DTE ENERGY CO, 10-K filed on 2/5/2020
Annual Report
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Document and Entity Information Document and Entity Information - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2019
Jan. 24, 2020
Jun. 28, 2019
Entity Information [Line Items]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2019    
Document Transition Report false    
Entity File Number 1-11607    
Entity Registrant Name DTE Energy Co    
Entity Incorporation, State or Country Code MI    
Entity Tax Identification Number 38-3217752    
Entity Address, Address Line One One Energy Plaza    
Entity Address, City or Town Detroit    
Entity Address, State or Province MI    
Entity Address, Postal Zip Code 48226-1279    
City Area Code 313    
Local Phone Number 235-4000    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 23.1
Entity Common Stock, Shares Outstanding   192,234,700  
Documents Incorporated by Reference
Certain information in DTE Energy's definitive Proxy Statement for its 2020 Annual Meeting of Common Shareholders to be held May 7, 2020, 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.
This combined Form 10-K is filed separately by two registrants: DTE Energy and DTE Electric. Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. DTE Electric makes no representation as to information relating exclusively to DTE Energy.
DTE Electric, a wholly-owned subsidiary of DTE Energy, meets the conditions set forth in General Instructions I(1)(a) and (b) of Form 10-K and is therefore filing this form with the reduced disclosure format specified in General Instruction I(2) of Form 10-K.
   
Entity Central Index Key 0000936340    
Current Fiscal Year End Date --12-31    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Amendment Flag false    
Common stock, without par value      
Entity Information [Line Items]      
Title of 12(b) Security Common stock, without par value    
Trading Symbol DTE    
Security Exchange Name NYSE    
2012 Series C 5.25% Junior Subordinated Debentures due 2062      
Entity Information [Line Items]      
Title of 12(b) Security 2012 Series C 5.25% Junior Subordinated Debentures due 2062    
Trading Symbol DTQ    
Security Exchange Name NYSE    
2016 Series B 5.375% Junior Subordinated Debentures due 2076      
Entity Information [Line Items]      
Title of 12(b) Security 2016 Series B 5.375% Junior Subordinated Debentures due 2076    
Trading Symbol DTJ    
Security Exchange Name NYSE    
2016 Series F 6.00% Junior Subordinated Debentures due 2076      
Entity Information [Line Items]      
Title of 12(b) Security 2016 Series F 6.00% Junior Subordinated Debentures due 2076    
Trading Symbol DTY    
Security Exchange Name NYSE    
2017 Series E 5.25% Junior Subordinated Debentures due 2077      
Entity Information [Line Items]      
Title of 12(b) Security 2017 Series E 5.25% Junior Subordinated Debentures due 2077    
Trading Symbol DTW    
Security Exchange Name NYSE    
2019 6.25% Corporate Units      
Entity Information [Line Items]      
Title of 12(b) Security 2019 6.25% Corporate Units    
Trading Symbol DTP    
Security Exchange Name NYSE    
DTE Electric      
Entity Information [Line Items]      
Entity File Number 1-2198    
Entity Registrant Name DTE Electric Co    
Entity Incorporation, State or Country Code MI    
Entity Tax Identification Number 38-0478650    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Common Stock, Shares Outstanding   138,632,324  
Entity Central Index Key 0000028385    
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Consolidated Statements of Operations - USD ($)
shares in Millions, $ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating Revenues      
Utility operations $ 6,638 $ 6,670 $ 6,434
Non-utility operations 6,031 7,542 6,173
Operating Revenues 12,669 14,212 12,607
Operating Expenses      
Fuel, purchased power, and gas — utility 1,798 1,981 1,881
Fuel, purchased power, and gas — non-utility 5,053 6,630 5,283
Operation and maintenance 2,419 2,451 2,270
Depreciation and amortization 1,263 1,124 1,030
Taxes other than income 414 405 391
Asset (gains) losses and impairments, net 15 27 41
Operating Expenses 10,962 12,618 10,896
Operating Income 1,707 1,594 1,711
Other (Income) and Deductions      
Interest expense 641 559 536
Interest income (17) (12) (12)
Non-operating retirement benefits, net 39 37 65
Other income (350) (333) (268)
Other expenses 70 127 103
Other (Income) and Deductions 383 378 424
Income Before Income Taxes 1,324 1,216 1,287
Income Tax Expense 152 98 175
Net Income 1,172 1,118 1,112
Less: Net Income (Loss) Attributable to Noncontrolling Interests 3 (2) (22)
Net Income Attributable to DTE Energy Company/DTE Electric Company $ 1,169 $ 1,120 $ 1,134
Basic Earnings per Common Share      
Net income attributable to DTE Energy Company (in dollars per share) $ 6.32 $ 6.18 $ 6.32
Diluted Earnings per Common Share      
Net income attributable to DTE Energy Company (in dollars per share) $ 6.31 $ 6.17 $ 6.32
Weighted Average Common Shares Outstanding      
Basic (in shares) 185 181 179
Diluted (in shares) 185 181 179
DTE Electric      
Operating Revenues      
Utility operations $ 5,224 $ 5,298 $ 5,102
Operating Revenues 5,224 5,298  
Operating Expenses      
Fuel, purchased power, and gas — utility 1,390 1,552 1,454
Operation and maintenance 1,452 1,470 1,428
Depreciation and amortization 946 836 753
Taxes other than income 310 307 302
Asset (gains) losses and impairments, net 13 (1) 0
Operating Expenses 4,111 4,164 3,937
Operating Income 1,113 1,134 1,165
Other (Income) and Deductions      
Interest expense 313 283 274
Interest income (2) 0 0
Non-operating retirement benefits, net (1) 0 0
Other income (107) (83) (77)
Other expenses 56 77 40
Other (Income) and Deductions 259 277 237
Income Before Income Taxes 854 857 928
Income Tax Expense 138 193 327
Net Income Attributable to DTE Energy Company/DTE Electric Company $ 716 $ 664 $ 601
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Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Net Income $ 1,172 $ 1,118 $ 1,112
Net Income 1,169 1,120 1,134
Other comprehensive income (loss), net of tax:      
Benefit obligations, net of taxes 8 8 10
Net unrealized gains (losses) on derivatives during the period, net of taxes (12)    
Net unrealized gains (losses) on derivatives during the period, net of taxes   (1) 1
Net unrealized gains on investments during the period, net of taxes 0 0 1
Foreign currency translation 1 (2) 1
Other comprehensive income (loss) (3) 5 13
Comprehensive income 1,169 1,123 1,125
Less: Comprehensive income (loss) attributable to noncontrolling interests 3 (2) (22)
Comprehensive Income Attributable to DTE Energy Company/DTE Electric Company 1,166 1,125 1,147
DTE Electric      
Net Income 716 664 601
Other comprehensive income (loss), net of tax:      
Net unrealized gains on investments during the period, net of taxes 0 0 1
Other comprehensive income (loss) 0 0 1
Comprehensive Income Attributable to DTE Energy Company/DTE Electric Company $ 716 $ 664 $ 602
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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Tax effect on benefit obligation $ 2 $ 2 $ 5
Tax effect on net unrealized gains (losses) on derivatives during the period (4)    
Tax effect on net unrealized gains (losses) on derivatives during the period   0 0
Tax effect on net unrealized gains (losses) on investments during the period 0 0 1
DTE Electric      
Tax effect on net unrealized gains (losses) on investments during the period $ 0 $ 0 $ 1
v3.19.3.a.u2
Consolidated Statements of Financial Position - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Current Assets    
Cash and cash equivalents $ 93 $ 71
Restricted cash 0 5
Accounts receivable (less allowance for doubtful accounts)    
Customer 1,642 1,789
Other 245 108
Inventories    
Fuel and gas 373 406
Materials and supplies 386 405
Derivative assets 133 102
Regulatory assets 5 153
Other 209 221
Total Current Assets 3,086 3,260
Investments    
Nuclear decommissioning trust funds 1,661 1,378
Investments in equity method investees 1,862 1,771
Other 265 219
Total Investments 3,788 3,368
Property    
Property, plant, and equipment 35,072 31,810
Accumulated depreciation and amortization (9,755) (10,160)
Property, plant and equipment, net 25,317 21,650
Other Assets    
Goodwill 2,464 2,293
Regulatory assets 4,171 4,568
Intangible assets 2,393 849
Notes receivable 202 64
Derivative assets 41 31
Prepaid postretirement costs 69 45
Operating lease right-of-use assets 169  
Other 182 160
Total Other Assets 9,691 8,010
Total Assets 41,882 36,288
Current Liabilities    
Accounts payable 1,076 1,329
Accounts payable    
Accrued interest 147 127
Dividends payable 195 172
Short-term borrowings 828 609
Current portion long-term debt, including finance leases 687 1,499
Derivative liabilities 83 67
Regulatory liabilities 65 126
Short-term borrowings    
Operating lease liabilities 33  
Acquisition related deferred payment 379 0
Other 504 509
Total Current Liabilities 3,997 4,438
Long-Term Debt (net of current portion)    
Mortgage bonds, notes, and other 14,778 10,982
Junior subordinated debentures 1,146 1,145
Finance lease obligations 11  
Finance lease obligations   7
Total Long-Term Debt (net of current portion) 15,935 12,134
Other Liabilities    
Deferred income taxes 2,315 1,975
Regulatory liabilities 3,264 2,922
Asset retirement obligations 2,672 2,469
Unamortized investment tax credit 166 138
Derivative liabilities 86 89
Accrued pension liability 808 837
Nuclear decommissioning 249 205
Operating lease liability 127  
Other 427 364
Total Other Liabilities 10,114 8,999
Commitments and Contingencies (Notes 10 and 19)
Equity    
Common stock 5,233 4,245
Retained earnings 6,587 6,112
Accumulated other comprehensive loss (148) (120)
Total DTE Energy Company/DTE Electric Company Equity 11,672 10,237
Noncontrolling interests 164 480
Total Equity 11,836 10,717
Total Liabilities and Equity 41,882 36,288
DTE Electric    
Current Assets    
Cash and cash equivalents 12 18
Accounts receivable (less allowance for doubtful accounts)    
Customer 729 750
Affiliates 25 11
Other 41 54
Inventories    
Fuel and gas 187 171
Materials and supplies 280 279
Regulatory assets 5 148
Other 78 89
Total Current Assets 1,357 1,520
Investments    
Nuclear decommissioning trust funds 1,661 1,378
Other 38 34
Total Investments 1,699 1,412
Property    
Property, plant, and equipment 24,279 22,747
Accumulated depreciation and amortization (6,706) (7,310)
Property, plant and equipment, net 17,573 15,437
Other Assets    
Regulatory assets 3,448 3,829
Intangible assets 15 21
Prepaid postretirement costs — affiliates 266 189
Operating lease right-of-use assets 87  
Other 143 121
Total Other Assets 3,959 4,160
Total Assets 24,588 22,529
Accounts payable    
Affiliates 59 71
Other 406 441
Accrued interest 84 74
Current portion long-term debt, including finance leases 636 4
Regulatory liabilities 40 98
Short-term borrowings    
Affiliates 97 101
Other 354 149
Operating lease liabilities 12  
Other 155 139
Total Current Liabilities 1,843 1,077
Long-Term Debt (net of current portion)    
Mortgage bonds, notes, and other 6,548 6,538
Finance lease obligations 4  
Finance lease obligations   7
Total Long-Term Debt (net of current portion) 6,552 6,545
Other Liabilities    
Deferred income taxes 2,355 2,246
Regulatory liabilities 2,546 2,171
Asset retirement obligations 2,447 2,271
Unamortized investment tax credit 166 137
Nuclear decommissioning 249 205
Accrued pension liability — affiliates 717 718
Accrued postretirement liability — affiliates 367 278
Operating lease liability 67  
Other 84 88
Total Other Liabilities 8,998 8,114
Commitments and Contingencies (Notes 10 and 19)
Equity    
Common stock 4,811 4,631
Retained earnings 2,384 2,162
Total DTE Energy Company/DTE Electric Company Equity 7,195 6,793
Total Liabilities and Equity $ 24,588 $ 22,529
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Consolidated Statements of Financial Position (Parenthetical) - USD ($)
$ in Millions
Dec. 31, 2019
Dec. 31, 2018
Current Assets:    
Allowance for doubtful accounts $ 91 $ 91
Stockholders' Equity:    
Common stock, shares authorized (in shares) 400,000,000 400,000,000
Common stock, shares issued (in shares) 192,208,533 181,925,281
Common stock, shares outstanding (in shares) 192,208,533 181,925,281
DTE Electric    
Current Assets:    
Allowance for doubtful accounts $ 46 $ 53
Stockholders' Equity:    
Common stock, par value (in dollars per share) $ 10 $ 10
Common stock, shares authorized (in shares) 400,000,000 400,000,000
Common stock, shares issued (in shares) 138,632,324 138,632,324
Common stock, shares outstanding (in shares) 138,632,324 138,632,324
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Consolidated Statements of Cash Flows - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating Activities      
Net Income $ 1,172 $ 1,118 $ 1,112
Net Income 1,169 1,120 1,134
Adjustments to reconcile Net Income to Net cash from operating activities:      
Depreciation and amortization 1,263 1,124 1,030
Nuclear fuel amortization 60 45 53
Allowance for equity funds used during construction (24) (28) (23)
Deferred income taxes 329 114 196
Equity earnings of equity method investees (111) (132) (102)
Dividends from equity method investees 160 74 74
Asset (gains) losses and impairments, net 14 29 38
Changes in assets and liabilities:      
Accounts receivable, net 49 (44) (252)
Inventories 59 (32) (4)
Prepaid postretirement benefit costs (24) (45) 0
Accounts payable (288) 146 129
Accrued pension liability (29) (87) (228)
Accrued postretirement liability 0 (61) 25
Derivative assets and liabilities (28) 31 (94)
Regulatory assets and liabilities 160 15 217
Other current and noncurrent assets and liabilities (113) 413 (54)
Net cash from operating activities 2,649 2,680 2,117
Investing Activities      
Plant and equipment expenditures — utility (2,724) (2,439) (2,037)
Plant and equipment expenditures — non-utility (273) (274) (213)
Acquisition, net of cash acquired (2,470) 0 0
Proceeds from sale of nuclear decommissioning trust fund assets 788 1,203 1,240
Investment in nuclear decommissioning trust funds (794) (1,188) (1,226)
Distributions from equity method investees 10 9 10
Contributions to equity method investees (149) (637) (299)
Notes receivable (98)    
Notes receivable   2 1
Other (22) (23) (38)
Net cash used for investing activities (5,732) (3,347) (2,562)
Financing Activities      
Issuance of long-term debt, net of issuance costs 2,506 1,432 1,398
Redemption of long-term debt (821) (105) (385)
Issuance of equity units, net of issuance costs 1,265 0 0
Short-term borrowings, net 219   122
Short-term borrowings, net   (12)  
Issuance of common stock 1,023 0 0
Repurchase of common stock 0 0 (51)
Dividends on common stock (692) (620) (592)
Contributions from noncontrolling interests, principally REF entities 38 53 50
Distributions to noncontrolling interests (59) (48) (40)
Purchases of noncontrolling interest, principally SGG (300) 0 0
Other (79) (46) (81)
Net cash from (used for) financing activities 3,100 654 421
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 17 (13) (24)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 76 89 113
Cash, Cash Equivalents, and Restricted Cash at End of Period 93 76 89
Supplemental disclosure of cash information      
Cash paid (received) for: Interest, net of interest capitalized 595 572 495
Cash paid (received) for: Income taxes 18 (26) 4
Supplemental disclosure of non-cash investing and financing activities      
Plant and equipment expenditures in accounts payable [1] 311 307 295
Premium on equity units [1] 150 0 0
DTE Electric      
Operating Activities      
Net Income 716 664 601
Adjustments to reconcile Net Income to Net cash from operating activities:      
Depreciation and amortization 946 836 753
Nuclear fuel amortization 60 45 53
Allowance for equity funds used during construction (22) (19) (18)
Deferred income taxes 97 189 345
Asset (gains) losses and impairments, net 13 0 0
Changes in assets and liabilities:      
Accounts receivable, net 20 33 (80)
Inventories (17) 15 31
Prepaid postretirement benefit costs — affiliates (77) (76) 1
Accounts payable (57) 54 (2)
Accrued pension liability — affiliates (1) (93) (197)
Accrued postretirement liability — affiliates 89 (33) 42
Regulatory assets and liabilities 139 4 202
Other current and noncurrent assets and liabilities (197) 101 (147)
Net cash from operating activities 1,709 1,720 1,584
Investing Activities      
Plant and equipment expenditures (2,200) (1,989) (1,574)
Proceeds from sale of nuclear decommissioning trust fund assets 788 1,203 1,240
Investment in nuclear decommissioning trust funds (794) (1,188) (1,226)
Other (21) (15) 18
Net cash used for investing activities (2,227) (1,989) (1,542)
Financing Activities      
Issuance of long-term debt, net of issuance costs 643 519 435
Redemption of long-term debt 0 0 (300)
Capital contribution by parent company 180 325 100
Short-term borrowings, net — affiliate (4) (15) (1)
Short-term borrowings, net — other 205 (89) 176
Dividends on common stock (494) (461) (432)
Other (18) (7) (18)
Net cash from (used for) financing activities 512 272 (40)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (6) 3 2
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 18 15 13
Cash, Cash Equivalents, and Restricted Cash at End of Period 12 18 15
Supplemental disclosure of cash information      
Cash paid (received) for: Interest, net of interest capitalized 295 283 252
Cash paid (received) for: Income taxes 46 0 (16)
Supplemental disclosure of non-cash investing and financing activities      
Plant and equipment expenditures in accounts payable $ 192 $ 181 $ 191
[1]
See Note 15 to the Consolidated Financial Statements, "Long-Term Debt" for additional non-cash financing activity related to the remarketing of RSNs.
v3.19.3.a.u2
Consolidated Statements of Changes in Equity - USD ($)
$ in Millions
Total
Common Stock
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interests
DTE Electric
DTE Electric
Common Stock
DTE Electric
Additional Paid-in Capital
DTE Electric
Retained Earnings
DTE Electric
Accumulated Other Comprehensive Income (Loss)
Beginning balance (in shares) at Dec. 31, 2016   179,433,000         138,632,000      
Beginning balance at Dec. 31, 2016 $ 9,499 $ 4,030 $ 5,114 $ (133) $ 488          
Beginning balance at Dec. 31, 2016           $ 5,995 $ 1,386 $ 2,820 $ 1,787 $ 2
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Net Income (Loss) 1,112   1,134   (22)          
Net Income 1,134         601     601  
Dividends declared on common stock (602)   (602)     (432)     (432)  
Repurchase of common stock (in shares)   (524,000)                
Repurchase of common stock (51) $ (51)                
Other comprehensive income (loss), net of tax 13     13   1       1
Stock-based compensation, net contributions from (distributions to) noncontrolling interests, and other (in shares)   478,000                
Stock-based compensation, net contributions from (distributions to) noncontrolling interests, and other 19 $ 10 (3)   12          
Capital contribution by parent company           100   100    
Ending balance (in shares) at Dec. 31, 2017   179,387,000         138,632,000      
Ending balance at Dec. 31, 2017 9,990 $ 3,989 5,643 (120) 478          
Ending balance at Dec. 31, 2017           6,265 $ 1,386 2,920 1,956 3
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Net Income (Loss) 1,118   1,120   (2)          
Net Income 1,120         664     664  
Dividends declared on common stock (653)   (653)     (461)     (461)  
Issuance of common stock (in shares)   255,000                
Issuance of common stock 26 $ 26                
Contribution of common stock to pension plan (in shares)   1,751,000                
Contribution of common stock to pension plan 175 $ 175                
Other comprehensive income (loss), net of tax 5     5   0        
Stock-based compensation, net contributions from (distributions to) noncontrolling interests, and other (in shares)   532,000                
Stock-based compensation, net contributions from (distributions to) noncontrolling interests, and other $ 56 $ 55 (3)   4          
Capital contribution by parent company           $ 325   325    
Ending balance (in shares) at Dec. 31, 2018 181,925,281 181,925,000       138,632,324 138,632,000      
Ending balance at Dec. 31, 2018 $ 10,717 $ 4,245 6,112 (120) 480          
Ending balance at Dec. 31, 2018 10,237         $ 6,793 $ 1,386 3,245 2,162 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Net Income (Loss) 1,172   1,169   3          
Net Income 1,169         716     716  
Dividends declared on common stock (714)   (714)     (494)     (494)  
Issuance of common stock (in shares)   8,634,000                
Issuance of common stock 1,014 $ 1,014                
Premium on equity units (150) (150)                
Issuance costs of equity units (30) $ (30)                
Contribution of common stock to pension plan (in shares)   815,000                
Contribution of common stock to pension plan 100 $ 100                
Other comprehensive income (loss), net of tax (3)     (3)   0        
Purchase of noncontrolling interests, principally SGG (300) $ (3)     (297)          
Stock-based compensation, net contributions from (distributions to) noncontrolling interests, and other (in shares)   835,000                
Stock-based compensation, net contributions from (distributions to) noncontrolling interests, and other $ 30 $ 57 (5)   (22)          
Capital contribution by parent company           $ 180   180    
Ending balance (in shares) at Dec. 31, 2019 192,208,533 192,209,000       138,632,324 138,632,000      
Ending balance at Dec. 31, 2019 $ 11,836 $ 5,233 $ 6,587 $ (148) $ 164          
Ending balance at Dec. 31, 2019 $ 11,672         $ 7,195 $ 1,386 $ 3,425 $ 2,384 $ 0
v3.19.3.a.u2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement of Stockholders' Equity [Abstract]      
Dividends declared on common stock (in dollars per share) $ 3.85 $ 3.60 $ 3.36
v3.19.3.a.u2
Organization and Basis of Presentation
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Basis of Presentation ORGANIZATION AND BASIS OF PRESENTATION
Corporate Structure
DTE Energy owns the following businesses:
DTE Electric is a public utility engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.2 million customers in southeastern Michigan;
DTE Gas is a public utility engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.3 million customers throughout Michigan and the sale of storage and transportation capacity; and
Other businesses primarily involved in 1) services related to the gathering, transportation, and storage of natural gas; 2) power and industrial projects; and 3) energy marketing and trading operations.
DTE Electric and DTE Gas are regulated by the MPSC. Certain activities of DTE Electric and DTE Gas, as well as various other aspects of businesses under DTE Energy are regulated by the FERC. In addition, the Registrants are regulated by other federal and state regulatory agencies including the NRC, the EPA, the EGLE, and for DTE Energy, the CFTC.
Basis of Presentation
The accompanying Consolidated Financial Statements of the Registrants are prepared using accounting principles generally accepted in the United States of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Registrants' estimates.
The information in these combined notes relates to each of the Registrants as noted in the Index of Combined Notes to Consolidated Financial Statements. However, DTE Electric does not make any representation as to information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.
Certain prior year balances for the Registrants were reclassified to match the current year's Consolidated Financial Statements presentation.
Principles of Consolidation
The Registrants consolidate all majority-owned subsidiaries and investments in entities in which they have controlling influence. Non-majority owned investments are accounted for using the equity method when the Registrants are able to significantly influence the operating policies of the investee. When the Registrants do not influence the operating policies of an investee, the cost method is used. These Consolidated Financial Statements also reflect the Registrants' proportionate interests in certain jointly-owned utility plants. The Registrants eliminate all intercompany balances and transactions.
The Registrants evaluate whether an entity is a VIE whenever reconsideration events occur. The Registrants consolidate VIEs for which they are the primary beneficiary. If a Registrant is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, a Registrant considers all relevant facts and circumstances, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. The Registrants perform ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.
Legal entities within DTE Energy's Power and Industrial Projects segment enter into long-term contractual arrangements with customers to supply energy-related products or services. The entities are generally designed to pass-through the commodity risk associated with these contracts to the customers, with DTE Energy retaining operational and customer default risk. These entities generally are VIEs and consolidated when DTE Energy is the primary beneficiary. In addition, DTE Energy has interests in certain VIEs through which control of all significant activities is shared with partners, and therefore are generally accounted for under the equity method.
DTE Energy currently owns an 85% interest in SGG, which owns and operates midstream natural gas assets. SGG has contracts through which certain construction risk is designed to pass-through to the customers, with DTE Energy retaining operational and customer default risk. SGG is a VIE with DTE Energy as the primary beneficiary.
The Registrants have variable interests in NEXUS, which include DTE Energy's 50% ownership interest and DTE Electric's transportation services contract. NEXUS is a joint venture which owns a 256-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan, and Ontario market centers. NEXUS also owns Generation Pipeline, LLC, a 23-mile regulated pipeline system located in northern Ohio, which was acquired in September 2019. Refer to Note 4, "Acquisitions," for additional information. NEXUS is a VIE as it has insufficient equity at risk to finance its activities. The Registrants are not the primary beneficiaries, as the power to direct significant activities is shared between the owners of the equity interests. DTE Energy accounts for its ownership interest in NEXUS under the equity method.
The Registrants hold ownership interests in certain limited partnerships. The limited partnerships include investment funds which support regional development and economic growth, as well as an operational business providing energy-related products. These entities are generally VIEs as a result of certain characteristics of the limited partnership voting rights. The ownership interests are accounted for under the equity method as the Registrants are not the primary beneficiaries.
DTE Energy has variable interests in VIEs through certain of its long-term purchase and sale contracts. DTE Electric has variable interests in VIEs through certain of its long-term purchase contracts. As of December 31, 2019, the carrying amount of assets and liabilities in DTE Energy's Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase and sale contracts are predominantly related to working capital accounts and generally represent the amounts owed by or to DTE Energy for the deliveries associated with the current billing cycle under the contracts. As of December 31, 2019, the carrying amount of assets and liabilities in DTE Electric's Consolidated Statements of Financial Position that relate to its variable interests under long-term purchase contracts are predominantly related to working capital accounts and generally represent the amounts owed by DTE Electric for the deliveries associated with the current billing cycle under the contracts. The Registrants have not provided any significant form of financial support associated with these long-term contracts. There is no material potential exposure to loss as a result of DTE Energy's variable interests through these long-term purchase and sale contracts. In addition, there is no material potential exposure to loss as a result of DTE Electric's variable interests through these long-term purchase contracts.
The maximum risk exposure for consolidated VIEs is reflected on the Registrants' Consolidated Statements of Financial Position and for DTE Energy, in Note 19 to the Consolidated Financial Statements, "Commitments and Contingencies," related to the REF guarantees and indemnities. For non-consolidated VIEs, the maximum risk exposure of the Registrants is generally limited to their investment, notes receivable, future funding commitments, and amounts which DTE Energy has guaranteed. See Note 19 to the Consolidated Financial Statements, "Commitments and Contingencies," for further discussion of the NEXUS guarantee arrangements.
The following table summarizes the major Consolidated Statements of Financial Position items for consolidated VIEs as of December 31, 2019 and 2018. All assets and liabilities of a consolidated VIE are presented where it has been determined that a consolidated VIE has either (1) assets that can be used only to settle obligations of the VIE or (2) liabilities for which creditors do not have recourse to the general credit of the primary beneficiary. VIEs, in which DTE Energy holds a majority voting interest and is the primary beneficiary, that meet the definition of a business and whose assets can be used for purposes other than the settlement of the VIE's obligations have been excluded from the table below.
Amounts for DTE Energy's consolidated VIEs are as follows:
 
December 31, 2019
 
December 31, 2018
 
SGG(a)
 
Other
 
Total
 
SGG(a)
 
Other
 
Total
 
(In millions)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
16

 
$
11

 
$
27

 
$
25

 
$
14

 
$
39

Restricted cash

 

 

 

 
5

 
5

Accounts receivable
8

 
19

 
27

 
9

 
37

 
46

Inventories

 
74

 
74

 
1

 
92

 
93

Property, plant, and equipment, net
410

 
33

 
443

 
395

 
46

 
441

Goodwill
25

 

 
25

 
25

 

 
25

Intangible assets
542

 

 
542

 
557

 

 
557

Other current and long-term assets
2

 

 
2

 
3

 

 
3

 
$
1,003

 
$
137

 
$
1,140

 
$
1,015

 
$
194

 
$
1,209

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
Accounts payable and accrued current liabilities
$
2

 
$
13

 
$
15

 
$
3

 
$
31

 
$
34

Other current and long-term liabilities
7

 
7

 
14

 
9

 
10

 
19

 
$
9

 
$
20

 
$
29

 
$
12

 
$
41

 
$
53

_____________________________________
(a)
Amounts shown are 100% of SGG's assets and liabilities, of which DTE Energy owns 85% at December 31, 2019 and 55% at December 31, 2018.
Amounts for DTE Energy's non-consolidated VIEs are as follows:
 
December 31,
 
2019
 
2018
 
(In millions)
Investments in equity method investees
$
1,503

 
$
1,425

Notes receivable
$
21

 
$
15

Future funding commitments
$
63

 
$
55


Equity Method Investments
Investments in non-consolidated affiliates that are not controlled by the Registrants, but over which they have significant influence, are accounted for using the equity method. Certain of the equity method investees are also considered VIEs and disclosed in the non-consolidated VIEs table above. At December 31, 2019 and 2018, DTE Energy's share of the underlying equity in the net assets of the investees exceeded the carrying amounts of Investments in equity method investees by $74 million and $59 million, respectively. The difference is being amortized over the life of the underlying assets.
DTE Energy equity method investees are described below:
 
 
Investments
 
% Owned
 
 
Segment
 
2019
 
2018
 
2019
 
2018
 
Description
 
 
(In millions)
 
 
 
 
 
 
Significant Equity Method Investees
 
 
 
 
 
 
 
 
 
 
Gas Storage and Pipelines
 
 
 
 
 
 
 
 
 
 
NEXUS Pipeline
 
$
1,345

 
$
1,260

 
50%
 
50%
 
256-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan, and Ontario market centers. Also includes Generation Pipeline, a 23-mile pipeline located in northern Ohio
Vector Pipeline
 
131

 
123

 
40%
 
40%
 
348-mile pipeline connecting Chicago, Michigan, and Ontario market centers
Millennium Pipeline
 
209

 
202

 
26%
 
26%
 
263-mile pipeline serving markets in the Northeast
 
 
1,685

 
1,585

 
 
 
 
 
 
Other Equity Method Investees
 
 
 
 
 
 
 
 
 
 
Other Segments
 
177

 
186

 
 
 
 
 
 
 
 
$
1,862

 
$
1,771

 
 
 
 
 
 

The balances in Other Equity Method Investees are individually insignificant and are primarily from the Power and Industrial Projects segment. These investments are comprised of projects that deliver energy and utility-type products and services to an industrial customer, sell electricity from renewable energy projects under long-term power purchase agreements, and produce and sell metallurgical coke.
For further information by segment, see Note 23 to the Consolidated Financial Statements, "Segment and Related Information."
The following table presents summarized financial information of subsidiaries not consolidated and 50 percent or less owned by DTE Energy. The amounts included in the table below represents 100% of the results of continuing operations of such entities accounted for under the equity method of accounting.
Summarized balance sheet data is as follows:
 
December 31,
 
2019
 
2018
 
(In millions)
Current Assets
$
374

 
$
358

Non-current assets
$
5,260

 
$
5,101

Current Liabilities
$
414

 
$
391

Non-current liabilities
$
698

 
$
762

Summarized income statement data is as follows:
 
December 31,
 
2019
 
2018
 
2017
 
(In millions)
Operating Revenues
$
1,210

 
$
883

 
$
756

Operating Expenses
$
853

 
$
622

 
$
561

Net Income
$
313

 
$
365

 
$
254


v3.19.3.a.u2
Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Significant Accounting Policies SIGNIFICANT ACCOUNTING POLICIES
Other Income
Other income for the Registrants is recognized for non-operating income such as equity earnings of equity method investees, allowance for equity funds used during construction, contract services, and gains (losses) from trading securities. DTE Energy's Power and Industrial Projects segment also recognizes Other income in connection with the sale of membership interests in reduced emissions fuel facilities to investors. In exchange for the cash received, the investors will receive a portion of the economic attributes of the facilities, including income tax attributes. The transactions are not treated as a sale of membership interests for financial reporting purposes. Other income related to fixed non-refundable cash payments received from investors for which the earnings process is not contingent upon production of refined coal is recognized on a straight-line basis over the non-cancelable contract term as the economic benefit from the ownership of the facility is transferred to investors. Other income related to cash payments that is contingent upon production of refined coal is considered earned and recognized when the contingency regarding the timing and amount of payment is resolved, generally as refined coal is produced and tax credits are generated.
The following is a summary of DTE Energy's Other income:
 
2019
 
2018
 
2017
 
(In millions)
Income from REF entities
$
130

 
$
98

 
$
77

Equity earnings of equity method investees
111

 
132

 
102

Gains from equity securities
37

 
6

 
26

Contract services
29

 
51

 
19

Allowance for equity funds used during construction
24

 
28

 
23

Other
19

 
18

 
21

 
$
350

 
$
333

 
$
268

The following is a summary of DTE Electric's Other income:
 
2019
 
2018
 
2017
 
(In millions)
Gains from equity securities allocated from DTE Energy
$
37

 
$
6

 
$
26

Contract services
32

 
51

 
21

Allowance for equity funds used during construction
22

 
19

 
18

Other
16

 
7

 
12

 
$
107

 
$
83

 
$
77


For information on equity earnings of equity method investees by segment, see Note 23 to the Consolidated Financial Statements, "Segment and Related Information."
Accounting for ISO Transactions
DTE Electric participates in the energy market through MISO. MISO requires that DTE Electric submit hourly day-ahead, real-time, and FTR bids and offers for energy at locations across the MISO region. DTE Electric accounts for MISO transactions on a net hourly basis in each of the day-ahead, real-time, and FTR markets. In any single hour, transactions in each of the MISO energy markets are netted based on MWh to determine if DTE Electric is in a net sale or purchase position. Net purchases are recorded in Fuel, purchased power, and gas utility and net sales are recorded in Operating Revenues Utility operations on the Registrants' Consolidated Statements of Operations.
The Energy Trading segment participates in the energy markets through various ISOs and RTOs. These markets require that Energy Trading submits hourly day-ahead, real-time bids and offers for energy at locations across each region. Energy Trading submits bids in the annual and monthly auction revenue rights and FTR auctions to the RTOs. Energy Trading accounts for these transactions on a net hourly basis for the day-ahead, real-time, and FTR markets. These transactions are related to trading contracts which, if derivatives, are presented on a net basis in Operating Revenues Non-utility operations, and if non-derivatives, the realized gains and losses for sales are recorded in Operating Revenues Non-utility operations and purchases are recorded in Fuel, purchased power, and gas non-utility in the DTE Energy Consolidated Statements of Operations.
DTE Electric and Energy Trading record accruals for future net purchases adjustments based on historical experience and reconcile accruals to actual costs when invoices are received from MISO and other ISOs and RTOs.
Derivatives
Energy Trading classifies derivative transactions as revenue or expense based on the intent of the transaction (buy or sell). Revenues are recorded on a gross or net basis within the income statement depending upon whether it represents a non-trading activity or trading activity, respectively. For additional information, refer to Note 14 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments".
Changes in Accumulated Other Comprehensive Income (Loss)
Comprehensive income (loss) is the change in common shareholders’ equity during a period from transactions and events from non-owner sources, including Net Income. The amounts recorded to Accumulated other comprehensive income (loss) for DTE Energy include changes in benefit obligations, consisting of deferred actuarial losses and prior service costs, unrealized gains and losses from derivatives accounted for as cash flow hedges, DTE Energy's interest in other comprehensive income of equity investees which comprise the net unrealized gains and losses on investments, and foreign currency translation adjustments. DTE Energy releases income tax effects from accumulated other comprehensive income when the circumstances upon which they are premised cease to exist.
Changes in Accumulated other comprehensive income (loss) are presented in DTE Energy's Consolidated Statements of Changes in Equity and DTE Electric's Consolidated Statements of Changes in Shareholder's Equity. For further discussion regarding changes in Accumulated other comprehensive income (loss), see Note 3 to the Consolidated Financial Statements, "New Accounting Pronouncements." For the years ended December 31, 2019 and 2018, reclassifications out of Accumulated other comprehensive income (loss) not relating to the adoption of new accounting pronouncements for DTE Energy were not material.
The following table summarizes the changes in DTE Energy's Accumulated other comprehensive income (loss) by component(a) for the years ended December 31, 2019 and 2018:
 
Net Unrealized Gain (Loss) on Derivatives
 
Net Unrealized Loss on Investments
 
Benefit Obligations(b)
 
Foreign Currency Translation
 
Total
 
(In millions)
Balance, December 31, 2017
$
(3
)
 
$
(2
)
 
$
(110
)
 
$
(5
)
 
$
(120
)
Other comprehensive loss before reclassifications
(2
)
 

 
(1
)
 
(2
)
 
(5
)
Amounts reclassified from Accumulated other comprehensive income (loss)
1

 

 
9

 

 
10

Net current-period Other comprehensive income (loss)
(1
)
 


8


(2
)

5

Implementation of ASU 2016-01
(7
)
 
2

 

 

 
(5
)
Balance, December 31, 2018
$
(11
)
 
$


$
(102
)

$
(7
)

$
(120
)
Other comprehensive income (loss) before reclassifications
(14
)
 

 
(7
)
 
1

 
(20
)
Amounts reclassified from Accumulated other comprehensive income (loss)
2

 

 
15

 

 
17

Net current-period Other comprehensive income (loss)
(12
)
 


8


1


(3
)
Implementation of ASU 2018-02
(2
)
 

 
(23
)
 

 
(25
)
Balance, December 31, 2019
$
(25
)
 
$


$
(117
)

$
(6
)

$
(148
)
______________________________________
(a)
All amounts are net of tax, except for Foreign currency translation.
(b)
The amounts reclassified from Accumulated other comprehensive income (loss) are included in the computation of the net periodic pension and other postretirement benefit costs (see Note 21 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets").
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents include cash on hand, cash in banks, and temporary investments purchased with remaining maturities of three months or less. Restricted cash consists of funds held to satisfy requirements of certain debt and DTE Energy partnership operating agreements. Restricted cash designated for interest and principal payments within one year is classified as a Current Asset.
Receivables
Accounts receivable are primarily composed of trade receivables and unbilled revenue. The Registrants' Accounts receivable are stated at net realizable value.
The allowance for doubtful accounts for DTE Electric and DTE Gas is generally calculated using the aging approach that utilizes rates developed in reserve studies. DTE Electric and DTE Gas establish an allowance for uncollectible accounts based on historical losses and management’s assessment of existing economic conditions, customer trends, and other factors. Customer accounts are generally considered delinquent if the amount billed is not received by the due date, which is typically in 21 days, however, factors such as assistance programs may delay aggressive action. DTE Electric and DTE Gas 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 is 150 days after service has been terminated.
The customer allowance for doubtful accounts for DTE Energy's other businesses is calculated based on specific review of probable future collections based on receivable balances generally in excess of 30 days.
DTE Energy unbilled revenues of $0.9 billion and $1.0 billion at December 31, 2019 and 2018, respectively, include $263 million and $264 million of DTE Electric unbilled revenues, respectively, included in Customer Accounts receivable.
Notes Receivable
Notes receivable, or financing receivables, for DTE Energy are primarily comprised of finance lease receivables and loans and are included in Notes receivable and Other current assets on DTE Energy’s Consolidated Statements of Financial Position. Notes receivable, or financing receivables, for DTE Electric are primarily comprised of loans.
Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. The Registrants cease accruing interest (nonaccrual status), consider a note receivable impaired, and establish an allowance for credit loss when it is probable that all principal and interest amounts due will not be collected in accordance with the contractual terms of the note receivable. Cash payments received on nonaccrual status notes receivable, that do not bring the account contractually current, are first applied to contractually owed past due interest, with any remainder applied to principal. Accrual of interest is generally resumed when the note receivable becomes contractually current.
In determining the allowance for credit losses for notes receivable, the Registrants consider the historical payment experience and other factors that are expected to have a specific impact on the counterparty’s ability to pay. In addition, the Registrants monitor the credit ratings of the counterparties from which they have notes receivable.
Inventories
Inventory related to utility operations is generally valued at average cost. Inventory related to non-utility operations is valued at the lower of cost or net realizable value.
DTE Gas' natural gas inventory of $40 million and $48 million as of December 31, 2019 and 2018, respectively, is determined using the last-in, first-out (LIFO) method. The replacement cost of gas in inventory exceeded the LIFO cost by $49 million and $113 million at December 31, 2019 and 2018, respectively.
Property, Retirement and Maintenance, and Depreciation and Amortization
Property is stated at cost and includes construction-related labor, materials, overheads, and AFUDC for utility property. The cost of utility properties retired is charged to accumulated depreciation. Expenditures for maintenance and repairs are charged to expense when incurred.
Utility property at DTE Electric and DTE Gas is depreciated over its estimated useful life using straight-line rates approved by the MPSC. DTE Energy's non-utility property is depreciated over its estimated useful life using the straight-line method. Depreciation and amortization expense also includes the amortization of certain regulatory assets for the Registrants.
The cost of nuclear fuel is capitalized. The amortization of nuclear fuel is included within Fuel, purchased power, and gas utility in the DTE Energy Consolidated Statements of Operations, and Fuel and purchased power in the DTE Electric Consolidated Statements of Operations, and is recorded using the units-of-production method.
See Note 7 to the Consolidated Financial Statements, "Property, Plant, and Equipment."
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 undiscounted 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.
Intangible Assets
The Registrants have certain Intangible assets as shown below:
 
 
 
December 31, 2019
 
December 31, 2018
 
Useful Lives
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
 
 
(In millions)
Intangible assets subject to amortization
 
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
25 to 40 years(a)
 
$
2,252

 
$
(66
)
 
$
2,186

 
$
779

 
$
(44
)
 
$
735

Contract intangibles
6 to 26 years
 
268

 
(76
)
 
192

 
159

 
(66
)
 
93

 
 
 
2,520

 
(142
)
 
2,378

 
938

 
(110
)
 
828

 
 
 
 
 
 
 
 
 
 
 
 
 
 
DTE Electric renewable energy credits
(b)
 
15

 

 
15

 
20

 

 
20

DTE Electric emission allowances
(b)
 

 

 

 
1

 

 
1

DTE Electric Long-term intangible assets
 
15

 

 
15

 
21

 

 
21

 
 
 
 
 
 
 
 
 
 
 
 
 
 
DTE Energy Long-term intangible assets
 
$
2,535

 
$
(142
)
 
$
2,393

 
$
959

 
$
(110
)
 
$
849


______________________________________
(a)
The useful lives of the customer relationship intangible assets are based on the number of years in which the assets are expected to economically contribute to the business. The expected economic benefit incorporates existing customer contracts and expected renewal rates based on the estimated volume and production lives of gas resources in the region.
(b)
Emission allowances and renewable energy credits are charged to expense, using average cost, as the allowances and credits are consumed in the operation of the business.
The following table summarizes DTE Energy's estimated customer relationship and contract intangible amortization expense expected to be recognized during each year through 2024:
 
2020
 
2021
 
2022
 
2023
 
2024
 
(In millions)
Estimated amortization expense
$
82

 
$
86

 
$
86

 
$
86

 
$
86


DTE Energy amortizes customer relationship and contract intangible assets on a straight-line basis over the expected period of benefit. DTE Energy's Intangible assets amortization expense was $33 million in 2019, $27 million in 2018, and $29 million in 2017.
Excise and Sales Taxes
The Registrants record 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 Registrants’ 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. The deferred amounts are included as a direct deduction from the carrying amount of each debt issue in Mortgage bonds, notes, and other and Junior subordinated debentures on DTE Energy's Consolidated Statements of Financial Position and in Mortgage bonds, notes, and other on DTE Electric's Consolidated Statements of Financial Position. In accordance with MPSC regulations applicable to DTE Energy’s electric and gas utilities, the unamortized discount, premium, and expense related to utility debt redeemed with a refinancing are amortized over the life of the replacement issue. Discount, premium, and expense on early redemptions of debt associated with DTE Energy's non-utility operations are charged to earnings.