8-KFinancial EventsRegulation FDExhibits & Filings

DTE ENERGY CO 8-K Report, Exit or Disposal Costs (Dec 17, 2015)

Filed December 17, 2015For Securities:DTEDTKDTBDTGDTW

Summary

DTE Energy Company (DTE) announced via an 8-K filing on December 17, 2015, the closure of its Shenango Incorporated coke battery plant in Pittsburgh, PA. This strategic decision is driven by a sharp downturn in the North American steel industry and aims to optimize coke production at a larger, more efficient facility. The closure will impact 173 employees and is expected to result in a one-time, after-tax charge of approximately $60 million in 2015, primarily from fixed asset write-offs. Despite the operational restructuring and associated charges, DTE Energy is reaffirming its 2015 operating earnings guidance of $4.65 - $4.91 per share and provided an early outlook for 2016 operating earnings guidance of $4.80 - $5.05 per share. Investors should note that these guidance figures are based on operating earnings and may exclude certain items that will impact reported earnings, with reconciliations not being provided due to the unpredictability of these items.

Key Highlights

  • 1DTE Energy is closing its Shenango Incorporated coke battery plant in Pittsburgh, PA, in mid-January 2016 due to industry downturn.
  • 2The closure is expected to incur approximately $60 million in one-time, after-tax charges in 2015, including $55 million for fixed asset write-offs.
  • 3Approximately $6 million of the total charges will be cash outflows.
  • 4173 employees will be affected by the plant closure.
  • 5DTE Energy is reaffirming its 2015 operating earnings guidance of $4.65 - $4.91 per share.
  • 6The company provided its 2016 early outlook operating earnings guidance of $4.80 - $5.05 per share.
  • 7Guidance figures are for operating earnings and may exclude items impacting reported earnings, with no reconciliation provided.

Frequently Asked Questions

DTE Energy is closing the Shenango Incorporated coke battery plant in Pittsburgh, PA, in response to a sharp downturn in the North American steel industry. The closure is intended to optimize coke production at the company's larger and more efficient facility.

DTE Energy expects to incur a one-time, nonrecurring charge of approximately $60 million after tax in 2015. This includes $55 million for fixed asset write-offs, $3 million for employee severance, and $2 million for other expenses. Of this total, about $6 million is expected to be a cash charge.

Yes, DTE Energy is reaffirming its 2015 operating earnings guidance of $4.65 - $4.91 per share. The company also provided an early outlook for 2016 operating earnings guidance of $4.80 - $5.05 per share.

The guidance provided is for operating earnings and may exclude certain items that impact reported earnings. While the $60 million charge is a significant event, the company is presenting its outlook based on operating performance, and reconciliations for excluded items are not provided.