DTE Energy Reports Third Quarter 2009 Results; Maintains Updated 2009 Earnings Guidance
October 29 2009 - 5:00PM
PR Newswire (US)
DETROIT, Oct. 29 /PRNewswire-FirstCall/ -- DTE Energy (NYSE:DTE)
today reported third quarter 2009 earnings of $158 million, or
$0.96 per diluted share, compared with $177 million, or $1.08 per
diluted share, in the third quarter of 2008. Operating earnings for
the third quarter 2009 were $157 million, or $0.95 per diluted
share, compared with third quarter 2008 operating earnings of $173
million, or $1.06 per diluted share. Operating earnings exclude
non-recurring items, certain timing-related items and discontinued
operations. Reconciliations of reported earnings to operating
earnings are at the end of this news release. Reported earnings for
the nine months ended Sept. 30, 2009, were $419 million or $2.55
per diluted share, versus $417 million or $2.55 per diluted share
in 2008. Reported earnings in 2008 included $0.50 per share related
to the sale of a portion of the company's Barnett Shale natural gas
property. Year-to-date operating earnings were $427 million or
$2.61 per diluted share, compared with $329 million or $2.00 per
diluted share in 2008. "We are very proud of what we accomplished
this year," said Anthony F. Earley Jr., DTE Energy chairman and
CEO. "Our balance sheet and liquidity remain solid, operational
metrics have improved across the board and we successfully executed
key regulatory proceedings, including implementing renewable energy
and energy optimization plans, and filing rate cases at both
utilities. Continued focus on these priorities, as well as
expanding our continuous improvement efforts, has allowed DTE
Energy to remain financially healthy during these turbulent times.
"We still have work to do, however," Earley added. "Neither of our
utilities will earn their allowed rate of return this year,
although continuous improvement initiatives have allowed them to
perform very well in a difficult environment. Solid performance
from the utilities, coupled with non-utility performance that is
ahead of plan, allowed us to increase our earnings guidance earlier
this month." As previously announced, the company updated earnings
guidance from $2.75 to $3.05 per share to $3.20 to $3.40 per share
at its Oct. 19, 2009, analyst meeting. Third quarter 2009 operating
earnings results, by segment: Utilities Electric Utility: Operating
earnings for Detroit Edison were $0.95 per diluted share versus
$0.98 in 2008. Drivers of the variance were a 7 percent reduction
in sales volume due to the economy and an additional 4 percent
lower sales volume due to cooler weather; partially offset by
December 2008 and July 2009 rate increases, as well as continuous
improvement and one-time cost reductions. Gas Utility: MichCon had
a seasonal operating loss of $0.14 per diluted share, compared with
an operating loss of $0.08 per diluted share in 2008. The
quarter-over-quarter variance is primarily due to increased
benefits, interest and depreciation expenses in 2009 and a tax
refund in 2008. Non-Utilities Gas Midstream: Operating earnings of
$0.08 per diluted share were greater than 2008 operating earnings
of $0.07 per diluted share, primarily due to increased pipeline
revenues. Unconventional Gas Production: This segment had an
operating loss of $0.01 per diluted share, down from third quarter
2008 operating earnings of $0.02 per diluted share. Lower commodity
prices in 2009 were the primary driver of this variance. Power and
Industrial Projects: Operating earnings were $0.04 per diluted
share, compared with operating earnings of $0.15 per diluted share
in 2008. Earnings in 2008 were higher than normal due to higher
coke production and an intercompany interest true-up with Corporate
and Other. Energy Trading: Energy Trading had operating earnings of
$0.04 per diluted share versus operating earnings of $0.10 per
diluted share in the third quarter of 2008. Lower realized gains
were the primary driver of the quarter-over-quarter variance.
Corporate and Other: The Corporate and Other segment had an
operating loss of $0.01 per diluted share compared to the operating
loss of $0.18 per diluted share in the third quarter of 2008.
Driving performance was lower interest and a 2008 intercompany
interest true-up with Power and Industrial Projects. Outlook for
2009 "Continuous improvement efforts at DTE Energy continue to
evolve, mature and accelerate," said David E. Meador, DTE Energy
executive vice-president and chief financial officer. "I am pleased
to report that our continuous improvement initiatives are yielding
substantial and sustainable results. These successful efforts,
coupled with strong earnings from our non-utilities and one-time
tax benefits, resulted in solid year-to-date earnings. "I am also
happy to report that these earnings results were achieved without
compromising on customer service, safety or system reliability,"
Meador added. "The dedicated efforts of our employees toward
maintaining and improving these standards has resulted in increased
reliability at our power plants, safety results that are top decile
in the industry and customer satisfaction that has remained
consistent in tough economic times. Continued focus on these
metrics remains a priority for DTE Energy." Conference call and
webcast information This earnings announcement, as well as a
package of slides and supplemental information, is available at
http://www.dteenergy.com/. DTE Energy plans to conduct a conference
call with the investment community hosted by Meador at 9 a.m. EDT
Friday, Oct. 30, to discuss third quarter earnings results.
Investors, the news media and the public may listen to a live
internet broadcast of the meeting at http://www.dteenergy.com/. The
telephone dial-in numbers are (877) 419-6593 or (719) 325-4887.
There is no passcode. The internet broadcast will be archived on
the company's website. An audio replay of the call will be
available from 11 a.m. Oct. 30 to Nov. 13. To access the replay,
dial (888) 203-1112 or (719) 457-0820 and enter passcode 7542853.
DTE Energy is a Detroit-based diversified energy company involved
in the development and management of energy-related businesses and
services nationwide. Its operating units include Detroit Edison, an
electric utility serving 2.2 million customers in Southeastern
Michigan, MichCon, a natural gas utility serving 1.2 million
customers in Michigan and other non-utility, energy businesses
focused on gas pipelines and storage, coal transportation,
unconventional gas production, and power and industrial projects.
Information about DTE Energy is available at dteenergy.com. Use of
Operating Earnings Information - In this release, DTE Energy
discusses 2009 operating earnings guidance. It is likely that
certain items that impact the company's 2009 reported results will
be excluded from operating results. Reconciliations to the
comparable 2009 reported earnings guidance is not provided because
it is not possible to provide a reliable forecast of specific line
items. These items may fluctuate significantly from period to
period and may have a significant impact on reported earnings. DTE
Energy management believes that operating earnings provide a more
meaningful representation of the company's earnings from ongoing
operations and uses operating earnings as the primary performance
measurement for external communications with analysts and
investors. Internally, DTE Energy uses operating earnings to
measure performance against budget and to report to the Board of
Directors. The information contained herein is as of the date of
this release. DTE Energy expressly disclaims any current intention
to update any forward-looking statements contained in this release
as a result of new information or future events or developments.
Words such as "anticipate," "believe," "expect," "projected" and
"goals" signify forward-looking statements. Forward-looking
statements are not guarantees of future results and conditions but
rather are subject to various assumptions, risks and uncertainties.
This release contains forward-looking statements about DTE Energy's
financial results and estimates of future prospects, and actual
results may differ materially. Many factors may impact
forward-looking statements including, but not limited to, the
following: the length and severity of ongoing economic decline
resulting in lower demand, customer conservation and increased
thefts of electricity and gas; changes in the economic and
financial viability of our customers, suppliers, and trading
counterparties, and the continued ability of such parties to
perform their obligations to the Company; high levels of
uncollectible accounts receivable; access to capital markets and
capital market conditions and the results of other financing
efforts which can be affected by credit agency ratings; instability
in capital markets which could impact availability of short and
long-term financing; potential for continued loss on investments,
including nuclear decommissioning and benefit plan assets and the
related increases in future expense and contributions; the timing
and extent of changes in interest rates; the level of borrowings;
the availability, cost, coverage and terms of insurance and
stability of insurance providers; the effects of weather and other
natural phenomena on operations and sales to customers, and
purchases from suppliers; economic climate and population growth or
decline in the geographic areas where we do business; environmental
issues, laws, regulations, and the increasing costs of remediation
and compliance, including actual and potential new federal and
state requirements that could include carbon and more stringent
mercury emission controls, a renewable portfolio standard, energy
efficiency mandates, and a carbon tax or cap and trade structure;
nuclear regulations and operations associated with nuclear
facilities; impact of electric and gas utility restructuring in
Michigan, including legislative amendments and Customer Choice
programs; employee relations and the impact of collective
bargaining agreements; unplanned outages; changes in the cost and
availability of coal and other raw materials, purchased power and
natural gas; volatility in the short-term natural gas storage
markets impacting third-party storage revenues; cost reduction
efforts and the maximization of plant and distribution system
performance; the effects of competition; the uncertainties of
successful exploration of gas shale resources and challenges in
estimating gas reserves with certainty; impact of regulation by the
FERC, MPSC, NRC and other applicable governmental proceedings and
regulations, including any associated impact on rate structures;
changes in and application of federal, state and local tax laws and
their interpretations, including the Internal Revenue Code,
regulations, rulings, court proceedings and audits; the amount and
timing of cost recovery allowed as a result of regulatory
proceedings, related appeals or new legislation; the cost of
protecting assets against, or damage due to, terrorism; changes in
and application of accounting standards and financial reporting
regulations; changes in federal or state laws and their
interpretation with respect to regulation, energy policy and other
business issues; and binding arbitration, litigation and related
appeals. New factors emerge from time to time. We cannot predict
what factors may arise or how such factors may cause our results to
differ materially from those contained in any forward-looking
statement. Any forward-looking statements refer only as of the date
on which such statements are made. We undertake no obligation to
update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. This presentation
should also be read in conjunction with the "Forward-Looking
Statements" section in each of DTE Energy's and Detroit Edison's
2008 Forms 10-K and 2009 Forms 10-Q (which sections are
incorporated herein by reference), and in conjunction with other
SEC reports filed by DTE Energy and Detroit Edison. DTE Energy
Company Consolidated Statements of Operations (Unaudited) Three
Months Nine Months Ended Ended September 30 September 30
------------- ------------- (in Millions, Except per Share Amounts)
2009 2008 2009 2008 ---- ---- ---- ---- Operating Revenues $1,961
$2,338 $5,904 $7,159 ------ ------ ------ ------ Operating Expenses
Fuel, purchased power and gas 735 1,034 2,272 3,332 Operation and
maintenance 554 628 1,740 2,081 Depreciation, depletion and
amortization 266 235 738 677 Taxes other than income 63 71 204 229
Gain on sale of non-utility assets - - - (128) Other asset (gains)
and losses, reserves and impairments, net - (5) (3) 7 --- -- -- -
1,618 1,963 4,951 6,198 ----- ----- ----- ----- Operating Income
343 375 953 961 --- --- --- --- Other (Income) and Deductions
Interest expense 143 125 409 371 Interest income (11) (5) (17) (13)
Other income (28) (34) (74) (74) Other expenses 8 22 17 45 - -- --
-- 112 108 335 329 --- --- --- --- Income Before Income Taxes 231
267 618 632 Income Tax Provision 73 97 197 231 -- -- --- --- Income
from Continuing Operations 158 170 421 401 Discontinued Operations
Income, net of tax - 8 - 22 --- - --- -- Net Income 158 178 421 423
Less: Net Income Attributable to the Noncontrolling Interests From
Continuing operations - 1 2 4 Discontinued operations - - - 2 --- -
- - - 1 2 6 Net Income Attributable to DTE Energy Company $158 $177
$419 $417 ==== ==== ==== ==== Basic Earnings per Common Share
Income from continuing operations $0.96 $1.03 $2.55 $2.43
Discontinued operations - 0.05 - 0.12 --- ---- --- ---- Total $0.96
$1.08 $2.55 $2.55 ===== ===== ===== ===== Diluted Earnings per
Common Share Income from continuing operations $0.96 $1.03 $2.55
$2.43 Discontinued operations - 0.05 - 0.12 --- ---- --- ---- Total
$0.96 $1.08 $2.55 $2.55 ===== ===== ===== ===== Weighted Average
Common Shares Outstanding Basic 165 163 164 163 Diluted 165 163 164
163 Dividends Declared per Common Share $0.53 $0.53 $1.59 $1.59 DTE
Energy Company Segment Net Income (Unaudited) Three Months Ended
September 30
-------------------------------------------------------- 2009 2008
--------------------------- --------------------------- Reported
Adjust- Operating Reported Adjust- Operating (in Millions) Earnings
ments Earnings Earnings ments Earnings -------- ------- ---------
-------- ------- -------- Electric Utility $156 $- $156 $159 $- 159
Gas Utility (23) - (23) (15) 2 B (13) Non-utility Operations Gas
Midstream 13 - 13 11 - 11 Unconventional Gas Production (2) - (2) 3
- 3 Power and Industrial Projects 10 (1) A 9 26 - 26 Energy Trading
6 - 6 19 (2) C 17 -- -- -- -- -- -- Total Non-utility operations 27
(1) 26 59 (2) 57 -- -- -- -- -- -- Corporate and Other (2) - (2)
(34) 4 C (30) Income from Continuing Operations 158 (1) 157 169 4
173 --- -- --- --- - --- Discontinued Operations - - - 8 (8) D -
---- --- ---- ---- --- ---- Net Income $158 $(1) $157 $177 $(4)
$173 ==== === ==== ==== === ==== Adjustments key A) General Motors
accounts receivable bad debt reserve. B) Costs to achieve savings
from Performance Excellence Process. C) Residual hedge impact from
Antrim sale. D) Results relating to discontinuance of synfuel
operations. DTE Energy Company Segment Diluted Earnings Per Share
(Unaudited) Three Months Ended September 30
-------------------------------------------------------- 2009 2008
--------------------------- --------------------------- Reported
Adjust- Operating Reported Adjust- Operating Earnings ments
Earnings Earnings ments Earnings ------- ------ -------- --------
------- -------- Electric Utility $0.95 $- $0.95 $0.98 $- $0.98 Gas
Utility (0.14) - (0.14) (0.09) 0.01 B (0.08) Non-utility Operations
Gas Midstream 0.08 - 0.08 0.07 - 0.07 Unconventional Gas Production
(0.01) - (0.01) 0.02 - 0.02 Power and Industrial Projects 0.05
(0.01) A 0.04 0.15 - 0.15 Energy Trading 0.04 - 0.04 0.11 (0.01) C
0.10 ---- ----- ---- ---- ----- ---- Total Non-utility operations
0.16 (0.01) 0.15 0.35 (0.01) 0.34 ---- ----- ---- ---- ----- ----
Corporate and Other (0.01) - (0.01) (0.21) 0.03 C (0.18) Income
from Continuing Operations 0.96 (0.01) 0.95 1.03 0.03 1.06 ----
----- ---- ---- ---- ---- Discontinued Operations - - - 0.05 (0.05)
D - ----- ------ ----- ----- ------ ----- Net Income $0.96 $(0.01)
$0.95 $1.08 $(0.02) $1.06 ===== ====== ===== ===== ====== =====
Adjustments key A) General Motors accounts receivable bad debt
reserve. B) Costs to achieve savings from Performance Excellence
Process. C) Residual hedge impact from Antrim sale. D) Results
relating to discontinuance of synfuel operations. DTE Energy
Company Segment Net Income (Unaudited) Nine Months Ended September
30 -------------------------------------------------------- 2009
2008 --------------------------- ---------------------------
Reported Adjust- Operating Reported Adjust- Operating (in Millions)
Earnings ments Earnings Earnings ments Earnings ------- -------
--------- -------- ------- --------- Electric Utility $313 $4 E
$317 $251 $- $251 Gas Utility 23 - 23 33 3 B 36 Non-utility
Operations Gas Midstream 37 - 37 27 - 27 Unconventional Gas
Production (6) - (6) 89 (81) F 8 Power and Industrial Projects 8 1
E 12 30 1 B 31 3 A Energy Trading 73 - 73 36 1 B 37 --- - --- ---
--- --- Total Non-utility operations 112 4 116 182 (79) 103 --- -
--- --- --- --- Corporate and Other (29) - (29) (69) 6 C (61) 2 G
Income from Continuing Operations 419 8 427 397 (68) 329 --- - ---
--- --- --- Discontinued Operations - - - 20 (20) D - ---- -- ----
---- ---- ---- Net Income $419 $8 $427 $417 $(88) $329 ==== == ====
==== ==== ==== Adjustments key A) General Motors accounts
receivable bad debt reserve. B) Costs to achieve savings from
Performance Excellence Process. C) Residual hedge impact from
Antrim sale. D) Results relating to discontinuance of synfuel
operations. E) Chrysler accounts receivable bad debt reserve. F)
Gain on sale of Barnett Core. G) Residual impact from Crete sale.
DTE Energy Company Segment Diluted Earnings Per Share (Unaudited)
Nine Months Ended September 30
-------------------------------------------------------- 2009 2008
--------------------------- --------------------------- Reported
Adjust- Operating Reported Adjust- Operating Earnings ments
Earnings Earnings ments Earnings -------- ------ -------- --------
------- --------- Electric Utility $1.91 $0.03 E $1.94 $1.54 $-
$1.54 Gas Utility 0.14 - 0.14 0.20 0.02 B 0.22 Non-utility
Operations Gas Midstream 0.23 - 0.23 0.17 - 0.17 Unconventional Gas
Production (0.04) - (0.04) 0.55 (0.50) F 0.05 Power and Industrial
Projects 0.04 0.01 E 0.07 0.18 - 0.18 0.02 A Energy Trading 0.45 -
0.45 0.22 - 0.22 ---- ---- ---- ---- ----- ---- Total Non-utility
operations 0.68 0.03 0.71 1.12 (0.50) 0.62 ---- ---- ---- ----
----- ---- Corporate and Other (0.18) - (0.18) (0.43) 0.04 C (0.38)
0.01 G Income from Continuing Operations 2.55 0.06 2.61 2.43 (0.43)
2.00 ---- ---- ---- ---- ----- ---- Discontinued Operations - - -
0.12 (0.12) D - ----- ----- ----- ----- ------ ----- Net Income
$2.55 $0.06 $2.61 $2.55 $(0.55) $2.00 ===== ===== ===== =====
====== ===== Adjustments key A) General Motors accounts receivable
bad debt reserve. B) Costs to achieve savings from Performance
Excellence Process. C) Residual hedge impact from Antrim sale. D)
Results relating to discontinuance of synfuel operations. E)
Chrysler accounts receivable bad debt reserve. F) Gain on sale of
Barnett Core. G) Residual impact from Crete sale. DATASOURCE: DTE
Energy CONTACT: Media, Scott Simons, +1-313-235-8808, or Lorie N.
Kessler, +1-313-235-8807, Analysts, Dan Miner, +1-313-235-5525, or
Lisa Muschong, +1-313-235-8505 Web Site: http://www.dteenergy.com/
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