-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A6dV29MXXl+Cb4QxhfnnED4zLw1aBqQzV7/UakIdtr8i0TWDyP7ukPi6JfsTM6Si mOF2bf5fHd/3P9/WCA8pjg== 0000950124-98-005889.txt : 19981029 0000950124-98-005889.hdr.sgml : 19981029 ACCESSION NUMBER: 0000950124-98-005889 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981028 SROS: CSX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DTE ENERGY CO CENTRAL INDEX KEY: 0000936340 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 383217752 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11607 FILM NUMBER: 98732355 BUSINESS ADDRESS: STREET 1: 2000 2ND AVENUE STREET 2: ROOM 2412 CITY: DETRIOT STATE: MI ZIP: 48226-1279 BUSINESS PHONE: 3132354000 MAIL ADDRESS: STREET 1: 2000 2ND AVENUE STREET 2: ROOM 2412 CITY: DETRIOT STATE: MI ZIP: 48226 FORMER COMPANY: FORMER CONFORMED NAME: DTE HOLDINGS INC DATE OF NAME CHANGE: 19950127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DETROIT EDISON CO CENTRAL INDEX KEY: 0000028385 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 380478650 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-02198 FILM NUMBER: 98732356 BUSINESS ADDRESS: STREET 1: 2000 SECOND AVE - 2112 WCB CITY: DETROIT STATE: MI ZIP: 48226 BUSINESS PHONE: 3132378000 10-Q 1 FORM 10-Q 1 =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 1998
COMMISSION REGISTRANTS; STATE OF INCORPORATION; I.R.S. EMPLOYER FILE NUMBER ADDRESS; AND TELEPHONE NUMBER IDENTIFICATION NO. ----------- ----------------------------- ------------------ 1-11607 DTE Energy Company 38-3217752 (a Michigan corporation) 2000 2nd Avenue Detroit, Michigan 48226-1279 313-235-4000 1-2198 The Detroit Edison Company 38-0478650 (a Michigan corporation) 2000 2nd Avenue Detroit, Michigan 48226-1279 313-235-8000
Indicate by check mark whether the registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. YES X NO __ At September 30, 1998, 145,075,152 shares of DTE Energy's Common Stock, substantially all held by non-affiliates, were outstanding. ================================================================================ 2 DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998 This document contains the Quarterly Reports on Form 10-Q for the quarter ended September 30, 1998 for each of DTE Energy Company and The Detroit Edison Company. Information contained herein relating to an individual registrant is filed by such registrant on its own behalf. Accordingly, except for its subsidiaries, The Detroit Edison Company makes no representation as to information relating to any other companies affiliated with DTE Energy Company. TABLE OF CONTENTS
Page ---- Definitions................................................................................3 Quarterly Report on Form 10-Q for DTE Energy Company: Part I - Financial Information.........................................................4 Item 1 - Condensed Consolidated Financial Statements (Unaudited)..............4 Notes to Condensed Consolidated Financial Statements (Unaudited)..............................................15 Independent Accountants' Report.....................................17 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.................................18 Part II- Other Information............................................................26 Item 5 - Other Information..................................................26 Quarterly Report on Form 10-Q for The Detroit Edison Company: Part I - Financial Information........................................................27 Item 1 - Condensed Consolidated Financial Statements (Unaudited).............27 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.................................27 Part II- Other Information............................................................27 Item 5 - Other Information...................................................27 Quarterly Reports on Form 10-Q for DTE Energy Company and The Detroit Edison Company: Item 6 - Exhibits and Reports on Form 8-K....................................28 Signature Page to DTE Energy Company Quarterly Report on Form 10-Q........................37 Signature Page to The Detroit Edison Company Quarterly Report on Form 10-Q................38
2 3 DEFINITIONS
Annual Report..............1997 Annual Report to the Securities and Exchange Commission on Form 10-K for DTE Energy Company or The Detroit Edison Company, as the case may be Annual Report Notes........Notes to Consolidated Financial Statements appearing on pages 39 through 61 and 65 through 67 of the 1997 Annual Report to the Securities and Exchange Commission on Form 10-K for DTE Energy Company and The Detroit Edison Company Company....................DTE Energy Company and Subsidiary Companies Detroit Edison.............The Detroit Edison Company (a wholly owned subsidiary of DTE Energy Company) and Subsidiary Companies Direct Access..............Gives all retail customers equal opportunity to utilize the transmission system which results in access to competitive generation resources DTE Capital................DTE Capital Corporation (a wholly owned subsidiary of DTE Energy Company) EPA........................United States Environmental Protection Agency kWh........................Kilowatthour MPSC.......................Michigan Public Service Commission MWh........................Megawatthour Note(s)....................Note(s) to Condensed Consolidated Financial Statements (Unaudited) appearing herein PSCR.......................Power Supply Cost Recovery Quarterly Report...........Quarterly Report to the Securities and Exchange Commission on Form 10-Q for DTE Energy Company or The Detroit Edison Company, as the case may be, for the quarters ended March 31, 1998 and June 30, 1998 Quarterly Report Notes.....Notes to Condensed Consolidated Financial Statements (Unaudited) appearing on pages 15 through 16 and pages 15 through 18 of the Quarterly Report to the Securities and Exchange Commission on Form 10-Q for the quarters ended March 31, 1998 and June 30, 1998, respectively, for DTE Energy Company and The Detroit Edison Company QUIDS......................Quarterly Income Debt Securities Registrant.................Company or Detroit Edison, as the case may be
3 4 QUARTERLY REPORT ON FORM 10-Q FOR DTE ENERGY COMPANY PART I - FINANCIAL INFORMATION ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED): DTE ENERGY COMPANY CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (In Millions, Except Per Share Amounts)
Three Months Ended Nine Months Ended September 30 September 30 ------------------------------------------------- 1998 1997 1998 1997 ------------------------------------------------- OPERATING REVENUES $ 1,199 $ 1,030 $ 3,208 $ 2,791 - -------------------------------------------------------------------------------------------------- OPERATING EXPENSES Fuel and purchased power 359 228 852 623 Operation and maintenance 338 290 906 764 Depreciation and amortization 169 159 496 489 Taxes other than income 67 68 207 203 - -------------------------------------------------------------------------------------------------- Total Operating Expenses 933 745 2,461 2,079 - -------------------------------------------------------------------------------------------------- OPERATING INCOME 266 285 747 712 - -------------------------------------------------------------------------------------------------- INTEREST EXPENSE AND OTHER Interest expense 83 76 236 219 Preferred stock dividends of subsidiary 1 3 6 9 Other - net 4 - 9 8 - -------------------------------------------------------------------------------------------------- Total Interest Expense and Other 88 79 251 236 - -------------------------------------------------------------------------------------------------- INCOME BEFORE INCOME TAXES 178 206 496 476 Income Taxes 46 74 159 188 - -------------------------------------------------------------------------------------------------- NET INCOME $ 132 $ 132 $ 337 $ 288 ================================================================================================== AVERAGE COMMON SHARES OUTSTANDING 145 145 145 145 - -------------------------------------------------------------------------------------------------- EARNINGS PER COMMON SHARE - BASIC AND DILUTED $ 0.91 $ 0.91 $ 2.32 $ 1.98 - --------------------------------------------------------------------------------------------------
See notes to condensed consolidated financial statements (unaudited). 4 5 DTE ENERGY COMPANY CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In Millions)
Three Months Ended Nine Months Ended September 30 September 30 --------------------------------------------------- 1998 1997 1998 1997 --------------------------------------------------- OPERATING ACTIVITIES Net Income $ 132 $ 132 $ 337 $ 288 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 169 159 496 489 Other (58) (2) (61) 6 Changes in current assets and liabilities: Accounts receivable (41) (5) (89) (30) Inventories (6) 15 (36) (10) Payables (9) 13 51 (28) Other 95 - 44 (36) - --------------------------------------------------------------------------------------------------------- Net cash from operating activities 282 312 742 679 - --------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Plant and equipment expenditures (391) (108) (632) (535) Investment in limited partnership 5 - (195) - Nuclear decommissioning trust funds 8 (8) (33) (45) Other - 3 (11) 3 - --------------------------------------------------------------------------------------------------------- Net cash used for investing activities (378) (113) (871) (577) - --------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Issuance of long-term debt 163 - 363 250 Increase (decrease) in short-term borrowings 94 (112) 356 97 Redemption of long-term debt - - (187) (185) Redemption of preferred stock - - (100) - Dividends on common stock (75) (75) (224) (224) Other 1 - 3 - - --------------------------------------------------------------------------------------------------------- Net cash from (used for) financing activities 183 (187) 211 (62) - --------------------------------------------------------------------------------------------------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 87 12 82 40 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 94 81 99 53 - --------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 181 $ 93 $ 181 $ 93 ========================================================================================================= SUPPLEMENTARY CASH FLOW INFORMATION Interest paid (excluding interest capitalized) $ 98 $ 74 $ 244 $ 212 Income taxes paid 49 58 115 186 New capital lease obligations 4 - 52 33
See notes to condensed consolidated financial statements (unaudited). 5 6 DTE ENERGY COMPANY CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (In Millions, Except Per Share Amounts and Shares)
September 30 December 31 1998 1997 ------------ ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 181 $ 99 Accounts receivable Customer (less allowance for doubtful accounts of $20) 371 305 Accrued unbilled revenues 156 137 Other 82 78 Inventories (at average cost) Fuel 159 130 Materials and supplies 181 173 Other 57 13 ------------- ------------- 1,187 935 ------------- ------------- INVESTMENTS Nuclear decommissioning trust funds 272 239 Other 252 57 ------------- ------------- 524 296 ------------- ------------- PROPERTY Property, plant and equipment 14,985 14,495 Property under capital leases 244 256 Nuclear fuel under capital lease 659 607 Construction work in progress 106 16 ------------- ------------- 15,994 15,374 ------------- ------------- Less accumulated depreciation and amortization 6,841 6,440 ------------- ------------- 9,153 8,934 ------------- ------------- OTHER ASSETS Regulatory assets 693 856 Other 255 202 ------------- ------------- 948 1,058 ------------- ------------- TOTAL ASSETS $ 11,812 $ 11,223 ============= =============
See notes to condensed consolidated financial statements (unaudited). 6 7
September 30 December 31 1998 1997 ------------ ----------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 284 $ 161 Accrued interest 46 57 Dividends payable 76 78 Accrued payroll 99 81 Short-term borrowings 399 42 Deferred income taxes 70 64 Current portion long-term debt 159 205 Current portion capital leases 124 110 Other 225 219 ------------- ------------- 1,482 1,017 ------------- ------------- OTHER LIABILITIES Deferred income taxes 1,939 1,983 Deferred investment tax credits 290 301 Capital leases 131 137 Other 253 302 ------------- ------------- 2,613 2,723 ------------- ------------- LONG-TERM DEBT 3,998 3,777 ------------- ------------- SHAREHOLDERS' EQUITY Detroit Edison cumulative preferred stock, $100 par value, 6,747,484 shares authorized, 5,207,657 issued, 500,000 and 1,501,223 shares outstanding, respectively 48 144 Common stock, without par value, 400,000,000 shares authorized, 145,075,152 and 145,097,829 issued and outstanding, respectively 1,951 1,951 Retained earnings 1,720 1,611 ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 3,719 3,706 ------------- ------------- CONTINGENCIES (NOTE 5) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,812 $ 11,223 ============= =============
See notes to condensed consolidated financial statements (unaudited). 7 8 DTE ENERGY COMPANY CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (In Millions, Except Per Share Amounts; Shares in Thousands)
1998 ---------------------------- Shares Amount ---------------------------- DETROIT EDISON CUMULATIVE PREFERRED STOCK Balance at beginning of year 1,501 $ 144 Redemption of cumulative preferred stock (1,001) (100) Preferred stock expense 4 ----------- ----------- Balance at September 30, 1998 500 $ 48 - --------------------------------------------------------------------------------------------- COMMON STOCK Balance at beginning of year 145,098 $ 1,951 Repurchase and retirement of common stock (23) - ------------ ----------- Balance at September 30, 1998 145,075 $ 1,951 - --------------------------------------------------------------------------------------------- RETAINED EARNINGS Balance at beginning of year $ 1,611 Net income 337 Dividends declared on common stock ($1.545 per share) (224) Preferred stock expense (4) ------------ Balance at September 30, 1998 $ 1,720 - ---------------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY $ 3,719 ==============================================================================================
See notes to condensed consolidated financial statements (unaudited). 8 9 [This page intentionally left blank.] 9 10 THE DETROIT EDISON COMPANY CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (In Millions)
Three Months Ended Nine Months Ended September 30 September 30 ------------------------------------------------------- 1998 1997 1998 1997 ------------------------------------------------------- OPERATING REVENUES $ 1,105 $ 985 $ 2,998 $ 2,727 - ------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Fuel and purchased power 344 228 818 623 Operation and maintenance 249 247 719 701 Depreciation and amortization 162 157 486 487 Taxes other than income 66 69 206 203 - ------------------------------------------------------------------------------------------------------------ Total Operating Expenses 821 701 2,229 2,014 - ------------------------------------------------------------------------------------------------------------ OPERATING INCOME 284 284 769 713 - ------------------------------------------------------------------------------------------------------------ INTEREST EXPENSE AND OTHER Interest expense 72 69 208 210 Other - net 3 2 13 11 - ------------------------------------------------------------------------------------------------------------ Total Interest Expense and Other 75 71 221 221 - ------------------------------------------------------------------------------------------------------------ INCOME BEFORE INCOME TAXES 209 213 548 492 Income Taxes 84 85 230 204 - ------------------------------------------------------------------------------------------------------------ NET INCOME 125 128 318 288 PREFERRED STOCK DIVIDENDS 1 3 6 9 - ------------------------------------------------------------------------------------------------------------ NET INCOME AVAILABLE FOR COMMON STOCK $ 124 $ 125 $ 312 $ 279 ============================================================================================================
Note: Detroit Edison's condensed consolidated financial statements (unaudited) are presented here for ease of reference and are not considered to be part of Item 1 of the Company's report. See notes to condensed consolidated financial statements (unaudited). 10 11 THE DETROIT EDISON COMPANY CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In Millions)
Three Months Ended Nine Months Ended September 30 September 30 ------------------------------------------------- 1998 1997 1998 1997 ------------------------------------------------- OPERATING ACTIVITIES Net Income $ 125 $ 128 $ 318 $ 288 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 162 157 486 487 Other (57) (10) (94) 35 Changes in current assets and liabilities: Accounts receivable (34) 3 (64) (13) Inventories 5 19 (29) 6 Payables (31) 20 18 (29) Other 97 (6) 39 (42) - ------------------------------------------------------------------------------------------------------------- Net cash from operating activities 267 311 674 732 - ------------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Plant and equipment expenditures (122) (107) (342) (316) Nuclear decommissioning trust funds 8 (8) (33) (45) Other (88) (1) (92) 7 - ------------------------------------------------------------------------------------------------------------- Net cash used for investing activities (202) (116) (467) (354) - ------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Issuance of long-term debt - - 100 - Increase (decrease) in short-term borrowings 18 (114) 205 62 Redemption of long-term debt - - (169) (185) Redemption of preferred stock - - (100) - Dividends on common and preferred stock (80) (83) (245) (248) Other - - 3 - - ------------------------------------------------------------------------------------------------------------- Net cash used for financing activities (62) (197) (206) (371) - ------------------------------------------------------------------------------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3 (2) 1 7 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 13 11 15 2 - ------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 16 $ 9 $ 16 $ 9 ============================================================================================================= SUPPLEMENTARY CASH FLOW INFORMATION Interest paid (excluding interest capitalized) $ 82 $ 74 $ 219 $ 210 Income taxes paid 84 68 195 200 New capital lease obligations 4 - 52 33
See notes to condensed consolidated financial statements (unaudited). 11 12 THE DETROIT EDISON COMPANY CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (In Millions, Except Per Share Amounts and Shares)
September 30 December 31 1998 1997 ------------ ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 16 $ 15 Accounts receivable Customer (less allowance for doubtful accounts of $20) 343 300 Accrued unbilled revenues 156 137 Other 65 63 Inventories (at average cost) Fuel 159 130 Materials and supplies 153 150 Other 51 11 ------------- ------------- 943 806 ------------- ------------- INVESTMENTS Nuclear decommissioning trust funds 272 239 Other 133 38 ------------- ------------- 405 277 ------------- ------------- PROPERTY Property, plant and equipment 14,489 14,204 Property under capital leases 244 256 Nuclear fuel under capital lease 659 607 Construction work in progress 14 12 ------------- ------------- 15,406 15,079 ------------- ------------- Less accumulated depreciation and amortization 6,814 6,431 ------------- ------------- 8,592 8,648 ------------- ------------- OTHER ASSETS Regulatory assets 693 856 Other 204 158 ------------- ------------- 897 1,014 ------------- ------------- TOTAL ASSETS $ 10,837 $ 10,745 ============= =============
See notes to condensed consolidated financial statements (unaudited). 12 13
September 30 December 31 1998 1997 ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 250 $ 150 Accrued interest 45 56 Dividends payable 80 83 Accrued payroll 95 80 Short-term borrowings 205 - Deferred income taxes 72 64 Current portion long-term debt 119 169 Current portion capital leases 124 110 Other 210 218 ------------- ------------- 1,200 930 ------------- ------------- OTHER LIABILITIES Deferred income taxes 1,907 1,973 Deferred investment tax credits 290 301 Capital leases 131 137 Other 251 300 ------------- ------------- 2,579 2,711 ------------- ------------- LONG-TERM DEBT 3,512 3,531 ------------- ------------- SHAREHOLDERS' EQUITY Cumulative preferred stock, $100 par value, 6,747,484 shares authorized, 5,207,657 issued, 500,000 and 1,501,223 shares outstanding, respectively 48 144 Common stock, $10 par value, 400,000,000 shares authorized, 145,119,875 issued and outstanding 1,451 1,451 Premium on common stock 548 548 Common stock expense (48) (48) Retained earnings 1,547 1,478 ------------- ------------- TOTAL SHAREHOLDERS' EQUITY 3,546 3,573 ------------- ------------- CONTINGENCIES (NOTE 5) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 10,837 $ 10,745 ============= =============
See notes to condensed consolidated financial statements (unaudited). 13 14 THE DETROIT EDISON COMPANY CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) (In Millions, Except Per Share Amounts; Shares in Thousands)
1998 ---------------------------- Shares Amount ---------------------------- CUMULATIVE PREFERRED STOCK Balance at beginning of year 1,501 $ 144 Redemption of cumulative preferred stock (1,001) (100) Preferred stock expense 4 ----------- ----------- Balance at September 30, 1998 500 $ 48 - --------------------------------------------------------------------------------------------- COMMON STOCK Balance at beginning of year 145,120 $ 1,451 ----------- ----------- Balance at September 30, 1998 145,120 $ 1,451 - --------------------------------------------------------------------------------------------- PREMIUM ON COMMON STOCK Balance at beginning of year $ 548 ----------- Balance at September 30, 1998 $ 548 - --------------------------------------------------------------------------------------------- COMMON STOCK EXPENSE Balance at beginning of year $ (48) ----------- Balance at September 30, 1998 $ (48) - --------------------------------------------------------------------------------------------- RETAINED EARNINGS Balance at beginning of year $ 1,478 Net income 318 Dividends declared Common stock ($1.65 per share) (239) Cumulative preferred stock* (6) Preferred stock expense (4) ----------- Balance at September 30, 1998 $ 1,547 - --------------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY $ 3,546 =============================================================================================
* At established rate for each series. See notes to condensed consolidated financial statements (unaudited). 14 15 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY NOTE 1 - ANNUAL REPORT NOTES These condensed consolidated financial statements (unaudited) should be read in conjunction with the Annual Report Notes and the Quarterly Report Notes. The Notes contained herein update and supplement matters discussed in the Annual Report Notes. The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The condensed consolidated financial statements are unaudited, but in the opinion of the Company and Detroit Edison, with respect to its own financial statements, include all adjustments necessary for a fair statement of the results for the interim periods. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year. NOTE 2 - REGULATORY MATTERS As discussed in Notes 1 and 3 of the Annual Report Notes, the MPSC has established a capacity factor performance standard which provides for the disallowance of net incremental replacement power costs if Fermi 2 does not perform to certain operating criteria. A disallowance is imposed for the amount by which the Fermi 2 three-year rolling average capacity factor is less than the greater of either the average of the top 50% of U.S. boiling water reactors or 50%. An estimate of the incremental cost of replacement power is required in computing the reserve for amounts due customers under this performance standard. At December 31, 1997, Detroit Edison had an accrual of $74 million for the disallowance that is expected to be imposed by the MPSC. Due primarily to an increase in the estimate of the incremental cost of replacement power at September 30, 1998, Detroit Edison recorded an increase in the Fermi 2 capacity factor performance standard liability of approximately $34 million. The additional liability was recorded as a reduction to operating revenues. Fermi 2 was shut down for refueling on September 4, 1998 and began restart activities in the last week of October, 1998. As discussed in Note 3 of the Annual Report, in December 1997, litigation was commenced in the Ingham County Circuit Court of Michigan contending that Detroit Edison and the MPSC breached a December 1988 MPSC Order by offsetting the stipulated revenue reduction with the amortization of 1997 storm costs. Following the denial of Detroit Edison's motion for summary disposition, both the MPSC and Detroit Edison filed emergency appeals with the Michigan Court of Appeals. While the Company's appeal was denied, on October 8, 1998, the Michigan Court of Appeals granted the MPSC's claim of appeal. 15 16 NOTE 3 - SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS At September 30, 1998, Detroit Edison had total short-term credit arrangements of approximately $675 million under which $205 million was outstanding. The amounts outstanding at September 30, 1998 consisted of $155 million of commercial paper and $50 million secured by its customer accounts receivable and unbilled revenues portfolio. At September 30, 1998, DTE Capital had short-term credit arrangements of $400 million, backed by a Support Agreement from the Company, under which $194 million of commercial paper was outstanding. NOTE 4 - LONG-TERM DEBT Detroit Edison has effective shelf registrations permitting issuance of $364.5 million in debt securities. The Company had $124 million in cash and cash equivalents restricted for debt service at September 30, 1998. NOTE 5- CONTINGENCIES LEGAL PROCEEDINGS Detroit Edison and plaintiffs in a class action pending in the Circuit Court for Wayne County, Michigan (Gilford, et al v. Detroit Edison), as well as plaintiffs in two other pending actions which make class claims (Sanchez, et al v. Detroit Edison, Circuit Court for Wayne County, Michigan; and Frazier v. Detroit Edison, United States District Court, Eastern District of Michigan), are preparing for binding arbitration to settle these matters. A July 1998 Consent Judgement has received preliminary Court approval. A Fairness Hearing with respect to the terms of the settlement was held in August 1998, and no objections to the settlement were raised. A second Fairness Hearing is comtemplated following the results of the arbitration. The settlement agreement provides that Detroit Edison's monetary liability is to be no less than $17.5 million and no greater than $65 million after the conclusion of all related proceedings. An amount related to this proceeding was accrued in 1997. ----------------------------------- This Quarterly Report on Form 10-Q, including the report of Deloitte & Touche LLP (on page 17) will automatically be incorporated by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 (Registration Nos. 33-53207, 33-64296 and 333-65765) of The Detroit Edison Company and Form S-8 (Registration Nos. 333-00023 and 333-47247) and Form S-3 (Registration No. 33-57545) of DTE Energy Company, filed under the Securities Act of 1933. Such report of Deloitte & Touche LLP, however, is not a "report" or "part of the Registration Statement" within the meaning of Sections 7 and 11 of the Securities Act of 1933 and the liability provisions of Section 11(a) of such Act do not apply. 16 17 INDEPENDENT ACCOUNTANTS' REPORT To the Boards of Directors and Shareholders of DTE Energy Company and The Detroit Edison Company We have reviewed the accompanying condensed consolidated balance sheets of DTE Energy Company and subsidiaries and The Detroit Edison Company and subsidiaries as of September 30, 1998, and the related condensed consolidated statements of income and of cash flows for the three-month and nine-month periods ended September 30, 1998 and 1997, and the condensed consolidated statements of changes in shareholders' equity for the nine-month period ended September 30, 1998. These financial statements are the responsibility of DTE Energy Company's management and The Detroit Edison Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists primarily of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheets of DTE Energy Company and subsidiaries and The Detroit Edison Company and subsidiaries as of December 31, 1997, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated January 26, 1998, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheets as of December 31, 1997 is fairly stated, in all material respects, in relation to the consolidated balance sheets from which they have been derived. DELOITTE & TOUCHE LLP Detroit, Michigan October 28, 1998 17 18 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY This analysis for the three and nine months ended September 30, 1998, as compared to the same periods in 1997, should be read in conjunction with the condensed consolidated financial statements (unaudited), the accompanying Notes, the Quarterly Report Notes and the Annual Report Notes. Detroit Edison is the principal subsidiary of the Company, and, as such, unless otherwise identified, this discussion explains material changes in results of operations of both the Company and Detroit Edison and identifies recent trends and events affecting both the Company and Detroit Edison. ELECTRIC INDUSTRY DEREGULATION Federal and state legislators and regulators are working to introduce competition and customer choice into the generation segment of the electric public utility industry, believing that competition will lead to reduced electric rates and stimulate economic growth. Traditional utility services are being unbundled, with many of such services becoming competitive; and a demand is being created for new energy-related services. As discussed in the Annual Report and the Quarterly Report, there are ongoing Michigan legislative, judicial and administrative proceedings, which address among other things, deregulation of the generation segment of the Michigan electric public utility industry. Federal legislation relating to deregulation has also been proposed. Although the Company and Detroit Edison expect a favorable outcome, neither the Company nor Detroit Edison are able to predict the outcome or timing of these proceedings. The Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) have been considering various accounting issues as a result of the transition to competition. Regulatory Accounting Issues As discussed in Note 1 of the Annual Report, Detroit Edison is subject to regulation by the MPSC and the Federal Energy Regulatory Commission (FERC). Detroit Edison meets the criteria of Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of Certain Types of Regulation." This accounting standard recognizes the cost based ratemaking process which results in differences in the application of generally accepted accounting principles between regulated and non-regulated businesses. SFAS No. 71 permits the recording of regulatory assets and liabilities that would have been treated as revenue and expense in non-regulated businesses. The deferred amounts are being amortized to revenue and expense as they are included in rates. Continued applicability of SFAS No. 71 requires that rates be designed to recover specific costs of providing regulated services and products, including regulatory assets, and that it be 18 19 reasonable to assume that rates are set at levels that will recover a utility's costs and can be charged to and collected from customers. In guidance issued in 1997, the Emerging Issues Task Force (EITF) of the FASB concluded that the application of SFAS No. 71 to a separable portion of a business which is subject to a deregulation plan should cease when legislation is passed and/or a rate order is issued that contains sufficient detail on a transition plan. Various MPSC Orders and proposed Michigan legislation would alter the regulatory process in Michigan and provide a plan for transition to competition for the generation segment of Detroit Edison's business. However, Detroit Edison has appealed the MPSC Orders that require the implementation of a Direct Access program in Michigan. Detroit Edison believes that it continues to qualify under the accounting model prescribed by SFAS No. 71. The continued applicability of SFAS No. 71 will depend on the outcome of legal and legislative proceedings discussed herein. During the second quarter of 1998, the SEC issued guidance regarding the accounting treatment for the recovery of stranded costs during the transition to competition. The SEC concluded that when an entity ceases to apply SFAS No. 71, any impaired portion of plant assets, identified for recovery in legislation/rate order by means of a regulated cash flow, should be treated as a regulatory asset in the separable portion of the enterprise from which the regulated cash flows are derived. The plant impairment analysis, performed at the lowest level of identifiable cash flows based on the facts and circumstances, should be exclusive of the regulated cash flows. The 1997 EITF guidance also concluded that regulatory assets and liabilities originating in the separable portion of the business which is no longer under SFAS No. 71 should not be written off if they are recoverable from a separable portion of business which still meets the criteria of SFAS No. 71. Detroit Edison's ability to recover regulatory assets and investment in generation plant in the transition to competition will depend on the outcome of regulatory and/or legislative action which provides for and permits recovery of such assets. Detroit Edison had $355 million of net regulatory assets and $4.8 billion of net investment in generation plant recorded in Property, Plant and Equipment at September 30, 1998. At the present time Detroit Edison believes that a satisfactory mechanism to recover regulatory assets and the investment in generation plant will be adopted by its regulators and/or legislators, although there can be no assurances that this will occur. Michigan Public Service Commission In July 1998, Detroit Edison filed an application with the MPSC for accounting authority to accelerate amortization of the Fermi 2 plant and its related regulatory assets by $164.2 million annually beginning January 1, 1999. Detroit Edison believes approval of its request will allow a reasonable opportunity, consistent with SFAS No. 71 and EITF guidance, to recover its stranded assets by the MPSC imposed deadline for recovery, December 31, 2007. Evidentiary hearings have concluded in the proceeding to address Detroit Edison's request to accelerate amortization of Fermi 2 and its related regulatory assets. The Michigan Attorney General and other parties are opposing the request and have argued for a reduction in, or complete elimination of, the MPSC's previous findings on the amount of recoverable stranded costs. An order by the MPSC is expected to be 19 20 issued before the end of 1998. Detroit Edison filed an application with the MPSC in June 1998 requesting approval of its Customer Choice Plan and accounting authority to defer costs that would be incurred to implement Direct Access. In its filing, Detroit Edison estimated that the cost to implement Direct Access would be approximately $100 million. Deferral of $19.9 million has been specifically requested in 1998. Approximately $3.9 million of costs have been incurred through September 30, 1998. Detroit Edison also indicated in its filings with the MPSC that recovery of Fermi 2 assets and other stranded assets must be reasonably assured before implementation of any Direct Access program begins. Under current accounting rules, to the extent that Detroit Edison cannot be assured recovery prior to implementation of a Direct Access program, it would be required to write off such assets; however, the Company and Detroit Edison do not anticipate a write off at this time. Detroit Edison is no longer seeking suspension of its PSCR clause and had filed motions with the MPSC to withdraw both of its earlier applications for a clause suspension. On October 26, 1998, the MPSC issued two related orders which granted Detroit Edison's motions, terminated the PSCR suspension hearing and ordered that Detroit Edison continue to implement its PSCR clause. In September 1998, Detroit Edison filed its 1999 PSCR case. Fuel and purchased power costs for 1999 are projected to increase by up to 25 percent, on average, over the corresponding forecast for 1998. A hearing schedule has not yet been established. As discussed in Management's Discussion and Analysis of Financial Condition and Results of Operations in the Annual Report, Detroit Edison has been involved in legal proceedings contesting the statutory authority of the MPSC to order an experimental retail wheeling program. On October 12, 1998 the Michigan Supreme Court granted Detroit Edison and other parties to the proceeding leave to appeal from a January 1998 Order of the Michigan Court of Appeals finding that the MPSC did have statutory authority to authorize experimental retail wheeling. GROWTH Non-regulated businesses are projected to increase over the five-year period ending 2002, and during this period such businesses could result in earnings of as much as $150 million annually. LIQUIDITY AND CAPITAL RESOURCES CASH PROVIDED BY OPERATING ACTIVITIES Net cash from operating activities was lower for the three month period due primarily to increased accounts receivables and lower payables. 20 21 Net cash from operating activities was higher in the nine month period due primarily to higher net income and higher payables, partially offset by increases in accounts receivable and inventories and an increase in other Detroit Edison non-cash items. CASH USED FOR INVESTING ACTIVITIES Net cash used for investing was higher for the three month period due primarily to higher investment in non-regulated plant and equipment expenditures. Net cash used for investing was higher for the nine month period due to increased non-regulated investments and plant and equipment expenditures. Cash requirements for non-regulated investments are estimated at $607 million in 1998, of which $485 million had been expended as of September 30, 1998. Detroit Edison's 1998 cash requirements for its capital expenditure program are estimated at $486 million, of which $342 million had been expended as of September 30, 1998. CASH FROM (USED FOR) FINANCING ACTIVITIES Net cash from financing was higher in the three month period due primarily to the issuance of long-term debt and an increase in short-term borrowings for non-regulated plant and equipment expenditures. Net cash from financing was higher in the nine month period due primarily to the issuance of long-term debt and the increase in short-term borrowings, partially offset by the redemption of preferred stock. In November 1998, Detroit Edison plans to issue $100 million of QUIDS which will be used to redeem approximately $50 million aggregate principal amount of its 8.5% Series of QUIDS due 2025 and all outstanding shares of its 7.74% Series Cumulative Preferred Stock. YEAR 2000 As discussed in Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K, the Company has been involved in an enterprise-wide program to address Year 2000 issues. A program office was established in mid-1997 to implement a rigorous plan to address the impact of Year 2000 to hardware and software systems, embedded systems (which include microprocessors used in the production and control of electric power), and critical service providers. The emphasis has been on mission critical systems that support core business activities or processes. Core business activities/processes include safety, environmental and regulatory (Federal Energy Regulatory Commission and Nuclear Regulatory Commission) compliance, product production and delivery, revenue collection, employee and supplier payment, and financial asset management. 21 22 The Company's plan for addressing Year 2000 is divided into several phases including: raising general awareness of Year 2000 throughout the company, maintaining an inventory of systems and devices, performing an assessment of inventoried systems and devices, performing compliance testing of suspect systems and devices, remediation of non-compliant systems and devices through replacement, repair, retirement, or identifying an acceptable work around, testing and remediation of systems and devices in an integrated environment and preparing business continuity plans. The inventory and assessment of known systems and devices has been completed. Compliance testing and remediation for mission critical and other systems and devices are in process. Completion of remediation and integration testing/remediation of mission critical systems is expected by the end of calendar year 1999. To support the program phases, the program office has been working with major utility industry associations and organizations, customers and vendors to gather and share information on Year 2000 issues. The program office has contacted vendors critical to Company operations to determine their progress on Year 2000. Based upon information to date, the Company and Detroit Edison anticipate that abnormal operating conditions may be experienced within the Detroit Edison production, transmission, and distribution systems as a result of Year 2000 conditions. These conditions could result in temporary interruption of service to customers. Abnormal operating conditions may also be experienced in other affiliates of the Company of a magnitude not determined at this time. To address these issues, a business continuity program is being developed to be operational in the fourth quarter of 1999. The business continuity program is expected to provide short and long-term solutions to Year 2000 related issues. The Company and Detroit Edison believe that with all Year 2000 modifications and business continuity plans in place, the Year 2000 will not have a material effect on their financial position, liquidity and results of operations. However, despite all efforts, there can be no assurances that Year 2000 issues can be totally eliminated. In addition, no assurances can be given that the systems of vendors, interconnected utilities, and customers will not result in Year 2000 problems. The Company and Detroit Edison estimate that Year 2000 costs will aggregate between $50 and $75 million, with $13 million expended between January 1, 1998 and September 30, 1998. Operating cash flow is expected to be sufficient to pay Year 2000 modification costs with no material impact on operating results or cash flows. 22 23 RESULTS OF OPERATIONS For the three months ended September 30, 1998, the Company's net income was $132 million or $0.91 per common share, the same as the three months ended September 30, 1997. For the nine months ended September 30, 1998 net income was $337 million or $2.32 per common share compared to $288 million or $1.98 per common share earned in the nine months ended September 30, 1997. The 1998 three month earnings were the same as last year and nine month earnings were higher than last year due primarily to higher sales and increased earnings from non-regulated subsidiary operations, offset by an increase in the Fermi 2 capacity factor performance standard liability due primarily to higher power costs. OPERATING REVENUES Increases in operating revenues were due primarily to higher non-regulated subsidiary revenues and higher system sales, partially offset by an increase in the Fermi 2 capacity factor performance standard liability. Detroit Edison kWh sales increased (decreased) as compared to the prior year as follows:
Three Nine Months Months ------ ------ Residential 19.3% 10.1% Commercial 9.4 7.0 Industrial 3.9 3.4 Other (primarily sales for resale) 22.4 30.5 Total System 11.1 7.6 Sales between utilities (17.5) 84.1 Total 8.9 11.7
The increase in residential sales in the three month and nine month periods resulted from growth in the customer base, increased usage and increased cooling related sales in the third quarter due to unusually warm weather. Commercial sales increased, reflecting a continuation of favorable economic conditions and increased cooling related sales. The increase in industrial sales reflects increased demand in the construction and automotive sectors. Sales to other customers increased, reflecting increased demand from sales for resale customers. Sales between utilities decreased in the three month period due to lower availability of energy for sale during the Fermi 2 refueling outage. Sales between utilities increased during the nine month period due to greater demand for energy and increased overall availability of energy for sale. 23 24 OPERATING EXPENSES FUEL AND PURCHASED POWER Net system output and average fuel and purchased power unit costs for Detroit Edison were as follows:
Three Months Nine Months ---------------- -------------- 1998 1997 1998 1997 ---- ---- ---- ---- (Thousands of MWh) Power plant generation Fossil 11,388 10,744 32,784 31,141 Nuclear 1,445 2,342 5,734 3,589 Purchased power 3,200 1,237 5,983 4,849 ------- ------- ------- ------- Net system output 16,033 14,323 44,501 39,579 ======= ======= ======= ======= Average unit cost ($/MWh) $ 20.36 $ 14.88 $ 17.35 $ 14.76 ======= ======= ======= =======
Fuel and purchased power expense increased in the three month period due to higher average unit costs as a result of increased market demand for power during periods of hot weather. The increase was also due to replacing lower cost nuclear fuel as a result of the Fermi 2 refueling outage with higher cost system generated and purchased power and higher net system output. For the nine month period, fuel and purchased power expense increased due to higher net system output, higher average unit costs as a result of increased market demand for power during periods of hot weather and the prior-period receipt of Fermi 2 business insurance proceeds. OPERATION AND MAINTENANCE Operation and maintenance expense increased for the three month period due primarily to new non-regulated subsidiary operation expense ($46 million), the Conners Creek restart ($6.6 million) and Year 2000 expenses ($6.8 million), partially offset by lower benefit costs ($5.2 million) and lower thermal energy expenses ($3.7 million). Operation and maintenance expense increased for the nine month period due primarily to non-regulated subsidiary operation expense ($124 million), the Conners Creek restart ($10.9 million), Year 2000 expense ($11.3 million) and nuclear generating operating costs ($13.8 million), partially offset by lower benefit costs ($19.7 million) and lower thermal energy expenses ($6.0 million). Storm damage costs of $30 million incurred during the first three quarters of 1997 were deferred in the fourth quarter of 1997 and are being amortized to expense over a 24 month period beginning in January 1998. 24 25 INCOME TAXES The effective income tax rate for the Company was lower in 1998 due primarily to increased alternate fuels credits. FORWARD-LOOKING STATEMENTS Certain information presented in this Quarterly Report on Form 10-Q is based upon the expectations of the Company and Detroit Edison and, as such, is forward-looking. The Private Securities Litigation Reform Act of 1995 encourages reporting companies to provide analyses and estimates of future prospects and also permits reporting companies to point out that actual results may differ from those anticipated. Actual results for the Company and Detroit Edison may differ from those expected due to a number of variables including, but not limited to, actual sales, the effects of competition, the implementation of utility restructuring in Michigan (which involves pending regulatory proceedings, pending and proposed statutory changes and the recovery of stranded costs), environmental (including proposed regulations to limit nitrogen oxide emissions) and nuclear requirements, the impact of FERC proceedings and regulations, the success of non-regulated lines of business and the timely completion of Year 2000 modifications. While the Company and Detroit Edison believe that estimates given accurately measure the expected outcome, actual results could vary materially due to the variables mentioned as well as others. 25 26 DTE ENERGY COMPANY PART II - OTHER INFORMATION ITEM 5 - OTHER INFORMATION. As discussed in Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K, during 1997 and 1998 the EPA issued ozone transport regulations and final new air quality standards relating to ozone and particulate air pollution. In September 1998, the EPA issued a State Implementation Plan (SIP) call, giving states a year to develop new regulations to limit nitrogen oxide emissions because of their contribution to ozone formation. The EPA draft proposal suggests most emission reductions should come from utilities. If Michigan follows the EPA's recommendations, it is estimated that it will cost Detroit Edison more than $400 million to comply. Until the state issues its regulations, it is impossible to predict the full impact of the SIP call. Additional environmental costs would be expected to be recovered under traditional ratemaking principles. However, Detroit Edison is unable to predict what effect, if any, deregulation of the electric utility industry would have on recoverability of such environmental costs. 26 27 QUARTERLY REPORT ON FORM 10-Q FOR THE DETROIT EDISON COMPANY PART I - FINANCIAL INFORMATION ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED). See pages 10 through 16. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. See the Company's and Detroit Edison's "Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations," which is incorporated herein by this reference. PART II - OTHER INFORMATION ITEM 5 - OTHER INFORMATION. As discussed in Detroit Edison's Part II, "Item 5 - Other Information" of the Quarterly Report, on April 14, 1998 the MPSC issued an order granting Detroit Edison's March 31, 1998 request to waive competitive bidding for Conners Creek and restart the plant. Although Detroit Edison believes that the plant complies with all applicable environmental requirements, the Michigan Department of Environmental Quality (MDEQ) and the Wayne County Michigan Air Quality Management Division have issued notices of violation contending that Detroit Edison is required to obtain a series of new licenses prior to plant operation. Detroit Edison is contesting these notices of violation. A hearing on Detroit Edison's motion to remand the case to the Ingham County Circuit Court of Michigan is scheduled for October 30, 1998 in the Eastern District. See the Company's Part II, "Item 5 - Other Information" which is incorporated herein by reference. 27 28 QUARTERLY REPORTS ON FORM 10-Q FOR DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits (i) Exhibits filed herewith. Exhibit Number ------- 11-13 - DTE Energy Company Basic and Diluted Earnings Per Share of Common Stock. 12-13 - The Detroit Edison Company Computation of Ratio of Earnings to Fixed Charges. 15-9 - Awareness Letter of Deloitte & Touche LLP regarding their report dated October 28, 1998. 27-23 - Financial Data Schedule for the period ended September 30, 1998 for DTE Energy Company. 27-24 - Financial Data Schedule for the period ended September 30, 1998 for The Detroit Edison Company. (ii) Exhibits incorporated herein by reference. 3(a)- Amended and Restated Articles of Incorporation of DTE Energy Company, dated December 13, 1995. (Exhibit 3-5 to Form 10-Q for quarter ended September 30, 1997). 3(b)- Certificate of Designation of Series A Junior Participating Preferred Stock of DTE Energy Company. (Exhibit 3-6 to Form 10-Q for quarter ended September 30, 1997). 3(c)- Restated Articles of Incorporation of Detroit Edison, as filed December 10, 1991 with the State of Michigan, Department of Commerce - Corporation and Securities Bureau (Exhibit 4-117 to Form 10-Q for quarter ended March 31, 1993). 28 29 3(d)- Certificate containing resolution of the Detroit Edison Board of Directors establishing the Cumulative Preferred Stock, 7.75% Series as filed February 22, 1993 with the State of Michigan, Department of Commerce - Corporation and Securities Bureau (Exhibit 4-134 to Form 10-Q for quarter ended March 31, 1993). 3(e)- Certificate containing resolution of the Detroit Edison Board of Directors establishing the Cumulative Preferred Stock, 7.74% Series, as filed April 21, 1993 with the State of Michigan, Department of Commerce - Corporation and Securities Bureau (Exhibit 4-140 to Form 10-Q for quarter ended March 31, 1993). 3(f)- Rights Agreement, dated as of September 23, 1997, by and between DTE Energy Company and The Detroit Edison Company, as Rights Agent (Exhibit 4-1 to DTE Energy Company Current Report on Form 8-K, dated September 22, 1997). 3(g)- Agreement and Plan of Exchange (Exhibit 1(2) to DTE Energy Form 8-B filed January 2, 1996, File No. 1- 11607). 4(a)- Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison (File No. 1-2198) and Bankers Trust Company as Trustee (Exhibit B-1 to Registration No. 2-1630) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings as set forth below: September 1, 1947 Exhibit B-20 to Registration No. 2-7136 October 1, 1968 Exhibit 2-B-33 to Registration No. 2-30096 November 15, 1971 Exhibit 2-B-38 to Registration No. 2-42160 January 15, 1973 Exhibit 2-B-39 to Registration No. 2-46595 June 1, 1978 Exhibit 2-B-51 to Registration No. 2-61643 June 30, 1982 Exhibit 4-30 to Registration No. 2-78941 August 15, 1982 Exhibit 4-32 to Registration No. 2-79674 October 15, 1985 Exhibit 4-170 to Form 10-K for year ended December 31, 1994 29 30 July 15, 1989 Exhibit 4-171 to Form 10-K for year ended December 31, 1994 December 1, 1989 Exhibit 4-172 to Form 10-K for year ended December 31, 1994 February 15, 1990 Exhibit 4-173 to Form 10-K for year ended December 31, 1994 April 1, 1991 Exhibit 4-15 to Form 10-K for year ended December 31, 1996 May 1, 1991 Exhibit 4-178 to Form 10-K for year ended December 31, 1996 May 15, 1991 Exhibit 4-179 to Form 10-K for year ended December 31, 1996 September 1, 1991 Exhibit 4-180 to Form 10-K for year ended December 31, 1996 November 1, 1991 Exhibit 4-181 to Form 10-K for year ended December 31, 1996 January 15, 1992 Exhibit 4-182 to Form 10-K for year ended December 31, 1996 February 29, 1992 Exhibit 4-187 to form 10-Q for quarter ended March 31, 1998 April 15, 1992 Exhibit 4-188 for quarter ended March 31, 1998 July 15, 1992 Exhibit 4-189 for quarter ended March 31, 1998 July 31, 1992 Exhibit 4-190 for quarter ended March 31, 1998 November 30, 1992 Exhibit 4-130 to Registration No. 33-56496 January 1, 1993 Exhibit 4-131 to Registration No. 33-56496 March 1, 1993 Exhibit 4-191 to form 10-Q for quarter ended March 31, 1998 March 15, 1993 Exhibit 4-192 to Form 10-Q for quarter ended March 31, 1998 April 1, 1993 Exhibit 4-143 to Form 10-Q for quarter ended March 31, 1993 April 26, 1993 Exhibit 4-144 to Form 10-Q for quarter ended March 31, 1993 May 31, 1993 Exhibit 4-148 to Registration No. 33-64296 June 30, 1993 Exhibit 4-149 to Form 10-Q for quarter ended June 30, 1993 (1993 Series AP) June 30, 1993 Exhibit 4-150 to Form 10-Q for quarter ended June 30, 1993 (1993 Series H) 30 31 September 15, 1993 Exhibit 4-158 to Form 10-Q for quarter ended September 30, 1993 March 1, 1994 Exhibit 4-163 to Registration No. 33-53207 June 15, 1994 Exhibit 4-166 to Form 10-Q for quarter ended June 30, 1994 August 15, 1994 Exhibit 4-168 to Form 10-Q for quarter ended September 30, 1994 December 1, 1994 Exhibit 4-169 to Form 10-K for year ended December 31, 1994 August 1, 1995 Exhibit 4-174 to Form 10-Q for quarter ended September 30, 1995 4(b)- Collateral Trust Indenture (notes), dated as of June 30, 1993 (Exhibit 4-152 to Registration No. 33-50325). 4(c)- First Supplemental Note Indenture, dated as of June 30, 1993 (Exhibit 4-153 to Registration No. 33-50325). 4(d)- Second Supplemental Note Indenture, dated as of September 15, 1993 (Exhibit 4-159 to Form 10-Q for quarter ended September 30, 1993). 4(e)- First Amendment, dated as of August 15, 1996, to Second Supplemental Note Indenture (Exhibit 4-17 to Form 10-Q for quarter ended September 30, 1996). 4(f)- Third Supplemental Note Indenture, dated as of August 15, 1994 (Exhibit 4-169 to Form 10-Q for quarter ended September 30, 1994). 4(g)- First Amendment, dated as of December 12, 1995, to Third Supplemental Note Indenture, dated as of August 15, 1994 (Exhibit 4-12 to Registration No. 333-00023). 4(h)- Fourth Supplemental Note Indenture, dated as of August 15, 1995 (Exhibit 4-175 to Detroit Edison Form 10-Q for quarter ended September 30, 1995). 4(i)- Fifth Supplemental Note Indenture, dated as of February 1, 1996 (Exhibit 4-14 to Form 10-K for year ended December 31, 1996). 31 32 4(j)- Sixth Supplemental Note Indenture, dated as of May 1, 1998, between Detroit Edison and Bankers Trust Company, as Trustee, creating the 7.54% Quarterly Income Debt Securities ("QUIDS"), including form of QUIDS. (Exhibit 4-193 to Form 10-Q for quarter ended June 30, 1998). 4(k)- Standby Note Purchase Credit Facility, dated as of August 17, 1994, among The Detroit Edison Company, Barclays Bank PLC, as Bank and Administrative Agent, Bank of America, The Bank of New York, The Fuji Bank Limited, The Long-Term Credit Bank of Japan, LTD, Union Bank and Citicorp Securities, Inc. and First Chicago Capital Markets, Inc. as Remarketing Agents (Exhibit 99-18 to Form 10-Q for quarter ended September 30, 1994). 99(a)- Belle River Participation Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982 (Exhibit 28-5 to Registration No. 2-81501). 99(b)- Belle River Transmission Ownership and Operating Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982 (Exhibit 28-6 to Registration No. 2-81501). 99(c)- 1988 Amended and Restated Loan Agreement, dated as of October 4, 1988, between Renaissance Energy Company (an unaffiliated company) ("Renaissance") and Detroit Edison (Exhibit 99-6 to Registration No. 33-50325). 99(d)- First Amendment to 1988 Amended and Restated Loan Agreement, dated as of February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-7 to Registration No. 33-50325). 99(e)- Second Amendment to 1988 Amended and Restated Loan Agreement, dated as of September 1, 1993, between Detroit Edison and Renaissance (Exhibit 99-8 to Registration No. 33-50325). 99(f)- Third Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Loan Agreement between Detroit Edison and Renaissance. (Exhibit 99-22 to Form 10-Q for quarter ended September 30, 1997). 32 33 99(g)- $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank PLC, New York Branch, as Agent (Exhibit 99-12 to Registration No. 33-50325). 99(h)- First Amendment, dated as of August 31, 1994, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, among The Detroit Edison Company, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-19 to Form 10-Q for quarter ended September 30, 1994). 99(i)- Third Amendment, dated as of March 8, 1996, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-11 to Form 10-Q for quarter ended March 31, 1996). 99(j)- Fourth Amendment, dated as of August 29, 1996, to $200,000,000 364-Day Credit Agreement dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Form 10-Q for quarter ended September 30, 1996). 99(k)- Fifth Amendment, dated as of August 28, 1997 to $200,000,000 364-Day Credit Agreement, dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-25 to Form 10-Q for quarter ended September 30, 1997). 99(l)- Sixth Amendment dated as of August 27, 1998, to $200,000,000 364-Day Credit Agreement dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-32 Registration Statement No. 333-65765). 99(m)- $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Registration No. 33-50325). 33 34 99(n)- First Amendment, dated as of September 1, 1994, to $200,000,000 Three-Year Credit Agreement, dated as of September 1, 1993, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-20 to Form 10-Q for quarter ended September 30, 1994). 99(o)- Third Amendment, dated as of March 8, 1996, to $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-12 to Form 10-Q for quarter ended March 31, 1996). 99(p)- Fourth Amendment, dated as of September 1, 1996, to $200,000,000 Multi-Year (formerly Three-Year) Credit Agreement, dated as of September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-14 to Form 10-Q for quarter ended September 30, 1996). 99(q)- Fifth Amendment, dated as of August 28, 1997, to $200,000,000 Multi-Year Credit Agreement, dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-24 to Form 10-Q for quarter ended September 30, 1997). 99(r)- 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between Detroit Edison and Renaissance (Exhibit 99-9 to Registration No. 33-50325). 99(s)- First Amendment to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated as of February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-10 to Registration No. 33-50325). 99(t)- Second Amendment, dated as of September 1, 1993, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract between Detroit Edison and Renaissance (Exhibit 99-11 to Registration No. 33-50325). 34 35 99(u)- Third Amendment, dated as of August 31, 1994, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between Detroit Edison and Renaissance (Exhibit 99-21 to Form 10-Q for quarter ended September 30, 1994). 99(v)- Fourth Amendment, dated as of March 8, 1996, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract Agreement, dated as of October 4, 1988, between Detroit Edison and Renaissance (Exhibit 99-10 to Form 10-Q for quarter ended March 31, 1996). 99(w)- Sixth Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract between Detroit Edison and Renaissance. (Exhibit 99-23 to Form 10-Q for quarter ended September 30, 1997). 99(x)- Standby Note Purchase Credit Facility, dated as of September 12, 1997, among Detroit Edison and the Bank's Signatory thereto and The Chase Manhattan Bank, as Administrative Agent, and Citicorp Securities, Inc., Lehman Brokers, Inc., as Remarketing Agents and Chase Securities, Inc. as Arranger. (Exhibit 999-26 to Form 10-Q for quarter ended September 30, 1997). 99(y)- Amended and Restated Credit Agreement, Dated as of January 21, 1998 among DTE Capital Corporation, the Initial Lenders, Citibank, N.A., as Agent, and Barclays Bank PLC, New York Branch and The First National Bank of Chicago, as Co-Agents, and Citicorp Securities, Inc., as Arranger. 99(z)- $60,000,000 Support Agreement dated as of January 21, 1998 between DTE Energy Company and DTE Capital Corporation. 99(aa)- $400,000,000 Support Agreement, dated as of January 21, 1998, between DTE Energy Company and DTE Capital Corporation. 99(bb)- $100,000,000 Support Agreement, dated as of June 16, 1998 between DTE Energy Company and DTE Capital Corporation. (Exhibit 4-194 to Form 10-Q for quarter ended June 30, 1998). 35 36 99(cc)- Indenture, dated as of June 15, 1998, between DTE Capital Corporation and The Bank of New York, as Trustee. (Exhibit 4-196 to Form 10-Q for quarter ended June 30, 1998). 99(dd)- First Supplemental Indenture, dated as of June 15, 1998, between DTE Capital Corporation and The Bank of New York, as Trustee, creating the $100,000,000 Remarketed Notes, Series A due 2038, including form of Note. (Exhibit 4-197 to Form 10-Q for quarter ended June 30, 1998). (b) Registrants filed a report on Form 8-K dated October 14, 1998 discussing an increase in the Fermi 2 capacity factor performance standard liability. 36 37 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DTE ENERGY COMPANY -------------------------------------- (Registrant) Date October 28, 1998 /s/ SUSAN M. BEALE ---------------- -------------------------------------- Susan M. Beale Vice President and Corporate Secretary Date October 28, 1998 /s/ DAVID E. MEADOR ---------------- -------------------------------------- David E. Meador Vice President and Controller 37 38 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE DETROIT EDISON COMPANY -------------------------------------- (Registrant) Date October 28, 1998 /s/ SUSAN M. BEALE ---------------- --------------------------------------- Susan M. Beale Vice President and Corporate Secretary Date October 28, 1998 /s/ DAVID E. MEADOR ---------------- --------------------------------------- David E. Meador Vice President and Controller 38 39 QUARTERLY REPORTS ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998 DTE ENERGY COMPANY File No. 1-11607 DETROIT EDISON COMPANY File No. 1-2198 EXHIBIT INDEX Exhibits filed herewith. Exhibit Number ------- 11-13- DTE Energy Company Basic and Diluted Earnings Per Share of Common Stock. 12-13- The Detroit Edison Company Computation of Ratio of Earnings to Fixed Charges. 15-9 - Awareness Letter of Deloitte & Touche LLP regarding their report dated October 28, 1998. 27-23- Financial Data Schedule for the period ended September 30, 1998 for DTE Energy Company. 27-24- Financial Data Schedule for the period ended September 30, 1998 for The Detroit Edison Company. Exhibits incorporated herein by reference. See Page No. ___ through ___ for location of exhibits incorporated by reference 3(a)- Amended and Restated Articles of Incorporation of DTE Energy Company, dated December 13, 1995. 3(b)- Certificate of Designation of Series A Junior Participating Preferred Stock of DTE Energy Company. 40 3(c) - Restated Articles of Incorporation of Detroit Edison, as filed December 10, 1991 with the State of Michigan, Department of Commerce-Corporation and Securities Bureau. 3(d) - Certificate containing resolution of the Detroit Edison Board of Directors establishing the Cumulative Preferred Stock, 7.75% Series as filed February 22, 1993 with the State of Michigan, Department of Commerce-Corporation and Securities Bureau. 3(e) - Certificate containing resolution of the Detroit Edison Board of Directors establishing the Cumulative Preferred Stock, 7.74% Series, as filed April 21, 1993 with the State of Michigan, Department of Commerce-Corporation and Securities Bureau. 3(f) - Rights Agreement, dated as of September 23, 1997, by and between DTE Energy Company and The Detroit Edison Company, as Rights Agent. 3(g) - Agreement and Plan of Exchange. 4(a) - Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison and Bankers Trust Company as Trustee and indentures supplemental thereto, dated as of dates indicated below: September 1, 1947 October 1, 1968 November 15, 1971 January 15, 1973 June 1, 1978 June 30, 1982 August 15, 1982 October 15, 1985 July 15, 1989 December 1, 1989 February 15, 1990 April 1, 1991 May 1, 1991 May 15, 1991 September 1, 1991 November 1, 1991 January 15, 1992 February 29, 1992 April 15, 1992 July 15, 1992 July 31, 1992 41 November 30, 1992 January 1, 1993 March 1, 1993 March 15, 1993 April 1, 1993 April 26, 1993 May 31, 1993 June 30, 1993 June 30, 1993 September 15, 1993 March 1, 1994 June 15, 1994 August 15, 1994 December 1, 1994 August 1, 1995 4(b) - Collateral Trust Indenture (notes), dated as of June 30, 1993. 4(c) - First Supplemental Note Indenture, dated as of June 30, 1993. 4(d) - Second Supplemental Note Indenture, dated as of September 15, 1993. 4(e) - First Amendment, dated as of August 15, 1996, to Second Supplemental Note Indenture. 4(f) - Third Supplemental Note Indenture, dated as of August 15, 1994. 4(g) - First Amendment, dated as of December 12, 1995, to Third Supplemental Note Indenture, dated as of August 15, 1994. 4(h) - Fourth Supplemental Note Indenture, dated as of August 15, 1995. 4(i) - Fifth Supplemental Note Indenture, dated as of February 1, 1996. 4(j) - Sixth Supplemental Note Indenture, dated as of May 1, 1998, between Detroit Edison and Bankers Trust Company, as Trustee, creating the 7.54% Quarterly Income Debt Securities ("QUIDS"), including form of QUIDS. 4(k) - Standby Note Purchase Credit Facility, dated as of August 17, 1994, among The Detroit Edison Company, Barclays Bank PLC, as Bank and Administrative Agent, Bank of 42 America, The Bank of New York, The Fuji Bank Limited, The Long-Term Credit Bank of Japan, LTD, Union Bank and Citicorp Securities, Inc. and First Chicago Capital Markets, Inc. as Remarketing Agents. 99(a) - Belle River Participation Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982. 99(b) - Belle River Transmission Ownership and Operating Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982. 99(c) - 1988 Amended and Restated Loan Agreement, dated as of October 4, 1988, between Renaissance Energy Company (an unaffiliated company) ("Renaissance") and Detroit Edison. 99(d) - First Amendment to 1988 Amended and Restated Loan Agreement, dated as of February 1, 1990, between Detroit Edison and Renaissance. 99(e) - Second Amendment to 1988 Amended and Restated Loan Agreement, dated as of September 1, 1993, between Detroit Edison and Renaissance. 99(f) - Third Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Loan Agreement between Detroit Edison and Renaissance. 99(g) - $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank PLC, New York Branch, as Agent. 99(h) - First Amendment, dated as of August 31, 1994, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, among The Detroit Edison Company, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent. 99(i) - Third Amendment, dated as of March 8, 1996, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent. 43 99(j) - Fourth Amendment, dated as of August 29, 1996, to $200,000,000 364-Day Credit Agreement dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent. 99(k) - Fifth Amendment, dated as of August 28, 1997 to $200,000,000 364-Day Credit Agreement, dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. 99(l) - Sixth Amendment dated as of August 27, 1998, to $200,000,000 364-Day Credit Agreement dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank, PLC, New York Branch, as Agent. (Exhibit 99-32 Registration Statement No. 333-65765). 99(m) - $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank, PLC, New York Branch, as Agent. 99(n) - First Amendment, dated as of September 1, 1994, to $200,000,000 Three-Year Credit Agreement, dated as of September 1, 1993, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent. 99(o) - Third Amendment, dated as of March 8, 1996, to $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent. 99(p) - Fourth Amendment, dated as of September 1, 1996, to $200,000,000 Multi-Year (formerly Three-Year) Credit Agreement, dated as of September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent. 99(q) - Fifth Amendment, dated as of August 28, 1997, to $200,000,000 Multi-Year Credit Agreement, dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. 44 99(r) - 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between Detroit Edison and Renaissance. 99(s) - First Amendment to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated as of February 1, 1990, between Detroit Edison and Renaissance. 99(t) - Second Amendment, dated as of September 1, 1993, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract between Detroit Edison and Renaissance. 99(u) - Third Amendment, dated as of August 31, 1994, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between Detroit Edison and Renaissance. 99(v) - Fourth Amendment, dated as of March 8, 1996, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract Agreement, dated as of October 4, 1988, between Detroit Edison and Renaissance. 99(w) - Sixth Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract between Detroit Edison and Renaissance. 99(x) - Standby Note Purchase Credit Facility, dated as of September 12, 1997, among Detroit Edison and the Bank's Signatory thereto and The Chase Manhattan Bank, as Administrative Agent, and Citicorp Securities, Inc., Lehman Brokers, Inc., as Remarketing Agents and Chase Securities, Inc. as Arranger. 99(y) - Amended and Restated Credit Agreement, Dated as of January 21, 1998 among DTE Capital Corporation, the Initial Lenders, Citibank, N.A., as Agent, and Barclays Bank PLC, New York Branch and The First National Bnak of Chicago, as Co-Agents, and Citicorp Securities, Inc., as Arranger. 99(z) - $60,000,000 Support Agreement dated as of January 21, 1998 between DTE Energy Company and DTE Capital Corporation. 99(aa)- $400,000,000 Support Agreement, dated as of January 21, 1998, between DTE Energy Company and DTE Capital Corporation. 45 99(bb)- $100,000,000 Support Agreement, dated as of June 16, 1998 between DTE Energy Company and DTE Capital Corporation. 99(cc)- Indenture, dated as of June 15, 1998, between DTE Capital Corporation and The Bank of New York, as Trustee. 99(dd)- First Supplemental Indenture, dated as of June 15, 1998, between DTE Capital Corporation and The Bank of New York, as Trustee, creating the $100,000,000 Remarketed Notes, Series A due 2038, including form of Note. EX-11.13 2 BASIC & DILUTED EARNINGS PER SHARE OF COMMON STOCK 1 EXHIBIT 11-13 DTE ENERGY COMPANY BASIC AND DILUTED EARNINGS PER SHARE OF COMMON STOCK
Three Months Nine Months Ended Ended September 30, 1998 September 30, 1998 ------------------ ------------------ (Thousands, except per share amounts) BASIC: Net Income......................................$ 132,037 $ 336,637 Weighted average number of common shares outstanding (a)........................ 145,075 145,078 Earnings per share of Common Stock based on weighted average number of shares outstanding.........................$ 0.91 $ 2.32 DILUTED: Net Income......................................$ 132,037 $ 336,637 Weighted average number of common shares outstanding (a)........................ 145,075 145,078 Incremental shares from assumed exercise of options.................................... 116 95 ---------- ----------- 145,191 145,173 ========== =========== Earnings per share of Common Stock assuming exercise of options..................$ 0.91 $ 2.32
- ------------------------------------------------------ (a) Based on a daily average. EX-12.13 3 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12-13 THE DETROIT EDISON COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Nine Months Year Ended December 31 Ended ---------------------- 9/30/98 1997 1996 1995 ------- ---- ---- ---- (Millions, except for ratio) Net income $ 318 $ 417 $ 328 $ 434 -------- ------- ----- ----- Taxes based on income: Current income taxes 216 308 224 221 Deferred taxes - net 24 (6) 16 79 Investment tax credit adjustments - net (11) (14) (15) (17) Municipal and state 3 4 3 3 -------- ------- ----- ----- Total taxes based on income 232 292 228 286 -------- ------- ----- ----- Fixed charges: Interest on long-term debt 192 262 275 275 Amortization of debt discount, premium and expense 8 11 12 11 Other interest 8 9 4 10 Interest factor of rents 26 34 34 29 -------- ------- ----- ------- Total fixed charges 234 316 325 325 -------- ------- ----- ------- Earnings before taxes based on income and fixed charges $ 784 $ 1,025 $ 881 $ 1,045 ======== ======= ===== ======= Ratio of earnings to fixed charges 3.35 3.24 2.71 3.21
EX-15.9 4 AWARENESS LETTER OF DELOITTE & TOUCHE 1 Exhibit 15-9 DTE Energy Company and The Detroit Edison Company Detroit, Michigan We have made reviews, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of DTE Energy Company and subsidiaries and The Detroit Edison Company and subsidiaries for the periods ended September 30, 1998 and 1997, as indicated in our report dated October 28, 1998. Because we did not perform an audit, we expressed no opinion on that information. We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, is incorporated by reference in the following Registration Statements: FORM REGISTRATION NUMBER DTE Energy Company Form S-3 33-57545 Form S-8 333-00023 Form S-8 333-47247 The Detroit Edison Company Form S-3 33-53207 Form S-3 33-64296 Form S-3 333-65765 We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act. DELOITTE & TOUCHE LLP Detroit, Michigan October 28, 1998 EX-27.23 5 ARTICLE 5 FDS (DTE ENERGY)
5 0000936340 DTE ENERGY COMPANY 1,000,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 181 0 629 20 340 1,187 15,994 6,841 11,812 1,482 3,998 0 48 1,951 1,720 11,812 0 3,208 0 2,461 15 0 236 496 159 337 0 0 0 337 2.32 2.32
EX-27.24 6 ARTICLE 5 FDS (DET. EDISON)
5 0000028385 THE DETROIT EDISON COMPANY 1,000,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 16 0 584 20 312 943 15,406 6,814 10,837 1,200 3,512 0 48 1,951 1,547 10,837 0 2,998 0 2,229 13 0 208 548 230 318 0 0 0 318 0 0
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