Acquisitions

9 Months Ended

Sep. 30, 2019

ACQUISITIONS

Electric Segment Acquisition

Effective September 12, 2019, DTE Energy closed on the purchase of an 89 MW renewable energy project located in Michigan from Heritage Sustainable Energy in support of renewable energy goals. Direct transaction costs primarily related to advisory fees were immaterial and are included in Operation and maintenance in DTE Energy's Consolidated Statements of Operations. The consideration paid for the entity acquired was approximately $174 million in cash.

The acquisition was accounted for using the acquisition method of accounting for business combinations. Accordingly, the cost was allocated to the underlying net assets based on their respective fair values as shown below:



	(In millions)
Contract intangibles	$	111
Property, plant, and equipment, net	59
Working capital	4
Total	$	174

The intangible assets recorded pertain to existing customer contracts and were estimated by applying the income approach, based on discounted projected cash flows attributable to the existing agreements. The contract intangible assets are amortized on a straight line basis with useful lives ranging from 11 years to 14 years, which is based on the remaining number of years the assets are expected to economically contribute to the business. The pro forma financial information has not been presented for DTE Energy because the effects of the acquisition were not material to the Consolidated Statements of Operations.

Concurrent with the above acquisition, DTE Energy entered into a separate purchase and sale agreement with Heritage Sustainable Energy to acquire an additional renewable energy project for approximately $30 million. This transaction is expected to close in early January 2020.

Gas Storage and Pipelines Segment Acquisition

Effective September 20, 2019, NEXUS closed on the purchase of Generation Pipeline, LLC, a pipeline system regulated by the Public Utilities Commission of Ohio. The 23-mile pipeline system supplies gas to industrial customers in the Toledo, OH area, has existing interconnects with ANR Pipeline Company and Panhandle Eastern Pipeline Company, and is located four miles from NEXUS. Total consideration paid for the acquired entity was approximately $163 million, of which DTE Energy's portion was 50%. DTE Energy accounts for its ownership interest in NEXUS under the equity method, which will now include equity in earnings related to Generation Pipeline, LLC.