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Long-Term Debt
 12 Months Ended
Dec. 31, 2019
Long-term Debt, Unclassified [Abstract]  
Long-Term Debt 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
 
2019
 
2018
 
 
 
 
 
(In millions)
Mortgage bonds, notes, and other
 
 
 
 
 
 
 
DTE Energy Debt, Unsecured
3.2%
 
2022 — 2033
 
$
6,625

 
$
4,425

DTE Electric Taxable Debt, Principally Secured
4.2%
 
2020 — 2049
 
6,930

 
6,280

DTE Electric Tax-Exempt Revenue Bonds(b)
4.3%
 
2020 — 2030
 
310

 
310

DTE Gas Taxable Debt, Principally Secured
4.3%
 
2020 — 2049
 
1,710

 
1,550

Other Long-Term Debt, including Non-Recourse Debt
 
 
 
 
—

 
1

 
 
 
 
 
15,575

 
12,566

Unamortized debt discount
 
 
 
 
(24
)
 
(16
)
Unamortized debt issuance costs
 
 
 
 
(91
)
 
(73
)
Long-term debt due within one year
 
 
 
 
(682
)
 
(1,495
)
 
 
 
 
 
$
14,778

 
$
10,982

Junior Subordinated Debentures
 
 
 
 
 
 
 
Subordinated Debentures
5.5%
 
2062 — 2077
 
$
1,180

 
$
1,180

Unamortized debt issuance costs
 
 
 
 
(34
)
 
(35
)
 
 
 
 
 
$
1,146

 
$
1,145


_______________________________________
(a)
Weighted average interest rate as of December 31, 2019.
(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
 
2019
 
2018
 
 
 
 
 
(In millions)
Mortgage bonds, notes, and other
 
 
 
 
 
 
 
Taxable Debt, Principally Secured
4.2%
 
2020 — 2049
 
$
6,930

 
$
6,280

Tax-Exempt Revenue Bonds(b)
4.3%
 
2020 — 2030
 
310

 
310

 
 
 
 
 
7,240

 
6,590

Unamortized debt discount
 
 
 
 
(15
)
 
(11
)
Unamortized debt issuance costs
 
 
 
 
(45
)
 
(41
)
Long-term debt due within one year
 
 
 
 
(632
)
 
—

 
 
 
 
 
$
6,548

 
$
6,538

_______________________________________
(a)
Weighted average interest rate as of December 31, 2019.
(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 2019, the following debt was issued:
Company
 
Month
 
Type
 
Interest Rate
 
Maturity Date
 
Amount
 
 
 
 
 
 
 
 
 
 
(In millions)
DTE Electric
 
February
 
Mortgage Bonds(a)
 
3.95%
 
2049
 
$
650

DTE Energy
 
June
 
Senior Notes(b)
 
2.60%
 
2022
 
300

DTE Energy
 
June
 
Senior Notes(b)
 
3.40%
 
2029
 
500

DTE Gas
 
October
 
Mortgage Bonds(b)
 
2.95%
 
2029
 
140

DTE Gas
 
October
 
Mortgage Bonds(b)
 
3.72%
 
2049
 
140

DTE Energy
 
November
 
Senior Notes(c)
 
2.25%
 
2022
 
500

DTE Energy
 
November
 
Senior Notes(c)
 
2.95%
 
2030
 
300

DTE Energy
 
November
 
Equity Units(c)
 
(d)
 
2025
 
1,300

 
 
 
 
 
 
 
 
 
 
$
3,830


_______________________________________
(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.
(c)
Proceeds were used to pay a portion of the purchase price of the Blue Union and LEAP acquisition. Refer to "Acquisition Financing" below for additional information.
(d)
See "Acquisition Financing" below for more information regarding the rates associated with the Equity Units.
Debt Redemptions
In 2019, the following debt was redeemed:
Company
 
Month
 
Type
 
Interest Rate
 
Maturity Date
 
Amount
 
 
 
 
 
 
 
 
 
 
(In millions)
DTE Energy
 
October
 
Senior Notes
 
1.50%
 
2019
 
$
400

DTE Gas
 
October
 
Senior Notes
 
5.00%
 
2019
 
120

DTE Energy
 
December
 
Senior Notes
 
2.40%
 
2019
 
300

DTE Energy
 
Various
 
Other long-term debt
 
Various
 
2019
 
1

 
 
 
 
 
 
 
 
 
 
$
821


The following table shows the Registrants' scheduled debt maturities, excluding any unamortized discount on debt:
 
2020
 
2021
 
2022
 
2023
 
2024
 
2025 and Thereafter
 
Total
 
(In millions)
DTE Energy(a)
$
682

 
$
462

 
$
2,716

 
$
1,177

 
$
1,425

 
$
10,293

 
$
16,755

DTE Electric
$
632

 
$
462

 
$
316

 
$
202

 
$
400

 
$
5,228

 
$
7,240


_______________________________________
(a)
Amounts include DTE Electric's scheduled debt maturities.
In January 2020, DTE Electric sent notice to optionally redeem its $300 million 2010 Series A 4.89% Senior Notes due September 2020.  The notes are expected to be redeemed in March 2020.
Junior Subordinated Debentures
DTE Energy has the right to defer interest payments on the Junior Subordinated Debentures. 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, 2019, no interest payments have been deferred on the Junior Subordinated Debentures.
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.
2016 Acquisition Senior Notes Remarketing
In October 2016, DTE Energy issued $675 million of 2016 Equity Units, initially in the form of Corporate Units. The Corporate Units were listed on the New York Stock Exchange under the symbol DTV. Each Corporate Unit consisted of a stock purchase contract and a 1/20 interest in a RSN issued by DTE Energy. The stock purchase contract obligated the holders to purchase shares of DTE Energy's common stock at a future settlement date. The purchase price under the stock purchase contracts was $50 per Corporate Unit and the number of shares purchased was determined by a formula based upon the average closing price of DTE Energy common stock near the settlement date. The RSNs were pledged as collateral to secure the purchase of common stock under the related stock purchase contracts.
In August 2019, DTE Energy remarketed the $675 million 2016 Series C 1.5% RSNs due 2024 pursuant to the terms of the 2016 Equity Units. As a result of the remarketing, the interest rate was reset to 2.529%, payable semi-annually at the new rate beginning October 1, 2019. DTE Energy did not receive any proceeds from the remarketing. All proceeds belonged to the investors holding the related 2016 Equity Units and were temporarily used to purchase a portfolio of treasury securities. The securities were released on behalf of investors on October 1, 2019 to satisfy the related stock purchase contracts and pay the purchase price to DTE Energy for the issuance of approximately 5.87 million shares of common stock.
Gas Storage and Pipelines Segment Acquisition Financing
In December 2019, DTE Energy closed on the purchase of midstream natural gas assets. The acquisition was financed through the issuance of Equity Units, Senior Notes, and common stock. For information on the common stock issuance, refer to Note 12 to the Consolidated Financial Statements, "Common Stock and Earnings Per Share."
In November 2019, DTE issued $1.3 billion of 2019 Equity Units. Each Equity Unit has a stated amount of $50 and was initially issued in the form of a Corporate Unit, 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 2019 Series F 2.25% RSNs due 2025. 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 DTP.
The stock purchase contract obligates the holder to purchase from DTE Energy on the settlement date, November 1, 2022, 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 $157.50, 0.3175 shares of common stock;
•
if the AMV is less than $157.50 but greater than $126.00, a number of shares of common stock equal to $50 divided by the AMV; and
•
if the AMV is less than or equal to $126.00, 0.3968 shares of common stock.
The RSNs bear interest at a rate of 2.25% per year, payable quarterly, and mature on November 1, 2025. The RSNs will be remarketed in 2022. 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.
DTE Energy will also pay the stock purchase contract holders quarterly contract adjustment payments at a rate of 4% per year of the stated amount of $50 per Equity Unit, or $2 per year, commencing on February 1, 2020. The present value of the future contract adjustment payments of $150 million is 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 will be 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 $157.50 (the threshold appreciation price). 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 8.3 million and 10.3 million shares of its common stock in November 2022. A total of 13 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 2019 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
 
RSN Maturity Date
(In millions, except interest rates)
11/1/19
 
26
 
$
1,268

 
$
1,300

 
2.25%
 
4.0%
 
11/1/2022
 
$
150

 
11/1/2025

In November 2019, DTE Energy issued $500 million of 2019 Series G 2.25% Senior Notes due 2022 and $300 million of Series H 2.95% Senior Notes due 2030. The proceeds from the Senior Notes were used for the acquisition.