-based compensation for the reporting periods is as follows: 2012 Stock-based compensation expense 2011 (In millions) $ 2010 83 33 5 $ 66 25 4 $ 52 20 Tax benefit Stock-based compensation cost capitalized in property, plant and equipment 3 Options Options...

  • Page 108
    ...: 2010 Risk-free interest rate Dividend yield Expected volatility 2.91% 5.08% 22.96% 6 years Expected life The Company includes both historical and implied share-price volatility in option volatility. Implied volatility is derived from exchange traded options on DTE Energy common stock...

  • Page 109
    ...of Contents DTE Energy Company Notes to Consolidated Financial Statements - (Continued) Performance Share Awards Performance shares awarded under the plan are for a specified number of shares of common stock that entitle the holder to receive a cash payment, shares of common stock or a combination...

  • Page 110
    ...: 2012 2011 (In millions) 2010 Cash paid (received) for: Interest (net of interest capitalized) Income taxes $ $ 438 $ $ 485 (205) $ $ 551 173 93 Supplementary non-cash information for the years ended December 31, were as follows: 2012 Common stock issued for employee benefit plans 2011...

  • Page 111
    ... of the sale of reduced emissions fuel, power sales, gas sales and coal transportation services in the following segments: 2012 Electric 2011 (In millions) 2010 $ 29 4 6 $ 33 2 8 238 70 $ 30 Gas Gas Storage and Pipelines - 4 161 Power and Industrial Projects Energy Trading 801 43...

  • Page 112
    ... to DTE Operating Revenue Interest Income Interest Expense Income Taxes (In millions) Energy Company Total Tssets Goodwill Capital Expenditures 2010 Electric $ 4,993 1,648 83 1,144 $ 849 92 5 60 $ (1) $ 313 $ 270 $ 441 127 51 $ 16,611 $ 1,206 $ 864 147 Gas Gas Storage...

  • Page 113
    110

  • Page 114
    ... from DTE Energy's definitive Proxy Statement for its 2013 Annual Meeting of Shareholders to be held May 2, 2013. The Proxy Statement will be filed with the Securities and Exchange Commission, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year covered by this report...

  • Page 115
    ...exhibits listed below refer to "The Detroit Edison Company" and "Michigan Consolidated Gas Company" and were effective prior to the change to DTE Electric Company and DTE Gas Company, respectively, effective January 1, 2013. Amended and Restated Articles of Incorporation of DTE Energy Company, dated...

  • Page 116
    ... and Deed of Trust, dated as of October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-212 to Detroit Edison's Form 10-K for the year ended December 31, 2000). (1990 Series B and C) Supplemental Indenture, dated as of...

  • Page 117
    ... October 1, 1924, between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A., as successor trustee (Exhibit 4-273 to Detroit Edison's Form 10-K for the year ended December 31, 2010). (2010 Series CT) Supplemental Indenture, dated as of March 1, 2011, to the Mortgage and...

  • Page 118
    114

  • Page 119
    ..., dated as of June 30, 1993 between The Detroit Edison Company and The Bank of New York Mellon Trust Company, N.A. as successor trustee (Exhibit 4-254 to Detroit Edison's Form 10-Q for the quarter ended June 30, 2008). (2008 Series ET Variable Rate Senior Notes due 2029) Amendment dated June 1, 2009...

  • Page 120
    ...quarter ended September 30, 2010). (2010 Series A 4.89% Senior Notes due 2020) 4(d) Indenture dated as of June 1, 1998 between Michigan Consolidated Gas Company and Citibank, N.A., as trustee, related to Senior Debt Securities (Exhibit 4-1 to Michigan Consolidated Gas Company Registration Statement...

  • Page 121

  • Page 122
    ... Energy's Definitive Proxy Statement dated March 15, 2012). DTE Energy Company Retirement Plan for Non-Employee Directors' Fees (as Amended and Restated effective as of December 31, 1998) (Exhibit 10-31 to Form 10-K for the year ended December 31, 1998). 10(g) 10(h) 10(i) 10(j) The Detroit Edison...

  • Page 123
    117

  • Page 124
    ... Company Master Plan Trust between DTE Energy Corporate Services, LLC and DTE Energy Investment Committee and JP Morgan Chase Bank, N.A., dated as of October 15, 2010. (iii) Exhibits furnished herewith: 32-79 32-80 Chief Executive Officer Section 906 Form 10-K Certification of Periodic Report...

  • Page 125
    Table of Contents DTE Energy Company Schedule II - Valuation and Qualifying Tccounts Year Ending December 31, 2012 Tllowance for Doubtful Tccounts (shown as deduction from Tccounts Receivable in the Consolidated Statements of Financial Position) 2011 (In millions) 2010 Balance at Beginning of ...

  • Page 126
    ... duly authorized. DTE ENERGY COMPANY (Registrant) By /s/ GERARD M. ANDERSON Gerard M. Anderson Chairman of the Board, President and Chief Executive Officer Date: February 20, 2013 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 127
    ... OF FIRST MORTGAGE BONDS, DESIGNATED AS 2012 Series D BONDS MICHIGAN CONSOLIDATED GAS COMPANY FORTY-THIRD SUPPLEMENTAL INDENTURE DATED AS OF DECEMBER 1, 2012 SUPPLEMENTAL TO INDENTURE OF MORTGAGE AND DEED OF TRUST DATED AS OF MARCH 1, 1944 TABLE OF CONTENTS PAGE ARTICLE I AMENDMENT OF INDENTURE...

  • Page 128
    ...the 1st day of December, 2012, between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under and by virtue of the laws of the State of Michigan (hereinafter called the "Company"), having its principal place of business at One Energy Plaza, Detroit, Michigan, and CITIBANK...

  • Page 129
    ... Mortgage Bonds (Secured Term Notes, Series B) 8¼% Series due 2014 Amount Initially Issued Outstanding $ 80,000,000 $ 80,000,000 Collateral Bonds (Senior Notes) 5.70% Collateral Bonds due 2033 2004 Series E Collateral Bonds 2008 Series A Collateral Bonds 2008 Series B Collateral Bonds 2008...

  • Page 130
    ... the rate of 3.92% per annum, payable semi-annually on the fifteenth day of June and December of each year and at maturity (each an "Interest Payment Date"), beginning on June 15, 2013. The principal, Make-Whole Amount (as defined below), if any, and interest on the Bonds shall be payable in lawful...

  • Page 131
    ... Business Day) prior to the relevant Interest Payment Date Original Issue Date: December 12, 2012 Stated Maturity: December 15, 2042 Interest Payment Dates: June 15 and December 15 of each year, beginning June 15, 2013. Interest Rate: 3.92% per annum MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter...

  • Page 132
    ...on, the Bonds, or for any claim based hereon or otherwise in respect of the Bonds or the Indenture, against any incorporator, stockholder, director or officer, past, present or future, of the Company, as such, or any predecessor or successor corporation, either directly or through the Company or any...

  • Page 133
    ..., actively traded on-the-run, benchmark U.S. Treasury security with the maturity closest to and less than the Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Bond. "Remaining Average Life" means, with...

  • Page 134
    ... or its successor in trust under the Indenture. IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this certificate to be executed under its name with the signature of its duly authorized Officer, under its corporate seal, which may be a facsimile, attested with the signature of its...

  • Page 135
    ... in writing; and (B) are accompanied by the following additional information and documents, as applicable: (x) if such Bonds are being delivered to the Company by a holder for registration in the name of such holder, without transfer, a certification from such holder to that effect; or (y) if...

  • Page 136
    ...1, 2008 providing for the terms of Collateral Bonds to be issued thereunder designated as 2008 Series M Collateral Bonds has heretofore been entered into between the Company and the Trustee and has been filed in the Office of the Secretary of State of Michigan as a financing statement on December 18...

  • Page 137
    ... 1,130 4,710 47,721 616 806 565 861 676 959 1,643 ARTICLE VI MISCELLANEOUS PROVISIONS Except insofar as herein otherwise expressly provided, all the provisions, terms and conditions of the Indenture shall be deemed to be incorporated in, and made a part of, this Forty-third Supplemental Indenture...

  • Page 138
    ... Richards /s/ Kathleen Hier Kathleen Hier State of Michigan } } ss. County of Wayne } The foregoing instrument was acknowledged before me this 6th day of December, 2012, by Donald J. Goshorn, as Assistant Treasurer, of Michigan Consolidated Gas Company, a Michigan corporation, on behalf of the...

  • Page 139
    ... Wayne County, MI Acting in Wayne County, MI My Commission Expires: December 28, 2016 Citibank, N.A., as Trustee By:/s/ Wafaa Orfy Wafaa Orfy Vice President Signed, sealed, acknowledged and delivered by CITIBANK, N.A. in the presence of: /s/ Louis Piscitelli Name: Louis Piscitelli Vice President...

  • Page 140
    ...Status . The Vice President, Human Resources shall designate employees as Executives. The Vice President, Human Resources may revoke such designation prior to any Plan Year with respect to the Executive's ability to defer future compensation payable by the Company or Participating Affiliated Company...

  • Page 141
    ...unfunded general obligation of the Employer of the particular Participant. Each Executive who is a Participant in the Plan will be provided a quarterly statement of the unfunded accounts maintained for the Participant. 4.2. Credits and Debits to Participants' Accounts . As of the end of a pay period...

  • Page 142
    ... Plan as Matching Contributions on behalf of the Participant for the pay period. This Amendment is executed on behalf of the Committee by its Chairperson, as authorized by the Committee's resolution. Dated: November 13, 2012 _____ Larry E. Steward Vice President, Human Resources Committee...

  • Page 143
    Exhibit 12-52 (willions of Dollars) DTE ENERGY COMPANY COMPUTATION OF RATIO OF EARNINGS TO FITED CHARGES Twelve wonths Ended December 31 2012 2011 2010 2009 2008 Earnings: Pretax earnings Adjustments Fixed Charges Net earnings Fixed Charges: Interest expense Adjustments 1,035 (4) 463 1,494 ...

  • Page 144
    ... 31, 2012 are listed below. All other subsidiaries, if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary. Subsidiary 1. DTE Electric Company 2. DTE Enterprises, Inc. 3. DTE Gas Holdings, Inc. 4. DTE Gas Company State of Incorporation Michigan Michigan...

  • Page 145
    ...47247) of DTE Energy Company of our report dated nebruary 20, 2013 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this norm 10 â€'K. /s/ PricewaterhouseCoopers LLP Detroit, Michigan nebruary 20...

  • Page 146
    ... not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /S/ GERARD M. ANDERSON Gerard M. Anderson Chairman of the Board, President and Chief Executive Officer of DTE Energy Company Date: February 20, 2013

  • Page 147
    ..., whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 20, 2013 /S/ DAVID E. MEADOR David E. Meador Executive Vice President and Chief Financial Officer of DTE Energy Company

  • Page 148
    ... respects, the financial condition and results of operations of the Company. Date: February 20, 2013 /S/ GERARD M. ANDERSON Gerard M. Anderson Chairman of the Board, President and Chief Executive Officer of DTE Energy Company A signed original of this written statement required by Section 906...

  • Page 149
    ...(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /S/ DAVID E. MEADOR Date: February 20, 2013 David E. Meador Executive Vice President and Chief Financial Officer of DTE Energy Company A signed...

  • Page 150