LONG-TERM DEBT

Long-Term Debt

DTE Energy's long-term debt outstanding and weighted average interest rates of debt outstanding at December 31 were:



	Interest Rate^(a)	Maturity Date	2018			2017
			(In millions)
Mortgage bonds, notes, and other
DTE Energy Debt, Unsecured	3.2%	2019 — 2033	$	4,425		$	3,825
DTE Electric Taxable Debt, Principally Secured	4.3%	2020 — 2048	6,280			5,755
DTE Electric Tax-Exempt Revenue Bonds^(b)	4.3%	2020 — 2030	310			310
DTE Gas Taxable Debt, Principally Secured	4.5%	2019 — 2048	1,550			1,330
Other Long-Term Debt, including Non-Recourse Debt			1			7
			12,566			11,227
Unamortized debt discount and premium, net			(16		)	(15		)
Unamortized debt issuance costs			(73		)	(69		)
Long-term debt due within one year			(1,495		)	(104		)
			$	10,982		$	11,039
Junior Subordinated Debentures
Subordinated Debentures	5.5%	2062 — 2077	$	1,180		$	1,180
Unamortized debt issuance costs			(35		)	(35		)
			$	1,145		$	1,145

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(a)	Weighted average interest rate as of December 31, 2018.


(b)	DTE Electric Tax-Exempt Revenue Bonds are issued by a public body that loans the proceeds to DTE Electric on terms substantially mirroring the Revenue Bonds.

DTE Electric's long-term debt outstanding and weighted average interest rates of debt outstanding at December 31 were:



	Interest Rate^(a)	Maturity Date	2018			2017
			(In millions)
Mortgage bonds, notes, and other
Taxable Debt, Principally Secured	4.3%	2020 — 2048	$	6,280		$	5,755
Tax-Exempt Revenue Bonds^(b)	4.3%	2020 — 2030	310			310
			6,590			6,065
Unamortized debt discount			(11		)	(10		)
Unamortized debt issuance costs			(41		)	(38		)
			$	6,538		$	6,017

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(a)	Weighted average interest rate as of December 31, 2018.


(b)	Tax-Exempt Revenue Bonds are issued by a public body that loans the proceeds to DTE Electric on terms substantially mirroring the Revenue Bonds.

Debt Issuances

In 2018, the following debt was issued:



Company	Month	Type	Interest Rate	Maturity Date	Amount
					(In millions)
DTE Electric	May	Mortgage Bonds^(a)	4.05%	2048	$	525
DTE Energy	August	Senior Notes^(b)	3.70%	2023	600
DTE Gas	August	Mortgage Bonds^(b)	3.81%	2028	195
DTE Gas	August	Mortgage Bonds^(b)	4.14%	2048	125
					$	1,445

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(a)	Bonds were issued as Green Bonds and the proceeds will be used to finance expenditures for solar and wind energy, payments under power purchase agreements for solar and wind energy, and energy optimization programs.


(b)	Proceeds were used for the repayment of short-term borrowings and general corporate purposes.

Debt Redemptions

In 2018, the following debt was redeemed:

Company

Month

Type

Interest Rate

Maturity Date

Amount

(In millions)

DTE Gas

April

Senior Notes

6.04%

2018

100

DTE Energy

Various

Other Long-Term Debt

Various

2018

105

The following table shows the Registrants' scheduled debt maturities, excluding any unamortized discount or premium on debt:



	2019		2020		2021		2022		2023		2024 and Thereafter		Total
	(In millions)
DTE Energy^(a)	$	1,495	$	682	$	462	$	616	$	1,177	$	9,314	$	13,746
DTE Electric	$	—	$	632	$	462	$	316	$	202	$	4,978	$	6,590

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(a)	Amounts include DTE Electric's scheduled debt maturities.

Junior Subordinated Debentures

At December 31, 2018, DTE Energy had the following Junior Subordinated Debentures:



	Interest Rate	Maturity Date	Amount
			(In millions)
2012 Series C	5.25%	2062	$	200
2016 Series B	5.375%	2076	300
2016 Series F	6.00%	2076	280
2017 Series E	5.25%	2077	400
			$	1,180

DTE Energy has the right to defer interest payments on the debt securities. Should DTE Energy exercise this right, it cannot declare or pay dividends on, or redeem, purchase or acquire, any of its capital stock during the deferral period. Any deferred interest payments will bear additional interest at the rate associated with the related debt issue. As of December 31, 2018, no interest payments have been deferred on the debt securities.

Cross Default Provisions

Substantially all of the net utility properties of DTE Electric and DTE Gas are subject to the lien of mortgages. Should DTE Electric or DTE Gas fail to timely pay their indebtedness under these mortgages, such failure may create cross defaults in the indebtedness of DTE Energy.

Acquisition Financing

Effective October 1, 2016, DTE Energy closed on the purchase of midstream natural gas assets. DTE Energy purchased 100% of AGS, located in Pennsylvania and West Virginia, and 40% of SGG, located in West Virginia, from M3 Midstream. In addition, DTE Energy purchased 15% of SGG from Vega Energy Partners, resulting in 55% total ownership of SGG by DTE Energy. The acquisition was financed through the issuance of Equity Units and Senior Notes.

In October 2016, DTE issued $675 million of Equity Units. Each Equity Unit has a stated amount of $50, initially in the form of a Corporate Unit, is comprised of (i) a forward purchase contract to buy DTE Energy common stock (stock purchase contract) and (ii) a 1/20 undivided beneficial ownership interest in $1,000 principal amount of DTE Energy’s 2016 Series C 1.5% RSNs due 2024. The RSN debt instruments and the stock purchase contract equity instruments are deemed to be separate instruments as the investor may trade the RSNs separately from the stock purchase contracts and may also settle the stock purchase contracts separately. The Corporate Units are listed on the New York Stock Exchange under the symbol DTV.

The stock purchase contract obligates the holder to purchase from DTE Energy on the settlement date, October 1, 2019, for a price of $50 per stock purchase contract, the following number of shares of DTE Energy’s common stock, subject to anti-dilution adjustments:


•	if the AMV of DTE Energy’s common stock, which is the average volume-weighted average price of DTE Energy’s common stock for the trading days during the 20 consecutive scheduled trading day period ending on the third scheduled trading day immediately preceding the stock purchase contract settlement date, is equal to or greater than $116.31, 0.4299 shares of common stock;


•	if the AMV is less than $116.31 but greater than $93.05, a number of shares of common stock equal to $50 divided by the AMV, rounded to the nearest 1/10,000th of a share; and


•	if the AMV is less than or equal to $93.05, 0.5373 shares of common stock.

The RSNs bear interest at a rate of 1.5% per year, payable quarterly, and mature on October 1, 2024. The RSNs will be remarketed in 2019. If this remarketing is successful, the interest rate on the RSNs will be reset, and thereafter interest will be payable semi-annually at the reset rate. If there is no successful remarketing, the interest rate on the RSNs will not be reset, and the holders of the RSNs will have the right to put the RSNs to DTE Energy at a price equal to 100% of the principal amount, and the proceeds of the put right will be deemed to have been applied against the holders’ obligation under the stock purchase contracts. DTE Energy may also redeem, in whole or in part, the RSNs in the event of a failed final remarketing.

On January 1, 2017, DTE Energy began paying the stock purchase contract holders quarterly contract adjustment payments at a rate of 5% per year of the stated amount of $50 per Equity Unit, or $2.50 per year. The present value of the future contract adjustment payments of $98 million was recorded as a reduction of shareholders’ equity, offset by the stock purchase contract liability. The stock purchase contract liability is included in Current Liabilities — Other and Other Liabilities — Other on DTE Energy’s Consolidated Statements of Financial Position. Interest payments on the RSNs are recorded as interest expense and stock purchase contract payments are charged against the liability. Accretion of the stock purchase contract liability is recorded as imputed interest expense. The treasury stock method is used to compute diluted EPS for the stock purchase contract. Under the treasury stock method, the stock purchase contract will only have a dilutive effect when the settlement rate is based on the market value of DTE’s common stock that is greater than $116.31 (the threshold appreciation price). At December 31, 2018, the stock purchase price contract was anti-dilutive and, therefore, not included in the computation of diluted earnings per share. If payments for the stock purchase contract are deferred, DTE Energy may not make any cash distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments. Also, during the deferral period, DTE Energy may not make any payments on or redeem or repurchase any debt securities that are equal in right of payment with, or subordinated to, the RSNs.

Until settlement of the stock purchase contracts, the shares of stock underlying each contract are not outstanding. Under the terms of the stock purchase contracts, assuming no anti-dilution or other adjustments, DTE Energy will issue between 5.8 million and 7.3 million shares of its common stock in October 2019. A total of 9 million shares of DTE Energy’s common stock have been reserved for issuance in connection with the stock purchase contracts.

Selected information about DTE Energy’s 2016 Equity Units is presented below:



Issuance Date	Units Issued	Total Net Proceeds		Total Long-Term Debt		RSN Annual Interest Rate	Stock Purchase Contract Annual Rate	Stock Purchase Settlement Date	Stock Purchase Contract Liability^(a)		RSN Maturity Date
(In millions, except interest rates)
10/5/2016	13.5	$	654	$	675	1.5%	5.0%	10/1/2019	$	98	10/1/2024

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(a)	Payments of $33 million and $32 million were made in 2018 and 2017, respectively. The stock purchase contract liability, exclusive of interest, was $33 million and $66 million at December 31, 2018 and 2017, respectively.