The assets of these businesses are well integrated with other DTE Energy operations. Pursuant to an operating agreement, DTE Gas provides physical operations, maintenance, and technical support for the Washington 10 and 28 storage facilities and for the Michigan gathering systems.

In addition, DTE Energy owns a 50% interest in the NEXUS Pipeline, a proposed 255-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan and Ontario market centers. A FERC application was filed in the fourth quarter of 2015 with an estimated in service date in the fourth quarter of 2017.

Regulation

Gas Storage and Pipelines operates natural gas storage facilities in Michigan as intrastate facilities regulated by the MPSC, and provides intrastate storage and related services pursuant to an MPSC-approved tariff. Gas Storage and Pipelines also provides interstate services in accordance with an Operating Statement on file with the FERC. Vector, Millennium, Birdsboro, and ~~Millennium~~NEXUS Pipelines provide interstate transportation services in accordance with their FERC-approved tariffs. In addition, NEXUS and Vector isare subject to applicable laws, rules, and regulations in Canada. ~~NEXUS Pipeline, when operational, will also provide interstate transportation services in accordance with their FERC-approved tariffs. In Pennsylvania,~~ Gas Storage and Pipelines' gathering and pipeline assets are subject to the rules and regulations of ~~the Pennsylvania Public Utility Commission. Bluestone Pipeline is regulated in the~~various state ~~of New York by the New York Public Service Commission.~~utility commissions.

Strategy and Competition

Gas Storage and Pipelines expects to continue its steady growth plan by expanding existing assets, acquiring and/or developing new assets that are typically supported with long-term customer commitments. ~~Gas Storage and Pipelines has competition from other pipelines and storage providers.~~ The focus will be on opportunities in the Midwest to Northeast region to supply natural gas to meet growing ~~demand.~~demand and displace less attractive supply from certain regions in North America. Much of the growth in demand for natural gas is expected to occur in the ~~Eastern~~eastern Canada and the ~~Northeast~~northeast U.S. regions. Gas Storage and Pipelines believes that the Vector, Millennium, and ~~Millennium~~NEXUS Pipelines are well positioned to provide access routes and low-cost expansion options to these ~~markets. In addition, Gas Storage and Pipelines believes that Millennium Pipeline is well positioned for~~markets due to growth in production from the ~~Marcellus Shale, especially with respect to Marcellus production~~Marcellus/Utica Shales in ~~Northern Pennsylvania.~~Pennsylvania and West Virginia. Gas Storage and Pipelines has ~~an agreement~~agreements with ~~Southwestern Energy Production Company to~~key producers that support its Bluestone Pipeline, ~~and~~ Susquehanna gathering, ~~system. DTE Energy expects to continue steady growth in the~~Tioga gathering, AGS, and SGG businesses. Gas Storage and Pipelines ~~business and~~ is evaluating new pipeline and storage investment opportunities that could include additional ~~Millennium~~pipeline and ~~Vector~~gathering expansions, ~~and~~ laterals, ~~Bluestone~~ compression, ~~and laterals, Susquehanna gathering expansions,~~ and other Marcellus/Utica shale midstream development or partnering ~~opportunities, such as the NEXUS Pipeline.~~ opportunities.

Gas Storage and ~~Pipelines' operations~~Pipelines has competition from other pipelines and storage providers. Operations are dependent upon a limited number of customers, and the loss of any one or a few customers could have a material adverse effect on the results of Gas Storage and Pipelines.

POWER AND INDUSTRIAL PROJECTS

Description

Power and Industrial Projects is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity and gas from renewable energy projects. This business segment provides services using project assets usually located on or near the customers' premises in the steel, automotive, pulp and paper, airport, chemical, and other industries as follows:

Industrial Energy Services

Steel and Petroleum Coke —Power and Industrial Projects produces metallurgical coke from ~~one~~a coke battery with a capacity of 1.0 million tons per year and has an investment in a second coke battery with a capacity of 1.2 million tons per year. Power and Industrial Projects also provides pulverized coal and petroleum coke to the steel, pulp and paper, and other industries.

Renewable Energy

Wholesale Power and Renewables —Power and Industrial Projects holds ownership interests in, and operates, ~~four~~five renewable generating plants with a capacity of ~~191~~217 MWs. The electric output is sold under long-term power purchase agreements.

Renewable Gas Recovery — Power and Industrial Projects ~~also develops landfill~~has ownership interests in, and operates, twenty-three gas recovery ~~systems that capture~~sites in nine different states. The sites recover methane from landfills and agricultural businesses and convert the gas to generate electricity, replace fossil fuels in industrial and ~~provide local utilities, industries, and consumers with an opportunity~~manufacturing operations, or refine to ~~use a competitive, renewable source of energy, in addition to providing environmental benefits by reducing GHG emissions.~~pipeline-quality gas, which can then be used as vehicle fuel.

Reduced Emissions Fuel

Reduced Emissions Fuel — Power and Industrial Projects has constructed and placed in service REF facilities at ~~nine~~ten sites including facilities located at ~~six~~seven third-party owned coal-fired power plants. DTE Energy has sold membership interests in ~~four~~five of the facilities and entered into lease arrangements ~~at two~~in three of the facilities. DTE Energy will continue to optimize these facilities by seeking investors or entering into lease arrangements for facilities operating at DTE Electric and other utility sites. DTE Energy is in the process of relocating an underutilized facility at an existing site to a new third-party owned coal-fired power plant. In addition, DTE Energy has ~~entered into~~ an agreement to operate an REF facility owned by an outside party located at a third-party owned coal-fired power plant. The facilities blend a proprietary additive with coal used in coal-fired power plants, resulting in reduced emissions of nitrogen oxide and mercury. Qualifying facilities are eligible to generate tax credits for ten years upon achieving certain criteria. The value of a tax credit is adjusted annually by an inflation factor published by the IRS. The value of the tax credit is reduced if the reference price of coal exceeds certain thresholds. The economic benefit of the REF facilities is dependent upon the generation of production tax credits.

Properties and Other

The following are significant properties operated by Power and Industrial Projects:



~~Facility~~Business Areas	Location	Service Type
Industrial Energy Services
Steel and Petroleum Coke
Pulverized Coal Operations	MI	Pulverized Coal
Coke Production	MI	Metallurgical Coke Supply
Other Investment in Coke Production and Petroleum Coke	IN and MS	Metallurgical Coke Supply and Pulverized Petroleum Coke
On-Site Energy
Automotive	~~Various sites in~~IN, MI, ~~IN,~~NY, and OH ~~and NY~~	Electric Distribution, Chilled Water, Waste Water, Steam, Cooling Tower Water, Reverse Osmosis Water, Compressed Air, Mist, and Dust Collectors
Airports	MI and PA	Electricity and Hot and Chilled Water
Chemical Manufacturing	~~IL,~~ KY and OH	Electricity, Steam, Natural Gas, Compressed Air, and Wastewater
Consumer Manufacturing	OH	Electricity, Steam, Wastewater, and Sewer
Business Park	PA	Electricity
Hospital and University	CA and IL	Electricity, Steam, and Chilled Water
~~Wholesale Power and Renewables~~Renewable Energy
Pulp and Paper	AL	Electric Generation and Steam
Renewables	CA and MN	Electric Generation
~~Landfill~~Renewable Gas Recovery	~~Various U.S. sites~~AZ, CA, MI, NC, NY, OH, TX, UT, and WI	Electric Generation and ~~Landfill~~Renewable Natural Gas
~~REF~~Reduced Emissions Fuel	MI, OH, ~~OK,~~ IL, PA, TX, and WI	REF Supply


	2015		2014		2013		2018		2017		2016
	(In millions)						(In millions)
Production Tax Credits Generated (Allocated to DTE Energy)
REF	$	77	$	84	$	44	$	178	$	144	$	103
Power Generation	11		11		8
Landfill Gas Recovery	3		2		1
Renewables							7		6		8
Renewable Gas Recovery							3		3		3
	$	91	$	97	$	53	$	188	$	153	$	114

Regulation

Strategy and Competition

Power and Industrial Projects will continue leveraging its energy-related operating experience and project management capability to develop and grow its steel, on-site energy, and renewable ~~power,~~energy businesses, and optimize the REF businesses. Power and Industrial Projects will also continue to pursue opportunities to provide asset management and operations services to third parties. There are limited competitors for Power and Industrial Projects' existing disparate businesses who provide similar products and services. Power and Industrial Projects' operations are dependent upon a limited number of customers, and the loss of any one or a few customers could have a material adverse effect on the results of Power and Industrial Projects.

Power and Industrial Projects anticipates building around its core strengths in the markets where it operates. In determining the markets in which to compete, Power and Industrial Projects examines closely the regulatory and competitive environment, new and pending legislation, the number of competitors, and its ability to achieve sustainable margins. Power and Industrial Projects plans to maximize the effectiveness of its related businesses as it expands. ~~As Power and Industrial Projects pursues growth opportunities, the first priority will be to achieve value-added returns.~~

Power and Industrial Projects intends to focus on the following areas for growth:

~~Obtaining investors in the REF projects;~~

~~Relocating underutilized REF facilities~~Providing operating services to ~~alternative coal-fired~~owners of on-site industrial power ~~plants which may provide increased production and emission reduction opportunities in 2016 and future years;~~plants;

Acquiring and developing ~~landfill~~renewable gas recovery facilities, renewable energy projects, and other energy ~~projects which may qualify for tax credits; and~~

~~Providing operating services to owners of on-site industrial and power plants.~~projects.

ENERGY TRADING

Description

Energy Trading focuses on physical and financial power and gas marketing and trading, structured transactions, enhancement of returns from its asset portfolio and optimization of contracted natural gas pipeline transportation, and storage positions. Energy Trading also provides natural gas, power, and related services which may include the management of associated storage and transportation contracts on the customers’ behalf and the supply or purchase of renewable energy credits to various customers. Energy Trading's customer base is predominantly utilities, local distribution companies, pipelines, producers and generators, and other marketing and trading companies. Energy Trading enters into derivative financial instruments as part of ~~their~~its marketing and hedging activities. These financial instruments are generally accounted for under the MTM method, which results in the recognition in earnings of unrealized gains and losses from changes in the fair value of the derivatives. Energy Trading utilizes forwards, futures, swaps, and option contracts to mitigate risk associated with marketing and trading activity, as well as for proprietary trading within defined risk guidelines. Energy Trading also provides commodity risk management services to the other businesses within DTE Energy.

Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments and physical power and natural gas contracts are deemed derivatives; whereas, natural gas inventory, contracts for pipeline transportation, renewable energy credits, and storage assets are not derivatives. As a result, this segment will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets. The business’ strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards, swaps, and options. This results in gains and losses that are recognized in different interim and annual accounting periods.

Regulation

Energy Trading has market-based rate authority from the FERC to sell power and blanket authority from the FERC to sell natural gas at market prices. Energy Trading is subject to FERC reporting requirements and market behavior rules. Energy Trading is also subject to the applicable laws, rules, and regulations related to the CFTC, U.S. Department of Homeland Security, and DOE. In addition, Energy Trading is subject to applicable laws, rules, and regulations in Canada.

Strategy and Competition

DTE Energy's strategy for the Energy Trading business is to deliver value-added services to DTE Energy customers. DTE Energy seeks to manage this business in a manner complementary to the growth of DTE Energy's other business segments. Energy Trading focuses on physical marketing and the optimization of its portfolio of energy assets. The segment competes with electric and gas marketers, financial institutions, traders, utilities, and other energy providers. The Energy Trading business is dependent upon the availability of capital and an investment grade credit rating. DTE Energy believes it has ample available capital capacity to support Energy Trading activities. DTE Energy monitors its use of capital closely to ensure that its commitments do not exceed capacity. A material credit restriction would negatively impact Energy Trading's financial performance. Competitors with greater access to capital, or at a lower cost, may have a competitive advantage. DTE Energy has risk management and credit processes to monitor and mitigate risk.

CORPORATE AND OTHER

Description

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulation and expect to continue recovering environmental costs related to utility operations through rates charged to customers. The following table summarizes DTE Energy's, including DTE Electric's, estimated significant future environmental expenditures based upon current regulations. Pending or future reconsiderations of current regulations may impact the estimated expenditures summarized in the table below. The amounts reported in the table do not include any expenditures related to the EPA Clean Power Plan that has been stayed as discussed below. Actual costs to comply could vary substantially. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented.



	DTE Electric		DTE Gas		Non-utility		Total
	(In millions)
Water	$	60	$	—	$	—	$	60
Contaminated and other sites	10		25		—		35
Coal combustion residuals and effluent limitations guidelines	515		—		—		515
Estimated total future expenditures through 2025	$	585	$	25	$	—	$	610
Estimated 2019 expenditures	$	30	$	15	$	—	$	45
Estimated 2020 expenditures	$	60	$	5	$	—	$	65

Water — The EPA finalized regulations on cooling water intake in August 2014. DTE Electric is conducting studies to determine the best technology for reducing the environmental impacts of the cooling water intake structures at each of its facilities. DTE Electric may be required to install technologies to reduce the impacts of the cooling water intakes.

Contaminated and Other Sites — Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke, or oil. The facilities, which produced gas, have been designated as MGP sites. DTE Gas owns, or previously owned, 14 such former MGP sites. DTE Electric owns, or previously owned, three former MGP sites. DTE Energy anticipates the cost amortization methodology approved by the MPSC for DTE Gas, which allows DTE Gas to amortize the MGP costs over a ten-year period beginning with the year subsequent to the year the MGP costs were incurred, will prevent environmental costs from having a material adverse effect on DTE Energy's operations. DTE Electric believes the likelihood of a material change to the accrued amount is remote based on current knowledge of the conditions at each site.

The Registrants are also in the process of cleaning up other sites where contamination is present as a result of historical and ongoing utility operations. These other sites include an engineered ash storage facility, electric distribution substations, gas pipelines, electric generating power plants, and underground and aboveground storage tank locations. Cleanup activities associated with these sites will be conducted over the next several years. Any significant change in assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for these sites and affect the Registrants' financial position and cash flows and the rates charged to their customers.

Coal Combustion Residuals and Effluent Limitations Guidelines — In April 2015, the EPA published a final rule for the disposal of coal combustion residuals, commonly known as coal ash. The rule became effective in October 2015. The rule is based on the continued listing of coal ash as a non-hazardous waste and relies on various self-implementation design and performance standards. DTE Electric owns and operates three permitted engineered coal ash storage facilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power plants. At certain facilities, the rule requires the installation of monitoring wells, compliance with groundwater standards, and the closure of basins at the end of the useful life of the associated power plant. At other facilities, the rule requires ash laden waters be moved from earthen basins to steel and concrete tanks. In 2018, DTE Electric updated its estimated expenditures to remediate accordingly. On October 12, 2018, a D.C. District Court decision became effective that may affect the timing of closure of coal ash impoundments that are not lined with an engineered liner system. In 2019, the EPA is expected to affirmatively undertake rulemaking to implement the D.C. District Court's decision that will determine any changes to DTE Electric's plans in the operations and closure of coal ash impoundments.

In November 2015, the EPA finalized effluent limitations guidelines for the steam electric power generating industry which requires additional controls to be installed between 2018 and 2023. The initial costs to comply with this rule are under development and estimates are included in the Coal Combustion Residual and Effluent Limitations Guidelines amount in the above table.

On April 12, 2017, the EPA granted a petition for reconsideration of the ELG Rule. The EPA also signed an administrative stay of the ELG Rule’s compliance deadlines for fly ash transport water, bottom ash transport water, and flue gas desulfurization (FGD) wastewater, among others. On June 6, 2017, the EPA published in the Federal Register a proposed rule to postpone certain applicable deadlines within the ELG rule. The final rule was published on September 18, 2017. The final rule nullified the administrative stay but also extended the earliest compliance deadlines for the FGD wastewater and bottom ash transport water until November 1, 2020 in order for the EPA to propose and finalize a new ruling. The ELG compliance requirements and final deadlines for bottom ash transport water and FGD wastewater, and total ELG related compliance costs will not be known until the EPA completes its reconsideration of the ELG Rule.

Air — DTE Electric is subject to the EPA ozone and fine particulate transport, and acid rain regulations that limit power plant emissions of SO₂ and NO_X. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to emission controls on fossil-fueled power plants to reduce SO₂, NO_X, mercury, and other emissions. These rulemakings could require additional controls for SO₂, NO_X, and other hazardous air pollutants over the next few years. DTE Electric does not anticipate additional capital expenditures to comply with air pollution requirements through 2025, pending the results of future rulemakings.

The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of the economy. Among these actions, the EPA has finalized performance standards for emissions of carbon dioxide from new and existing fossil-fuel EGUs. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. In October 2017, the EPA issued a proposal to repeal the Clean Power Plan, and in August 2018 the EPA issued its proposed Affordable Clean Energy rule to replace the Clean Power Plan. In addition, in December 2018, the EPA issued proposed revisions to the carbon dioxide standards for new, modified or reconstructed fossil-fuel fired EGUs. The carbon dioxide standard for new sources are not expected to have a material impact on DTE Electric, since DTE Electric has no plans to build new coal-fired generation and any potential new gas generation will be able to comply with the standards. These proposed rules do not impact DTE Energy's goal to reduce carbon emissions 30% by the early 2020s, 45% by 2030, 75% by 2040, and more than 80% by 2050.

Pending or future legislation or other regulatory actions could have a material impact on DTE Electric's operations and financial position and the rates charged to its customers. Impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additional capital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where control equipment is not economical. DTE Electric would seek to recover these incremental costs through increased rates charged to its utility customers, as authorized by the MPSC.

See Management’s Discussion and Analysis in Item 7 of this Report and Notes 8, 9, and 18 to the Consolidated Financial Statements in Item 8 of this Report, "Asset Retirement Obligations," "Regulatory Matters," and "Commitments and Contingencies."

EMPLOYEES

DTE Energy and its subsidiaries had approximately 10,600 employees as of December 31, 2018, of which approximately 5,200 were represented by unions. DTE Electric had approximately 4,900 employees as of December 31, 2018, of which approximately 2,800 were represented by unions. There are several bargaining units for DTE Energy subsidiaries' represented employees. The majority of represented employees for both DTE Energy and DTE Electric are under contracts that expire in 2020 and 2021.

Item 1A. Risk Factors

There are various risks associated with the operations of the Registrants' utility businesses and DTE Energy's non-utility businesses. To provide a framework to understand the operating environment of the Registrants, below is a brief explanation of the more significant risks associated with their businesses. Although the Registrants have tried to identify and discuss key risk factors, others could emerge in the future. Each of the following risks could affect performance.

The Registrants are subject to rate regulation. Electric and gas rates for the utilities are set by the MPSC and the FERC and cannot be changed without regulatory authorization. The Registrants may be negatively impacted by new regulations or interpretations by the MPSC, the FERC, or other regulatory bodies. The Registrants' ability to recover costs may be impacted by the time lag between the incurrence of costs and the recovery of the costs in customers' rates. Regulators also may decide to disallow recovery of certain costs in customers' rates if they determine that those costs do not meet the standards for recovery under current governing laws and regulations. Regulators may also disagree with the Registrants' rate calculations under the various mechanisms that are intended to mitigate the risk to their utilities related to certain aspects of the business. If the Registrants cannot agree with regulators on an appropriate reconciliation of those mechanisms, it may impact the Registrants' ability to recover certain costs through customer rates. Regulators may also decide to eliminate these mechanisms in future rate cases, which may make it more difficult for the Registrants to recover their costs in the rates charged to customers. The Registrants cannot predict what rates the MPSC will authorize in future rate cases. New legislation, regulations, or interpretations could change how the business operates, impact the Registrants' ability to recover costs through rates or the timing of such recovery, or require the Registrants to incur additional expenses.

Changes to Michigan's electric retail access program could negatively impact the Registrants' financial performance. The State of Michigan currently experiences a hybrid market, where the MPSC continues to regulate electric rates for DTE Electric customers, while alternative electric suppliers charge market-based rates. MPSC rate orders, and energy legislation enacted by the State of Michigan, have placed a 10% cap on the total potential retail access migration. However, even with the legislated 10% cap on participation, there continues to be legislative and financial risk associated with the electric retail access program. Electric retail access migration is sensitive to market price and full service electric price changes. The Registrants are required under current regulation to provide full service to retail access customers that choose to return, potentially resulting in the need for additional generating capacity.

The Registrants' electric distribution system and DTE Energy's gas distribution system are subject to risks from their operation, which could reduce revenues, increase expenses, and have a material adverse effect on their business, financial position, and results of operations. The Registrants' electric distribution and DTE Energy’s gas distribution systems are subject to many operational risks. These operational systems and infrastructure have been in service for many years. Equipment, even when maintained in accordance with good utility practices, is subject to operational failure, including events that are beyond the Registrants' control, and could require significant operation and maintenance expense or capital expenditures to operate efficiently. Because the Registrants’ distribution systems are interconnected with those of third parties, the operation of the Registrants’ systems could be adversely affected by unexpected or uncontrollable events occurring on the systems of such third parties.

DTE Energy's non-utility businesses may not perform to its expectations. DTE Energy relies on non-utility operations for an increasing portion of earnings. If DTE Energy's current and contemplated non-utility investments do not perform at expected levels, DTE Energy could experience diminished earnings and a corresponding decline in shareholder value.

DTE Energy relies on cash flows from subsidiaries. DTE Energy is a holding company. Cash flows from the utility and non-utility subsidiaries are required to pay interest expenses and dividends on DTE Energy debt and securities. Should a major subsidiary not be able to pay dividends or transfer cash flows to DTE Energy, its ability to pay interest and dividends would be restricted.

The Registrants' businesses have safety risks. The Registrants' electric distribution system, power plants, renewable energy equipment, and other facilities, and DTE Energy's gas distribution system, gas infrastructure, and other facilities, could be involved in incidents that result in injury, death, or property loss to employees, customers, third parties, or the public. Although the Registrants have insurance coverage for many potential incidents, depending upon the nature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatory agencies or other public authorities.

Environmental laws and liability may be costly. The Registrants are subject to, and affected by, numerous environmental regulations. These regulations govern air emissions, water quality, wastewater discharge, and disposal of solid and hazardous waste. Compliance with these regulations can significantly increase capital spending, operating expenses, and plant down times, and can negatively affect the affordability of the rates charged to customers.

Uncertainty around future environmental regulations creates difficulty planning long-term capital projects in the Registrants' generation fleet and, for DTE Energy's gas distribution businesses. These laws and regulations require the Registrants to seek a variety of environmental licenses, permits, inspections, and other regulatory approvals. The Registrants could be required to install expensive pollution control measures or limit or cease activities, including the retirement of certain generating plants, based on these regulations. Additionally, the Registrants may become a responsible party for environmental cleanup at sites identified by a regulatory body. The Registrants cannot predict with certainty the amount and timing of future expenditures related to environmental matters because of the difficulty of estimating cleanup costs. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on potentially responsible parties.

The Registrants may also incur liabilities as a result of potential future requirements to address climate change issues. Proposals for voluntary initiatives and mandatory controls are being discussed both in the United States and worldwide to reduce GHGs such as carbon dioxide, a by-product of burning fossil fuels. If increased regulations of GHG emissions are implemented, the operations of DTE Electric's fossil-fueled generation assets may be significantly impacted. Since there can be no assurances that environmental costs may be recovered through the regulatory process, the Registrants' financial performance may be negatively impacted as a result of environmental matters.

For DTE Energy, future environmental regulation of natural gas extraction techniques, including hydraulic fracturing, being discussed both at the United States federal level and by some states may affect the profitability of natural gas extraction businesses which could affect demand for, and profitability of, DTE Energy's gas transportation businesses.

Threats of cyber incidents, physical security, and terrorism could affect the Registrants' business. Issues may threaten the Registrants such as cyber incidents, physical security, or terrorism that may disrupt the Registrants' operations, and could harm the Registrants' operating results.

Information security risks have increased in recent years as a result of the proliferation of new technologies and the increased sophistication and frequency of cyberattacks, and data security breaches. The Registrants' industry requires the continued operation of sophisticated information and control technology systems and network infrastructure. Despite implementation of security measures, all of the Registrants' technology systems are vulnerable to disability or failures due to cyber incidents, physical security threats, acts of war or terrorism, and other causes, as well as loss of operational control of the Registrants' electric generation and distribution assets and, DTE Energy's gas distribution assets. If the Registrants' information technology systems were to fail and they were unable to recover in a timely way, the Registrants may be unable to fulfill critical business functions, which could have a material adverse effect on the Registrants' business, operating results, and financial condition.

Suppliers, vendors, contractors, and information technology providers have access to systems that support the Registrants’ operations and maintain customer and employee data. A breach of these third-party systems could adversely affect the business as if it was a breach of our own system. Also, because the Registrants’ generation and distribution systems are part of an interconnected system, a disruption caused by a cyber incident at another utility, electric generator, system operator, or commodity supplier could also adversely affect the Registrants’ businesses, operating results, and financial condition.

In addition, the Registrants' generation plants and electrical distribution facilities, and DTE Energy's gas pipeline and storage facilities, in particular, may be targets of physical security threats or terrorist activities that could disrupt the Registrants' ability to produce or distribute some portion of their products. The Registrants have increased security as a result of past events and may be required by regulators or by the future threat environment to make investments in security that the Registrants cannot currently predict.

Failure to maintain the security of personally identifiable information could adversely affect the Registrants. In connection with the Registrants' businesses, they collect and retain personally identifiable information of their customers, shareholders, and employees. Customers, shareholders, and employees expect that the Registrants will adequately protect their personal information. The regulatory environment surrounding information security and privacy is increasingly demanding. A significant theft, loss, or fraudulent use of customer, shareholder, employee, or Registrant data by cybercrime or otherwise, could adversely impact the Registrants' reputation, and could result in significant costs, fines, and litigation.

Construction and capital improvements to the Registrants' power facilities, DTE Energy's distribution systems and its Gas Storage and Pipelines business subject them to risk. The Registrants are managing ongoing, and planning future, significant construction and capital improvement projects at the Registrants' multiple power generation and distribution facilities, at DTE Energy's gas distribution system, and at DTE Energy's Gas Storage and Pipelines business. Many factors that could cause delays or increased prices for these complex projects are beyond the Registrants' control, including the cost of materials and labor, subcontractor performance, timing and issuance of necessary permits or approvals (including required certificates from regulatory agencies), construction disputes, impediments to acquiring rights-of-way or land rights on a timely basis and on acceptable terms, cost overruns, and weather conditions. Failure to complete these projects on schedule and on budget for any reason could adversely affect the Registrants' financial performance, operations, or expected investment returns at the affected facilities, businesses and development projects.

Operation of a nuclear facility subjects the Registrants to risk. Ownership of an operating nuclear generating plant subjects the Registrants to significant additional risks. These risks include, among others, plant security, environmental regulation and remediation, changes in federal nuclear regulation, increased capital expenditures to meet industry requirements, and operational factors that can significantly impact the performance and cost of operating a nuclear facility compared to other generation options. Insurance maintained by the Registrants for various nuclear-related risks may not be sufficient to cover the Registrants' costs in the event of an accident or business interruption at the nuclear generating plant, which may affect the Registrants' financial performance. In addition, the Registrants' nuclear decommissioning trust fund, to finance the decommissioning of the nuclear generating plant, may not be sufficient to fund the cost of decommissioning. A decline in market value of assets held in decommissioning trust funds due to poor investment performance or other factors may increase the funding requirements for these obligations. Any increase in funding requirements may have a material impact on the Registrants’ liquidity, financial position, or results of operations.

The supply and/or price of energy commodities and/or related services may impact the Registrants' financial results. The Registrants are dependent on coal for much of their electrical generating capacity as well as uranium for their nuclear operations. DTE Energy's access to natural gas supplies is critical to ensure reliability of service for utility gas customers. DTE Energy's non-utility businesses are also dependent upon supplies and prices of energy commodities and services. Price fluctuations, fuel supply disruptions, and changes in transportation costs, could have a negative impact on the amounts DTE Electric charges utility customers for electricity and DTE Gas charges utility customers for gas, and on the profitability of DTE Energy's non-utility businesses. The Registrants' hedging strategies and regulatory recovery mechanisms may be insufficient to mitigate the negative fluctuations in commodity supply prices in their utility and, for DTE Energy, non-utility businesses, and the Registrants' financial performance may therefore be negatively impacted by price fluctuations. The price of energy also impacts the market for DTE Energy's non-utility businesses that compete with utilities and alternative electric suppliers.

The supply and/or price of other industrial raw and finished inputs and/or related services may impact the Registrants' financial results. The Registrants are dependent on supplies of certain commodities, such as copper and limestone, among others, and industrial materials, and services in order to maintain day-to-day operations and maintenance of their facilities. Price fluctuations, or supply interruptions for these commodities and other items, could have a negative impact on the amounts charged to customers for the Registrants' utility products and, for DTE Energy, on the profitability of the non-utility businesses.

Emerging technologies may have a material adverse effect on the Registrants. Advances in technology that produce power or reduce power consumption include cost-effective renewable energy technologies, distributed generation, energy waste reduction technologies, and energy storage devices. Such developments may impact the price of energy, may affect energy deliveries as customer-owned generation becomes more cost-effective, may require further improvements to our distribution systems to address changing load demands, and could make portions of our electric system power supply and/or distribution facilities obsolete prior to the end of their useful lives. Such technologies could also result in further declines in commodity prices or demand for delivered energy. Each of these factors could materially affect the Registrants’ results of operations, cash flows, or financial position.

Adverse changes in the Registrants' credit ratings may negatively affect them. Regional and national economic conditions, increased scrutiny of the energy industry and regulatory changes, as well as changes in the Registrants' economic performance, could result in credit agencies reexamining their credit ratings. While credit ratings reflect the opinions of the credit agencies issuing such ratings and may not necessarily reflect actual performance, a downgrade in the Registrants' credit ratings below investment grade could restrict or discontinue their ability to access capital markets and could result in an increase in their borrowing costs, a reduced level of capital expenditures, and could impact future earnings and cash flows. In addition, a reduction in the Registrants' credit ratings may require them to post collateral related to various physical or financially settled contracts for the purchase of energy-related commodities, products, and services, which could impact their liquidity.

Poor investment performance of pension and other postretirement benefit plan assets and other factors impacting benefit plan costs could unfavorably impact the Registrants' liquidity and results of operations. The Registrants' costs of providing non-contributory defined benefit pension plans and other postretirement benefit plans are dependent upon a number of factors, such as the rates of return on plan assets, the level of interest rates used to measure the required minimum funding levels of the plans, future government regulation, and the Registrants' required or voluntary contributions made to the plans. The performance of the debt and equity markets affects the value of assets that are held in trust to satisfy future obligations under the Registrants' plans. The Registrants have significant benefit obligations and hold significant assets in trust to satisfy these obligations. These assets are subject to market fluctuations and will yield uncertain returns, which may fall below the Registrants' projected return rates. A decline in the market value of the pension and other postretirement benefit plan assets will increase the funding requirements under the pension and other postretirement benefit plans if the actual asset returns do not recover these declines in the foreseeable future. Additionally, the pension and other postretirement benefit plan liabilities are sensitive to changes in interest rates. If interest rates decrease, the liabilities increase, resulting in increasing benefit expense and funding requirements. Also, if future increases in pension and other postretirement benefit costs as a result of reduced plan assets are not recoverable from the Registrants' utility customers, the results of operations and financial position of the Registrants could be negatively affected. Without sustained growth in the plan investments over time to increase the value of plan assets, the Registrants could be required to fund these plans with significant amounts of cash. Such cash funding obligations could have a material impact on the Registrants' cash flows, financial position, or results of operations.

The Registrants' ability to access capital markets is important. The Registrants' ability to access capital markets is important to operate their businesses and to fund capital investments. Turmoil in credit markets may constrain the Registrants' ability, as well as the ability of their subsidiaries, to issue new debt, including commercial paper, and refinance existing debt at reasonable interest rates. In addition, the level of borrowing by other energy companies, and the market as a whole, could limit the Registrants' access to capital markets. The Registrants' long-term revolving credit facilities do not expire until 2022, but the Registrants regularly access capital markets to refinance existing debt or fund new projects at the Registrants' utilities and DTE Energy's non-utility businesses, and the Registrants cannot predict the pricing or demand for those future transactions.

DTE Energy's participation in energy trading markets subjects it to risk. Events in the energy trading industry have increased the level of scrutiny on the energy trading business and the energy industry as a whole. In certain situations, DTE Energy may be required to post collateral to support trading operations, which could be substantial. If access to liquidity to support trading activities is curtailed, DTE Energy could experience decreased earnings potential and cash flows. Energy trading activities take place in volatile markets and expose DTE Energy to risks related to commodity price movements, deviations in weather, and other related risks. DTE Energy's trading business routinely has speculative trading positions in the market, within strict policy guidelines DTE Energy sets, resulting from the management of DTE Energy's business portfolio. To the extent speculative trading positions exist, fluctuating commodity prices can improve or diminish DTE Energy's financial results and financial position. DTE Energy manages its exposure by establishing and enforcing strict risk limits and risk management procedures. During periods of extreme volatility, these risk limits and risk management procedures may not work as planned and cannot eliminate all risks associated with these activities.

Weather significantly affects operations. At both utilities, deviations from normal hot and cold weather conditions affect the Registrants' earnings and cash flows. Mild temperatures can result in decreased utilization of the Registrants' assets, lowering income and cash flows. At DTE Electric, ice storms, tornadoes, or high winds can damage the electric distribution system infrastructure and power generation facilities and require it to perform emergency repairs and incur material unplanned expenses. The expenses of storm restoration efforts may not be fully recoverable through the regulatory process. DTE Gas can experience higher than anticipated expenses from emergency repairs on its gas distribution infrastructure required as a result of weather related issues.

Unplanned power plant outages may be costly. Unforeseen maintenance may be required to safely produce electricity or comply with environmental regulations. As a result of unforeseen maintenance, the Registrants may be required to make spot market purchases of electricity that exceed the costs of generation. The Registrants' financial performance may be negatively affected if unable to recover such increased costs.

Regional, national, and international economic conditions can have an unfavorable impact on the Registrants. The Registrants' utility and DTE Energy's non-utility businesses follow the economic cycles of the customers they serve and credit risk of counterparties they do business with. Should the financial conditions of some of DTE Energy's significant customers deteriorate as a result of regional, national or international economic conditions, reduced volumes of electricity and gas, and demand for energy services DTE Energy supplies, collections of accounts receivable, reductions in federal and state energy assistance funding, and potentially higher levels of lost gas or stolen gas and electricity could result in decreased earnings and cash flows.

Renewable portfolio standards and energy waste reduction programs may affect the Registrants' business. The Registrants are subject to existing Michigan, and potential future, federal legislation and regulation requiring them to secure sources of renewable energy. The Registrants have complied with the existing federal and state legislation, but do not know what requirements may be added by federal or state legislation in the future. In addition, the Registrants expect to comply with new Michigan legislation increasing the percentage of power required to be provided by renewable energy sources. The Registrants cannot predict the financial impact or costs associated with complying with potential future legislation and regulations. Compliance with these requirements can significantly increase capital expenditures and operating expenses and can negatively affect the affordability of the rates charged to customers.

Failure to attract and retain key executive officers and other skilled professional and technical employees could have an adverse effect on the Registrants’ operations. The Registrants' businesses are dependent on their ability to attract and retain skilled employees. Competition for skilled employees in some areas is high, and the inability to attract and retain these employees could adversely affect the Registrants' business and future operating results. In addition, the Registrants have an aging utility workforce, and the failure of a successful transfer of knowledge and expertise could negatively impact their operations.

A work interruption may adversely affect the Registrants. There are several bargaining units for DTE Energy's approximately 5,200 and DTE Electric's approximately 2,800 represented employees. The majority of represented employees are under contracts that expire in 2020 and 2021. A union choosing to strike would have an impact on the Registrants' businesses. The Registrants are unable to predict the effect a work stoppage would have on their costs of operations and financial performance.

DTE Energy's ability to utilize production tax credits may be limited. To reduce U.S. dependence on imported oil, the Internal Revenue Code provides production tax credits as an incentive for taxpayers to produce fuels and electricity from alternative sources. DTE Energy generated production tax credits from coke production, renewable gas recovery, reduced emission fuel, and gas production operations, and for the Registrants, renewable energy generation. If the Registrants' production tax credits were disallowed in whole or in part as a result of an IRS audit or changes in tax law, there could be additional tax liabilities owed for previously recognized tax credits that could significantly impact the Registrants' earnings and cash flows.

If DTE Energy's goodwill becomes impaired, it may be required to record a charge to earnings. DTE Energy annually reviews the carrying value of goodwill associated with acquisitions it has made for impairment. Factors that may be considered for purposes of this analysis include any change in circumstances indicating that the carrying value of DTE Energy goodwill may not be recoverable, such as a decline in stock price and market capitalization, future cash flows, and slower growth rates in the industry. DTE Energy cannot predict the timing, strength, or duration of any economic slowdown or subsequent recovery, worldwide or in the economy or markets in which it operates; however, when events or changes in circumstances indicate that the carrying value of these assets may not be recoverable, DTE Energy may take a non-cash impairment charge, which could potentially materially impact DTE Energy's results of operations and financial position.

The Registrants may not be fully covered by insurance. The Registrants have a comprehensive insurance program in place to provide coverage for various types of risks, including catastrophic damage as a result of severe weather or other natural disasters, war, terrorism, or a combination of other significant unforeseen events that could impact the Registrants' operations. Economic losses might not be covered in full by insurance, or the Registrants' insurers may be unable to meet contractual obligations.

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

In March 2018, the Trenton Channel Power Plant experienced exceedances of its mercury emission limits. The exceedances were reported to the EPA and the MDEQ. On September 12, 2018, the EPA issued a NOV. DTE Electric is currently working with the EPA to address the NOV. At this time, DTE Electric cannot predict the impact of the NOV.

For more information on legal proceedings and matters related to the Registrants, see Notes 9 and 18 to the Consolidated Financial Statements in Item 8 of this Report, "Regulatory Matters" and "Commitments and Contingencies," respectively.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.

At December 31, 2018, there were 181,925,281 shares of DTE Energy common stock outstanding. These shares were held by a total of 51,338 shareholders of record.

All of the 138,632,234 issued and outstanding shares of DTE Electric common stock, par value $10 per share, are owned by DTE Energy, and constitute 100% of the voting securities of DTE Electric. Therefore, no market exists for DTE Electric's common stock.

For information on DTE Energy dividend restrictions, see Note 16 to the Consolidated Financial Statements in Item 8 of this Report, "Short-Term Credit Arrangements and Borrowings."

All of DTE Energy's equity compensation plans that provide for the annual awarding of stock-based compensation have been approved by shareholders. For additional detail, see Note 21 to the Consolidated Financial Statements in Item 8 of this Report, "Stock-Based Compensation."

See the following table for information as of December 31, 2018:



	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	52,100	$	43.30	2,897,674

UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers

The following table provides information about DTE Energy's purchases of equity securities that are registered by DTE Energy pursuant to Section 12 of the Exchange Act of 1934 for the quarter ended December 31, 2018:



	Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2018 — 10/31/2018	143	$	110.14	—	—	—
11/01/2018 — 11/30/2018	—	$	—	—	—	—
12/01/2018 — 12/31/2018	—	$	—	—	—	—
Total	143			—


(a)	Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)



	Annual Return Percentage Year Ended December 31,
Company/Index	2014	2015		2016	2017	2018
DTE Energy Company	34.61	(3.77	)	26.93	14.59	4.19
S&P 500 Index	13.69	1.38		11.95	21.82	(4.39	)
S&P 500 Multi-Utilities Index	28.94	(1.73	)	18.56	12.09	1.77



	Indexed Returns Year Ended December 31,
	Base Period
Company/Index	2013	2014	2015	2016	2017	2018
DTE Energy Company	100.00	134.61	129.54	164.41	188.40	196.30
S&P 500 Index	100.00	113.69	115.26	129.04	157.19	150.29
S&P 500 Multi-Utilities Index	100.00	128.94	126.71	150.22	168.38	171.35

Item 6. Selected Financial Data

The following selected financial data of DTE Energy should be read in conjunction with the accompanying Management’s Discussion and Analysis in Item 7 of this Report and Combined Notes to Consolidated Financial Statements in Item 8 of this Report. This information has been omitted for DTE Electric per General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries (reduced disclosure format).



	2018		2017		2016		2015		2014
	(In millions, except per share amounts)
Operating Revenues	$	14,212	$	12,607	$	10,630	$	10,337	$	12,301
Net Income Attributable to DTE Energy Company^(a)	$	1,120	$	1,134	$	868	$	727	$	905
Diluted Earnings Per Common Share	$	6.17	$	6.32	$	4.83	$	4.05	$	5.10
Financial Information
Dividends declared per share of common stock	$	3.60	$	3.36	$	3.06	$	2.84	$	2.69
Total Assets	$	36,288	$	33,767	$	32,041	$	28,662	$	27,827
Long-Term Debt^(b)	$	12,134	$	12,185	$	11,269	$	8,760	$	8,271
Shareholders’ equity	$	10,237	$	9,512	$	9,011	$	8,772	$	8,327


(a)	The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.


(b)	Long-Term Debt includes Capital lease obligations and excludes debt due within one year.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following combined discussion is separately filed by DTE Energy and DTE Electric. However, DTE Electric does not make any representations as to information related solely to DTE Energy or the subsidiaries of DTE Energy other than itself.

EXECUTIVE OVERVIEW

DTE Energy is a diversified energy company with 2018 Operating Revenues of approximately $14.2 billion and Total Assets of approximately $36.3 billion. DTE Energy is the parent company of DTE Electric and DTE Gas, regulated electric and natural gas utilities engaged primarily in the business of providing electricity and natural gas sales, distribution, and storage services throughout Michigan. DTE Energy operates three energy-related non-utility segments with operations throughout the United States.

The following table summarizes DTE Energy's financial results:



	Years Ended December 31,
	2018		2017		2016
	(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company	$	1,120	$	1,134	$	868
Diluted Earnings per Common Share	$	6.17	$	6.32	$	4.83

The decrease in 2018 Net Income Attributable to DTE Energy Company was primarily due to lower earnings in the Gas Storage and Pipelines, Energy Trading, and Corporate and Other segments, partially offset by higher earnings in the Electric, Gas, and Power and Industrial Projects segments. The 2018 decrease was partially attributable to true-up adjustments for the remeasurement of deferred taxes of $21 million as the adjustments increased Income Tax Expense, of which $17 million was attributable to the regulated utilities and increased Regulatory liabilities. The increase in 2017 Net Income Attributable to DTE Energy Company was primarily due to higher earnings in the Gas Storage and Pipelines, Energy Trading, and Power and Industrial Projects segments, partially offset by lower earnings in the Corporate and Other segment. The 2017 increase was also due to $105 million of net income tax benefit related to the enactment of the TCJA.

Please see detailed explanations of segment performance in the following "Results of Operations" section.

DTE Energy's strategy is to achieve long-term earnings growth, a strong balance sheet, and an attractive dividend yield.

DTE Energy's utilities are investing capital to improve customer reliability through investments in base infrastructure and new generation, and to comply with environmental requirements. DTE Energy expects that planned significant capital investments will result in earnings growth. DTE Energy is focused on executing plans to achieve operational excellence and customer satisfaction with a focus on customer affordability. DTE Energy operates in a constructive regulatory environment and has solid relationships with its regulators.

In May 2017, DTE Energy announced its plan to reduce carbon emissions. This goal will be attained by cutting carbon emissions 30% by the early 2020s, 45% by 2030, 75% by 2040, and more than 80% by 2050. To achieve this reduction, DTE Energy will transition away from coal-powered sources and incorporate more renewable energy, energy waste reduction projects, demand response, and natural gas fueled generation. DTE Energy has already begun the transition in the way it produces power through the continued retirement of its aging coal-fired plants. In May 2018, DTE Energy announced its plans to accelerate its clean energy initiatives by targeting at least a 50% clean energy goal by 2030 to be achieved through a combination of investments in renewable energy and energy waste reduction projects. Refer to the "Capital Investments" section below for further discussion.

DTE Energy has significant investments in non-utility businesses. DTE Energy employs disciplined investment criteria when assessing growth opportunities that leverage its assets, skills, and expertise, and provides diversity in earnings and geography. Specifically, DTE Energy invests in targeted energy markets with attractive competitive dynamics where meaningful scale is in alignment with its risk profile. DTE Energy expects growth opportunities in the Gas Storage and Pipelines and Power and Industrial Projects segments.

A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term and long-term financing. Near-term growth will be funded through internally generated cash flows and the issuance of debt and equity. DTE Energy has an enterprise risk management program that, among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related to commodity price changes, interest rates, and counterparty credit risk.

CAPITAL INVESTMENTS

DTE Energy's utility businesses require significant capital investments to maintain and improve the electric generation and electric and natural gas distribution infrastructure and to comply with environmental regulations and renewable energy requirements.

DTE Electric's capital investments over the 2019-2023 period are estimated at $11.3 billion comprised of $4.0 billion for capital replacements and other projects, $4.6 billion for distribution infrastructure, and $2.7 billion for new generation. DTE Electric has retired four coal-fired generation units at the Trenton Channel, River Rouge, and St Clair facilities and has announced plans to retire its remaining thirteen coal-fired generating units. Seven of these coal-fired generating units will be retired through 2023 at the Trenton Channel, River Rouge, and St. Clair facilities. The remaining coal-fired generating units at the Belle River and Monroe facilities are expected to be retired by 2040. The retired facilities will be replaced with renewables, energy waste reduction, demand response, and natural gas fueled generation. In April 2018, DTE Electric received approval from the MPSC to build a natural gas fueled combined cycle generation facility to provide approximately 1,100 megawatts of energy beginning in 2022. In August 2018, DTE Electric began construction on its natural gas fueled combined cycle generation facility. In March 2018, DTE Electric filed its 2018 Renewable Energy Plan with the MPSC proposing approximately 1,000 additional megawatts of energy from new wind and solar projects to be completed by 2022. The MPSC had previously approved 300 of the 1,000 additional megawatts for wind projects in an MPSC order received in September 2016. In January 2018, DTE Electric filed with the MPSC its five-year distribution operations investment and maintenance plan to improve system reliability. DTE Electric plans to seek regulatory approval for capital expenditures consistent with prior ratemaking treatment. For further discussion of regulatory matters, see Note 9 to the Consolidated Financial Statements, "Regulatory Matters."

DTE Gas' capital investments over the 2019-2023 period are estimated at $2.5 billion comprised of $1.2 billion for base infrastructure, and $1.3 billion for gas main renewal, meter move out, and pipeline integrity programs. DTE Gas plans to seek regulatory approval for capital expenditures consistent with ratemaking treatment.

DTE Energy's non-utility businesses' capital investments are primarily for expansion, growth, and ongoing maintenance. Gas Storage and Pipelines' capital investments over the 2019-2023 period are estimated at $4.0 billion to $5.0 billion for gathering and pipeline investments and expansions. Power and Industrial Projects' capital investments over the 2019-2023 period are estimated at $1.0 billion to $1.4 billion for industrial energy services and RNG projects.

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulation. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented. Actual costs to comply could vary substantially. The Registrants expect to continue recovering environmental costs related to utility operations through rates charged to customers, as authorized by the MPSC.

Air — DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of SO₂ and NO_X. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to controls on fossil-fueled power plants to reduce SO₂, NO_X, mercury, and other emissions. Additional rulemakings may occur over the next few years which could require additional controls for SO₂, NO_X, and other hazardous air pollutants. To comply with existing requirements, DTE Electric spent approximately $2.4 billion through 2018. DTE Electric does not anticipate additional capital expenditures through 2025.

The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of the economy. Among these actions, in 2015 the EPA finalized performance standards for emissions of carbon dioxide from new and existing EGUs. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth." The order instructs the EPA to review, and if appropriate, suspend, revise or rescind the Clean Power Plan rule. Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to hold all legal challenges in abeyance until the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issue an ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. In August 2018, the EPA proposed revised emission guidelines for GHGs from existing electric utility generating units. The proposed rule, named the Affordable Clean Energy (ACE) rule, is intended to replace the Clean Power Plan rule. Comments on the proposed ACE rule were due on October 31, 2018. It is not possible to determine the potential impact of the EPA's proposed ACE rule on existing sources at this time.

Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives, could also increase the economic viability of energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy waste reduction initiatives, and the potential development of market-based trading of carbon instruments which could provide new business opportunities for DTE Energy's utility and non-utility segments. At the present time, it is not possible to quantify the financial impacts of these climate related regulatory initiatives on the Registrants or their customers.

See Items 1. and 2. Business and Properties and Note 18 to the Consolidated Financial Statements in Item 8 of this Report, "Commitments and Contingencies," for further discussion of Environmental Matters.

OUTLOOK

The next few years will be a period of rapid change for DTE Energy and for the energy industry. DTE Energy's strong utility base, combined with its integrated non-utility operations, position it well for long-term growth.

Looking forward, DTE Energy will focus on several areas that are expected to improve future performance:

electric and gas customer satisfaction;

electric distribution system reliability;

new electric generation;

gas distribution system renewal;

rate competitiveness and affordability;

regulatory stability and investment recovery for the electric and gas utilities;

employee safety and engagement;

cost structure optimization across all business segments;

cash, capital, and liquidity to maintain or improve financial strength; and

investments that integrate assets and leverage skills and expertise.

DTE Energy will continue to pursue opportunities to grow its businesses in a disciplined manner if it can secure opportunities that meet its strategic, financial, and risk criteria.

RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations includes financial information prepared in accordance with GAAP, as well as the non-GAAP financial measures, Utility Margin and Non-utility Margin, discussed below, which DTE Energy uses as measures of its operational performance. Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

DTE Energy uses Utility Margin and Non-utility Margin, non-GAAP financial measures, to assess its performance by reportable segment.

Utility Margin includes electric and gas Operating Revenues net of Fuel, purchased power, and gas expenses. The utilities’ fuel, purchased power, and natural gas supply are passed through to customers, and therefore, result in changes to the utilities’ revenues that are comparable to changes in such expenses. As such, DTE Energy believes Utility Margin provides a meaningful basis for evaluating the utilities’ operations across periods, as it excludes the revenue effect of fluctuations in these expenses.

The Non-utility Margin relates to the Power and Industrial Projects and Energy Trading segments. For the Power and Industrial Projects segment, Non-utility Margin primarily includes Operating Revenues net of Fuel, purchased power, and gas expenses. Operating Revenues include sales of refined coal to third parties and the affiliated Electric utility, metallurgical coke and related by-products, petroleum coke, renewable natural gas, and electricity, as well as rental income and revenues from utility-type consulting, management, and operational services. For the Energy Trading segment, Non-utility Margin includes revenue and realized and unrealized gains and losses from physical and financial power and gas marketing, optimization, and trading activities, net of Purchased power and gas related to these activities. DTE Energy evaluates its operating performance of these non-utility businesses using the measure of Operating Revenues net of Fuel, purchased power, and gas expenses.

Utility Margin and Non-utility Margin are not measures calculated in accordance with GAAP and should be viewed as a supplement to and not a substitute for the results of operations presented in accordance with GAAP. Utility Margin and Non-utility Margin do not intend to represent operating income, the most comparable GAAP measure, as an indicator of operating performance and are not necessarily comparable to similarly titled measures reported by other companies.

The following sections provide a detailed discussion of the operating performance and future outlook of DTE Energy's segments. Segment information, described below, includes intercompany revenues and expenses, and other income and deductions that are eliminated in the Consolidated Financial Statements.



	2018			2017			2016
	(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment
Electric	$	664		$	606		$	622
Gas	150			146			138
Gas Storage and Pipelines	235			275			119
Power and Industrial Projects	161			138			95
Energy Trading	39			72			(45		)
Corporate and Other	(129		)	(103		)	(61		)
Net Income Attributable to DTE Energy Company	$	1,120		$	1,134		$	868

ELECTRIC

The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries.

The Electric segment consists principally of DTE Electric. Electric results are discussed below:



	2018			2017		2016
	(In millions)
Operating Revenues — Utility operations	$	5,298		$	5,102	$	5,225
Fuel and purchased power — utility	1,552			1,454		1,532
Utility Margin	3,746			3,648		3,693
Operation and maintenance	1,437			1,382		1,408
Depreciation and amortization	836			753		750
Taxes other than income	307			302		284
Asset (gains) losses and impairments, net	(1		)	—		—
Operating Income	1,167			1,211		1,251
Other (Income) and Deductions	310			284		276
Income Tax Expense	193			321		353
Net Income Attributable to DTE Energy Company	$	664		$	606	$	622

See DTE Electric's Consolidated Statements of Operations in Item 8 of this Report for a complete view of its results. For an explanation of differences between the Electric segment and DTE Electric's Consolidated Statements of Operations, refer to Note 20 to the Consolidated Financial Statements, "Retirement Benefits and Trusteed Assets."

Utility Margin increased $98 million in 2018 and decreased $45 million in 2017. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.

The following table details changes in various Utility Margin components relative to the comparable prior period:



	2018			2017
	(In millions)
Weather	$	152		$	(109	)
Implementation of new rates	51			124
Regulatory mechanism — TRM	40			(26		)
PSCR disallowance in 2017	13			(13		)
Base sales	(3		)	(26		)
TCJA rate reduction	(156		)	—
Other regulatory mechanisms and other	1			5
Increase (decrease) in Utility Margin	$	98		$	(45	)



	2018	2017	2016
	(In thousands of MWh)
DTE Electric Sales
Residential	15,959	14,885	15,875
Commercial	17,282	17,283	17,521
Industrial	10,324	9,897	10,004
Other	221	258	264
	43,786	42,323	43,664
Interconnection sales^(a)	2,796	2,623	2,334
Total DTE Electric Sales	46,582	44,946	45,998

DTE Electric Deliveries
Retail and wholesale	43,786	42,323	43,664
Electric retail access, including self-generators^(b)	4,737	4,820	4,936
Total DTE Electric Sales and Deliveries	48,523	47,143	48,600


(a)	Represents power that is not distributed by DTE Electric.


(b)	Represents deliveries for self-generators that have purchased power from alternative energy suppliers to supplement their power requirements.

DTE Electric sales increased for residential, commercial, and industrial primarily due to favorable weather in 2018.

Operation and maintenance expense increased $55 million in 2018 and decreased $26 million in 2017. The increase in 2018 was primarily due to increased uncollectible expense of $34 million due to customer billing initiatives following implementation of the new billing system, increased power plant generation expense of $24 million, an increase in energy waste reduction expense of $10 million to meet higher energy savings targets, partially offset by decreased distribution operations expense of $13 million. The decrease in 2017 was primarily due to decreased power plant generation expenses of $66 million, partially offset by increased storm restoration expenses of $27 million, and increased line clearance expenses of $10 million. The decrease in power plant generation includes an increase of $6 million of costs related to the 2016 fire at a generation facility, offset by $21 million of insurance proceeds received in 2017.

Depreciation and amortization expense increased $83 million in 2018 and increased $3 million in 2017. In 2018, the increase was primarily due to an increase to depreciable base of $46 million and an increase of $42 million associated with the TRM, partially offset by a decrease in regulatory asset amortization of $5 million. In 2017, the increase was due to $45 million of increased expense from an increased depreciable base, partially offset by a decrease of $29 million associated with the TRM, and a decrease of $13 million in amortization of regulatory assets.

Other (Income) and Deductions increased $26 million in 2018 and increased $8 million in 2017. The increase in 2018 was primarily due to higher interest expense of $9 million and change in investment earnings (loss of $11 million in 2018 compared to a gain of $26 million in 2017), partially offset by decreased non-operating retirement benefits expense of $13 million and a contribution to the DTE Energy Foundation of $7 million in 2017. The increase in 2017 was primarily due to higher interest expense of $10 million, lower interest income of $8 million related to a sales and use tax settlement received in 2016, and a $7 million contribution to the DTE Energy Foundation, partially offset by $12 million of higher investment earnings and a $3 million decrease in Low Income Self-Sufficiency Plan (LSP) contributions to not-for-profit organizations in 2016.

Outlook— DTE Electric will continue to move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn its authorized return on equity. DTE Electric expects that planned significant capital investments will result in earnings growth. DTE Electric will maintain a strong focus on customers by increasing reliability and satisfaction while keeping customer rate increases affordable. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investment returns and changes in discount rate assumptions in benefit plans and health care costs, uncertainty of legislative or regulatory actions regarding climate change, and effects of energy waste reduction programs.

DTE Electric filed a rate case with the MPSC on July 6, 2018 requesting an increase in base rates of $328 million based on a projected twelve-month period ending April 30, 2020. The requested increase in base rates is primarily due to an increase in net plant resulting from infrastructure investments, depreciation expense, as requested in the 2016 DTE Electric Depreciation Case Filing, and reliability improvement projects. The rate filing also requests an increase in return on equity from 10.0% to 10.5% and includes projected changes in sales, operation and maintenance expenses, and working capital. In addition, the rate filing requests an Infrastructure Recovery Mechanism to recover the incremental revenue requirement associated with certain distribution, fossil generation, and nuclear generation capital expenditures through 2022. DTE Electric also included Calculation C in this filing to address all remaining issues relative to the enactment of the TCJA, which is primarily the remeasurement of deferred taxes and how the amounts deferred as Regulatory liabilities will flow to ratepayers. A final MPSC order in this case is expected by May 2019. Refer to Note 9 to the Consolidated Financial Statements, “Regulatory Matters” for additional information.

GAS

The Gas segment consists principally of DTE Gas. Gas results are discussed below:



	2018		2017		2016
	(In millions)
Operating Revenues — Utility operations	$	1,436	$	1,388	$	1,324
Cost of gas — utility	446		443		454
Utility Margin	990		945		870
Operation and maintenance	502		449		440
Depreciation and amortization	133		123		106
Taxes other than income	73		65		64
Asset (gains) losses and impairments, net	—		—		4
Operating Income	282		308		256
Other (Income) and Deductions	65		84		41
Income Tax Expense	67		78		77
Net Income Attributable to DTE Energy Company	$	150	$	146	$	138

Utility Margin increased $45 million in 2018 and increased $75 million in 2017. Revenues associated with certain surcharges are offset by related expenses elsewhere in DTE Energy's Consolidated Statements of Operations.

The following table details changes in various Utility Margin components relative to the comparable prior period:



	2018			2017
	(In millions)
Weather	$	46		$	(6	)
Implementation of new rates	15			80
Midstream storage and transportation revenues	15			(5		)
Regulatory mechanism — RDM	(3		)	4
TCJA rate reduction	(40		)	—
Other regulatory mechanisms and other	12			2
Increase in Utility Margin	$	45		$	75



	2018	2017	2016
	(In Bcf)
Gas Markets
Gas sales	135	119	116
End-user transportation	187	165	182
	322	284	298
Intermediate transportation	329	260	214
Total Gas sales	651	544	512

Operation and maintenance expense increased $53 million in 2018 and increased $9 million in 2017. The increase in 2018 was primarily due to increased uncollectible expense of $28 million due to customer billing initiatives following implementation of a new customer billing system and higher gas operations expenses of $22 million, which included increased investment spending and higher pipeline integrity expenses. The increase in 2017 was primarily due to increased corporate expenses of $3 million and increased gas operations expenses of $3 million.

Depreciation and amortization expense increased $10 million in 2018 and increased $17 million in 2017. The increase in 2018 was primarily due to an increased depreciable base. The increase in 2017 was primarily due to an increased depreciable base and higher depreciation rates.

Other (Income) and Deductions decreased $19 million in 2018 and increased $43 million in 2017. The decrease in 2018 was primarily due to lower contributions to the DTE Energy Foundation and other not-for-profit organizations of $27 million, partially offset by higher net interest expense of $6 million. The increase in 2017 was primarily due to increased non-operating retirement benefits expenses of $31 million, increased contributions to the DTE Energy Foundation and other not-for-profit organizations of $7 million and higher interest expense of $5 million.

Outlook — DTE Gas will continue to move forward in its efforts to achieve operational excellence, sustain strong cash flows, and earn its authorized return on equity. DTE Gas expects that planned significant infrastructure capital investments will result in earnings growth. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, and investment returns and changes in discount rate assumptions in benefit plans and health care costs. DTE Gas expects to continue its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.

DTE filed its Calculation C case with the MPSC on November 16, 2018 to reduce the revenue requirement by $12 million related to the amortization of deferred tax remeasurement. Calculation C addresses all remaining issues relative to the enactment of the TCJA, which is primarily the remeasurement of deferred taxes and how the amounts deferred as Regulatory liabilities will flow to ratepayers. Refer to Note 9 to the Consolidated Financial Statements, “Regulatory Matters” for additional information.

GAS STORAGE AND PIPELINES

The Gas Storage and Pipelines segment consists of the non-utility gas pipelines and storage businesses. Gas Storage and Pipelines results are discussed below:



	2018			2017			2016
	(In millions)
Operating Revenues — Non-utility operations	$	485		$	453		$	302
Cost of gas — Non-utility	22			30			6
Operation and maintenance	103			83			81
Depreciation and amortization	82			76			45
Taxes other than income	8			8			4
Asset (gains) losses and impairments, net	—			2			—
Operating Income	270			254			166
Other (Income) and Deductions	(61		)	(18		)	(31		)
Income Tax Expense (Benefit)	68			(30		)	71
Net Income	263			302			126
Less: Net Income Attributable to Noncontrolling Interests	28			27			7
Net Income Attributable to DTE Energy Company	$	235		$	275		$	119

Operating Revenues — Non-utility operations increased $32 million in 2018 and increased $151 million in 2017. The increase in both periods was primarily due to increased pipeline and gathering volumes. The 2017 increase was also due to the acquisition of AGS and SGG in October 2016.

Cost of gas — Non-utility decreased $8 million in 2018 and increased $24 million in 2017. The 2018 decrease was driven by lower physical purchases of gas from AGS customers for resale to optimize available transportation capacity. The 2017 increase was driven by higher physical purchases of gas from AGS customers for resale to optimize available transportation capacity.

Operation and maintenance expense increased $20 million in 2018 and increased $2 million in 2017. The 2018 increase was primarily due to increased labor related expenses and additional compression activity on the Bluestone Pipeline and Susquehanna gathering systems.

Depreciation and amortization expense increased $6 million in 2018 and increased $31 million in 2017. The 2017 increase was primarily due to the acquisition of AGS and SGG in October 2016.

Other (Income) and Deductions increased $43 million in 2018 and decreased $13 million in 2017. The 2018 increase was primarily due to increased earnings from pipeline investments and a $16 million net loss on extinguishment of debt within the storage business in 2017, partially offset by higher interest expense. The 2017 decrease was primarily due to a $16 million net loss on extinguishment of debt within the storage business and contributions to the DTE Energy Foundation and other not-for-profit organizations, partially offset by increased earnings from pipeline investments.

Income Tax Expense (Benefit) increased $98 million in 2018 and decreased $101 million in 2017. The changes were primarily driven by the $115 million remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017. The 2017 change was partially offset by increased tax expense on higher earnings in 2017.

Net Income Attributable to Noncontrolling Interests increased $1 million in 2018 and increased $20 million in 2017. The 2017 increase was primarily due to the acquisition of SGG in October 2016.

Outlook — DTE Energy believes its long-term agreements with producers and the quality of the natural gas reserves in the Marcellus/Utica region soundly position the gathering systems for future revenues.

NEXUS Pipeline was placed in service in in October 2018. The NEXUS Pipeline provides a transportation path for Appalachian Basin shale gas, including Utica and Marcellus shale gas, directly to consuming markets in northern Ohio, southeastern Michigan, and Dawn Ontario. DTE Energy owns a 50% partnership interest in the NEXUS Pipeline with an investment balance of $1.26 billion at December 31, 2018.

On January 11, 2019, NEXUS signed an agreement to purchase Generation Pipeline, LLC, a public utility regulated by the Public Utilities Commission of Ohio. This 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 4 miles away from Nexus. The transaction is expected to close in the first half of 2019 upon regulatory approvals.

AGS and SGG provide a platform for midstream growth and access to further investment opportunities in the Appalachian basin, an additional connection to the NEXUS Pipeline which should drive incremental volumes on the NEXUS Pipeline, and producer relationships that may lead to more partnering opportunities.

Gas Storage and Pipelines expects to maintain its steady growth by developing an asset portfolio with multiple growth platforms through investment in new projects and expansions. Gas Storage and Pipelines will continue to look for additional investment opportunities and other storage and pipeline projects at favorable prices.

POWER AND INDUSTRIAL PROJECTS

The Power and Industrial Projects segment is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity and pipeline-quality gas from renewable energy projects. Power and Industrial Projects results are discussed below:



	2018			2017			2016
	(In millions)
Operating Revenues — Non-utility operations	$	2,204		$	2,089		$	1,906
Fuel, purchased power, and gas — non-utility	1,888			1,813			1,640
Non-utility Margin	316			276			266
Operation and maintenance	363			342			317
Depreciation and amortization	67			72			72
Taxes other than income	12			11			13
Asset (gains) losses and impairments, net	27			20			(1		)
Operating Loss	(153		)	(169		)	(135		)
Other (Income) and Deductions	(89		)	(63		)	(49		)
Income Taxes
Benefit	(7		)	(42		)	(26		)
Production Tax Credits	(188		)	(153		)	(114		)
	(195		)	(195		)	(140		)
Net Income	131			89			54
Less: Net Loss Attributable to Noncontrolling Interests	(30		)	(49		)	(41		)
Net Income Attributable to DTE Energy Company	$	161		$	138		$	95

Operating Revenues — Non-utility operations increased $115 million in 2018 and increased $183 million in 2017. The changes are due to the following:



	2018
	(In millions)
Higher demand due to improved conditions in the steel business	$	59
Higher production in the renewables business	25
Higher production, offset by lower coal prices in the REF business	18
Higher sales primarily associated with new contracts in the on-site business	13
	$	115

	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	107
Higher production driven by new projects, offset by lower coal prices in the REF business	102
Lower production and one-time recovery in 2016, offset by an acquisition in the renewables business	(9		)
Lower sales primarily associated with expired contracts in the on-site business	(17		)
	$	183

Non-utility Margin increased $40 million in 2018 and increased $10 million in 2017. The changes are due to the following:



	2018
	(In millions)
Higher production in the renewables business	$	20
Higher sales primarily associated with new contracts in the on-site business	12
Higher demand due to improved conditions in the steel business	8
	$	40

	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	42
Lower production and one-time recovery in 2016 in the renewables business	(11		)
Lower sales primarily associated with expired contracts in the on-site business	(15		)
Other	(6		)
	$	10

Operation and maintenance expense increased $21 million in 2018 and increased $25 million in 2017. The 2018 increase was primarily due to higher production in the REF business of $11 million and new contracts in the on-site business of $8 million. The 2017 increase was primarily due to an increase in maintenance spending driven by improved conditions in the steel business of $16 million, higher maintenance and a new acquisition in the renewables business of $7 million, and an increase associated with new projects in the REF business of $5 million, offset by lower spending as a result of Shenango plant closure activities in the first half of 2016 of $6 million.

Asset (gains) losses and impairments, net increased $7 million in 2018 from the net loss of $20 million in 2017 and decreased $21 million in 2017 from the net gain of $1 million in 2016. The 2018 increase was primarily due to $15 million of a liability adjustment related to contingent consideration and an $8 million asset write-off associated with the renewable business in anticipation of a contract ending in 2020. The 2017 decrease was primarily due to an impairment in the REF business of $14 million and an impairment of a petroleum coke project of $6 million.

Other (Income) and Deductions increased $26 million in 2018 and increased $14 million in 2017. The 2018 increase was primarily due to higher production in the REF business of $20 million and decreased contributions to the DTE Energy Foundation of $4 million. The 2017 increase was primarily due to increased equity earnings in the renewable business of $9 million and insurance settlements in the renewable and REF businesses of $6 million, offset by increased contributions to the DTE Energy Foundation of $6 million.

Income Taxes — Benefit decreased by $35 million in 2018 and increased by $16 million in 2017. The 2018 decrease was primarily due to the 2017 remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017. The increase in 2017 was primarily due to the remeasurement of deferred tax assets and liabilities to reflect the reduction in the corporate tax rate from the enactment of the TCJA in December 2017 of $21 million, an increase due to higher pretax loss of $7 million, and a decrease due to a worthless stock deduction associated with the Shenango closure in 2016 of $10 million.

Income Taxes — Production Tax Credits increased by $35 million in 2018 and increased $39 million in 2017. The increase in both periods was primarily due to higher production in the REF business.

Net Loss Attributable to Noncontrolling Interests decreased by $19 million in 2018 and increased by $8 million in 2017. The 2018 decrease was primarily due to termination of a project in the REF business. The 2017 increase was primarily due to a change in the ownership percentage in one of the REF projects of $8 million.

Outlook — Power and Industrial Projects has constructed and placed in service REF facilities at ten sites including facilities located at seven third-party owned coal-fired power plants. DTE Energy has sold membership interests in five of the facilities and entered into lease arrangements in three of the facilities. Three REF facilities will phase out in 2019 with the remaining seven to be phased out at the end of 2021.

Power and Industrial Projects will continue to leverage its extensive energy-related operating experience and project management capability to develop additional energy projects to serve energy intensive industrial customers.

ENERGY TRADING

Energy Trading focuses on physical and financial power and natural gas marketing and trading, structured transactions, enhancement of returns from its asset portfolio, and optimization of contracted natural gas pipeline transportation and storage positions. Energy Trading also provides natural gas, power, and related services, which may include the management of associated storage and transportation contracts on the customers' behalf, and the supply or purchase of renewable energy credits to various customers. Energy Trading results are discussed below:



	2018		2017		2016
	(In millions)
Operating Revenues — Non-utility operations	$	5,557	$	4,277	$	2,575
Purchased power and gas — non-utility	5,417		4,077		2,552
Non-utility Margin	140		200		23
Operation and maintenance	75		68		63
Depreciation and amortization	5		5		3
Taxes other than income	5		4		2
Operating Income (Loss)	55		123		(45		)
Other (Income) and Deductions	3		2		29
Income Tax Expense (Benefit)	13		49		(29		)
Net Income (Loss) Attributable to DTE Energy Company	$	39	$	72	$	(45	)

Operating Revenues — Non-utility operations and Purchased power and gas — non-utility were impacted primarily by an increase in volumes as well as an increase in gas prices for the years ended December 31, 2018 and December 31, 2017, primarily in the gas structured strategy.

Non-utility Margin decreased $60 million in 2018 and increased $177 million in 2017. The change in both periods was primarily due to timing from the unrealized and realized margins presented in the following tables:



	2018
	(In millions)
Unrealized Margins^(a)
Favorable results, primarily in the power trading strategy	$	20
Unfavorable results, primarily in gas structured, and power full requirements strategies^(b)	(100		)
	(80		)
Realized Margins^(a)
Favorable results, primarily in the gas structured strategy	54
Unfavorable results, primarily in the power full requirements strategy^(c)	(34		)
	20
Decrease in Non-utility Margin	$	(60	)

(a)

Natural gas structured transactions typically involve a physical purchase or sale of natural gas in the future and/or natural gas basis financial instruments which are derivatives and a related non-derivative pipeline transportation contract. These gas structured transactions can result in significant earnings volatility as the derivative components are marked-to-market without revaluing the related non-derivative contracts.


(b)	Amount includes $74 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.


(c)	Amount includes $11 million of timing related gains related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.



	2017
	(In millions)
Unrealized Margins^(a)
Favorable results, primarily in gas structured and gas full requirements strategies^(b)	$	113
Unfavorable results, primarily in power and gas trading and power full requirements strategies	(26		)
	87
Realized Margins^(a)
Favorable results, primarily in gas structured, environmental trading and gas storage strategies^(c)	103
Unfavorable results, primarily in the power full requirements strategy	(13		)
	90
Increase in Non-utility Margin	$	177

(a)


(b)	Amount includes $113 million of timing related gains related to gas strategies which will reverse in future periods as the underlying contracts settle.


(c)	Amount includes $95 million of timing related losses related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.

Other (Income) and Deductions increased$1 million in 2018 and decreased $27 million in 2017 due to contributions to the DTE Energy Foundation in 2016.

Outlook — In the near-term, Energy Trading expects market conditions to remain challenging, and the profitability of this segment may be impacted by the volatility in commodity prices and the uncertainty of impacts associated with regulatory changes, and changes in operating rules of RTOs. Significant portions of the Energy Trading portfolio are economically hedged. Most financial instruments and physical power and natural gas contracts are deemed derivatives, whereas natural gas inventory, pipeline transportation, renewable energy credits, and storage assets are not derivatives. As a result, Energy Trading will experience earnings volatility as derivatives are marked-to-market without revaluing the underlying non-derivative contracts and assets. Energy Trading's strategy is to economically manage the price risk of these underlying non-derivative contracts and assets with futures, forwards, swaps, and options. This results in gains and losses that are recognized in different interim and annual accounting periods.

See also the "Fair Value" section herein and Notes 12 and 13 to the Consolidated Financial Statements in Item 8 of this Report, "Fair Value" and "Financial and Other Derivative Instruments," respectively.

~~CORPORATE~~EMPLOYEES

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.

At December 31, 2018, there were 181,925,281 shares of DTE Energy common stock outstanding. These shares were held by a total of 51,338 shareholders of record.

For information on DTE Energy dividend restrictions, see Note 16 to the Consolidated Financial Statements in Item 8 of this Report, "Short-Term Credit Arrangements and Borrowings."

See the following table for information as of December 31, 2018:



	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	52,100	$	43.30	2,897,674

UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND ~~OTHER~~USE OF PROCEEDS

~~Description~~Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers



	Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2018 — 10/31/2018	143	$	110.14	—	—	—
11/01/2018 — 11/30/2018	—	$	—	—	—	—
12/01/2018 — 12/31/2018	—	$	—	—	—	—
Total	143			—


(a)	Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)



	Annual Return Percentage Year Ended December 31,
Company/Index	2014	2015		2016	2017	2018
DTE Energy Company	34.61	(3.77	)	26.93	14.59	4.19
S&P 500 Index	13.69	1.38		11.95	21.82	(4.39	)
S&P 500 Multi-Utilities Index	28.94	(1.73	)	18.56	12.09	1.77



	Indexed Returns Year Ended December 31,
	Base Period
Company/Index	2013	2014	2015	2016	2017	2018
DTE Energy Company	100.00	134.61	129.54	164.41	188.40	196.30
S&P 500 Index	100.00	113.69	115.26	129.04	157.19	150.29
S&P 500 Multi-Utilities Index	100.00	128.94	126.71	150.22	168.38	171.35

Item 6. Selected Financial Data



	2018		2017		2016		2015		2014
	(In millions, except per share amounts)
Operating Revenues	$	14,212	$	12,607	$	10,630	$	10,337	$	12,301
Net Income Attributable to DTE Energy Company^(a)	$	1,120	$	1,134	$	868	$	727	$	905
Diluted Earnings Per Common Share	$	6.17	$	6.32	$	4.83	$	4.05	$	5.10
Financial Information
Dividends declared per share of common stock	$	3.60	$	3.36	$	3.06	$	2.84	$	2.69
Total Assets	$	36,288	$	33,767	$	32,041	$	28,662	$	27,827
Long-Term Debt^(b)	$	12,134	$	12,185	$	11,269	$	8,760	$	8,271
Shareholders’ equity	$	10,237	$	9,512	$	9,011	$	8,772	$	8,327


(a)	The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.


(b)	Long-Term Debt includes Capital lease obligations and excludes debt due within one year.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE OVERVIEW

The following table summarizes DTE Energy's financial results:



	Years Ended December 31,
	2018		2017		2016
	(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company	$	1,120	$	1,134	$	868
Diluted Earnings per Common Share	$	6.17	$	6.32	$	4.83

The decrease in 2018 Net Income Attributable to DTE Energy Company was primarily due to lower earnings in the Gas Storage and Pipelines, Energy Trading, and Corporate and Other ~~includes various holding company activities, holds certain~~segments, partially offset by higher earnings in the Electric, Gas, and Power and Industrial Projects segments. The 2018 decrease was partially attributable to true-up adjustments for the remeasurement of deferred taxes of $21 million as the adjustments increased Income Tax Expense, of which $17 million was attributable to the regulated utilities and increased Regulatory liabilities. The increase in 2017 Net Income Attributable to DTE Energy Company was primarily due to higher earnings in the Gas Storage and Pipelines, Energy Trading, and Power and Industrial Projects segments, partially offset by lower earnings in the Corporate and Other segment. The 2017 increase was also due to $105 million of net income tax benefit related to the enactment of the TCJA.

Please see detailed explanations of segment performance in the following "Results of Operations" section.

DTE Energy's strategy is to achieve long-term earnings growth, a strong balance sheet, and an attractive dividend yield.

A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term and long-term financing. Near-term growth will be funded through internally generated cash flows and the issuance of debt and ~~energy-related investments.~~equity. DTE Energy has an enterprise risk management program that, among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related to commodity price changes, interest rates, and counterparty credit risk.

CAPITAL INVESTMENTS

ENVIRONMENTAL MATTERS

The Registrants are subject to extensive environmental regulation and expect to continue recovering environmental costs related to utility operations through rates charged to customers. The following table summarizes DTE Energy's, including DTE Electric's, estimated significant future environmental expenditures based upon current regulations. The amounts reported in the following table do not include any expenditures related to the EPA Clean Power Plan as discussed below. Actual costs to comply could vary substantially.regulation. Additional costs may result as the effects of various substances on the environment are studied and governmental regulations are developed and implemented.

DTE Electric DTE Gas Non-utility Total
(In millions)
Air $ 40
$ —
$ —
$ 40
Water 90
—
—
90
Contaminated and other sites 10
20
—
30
Coal Combustion Residuals and Effluent Limitations Guidelines 290
—
—
290
Estimated total future expenditures through 2022 $ 430
$ 20
$ —
$ 450
Estimated 2016 expenditures $ 70
$ 7
$ —
$ 77
Estimated 2017 expenditures $ 40
$ 4
$ —
$ 44
Actual costs to comply could vary substantially. The Registrants expect to continue recovering environmental costs related to utility operations through rates charged to customers, as authorized by the MPSC.

Air — DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of ~~sulfur dioxide~~SO₂ and ~~nitrogen oxides.~~NO_X. The EPA and the State of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to ~~additional emission~~ controls on fossil-fueled power plants to reduce ~~nitrogen oxide and sulfur dioxide, with further emission controls planned for reductions of~~SO₂, NO_X, mercury, and other emissions. ~~These~~Additional rulemakings may occur over the next few years which could require additional controls for ~~sulfur dioxide, nitrogen oxides,~~SO₂, NO_X, and other hazardous air ~~pollutants over the next few years.~~pollutants. To comply with existing requirements, DTE Electric spent approximately $2.4 billion through 2018. DTE Electric does not anticipate additional capital expenditures through 2025.

The EPA ~~is implementing~~has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of the economy. Among these actions, in 2015 the EPA ~~has~~ finalized performance standards for emissions of carbon dioxide from new and existing ~~electric generating units (EGUs).~~EGUs. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The ~~carbon standards for new sources are not expected to have a material impact on DTE Electric, since DTE Electric~~Clean Power Plan has no ~~plans~~legal effect while the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth." The order instructs the EPA to ~~build new coal-fired generation~~review, and ~~any potential new gas generation will be able~~if appropriate, suspend, revise or rescind the Clean Power Plan rule. Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to ~~comply with~~hold all legal challenges in abeyance until the ~~standards.~~review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issue an ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. In August 2018, the EPA proposed revised emission guidelines for GHGs from existing electric utility generating units. The proposed rule, named the Affordable Clean Energy (ACE) rule, is intended to replace the Clean Power Plan rule. Comments on the proposed ACE rule were due on October 31, 2018. It is not possible to determine the potential impact of the ~~final carbon standards (also known as the EPA Clean Power Plan)~~EPA's proposed ACE rule on existing sources at this time.

~~Water~~ ~~— The EPA finalized regulations on cooling water intake in August 2014.~~Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives, could also increase the economic viability of energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy waste reduction initiatives, and the potential development of market-based trading of carbon instruments which could provide new business opportunities for DTE ~~Electric~~Energy's utility and non-utility segments. At the present time, it is ~~conducting studies~~not possible to ~~determine~~quantify the ~~best technology for reducing the environmental~~financial impacts of these climate related regulatory initiatives on the ~~cooling water intake structures at each of its facilities. DTE Electric may be required to install technologies to reduce the impacts of the cooling water intakes.~~

~~Contaminated and Other Sites~~ ~~— Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke,~~Registrants or oil. The facilities, which produced gas, have been designated as MGP sites. DTE Gas owns, or previously owned, fourteen such former MGP sites. DTE Electric owns, or previously owned, three former MGP sites. DTE Energy anticipates the cost amortization methodology approved by the MPSC for DTE Gas, which allows DTE Gas to amortize the MGP costs over a ten-year period beginning with the year subsequent to the year the MGP costs were incurred, will prevent environmental costs from having a material adverse effect on DTE Energy's operations. DTE Electric believes the likelihood of a material change to the accrued amount is remote based on current knowledge of the conditions at each of its sites.

~~Coal Combustion Residuals~~See Items 1. and ~~Effluent Limitations Guidelines~~— In April 2015, the EPA published a final rule for the disposal of coal combustion residuals, commonly known as coal ash. The rule became effective in October 2015. The rule is based on the continued listing of coal ash as a non-hazardous waste2. Business and ~~relies on various self-implementation design~~Properties and performance standards. DTE Electric owns and operates 3 permitted engineered coal ash storage facilities to dispose of coal ash from coal-fired power plants and operates a number of smaller impoundments at its power plants. At certain facilities, the rule requires the installation of monitoring wells, compliance with groundwater standards, and the closure of basins at the end of the useful life of the associated power plant. At other facilities, the rule requires ash laden waters be moved from earthen basins to steel and concrete tanks.

In November 2015, the EPA finalized effluent limitations guidelines for the steam electric power generating industry which may require additional controls to be installed between 2018 and 2023. The initial costs to comply with this rule have been developed and included in the Coal Combustion Residual and Effluent Limitations Guidelines amount in the above table.

~~See Management’s Discussion and Analysis in Item 7 of this Report and Notes 7, 8, and 17~~Note 18 to the Consolidated Financial Statements in Item 8 of this Report, ~~"Regulatory Matters", "Asset Retirement Obligations", and~~ "Commitments and ~~Contingencies".~~Contingencies," for further discussion of Environmental Matters.

OUTLOOK

Looking forward, DTE Energy will focus on several areas that are expected to improve future performance:

electric and gas customer satisfaction;

electric distribution system reliability;

new electric generation;

gas distribution system renewal;

rate competitiveness and affordability;

regulatory stability and investment recovery for the electric and gas utilities;

employee safety and engagement;

cost structure optimization across all business segments;

cash, capital, and liquidity to maintain or improve financial strength; and

investments that integrate assets and leverage skills and expertise.

DTE Energy will continue to pursue opportunities to grow its businesses in a disciplined manner if it can secure opportunities that meet its strategic, financial, and risk criteria.

RESULTS OF OPERATIONS

DTE Energy uses Utility Margin and Non-utility Margin, non-GAAP financial measures, to assess its performance by reportable segment.



	2018			2017			2016
	(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment
Electric	$	664		$	606		$	622
Gas	150			146			138
Gas Storage and Pipelines	235			275			119
Power and Industrial Projects	161			138			95
Energy Trading	39			72			(45		)
Corporate and Other	(129		)	(103		)	(61		)
Net Income Attributable to DTE Energy Company	$	1,120		$	1,134		$	868

ELECTRIC

The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries.

The Electric segment consists principally of DTE Electric. Electric results are discussed below:



	2018			2017		2016
	(In millions)
Operating Revenues — Utility operations	$	5,298		$	5,102	$	5,225
Fuel and purchased power — utility	1,552			1,454		1,532
Utility Margin	3,746			3,648		3,693
Operation and maintenance	1,437			1,382		1,408
Depreciation and amortization	836			753		750
Taxes other than income	307			302		284
Asset (gains) losses and impairments, net	(1		)	—		—
Operating Income	1,167			1,211		1,251
Other (Income) and Deductions	310			284		276
Income Tax Expense	193			321		353
Net Income Attributable to DTE Energy Company	$	664		$	606	$	622

The following table details changes in various Utility Margin components relative to the comparable prior period:



	2018			2017
	(In millions)
Weather	$	152		$	(109	)
Implementation of new rates	51			124
Regulatory mechanism — TRM	40			(26		)
PSCR disallowance in 2017	13			(13		)
Base sales	(3		)	(26		)
TCJA rate reduction	(156		)	—
Other regulatory mechanisms and other	1			5
Increase (decrease) in Utility Margin	$	98		$	(45	)



	2018	2017	2016
	(In thousands of MWh)
DTE Electric Sales
Residential	15,959	14,885	15,875
Commercial	17,282	17,283	17,521
Industrial	10,324	9,897	10,004
Other	221	258	264
	43,786	42,323	43,664
Interconnection sales^(a)	2,796	2,623	2,334
Total DTE Electric Sales	46,582	44,946	45,998

DTE Electric Deliveries
Retail and wholesale	43,786	42,323	43,664
Electric retail access, including self-generators^(b)	4,737	4,820	4,936
Total DTE Electric Sales and Deliveries	48,523	47,143	48,600


(a)	Represents power that is not distributed by DTE Electric.


(b)	Represents deliveries for self-generators that have purchased power from alternative energy suppliers to supplement their power requirements.

DTE Electric sales increased for residential, commercial, and industrial primarily due to favorable weather in 2018.

GAS

The Gas segment consists principally of DTE Gas. Gas results are discussed below:



	2018		2017		2016
	(In millions)
Operating Revenues — Utility operations	$	1,436	$	1,388	$	1,324
Cost of gas — utility	446		443		454
Utility Margin	990		945		870
Operation and maintenance	502		449		440
Depreciation and amortization	133		123		106
Taxes other than income	73		65		64
Asset (gains) losses and impairments, net	—		—		4
Operating Income	282		308		256
Other (Income) and Deductions	65		84		41
Income Tax Expense	67		78		77
Net Income Attributable to DTE Energy Company	$	150	$	146	$	138

The following table details changes in various Utility Margin components relative to the comparable prior period:



	2018			2017
	(In millions)
Weather	$	46		$	(6	)
Implementation of new rates	15			80
Midstream storage and transportation revenues	15			(5		)
Regulatory mechanism — RDM	(3		)	4
TCJA rate reduction	(40		)	—
Other regulatory mechanisms and other	12			2
Increase in Utility Margin	$	45		$	75



	2018	2017	2016
	(In Bcf)
Gas Markets
Gas sales	135	119	116
End-user transportation	187	165	182
	322	284	298
Intermediate transportation	329	260	214
Total Gas sales	651	544	512

GAS STORAGE AND PIPELINES

The Gas Storage and Pipelines segment consists of the non-utility gas pipelines and storage businesses. Gas Storage and Pipelines results are discussed below:



	2018			2017			2016
	(In millions)
Operating Revenues — Non-utility operations	$	485		$	453		$	302
Cost of gas — Non-utility	22			30			6
Operation and maintenance	103			83			81
Depreciation and amortization	82			76			45
Taxes other than income	8			8			4
Asset (gains) losses and impairments, net	—			2			—
Operating Income	270			254			166
Other (Income) and Deductions	(61		)	(18		)	(31		)
Income Tax Expense (Benefit)	68			(30		)	71
Net Income	263			302			126
Less: Net Income Attributable to Noncontrolling Interests	28			27			7
Net Income Attributable to DTE Energy Company	$	235		$	275		$	119

Depreciation and amortization expense increased $6 million in 2018 and increased $31 million in 2017. The 2017 increase was primarily due to the acquisition of AGS and SGG in October 2016.

Net Income Attributable to Noncontrolling Interests increased $1 million in 2018 and increased $20 million in 2017. The 2017 increase was primarily due to the acquisition of SGG in October 2016.

POWER AND INDUSTRIAL PROJECTS



	2018			2017			2016
	(In millions)
Operating Revenues — Non-utility operations	$	2,204		$	2,089		$	1,906
Fuel, purchased power, and gas — non-utility	1,888			1,813			1,640
Non-utility Margin	316			276			266
Operation and maintenance	363			342			317
Depreciation and amortization	67			72			72
Taxes other than income	12			11			13
Asset (gains) losses and impairments, net	27			20			(1		)
Operating Loss	(153		)	(169		)	(135		)
Other (Income) and Deductions	(89		)	(63		)	(49		)
Income Taxes
Benefit	(7		)	(42		)	(26		)
Production Tax Credits	(188		)	(153		)	(114		)
	(195		)	(195		)	(140		)
Net Income	131			89			54
Less: Net Loss Attributable to Noncontrolling Interests	(30		)	(49		)	(41		)
Net Income Attributable to DTE Energy Company	$	161		$	138		$	95

Operating Revenues — Non-utility operations increased $115 million in 2018 and increased $183 million in 2017. The changes are due to the following:



	2018
	(In millions)
Higher demand due to improved conditions in the steel business	$	59
Higher production in the renewables business	25
Higher production, offset by lower coal prices in the REF business	18
Higher sales primarily associated with new contracts in the on-site business	13
	$	115

	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	107
Higher production driven by new projects, offset by lower coal prices in the REF business	102
Lower production and one-time recovery in 2016, offset by an acquisition in the renewables business	(9		)
Lower sales primarily associated with expired contracts in the on-site business	(17		)
	$	183

Non-utility Margin increased $40 million in 2018 and increased $10 million in 2017. The changes are due to the following:



	2018
	(In millions)
Higher production in the renewables business	$	20
Higher sales primarily associated with new contracts in the on-site business	12
Higher demand due to improved conditions in the steel business	8
	$	40

	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	42
Lower production and one-time recovery in 2016 in the renewables business	(11		)
Lower sales primarily associated with expired contracts in the on-site business	(15		)
Other	(6		)
	$	10

Income Taxes — Production Tax Credits increased by $35 million in 2018 and increased $39 million in 2017. The increase in both periods was primarily due to higher production in the REF business.

ENERGY TRADING



	2018		2017		2016
	(In millions)
Operating Revenues — Non-utility operations	$	5,557	$	4,277	$	2,575
Purchased power and gas — non-utility	5,417		4,077		2,552
Non-utility Margin	140		200		23
Operation and maintenance	75		68		63
Depreciation and amortization	5		5		3
Taxes other than income	5		4		2
Operating Income (Loss)	55		123		(45		)
Other (Income) and Deductions	3		2		29
Income Tax Expense (Benefit)	13		49		(29		)
Net Income (Loss) Attributable to DTE Energy Company	$	39	$	72	$	(45	)



	2018
	(In millions)
Unrealized Margins^(a)
Favorable results, primarily in the power trading strategy	$	20
Unfavorable results, primarily in gas structured, and power full requirements strategies^(b)	(100		)
	(80		)
Realized Margins^(a)
Favorable results, primarily in the gas structured strategy	54
Unfavorable results, primarily in the power full requirements strategy^(c)	(34		)
	20
Decrease in Non-utility Margin	$	(60	)

(a)


(b)	Amount includes $74 million of timing related losses related to gas strategies which will reverse in future periods as the underlying contracts settle.


(c)	Amount includes $11 million of timing related gains related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.



	2017
	(In millions)
Unrealized Margins^(a)
Favorable results, primarily in gas structured and gas full requirements strategies^(b)	$	113
Unfavorable results, primarily in power and gas trading and power full requirements strategies	(26		)
	87
Realized Margins^(a)
Favorable results, primarily in gas structured, environmental trading and gas storage strategies^(c)	103
Unfavorable results, primarily in the power full requirements strategy	(13		)
	90
Increase in Non-utility Margin	$	177

(a)


(b)	Amount includes $113 million of timing related gains related to gas strategies which will reverse in future periods as the underlying contracts settle.


(c)	Amount includes $95 million of timing related losses related to gas strategies recognized in previous periods that reversed as the underlying contracts settled.

Other (Income) and Deductions increased$1 million in 2018 and decreased $27 million in 2017 due to contributions to the DTE Energy Foundation in 2016.

EMPLOYEES

DTE Energy and its subsidiaries had approximately ~~10,000~~10,600 employees as of December 31, ~~2015,~~2018, of which approximately ~~4,900~~5,200 were represented by unions. DTE Electric had approximately ~~4,500~~4,900 employees as of December 31, ~~2015,~~2018, of which approximately ~~2,600~~2,800 were represented by unions. There are several bargaining units for DTE ~~Energy’s~~Energy subsidiaries' represented employees. The majority of represented employees for both DTE Energy and DTE Electric are under contracts that expire in ~~2016~~2020 and ~~2017.~~2021.

Item 1A.Risk Factors

The Registrants are subject to rate regulation.Electric and gas rates for the utilities are set by the MPSC and the FERC and cannot be changed without regulatory authorization. The Registrants may be negatively impacted by new regulations or interpretations by the MPSC, the FERC, or other regulatory bodies. The Registrants' ability to recover costs may be impacted by the time lag between the incurrence of costs and the recovery of the costs in customers' rates. Regulators also may decide to disallow recovery of certain costs in customers' rates if they determine that those costs do not meet the standards for recovery under current governing laws and regulations. The Registrants' utilities typically self-implement base rate changes six months after rate case filings, in accordance with Michigan law. However, if the final rates authorized by regulators in the final rate order are lower than the amounts the Registrants collected during the self-implementation period, the Registrants must refund the difference with interest. Regulators may also disagree with the Registrants' rate calculations under the various mechanisms that are intended to mitigate the risk to their utilities related to certain aspects of the business. If the Registrants cannot agree with regulators on an appropriate reconciliation of those mechanisms, it may impact the Registrants' ability to recover certain costs through customer rates. Regulators may also decide to eliminate these mechanisms in future rate cases, which may make it more difficult for the Registrants to recover their costs in the rates charged to customers. The Registrants cannot predict what rates the MPSC will authorize in future rate cases. New legislation, regulations, or interpretations could change how the business operates, impact the Registrants' ability to recover costs through rates or the timing of such recovery, or require the Registrants to incur additional expenses. ~~The outcome of the current Michigan energy policy reform legislative process could impact the Registrants' recovery of costs through rates.~~

Changes to Michigan's electric retail access program could negatively impact the Registrants' financial performance. The State of Michigan currently experiences a hybrid market, where the MPSC continues to regulate electric rates for DTE Electric customers, while alternative electric suppliers charge market-based rates. MPSC rate orders, and energy legislation enacted by the State of Michigan, ~~in 2008,~~ have placed a 10% cap on the total potential retail access migration. However, even with the legislated 10% cap on participation, there continues to be legislative and financial risk associated with the electric retail access program. Electric retail access migration is sensitive to market price and full service electric price changes. The Registrants are required under current regulation to provide full service to retail access customers that choose to return, potentially resulting in the need for additional generating capacity.

The ~~outcome~~Registrants' electric distribution system and DTE Energy's gas distribution system are subject to risks from their operation, which could reduce revenues, increase expenses, and have a material adverse effect on their business, financial position, and results of operations. The Registrants' electric distribution and DTE Energy’s gas distribution systems are subject to many operational risks. These operational systems and infrastructure have been in service for many years. Equipment, even when maintained in accordance with good utility practices, is subject to operational failure, including events that are beyond the Registrants' control, and could require significant operation and maintenance expense or capital expenditures to operate efficiently. Because the Registrants’ distribution systems are interconnected with those of third parties, the operation of the ~~current Michigan energy policy reform legislative process~~Registrants’ systems could ~~impact~~be adversely affected by unexpected or uncontrollable events occurring on the ~~Registrants' recovery~~systems of ~~costs through rates.~~such third parties.

~~The MISO regional energy market, including the State~~DTE Energy's non-utility businesses may not perform to its expectations. DTE Energy relies on non-utility operations for an increasing portion of Michigan, is expected to face capacity constraints beginning in 2016, due primarily to the retirement of coal-fired generation caused by increasingly stringent environmental requirements. Significant investment in new natural gas-fired generationearnings. If DTE Energy's current and ~~renewables will be required. Under the current regulatory structure, retail access customers~~contemplated non-utility investments do not ~~fund capacity costs, potentially impacting~~perform at expected levels, DTE Energy could experience diminished earnings and a corresponding decline in shareholder value.

The Registrants' businesses have safety risks. The Registrants' electric ~~supply reliability~~distribution system, power plants, renewable energy equipment, and ~~utility customer affordability.~~other facilities, and DTE Energy's gas distribution system, gas infrastructure, and other facilities, could be involved in incidents that result in injury, death, or property loss to employees, customers, third parties, or the public. Although the Registrants have insurance coverage for many potential incidents, depending upon the nature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatory agencies or other public authorities.

Uncertainty around future environmental regulations creates difficulty planning long-term capital projects in the Registrants' generation fleet and, for DTE ~~Energy,~~Energy's gas distribution businesses. These laws and regulations require the Registrants to seek a variety of environmental licenses, permits, inspections, and other regulatory approvals. The Registrants could be required to install expensive pollution control measures or limit or cease activities, including the retirement of certain generating plants, based on these regulations. Additionally, the Registrants may become a responsible party for environmental cleanup at sites identified by a regulatory body. The Registrants cannot predict with certainty the amount and timing of future expenditures related to environmental matters because of the difficulty of estimating cleanup costs. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on potentially responsible parties.

Operation of a nuclear facility subjects the Registrants to risk. Ownership of an operating nuclear generating plant subjects the Registrants to significant additional risks. These risks include, among others, plant security, environmental regulation and remediation, changes in federal nuclear regulation, increased capital expenditures to meet industry requirements, and operational factors that can significantly impact the performance and cost of operating a nuclear ~~facility. While~~facility compared to other generation options. Insurance maintained by the Registrants ~~maintain insurance~~ for various nuclear-related risks ~~there can be no assurances that such insurance will~~may not be sufficient to cover the Registrants' costs in the event of an accident or business interruption at the nuclear generating plant, which may affect the Registrants' financial performance. In addition, ~~while~~ the ~~Registrants have a~~Registrants' nuclear decommissioning trust fund, to finance the decommissioning of the nuclear generating plant, ~~there can be no assurances that such fund will~~may not be sufficient to fund the cost of decommissioning. A decline in market value of assets held in decommissioning trust funds due to poor investment performance or other factors may increase the funding requirements for these obligations. Any increase in funding requirements may have a material impact on the Registrants’ liquidity, financial position, or results of operations.

The supply and/or price of energy commodities and/or related services may impact the Registrants' financial results.The Registrants are dependent on coal for much of their electrical generating ~~capacity.~~capacity as well as uranium for their nuclear operations. DTE Energy's access to natural gas supplies is critical to ensure reliability of service for utility gas customers. DTE Energy's non-utility businesses are also dependent upon supplies and prices of energy commodities and services. Price fluctuations, fuel supply disruptions, and changes in transportation costs, could have a negative impact on the amounts DTE Electric charges utility customers for electricity and DTE Gas charges utility customers for gas, and on the profitability of DTE Energy's non-utility businesses. The ~~Registrants have~~Registrants' hedging strategies and regulatory recovery mechanisms ~~in place~~may be insufficient to mitigate ~~some of~~ the negative fluctuations in commodity supply prices in their utility and, for DTE Energy, non-utility businesses, ~~but there can be no assurances that~~and the Registrants' financial performance ~~will not~~may therefore be negatively impacted by price fluctuations. The price of energy also impacts the market for DTE Energy's non-utility businesses that compete with utilities and alternative electric suppliers.

Poor investment performance of pension and other postretirement benefit plan assets and other factors impacting benefit plan costs could unfavorably impact the Registrants' liquidity and results of operations.The Registrants' costs of providing non-contributory defined benefit pension plans and other postretirement benefit plans are dependent upon a number of factors, such as the rates of return on plan assets, the level of interest rates used to measure the required minimum funding levels of the plans, future government regulation, and the Registrants' required or voluntary contributions made to the plans. The performance of the debt and equity markets affects the value of assets that are held in trust to satisfy future obligations under the Registrants' plans. The Registrants have significant benefit obligations and hold significant assets in trust to satisfy these obligations. These assets are subject to market fluctuations and will yield uncertain returns, which may fall below the Registrants' projected return rates. A decline in the market value of the pension and other postretirement benefit plan assets will increase the funding requirements under the pension and other postretirement benefit plans if the actual asset returns do not recover these declines in the foreseeable future. Additionally, the pension and other postretirement benefit plan liabilities are sensitive to changes in interest rates. AsIf interest rates decrease, the liabilities increase, resulting in increasing benefit expense and funding requirements. Also, if future increases in pension and other postretirement benefit costs as a result of reduced plan assets are not recoverable from the Registrants' utility customers, the results of operations and financial position of the Registrants could be negatively affected. Without sustained growth in the plan investments over time to increase the value of plan assets, the Registrants could be required to fund these plans with significant amounts of cash. Such cash funding obligations could have a material impact on the Registrants' cash flows, financial position, or results of operations.

The Registrants' ability to access capital markets is important.The Registrants' ability to access capital markets is important to operate their businesses and to fund capital investments. Turmoil in credit markets may constrain the Registrants' ability, as well as the ability of their subsidiaries, to issue new debt, including commercial paper, and refinance existing debt at reasonable interest rates. In addition, the level of borrowing by other energy companies, and the market as a whole, could limit the Registrants' access to capital markets. The Registrants' long-term revolving credit facilities do not expire until ~~2020,~~2022, but the Registrants regularly access capital markets to refinance existing debt or fund new projects at the Registrants' utilities and DTE Energy's non-utility businesses, and the Registrants cannot predict the pricing or demand for those future transactions.

~~Construction and capital improvements to the Registrants' power facilities and DTE Energy's distribution systems subject them to risk.~~ The Registrants are managing ongoing, and planning future, significant construction and capital improvement projects at multiple power generation and distribution facilities and DTE Energy's gas distribution system. Many factors that could cause delays or increased prices for these complex projects are beyond the Registrants' control, including the cost of materials and labor, subcontractor performance, timing and issuance of necessary permits, construction disputes, and weather conditions. Failure to complete these projects on schedule and on budget for any reason could adversely affect the Registrants' financial performance and operations at the affected facilities and businesses.

~~DTE Energy's non-utility businesses may not perform to its expectations.~~ DTE Energy relies on non-utility operations for an increasing portion of earnings. If DTE Energy's current and contemplated non-utility investments do not perform at expected levels, DTE Energy could experience diminished earnings and a corresponding decline in shareholder value.

DTE Energy's participation in energy trading markets subjects it to risk.Events in the energy trading industry have increased the level of scrutiny on the energy trading business and the energy industry as a whole. In certain situations, DTE Energy may be required to post collateral to support trading operations, which could be substantial. If access to liquidity to support trading activities is curtailed, DTE Energy could experience decreased earnings potential and cash flows. Energy trading activities take place in volatile markets and expose DTE Energy to risks related to commodity price movements, deviations in weather, and other related risks. DTE Energy's trading business routinely has speculative trading positions in the market, within strict policy guidelines DTE Energy sets, resulting from the management of DTE Energy's business portfolio. To the extent speculative trading positions exist, fluctuating commodity prices can improve or diminish DTE Energy's financial results and financial position. DTE Energy manages its exposure by establishing and enforcing strict risk limits and risk management procedures. During periods of extreme volatility, these risk limits and risk management procedures may not work as planned and cannot eliminate all risks associated with these activities.

~~DTE Energy's ability to utilize production tax credits may be limited.~~ To reduce U.S. dependence on imported oil, the Internal Revenue Code provides production tax credits as an incentive for taxpayers to produce fuels and electricity from alternative sources. DTE Energy generated production tax credits from coke production, landfill gas recovery, reduced emission fuel, renewable energy generation, and gas production operations. All production tax credits taken after 2013 are subject to audit by the IRS. If DTE Energy's production tax credits were disallowed in whole or in part as a result of an IRS audit, there could be additional tax liabilities owed for previously recognized tax credits that could significantly impact DTE Energy's earnings and cash flows.

Weather significantly affects operations.At both utilities, deviations from normal hot and cold weather conditions affect the Registrants' earnings and cash flows. Mild temperatures can result in decreased utilization of the Registrants' assets, lowering income and cash flows. At DTE Electric, ice storms, tornadoes, or high winds can damage the electric distribution system infrastructure and power generation facilities and require it to perform emergency repairs and incur material unplanned expenses. The expenses of storm restoration efforts may not be fully recoverable through the regulatory process. DTE Gas can experience higher than anticipated expenses from emergency repairs on its gas distribution infrastructure required as a result of weather related issues.

~~DTE Energy relies on cash flows from subsidiaries.~~ DTE Energy is a holding company. Cash flows from the utility and non-utility subsidiaries are required to pay interest expenses and dividends on DTE Energy debt and securities. Should a major subsidiary not be able to pay dividends or transfer cash flows to DTE Energy, its ability to pay interest and dividends would be restricted.

~~Renewable portfolio standards and energy efficiency programs may affect the Registrants' business.~~ The Registrants are subject to existing Michigan, and potential future, federal legislation and regulation requiring them to secure sources of renewable energy. The Registrants have complied with the existing state legislation, but do not know what requirements may be added by federal legislation. In addition, there could be additional state requirements increasing the percentage of power required to be provided by renewable energy sources. The Registrants cannot predict the financial impact or costs associated with complying with potential future legislation and regulations. Compliance with these requirements can significantly increase capital expenditures and operating expenses and can negatively affect the affordability of the rates charged to customers.

The Registrants are also required by Michigan legislation to implement energy efficiency measures and provide energy efficiency customer awareness and education programs. These requirements necessitate expenditures, and implementation of these programs creates the risk of reducing the Registrants' revenues as customers decrease their energy usage. The Registrants cannot predict how these programs will impact their business and future operating results.

~~Threats of terrorism or cyber-attacks could~~Renewable portfolio standards and energy waste reduction programs may affect the Registrants' business.The Registrants are subject to existing Michigan, and potential future, federal legislation and regulation requiring them to secure sources of renewable energy. The Registrants have complied with the existing federal and state legislation, but do not know what requirements may be ~~threatened~~added by ~~problems such as computer viruses~~federal or ~~terrorism that may disrupt~~state legislation in the Registrants' operations and could harm the Registrants' operating results. The Registrants' industry requires the continued operation of sophisticated information technology systems and network infrastructure. Despite implementation of security measures, all of the Registrants' technology systems are vulnerable to disability or failures due to hacking, viruses, acts of war or terrorism, and other causes. If the Registrants' information technology systems were to fail and they were unable to recover in a timely way, the Registrants might be unable to fulfill critical business functions, which could have a material adverse effect on the Registrants' business, operating results, and financial condition.

future. In addition, the ~~Registrants' generation plants~~Registrants expect to comply with new Michigan legislation increasing the percentage of power required to be provided by renewable energy sources. The Registrants cannot predict the financial impact or costs associated with complying with potential future legislation and ~~electrical distribution facilities~~regulations. Compliance with these requirements can significantly increase capital expenditures and ~~for DTE Energy, gas pipeline~~operating expenses and ~~storage facilities, in particular may be targets~~can negatively affect the affordability of ~~terrorist activities that could disrupt~~the rates charged to customers.

The Registrants are also required by Michigan legislation to implement energy waste reduction measures and provide energy waste reduction customer awareness and education programs. These requirements necessitate expenditures, and implementation of these programs creates the risk of reducing the Registrants' ~~ability to produce or distribute some portion of~~revenues as customers decrease their ~~products.~~energy usage. The Registrants ~~have increased security as a result of past events~~cannot predict how these programs will impact their business and ~~may be required by regulators or by the~~ future ~~terrorist threat environment to make investments in security that the Registrants cannot currently predict.~~operating results.

~~Failure to maintain the security of personally identifiable information could adversely affect the Registrants.~~ In connection with the Registrant's businesses, they collect and retain personally identifiable information of their customers, shareholders, and employees. Customers, shareholders, and employees expect that the Registrants will adequately protect their personal information, and the regulatory environment surrounding information security and privacy is increasingly demanding. A significant theft, loss, or fraudulent use of customer, shareholder, employee, or Registrant data by cybercrime or otherwise could adversely impact the Registrants' reputation and could result in significant costs, fines, and litigation.

Failure to attract and retain key executive officers and other skilled professional and technical employees could have an adverse effect on the ~~Registrants' operations.~~Registrants’ operations. The Registrants' businesses are dependent on their ability to attract and retain skilled employees. Competition for skilled employees in some areas is high, and the inability to attract and retain these employees could adversely affect the Registrants' business and future operating results. In addition, the Registrants have an aging utility workforce, and the failure of a successful transfer of knowledge and expertise could negatively impact their operations.

A work interruption may adversely affect the Registrants. There are several bargaining units for DTE Energy's approximately ~~4,900~~5,200 and DTE Electric's approximately ~~2,600~~2,800 represented employees. The majority of represented employees are under contracts that expire in ~~2016~~2020 and ~~2017.~~2021. A union choosing to strike would have an impact on the Registrants' businesses. The Registrants are unable to predict the effect a work stoppage would have on their costs of operations and financial performance.

The ~~Registrants' businesses have safety risks.~~ The Registrants' electric distribution system, power plants, wind energy equipment, and other facilities, and DTE Energy's gas distribution system, gas infrastructure, and other facilities, could be involved in incidents that result in injury, death or property loss to employees, customers, or the public. Although the Registrants have insurance coverage for many potential incidents, depending upon the nature and severity of any incident, they could experience financial loss, damage to their reputation, and negative consequences from regulatory agencies or other public authorities.

~~The~~ Registrants may not be fully covered by insurance. The Registrants have a comprehensive insurance program in place to provide coverage for various types of risks, including catastrophic damage as a result of ~~acts of God,~~severe weather or other natural disasters, war, terrorism, or a combination of other significant unforeseen events that could impact the Registrants' operations. Economic losses might not be covered in full by insurance, or the Registrants' insurers may be unable to meet contractual ~~obligations~~.obligations.

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

For more information on ~~material~~ legal proceedings and matters related to the Registrants, see Notes 89 and 1718 to the Consolidated Financial Statements in Item 8 of this Report, "Regulatory Matters" and "Commitments and ~~Contingencies".~~Contingencies," respectively.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock. The following table indicates the reported high and low sales prices of DTE Energy common stock on the Composite Tape of the New York Stock Exchange and dividends paid per share for each quarterly period during the past two years:

Dividends
Paid per Share
Year Quarter High Low
2015

First $ 92.27
$ 76.84
$ 0.6900
Second $ 84.27
$ 73.23
$ 0.6900
Third $ 85.12
$ 74.53
$ 0.7300
Fourth $ 85.36
$ 77.35
$ 0.7300
2014

First $ 74.61
$ 64.84
$ 0.6550
Second $ 79.45
$ 72.76
$ 0.6550
Third $ 78.89
$ 71.60
$ 0.6900
Fourth $ 90.77
$ 75.76
$ 0.6900

At December 31, ~~2015,~~2018, there were ~~179,470,213~~181,925,281 shares of DTE Energy common stock outstanding. These shares were held by a total of ~~58,999~~51,338 shareholders of record.

DTE Energy paid cash dividends on common stock of $501 million in 2015, $470 million in 2014, and $445 million in 2013. The amount of future dividends will depend on DTE Energy's earnings, cash flows, financial condition, and other factors that are periodically reviewed by the DTE Energy Board of Directors. Although there can be no assurances, DTE Energy anticipates paying dividends for the foreseeable future.

All of the ~~138,632,324~~138,632,234 issued and outstanding shares of DTE Electric common stock, par value $10 per share, are owned by DTE Energy, and constitute 100% of the voting securities of DTE Electric. Therefore, no market exists for DTE Electric's common stock.

~~DTE Electric paid cash dividends on common stock of $395 million in 2015, $370 million in 2014, and $342 million in 2013.~~

For information on DTE Energy dividend restrictions, see Note 1516 to the Consolidated Financial Statements in Item 8 of this Report, "Short-Term Credit Arrangements and ~~Borrowings".~~Borrowings."

All of DTE Energy's equity compensation plans that provide for the annual awarding of stock-based compensation have been approved by shareholders. For additional detail, see Note 1921 to the Consolidated Financial Statements in Item 8 of this Report, "Stock-Based ~~Compensation".~~Compensation."

See the following table for information as of December 31, ~~2015:~~2018:

Number of Securities to be Issued Upon Exercise of Outstanding Options Weighted-Average Exercise Price of Outstanding Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders 262,282
$ 42.52
2,892,454



	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	52,100	$	43.30	2,897,674

UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers

Number of Shares Purchased (a) Average Price
Paid per Share (a) Number of Shares Purchased as Part of Publicly Announced
Plans or Programs Average Price Paid per Share Maximum Dollar
Value that May
Yet Be Purchased Under the Plans or Programs
10/01/2015 — 10/31/2015 1,576
$ 79.43
—
—
—
11/01/2015 — 11/30/2015 2,436
$ 78.53
—
—
—
12/01/2015 — 12/31/2015 1,900
$ 78.42
—
—
—
Total 5,912

—



	Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2018 — 10/31/2018	143	$	110.14	—	—	—
11/01/2018 — 11/30/2018	—	$	—	—	—	—
12/01/2018 — 12/31/2018	—	$	—	—	—	—
Total	143			—


(a)	Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)


	Annual Return Percentage Year Ended December 31,						Annual Return Percentage Year Ended December 31,
Company/Index	2011	2012	2013	2014	2015		2014	2015		2016	2017	2018
DTE Energy Company	25.76	14.90	14.89	34.61	(3.77	)	34.61	(3.77	)	26.93	14.59	4.19
S&P 500 Index	2.11	16.00	32.39	13.69	1.38		13.69	1.38		11.95	21.82	(4.39	)
S&P 500 Multi-Utilities Index	18.41	4.24	17.88	28.94	(1.73	)	28.94	(1.73	)	18.56	12.09	1.77


	Indexed Returns Year Ended December 31,						Indexed Returns Year Ended December 31,
	Base Period						Base Period
Company/Index	2010	2011	2012	2013	2014	2015	2013	2014	2015	2016	2017	2018
DTE Energy Company	100	125.76	144.51	166.03	223.49	215.07	100.00	134.61	129.54	164.41	188.40	196.30
S&P 500 Index	100	102.11	118.45	156.82	178.29	180.75	100.00	113.69	115.26	129.04	157.19	150.29
S&P 500 Multi-Utilities Index	100	118.41	123.42	145.50	187.59	184.35	100.00	128.94	126.71	150.22	168.38	171.35

~~Looking forward,~~Renewable Energy

Wholesale Power and Renewables — Power and Industrial Projects holds ownership interests in, and operates, five renewable generating plants with a capacity of 217 MWs. The electric output is sold under long-term power purchase agreements.

Renewable Gas Recovery — Power and Industrial Projects has ownership interests in, and operates, twenty-three gas recovery sites in nine different states. The sites recover methane from landfills and agricultural businesses and convert the gas to generate electricity, replace fossil fuels in industrial and manufacturing operations, or refine to pipeline-quality gas, which can then be used as vehicle fuel.

Reduced Emissions Fuel

Reduced Emissions Fuel — Power and Industrial Projects has constructed and placed in service REF facilities at ten sites including facilities located at seven third-party owned coal-fired power plants. DTE Energy ~~will focus on several areas that are expected to improve future performance:~~

~~electric~~has sold membership interests in five of the facilities and ~~gas customer satisfaction;~~

~~electric reliability;~~

~~rate competitiveness and affordability;~~

~~regulatory stability and investment recovery for~~entered into lease arrangements in three of the ~~electric and gas utilities;~~

~~growth of utility asset base;~~

~~employee engagement;~~

~~cost structure optimization across all business segments;~~

~~cash, capital, and liquidity to maintain or improve financial strength; and~~

~~investments that integrate assets and leverage skills and expertise.~~

facilities. In addition, DTE Energy has an agreement to operate an REF facility owned by an outside party located at a third-party owned coal-fired power plant. The facilities blend a proprietary additive with coal used in coal-fired power plants, resulting in reduced emissions of nitrogen oxide and mercury. Qualifying facilities are eligible to generate tax credits for ten years upon achieving certain criteria. The value of a tax credit is adjusted annually by an inflation factor published by the IRS. The value of the tax credit is reduced if the reference price of coal exceeds certain thresholds. The economic benefit of the REF facilities is dependent upon the generation of production tax credits.

Properties and Other

The following are significant properties operated by Power and Industrial Projects:



Business Areas	Location	Service Type
Industrial Energy Services
Steel and Petroleum Coke
Pulverized Coal Operations	MI	Pulverized Coal
Coke Production	MI	Metallurgical Coke Supply
Other Investment in Coke Production and Petroleum Coke	IN and MS	Metallurgical Coke Supply and Pulverized Petroleum Coke
On-Site Energy
Automotive	IN, MI, NY, and OH	Electric Distribution, Chilled Water, Waste Water, Steam, Cooling Tower Water, Reverse Osmosis Water, Compressed Air, Mist, and Dust Collectors
Airports	MI and PA	Electricity and Hot and Chilled Water
Chemical Manufacturing	KY and OH	Electricity, Steam, Natural Gas, Compressed Air, and Wastewater
Consumer Manufacturing	OH	Electricity, Steam, Wastewater, and Sewer
Business Park	PA	Electricity
Hospital and University	CA and IL	Electricity, Steam, and Chilled Water
Renewable Energy
Pulp and Paper	AL	Electric Generation and Steam
Renewables	CA and MN	Electric Generation
Renewable Gas Recovery	AZ, CA, MI, NC, NY, OH, TX, UT, and WI	Electric Generation and Renewable Natural Gas
Reduced Emissions Fuel	MI, OH, IL, PA, TX, and WI	REF Supply



	2018		2017		2016
	(In millions)
Production Tax Credits Generated (Allocated to DTE Energy)
REF	$	178	$	144	$	103
Renewables	7		6		8
Renewable Gas Recovery	3		3		3
	$	188	$	153	$	114

Regulation

Strategy and Competition

Power and Industrial Projects will continue leveraging its energy-related operating experience and project management capability to develop and grow its steel, on-site energy, and renewable energy businesses, and optimize the REF businesses. Power and Industrial Projects will also continue to pursue opportunities to ~~grow~~provide asset management and operations services to third parties. There are limited competitors for Power and Industrial Projects' existing disparate businesses who provide similar products and services. Power and Industrial Projects' operations are dependent upon a limited number of customers, and the loss of any one or a few customers could have a material adverse effect on the results of Power and Industrial Projects.

Power and Industrial Projects intends to focus on the following areas for growth:

Providing operating services to owners of on-site industrial power plants;

Acquiring and developing renewable gas recovery facilities, renewable energy projects, and other energy projects.

ENERGY TRADING

Description

Energy Trading focuses on physical and financial power and gas marketing and trading, structured transactions, enhancement of returns from its asset portfolio and optimization of contracted natural gas pipeline transportation, and storage positions. Energy Trading also provides natural gas, power, and related services which may include the management of associated storage and transportation contracts on the customers’ behalf and the supply or purchase of renewable energy credits to various customers. Energy Trading's customer base is predominantly utilities, local distribution companies, pipelines, producers and generators, and other marketing and trading companies. Energy Trading enters into derivative financial instruments as part of its marketing and hedging activities. These financial instruments are generally accounted for under the MTM method, which results in the recognition in earnings of unrealized gains and losses from changes in the fair value of the derivatives. Energy Trading utilizes forwards, futures, swaps, and option contracts to mitigate risk associated with marketing and trading activity, as well as for proprietary trading within defined risk guidelines. Energy Trading also provides commodity risk management services to the other businesses within DTE Energy.

Regulation

Strategy and Competition

DTE Energy's strategy for the Energy Trading business is to deliver value-added services to DTE Energy customers. DTE Energy seeks to manage this business in a ~~disciplined~~ manner complementary to the growth of DTE Energy's other business segments. Energy Trading focuses on physical marketing and the optimization of its portfolio of energy assets. The segment competes with electric and gas marketers, financial institutions, traders, utilities, and other energy providers. The Energy Trading business is dependent upon the availability of capital and an investment grade credit rating. DTE Energy believes it has ample available capital capacity to support Energy Trading activities. DTE Energy monitors its use of capital closely to ensure that its commitments do not exceed capacity. A material credit restriction would negatively impact Energy Trading's financial performance. Competitors with greater access to capital, or at a lower cost, may have a competitive advantage. DTE Energy has risk management and credit processes to monitor and mitigate risk.

CORPORATE AND OTHER

Description

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.

ENVIRONMENTAL MATTERS



	DTE Electric		DTE Gas		Non-utility		Total
	(In millions)
Water	$	60	$	—	$	—	$	60
Contaminated and other sites	10		25		—		35
Coal combustion residuals and effluent limitations guidelines	515		—		—		515
Estimated total future expenditures through 2025	$	585	$	25	$	—	$	610
Estimated 2019 expenditures	$	30	$	15	$	—	$	45
Estimated 2020 expenditures	$	60	$	5	$	—	$	65

EMPLOYEES

Item 1A. Risk Factors

Operation of a nuclear facility subjects the Registrants to risk. Ownership of an operating nuclear generating plant subjects the Registrants to significant additional risks. These risks include, among others, plant security, environmental regulation and remediation, changes in federal nuclear regulation, increased capital expenditures to meet industry requirements, and operational factors that can ~~secure opportunities~~significantly impact the performance and cost of operating a nuclear facility compared to other generation options. Insurance maintained by the Registrants for various nuclear-related risks may not be sufficient to cover the Registrants' costs in the event of an accident or business interruption at the nuclear generating plant, which may affect the Registrants' financial performance. In addition, the Registrants' nuclear decommissioning trust fund, to finance the decommissioning of the nuclear generating plant, may not be sufficient to fund the cost of decommissioning. A decline in market value of assets held in decommissioning trust funds due to poor investment performance or other factors may increase the funding requirements for these obligations. Any increase in funding requirements may have a material impact on the Registrants’ liquidity, financial position, or results of operations.

The supply and/or price of energy commodities and/or related services may impact the Registrants' financial results. The Registrants are dependent on coal for much of their electrical generating capacity as well as uranium for their nuclear operations. DTE Energy's access to natural gas supplies is critical to ensure reliability of service for utility gas customers. DTE Energy's non-utility businesses are also dependent upon supplies and prices of energy commodities and services. Price fluctuations, fuel supply disruptions, and changes in transportation costs, could have a negative impact on the amounts DTE Electric charges utility customers for electricity and DTE Gas charges utility customers for gas, and on the profitability of DTE Energy's non-utility businesses. The Registrants' hedging strategies and regulatory recovery mechanisms may be insufficient to mitigate the negative fluctuations in commodity supply prices in their utility and, for DTE Energy, non-utility businesses, and the Registrants' financial performance may therefore be negatively impacted by price fluctuations. The price of energy also impacts the market for DTE Energy's non-utility businesses that ~~meet~~compete with utilities and alternative electric suppliers.

DTE Energy's participation in energy trading markets subjects it to risk. Events in the energy trading industry have increased the level of scrutiny on the energy trading business and the energy industry as a whole. In certain situations, DTE Energy may be required to post collateral to support trading operations, which could be substantial. If access to liquidity to support trading activities is curtailed, DTE Energy could experience decreased earnings potential and cash flows. Energy trading activities take place in volatile markets and expose DTE Energy to risks related to commodity price movements, deviations in weather, and other related risks. DTE Energy's trading business routinely has speculative trading positions in the market, within strict policy guidelines DTE Energy sets, resulting from the management of DTE Energy's business portfolio. To the extent speculative trading positions exist, fluctuating commodity prices can improve or diminish DTE Energy's financial results and financial position. DTE Energy manages its ~~strategic, financial,~~exposure by establishing and enforcing strict risk limits and risk ~~criteria.~~management procedures. During periods of extreme volatility, these risk limits and risk management procedures may not work as planned and cannot eliminate all risks associated with these activities.

Item 1B. Unresolved Staff Comments

None.

~~RESULTS~~

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.

At December 31, 2018, there were 181,925,281 shares of DTE Energy common stock outstanding. These shares were held by a total of 51,338 shareholders of record.

For information on DTE Energy dividend restrictions, see Note 16 to the Consolidated Financial Statements in Item 8 of this Report, "Short-Term Credit Arrangements and Borrowings."

See the following table for information as of December 31, 2018:



	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	52,100	$	43.30	2,897,674

UNREGISTERED SALES OF ~~OPERATIONS~~DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers

The following ~~sections provide a detailed discussion~~table provides information about DTE Energy's purchases of equity securities that are registered by DTE Energy pursuant to Section 12 of the ~~operating performance and future outlook~~Exchange Act of ~~DTE Energy's segments. Segment information, described below, includes intercompany revenues and expenses, and other income and deductions that are eliminated in~~1934 for the ~~Consolidated Financial Statements.~~quarter ended December 31, 2018:

2015 2014 2013
(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment:
Electric $ 542
$ 528
$ 484
Gas 132
140
143
Gas Storage and Pipelines 107
82
70
Power and Industrial Projects 16
90
66
Energy Trading (22 ) 122
(58 )
Corporate and Other (48 ) (57 ) (44 )
Net Income Attributable to DTE Energy Company $ 727
$ 905
$ 661



	Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2018 — 10/31/2018	143	$	110.14	—	—	—
11/01/2018 — 11/30/2018	—	$	—	—	—	—
12/01/2018 — 12/31/2018	—	$	—	—	—	—
Total	143			—


(a)	Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

~~ELECTRIC~~

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)



	Annual Return Percentage Year Ended December 31,
Company/Index	2014	2015		2016	2017	2018
DTE Energy Company	34.61	(3.77	)	26.93	14.59	4.19
S&P 500 Index	13.69	1.38		11.95	21.82	(4.39	)
S&P 500 Multi-Utilities Index	28.94	(1.73	)	18.56	12.09	1.77



	Indexed Returns Year Ended December 31,
	Base Period
Company/Index	2013	2014	2015	2016	2017	2018
DTE Energy Company	100.00	134.61	129.54	164.41	188.40	196.30
S&P 500 Index	100.00	113.69	115.26	129.04	157.19	150.29
S&P 500 Multi-Utilities Index	100.00	128.94	126.71	150.22	168.38	171.35

Item 6. Selected Financial Data

The following selected financial data of DTE Energy should be read in conjunction with the accompanying Management’s ~~Narrative~~Discussion and Analysis in Item 7 of ~~Results~~this Report and Combined Notes to Consolidated Financial Statements in Item 8 of ~~Operations discussion~~this Report. This information has been omitted for DTE Electric ~~is presented in a reduced disclosure format in accordance with~~per General Instruction I (2) (a) of Form 10-K for wholly-owned ~~subsidiaries.~~

~~The Electric segment consists principally of DTE Electric. Results for Electric segment with a reconciliation to DTE Electric are discussed below:~~subsidiaries (reduced disclosure format).

2015 2014 2013
(In millions)
Operating Revenues — Utility operations $ 4,901
$ 5,283
$ 5,199
Fuel and purchased power — utility 1,573
1,705
1,668
Gross Margin 3,328
3,578
3,531
Operation and maintenance 1,344
1,332
1,377
Depreciation and amortization 637
933
902
Taxes other than income 277
268
261
Asset (gains) losses and impairments, net —
(1 ) (3 )
Operating Income 1,070
1,046
994
Other (Income) and Deductions 238
222
258
Income Tax Expense 290
296
252
Segment Net Income Attributable to DTE Energy Company $ 542
$ 528
$ 484
Reconciliation of Segment Net Income Attributable to DTE Energy Company to DTE Electric Net Income 2
4
3
DTE Electric Net Income Attributable to DTE Energy Company $ 544
$ 532
$ 487

~~See DTE Electric's Consolidated Statements of Operations in Item 8 of this report for a complete view of its results.~~

~~Gross Margin~~ decreased $250 million in 2015 and increased $47 million in 2014. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in the Registrants' Consolidated Statements of Operations.

~~The following table details changes in various gross margin components relative to the comparable prior period:~~

2015 2014
(In millions)
Implementation of new rates $ 117
$ —
Base sales, inclusive of weather effect 24
(48 )
Renewable energy program 3
20
PSCR disallowance (19 ) —
Securitization bond and tax surcharge (376 ) (10 )
Amortization of refundable revenue decoupling/deferred gain —
63
Low-income energy assistance surcharge —
17
Regulatory mechanisms and other 1
5
Increase (decrease) in Electric segment Gross Margin $ (250 ) $ 47
Reconciliation of Electric segment Gross Margin to DTE Electric Gross Margin (1 ) —
Increase (decrease) in DTE Electric Gross Margin $ (251 ) $ 47

2015 2014 2013
(In thousands of MWh)
DTE Electric Sales
Residential 15,001
14,940
15,273
Commercial 17,192
16,792
16,661
Industrial 9,690
10,199
10,303
Other 291
517
942
42,174
42,448
43,179
Interconnection sales (a) 4,108
3,630
3,883
Total DTE Electric Sales 46,282
46,078
47,062

DTE Electric Deliveries

Retail and Wholesale 42,174
42,448
43,179
Electric retail access, including self generators (b) 4,899
5,033
5,200
Total DTE Electric Sales and Deliveries 47,073
47,481
48,379



	2018		2017		2016		2015		2014
	(In millions, except per share amounts)
Operating Revenues	$	14,212	$	12,607	$	10,630	$	10,337	$	12,301
Net Income Attributable to DTE Energy Company^(a)	$	1,120	$	1,134	$	868	$	727	$	905
Diluted Earnings Per Common Share	$	6.17	$	6.32	$	4.83	$	4.05	$	5.10
Financial Information
Dividends declared per share of common stock	$	3.60	$	3.36	$	3.06	$	2.84	$	2.69
Total Assets	$	36,288	$	33,767	$	32,041	$	28,662	$	27,827
Long-Term Debt^(b)	$	12,134	$	12,185	$	11,269	$	8,760	$	8,271
Shareholders’ equity	$	10,237	$	9,512	$	9,011	$	8,772	$	8,327


(a)	~~Represents power that is not distributed by DTE Electric.~~The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.


(b)	~~Represents deliveries for self generators that have purchased power from alternative energy suppliers to supplement their power requirements.~~Long-Term Debt includes Capital lease obligations and excludes debt due within one year.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following combined discussion is separately filed by DTE Energy and DTE Electric. However, DTE Electric ~~residential and commercial sales increased due primarily~~does not make any representations as to ~~favorable weather, while industrial sales decreased due primarily to lower steel customer load.~~

~~Operation and maintenance expense~~ increased $12 million in 2015 and decreased $45 million in 2014. The increase in 2015 is primarily due to increased power plant generation expenses of $28 million, increased line clearance expenses of $25 million, increased distribution operations expenses of $13 million, and $18 million of expensesinformation related ~~to the transition of PLD customers~~solely to DTE ~~Electric's~~Energy or the subsidiaries of DTE Energy other than itself.

EXECUTIVE OVERVIEW

DTE Energy is a diversified energy company with 2018 Operating Revenues of approximately $14.2 billion and Total Assets of approximately $36.3 billion. DTE Energy is the parent company of DTE Electric and DTE Gas, regulated electric and natural gas utilities engaged primarily in the business of providing electricity and natural gas sales, distribution, ~~system effective July 1, 2014, partially offset by decreased storm restoration expenses of $63 million~~ and ~~decreased employee benefits of $7 million.~~ storage services throughout Michigan. DTE Energy operates three energy-related non-utility segments with operations throughout the United States.

The following table summarizes DTE Energy's financial results:



	Years Ended December 31,
	2018		2017		2016
	(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company	$	1,120	$	1,134	$	868
Diluted Earnings per Common Share	$	6.17	$	6.32	$	4.83

The decrease in 2014 is primarily due to decreased employee benefit expenses of $68 million, decreased distribution operations expenses of $36 million, and decreased power plant generation expenses of $7 million, partially offset by higher storm restoration expenses of $19 million, increased low-income energy assistance of $17 million, $17 million of expenses related to the transition of PLD customers2018 Net Income Attributable to DTE Electric's distribution system, and increased energy optimization and renewable energy expenses of $13 million. The MPSC approved a TRM that provides for recovery of the deferred net incremental revenue requirement associated with the transition of former PLD customers that is reflected in the Depreciation and amortization line in DTE Electric's Consolidated Statements of Operations.

~~Depreciation and amortizationexpense~~ decreased $296 million in 2015 and increased $31 million in 2014. The 2015 decrease was due to $342 million of decreased amortization of regulatory assets related to Securitization and $15 million associated with the TRM, partially offset by $61 million of increased expenses due to an increased depreciable base. The 2014 increase was due to $42 million of increased expense due to an increased depreciable base and increased amortization of regulatory assets of $3 million, primarily related to Securitization, partially offset by $14 million associated with the TRM.

~~Other (Income) and Deductions~~ ~~increased $16 million in 2015 and decreased $36 million in 2014. The increase in 2015~~Energy Company was primarily due to lower ~~investment~~ earnings in the Gas Storage and Pipelines, Energy Trading, and Corporate and Other segments, partially offset by higher earnings in the Electric, Gas, and Power and Industrial Projects segments. The 2018 decrease was partially attributable to true-up adjustments for the remeasurement of ~~$11~~deferred taxes of $21 million as the adjustments increased Income Tax Expense, of which $17 million was attributable to the regulated utilities and ~~higher interest expense of $8 million.~~increased Regulatory liabilities. The ~~decrease~~increase in ~~2014~~2017 Net Income Attributable to DTE Energy Company was primarily due to ~~decreased interest expenses~~higher earnings in the Gas Storage and Pipelines, Energy Trading, and Power and Industrial Projects segments, partially offset by lower earnings in the Corporate and Other segment. The 2017 increase was also due to $105 million of ~~$18 million and the 2013 contribution~~net income tax benefit related to the enactment of the TCJA.

Please see detailed explanations of segment performance in the following "Results of Operations" section.

DTE ~~Energy Foundation of $18 million.~~

~~Outlook~~— ~~DTE Electric will continue to move forward in its efforts~~Energy's strategy is to achieve ~~operational excellence, sustained~~long-term earnings growth, a strong ~~cash flows,~~balance sheet, and ~~earn its authorized return on equity.~~ an attractive dividend yield.

DTE ~~Electric~~Energy's utilities are investing capital to improve customer reliability through investments in base infrastructure and new generation, and to comply with environmental requirements. DTE Energy expects that planned significant capital investments will result in earnings growth. Looking forward, additional factors may impact earnings such as weather, the outcome of regulatory proceedings, benefit plan design changes, investment returns and changes in discount rate assumptions in benefit plans and health care costs, uncertainty of legislative or regulatory actions regarding climate change and electric retail access, and effects of energy efficiency programs. DTE Electric residential and commercial sales have increased due primarily to improved economic activity and have been substantially offset by energy efficiency measures taken by customers. DTE Electric expects to continue its efforts to improve productivity and decrease costs while improving customer satisfaction with consideration of customer rate affordability.

DTE Electric filed a rate case with the MPSC on February 1, 2016 requesting an increase in base rates of $344 million based on a projected twelve-month period ending July 31, 2017. The requested increase in base rates is due primarily to an increase in net plant resulting from infrastructure investments, environmental compliance, and reliability improvement projects. The rate filing also includes projected changes in sales, operation and maintenance expenses, and working capital. The rate filing also requests an increase in return on equity from 10.3% to 10.5% on a capital structure of 50% equity and 50% debt. DTE Electric anticipates self-implementing a rate increase in August 2016 with an MPSC order expected by February 2017.

~~GAS~~

~~The Gas segment consists principally of DTE Gas. Gas results are discussed below:~~

2015 2014 2013
(In millions)
Operating Revenues — Utility operations $ 1,376
$ 1,636
$ 1,474
Cost of gas — utility 526
725
624
Gross Margin 850
911
850
Operation and maintenance 430
456
429
Depreciation and amortization 104
99
95
Taxes other than income 62
61
56
Operating Income 254
295
270
Other (Income) and Deductions 50
77
50
Income Tax Expense 72
78
77
Net Income Attributable to DTE Energy Company $ 132
$ 140
$ 143

~~Gross Margin~~ decreased $61 million in 2015 and increased $61 million in 2014. Revenues associated with certain mechanisms and surcharges are offset by related expenses elsewhere in DTE Energy's Consolidated Statements of Operations.

~~The following table details changes in various gross margin components relative to the comparable prior period:~~

2015 2014
(In millions)
Weather $ (64 ) $ 31
Infrastructure recovery mechanism 12
7
Home protection program 4
7
Revenue decoupling mechanism 7
(3 )
Midstream storage and transportation revenues (10 ) 6
Other (10 ) 13
Increase (decrease) in Gross Margin $ (61 ) $ 61

2015 2014 2013
Gas Markets (in Bcf)
Gas sales 122
138
128
End-user transportation 169
167
157
291
305
285
Intermediate transportation 289
305
300
Total Gas sales 580
610
585

~~Operation and maintenanceexpense~~ decreased $26 million in 2015 and increased $27 million in 2014. The decrease in 2015 is primarily due to decreased gas operations expenses of $12 million, decreased employee benefits expenses of $10 million, decreased transmission expenses of $3 million, and decreased uncollectible expenses of $3 million. The increase in 2014 is primarily due to increased gas operations expenses of $32 million, increased uncollectible expenses of $4 million, and increased corporate administrative expenses of $3 million, partially offset by decreased employee benefit expenses of $10 million and reduced energy optimization expenses of $2 million.

~~Other (Income) and Deductions~~ ~~decreased $27 million in 2015 and increased $27 million in 2014. The decrease in 2015 is primarily due to the 2014 contribution to the~~ DTE Energy ~~Foundation and other charitable organizations. The increase in 2014~~ is ~~primarily due to contributions to the DTE Energy Foundation and other charitable organizations in 2014.~~

~~Outlook —~~ ~~DTE Gas will continue to move forward in its efforts~~focused on executing plans to achieve operational excellence ~~sustained~~and customer satisfaction with a focus on customer affordability. DTE Energy operates in a constructive regulatory environment and has solid relationships with its regulators.

A key priority for DTE Energy is to maintain a strong balance sheet which facilitates access to capital markets and reasonably priced short-term and long-term financing. Near-term growth will be funded through internally generated cash flows and ~~earn its authorized return on~~the issuance of debt and equity. DTE ~~Gas expects~~Energy has an enterprise risk management program that, ~~planned~~among other things, is designed to monitor and manage exposure to earnings and cash flow volatility related to commodity price changes, interest rates, and counterparty credit risk.

CAPITAL INVESTMENTS

DTE Energy's utility businesses require significant ~~infrastructure~~ capital investments ~~will result in earnings growth. Looking forward, additional factors may impact earnings such as weather,~~to maintain and improve the ~~outcome of regulatory proceedings, benefit plan design changes,~~electric generation and ~~investment returns~~electric and ~~changes in discount rate assumptions in benefit plans~~natural gas distribution infrastructure and ~~health care costs. DTE Gas expects~~ to ~~continue its efforts to improve productivity~~comply with environmental regulations and ~~decrease costs while improving customer satisfaction with consideration of customer rate affordability.~~renewable energy requirements.

DTE ~~Gas~~Electric's capital investments over the 2019-2023 period are estimated at $11.3 billion comprised of $4.0 billion for capital replacements and other projects, $4.6 billion for distribution infrastructure, and $2.7 billion for new generation. DTE Electric has retired four coal-fired generation units at the Trenton Channel, River Rouge, and St Clair facilities and has announced plans to retire its remaining thirteen coal-fired generating units. Seven of these coal-fired generating units will be retired through 2023 at the Trenton Channel, River Rouge, and St. Clair facilities. The remaining coal-fired generating units at the Belle River and Monroe facilities are expected to be retired by 2040. The retired facilities will be replaced with renewables, energy waste reduction, demand response, and natural gas fueled generation. In April 2018, DTE Electric received approval from the MPSC to build a natural gas fueled combined cycle generation facility to provide approximately 1,100 megawatts of energy beginning in 2022. In August 2018, DTE Electric began construction on its natural gas fueled combined cycle generation facility. In March 2018, DTE Electric filed ~~a rate case~~its 2018 Renewable Energy Plan with the MPSC ~~on December 18, 2015 requesting an increase~~proposing approximately 1,000 additional megawatts of energy from new wind and solar projects to be completed by 2022. The MPSC had previously approved 300 of the 1,000 additional megawatts for wind projects in base rates of $183 million based on a projected twelve-month period ending October 31, 2017. The requested increase in base rates is due primarily to an increase in net plant of $800 million, inclusive of IRM capital investments being recovered through approved IRM surcharge filings. The rate filing also includes projected changes in sales, operation and maintenance expenses, and working capital. The rate filing also requests an increase in return on equity from 10.5% to 10.75% on a capital structure of 52% equity and 48% debt. DTE Gas anticipates self-implementing a rate increase in November 2016 with an MPSC order ~~expected by December~~received in September 2016. ~~Concurrent~~In January 2018, DTE Electric filed with the MPSC ~~order in this rate case,~~its five-year distribution operations investment and maintenance plan to improve system reliability. DTE Electric plans to seek regulatory approval for capital expenditures consistent with prior ratemaking treatment. For further discussion of regulatory matters, see Note 9 to the ~~existing IRM surcharge will be terminated. However, in this rate case filing,~~Consolidated Financial Statements, "Regulatory Matters."

ENVIRONMENTAL MATTERS

The EPA has implemented regulatory actions under the Clean Air Act to address emissions of GHGs from the utility sector and other sectors of the economy. Among these actions, in 2015 the EPA finalized performance standards for emissions of carbon dioxide from new and existing EGUs. In February 2016, the U.S. Supreme Court granted petitioners' requests for a stay of the carbon rules for existing EGUs (also known as the EPA Clean Power Plan) pending final review by the courts. The Clean Power Plan has no legal effect while the stay is in place. On March 28, 2017, a presidential executive order was issued on "Promoting Energy Independence and Economic Growth." The order instructs the EPA to review, and if appropriate, suspend, revise or rescind the Clean Power Plan rule. Following the issuance of this order, the federal government requested the U.S. Court of Appeals for the D.C. Circuit to ~~implement~~hold all legal challenges in abeyance until the review of these regulations is completed. On October 10, 2017, the EPA proposed to rescind the Clean Power Plan and announced its intent to issue an ANPR seeking input as to whether it should replace the rule and, if so, what form it should take. In August 2018, the EPA proposed revised emission guidelines for GHGs from existing electric utility generating units. The proposed rule, named the Affordable Clean Energy (ACE) rule, is intended to replace the Clean Power Plan rule. Comments on the proposed ACE rule were due on October 31, 2018. It is not possible to determine the potential impact of the EPA's proposed ACE rule on existing sources at this time.

Increased costs for energy produced from traditional coal-based sources due to recent, pending, and future regulatory initiatives, could also increase the economic viability of energy produced from renewable, natural gas fueled generation, and/or nuclear sources, energy waste reduction initiatives, and the potential development of market-based trading of carbon instruments which could provide new ~~IRM surcharge~~business opportunities for DTE Energy's utility and non-utility segments. At the present time, it is not possible to ~~become effective~~quantify the financial impacts of these climate related regulatory initiatives on the Registrants or their customers.

See Items 1. and 2. Business and Properties and Note 18 to the Consolidated Financial Statements in ~~January 2017.~~Item 8 of this Report, "Commitments and Contingencies," for further discussion of Environmental Matters.

GAS STORAGE AND PIPELINES

~~The~~ Description

Gas Storage and Pipelines ~~segment consists of~~owns natural gas storage fields, lateral and gathering pipeline systems, compression and surface facilities, and has ownership interests in interstate pipelines serving the ~~non-utility gas pipelines~~Midwest, Ontario, and Northeast markets. The pipeline and storage ~~businesses.~~ assets are primarily supported by long-term, fixed-price revenue contracts.

Properties

Gas Storage and Pipelines ~~results are discussed below:~~holds the following properties:

2015 2014 2013
(In millions)
Operating Revenues — Non-utility operations $ 243
$ 203
$ 132
Operation and maintenance 58
46
25
Depreciation and amortization 30
34
23
Taxes other than income 5
4
3
Asset (gains) losses and impairments, net —
1
—
Operating Income 150
118
81
Other (Income) and Deductions (29 ) (19 ) (36 )
Income Tax Expense 70
53
45
Net Income 109
84
72
Net Income Attributable to Noncontrolling Interests 2
2
2
Net Income Attributable to DTE Energy Company $ 107
$ 82
$ 70



Property Classification	% Owned	Description	Location
Pipelines
Appalachia Gathering System	100%	116-mile pipeline delivering Marcellus Shale gas to Texas Eastern Pipeline and Stonewall Gas Gathering system	PA and WV
Birdsboro Pipeline	100%	14-mile pipeline delivering gas supply to the Birdsboro Power Plant	PA
Bluestone Pipeline	100%	64-mile pipeline delivering Marcellus Shale gas to Millennium Pipeline and Tennessee Pipeline	PA and NY
Michigan gathering systems	100%	590-mile pipeline system in northern Michigan	MI
Millennium Pipeline	26%	269-mile pipeline serving markets in the Northeast	NY
NEXUS Pipeline	50%	256-mile pipeline to transport Utica and Marcellus shale gas to Ohio, Michigan, and Ontario market centers	OH and MI
Stonewall Gas Gathering	55%	68-mile pipeline connecting Appalachia Gathering System to Columbia Pipeline	WV
Susquehanna gathering system	100%	203-mile pipeline delivering Southwestern Energy's Marcellus Shale gas production to Bluestone Pipeline	PA
Tioga Gas Gathering	100%	3-mile pipeline delivering production gas to Dominion Transmission interconnect	PA
Vector Pipeline	40%	348-mile pipeline connecting Chicago, Michigan, and Ontario market centers	IL, IN, MI, and Ontario
Storage
Washington 10	100%	75 Bcf of storage capacity	MI
Washington 28	50%	16 Bcf of storage capacity	MI

~~Operating Revenues — Non-utility~~

The assets of these businesses are well integrated with other DTE Energy operations. Pursuant to an operating agreement, DTE Gas provides physical operations, ~~increased $40 million in 2015~~ maintenance, and ~~increased $71 million in 2014. The 2015 increase is due primarily to increased volumes on~~technical support for the ~~Bluestone Pipeline~~Washington 10 and ~~Susquehanna~~28 storage facilities and for the Michigan gathering ~~systems, partially offset by decreased~~systems.

Regulation

Gas Storage and Pipelines operates natural gas storage ~~revenues due~~facilities in Michigan as intrastate facilities regulated by the MPSC, and provides intrastate storage and related services pursuant to ~~expiring contracts being replaced~~an MPSC-approved tariff. Gas Storage and Pipelines also provides interstate services in accordance with ~~contracts at lower rates. The 2014 increase is due primarily~~an Operating Statement on file with the FERC. Vector, Millennium, Birdsboro, and NEXUS Pipelines provide interstate transportation services in accordance with their FERC-approved tariffs. In addition, NEXUS and Vector are subject to ~~increased volumes on the Bluestone Pipeline~~applicable laws, rules, and ~~additional segments placed~~regulations in ~~service in the Susquehanna~~Canada. Gas Storage and Pipelines' gathering ~~system. Storage revenue also increased due to weather favorability in early 2014, partially offset by lower market rates.~~

~~Operation~~ and ~~maintenance expense~~ increased $12 million in 2015 and increased $21 million in 2014. The 2015 increase is due primarily to increased activity on the Bluestone and Susquehanna projects and increased gas storage operations expense. The 2014 increase is due primarily to increased activity on the Bluestone and Susquehanna projects and increased corporate overheads due to growth of this segment.

~~Depreciation and amortizationexpense~~ ~~decreased $4 million in 2015 and increased $11 million in 2014. The 2015 decrease is due primarily to a change in the estimated useful life of Susquehanna gathering~~pipeline assets ~~related to a contract extension in the fourth quarter of 2014, partially offset by additional Bluestone and Susquehanna projects placed in service. The 2014 increase is due primarily~~are subject to the ~~growth~~rules and regulations of ~~the Bluestone~~various state utility commissions.

Strategy and ~~Susquehanna projects.~~

~~Other (Income) and Deductions~~ increased $10 million in 2015 and decreased $17 million in 2014. The 2015 increase is due primarily to increased earnings from pipeline investments. The 2014 decrease is due primarily to decreased earnings from a pipeline investment and increased intercompany interest expense. The earnings from the pipeline investment were negatively impacted in 2014 by a revenue deferral for depreciation collected in FERC-approved tariff rates in excess of depreciation expense.Competition

~~Outlook —~~Gas Storage and Pipelines expects to ~~maintain~~continue its steady growth plan by expanding existing assets, acquiring and/or developing ~~an asset portfolio~~new assets that are typically supported with ~~multiple~~long-term customer commitments. The focus will be on opportunities in the Midwest to Northeast region to supply natural gas to meet growing demand and displace less attractive supply from certain regions in North America. Much of the growth ~~platforms through investment~~ in ~~new projects~~demand for natural gas is expected to occur in the eastern Canada and ~~expansions.~~the northeast U.S. regions. Gas Storage and Pipelines ~~will continue~~believes that the Vector, Millennium, and NEXUS Pipelines are well positioned to ~~look for additional~~provide access routes and low-cost expansion options to these markets due to growth in production from the Marcellus/Utica Shales in Pennsylvania and West Virginia. Gas Storage and Pipelines has agreements with key producers that support its Bluestone Pipeline, Susquehanna gathering, Tioga gathering, AGS, and SGG businesses. Gas Storage and Pipelines is evaluating new pipeline and storage investment opportunities that could include additional pipeline and gathering expansions, laterals, compression, and other Marcellus/Utica shale midstream development or partnering opportunities.

Gas Storage and Pipelines has competition from other pipelines and storage ~~and pipeline projects at favorable prices. The 2015 capacity expansion~~providers. Operations are dependent upon a limited number of Bluestone Pipeline in Susquehanna County, Pennsylvania and Broome County, New York, is complete and included a second compressor facility and approximately six miles of additional pipeline loop to accommodate increased shipper demand. Planning and design activities are underway for Bluestone Pipeline's 2016 expansion. Additionally, the Susquehanna gathering system is being expanded to accommodate increased production. Despite recent pressure on producers from low commodity prices, DTE Energy believes its long-term agreement with Southwestern Energy Production Companycustomers, and the ~~quality~~loss of ~~the natural gas reserves in the Marcellus region soundly positions Bluestone Pipeline and Susquehanna gathering system for future growth.~~

~~Progress continues on development activities~~any one or a few customers could have a material adverse effect on the ~~NEXUS Pipeline, a transportation path to transport Appalachian Basin shale gas, including Utica~~results of Gas Storage and Marcellus shale gas, directly to consuming markets in northern Ohio, southeastern Michigan, and Dawn Ontario. DTE Energy owns a 50% partnership interest in the NEXUS Pipeline. A FERC application was filed in the fourth quarter of 2015 with an estimated in service date in the fourth quarter of 2017.Pipelines.

POWER AND INDUSTRIAL PROJECTS

~~The~~ Description

Power and Industrial Projects ~~segment~~ is comprised primarily of projects that deliver energy and utility-type products and services to industrial, commercial, and institutional customers, produce reduced emissions fuel, and sell electricity and gas from renewable energy projects. This business segment provides services using project assets usually located on or near the customers' premises in the steel, automotive, pulp and paper, airport, chemical, and other industries as follows:

Industrial Energy Services

Steel and Petroleum Coke — Power and Industrial Projects ~~results are discussed below:~~

2015 2014 2013
(In millions)
Operating Revenues — Non-utility operations $ 2,224
$ 2,289
$ 1,950
Fuel, purchased power, and gas — non-utility 1,837
1,913
1,571
Gross Margin 387
376
379
Operation and maintenance 379
368
343
Depreciation and amortization 78
77
72
Taxes other than income 15
15
15
Asset (gains) losses and impairments, net 106
(12 ) (4 )
Operating Loss (191 ) (72 ) (47 )
Other (Income) and Deductions (58 ) (66 ) (73 )
Income Taxes
Expense (Benefits) (49 ) (3 ) 8
Production Tax Credits (91 ) (97 ) (53 )
(140 ) (100 ) (45 )
Net Income 7
94
71
Net Income (Loss) Attributable to Noncontrolling Interests (9 ) 4
5
Net Income Attributable to DTE Energy Company $ 16
$ 90
$ 66

~~Gross Margin~~ ~~increased $11 million in 2015 and decreased $3 million in 2014. The 2015 increase is primarily due to an $8 million increase in production at~~produces metallurgical coke from a ~~renewable power project, a $6 million increase in pricing at two landfill gas projects, a $6 million increase associated~~coke battery with a ~~newly constructed~~capacity of 1.0 million tons per year and has an investment in a second coke battery with a capacity of 1.2 million tons per year. Power and Industrial Projects also provides pulverized coal and petroleum coke to the steel, pulp and paper, and other industries.

On-Site Energy — Power and Industrial Projects provides power generation, steam production, chilled water production, wastewater treatment, and compressed air supply to industrial customers. Power and Industrial Projects also provides utility-type services using project assets usually located on or near the customers' premises in the ~~on-site business,~~automotive, airport, chemical, and a $5 million increase in production in the REF business, partially offset by a $13 million decrease in product sales at the steel projects. The 2014 decrease is primarily due to a $13 million decrease in sales associated with project terminations in the on-site energy business, $12 million of higher start-up costs associated with new projects in the REF business, a $3 million decrease in lower pricing in the steel business, partially offset by a $19 million increase associated with new renewable powerother industries.

Renewable Energy

Wholesale Power and ~~landfill gas projects,~~Renewables — Power and ~~a $6 million increase due to the closing of the coal transportation business.~~

~~Operation and maintenanceexpense~~ increased $11 million in 2015 and increased $25 million in 2014. The 2015 increase is primarily due to costs associated with closure of the Shenango coke battery. The 2014 increase is primarily due to $16 million of higher maintenance and general administrative expenses in the steel business and $9 million of higher spending associated with the start-up of a renewable power project.

~~Depreciation and amortization expense~~ ~~increased by $1 million in 2015 and increased by $5 million in 2014. The 2014 increase is primarily due to $4 million associated with the start-up of a renewable power project.~~

~~Asset (gains) losses and impairments, net~~ decreased by $118 million in 2015 and increased by $8 million in 2014. The 2015 decrease is due primarily to the closure of the Shenango coke battery and a renewable power project. The 2014 increase is due primarily to a gain associated with a sale of an on-site project in 2014 and an asset impairment recorded in 2013.

~~Other (Income) and Deductions~~ decreased by $8 million in 2015 and decreased $7 million in 2014. The 2015 decrease is due primarily to charitable contributions, and the 2014 decrease is due primarily to lower equity earnings at various projects.

~~Income Taxes - Expense (Benefits)~~ ~~decreased by $46 million in 2015. The decrease is primarily due to the impact of the closure of the Shenango coke battery and a renewable power project.~~

~~Income Taxes - Production Tax Credits~~ ~~decreased by $6 million in 2015 and increased $44 million in 2014. The 2015 decrease is primarily due to the reduction of~~Industrial Projects holds ownership interests in, and operates, five renewable generating plants with a capacity of 217 MWs. The electric output is sold under long-term power purchase agreements.

Renewable Gas Recovery — Power and Industrial Projects has ownership interests in, and operates, twenty-three gas recovery sites in nine different states. The sites recover methane from landfills and agricultural businesses and convert the ~~REF projects. The 2014 increase is due primarily~~gas to ~~higher production volumes of refined coal that resulted~~generate electricity, replace fossil fuels in ~~higher tax credits at REF projects.~~industrial and manufacturing operations, or refine to pipeline-quality gas, which can then be used as vehicle fuel.

Reduced Emissions Fuel

~~Net Income (Loss) Attributable to Noncontrolling Interests~~ decreased by $13 million in 2015 and decreased by $1 million in 2014. The 2015 loss allocated to noncontrolling interests is primarily due to lease arrangements with investors at various REF facilities.

~~Outlook~~Reduced Emissions Fuel — Power and Industrial Projects has constructed and placed in service REF facilities at ~~nine~~ten sites including facilities located at ~~six~~seven third-party owned coal-fired power plants. DTE Energy has sold membership interests in ~~four~~five of the facilities and entered into lease arrangements in ~~two~~three of the facilities. DTE Energy will continue to optimize these facilities by seeking investors or entering into lease arrangements for facilities operating at DTE Electric and other utility sites. DTE Energy is in the process of relocating underutilized facility equipment at an existing site to a new third-party owned coal-fired power plant. In addition, DTE Energy has ~~entered into~~ an agreement to operate an REF facility owned by an outside party located at a third-party owned coal-fired power plant. The facilities blend a proprietary additive with coal used in coal-fired power plants, resulting in reduced emissions of nitrogen oxide and mercury. Qualifying facilities are eligible to generate tax credits for ten years upon achieving certain criteria. The value of a tax credit is adjusted annually by an inflation factor published by the IRS. The value of the tax credit is reduced if the reference price of coal exceeds certain thresholds. The economic benefit of the REF facilities is dependent upon the generation of production tax credits.

~~DTE Energy expects decreased production levels~~Properties and Other

The following are significant properties operated by Power and Industrial Projects:



Business Areas	Location	Service Type
Industrial Energy Services
Steel and Petroleum Coke
Pulverized Coal Operations	MI	Pulverized Coal
Coke Production	MI	Metallurgical Coke Supply
Other Investment in Coke Production and Petroleum Coke	IN and MS	Metallurgical Coke Supply and Pulverized Petroleum Coke
On-Site Energy
Automotive	IN, MI, NY, and OH	Electric Distribution, Chilled Water, Waste Water, Steam, Cooling Tower Water, Reverse Osmosis Water, Compressed Air, Mist, and Dust Collectors
Airports	MI and PA	Electricity and Hot and Chilled Water
Chemical Manufacturing	KY and OH	Electricity, Steam, Natural Gas, Compressed Air, and Wastewater
Consumer Manufacturing	OH	Electricity, Steam, Wastewater, and Sewer
Business Park	PA	Electricity
Hospital and University	CA and IL	Electricity, Steam, and Chilled Water
Renewable Energy
Pulp and Paper	AL	Electric Generation and Steam
Renewables	CA and MN	Electric Generation
Renewable Gas Recovery	AZ, CA, MI, NC, NY, OH, TX, UT, and WI	Electric Generation and Renewable Natural Gas
Reduced Emissions Fuel	MI, OH, IL, PA, TX, and WI	REF Supply



	2018		2017		2016
	(In millions)
Production Tax Credits Generated (Allocated to DTE Energy)
REF	$	178	$	144	$	103
Renewables	7		6		8
Renewable Gas Recovery	3		3		3
	$	188	$	153	$	114

Regulation

Certain electric generating facilities within Power and Industrial Projects have market-based rate authority from the FERC to sell power. The facilities are subject to FERC reporting requirements and market behavior rules. Certain projects of ~~metallurgical coke~~Power and ~~pulverized coal supplied~~Industrial Projects are also subject to ~~steel industry customers for 2016. A recent downturn in~~ the ~~steel industry in the United States will likely negatively impact the volume~~applicable laws, rules, and ~~pricing of metallurgical coke sales for the upcoming year. See discussion of potential impairment risk~~regulations related to ~~long-lived steel related assets in~~ the ~~Critical Accounting Estimates section. The segment has four renewable power generation facilities in operation. On-site energy services will continue to be delivered in accordance with the terms~~EPA, U.S. Department of ~~long-term contracts. DTE Energy will continue to look for additional investment opportunities~~Homeland Security, DOE, and ~~other energy projects at favorable prices.~~various state utility commissions.

Strategy and Competition

Power and Industrial Projects will continue ~~to leverage~~leveraging its ~~extensive~~ energy-related operating experience and project management capability to develop ~~additional~~and grow its steel, on-site energy, and renewable energy businesses, and optimize the REF businesses. Power and Industrial Projects will also continue to pursue opportunities to provide asset management and operations services to third parties. There are limited competitors for Power and Industrial Projects' existing disparate businesses who provide similar products and services. Power and Industrial Projects' operations are dependent upon a limited number of customers, and the loss of any one or a few customers could have a material adverse effect on the results of Power and Industrial Projects.

Power and Industrial Projects intends to focus on the following areas for growth:

Providing operating services to owners of on-site industrial power plants;

Acquiring and developing renewable gas recovery facilities, renewable energy projects, ~~to serve~~and other energy ~~intensive industrial customers.~~projects.

ENERGY TRADING

Description

Energy Trading focuses on physical and financial power and gas marketing and trading, structured transactions, enhancement of returns from its asset portfolio and optimization of contracted natural gas pipeline transportation, and storage positions. Energy Trading also provides natural gas, power, and related services which may include the management of associated storage and transportation contracts on the customers’ behalf and the supply or purchase of renewable energy credits to various customers. Energy Trading's customer base is predominantly utilities, local distribution companies, pipelines, producers and generators, and other marketing and trading companies. Energy Trading enters into derivative financial instruments as part of its marketing and hedging activities. These financial instruments are generally accounted for under the MTM method, which results in the recognition in earnings of unrealized gains and losses from changes in the fair value of the derivatives. Energy Trading utilizes forwards, futures, swaps, and option contracts to mitigate risk associated with marketing and trading activity, as well as for proprietary trading within defined risk guidelines. Energy Trading also provides commodity risk management services to the other businesses within DTE Energy.

Regulation

Strategy and Competition

CORPORATE AND OTHER

Description

Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds energy-related investments.

ENVIRONMENTAL MATTERS



	DTE Electric		DTE Gas		Non-utility		Total
	(In millions)
Water	$	60	$	—	$	—	$	60
Contaminated and other sites	10		25		—		35
Coal combustion residuals and effluent limitations guidelines	515		—		—		515
Estimated total future expenditures through 2025	$	585	$	25	$	—	$	610
Estimated 2019 expenditures	$	30	$	15	$	—	$	45
Estimated 2020 expenditures	$	60	$	5	$	—	$	65

EMPLOYEES

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

None.

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

DTE Energy common stock is listed under the ticker symbol "DTE" on the New York Stock Exchange, which is the principal market for such stock.

At December 31, 2018, there were 181,925,281 shares of DTE Energy common stock outstanding. These shares were held by a total of 51,338 shareholders of record.

For information on DTE Energy dividend restrictions, see Note 16 to the Consolidated Financial Statements in Item 8 of this Report, "Short-Term Credit Arrangements and Borrowings."

See the following table for information as of December 31, 2018:



	Number of Securities to be Issued Upon Exercise of Outstanding Options	Weighted-Average Exercise Price of Outstanding Options		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Plans approved by shareholders	52,100	$	43.30	2,897,674

UNREGISTERED SALES OF DTE ENERGY EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of DTE Energy Equity Securities by the Issuer and Affiliated Purchasers



	Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2018 — 10/31/2018	143	$	110.14	—	—	—
11/01/2018 — 11/30/2018	—	$	—	—	—	—
12/01/2018 — 12/31/2018	—	$	—	—	—	—
Total	143			—


(a)	Represents shares of DTE Energy common stock withheld to satisfy income tax obligations upon the vesting of restricted stock based on the price in effect at the grant date.

COMPARISON OF CUMULATIVE FIVE YEAR TOTAL RETURN

Total Return to DTE Energy Shareholders

(Includes reinvestment of dividends)



	Annual Return Percentage Year Ended December 31,
Company/Index	2014	2015		2016	2017	2018
DTE Energy Company	34.61	(3.77	)	26.93	14.59	4.19
S&P 500 Index	13.69	1.38		11.95	21.82	(4.39	)
S&P 500 Multi-Utilities Index	28.94	(1.73	)	18.56	12.09	1.77



	Indexed Returns Year Ended December 31,
	Base Period
Company/Index	2013	2014	2015	2016	2017	2018
DTE Energy Company	100.00	134.61	129.54	164.41	188.40	196.30
S&P 500 Index	100.00	113.69	115.26	129.04	157.19	150.29
S&P 500 Multi-Utilities Index	100.00	128.94	126.71	150.22	168.38	171.35

Item 6. Selected Financial Data



	2018		2017		2016		2015		2014
	(In millions, except per share amounts)
Operating Revenues	$	14,212	$	12,607	$	10,630	$	10,337	$	12,301
Net Income Attributable to DTE Energy Company^(a)	$	1,120	$	1,134	$	868	$	727	$	905
Diluted Earnings Per Common Share	$	6.17	$	6.32	$	4.83	$	4.05	$	5.10
Financial Information
Dividends declared per share of common stock	$	3.60	$	3.36	$	3.06	$	2.84	$	2.69
Total Assets	$	36,288	$	33,767	$	32,041	$	28,662	$	27,827
Long-Term Debt^(b)	$	12,134	$	12,185	$	11,269	$	8,760	$	8,271
Shareholders’ equity	$	10,237	$	9,512	$	9,011	$	8,772	$	8,327


(a)	The 2017 results include a $105 million net income tax benefit related to the enactment of the TCJA.


(b)	Long-Term Debt includes Capital lease obligations and excludes debt due within one year.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE OVERVIEW

The following table summarizes DTE Energy's financial results:



	Years Ended December 31,
	2018		2017		2016
	(In millions, except per share amounts)
Net Income Attributable to DTE Energy Company	$	1,120	$	1,134	$	868
Diluted Earnings per Common Share	$	6.17	$	6.32	$	4.83

Please see detailed explanations of segment performance in the following "Results of Operations" section.

DTE Energy's strategy is to achieve long-term earnings growth, a strong balance sheet, and an attractive dividend yield.

CAPITAL INVESTMENTS

ENVIRONMENTAL MATTERS

OUTLOOK

Looking forward, DTE Energy will focus on several areas that are expected to improve future performance:

electric and gas customer satisfaction;

electric distribution system reliability;

new electric generation;

gas distribution system renewal;

rate competitiveness and affordability;

regulatory stability and investment recovery for the electric and gas utilities;

employee safety and engagement;

cost structure optimization across all business segments;

cash, capital, and liquidity to maintain or improve financial strength; and

investments that integrate assets and leverage skills and expertise.

DTE Energy will continue to pursue opportunities to grow its businesses in a disciplined manner if it can secure opportunities that meet its strategic, financial, and risk criteria.

RESULTS OF OPERATIONS

DTE Energy uses Utility Margin and Non-utility Margin, non-GAAP financial measures, to assess its performance by reportable segment.



	2018			2017			2016
	(In millions)
Net Income (Loss) Attributable to DTE Energy by Segment
Electric	$	664		$	606		$	622
Gas	150			146			138
Gas Storage and Pipelines	235			275			119
Power and Industrial Projects	161			138			95
Energy Trading	39			72			(45		)
Corporate and Other	(129		)	(103		)	(61		)
Net Income Attributable to DTE Energy Company	$	1,120		$	1,134		$	868

ELECTRIC

The Results of Operations discussion for DTE Electric is presented in a reduced disclosure format in accordance with General Instruction I (2) (a) of Form 10-K for wholly-owned subsidiaries.

The Electric segment consists principally of DTE Electric. Electric results are discussed below:



	2018			2017		2016
	(In millions)
Operating Revenues — Utility operations	$	5,298		$	5,102	$	5,225
Fuel and purchased power — utility	1,552			1,454		1,532
Utility Margin	3,746			3,648		3,693
Operation and maintenance	1,437			1,382		1,408
Depreciation and amortization	836			753		750
Taxes other than income	307			302		284
Asset (gains) losses and impairments, net	(1		)	—		—
Operating Income	1,167			1,211		1,251
Other (Income) and Deductions	310			284		276
Income Tax Expense	193			321		353
Net Income Attributable to DTE Energy Company	$	664		$	606	$	622

The following table details changes in various Utility Margin components relative to the comparable prior period:



	2018			2017
	(In millions)
Weather	$	152		$	(109	)
Implementation of new rates	51			124
Regulatory mechanism — TRM	40			(26		)
PSCR disallowance in 2017	13			(13		)
Base sales	(3		)	(26		)
TCJA rate reduction	(156		)	—
Other regulatory mechanisms and other	1			5
Increase (decrease) in Utility Margin	$	98		$	(45	)



	2018	2017	2016
	(In thousands of MWh)
DTE Electric Sales
Residential	15,959	14,885	15,875
Commercial	17,282	17,283	17,521
Industrial	10,324	9,897	10,004
Other	221	258	264
	43,786	42,323	43,664
Interconnection sales^(a)	2,796	2,623	2,334
Total DTE Electric Sales	46,582	44,946	45,998

DTE Electric Deliveries
Retail and wholesale	43,786	42,323	43,664
Electric retail access, including self-generators^(b)	4,737	4,820	4,936
Total DTE Electric Sales and Deliveries	48,523	47,143	48,600


(a)	Represents power that is not distributed by DTE Electric.


(b)	Represents deliveries for self-generators that have purchased power from alternative energy suppliers to supplement their power requirements.

DTE Electric sales increased for residential, commercial, and industrial primarily due to favorable weather in 2018.

GAS

The Gas segment consists principally of DTE Gas. Gas results are discussed below:



	2018		2017		2016
	(In millions)
Operating Revenues — Utility operations	$	1,436	$	1,388	$	1,324
Cost of gas — utility	446		443		454
Utility Margin	990		945		870
Operation and maintenance	502		449		440
Depreciation and amortization	133		123		106
Taxes other than income	73		65		64
Asset (gains) losses and impairments, net	—		—		4
Operating Income	282		308		256
Other (Income) and Deductions	65		84		41
Income Tax Expense	67		78		77
Net Income Attributable to DTE Energy Company	$	150	$	146	$	138

The following table details changes in various Utility Margin components relative to the comparable prior period:



	2018			2017
	(In millions)
Weather	$	46		$	(6	)
Implementation of new rates	15			80
Midstream storage and transportation revenues	15			(5		)
Regulatory mechanism — RDM	(3		)	4
TCJA rate reduction	(40		)	—
Other regulatory mechanisms and other	12			2
Increase in Utility Margin	$	45		$	75



	2018	2017	2016
	(In Bcf)
Gas Markets
Gas sales	135	119	116
End-user transportation	187	165	182
	322	284	298
Intermediate transportation	329	260	214
Total Gas sales	651	544	512

GAS STORAGE AND PIPELINES

The Gas Storage and Pipelines segment consists of the non-utility gas pipelines and storage businesses. Gas Storage and Pipelines results are discussed below:



	2018			2017			2016
	(In millions)
Operating Revenues — Non-utility operations	$	485		$	453		$	302
Cost of gas — Non-utility	22			30			6
Operation and maintenance	103			83			81
Depreciation and amortization	82			76			45
Taxes other than income	8			8			4
Asset (gains) losses and impairments, net	—			2			—
Operating Income	270			254			166
Other (Income) and Deductions	(61		)	(18		)	(31		)
Income Tax Expense (Benefit)	68			(30		)	71
Net Income	263			302			126
Less: Net Income Attributable to Noncontrolling Interests	28			27			7
Net Income Attributable to DTE Energy Company	$	235		$	275		$	119

Depreciation and amortization expense increased $6 million in 2018 and increased $31 million in 2017. The 2017 increase was primarily due to the acquisition of AGS and SGG in October 2016.

Net Income Attributable to Noncontrolling Interests increased $1 million in 2018 and increased $20 million in 2017. The 2017 increase was primarily due to the acquisition of SGG in October 2016.

POWER AND INDUSTRIAL PROJECTS



	2018			2017			2016
	(In millions)
Operating Revenues — Non-utility operations	$	2,204		$	2,089		$	1,906
Fuel, purchased power, and gas — non-utility	1,888			1,813			1,640
Non-utility Margin	316			276			266
Operation and maintenance	363			342			317
Depreciation and amortization	67			72			72
Taxes other than income	12			11			13
Asset (gains) losses and impairments, net	27			20			(1		)
Operating Loss	(153		)	(169		)	(135		)
Other (Income) and Deductions	(89		)	(63		)	(49		)
Income Taxes
Benefit	(7		)	(42		)	(26		)
Production Tax Credits	(188		)	(153		)	(114		)
	(195		)	(195		)	(140		)
Net Income	131			89			54
Less: Net Loss Attributable to Noncontrolling Interests	(30		)	(49		)	(41		)
Net Income Attributable to DTE Energy Company	$	161		$	138		$	95

Operating Revenues — Non-utility operations increased $115 million in 2018 and increased $183 million in 2017. The changes are due to the following:



	2018
	(In millions)
Higher demand due to improved conditions in the steel business	$	59
Higher production in the renewables business	25
Higher production, offset by lower coal prices in the REF business	18
Higher sales primarily associated with new contracts in the on-site business	13
	$	115

	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	107
Higher production driven by new projects, offset by lower coal prices in the REF business	102
Lower production and one-time recovery in 2016, offset by an acquisition in the renewables business	(9		)
Lower sales primarily associated with expired contracts in the on-site business	(17		)
	$	183

Non-utility Margin increased $40 million in 2018 and increased $10 million in 2017. The changes are due to the following:



	2018
	(In millions)
Higher production in the renewables business	$	20
Higher sales primarily associated with new contracts in the on-site business	12
Higher demand due to improved conditions in the steel business	8
	$	40

	2017
	(In millions)
Higher demand due to improved conditions in the steel business	$	42
Lower production and one-time recovery in 2016 in the renewables business	(11		)
Lower sales primarily associated with expired contracts in the on-site business	(15		)
Other	(6		)
	$	10

Income Taxes — Production Tax Credits increased by $35 million in 2018 and increased $39 million in 2017. The increase in both periods was primarily due to higher production in the REF business.

ENERGY TRADING


	2015			2014		2013			2018		2017		2016
	(In millions)								(In millions)
Operating Revenues — Non-utility operations	$	2,459		$	3,762	$	1,771		$	5,557	$	4,277	$	2,575
Purchased power and gas — non-utility	2,417			3,478		1,782			5,417		4,077		2,552
Gross Margin	42			284		(11		)
Non-utility Margin									140		200		23
Operation and maintenance	67			70		72			75		68		63
Depreciation and amortization	2			1		1			5		5		3
Taxes other than income	4			4		4			5		4		2
Operating Income (Loss)	(31		)	209		(88		)	55		123		(45		)
Other (Income) and Deductions	6			10		8			3		2		29
Income Tax Expense (Benefit)	(15		)	77		(38		)	13		49		(29		)
Net Income (Loss) Attributable to DTE Energy Company	$	(22	)	$	122	$	(58	)	$	39	$	72	$	(45	)

~~The following table summarizes the changes in~~

DTE ~~Electric's Accumulated other comprehensive income (loss) by component for the years ended December 31, 2015 and 2014:~~Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Changes in Accumulated Other Comprehensive Income (Loss) by Component (a)
Net Unrealized Gain on Investments Benefit Obligations (b) Total
(In millions)
Balance, December 31, 2013 $ 1
$ (17 ) $ (16 )
Other comprehensive loss before reclassifications —
(12 ) (12 )
Amounts reclassified from Accumulated other comprehensive income —
2
2
Net current-period Other comprehensive loss —
(10 ) (10 )
Balance, December 31, 2014 $ 1
$ (27 ) $ (26 )
Other comprehensive income before reclassifications 1
—
1
Transfer of amounts from Accumulated other comprehensive income to affiliate —
27
27
Amounts reclassified from Accumulated other comprehensive income —
—
—
Net current-period Other comprehensive income 1
27
28
Balance, December 31, 2015 $ 2
$ —
$ 2

~~(a)All amounts are net of tax.~~


~~(b)~~	The amounts reclassified from Accumulated other comprehensive income (loss) are included in the computation of the net periodic pension and other postretirement benefit costs (see Note 18 to the Consolidated Financial Statements "Retirement Benefits and Trusteed Assets").

Cash, Cash Equivalents, and Restricted Cash

Cash and cash equivalents include cash on hand, cash in banks, and temporary investments purchased with remaining maturities of three months or less. Restricted cash consists of funds held to satisfy requirements of certain debt and DTE Energy partnership operating agreements. Restricted cash designated for interest and principal payments within one year is classified as a Current Asset.

The following is a table that provides a reconciliation of DTE Energy's Cash and cash equivalents as well as Restricted cash reported within the Consolidated Statements of Financial Position that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows:



	2018		2017
	(In millions)
Cash and cash equivalents	$	71	$	66
Restricted cash	5		23
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	$	76	$	89

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes to Consolidated Financial Statements — (Continued)~~

Receivables

Accounts receivable are primarily composed of trade receivables and unbilled revenue. The Registrants' Accounts receivable are stated at net realizable value.

The allowance for doubtful accounts for DTE Electric and DTE Gas is generally calculated using the aging approach that utilizes rates developed in reserve studies. DTE Electric and DTE Gas establish an allowance for uncollectible accounts based on historical losses and management’s assessment of existing economic conditions, customer trends, and other factors. Customer accounts are generally considered delinquent if the amount billed is not received by the due date, which is typically in 21 days, however, factors such as assistance programs may delay aggressive action. DTE Electric and DTE Gas assess late payment fees on trade receivables based on past-due terms with customers. Customer accounts are written off when collection efforts have been exhausted. The time period for write-off is 150 days after service has been terminated.

The customer allowance for doubtful accounts for DTE Energy's other businesses is calculated based on specific review of probable future collections based on receivable balances generally in excess of 30 days.

DTE Energy unbilled revenues of ~~$620~~$1.0 billion at December 31, 2018 and 2017 include $264 million and ~~$773 million, including $237 million and $250~~$290 million of DTE Electric unbilled revenues, ~~are~~respectively, included in Customer Accounts ~~receivable at December 31, 2015 and 2014, respectively.~~receivable.

Notes Receivable

Notes receivable, or financing receivables, for DTE Energy are primarily comprised of capital lease receivables and loans and are included in Notes receivable and Other current assets on DTE Energy’s Consolidated Statements of Financial Position. Notes receivable, or financing receivables, for DTE Electric are primarily comprised of loans.

Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. The Registrants cease accruing interest (nonaccrual status), consider a note receivable impaired, and establish an allowance for credit loss when it is probable that all principal and interest amounts due will not be collected in accordance with the contractual terms of the note receivable. Cash payments received on nonaccrual status notes receivable, that do not bring the account contractually current, are first applied to contractually owed past due interest, with any remainder applied to principal. Accrual of interest is generally resumed when the note receivable becomes contractually current.

In determining the allowance for credit losses for notes receivable, the Registrants consider the historical payment experience and other factors that are expected to have a specific impact on the counterparty’s ability to pay. In addition, the Registrants monitor the credit ratings of the counterparties from which they have ~~Notes~~notes receivable.

Inventories

Inventory related to utility operations is generally valued at average cost. Inventory related to non-utility operations is valued at the lower of cost or ~~market.~~net realizable value.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

DTE Gas' natural gas inventory of ~~$65~~$48 million and ~~$43~~$29 million as of December 31, ~~2015~~2018 and ~~2014,~~2017, respectively, is determined using the last-in, first-out (LIFO) method. The replacement cost of gas ~~remaining~~ in ~~storage~~inventory exceeded the LIFO cost by ~~$60~~$113 million and ~~$110~~$81 million at December 31, ~~2015~~2018 and ~~2014,~~2017, respectively.

Property, Retirement and Maintenance, and Depreciation and Amortization

Property is stated at cost and includes construction-related labor, materials, overheads, and AFUDC for utility property. The cost of utility properties retired is charged to accumulated depreciation. Expenditures for maintenance and repairs are charged to expense when incurred, except for outage-related maintenance repairs for Fermi 2.

Utility property at DTE Electric and DTE Gas is depreciated over its estimated useful life using straight-line rates approved by the MPSC.

DTE Energy's non-utility property is depreciated over its estimated useful life using the straight-line method.

Depreciation and amortization expense also includes the amortization of certain regulatory assets for the Registrants.

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes to Consolidated Financial Statements — (Continued)~~

Approximately $4 million and ~~$16~~$15 million of expenses related to Fermi 2 refueling outages were accrued at December 31, ~~2015~~2018 and ~~2014,~~2017, respectively. Amounts are accrued on a pro-rata basis, generally over an 18-month period, that coincides with scheduled refueling outages at Fermi 2. This accrual of outage costs matches the regulatory recovery of these costs in rates set by the MPSC. See Note 89 to the Consolidated Financial Statements, "Regulatory ~~Matters".~~Matters."

The cost of nuclear fuel is capitalized. The amortization of nuclear fuel is included within Fuel, purchased power, and gas — utility in the DTE Energy Consolidated Statements of Operations, and Fuel and purchased power in the DTE Electric Consolidated Statements of Operations, and is recorded using the units-of-production method.

See Note 6 to the Consolidated Financial Statements, "Property, Plant, and Equipment."

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If the carrying amount of the asset exceeds the expected ~~discounted~~undiscounted future cash flows generated by the asset, an impairment loss is recognized resulting in the asset being written down to its estimated fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell.

~~Intangible Assets~~

~~DTE Energy has certain Intangible assets as shown below:~~

December 31,
2015 2014
(In millions)
Emission allowances $ 1
$ 1
Renewable energy credits 38
45
Contract intangible assets 117
122
156
168
Less accumulated amortization 62
57
Intangible assets, net 94
111
Less current intangible assets 5
9
$ 89
$ 102

~~DTE Electric has certain Intangible assets as shown below:~~

December 31,
2015 2014
(In millions)
Emission allowances $ 1
$ 1
Renewable energy credits 38
45
39
46
Less current intangible assets 5
9
$ 34
$ 37

Emission allowances and renewable energy credits are charged to expense, using average cost, as the allowances and credits are consumed in the operation of the businesses by the Registrants. DTE Energy amortizes contract Intangible assets on a straight-line basis over the expected period of benefit, ranging from 1 to 26 years. DTE Energy's Intangible assets amortization expense was $11 million in 2015, $12 million in 2014, and $14 million in 2013.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Intangible Assets

The Registrants have certain Intangible assets as shown below:



		December 31, 2018							December 31, 2017
	Useful Lives	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
		(In millions)
Intangible assets subject to amortization
Customer relationships	25 - 40 years^(a)	$	779	$	(44	)	$	735	$	770	$	(24	)	$	746
Contract intangibles	6 to 26 years	159		(66		)	93		168		(72		)	96
		938		(110		)	828		938		(96		)	842

DTE Electric renewable energy credits	(b)	20		—			20		24		—			24
DTE Electric emission allowances	(b)	1		—			1		1		—			1
		21		—			21		25		—			25
Long-term intangible assets
DTE Electric		$	21	$	—		$	21	$	25	$	—		$	25
DTE Energy		$	959	$	(110	)	$	849	$	963	$	(96	)	$	867


(a)	The useful life of the customer relationship intangible assets is based on the number of years in which the assets are expected to economically contribute to the business. The expected economic benefit incorporates existing customer contracts and expected renewal rates based on the estimated volume and production lives of gas resources in the region.


(b)	Emission allowances and renewable energy credits are charged to expense, using average cost, as the allowances and credits are consumed in the operation of the business.

The following table summarizes DTE Energy's estimated customer relationship and contract intangible amortization expense expected to be recognized during each year through ~~2020:~~2023:

Estimated amortization expense (In millions)
2016 $ 10
2017 $ 7
2018 $ 7
2019 $ 7
2020 $ 5



	2019		2020		2021		2022		2023
	(In millions)
Estimated amortization expense	$	27	$	26	$	25	$	25	$	25

DTE Energy amortizes customer relationship and contract intangible assets on a straight-line basis over the expected period of benefit. DTE Energy's Intangible assets amortization expense was $27 million in 2018, $29 million in 2017, and $16 million in 2016.

Excise and Sales Taxes

The Registrants record the billing of excise and sales taxes as a receivable with an offsetting payable to the applicable taxing authority, with no net impact on the ~~Registrants'~~Registrants’ Consolidated Statements of Operations.

Deferred Debt Costs

The costs related to the issuance of long-term debt are deferred and amortized over the life of each debt issue. The deferred amounts are included as a direct deduction from the carrying amount of each debt issue in ~~Other long-term assets~~Mortgage bonds, notes, and other and Junior subordinated debentures on ~~the Registrant's~~DTE Energy's Consolidated Statements of Financial Position and in Mortgage bonds, notes, and other on DTE Electric's Consolidated Statements of Financial Position. In accordance with MPSC regulations applicable to DTE Energy’s electric and gas utilities, the unamortized discount, premium, and expense related to utility debt redeemed with a refinancing are amortized over the life of the replacement issue. Discount, premium, and expense on early redemptions of debt associated with DTE Energy's non-utility operations are charged to earnings.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

Investments in Debt and Equity Securities

The Registrants generally ~~classify~~record investments in debt and equity securities ~~as either trading or available-for-sale and have recorded such investments~~ at market value with unrealized gains or losses included in ~~earnings or in Other comprehensive income or loss, respectively.~~earnings. Changes in the fair value of Fermi 2 nuclear decommissioning investments are recorded as adjustments to Regulatory assets or liabilities, due to a recovery mechanism from customers. The Registrants' equity investments are reviewed for impairment each reporting period. If the assessment indicates that ~~the~~an impairment ~~is other than temporary,~~exists, a loss is recognized resulting in the equity investment being written down to its estimated fair value. See Note 1112 of the Consolidated Financial Statements, "Fair ~~Value".~~

~~Government Grants~~

Grants are recognized when there is reasonable assurance that the grant will be received and that any conditions associated with the grant will be met. When grants are received related to Property, plant, and equipment, the Registrants reduce the cost of the assets on their Consolidated Statements of Financial Position, resulting in lower depreciation expense over the life of the associated asset. Grants received related to expenses are reflected as a reduction of the associated expense in the period in which the expense is incurred.Value."

DTE Energy Foundation

DTE Energy's charitable contributions to the DTE Energy Foundation were ~~$12~~$22 million, ~~$25~~$43 million, and ~~$18~~$26 million for the years ended December 31, ~~2015, 2014,~~2018, 2017, and ~~2013,~~2016, respectively. The DTE Energy Foundation is a non-consolidated not-for-profit private foundation, the purpose of which is to contribute to and assist charitable organizations.

~~DTE Energy Company — DTE Electric Company~~

~~Combined Notes to Consolidated Financial Statements — (Continued)~~

Other Accounting Policies

See the following notes for other accounting policies impacting the Registrants’ Consolidated Financial Statements:



Note		Title
74		Revenue
8		Asset Retirement Obligations
89		Regulatory Matters
910		Income Taxes
1112		Fair Value
1213		Financial and Other Derivative Instruments
1920		Retirement Benefits and Trusteed Assets
21		Stock-Based Compensation

NOTE 3 — NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with ~~Customers.~~Customers (Topic 606), as amended. The objectives of this ASU are to improve upon revenue recognition requirements by providing a single comprehensive model to determine the measurement of revenue and timing of recognition. The core principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This ASU also ~~requires~~required expanded qualitative and quantitative disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. ~~In July 2015, the FASB deferred implementation of the revenue standard to be effective for the first interim period within annual reporting periods beginning after December 15, 2017.~~ The standard is to be applied ~~retrospectively~~using either a full retrospective or modified retrospective approach. The Registrants adopted the standard effective January 1, 2018, using the modified retrospective approach. Under the modified retrospective approach, the information for periods prior to the adoption date has not been restated and ~~early~~continues to be reported under the accounting standards in effect for those periods. As permitted under the standard, the Registrants have elected to apply the guidance only to those contracts that were not completed at January 1, 2018, and have elected not to restate the impacts of any contract modifications made prior to the earliest period presented.

The adoption ~~is permitted~~of the ASU did not have a significant impact on the Registrants' financial position or results of operations, but required additional disclosures for revenue. See Note 4 to the Consolidated Financial Statements, "Revenue."

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

In March 2017, the FASB issued ASU No. 2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update required that an employer report the service cost component in the ~~preceding year.~~same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of income from operations. The amendments in this update also allow only the service cost component to be eligible for capitalization when applicable. The Registrants adopted the standard effective January 1, 2018. The standard has been applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. As permitted by the standard, the Registrants have used benefit cost amounts disclosed for prior periods as the basis for retrospective application in the income statement. As a result of regulatory mechanisms, the impact to the Consolidated Financial Statements was not material for the year ended December 31, 2018.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, as amended. The new guidance is intended to improve the recognition and measurement of financial instruments. The guidance primarily impacts accounting for equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) and financial liabilities under the fair value option. The guidance requires equity investments to be generally measured at fair value, with subsequent changes in fair value recognized in net income. The guidance requires entities to make a cumulative-effect adjustment to the Statements of Financial Position as of the beginning of the first reporting period in which the guidance is effective. The Registrants adopted the standard effective January 1, 2018. Upon adoption, DTE Energy and DTE Electric recorded a cumulative-effect adjustment to reclassify $5 million and $3 million of unrealized gains from Accumulated other comprehensive income (loss) to Retained earnings, respectively.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC paragraphs pursuant to SEC Staff Accounting Bulletin No. 118. The Amendments in this update add various SEC paragraphs pursuant to the issuance of SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118). SAB 118 directs taxpayers to consider the implications of the TCJA as provisional when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. As described in Note 10 to the Consolidated Financial Statements, "Income Taxes," within the combined DTE Energy and DTE Electric 2017 Annual Report on Form 10-K and in accordance with SAB 118, the Registrants recorded amounts that were considered provisional. During the year ended December 31, 2018, DTE Energy and DTE Electric finalized their SAB 118 analysis and recorded true-up adjustments to the remeasurement of deferred taxes of $21 million and $7 million, respectively. The impact of the true-up adjustments was an increase in Income Tax Expense, of which $17 million was attributable to the regulated utilities and increased Regulatory liabilities.The true-up adjustments were a result of further analysis for items subject to further consideration at December 31, 2017, under SAB 118 and primarily related to timing differences not recoverable from DTE Electric and DTE Gas customers.

Recently Issued Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), as amended. This guidance requires a lessee to account for leases as finance or operating leases, and disclose key information about leasing arrangements. Both types of leases will result in the lessee recognizing a right-of-use asset and a corresponding lease liability on its balance sheet, with differing methodology for income statement recognition, depending on the lease classification. The Registrants will adopt the standard on January 1, 2019. The standard allows lessees and lessors to apply either, 1) a modified retrospective approach for leases existing or entered into after the beginning of the earliest comparative period in the Consolidated Financial Statements, or 2) a prospective transition approach for leases existing as of January 1, 2019 with a cumulative effect adjustment to be recorded to retained earnings. The Registrants will apply the standard on a prospective basis. The Registrants will elect the package of practical expedients allowing entities to not reassess whether an agreement is a lease, to carryforward the existing lease classification, and to not reassess initial direct costs associated with existing leases. These practical expedients apply to leases that commenced prior to January 1, 2019. The Registrants will also elect to exclude leases from the balance sheet that are for a period of one year or less, as well as, the practical expedient allowing entities to not evaluate land easements under the new guidance at adoption if they were not previously accounted for as leases.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

A third-party software tool has been implemented that will assist with the initial adoption and ongoing compliance of the standard. The Registrants are ~~currently~~implementing new business processes, internal controls, and accounting policies. The Registrants are in the process of drafting disclosures to satisfy the standard's requirements. In addition, the Registrants are continuing to monitor utility industry implementation guidance and interpretation. While the Registrants expect an increase in assets and liabilities, as well as additional disclosures, they are still assessing the impact of this ASU on their Consolidated Financial Statements.

In ~~February 2015,~~June 2016, the FASB issued ASU No. ~~2015-02,~~ 2016-13,~~Amendments~~ Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update replace the incurred loss impairment methodology in current generally accepted accounting principles with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Entities will apply the ~~Consolidation Analysis~~,new guidance as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which ~~changes~~ the ~~analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities.~~guidance is adopted. The ASU affects (1) limited partnerships and similar legal entities, (2) evaluating fees paid to a decision maker or a service provider as a variable interest, (3) the effect of fee arrangements on the primary beneficiary determination, (4) the effect of related parties on the primary beneficiary determination, and (5) certain investment funds. It is effective for the Registrants ~~for the first interim period within annual reporting periods~~ beginning after December 15, ~~2015~~2019, and ~~early~~interim periods therein. Early adoption is permitted. The Registrants are currently assessing the impact of this ~~ASU~~standard on their Consolidated Financial Statements.

In ~~April 2015,~~February 2018, the FASB issued ASU No. ~~2015-03,~~2018-02, ~~Simplifying the Presentation~~Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of ~~Debt Issuance Costs~~Certain Tax Effects from Accumulated Other Comprehensive Income. ~~This ASU requires that debt issuance costs related~~The amendments in this update allow a reclassification from accumulated other comprehensive income to ~~a recognized debt liability be presented in the balance sheet as a direct deduction~~retained earnings for stranded tax effects resulting from the ~~carrying amount of that debt liability, consistent with debt discounts. This~~TCJA. The amendments in this update also require entities to disclose their accounting policy for releasing income tax effects from accumulated other comprehensive income. The ASU is effective for ~~reporting periods~~the Registrants for fiscal years beginning after December 15, ~~2015~~2018, and interim periods therein. ~~It is to be applied retrospectively and early~~Early adoption is permitted. ~~Had~~The Registrants are currently assessing the ~~Registrants early adopted~~impact of this ~~ASU it would have decreased assets and liabilities~~standard on ~~DTE Energy’s and DTE Electric’s~~their Consolidated ~~Statements of~~ Financial ~~Position by $74 million and $36 million, respectively, at December 31, 2015, and $73 million and $35 million, respectively, at December 31, 2014.~~Statements.

In ~~July 2015,~~August 2018, the FASB issued ASU No. ~~2015-11,~~2018-13, Fair Value Measurements (Topic 820): Disclosure Framework — ~~Inventory (Topic 330), Simplifying~~Changes to the Disclosure Requirements for Fair Value Measurement ~~of Inventory~~. The ~~ASU replaces~~amendments in this update modify the ~~current lower of cost or market test with a lower of cost or net realizable~~disclosure requirements on fair value ~~test when cost is determined on a first-in, first-out or average cost basis.~~measurements in Topic 820. The ~~standard~~ASU is effective for ~~public entities~~the Registrants for ~~annual reporting periods~~fiscal years beginning after December 15, ~~2016,~~2019, and interim periods therein. ~~It is to be applied prospectively and early~~Early adoption is permitted. The ~~ASU will not have a significant~~Registrants are currently assessing the impact of this standard on ~~the Registrants'~~their Consolidated Financial Statements.

In ~~November 2015,~~August 2018, the FASB issued ASU No. ~~2015-17,~~ 2018-14,~~Balance Sheet Classification of Deferred Taxes~~ Compensation — Retirement Benefits — Defined Benefit Plans (Subtopic 715-20): Disclosure Framework — Changes to the Disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ~~This ASU requires~~The amendments in this update modify the disclosure requirements for employers that ~~all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This~~sponsor defined benefit pension or other postretirement plans. The ASU is effective for ~~reporting periods beginning~~the Registrants for fiscal years ending after December 15, ~~2016, including interim periods therein. It may be applied either prospectively or retrospectively, and early~~2020. Early adoption is permitted. The Registrants ~~adopted this ASU at December 31, 2015. The adoption~~are currently assessing the impact of this standard on their Consolidated Financial Statements.

In August 2018, the FASB issued ASU ~~impacted DTE Energy’s~~No. 2018-15, Intangibles — Goodwill and ~~DTE Electric’s~~Other — Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The ASU is effective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Registrants are currently assessing the impact of this standard on their Consolidated ~~Statements~~Financial Statements.

In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810):Targeted Improvements to Related Party Guidance for Variable Interest Entities. The amendments in this update modify the requirements for determining whether a decision-making fee is a variable interest and require reporting entities to consider indirect interests held through related parties under common control on a proportional basis. The ASU is effective for the Registrants for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Registrants are currently assessing the impact of this standard on their Consolidated Financial ~~Position by decreasing assets and liabilities for 2014 by $75 million and $2 million, respectively.~~Statements.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

NOTE 4 — ~~ACQUISITIONS AND EXIT ACTIVITIES~~REVENUE

~~Acquisitions~~Significant Accounting Policy

~~On January 21, 2015,~~Upon the adoption of Topic 606, revenue is measured based upon the consideration specified in a contract with a customer at the time when performance obligations are satisfied. Under Topic 606, a performance obligation is a promise in a contract to transfer a distinct good or service or a series of distinct goods or services to the customer. The Registrants recognize revenue when performance obligations are satisfied by transferring control over a product or service to a customer. The Registrants have determined control to be transferred when the product is delivered or the service is provided to the customer. For the year ended December 31, 2018, recognition of revenue for the Registrants subsequent to the adoption of Topic 606 is substantially similar in amount and approach to that prior to adoption.

Rates for DTE Electric ~~closed on an acquisition~~and DTE Gas include provisions to adjust billings for fluctuations in fuel and purchased power costs, cost of ~~a 732 MW simple-cycle~~ natural gas, ~~facility~~and certain other costs. Revenues are adjusted for differences between actual costs subject to reconciliation and the amounts billed in ~~Carson City, Michigan from~~ current rates. Under or over recovered revenues related to these cost recovery mechanisms are included in Regulatory assets or liabilities on the Registrants' Consolidated Statements of Financial Position and are recovered or returned to customers through adjustments to the billing factors.

For discussion of derivative contracts, see Note 13 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."

Disaggregation of Revenue

The ~~LS Power Group.The facility will serve to meet customer needs during periods~~following is a summary of ~~peak demand.~~ revenues disaggregated by segment for DTE Energy:



	2018
	(In millions)
Electric^(a)
Residential	$	2,494
Commercial	1,794
Industrial	690
Other	320
Total Electric operating revenues^(b)	$	5,298

Gas
Gas sales	$	1,055
End User Transportation	232
Intermediate Transportation	58
Other	91
Total Gas operating revenues^(c)	$	1,436

Other segment operating revenues
Gas Storage and Pipelines	$	485
Power and Industrial Projects^(d)	$	2,204
Energy Trading^(e)	$	5,557


(a)	Revenues under the Electric segment generally represent those of DTE Electric.


(b)	Includes $21 million under Alternative Revenue Programs and $20 million of other revenues, which are both outside the scope of Topic 606 for the year ended December 31, 2018.


(c)	Includes $2 million under Alternative Revenue Programs and $7 million of other revenues, which are both outside the scope of Topic 606 for the year ended December 31, 2018.


(d)	Includes revenues outside the scope of Topic 606 primarily related to $125 million of contracts accounted for as leases for the year ended December 31, 2018.


(e)	Includes revenues outside the scope of Topic 606 primarily related to $4.5 billion of derivatives for the year ended December 31, 2018.

DTE Energy Company — DTE Electric ~~has completed its valuation analysis~~Company

Combined Notes to ~~arrive at~~Consolidated Financial Statements — (Continued)

Nature of Goods and Services

The following is a description of principal activities, separated by reportable segments, from which DTE Energy generates revenue. For more detailed information about reportable segments, see Note 22 to the ~~fair value of~~Consolidated Financial Statements, “Segment and Related Information.”

The Registrants have contracts with customers which may contain more than one performance obligation. When more than one performance obligation exists in a contract, the ~~assets acquired. The cash~~ consideration ~~and total purchase price of approximately $241 million was~~under the contract is allocated to the performance obligations based on the ~~underlying fair value of the assets acquired, which was primarily Property, plant, and equipment. The pro forma results of operations have not been presented for~~relative standalone selling price. DTE ~~Electric as the effects of the acquisition were not material to either Registrant's Consolidated Statements of Operations.~~

On October 1, 2015, DTE Electric closed on an acquisition of a 350 MW simple-cycle natural gas facility in East China Township, Michigan from a non-utility affiliate of DTE Energy. The facility will serve to meet customer needs during periods of peak demand. DTE Electric has completed its purchase accounting. The cash consideration and total purchase price of approximately $69 million wasEnergy generally determines standalone selling prices based on the ~~net book value~~prices charged to customers or the use of the ~~assets acquired, which was primarily Property, plant, and equipment.~~adjusted market assessment approach. The ~~pro forma results of operations have not been presented for DTE Electric as~~adjusted market assessment approach involves the ~~effects~~evaluation of the ~~acquisition were not material to its Consolidated Statements of Operations.~~

~~Exit Activities~~

~~On December 17, 2015,~~market in which DTE Energy ~~announced~~sells goods or services and estimating the ~~closure~~price that a customer in that market would be willing to pay.

Under Topic 606, when a customer simultaneously receives and consumes the product or service provided, revenue is considered to be recognized over time. Alternatively, if it is determined that the criteria for recognition of revenue over time is not met, the revenue is considered to be recognized at a point in time.

Electric

Electric consists principally of DTE Electric. Electric revenues are primarily comprised of the ~~Shenango coke battery plant~~supply and delivery of electricity, and related capacity. Revenues are primarily associated with cancelable contracts, with the exception of certain long-term contracts with commercial and industrial customers. Revenues, including estimated unbilled amounts, are generally recognized over time based upon volumes delivered or through the passage of time ratably based upon providing a stand-ready service. The Registrants have determined that the above methods represent a faithful depiction of the transfer of control to the customer. Unbilled revenues are typically determined utilizing approved tariff rates and estimated meter volumes. Estimated unbilled amounts recognized in ~~response~~revenue are subject to ~~a sharp downturn~~adjustment in the ~~North American steel industry. The plant, which is included~~following reporting period as actual volumes by customer class are known. Revenues are typically subject to tariff rates based upon customer class and type of service, and are billed and received monthly. Tariff rates are determined by the MPSC on a per unit or monthly basis.

Gas

Gas consists principally of DTE Gas. Gas revenues are primarily comprised of the supply and delivery of natural gas, and other services including storage, transportation, and appliance maintenance. Revenues are primarily associated with cancelable contracts with the exception of certain long-term contracts with commercial and industrial customers. Revenues, including estimated unbilled amounts, are generally recognized over time based upon volumes delivered or through the passage of time ratably based upon providing a stand-ready service. DTE Energy has determined that the above methods represent a faithful depiction of the transfer of control to the customer. Unbilled revenues are typically determined using both estimated meter volumes and estimated usage based upon the number of unbilled days and historical temperatures. Estimated unbilled amounts recognized in revenue are subject to adjustment in the following reporting period as actual volumes by customer class and service type are known. Revenues are typically subject to tariff rates or other rates subject to regulatory oversight and are billed and received monthly. Tariff rates are determined by the MPSC on a per unit or monthly basis.

Gas Storage and Pipelines

Gas Storage and Pipelines revenues generally consist of services related to the gathering, transportation, and storage of natural gas. Contracts are primarily long-term in nature. Revenues, including estimated unbilled amounts, are generally recognized over time based upon services provided or through the passage of time ratably based upon providing a stand-ready service. DTE Energy has determined that the above methods represent a faithful depiction of the transfer of control to the customer. Revenues are typically billed and received monthly. Pricing for such revenues may consist of demand rates, commodity rates, transportation rates, and other associated fees. Consideration may consist of both fixed and variable components. Generally, uncertainties in the variable consideration components are resolved and revenues are known at the time of recognition.

Power and Industrial Projects

Power and Industrial Projects ~~segment, is located in Pittsburgh, PA. As a result~~revenues include contracts accounted for as leases which are outside of the ~~closure,~~ scope of Topic 606. For performance obligations within the scope of Topic 606, the timing of revenue recognition is dependent upon when control over the associated product or service is transferred.

DTE Energy ~~recorded a one-time pre-tax non-cash impairment charge of $111 million. The charge included $96 million~~Company — DTE Electric Company

Combined Notes to fully impair the long-lived assets, employee severance expenses related to the workforce reduction of approximately 170 employees for $3 million, and other expenses, including write downs of inventory, of $12 million. DTE Energy's coke production has been shifted to a larger, more efficient coke battery plant in theConsolidated Financial Statements — (Continued)

Revenues at Power and Industrial Projects, ~~segment. Production~~within the scope of Topic 606, generally consist of sales of refined coal, coal, blast furnace coke, coke oven gas, electricity, equipment maintenance services, and other energy related products and services. Revenues, including estimated unbilled amounts, for the sale of blast furnace coke are generally recognized at a point in time when the product is delivered, which represents the transfer of control to the customer. Other revenues are generally recognized over time based upon services provided or through the passage of time ratably based upon providing a stand-ready service. DTE Energy has determined that the above methods represent a faithful depiction of the transfer of control to the customer. Market based pricing structures exist in such contracts including adjustments for consumer price or other indices. Consideration may consist of both fixed and variable components. Generally, uncertainties in the variable consideration components are resolved and revenues are known at the time of recognition. Billing terms vary and are generally monthly with payment terms typically within 30 days following billing.

Energy Trading

Energy Trading revenues consist primarily of derivative contracts outside of the scope of Topic 606. For performance obligations within the scope of Topic 606, the timing of revenue recognition is dependent upon when control over the associated product or service is transferred.

Revenues, including estimated unbilled amounts, within the scope of Topic 606 arising from the ~~Shenango coke battery plant ceased~~sale of natural gas, electricity, power capacity, and other energy related products are generally recognized over time based upon volumes delivered or through the passage of time ratably based upon providing a stand-ready service. DTE Energy has determined that the above methods represent a faithful depiction of the transfer of control to the customer. Revenues are known at the time of recognition. Payment for the aforementioned revenues is generally due from customers in ~~January 2016.~~the month following delivery.

ARevenues associated with RECs are recognized at a point in time when control of the RECs are transferred to the customer which is deemed to be when the subject RECs are entered for transfer to the customer in the applicable regulatory tracking system. Revenues associated with RECs under a wholesale full requirements power contract are deferred until control has been transferred. The deferred revenues represent a contract liability for which payment has been received and the amounts have been estimated using the adjusted market assessment approach. With the exception of RECs, generally all other performance obligations associated with wholesale full requirements power contracts are satisfied over time in conjunction with the delivery of power. At the time power is delivered, DTE Energy may not have control over the RECs as the RECs are not self-generated and may not yet have been procured resulting in deferred revenues.

Deferred Revenue

The following is a summary of ~~the charges in the Consolidated Statements of Operations resulting from DTE Energy's exit activities is shown below:~~deferred revenue activity:

2015
(In millions)
Fuel, purchased power, and gas — non-utility $ 5
Operation and maintenance 10
Asset (gains) losses and impairments, net 96
Total Exit Activity Charges $ 111



	DTE Energy
	(In millions)
Beginning Balance, January 1, 2018	$	56
Increases due to cash received or receivable, excluding amounts recognized as revenue during the period	48
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(30		)
Ending Balance, December 31, 2018	$	74

~~For~~The deferred revenues at DTE Energy generally represent amounts ~~accrued at December 31, 2015~~paid by or receivable from customers for which the associated performance obligation has not yet been satisfied.

Deferred revenues include amounts associated with REC performance obligations under certain wholesale full requirements power contracts. Deferred revenues associated with RECs are recognized as revenue when control of the RECs has transferred.

Other performance obligations associated with deferred revenues include providing products and services related to customer prepayments. Deferred revenues associated with these ~~exit activities,~~ products and services are recognized when control has transferred to the customer.

DTE Energy ~~expects future cash payments of approximately $7 million~~Company — DTE Electric Company

Combined Notes to be made in 2016. DTE Energy anticipates incurring additional costs, including environmental remediation costs, in connection with the closure. An estimate of the amount of additional costs and timing of the activities cannot be determined at December 31, 2015 as alternatives are currently being evaluated, however, the likelihood of these costs being material to DTE Energy's Consolidated Financial Statements ~~is remote.~~— (Continued)

The following table represents deferred revenue amounts for DTE Energy that are expected to be recognized as revenue in future periods:



	DTE Energy
	(In millions)
2019	$	46
2020	1
2021	5
2022	7
2023	5
2024 and thereafter	10
	$	74

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under Topic 606, the Registrants did not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which revenue is recognized at the amount to which the Registrants have the right to invoice for goods provided and services performed, and (3) contracts for which variable consideration relates entirely to an unsatisfied performance obligation.

Such contracts consist of varying types of performance obligations across the segments, including the supply and delivery of energy related products and services. Contracts with variable volumes and/or variable pricing, including those with pricing provisions tied to a consumer price or other index, have also been excluded as the related consideration under the contract is variable at inception of the contract. Contract lengths vary from cancelable to multi-year.

The Registrants expect to recognize revenue for the following amounts related to fixed consideration associated with remaining performance obligations in each of the future periods noted:



	DTE Energy		DTE Electric
	(In millions)
2019	$	267	$	8
2020	263		—
2021	219		—
2022	172		—
2023	139		—
2024 and thereafter	658		—
	$	1,718	$	8

Other Matters

DTE Energy and DTE Electric have recognized charges of $140 million and $85 million related to expense recognized for estimated uncollectible accounts receivable for the year ended December 31, 2018, respectively.

DTE Energy Company — DTE Electric Company

Combined Notes to Consolidated Financial Statements — (Continued)

NOTE 5 — GOODWILL

DTE Energy has goodwill resulting from business combinations.

The following is the summary of change in the carrying amount of goodwill for the years ended December 31:



	2018		2017
	(In millions)
Balance as of January 1	$	2,293	$	2,286
Goodwill attributable to Gas Storage and Pipelines 2016 acquisition of AGS and SGG	—		7
Balance at December 31	$	2,293	$	2,293

NOTE 56 — PROPERTY, PLANT, AND EQUIPMENT

The following is a summary of Property, plant, and equipment by classification as of December 31:


	2015			2014			2018			2017
Property, plant, and equipment	(In millions)						(In millions)
DTE Electric
Generation	$	11,767		$	10,712		$	11,027		$	12,166
Distribution	7,816			7,414			9,153			8,637
Other	1,808			1,679			2,567			2,169
Total DTE Electric	21,391			19,805			22,747			22,972
DTE Gas
Distribution	3,124			2,946			3,823			3,523
Storage	453			448			548			533
Transmission and other	890			863			1,204			1,118
Total DTE Gas	4,467			4,257			5,575			5,174
Non-utility and other	2,263			2,476			3,488			3,278
Total DTE Energy	28,121			26,538			31,810			31,424
Less accumulated depreciation and amortization
Accumulated depreciation and amortization
DTE Electric
Generation	(4,346		)	(3,863		)	(3,609		)	(4,403		)
Distribution	(2,707		)	(2,822		)	(2,974		)	(2,914		)
Other	(593		)	(531		)	(727		)	(667		)
Total DTE Electric	(7,646		)	(7,216		)	(7,310		)	(7,984		)
DTE Gas
Distribution	(1,163		)	(1,130		)	(1,283		)	(1,238		)
Storage	(147		)	(142		)	(165		)	(159		)
Transmission and other	(370		)	(363		)	(404		)	(384		)
Total DTE Gas	(1,680		)	(1,635		)	(1,852		)	(1,781		)
Non-utility and other	(761		)	(867		)	(998		)	(938		)
Total DTE Energy	(10,087		)	(9,718		)	(10,160		)	(10,703		)
Net DTE Energy Property, plant, and equipment	$	18,034		$	16,820		$	21,650		$	20,721
Net DTE Electric Property, plant, and equipment	$	13,745		$	12,589		$	15,437		$	14,988



Commission File Number	Registrants, State of Incorporation, Address, and Telephone Number	I.R.S. Employer Identification No.
1-11607	DTE Energy Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000	38-3217752

1-2198	DTE Electric Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000	38-0478650



DTE Energy	Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o	Emerging growth company o
		~~(Do not check if a smaller reporting company)~~
DTE Electric	Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o
		~~(Do not check if a smaller reporting company)~~ Emerging growth company o



		Page
	Definitions	1
	Filing Format	34
	Forward-Looking Statements	35
PART I
Items 1. & 2.	Business and Properties	57
Item 1A.	Risk Factors	1820
Item 1B.	Unresolved Staff Comments	2225
Item 3.	Legal Proceedings	2226
Item 4.	Mine Safety Disclosures	2226
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	2327
Item 6.	Selected Financial Data	2629
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2629
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4752
Item 8.	Financial Statements and Supplementary Data	5055
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~133~~146
Item 9A.	Controls and Procedures	~~133~~146
Item 9B.	Other Information	~~133~~146
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	~~133~~146
Item 11.	Executive Compensation	~~133~~146
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~133~~146
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~133~~146
Item 14.	Principal Accountant Fees and Services	~~133~~146
PART IV
Item 15.	Exhibits and Financial Statement Schedules	~~135~~148
Item 16.	Form 10-K Summary	158
	Signatures	~~146~~160



AFUDC		Allowance for Funds Used During Construction

AGS		Appalachia Gathering System is a midstream natural gas asset located in Pennsylvania and West Virginia. DTE Energy purchased 100% of AGS in October 2016, and this asset is part of DTE Energy's Gas Storage and Pipelines segment.

AMV		Applicable Market Value

ANPR		Advanced Notice of Proposed Rulemaking

ARO		Asset Retirement Obligation

ASU		Accounting Standards Update issued by the FASB

CCR		Coal Combustion Residuals

CFTC		U.S. Commodity Futures Trading Commission

~~COA~~CON	~~U.S. Court~~	Certificate of ~~Appeals for the District of Columbia~~Necessity

DOE		U.S. Department of Energy

DTE Electric		DTE Electric Company (a direct wholly-owned subsidiary of DTE Energy) and subsidiary companies

DTE Energy		DTE Energy Company, directly or indirectly the parent of DTE Electric, DTE Gas, and numerous non-utility subsidiaries

DTE Gas		DTE Gas Company (an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies

EGU		Electric Generating Unit

ELG		Effluent Limitations Guidelines

EPA		U.S. Environmental Protection Agency

Equity units		DTE Energy's 2016 equity units issued in October 2016, which were used to finance the October 1, 2016 Gas Storage and Pipelines acquisition.

FASB		Financial Accounting Standards Board

FERC		Federal Energy Regulatory Commission

FOV		Finding of Violation

FTRs		Financial Transmission Rights are financial instruments that entitle the holder to receive payments related to costs incurred for congestion on the transmission grid.

GCR		A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs.

GHGs		Greenhouse gases

Green Bonds		A financing option to fund projects that have a positive environmental impact based upon a specified set of criteria. The proceeds are required to be used for eligible green expenditures.

IRM		Infrastructure Recovery Mechanism

IRS		Internal Revenue Service

~~MBT~~ISO	~~Michigan Business Tax~~	Independent System Operator

~~MCIT~~LIBOR	~~Michigan Corporate Income Tax~~	London Inter-Bank Offered Rates

~~MCOA~~LLC	~~Michigan Court~~	DTE Energy Corporate Services, LLC, a subsidiary of ~~Appeals~~DTE Energy

MDEQ		Michigan Department of Environmental Quality

MGP		Manufactured Gas Plant

MISO		Midcontinent Independent System Operator, Inc.



MPSC		Michigan Public Service Commission

MTM		Mark-to-market

NAV		Net Asset Value

NEIL		Nuclear Electric Insurance Limited

NEXUS		NEXUS Gas Transmission, LLC, a joint venture in which DTE Energy owns a 50% partnership interest.

Non-utility		An entity that is not a public utility. Its conditions of service, prices of goods and services, and other operating related matters are not directly regulated by the MPSC.

NOV		Notice of Violation

NO_X		Nitrogen Oxides

NRC		U.S. Nuclear Regulatory Commission

PG&E		Pacific Gas and Electric Corporation

PLD		City of Detroit's Public Lighting Department



Registrant	Title of Each Class	Name of Exchange on which Registered
DTE Energy Company (DTE Energy)	Common stock, without par value	New York Stock Exchange

DTE Energy	~~2011~~2012 Series ~~I 6.5%~~C 5.25% Junior Subordinated Debentures due ~~2061~~2062	New York Stock Exchange

DTE Energy	~~2012~~2016 Series CB 5.375% Junior Subordinated Debentures due 2076	New York Stock Exchange

DTE Energy	2016 Series F 6.00% Junior Subordinated Debentures due 2076	New York Stock Exchange

DTE Energy	2017 Series E 5.25% Junior Subordinated Debentures due ~~2062~~2077	New York Stock Exchange

DTE Energy	6.50% Corporate Units	New York Stock Exchange

DTE Electric Company (DTE Electric)	None	None



DTE Energy	~~DTE Energy Yes~~ o No x~~DTE Electric~~ Yes x No o	DTE Electric	Yes x No o



DTE Energy	~~DTE Energy Yes~~ x No o~~DTE Electric~~ Yes x No o	DTE Electric	Yes x No o



Registrant	Description	Shares
DTE Energy	Common Stock, without par value	~~179,476,008~~181,923,685

DTE Electric	Common Stock, $10 par value, directly-owned by DTE Energy	138,632,324



Production tax credits		Tax credits as authorized under Sections 45K and 45 of the Internal Revenue Code that are designed to stimulate investment in and development of alternate fuel sources. The amount of a production tax credit can vary each year as determined by the IRS.

PSCR		A Power Supply Cost Recovery mechanism authorized by the MPSC that allows DTE Electric to recover through rates its fuel, fuel-related, and purchased power costs.

RDM		A Revenue Decoupling Mechanism authorized by the MPSC that is designed to minimize the impact on revenues of changes in average customer usage.

REC		Renewable Energy Credit

REF		Reduced Emissions Fuel

Registrants		DTE Energy and DTE Electric

Retail access		Michigan legislation provided customers the option of access to alternative suppliers for electricity and natural gas.

RNG		Renewable Natural Gas

RSN		Remarketable Senior Notes

RTO		Regional Transmission Organization

SEC		Securities and Exchange Commission

~~Securitization~~SGG		Stonewall Gas Gathering is a midstream natural gas asset located in West Virginia. DTE ~~Electric financed specific stranded costs at lower interest rates through the sale~~Energy purchased 55% of ~~rate reduction bonds by a wholly-owned special purpose entity, The Detroit Edison Securitization Funding LLC.~~SGG in October 2016, and this asset is part of DTE Energy's Gas Storage and Pipelines segment.

Shenango		Shenango Incorporated is a coke battery plant located in Pittsburgh, PA, that was closed in January 2016 and is included in the Power and Industrial Projects segment.

SO₂		Sulfur Dioxide

TCJA		Tax Cuts and Jobs Act of 2017

TCJA rate reduction liability		Beginning January 1, 2018, as a result of the change in the corporate tax rate, DTE Electric and DTE Gas have reduced revenue and recorded an offsetting regulatory liability.

Topic 606		FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended

TRIA		Terrorism Risk Insurance Program Reauthorization Act of 2015



TRM		A Transitional Reconciliation Mechanism authorized by the MPSC that allows DTE Electric to recover through rates the deferred net incremental revenue requirement associated with the transition of PLD customers to DTE Electric's distribution system.

VEBA		Voluntary Employees Beneficiary Association

VIE		Variable Interest Entity



Units of Measurement

Bcf	Billion cubic feet of natural gas

BTU	~~Heat~~British thermal unit, heat value (energy content) of fuel

kWh	Kilowatthour of electricity

~~Mcf~~MDth/d	~~Thousand cubic feet of gas~~Million dekatherms per day

MMBtu	One million BTU

~~MMcf/d~~	~~Million cubic feet of gas per day~~

MW	Megawatt of electricity

MWh	Megawatthour of electricity


~~(a)~~	~~Includes revenue associated with the under or over recoveries of tracking mechanisms and deferred gain amortization of the previously reversed RDM liability.~~


	Location by Michigan		Net Generation Capacity (a)	Location by Michigan County				Net Generation Capacity^(a)
Facility	County	Year in Service	(MW)		Year in Service		(MW)
Fossil-fueled Steam-Electric
Belle River (b)	St. Clair	1984 and 1985	1,034	Location by Michigan County	St. Clair		1984 and 1985		1,034
Greenwood	St. Clair	1979	785	St. Clair		1979		785
Monroe (c)	Monroe	1971, 1973, and 1974	3,066	Monroe		1971, 1973, and 1974		3,066
River Rouge	Wayne	1957 and 1958	523	Wayne		1958		272
St. Clair	St. Clair	1953, 1954, 1959, 1961, and 1969	1,367	St. Clair		1953, 1954, 1961, and 1969		1,216
Trenton Channel	Wayne	1949 and 1968	630	Wayne		1968		495
			7,405					6,868
Natural gas and Oil-fueled Peaking Units	Various	1966-1971, 1981, 1999, 2002, and 2003	2,009	Various		1966-1971, 1981, 1999, 2002, and 2003		2,033
Nuclear-fueled Steam-Electric Fermi 2	Monroe	1988	1,124	Monroe		1988		1,141
Hydroelectric Pumped Storage Ludington (d)	Mason	1973	958	Mason		1973		1,054
Renewables (e)
Wind(f)
Brookfield Wind Park	Huron	2014	75	Huron		2014		75
Echo Wind Park	Huron	2014	112	Huron		2014		112
Gratiot Wind Park	Gratiot	2011 and 2012	102	Gratiot		2011 and 2012		102
Pinnebog Wind Park				Huron		2016		51
Thumb Wind Project	Huron and Sanilac	2012	110	Huron and Sanilac		2012		110
			399					450
Solar	Various	2010-2015	12
Utility-Owned SolarCurrents				Various		2010-2016		14
Utility Scale Solar				Various		2017		50
			11,907					64
								11,610


(b)	~~The~~Represents DTE Electric's 81% interest in Belle River with a total capability ~~represents DTE Electric’s entitlement to 81%~~ of ~~the capacity and energy of the plant.~~1,270 MW. See Note 67 to the Consolidated Financial Statements in Item 8 of this Report, "Jointly-Owned Utility ~~Plant".~~Plant."


	Circuit Miles		Circuit Miles
Operating Voltage-Kilovolts (kV)	Overhead	Underground	Overhead	Underground
4.8 kV to 13.2 kV	27,686	14,731	28,498	15,252
24 kV	182	692	182	686
40 kV	2,290	383	2,306	376
120 kV	60	8	61	8
	30,218	15,814	31,047	16,322


(c)	The Monroe generating plant provided ~~40%~~43% of DTE Electric’s total ~~2015~~2018 power plant generation.


(d)	Represents DTE Electric’s 49% interest in Ludington with a total capability of ~~1,955~~2,151 MW. See Note 67 to the Consolidated Financial Statements in Item 8 of this Report, "Jointly-Owned Utility ~~Plant".~~Plant."


(e)	In addition to the owned renewable facilities described above, DTE Electric has long-term contracts for ~~487~~481 MW of renewable power generated from wind, solar, and biomass facilities.


(f)	In December 2018, DTE Electric acquired the majority of the Pine River Wind Park with a Net Generation Capacity of 161 MW located in Gratiot County, which is expected to be placed into service in the first quarter of 2019.


	Availability (MMcf/d)	Contract Expiration	Availability (MDth/d)	Contract Expiration
Great Lakes Gas Transmission L.P.	30	2017	30	2022
Viking Gas Transmission Company	21	2017	21	2022
Vector Pipeline L.P.	50	2017
Trunkline Gas Company	51	2017
Vector Pipeline L.P. (an affiliate)			20	2022
ANR Pipeline Company	154	2028	129	2028
Panhandle Eastern Pipeline Company	95	2029	125	2029
NEXUS Pipeline (an affiliate)			75	2033



						Dividends Paid per Share
Year	Quarter	High		Low		Dividends Paid per Share
2015
	First	$	92.27	$	76.84	$	0.6900
	Second	$	84.27	$	73.23	$	0.6900
	Third	$	85.12	$	74.53	$	0.7300
	Fourth	$	85.36	$	77.35	$	0.7300
2014
	First	$	74.61	$	64.84	$	0.6550
	Second	$	79.45	$	72.76	$	0.6550
	Third	$	78.89	$	71.60	$	0.6900
	Fourth	$	90.77	$	75.76	$	0.6900



	Number of Shares Purchased (a)	Average Price Paid per Share (a)		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Average Price Paid per Share	Maximum Dollar Value that May Yet Be Purchased Under the Plans or Programs
10/01/2015 — 10/31/2015	1,576	$	79.43	—	—	—
11/01/2015 — 11/30/2015	2,436	$	78.53	—	—	—
12/01/2015 — 12/31/2015	1,900	$	78.42	—	—	—
Total	5,912			—


(a)	~~2011~~The 2017 results include ~~an $87~~a $105 million net income tax benefit related to the enactment of the ~~MCIT.~~TCJA.


(b)	~~Discontinued operations represents DTE Energy's Unconventional Gas Production business that was sold in 2012 resulting in a $55 million after-tax loss on sale.~~Long-Term Debt includes Capital lease obligations and excludes debt due within one year.


	Total		2016		2017-2018		2019-2020		2021 and Beyond		Total		2019		2020-2021		2022-2023		2024 and Thereafter
	(In millions)										(In millions)
Long-term debt:
Mortgage bonds, notes, and other (a)	$	8,820	$	465	$	416	$	1,115	$	6,824	$	12,566	$	1,495	$	1,144	$	1,793	$	8,134
Junior subordinated debentures(b)	480		—		—		—		480		1,180		—		—		—		1,180
Capital lease obligations	24		9		12		3		—		11		4		7		—		—
Interest	7,022		475		756		754		5,037		10,340		556		1,016		929		7,839
Stock purchase contract											33		33		—		—		—
Operating leases	197		37		55		34		71		154		42		48		19		45
Electric, gas, fuel, transportation, and storage purchase obligations (b)	6,097		1,918		1,542		575		2,062
Long-term DTE Electric renewable energy power purchase agreements (c)(d)	1,379		82		165		165		967
Other long-term obligations (e)(f)(g)	126		38		64		10		14
Electric, gas, fuel, transportation, and storage purchase obligations^(c)											5,509		2,216		1,465		591		1,237
Long-term DTE Electric renewable energy power purchase agreements^(d)(e)											1,133		100		162		162		709
Other long-term obligations^(f)(g)(h)											715		375		326		7		7
Total obligations	$	24,145	$	3,024	$	3,010	$	2,656	$	15,455	$	31,641	$	4,821	$	4,168	$	3,501	$	19,151


(a)	Excludes ~~$15~~$16 million of unamortized debt discount ~~on debt.~~and $73 million of unamortized debt issuance costs.


(c)	Excludes amounts associated with full requirements contracts where no stated minimum purchase volume is required.


~~(c)~~(d)	The agreements represent the minimum ~~settlements~~obligations with suppliers for renewable energy and renewable energy credits under existing contract terms which expire from 2030 through 2035. DTE Electric's share of plant output ranges from ~~44%~~29% to 100%.


~~(d)~~(e)	Excludes a power purchase agreement with a non-utility affiliate of DTE Energy.


~~(e)~~(f)	Includes liabilities for unrecognized tax benefits of $3$10 million.


~~(f)~~(g)	Excludes other long-term liabilities of ~~$138~~$172 million not directly derived from contracts or other agreements.


Reporting Unit	Goodwill		Fair Value Reduction % (a)		Discount Rate		Terminal Multiple (b)	Valuation Methodology (c)	Goodwill		Fair Value Reduction %^(a)		Discount Rate		Terminal Multiple^(b)	Valuation Methodology^(c)
	(In millions)								(In millions)
Electric	$	1,208	37	%	7	%	9.5x	DCF, assuming stock sale	$	1,208	35	%	6	%	10.0x	DCF, assuming stock sale
Gas	743		31	%	6	%	10.5x	DCF, assuming stock sale	743		30	%	7	%	12.0x	DCF, assuming stock sale
Gas Storage and Pipelines	24		74	%	8	%	11.0x	DCF, assuming asset sale	299		19	%	7	%	n/a^(d)	DCF, assuming asset sale
Power and Industrial Projects ~~(d)~~(e)	26		23	%	7	%	10.0x	DCF, assuming asset sale (e)	26		18	%	6	%	9.0x	DCF, assuming asset sale^(f)
Energy Trading	17		47	%	10	%	n/a (f)	DCF, assuming asset sale	17		56	%	12	%	n/a^(g)	DCF, assuming asset sale
	$	2,018							$	2,293


(a)	Percentage by which the fair value of equity of the reporting unit would need to decline to equal its carrying value, including goodwill.


(b)	Multiple of enterprise value (sum of debt plus equity value) to earnings before interest, taxes, depreciation, and amortization (EBITDA).


(c)	Discounted cash flows (DCF) incorporated ~~2016-2020~~2019-2023 projected cash flows plus a calculated terminal value.