SIGNIFICANT ACCOUNTING POLICIES

Other Income

Other income for the Registrants is recognized for non-operating income such as equity earnings, allowance for equity funds used during construction, and contract services. DTE Energy's Power & 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 is considered earned when refined coal is produced and tax credits are generated. Power & Industrial Projects recognized approximately $24 million and $25 million of Other income for the three months ended September 30, 2015 and 2014, respectively, and approximately $64 million and $57 million of Other income for the nine months ended September 30, 2015 and 2014, respectively.

Changes in Accumulated Other Comprehensive Income (Loss)

For the three and nine months ended September 30, 2015 and 2014, reclassifications out of Accumulated other comprehensive income (loss) for the Registrants were not material. Refer to Note 13 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets", regarding the transfer of a portion of DTE Electric benefit obligations during the year. 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.

Intangible Assets

DTE Energy has certain intangible assets relating to emission allowances, renewable energy credits and non-utility contracts as shown below:



	September 30,		December 31,
	2015		2014
	(In millions)
Emission allowances	$	1	$	1
Renewable energy credits	49		45
Contract intangible assets	109		122
	159		168
Less accumulated amortization	59		57
Intangible assets, net	100		111
Less current intangible assets	11		9
	$	89	$	102

DTE Electric has certain intangible assets relating to emission allowances and renewable energy credits as shown below:



	September 30,		December 31,
	2015		2014
	(In millions)
Emission allowances	$	1	$	1
Renewable energy credits	49		45
	50		46
Less current intangible assets	11		9
	$	39	$	37

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 businesses by the Registrants. DTE Energy amortizes contract intangible assets on a straight-line basis over the expected period of benefit, ranging from 1 to 26 years.

Income Taxes

The effective tax rate and unrecognized tax benefits of the Registrants are as follows:



	Effective Tax Rate								Unrecognized Tax Benefits
	Three Months Ended September 30,				Nine Months Ended September 30,				September 30,
	2015		2014		2015		2014		2015
									(In millions)
DTE Energy	28	%	12	%	28	%	27	%	$	3
DTE Electric	35	%	36	%	35	%	36	%	$	4

The increase in DTE Energy's effective tax rate for the three months ended September 30, 2015 is primarily due to higher annual forecasted production tax credits in 2014 as compared to 2015.

The increase in DTE Energy's effective tax rate for the nine months ended September 30, 2015 is primarily due to lower production tax credits partially offset by the inclusion in 2014 of $8 million of deferred tax expense resulting from the New York state income tax reform enacted on March 31, 2014.

The decrease in DTE Electric's effective tax rate for the three and nine months ended September 30, 2015 is due primarily to higher production tax credits in 2015.

If recognized, $2 million of the unrecognized tax benefits of the Registrants would favorably impact their effective tax rates. During the 2015 third quarter, there was a decrease of $6 million of unrecognized tax benefits at DTE Energy due to the expiration of statute of limitations. The $6 million decrease did not impact tax expense because the unrecognized tax benefit was offset by a net operating loss. The Registrants do not anticipate any material changes to the unrecognized tax benefits in the next twelve months.

DTE Electric had income tax receivables with DTE Energy of $68 million and $29 million at September 30, 2015 and December 31, 2014, respectively.