10-QPeriod: Q3 FY2012

DTE ENERGY CO Quarterly Report for Q3 Ended Sep 30, 2012

Filed October 24, 2012For Securities:DTEDTKDTBDTGDTW

Summary

DTE Energy Company's third quarter 2012 filing shows a notable increase in net income attributable to DTE Energy Company, reaching $227 million ($1.31 per diluted share) compared to $183 million ($1.07 per diluted share) in the same period of 2011. This improvement was primarily driven by stronger performance in the Electric Utility and Power and Industrial Projects segments, partially offset by a decline in the Energy Trading segment. For the nine months ended September 30, 2012, net income was $529 million ($3.08 per diluted share), a decrease from $561 million ($3.30 per diluted share) in the prior year. This year-to-date decrease is largely attributable to a significant income tax benefit recorded in 2011 related to the enactment of the Michigan Business Tax (MBT) credit, which did not recur in 2012. The company's financial position remains stable, with total assets of $25.9 billion and total liabilities and equity of $25.9 billion as of September 30, 2012.

Financial Highlights

49 data points
Beta

Revenue

$2.19B

Net Income

$227.00M

10.4% Net Margin

EPS (Diluted)

$1.31

Total Assets

$25.91B

Cash & Equivalents

$59.00M

Free Cash Flow

$568.00M

Financial Statements
Beta
Revenue$2.19B
Operating Expenses$1.78B
Operating Income$406.00M
Interest Expense$109.00M
Net Income$227.00M
EPS (Basic)$1.32
EPS (Diluted)$1.31
Shares Outstanding (Basic)172.00M
Shares Outstanding (Diluted)172.00M

Key Highlights

  • 1Net income attributable to DTE Energy Company increased by 24% to $227 million in Q3 2012 compared to Q3 2011.
  • 2Diluted earnings per share rose to $1.31 in Q3 2012 from $1.07 in Q3 2011.
  • 3The Electric Utility segment was a key driver of improved quarterly performance, with net income up to $194 million from $157 million.
  • 4The Power and Industrial Projects segment also contributed positively, with net income increasing to $22 million from $12 million.
  • 5Energy Trading segment performance declined, with net income falling to $1 million from $22 million.
  • 6The company's total assets stood at $25.9 billion as of September 30, 2012.
  • 7Capital expenditures for utility businesses are planned to be significant, with Detroit Edison's 2012-2016 estimates at $4 billion for base investments plus environmental and renewable expenditures.

Frequently Asked Questions

The primary reason for the decrease in net income for the nine months ended September 30, 2012, compared to the same period in 2011, is a significant income tax benefit of $88 million recorded in 2011 related to the enactment of the Michigan Business Tax (MBT) credit. This benefit did not recur in 2012.

In the third quarter of 2012, the Electric Utility segment's net income increased to $194 million from $157 million in the prior year's quarter. The Power and Industrial Projects segment also saw an increase, with net income rising to $22 million from $12 million. However, the Energy Trading segment experienced a decline in net income, falling to $1 million from $22 million in the prior year's quarter.

DTE Energy plans significant capital investments in its utility businesses. For Detroit Edison, capital investments over the 2012-2016 period are estimated at $4 billion for base investments, along with an additional $1.3 billion to $1.8 billion for mandated environmental requirements and $900 million for renewable and energy efficiency expenditures. MichCon's capital investments over the same period are estimated at $675 million for base capital investments, plus $250 million for gas main renewal and $115 million for meter move-out programs.

DTE Energy is subject to extensive environmental regulations. The company anticipates continued recovery of environmental costs related to utility operations through customer rates. However, pending or future legislation or regulatory actions regarding climate change could materially impact operations and financial position, potentially requiring expenditures beyond current plans, increasing financing costs, or necessitating the retirement of facilities. The company would seek to recover these incremental costs through customer rates.