1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED COMMISSION FILE NUMBER
MARCH 31,JUNE 30, 1995 1-2198
__________________________________------------------
THE DETROIT EDISON COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 38-0478650
(State of incorporation) (I.R.S. Employer
Identification No.)
2000 SECOND AVENUE, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(313) 237-8000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
----- ------
AT APRIL 30,JULY 31, 1995, 144,875,094144,883,349 SHARES OF THE COMPANY'S $10 PAR VALUE COMMON
STOCK WERE OUTSTANDING.
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TABLE OF CONTENTS
Page
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Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Part I - Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 1 - Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . 3
Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . . . 8
Independent Accountants' Report . . . . . . . . . . . . . . . . . . . . . . . . . . 1011
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.Operations . . . . . . . . . . . . . . . . . . . . . . . 11. . . . . . . 12
Part II - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1820
Item 1 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Item 4 - Submission of Matters to a Vote of Security Holders . 18. . . . . . . . . . . . . . 20
Item 5 - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1821
Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . 1923
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2429
DEFINITIONS
ABATE . . . . . . . . . . . . Association of Businesses Advocating Tariff Equity
Annual Report . . . . . . . . The Company's 1994 Annual Report to the Securities and
Exchange Commission on Form 10-K
Annual Report Notes . . . . . Notes to Consolidated Financial Statements appearing on
pages 37 through 48 of the Company's 1994 Annual Report
to the Securities and Exchange Commission on Form 10-K
Company . . . . . . . . . . . The Detroit Edison Company and subsidiary companies
Consumers . . . . . . . . . . Consumers Power Company
FERC . . . . . . . . . . . . Federal Energy Regulatory Commission
kWh . . . . . . . . . . . . . Kilowatthour
MPSC . . . . . . . . . . . . Michigan Public Service Commission
MW . . . . . . . . . . . . . Megawatts
Note(s) . . . . . . . . . . . Note(s) to Consolidated Financial Statements (Unaudited)
appearing herein
NRC . . . . . . . . . . . . . Nuclear Regulatory Commission
PSCR . . . . . . . . . . . . Power Supply Cost Recovery
Quarterly Report . . . . . . The Company's Quarterly Report to the Securities
and Exchange Commission on Form 10-Q for quarter ended
March 31, 1995
Quarterly Report Notes . . . Notes to Consolidated Financial Statements (Unaudited)
appearing in the Company's Quarterly Report to the
Securities and Exchange Commission on Form 10-Q for
quarter ended March 31, 1995
Registrant . . . . . . . . . The Detroit Edison Company
2
3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED).
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Dollars in Thousands)
Three Months Ended Six Months Ended Twelve Months Ended
March 31 March 31
---------------------------------------------------------------June 30 June 30 June 30
1995 1994 1995 1994 ---------------------------------------------------------------1995 1994
--------------------------------------------------------------------------------
OPERATING REVENUES
Electric - System $ 863,048838,913 $ 870,506853,906 $ 3,440,8931,701,961 $ 3,484,6121,724,412 $ 3,425,899 $ 3,522,913
Electric - Interconnection 7,339 16,639 33,841 66,68312,300 13,682 19,639 30,321 32,459 65,440
Steam 9,887 12,444 25,292 28,657
- --------------------------------------------------------------------------------------------------------------------4,742 5,102 14,629 17,546 24,933 29,120
-----------------------------------------------------------------------------------------------------------------------
Total Operating Revenues $ 880,274855,955 $ 899,589872,690 $ 3,500,0261,736,229 $ 3,579,952
- --------------------------------------------------------------------------------------------------------------------1,772,279 $ 3,483,291 $ 3,617,473
-----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Operation
Fuel $ 169,660175,532 $ 195,030175,630 $ 693,845345,192 $ 770,109370,660 $ 693,747 $ 763,539
Purchased power 35,112 43,806 108,253 107,39832,747 47,068 67,859 90,874 93,931 135,510
Other operation 137,373 140,341 618,098 616,691148,998 147,506 286,371 287,847 619,590 626,423
Maintenance 52,471 56,171 258,710 245,58859,903 66,634 112,374 122,805 251,979 240,915
Depreciation and amortization 125,044 115,983 485,476 438,179124,630 120,064 249,674 236,047 490,042 449,663
Deferred Fermi 2 amortization (1,493) (1,866) (7,092) (8,585)(1,867) (2,986) (3,733) (6,718) (8,212)
Amortization of deferred Fermi 2
depreciation and return 23,247 21,207 86,868 44,37246,494 42,414 88,908 57,857
Taxes other than income 62,645 69,314 249,204 263,01861,459 71,240 124,104 140,554 239,424 269,106
Income taxes 82,051 70,284 282,425 291,648
- --------------------------------------------------------------------------------------------------------------------65,218 63,376 147,269 133,660 284,266 295,804
-----------------------------------------------------------------------------------------------------------------------
Total Operating Expenses $ 686,110690,241 $ 710,270710,858 $ 2,775,7871,376,351 $ 2,768,418
- --------------------------------------------------------------------------------------------------------------------1,421,128 $ 2,755,169 $ 2,830,605
-----------------------------------------------------------------------------------------------------------------------
OPERATING INCOME $ 194,164165,714 $ 189,319161,832 $ 724,239359,878 $ 811,534
- --------------------------------------------------------------------------------------------------------------------351,151 $ 728,122 $ 786,868
-----------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND DEDUCTIONS
Allowance for other funds used
during construction $ 315268 $ 443550 $ 1,556583 $ 2,123993 $ 1,274 $ 2,280
Other income and (deductions) - net (13,335) (3,073) (35,387) (24,407)(4,941) (2,538) (18,276) (5,611) (37,695) (24,282)
Income taxes 4,998 925 12,337 8,3091,172 1,000 6,170 1,925 12,413 8,440
Accretion income 3,014 3,645 13,013 36,6142,845 3,491 5,859 7,136 12,367 29,044
Income taxes - disallowed plant
costs and accretion income (929) (1,144) (4,037) (11,415)
- --------------------------------------------------------------------------------------------------------------------(868) (1,091) (1,797) (2,235) (3,814) (8,737)
-----------------------------------------------------------------------------------------------------------------------
Net Other Income and Deductions $ (5,937)(1,524) $ 7961,412 $ (12,518)(7,461) $ 11,224
- --------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES2,208 $ 188,227(15,455) $ 190,115 $ 711,721 $ 822,758
- --------------------------------------------------------------------------------------------------------------------6,745
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INTEREST CHARGES
Long-term debt $ 68,42468,096 $ 69,94569,659 $ 272,242136,520 $ 304,877139,604 $ 270,679 $ 287,667
Amortization of debt discount,
premium and expense 2,799 2,617 11,015 10,2572,779 2,620 5,578 5,237 11,174 10,463
Other 3,901 4,993 10,077 9,4162,313 4,230 6,214 9,223 8,161 12,801
Allowance for borrowed funds used
during construction (credit) (387) (310) (2,142) (1,361)
- --------------------------------------------------------------------------------------------------------------------(554) (548) (941) (858) (2,148) (1,507)
-----------------------------------------------------------------------------------------------------------------------
Net Interest Charges $ 74,73772,634 $ 77,24575,961 $ 291,192147,371 $ 323,189
- --------------------------------------------------------------------------------------------------------------------153,206 $ 287,866 $ 309,424
-----------------------------------------------------------------------------------------------------------------------
NET INCOME $ 113,49091,556 $ 112,87087,283 $ 420,529205,046 $ 499,569200,153 $ 424,801 $ 484,189
PREFERRED STOCK DIVIDEND REQUIREMENTS 7,407 7,412 29,634 30,104
- --------------------------------------------------------------------------------------------------------------------7,404 7,411 14,811 14,823 29,627 29,651
-----------------------------------------------------------------------------------------------------------------------
EARNINGS FOR COMMON STOCK $ 106,08384,152 $ 105,45879,872 $ 390,895190,235 $ 469,465
====================================================================================================================185,330 $ 395,174 $ 454,538
=======================================================================================================================
COMMON SHARES OUTSTANDING -
AVERAGE 144,864,103 147,050,429 145,612,411 147,038,591144,875,672 147,054,370 144,869,919 147,052,410 145,069,229 147,045,359
EARNINGS PER SHARE $ 0.730.58 $ 0.720.54 $ 2.681.31 $ 3.191.26 $ 2.72 $ 3.09
DIVIDENDS DECLARED PER SHARE
OF COMMON STOCK $ 0.515 $0.515 $ 0.5151.03 $ 1.03 $ 2.06 $ 2.06
See accompanying Notes to Consolidated Financial Statements (Unaudited).
3
4
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
ASSETS
(Dollars in Thousands)
March 31June 30 December 31
1995 1994
----------------- ------------------------ -----------
UTILITY PROPERTIES
Plant in service
Electric $ 13,001,03313,079,251 $ 12,941,414
Steam 70,42670,654 69,813
- -------------------------------------------------------------------------------------------------------------------------------- ------------
$ 13,071,45913,149,905 $ 13,011,227
Less: Accumulated depreciation and amortization (4,646,022)(4,756,464) (4,529,692)
- -------------------------------------------------------------------------------------------------------------------------------- ------------
$ 8,425,4378,393,441 $ 8,481,535
Construction work in progress 124,761129,271 104,431
- -------------------------------------------------------------------------------------------------------------------------------- ------------
Net utility properties $ 8,550,1988,522,712 $ 8,585,966
- -------------------------------------------------------------------------------------------------------------------------------- ------------
Property under capital leases (less accumulated amortization
of $96,055$97,037 and $94,678, respectively) $ 132,626129,581 $ 134,542
Nuclear fuel under capital lease (less accumulated amortization
of $378,625$390,685 and $374,405, respectively) 186,982175,022 193,411
- -------------------------------------------------------------------------------------------------------------------------------- ------------
Net property under capital leases $ 319,608304,603 $ 327,953
- -------------------------------------------------------------------------------------------------------------------------------- ------------
Total owned and leased properties $ 8,869,8068,827,315 $ 8,913,919
- -------------------------------------------------------------------------------------------------------------------------------- ------------
OTHER PROPERTY AND INVESTMENTS
Non-utility property $ 11,16311,181 $ 11,281
Investments and special funds 17,26023,225 18,722
Nuclear decommissioning trust funds 88,46399,784 76,492
- -------------------------------------------------------------------------------------------------------------------------------- ------------
$ 116,886134,190 $ 106,495
- -------------------------------------------------------------------------------------------------------------------------------- ------------
CURRENT ASSETS
Cash and temporary cash investments $ 16,58912,685 $ 8,122
Customer accounts receivable and unbilled revenues (less allowance
for uncollectible accounts of $29,000$28,000 and $30,000, respectively) 320,217388,303 195,824
Other accounts receivable 28,93037,686 34,212
Inventories (at average cost)
Fuel 140,165161,309 136,331
Materials and supplies 156,703159,390 155,921
Prepayments 75,97835,720 10,516
- -------------------------------------------------------------------------------------------------------------------------------- ------------
$ 738,582795,093 $ 540,926
- -------------------------------------------------------------------------------------------------------------------------------- ------------
DEFERRED DEBITS
Unamortized debt expense $ 42,43842,167 $ 42,876
Unamortized loss on reacquired debt 121,809119,621 123,996
Recoverable income taxes 650,916638,731 663,101
Other postretirement benefits 31,93329,029 36,562
Fermi 2 phase-in plan 367,517344,270 390,764
Fermi 2 deferred amortization 53,75255,245 52,259
Other 148,379138,758 122,080
- -------------------------------------------------------------------------------------------------------------------------------- ------------
$ 1,416,7441,367,821 $ 1,431,638
- -------------------------------------------------------------------------------------------------------------------------------- ------------
TOTAL $ 11,142,01811,124,419 $ 10,992,978
================================================================================================================================ ============
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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5
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
LIABILITIES
(Dollars in Thousands)
March 31June 30 December 31
1995 1994
----------------- -------------------------------- ----------------
CAPITALIZATION
Common stock - $10 par value, 400,000,000 shares authorized;
144,865,754144,882,760 and 144,863,447 shares outstanding, respectively
(309,483(292,423 and 311,804 shares, respectively, reserved for conversion
of preferred stock) $ 1,448,6581,448,828 $ 1,448,635
Premium on common stock 545,843545,975 545,825
Common stock expense (47,462)(47,468) (47,461)
Retained earnings used in the business 1,410,5581,420,095 1,379,081
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
Total common shareholders' equity $ 3,357,5973,367,430 $ 3,326,080
Cumulative preferred stock - $100 par value, 6,747,484 shares
authorized; 3,905,0573,902,022 and 3,905,470 shares outstanding,
respectively (1,539,827 shares unissued)
Redeemable solely at the option of the Company 380,243379,946 380,283
Long-term debt 3,825,3113,806,112 3,825,296
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
Total Capitalization $ 7,563,1517,553,488 $ 7,531,659
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
OTHER NON-CURRENT LIABILITIES
Obligations under capital leases $ 124,094120,838 $ 126,076
Other postretirement benefits 34,47733,536 37,143
Other 49,13554,252 48,707
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
$ 207,706208,626 $ 211,926
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
CURRENT LIABILITIES
Short-term borrowings $ 137,936141,877 $ 39,489
Amounts due within one year
Long-term debt -19,214 19,214
Obligations under capital leases 195,514183,765 201,877
Accounts payable 139,105139,562 147,020
Property and general taxes 25,52715,772 31,608
Income taxes 57,28433,712 5,304
Accumulated deferred income taxes 36,39530,742 32,625
Interest 59,30459,100 60,214
Dividends payable 82,01382,017 82,012
Payrolls 80,11572,969 71,958
Fermi 2 refueling outage 5,0678,022 1,267
Other 83,94397,671 97,215
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
$ 902,203884,423 $ 789,803
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
DEFERRED CREDITS
Accumulated deferred income taxes $ 2,028,9012,039,935 $ 2,014,821
Accumulated deferred investment tax credits 342,620338,860 346,379
Other 97,43799,087 98,390
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
$ 2,468,9582,477,882 $ 2,459,590
- ----------------------------------------------------------------------------------------------------------------------------------------------- --------------
COMMITMENTS AND CONTINGENCIES (Note 5)
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 11,142,01811,124,419 $ 10,992,978
=============================================================================================================================================== ==============
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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6
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
Three Months Ended Six Months Ended Twelve Months Ended
March 31 March 31
----------------------------------------------------------June 30 June 30 June 30
-----------------------------------------------------------------------------
1995 1994 1995 1994 ----------------------------------------------------------1995 1994
--------- -------- ---------- --------- ---------- ------------
OPERATING ACTIVITIES
Net Income $ 113,49091,556 $ 112,87087,283 $ 420,529205,046 $ 499,569200,153 $ 424,801 $ 484,189
Adjustments to reconcile net income
to net cash from operating activities:
Accretion income (3,014) (3,645) (13,013) (36,614)(2,845) (3,491) (5,859) (7,136) (12,367) (29,044)
Depreciation and amortization 125,044 115,983 485,476 438,179124,630 120,064 249,674 236,047 490,042 449,663
Deferred Fermi 2 amortization,
depreciation and return - net 21,754 19,341 79,776 35,78719,340 43,508 38,681 82,190 49,645
Deferred income taxes and investment
tax credit - net 26,276 11,845 107,718 67,05013,807 38,230 40,083 50,075 83,295 83,147
Fermi 2 refueling outage - net 3,800 2,797 (18,504) 15,7992,955 (15,937) 6,755 (13,140) 388 (4,992)
Premiums on reacquired long-term debt
and preferred stock - (213) - (213) (11,350) (33,962)
Other (21,889) (17,378) (35,602) 24,73621,111 (12,009) (778) (29,387) (2,481) 11,148
Changes in current assets and
liabilities:
Customer accounts receivable and
unbilled revenues (124,393) 32,841 (157,739) 21,984(68,086) (29,035) (192,479) 3,806 (196,790) (16,354)
Other accounts receivable 5,282 (6,782) 4,471 (11,633)(8,756) 4,431 (3,474) (2,351) (8,716) 1,933
Inventories (4,876) 24,547 (31,197) 52,423(22,788) (17,998) (27,664) 6,549 (35,987) 27,699
Accounts payable (7,202) (17,942) (3,118) 7,7982,059 9,016 (5,143) (8,926) (10,075) 22,238
Taxes payable 46,136 31,230 (3,125) (7,264)(32,882) (37,247) 13,254 (6,017) 1,240 12,728
Interest payable (910) (3,637) (3,447) (24,667)(204) 5,476 (1,114) 1,839 (9,127) (13,887)
Other (72,120) (82,363) 8,054 956
- --------------------------------------------------------------------------------------------------------------------------------48,191 53,000 (23,929) (29,363) 3,245 (6,702)
--------- --------- ---------- ---------- ---------- -----------
Net cash from operating activities $ 107,378 $ 219,707 $ 840,279 $ 1,084,103
- --------------------------------------------------------------------------------------------------------------------------------190,502 220,910 297,880 440,617 798,308 1,037,449
--------- --------- ---------- ---------- ---------- -----------
INVESTING ACTIVITIES
Plant and equipment expenditures $ (85,234) $ (76,383) $ (375,243) $ (386,781)(94,744) (94,792) (179,978) (171,175) (375,195) (394,479)
Purchase of leased equipment - - - (11,500) - (13,902)
Nuclear decommissioning trust funds (11,971) (20,514) (38,020) (24,314)(11,321) (8,122) (23,292) (28,636) (41,219) (31,270)
Non-utility investments 1,461 (356) (12,213) (987)(2,013) (842) (552) (1,198) (13,384) (157)
Changes in current assets and liabilities 853 (4,802) 10,697 11,516(4,441) 2,312 (3,588) (2,490) 3,944 17,324
Other (1,081) 1,588 (13,019) (13,908)
- --------------------------------------------------------------------------------------------------------------------------------(3,511) 8,207 (4,592) 9,795 (24,737) (1,363)
--------- --------- ---------- ---------- ---------- -----------
Net cash used for investing activities $ (95,972) $(111,967) $ (427,798) $ (428,376)
- --------------------------------------------------------------------------------------------------------------------------------(116,030) (93,237) (212,002) (205,204) (450,591) (423,847)
--------- --------- ---------- ---------- ---------- -----------
FINANCING ACTIVITIES
Sale of cumulative preferred stock $ - $ - $ - $ 50,000
Sale of general and refunding mortgage
bonds - - - - 200,000 835,000210,000
Funds received from Trustees:
Installment sales contracts and
loan agreements - 7,535 - 50,470 76,5107,535 42,935 78,360
Increase (decrease) in short-term
borrowings 98,447 (5,783) 5,515 132,4213,941 (40,485) 102,388 (46,268) 49,941 91,936
Redemption of long-term debt - (7,535) (19,214) (19,214) (258,034) (1,709,289)
Redemption of preferred stock - - - (49,908)
Premiums on reacquired long-term debt and preferred stock - - (11,563) (63,269)(26,749) (250,499) (689,289)
Purchase of common stock - - - - (59,855) -
Dividends on common and preferred stock (82,013) (83,143) (330,315) (331,857)
Other (159) (106) (2,675) (10,817)
- --------------------------------------------------------------------------------------------------------------------------------(83,145) (164,026) (166,288) (329,183) (332,438)
0ther (304) (427) (463) (533) (2,552) (4,767)
--------- --------- ---------- ---------- ---------- -----------
Net cash used for financing activities $ (2,939) $(108,246) $ (406,457) $(1,071,209)
- --------------------------------------------------------------------------------------------------------------------------------(78,376) (124,057) (81,315) (232,303) (349,213) (646,198)
--------- --------- ---------- ---------- ---------- -----------
NET INCREASE (DECREASE) IN CASH AND
TEMPORARY CASH INVESTMENTS $ 8,467 $ (506) $ 6,024 $ (415,482)(3,904) 3,616 4,563 3,110 (1,496) (32,596)
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF THE PERIOD 16,589 10,565 8,122 11,071 10,565 426,047
- --------------------------------------------------------------------------------------------------------------------------------14,181 46,777
--------- --------- ---------- ---------- ---------- -----------
CASH AND TEMPORARY CASH INVESTMENTS AT
END OF THE PERIOD $ 16,58912,685 $ 10,56514,181 $ 16,58912,685 $ 10,565
- --------------------------------------------------------------------------------------------------------------------------------14,181 $ 12,685 $ 14,181
========= ========= ========== ========== ========== ===========
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (excluding interest
capitalized) $ 69,79369,907 $ 77,48367,301 $ 281,685139,699 $ 334,884144,784 $ 284,290 $ 309,715
Income taxes paid 240 2,257 181,155 229,91376,240 66,948 76,480 69,205 190,447 203,470
New capital lease obligations 327 4,377 2,741 39,141
================================================================================================================================100 1,525 427 5,902 1,316 39,877
========= ========= ========== ========== ========== ===========
See accompanying Notes to Consolidated Financial Statements (Unaudited).
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THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY (UNAUDITED)
(Dollars in Thousands)
Common Stock Premium Retained
------------------------------------------------------ on Common Earnings
$10 Par Common Stock Used in the
Shares Value Stock Expense Business
------------------------------------------------------------------------------------- -------- -------- ------- -----------
BALANCE AT DECEMBER 31, 1994 144,863,447 $ 1,448,635 $ 545,825 $ (47,461) $ 1,379,081$1,448,635 $545,825 $(47,461) $1,379,081
Issuance of common stock on conversion
of convertible cumulative preferred
stock, 5 1/2% series 2,307 23 18 (1)19,313 193 150 (7)
Net income 113,490205,046
Cash dividends declared
Common stock - $0.515$1.03 per share (74,606)(149,221)
Cumulative preferred stock* (7,407)
- ---------------------------------------------------------------------------------------------------------------------------------(14,811)
----------- ---------- -------- -------- ----------
BALANCE AT MARCH 31,JUNE 30, 1995 144,865,754 $ 1,448,658 $ 545,843 $ (47,462) $ 1,410,558
=================================================================================================================================144,882,760 $1,448,828 $545,975 $(47,468) $1,420,095
=========== ========== ======== ======== ==========
*At established rate for each series.
See accompanying Notes to Consolidated Financial Statements (Unaudited).
7
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - ANNUAL REPORT NOTES
These consolidated financial statements (unaudited) should be read in
conjunction with the Quarterly Report Notes and the Annual Report Notes. The
Notes contained herein update and supplement matters discussed in the Quarterly
Report Notes and the Annual Report Notes.
The preceding consolidated financial statements are unaudited, but, in
the opinion of the Company, include all adjustments necessary for a fair
statement of the results for the interim periods. Financial results for this
interim period are not necessarily indicative of results that may be expected
for any other interim period or for the fiscal year.
NOTE 2 - FERMI 2
As discussed in Note 2 of the Annual Report Notes and Note 2 of the
Quarterly Report Notes, Fermi 2 was out of service in 1994. On December 25,
1993, the reactor automatically shut down following a turbine-generator
failure. Major repairs have been completed.were completed in 1994 and early 1995. The unit has been synchronized towas
operating at 866 MW at the gridend of June 1995 and the power ascension and testing
program is continuing.unit's capacity factor was
27.6% for the six-month period ended June 30, 1995. The Company expects that
most repair costs related to returning the Fermi 2 turbine-generator to service
will be covered by insurance. These costs are estimated to be in the $70 million toapproximately
$80 million
range.million. The Company has received partial insurance payments of $45 million
for property damage.damage through June 30, 1995. In addition, the Company has
received insurance payments of $71.5 million for replacement power costs.costs
through June 30, 1995.
NOTE 3 - RATE MATTERS
As discussed in Note 3 of the Annual Report Notes and Note 3 of the
Quarterly Report Notes, Fermi 2 was out of service in 1994 and will operate at
a reduced power output until the installation of major turbine components
during the next refueling outage in 1996. As a result,Therefore, the three-year rolling
average capacity factor utilized in the Fermi 2 performance standard
calculation will be unfavorably affected in 1994-1998.1995-1998, which will result in an
estimated capacity factor disallowance in the range of $40 million to $55
million. The plant's three-year rolling average capacity factor was 53.7% for
1994 utilizing a capacity of 1,093 MW for 1992 and 1993 and 1,139 MW for 1994.
The three-year rolling average capacity factor for the top 50% of U.S. boiling
water reactors was 78.6% for the 35-month period ending November 1994 was 78.3%.1994. At March 31,June 30, 1995, the Company had accrued
$34.7$45.7 million for the Fermi 2 capacity factor performance standard
disallowances that are expected to be imposed by the MPSC during the period
1994-1998.1995-1998, based on the following assumptions:
8
9
a. Fermi 2 estimated three-year rolling average capacity factor of
44.4% in 1995, 34.6% in 1996, 64.1% in 1997 and 72.7% in 1998;
b. Estimated three-year rolling average capacity factor for the top
50% of U.S. boiling water reactors of 79% in 1995, 79.5% in 1996,
79.5% in 1997 and 80% in 1998;
c. Estimated incremental cost of replacement power of $8 per
megawatthour in 1995 and increasing to $11 per megawatthour in 1998.
NOTE 4 - SALE OF ACCOUNTS RECEIVABLE AND UNBILLED REVENUES
As discussed in Note 5 of the Annual Report Notes and Note 4 of the
Quarterly Report Notes, the Company has an agreement providing for the sale,
assignment and repurchase, from time to time, of an undivided ownership
interest in up to $200 million of the Company's customer accounts 8
9
receivable
and unbilled revenues. At MarchDecember 31, 1994, customer accounts receivable and
unbilled revenues in the Consolidated Balance Sheet were reduced by $200
million reflecting such sales. During the six-month period ended June 30,
1995, customer accounts receivable and unbilled revenues increased as the
Company had
repurchased $150 millionthe $200 million. Therefore, at June 30, 1995, there were
no sales under this agreement.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
As discussed in Note 12 of the Annual Report Notes and in 1986,Note 5 of the
Michigan Attorney General and the Michigan Natural Resources Commission filed a
state lawsuit againstQuarterly Report Notes, on October 5, 1994, the Company and Consumers as co-owners(a 49% co-owner of the
Ludington Pumped Storage Plant ("Ludington") for claimed aquatic losses. The Company is
a 49% co-owner of Ludington. On October 5, 1994, the CompanyPlant) and all other parties to thea 1986 state actionlawsuit
and a related FERC proceeding except certain
Indian tribes, reached a tentative settlement. On February 28, 1995, the
Company and Consumers jointly submitted to FERC the Ludington Pumped Storage
Project ("LPSP") Settlement Agreement -- FERC Offer of Settlement. On March
15, 1995, the Michigan Supreme Court remanded the case to the trial court. On
March 17, 1995, the Circuit Court for Ingham County, Michigan (the trial court)
entered an order adopting the settlement as final upon the receipt of
regulatory approvals. This agreement would resolve all matters before FERC
relating to fish mortality or angler access resulting from the operation of the
LPSP during the present term of the license. The settlement
remains contingent upon FERC and MPSC approval. FERC action isFERC's decision, originally
expected by the end of the summer.
____________________summer, is not anticipated before the end of the
year.
As discussed in Note 12 of the Annual Report Notes, the Company and 23
other potentially responsible parties ("PRPs") have been involved since January
1989 with the Carter Industrial superfund site in Detroit, Michigan. On May
22, 1995, the U.S. District Court for the Eastern District of Michigan approved
an Environmental Protection Agency ("EPA") amendment to the Record of Decision
regarding the method of remediation of the site to allow removal and
landfilling of the contaminated soil, which will reduce the Company's portion
of the cleanup costs by $3-4 million. On July 14, 1995, the PRP group awarded
a contract to complete the remediation. There continues to be the possibility
that EPA may, through subsequent proceedings, require a cleanup of the sewer
and sewer outfall emptying into the Detroit River. At this time, it is
impossible to predict what further impact, if any, this matter will have upon
the Company.
9
10
NOTE 6 - NEW ACCOUNTING STANDARD
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. This statement, which is effective for 1996 financial statements, requires
that long-lived assets be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The statement also requires that a loss be recognized whenever a
regulator excludes all or part of an asset's cost from a company's rate base.
The Company is continuing to review SFAS 121, but does not expect that the
application of this statement will have a material impact on its financial
position or results of operations based on the current regulatory structure in
which the Company operates.
-----------------------------------
This Quarterly Report on Form 10-Q, including the report of Deloitte &
Touche LLP (on page 10)11) will automatically be incorporated by reference in the
Prospectuses constituting part of the Company's Registration Statements on Form
S-3 (Registration Nos. 33-30809, 33-50325, 33-53207, 33-57095 and 33-64296),
Form S-4 (Registration No. 33-60333), Form S-8 (Registration No. 33-32449) and
Form S-4 (Registration No. 33-57545) of DTE Holdings, Inc., filed under the
Securities Act of 1933. Such report of Deloitte & Touche LLP, however, is not
a "report" or "part of the Registration Statement" within the meaning of
Sections 7 and 11 of the Securities Act of 1933 and the liability provisions of
Section 11(a) of such Act do not apply.
910
1011
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
The Detroit Edison Company
We have reviewed the accompanying consolidated balance sheet of The
Detroit Edison Company and subsidiary companies as of March 31,June 30, 1995, and the
related consolidated statements of income and of cash flows for the
three-month, six-month and twelve-month periods then ended, and the
consolidated statement of common shareholders' equity for the three-monthsix-month period
then ended. These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
The interim financial statements as of March 31,June 30, 1994, and for the
three-month, six-month and twelve-month periods then ended were reviewed by
other accountants whose report dated May 10,August 8, 1994 stated that they were not
aware of any material modifications that should be made to those statements in
order for them to be in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Detroit, Michigan
May 8,August 7, 1995
1011
1112
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This analysis for the three, six and twelve months ended March 31,June 30, 1995,
as compared to the same periods in 1994, should be read in conjunction with the
consolidated financial statements (unaudited), the accompanying Notes, the
Quarterly Report Notes and the Annual Report Notes.
RESULTS OF OPERATIONS
Total and per share earnings for common stock increased in the three-month periodthree- and
six-month periods due to a 1.3 percent rise inhigher electricity sales and lower operation and maintenanceoperating expenses,
(including lowerincluding reduced fuel and purchased power expenses).expenses. However, operating
revenues decreased due to lower PSCR clause revenues resulting from lower fuel
and purchased power expenses. Aexpenses, a reduction in revenues from interconnection
sales, an additional reserve for estimated future Fermi 2 nuclear power plant
performance and lower rates also contributed to the
decrease.rates. The operating revenue decreases were partially
offset by higher system sales.
For the twelve-month period, total and per share earnings for common
stock decreased due in part to a January 1994 order by the MPSC which reduced
rates by $78 million annually and increased depreciation and operation
expenses. In addition, accretion income decreased and amortization of the
Fermi 2 nuclear power plant phase-in plan increased significantly. Also, since
Fermi 2 was down for repair during 1994, the Company elected to upgrade various
plant facilities, which increased maintenance expense, and also established a
reserve for estimated performance disallowances in 1994-1998. The earnings
drop was limited by higher system sales, lower property and Michigan Single
Business tax expenses and lower interest expense on long-term debt.
At March 31,June 30, 1995, the book value of the Company's common stock was $23.11$23.17
per share, an increase of $0.22$0.28 per share or 1.0%1.2% since December 31, 1994.
Return on average total common shareholders' equity was 11.6%11.7% and 14.4%13.8% for the
twelve months ended March 31,June 30, 1995 and 1994, respectively.
The ratio of earnings to fixed charges was 3.173.20 and 3.253.31 for the twelve
months ended March 31,June 30, 1995 and 1994, respectively. The ratio of earnings to
fixed charges and preferred stock dividend requirements for the 1995 and 1994
twelve-month periods was 2.762.79 and 2.87,2.91, respectively.
1112
1213
OPERATING REVENUES
Total operating revenues increased (decreased) due to the following factors:
Three Six Twelve
Months Months Months
------ ------ ------
(Millions)
Rate changes
MPSC rate reduction $ -- $ (5) $ (70)(49)
Special manufacturing contracts (8) (9) (9)
PSCR Clause (14) (35)(29) (60)
------ ----- -----
(19) (105)(22) (43) (118)
System sales volume and mix 15 9932 66
Interconnection sales (9)(1) (11) (33)
Fermi 2 capacity factor performance
standard reserve (5) (36)(see Note 3) (11) (16) (47)
Other - net (1) (5)2 2 (2)
------ ----- -----
Total $ (19)(17) $ (80)(36) $(134)
====== ===== =====
RATE CHANGES
The January 1994 MPSC rate order reduced the Company's rates by $78
million annually. In keeping with the MPSC's recognition of the need for
industrial customers to be competitive, the January 1994 rate reduction was
allocated among the various classes of customers approximately as follows:
Industrial - $43 million, Commercial - $24 million, Residential - $10 million
and Governmental - $1 million.
On March 23, 1995, the MPSC issued an order approving the Company's
10-year special manufacturing contracts with Chrysler Corporation, Ford Motor
Company and General Motors Corporation. The revenue reductions from these
contracts initially will amount to $30 million annually and increase to $50
million annually in 1999-2004, which the Company expects to offset by further
reducing its operating expenses.
The decreases in PSCR Clause revenues resulted from lower fuel and
purchased power expenses.
13
14
kWh SALES
kWh sales increased (decreased) as follows:
Three Six Twelve
Months Months Months
------ ------ ------
Residential (1.1)0.4 % 0.1(0.4) % (1.4) %
Commercial 0.8 3.22.6 1.8 2.3
Industrial 4.1 5.25.1 4.6 5.5
Other (includes primarily sales for resale) 1.8 (10.8)4.1 2.9 (7.3)
Total System 2.9 2.1 1.8
Interconnection 21.9 (12.2) (46.1)
Total 4.0 1.3 2.4
Interconnection (44.4) (54.9)
Total (1.4) (2.2)(1.6)
The decreasedecreases in residential sales for the three-month period was
primarilysix-month and twelve-month
periods were due to warmer weather in the first quarter of 1995 resultingdecreasing
heating related sales while cooler weather in decreased heating-related sales.the third quarter of 1994 reduced
cooling related sales for the twelve-month period. The increaseincreases in commercial
sales reflect an improvement in economic conditions.
The increases in industrial sales reflectsreflect higher sales to automotive
steel and other
12
13
industrial customers. The increased sales to other customers reflects
increased load requirements of wholesale for resale customers.
The increase in commercial sales for the twelve-month period was due
primarily to improved economic conditions. Industrial sales increased due to
higher sales to automotive customers as a result of strong demand for both
autos and trucks and increased sales to steel and other industrial customers due to
increased sales instrong demand from the automotive market.and construction sectors and growth in
exports. The decreasedincreased sales to other customers reflects decreasedfor the three-month and
six-month periods reflect increased load requirements of wholesale for resale
customers.customers while sales to these customers decreased for the twelve-month period.
Interconnection sales decreased for the three-month periodsix-month and twelve-month
periods due to lower
sales to Consumers. For the twelve-month period, interconnection sales
decreased due to the reduced availability of energy for sale as a result of the Fermi
2 outage and also lower saleswarmer winter weather, and increased for the second quarter due to
Consumers.increased availability of energy for sale.
OPERATING EXPENSES
FUEL AND PURCHASED POWER
Fuel and purchased power expenses increased (decreased) due to the following
factors:
Three Six Twelve
Months Months Months
------ ------ ------
(Millions)
Net system output $ (3)8 $ (17)5 $ (15)
Average unit cost (20) (45) (25) 10
Fermi 2 business interruption
insurance proceeds -- (5) (71)
Other (1) 3(2) (3) --
------ ----- ------
Total $ (34)(14) $ (75)(48) $ (111)
====== ===== ======
14
15
Net system output and average unit costs were as follows:
Three Months Six Months Twelve Months
---------------- ------------------------------ ---------- -------------
1995 1994 1995 1994 1995 1994
---- ---- ---- ---- ---- ----
(Thousands of Megawatthours, "MWh")
Power plant generation
Fossil 10,331 10,788 42,012 40,87910,355 10,473 20,687 21,262 41,836 41,833
Nuclear 2451,078 - 188 6,0601,323 - 1,323 4,122
Purchased power 1,564 1,493 6,669 2,959
--------1,143 1,669 2,706 3,161 6,143 4,228
------- ------- ------------- ------ ------ ------ ------
Net system output 12,140 12,281 48,869 49,898
========12,576 12,142 24,716 24,423 49,302 50,183
======= ======= ============= ====== ====== ====== ======
Average unit cost ($/MWh) $ 15.79 $ 17.90 $ 16.41 $ 16.22
========15.31 $16.87 $15.54 $17.39 $16.02 $16.52
======= ======= ============= ====== ====== ====== ======
13
14
Fuel and purchased power expenses decreased for the three-month period
due to lower net system output, increased usageaverage fuel and
purchased power unit costs primarily resulting from the use of lower-cost low
sulfur western coal and the receipt of Fermi 2 business interruption insurance
proceeds.coal. For the twelve-month period, fuel and purchased power
expenses also decreased due to lower net system output and the receipt of Fermi
2 business interruption insurance proceeds, partially offset by increased average unit
costs resulting from replacing lower-cost nuclear generation due to the Fermi 2
outage and meeting demand for energy with higher-cost generation and purchased
power.proceeds. Fermi 2 was out of service in 1994
as a result of a turbine-generator failure in December 1993.
OTHER OPERATION
Three Months
Other operation expense increased due to higher postretirement health
care and life insurance benefits expenses ($3.2 million), higher demand-side
management expenses ($2.2 million) and higher incentive award expenses related
to a shareholder value improvement plan ($1.8 million), partially offset by
expenses recorded in the year-earlier period for employee reorganization
expenses ($4.6 million) and lower employee retirement plan expenses ($1.3
million).
Six Months
Other operation expense decreased due to expenses recorded in the
year-earlier period for lump sum payments to non-represented employees ($7.2
million) and for employee reorganization expenses ($4.6 million) and to lower
labor ($3.0 million), retirement plan ($2.7 million) and injuries and damages
employee retirement plan and steam heating($2.3 million) expenses. These decreases were partially offset by higher
sales and other
postretirement health care and life insurance benefits expenses and($6.5 million),
higher incentive award expenses related to a shareholder value improvement plan.plan
($5.2 million) and higher demand-side management ($3.7 million) and sales ($3.0
million) expenses.
Twelve Months
Other operation expense increaseddecreased due to higher expenses related to other
postretirement health care and life insurance benefits, nuclear plant and
demand-side management and service quality claims expenses. These increases
were partially offset by expenses recorded in the
year-earlier period for employee reorganizations ($17.7 million), the write-off
of obsolete and excess
15
16
stock material ($12.4 million), a reserve for steam purchases under the
agreement with the Greater Detroit Resource Recovery Authority ($11.0 million)
and employee reorganization expenseslump sum payments to non-represented employees ($7.2 million), and lower injuries and damages expense,to lower
incentive award expensesawards related to a shareholder value improvement plan ($7.5 million)
and lower uncollectibleuncollectibles ($7.1 million), injuries and fossildamages ($6.1 million),
and employee retirement plan ($4.6 million) expenses. These decreases were
partially offset by higher postretirement health care and life insurance
benefits ($37.0 million), nuclear plant ($9.2 million), service quality claims
($8.7 million), and demand-side management ($6.9 million) expenses.
MAINTENANCE
Three Months and Six Months
Maintenance expense decreased due primarily to lower storm and nuclear
plant expenses, partially offset by higher fossil plantline clearance
expenses.
Twelve Months
Maintenance expense increased due primarily to higher nuclear plant and
storm expenses ($22.4
million), partially offset by lower line clearance expenses.
14
15and storm expenses ($11.6
million).
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense increased due to increases in plant
in service and increased Fermi 2 decommissioning costs authorized by a January
1994 MPSC rate order and to
increases in plant in service.order.
DEFERRED FERMI 2 AMORTIZATION
Deferred Fermi 2 amortization, a non-cash item of income, was recorded
beginning with the Company's purchase of the Wolverine Power Supply
Cooperative, Inc.'s ownership interest in Fermi 2 in February 1990. The annual
amount deferred decreases each year through 1999.
AMORTIZATION OF DEFERRED FERMI 2 DEPRECIATION AND RETURN
Deferred Fermi 2 depreciation and return, non-cash items of income, were
recorded beginning with the implementation of the Fermi 2 rate phase-in plan in
January 1988. The annual amounts deferred decreased each year through 1992.
Beginning in 1993 and continuing through 1998, these deferred amounts will be
amortized to operating expense as the cash recovery is realized through
revenues.
TAXES OTHER THAN INCOME TAXES
Taxes other than income taxes decreased due to lower property, taxespayroll and
payroll taxes, partially offset in the twelve-month period by higher
Michigan Single Business Tax.taxes.
16
17
INCOME TAXES
Three Months
Income taxes increased due to higher pretax income.
Six Months
Income taxes increased due to higher pretax income and a tax reduction
recorded in the prior period related to the 1987-1988 Internal Revenue Service
audit.
Twelve Months
Income taxes decreased due to lower pretax income, partially offset by
higher prior years' federal income tax accrual, and higher taxes due to the
increase in amortization of deferred Fermi 2 depreciation and return.return and a tax
reduction recorded in the prior period related to the 1987-1988 Internal
Revenue Service audit.
OTHER INCOME AND DEDUCTIONS
OTHER INCOME AND (DEDUCTIONS) - NET
Three Months and Six Months
Other deductions increased in both periods due to expenses incurred in the
formation of a holding company ($2.1 million) and in the six- month period due
to promotional practices expenses.
15
16expenses ($7.2 million).
Twelve Months
Other deductions increased due to promotional practices expenses ($7.2
million), a contribution to the Detroit Edison Foundation and($5.0 million), the
write-off of premiums and expenses related to the $50 million portion of 1989
Series A General and Refunding Mortgage Bonds not refinanced ($5.2 million) and
expenses incurred in the formation of a holding company ($2.1 million),
partially offset by the accrual for decommissioning expenses for Fermi 1 in the
prior period.period ($7.6 million).
ACCRETION INCOME
Accretion income, a non-cash item of income, was recorded beginning in
January 1988 to restore to income, over the period 1988-1998, losses recorded
due to discounting indirect disallowances of plant costs. The annual amount of
accretion income recorded decreases each year through 1998. Also, effective in
January 1994, accretion income decreased due to the return to rate base of
Greenwood Unit No. 1.
17
18
INTEREST CHARGES
LONG-TERM DEBT
Interest expense on long-term debt decreased due to the early redemption
and refinancing of securities when economic and the redemption of maturing
securities.
OTHER
Other interest expense decreased due to expense recorded in the
year-earlier period for prior years' Michigan Single Business Tax audits and
the settlement of 1987 and 1988 federal income tax audits.
LIQUIDITY AND CAPITAL RESOURCES
CASH GENERATION AND CASH REQUIREMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Net cash from operating activities decreased due to changes in current
assets and liabilities, primarily as a result of the repurchase of $150$200 million
of customer accounts receivable and unbilled revenues under the agreement for
the sale, assignment and repurchase from time to time of the Company's
customer accounts receivable and unbilled revenues, and for the twelve-month
period, lower net income.
Net cash used for investing activities was lowerhigher in the 1995 three-month
period due primarily to the additionalincreased funding in the 1994 three-month period of utility investments and the
nuclear decommissioning trust fund for Fermi 1.funds. Net cash used for investing activities
was lowerhigher in the six-month period due to increased funding of utility
investments and higher plant and equipment expenditures, partially offset by
purchases of leased equipment in the prior period. Net cash used for investing
activities was higher in the twelve-month period due to increased funding of
utility and non-utility investments and nuclear decommissioning trust funds,
partially offset by lower plant and equipment expenditures and purchases of
leased equipment in the prior period,
substantially offset by increased funding of nuclear decommissioning trust
funds.period.
Net cash used for financing activities decreased due to reduced activity
in the Company's extensive debt refinancing program, partially offset in the
twelve-month period
16
17 by the one-time purchase of common stock from the trustee
of the Detroit Edison Savings & Investment Plans as a result of a plan change.
ADDITIONAL INFORMATION
The Company's 1995 cash requirements for its capital expenditure program
are estimated at $394$422 million, of which $85$177 million had been expended as of
March 31,June 30, 1995.
18
19
The Company's internal cash generation in 1995 is expected to be
sufficient to meet cash requirements for capital expenditures as well as
scheduled redemption requirements.redemptions not subject to refinancing.
The Company had short-term credit arrangements of approximately $405$409
million at March 31,June 30, 1995, under which $138$142 million of borrowings were
outstanding.
CAPITALIZATION
The Company's capital structure as of March 31,June 30, 1995 was 44.4%44.6% common
shareholders' equity, 5.0% preferred stock and 50.6%50.4% long-term debt as compared
to 44.2%, 5.0% and 50.8%, respectively, at December 31, 1994.
COMPETITION
On December 5, 1994, the Company's Board of Directors approved the
formation of a holding company. The Company's shareholders approved this
organizational structure at the Company's April 24, 1995 Annual Meeting of
Common Shareholders. This organizational structure is subject to additional
regulatory approvals.
On March 29, 1995, the FERC issued a Notice of Proposed Rulemaking seeking comment on
several proposals for encouraging morePromoting Wholesale Competition Through Open Access Non-discriminatory
Transmission Services by Public Utilities. According to the FERC, the goals of
the new rules are to facilitate the development of a competitive market by
insuring that wholesale buyers and sellers can reach each other and to
eliminate anticompetitive and discriminatory practices in transmission services
which, in turn, should lead to lower electric power markets. The proposals address several fundamental issues facingrates.
During June 1995, the electric power industry including transmission open access, stranded costs,
jurisdiction over transmission in interstate commerce including retail wheelingStaff of the MPSC issued a discussion draft
entitled, PROPOSAL "M" A MICHIGAN PLAN FOR FLEXIBLE AND COMPETITIVE ENERGY
UTILITY SERVICES. Discussions are proceeding as to the development of a new
Michigan energy regulatory framework.
JULY 13-16, 1995 STORMS
On July 13, 15 and over local distribution, real-time information networks16, severe weather conditions damaged property within
the Company's service area and implementation
of open access.caused numerous customer outages. It is
estimated that the total cost associated with this severe weather will be
approximately $25-30 million. The Company is currently studying these proposals andhas storm insurance which provides
for coverage after incurring costs of $10 million for a storm. The Company
will be filing a claim for costs incurred as a result of the severe weather.
At this time, the Company is unable to predict how much will ultimately be
recovered from insurance. Since the ultimate impactCompany will not recover all of these proposals on its operations.
17the storm
costs, earnings for the third quarter of 1995 will be negatively impacted by
the storms.
19
1820
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS. SEE NOTE 5.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The annual meeting of the holders of Common Stock of the Company
was held on April 24, 1995. Proxies for the meeting were
solicited pursuant to Regulation 14(a).
(b) There was no solicitation in opposition to the Board of Directors'
nominees, as listed in the proxy statement, for directors to be
elected at the meeting and all such nominees were elected.
The terms of the previously elected nine directors listed below
continue until the annual meeting dates shown after each name:
Lillian Bauder April 22, 1996
David Bing April 22, 1996
Larry G. Garberding April 22, 1996
Alan E. Schwartz April 22, 1996
William Wegner April 22, 1996
John E. Lobbia April 28, 1997
Patricia S. Longe April 28, 1997
Eugene A. Miller April 28, 1997
Dean E. Richardson April 28, 1997
(c) At the annual meeting of the holders of Common Stock of the
Company held on April 24, 1995, the following four directors were
elected to serve until the 1998 annual meeting with the votes
shown:
Total Vote
Total Vote Withheld
for Each From Each
Director Director
---------- ---------
Terence E. Adderley 113,508,494 2,872,751
Anthony F. Earley, Jr. 113,494,737 2,886,766
Allan D. Gilmour 113,516,707 2,866,583
Theodore S. Leipprandt 113,433,908 2,947,382
Shareholders ratified the appointment of Deloitte & Touche LLP as
the Company's independent accountants for the year 1995 with the
votes shown:
For Against Abstain
----------- --------- ---------
113,090,661 1,371,522 1,919,649
20
21
Shareholders also voted on the two items below:
(1) An agreement and plan of exchange which will result in
Detroit Edison becoming a subsidiary of a newly formed
holding company, and in the shareholders of Detroit Edison
becoming shareholders of the holding company.
For Against Abstain
----------- --------- ---------
106,204,308 5,705,957 4,471,567
(2) A Long-Term Incentive Plan
For Against Abstain
---------- ---------- ----------
92,572,687 19,929,759 3,879,386
(d) Not applicable.
ITEM 5 - OTHER INFORMATION.
As discussed in Part I, Items 1 and 2 - Business Properties,
"Environmental Matters - Wastes and Properties, "Fuel
Costs and Supply - Nuclear"Toxic Substances" of the Annual Report, a
nationwide environmental problem is the discovery of improperly disposed of
hidden or buried hazardous wastes. The Company has been found responsible for
cleanup of wastes found on its property, even in cases where the dumping
occurred without the Company's knowledge or permission. On June 5, 1995,
Governor John Engler signed P.A. 71 of 1995, which amended the Michigan
Environmental Response Act, now part of the Natural Resources and Environmental
Protection Act. Among other changes, P.A. 71 amended the liability standards
to hold a person liable for remediation only if they are responsible for an
activity causing a release of a substance to the environment. Since the
previous standard of liability was simply ownership of the property, the
Company has a contract
withbelieves the United States Department of Energy ("DOE") for the future storageamendment will remove deterrences to development in its
service territory and disposal of spent nuclear fuel from Fermi 2. The DOE has stated that it will
be unablemore fairly allocate cleanup costs to store spent nuclear fuel at a permanent repository until after
2010. Currently the Company estimates that existing temporary storage capacity
at Fermi 2 will be sufficient until the year 2000 or until 2018 with the
expansion of such storage capacity.
As discussed in Part I, Items 1 and 2 - Business and Properties,"
Regulation and Rates - Michigan Public Service Commission" of the Annual
Report, in 1994 the MPSC issued an order approving a settlement agreement
resolving the issues concerning the reconciliation of the Company's 1993 PSCR
plan. On March 30, 1995, the Company submitted its 1994 PSCR reconciliation
filing with the MPSC. The application states that expenses exceeded revenues by
$49.9 million.those responsible.
However, after calculation of the Fermi 2 performance standard
disallowance pursuant to the methodology approved by the MPSC in a January 25,
1995 settlement agreement, the Company experienced a net over-recovery of
approximately $5 million. The Company seeks MPSC approval to refund this
amount to its customers. A prehearing conference in this matter is scheduled
in May 1995.companies are still liable under federal law.
As discussed in Part I, Items 1 and 2 - Business and Properties,
"Regulation and Rates - Federal Energy Regulatory Commission"Michigan Public Service Commission - Competitive
Bidding" of the Annual Report, on FebruaryMay 1, 1995, the Company filed its
preliminary Request for Proposal ("RFP") to solicit bids for the acquisition of
new capacity starting in the year 2004. The filing describes Detroit Edison's
future requirements for additional generating capacity and addresses the role
competitive bidding will play in meeting that capacity need. To better serve
its customers in an increasingly competitive marketplace, the Company is
proposing customer load management options which have the potential to provide
an additional 500 MW of peak reduction by the year 2003. The Company also
filed, as required by Commission order, a proposed retail wheeling tariff and
proposal for implementing the retail wheeling program.
21
22
As discussed in Part I, Items 1 and 2 - Business and Properties,
"Regulation and Rates - Michigan Public Service Commission - Retail Wheeling"
of the Annual Report, the MPSC has been considering the propriety of an
experimental retail wheeling program. On May 8, 1995, the U.S. District Court,
Western District of Michigan, Southern Division, issued an order granting the
MPSC's Motion to Dismiss the Company's declaratory judgment action in
connection with the MPSC's April 11, 1994 interim order. On June 19, 1995, the
MPSC issued a final order finding that an experimental retail wheeling program
is in the public interest and establishing rates and charges for the five-year
experimental program. Under the program, retail wheeling customers would make
their own arrangements to procure power. Implementation of the experimental
program would be limited to 90 MW for Detroit Edison and will be coordinated
with the Company's next solicitation of new capacity. On July 14, 1995, the
Company filed an Application with FERC
seeking authority to establish a holding company.testimony supporting its proposal for implementing the MPSC's
experimental retail wheeling program including requirements for collecting data
and evaluating the experiment. The Company's identified need date for new
capacity is 2004. On April 21,July 19, 1995, the Company received FERC approval.
On March 27,filed a claim of appeal with
the Michigan Court of Appeals. Also, on July 19, 1995, theConsumers, ABATE and
Dow Chemical Company requested that the NRC consent to the
transfer of control of its NRC licenses as partfiled petitions for rehearing and/or clarification of the
formationJune 19, 1995 order with the MPSC. On July 21, 1995, ABATE filed a letter with
the Michigan Court of Appeals seeking to dismiss the holding
company. The Company anticipates thatCompany's appeal until
such time as the NRC will issue such consent in a
timely manner.MPSC acts on the petitions.
As discussed in Part I, Items 1 and 2 - Business and Properties,
"Regulation and Rates - Nuclear Regulatory Commission" of the Annual Report and
in Item 5 - Other Information of the Quarterly Report, on May 18, 1994, the
NRC issued the fourteenth Systematic Assessment of Licensee Performance
("SALP") report on Fermi 2 operations. The next SALP period is expected to end
approximately six months after the current Fermi 2 testing and
power ascension program is completed.
As discussed in Part I, Items 1 and 2 - Business and Properties,
"Environmental Matters - Water"March 1996.
An all time high peak demand of the Annual Report, National Pollutant
Discharge Elimination System ("NPDES") permits9,878 MW was experienced for the Company's
power plantssystem on June 19, 1995, with a reserve margin of 4.2%. The previous peak was
9,684 MW set in June 1994. Based on the current load forecast and planned
generating capability, the Company estimates that its summer reserve margin,
expressed as a percentage of peak demand, will be approximately 17% for 1996
and 15% for 1997. Included as part of the 1996 and 1997 reserve margin
projections are issued by the Michigan Department of Natural Resources pursuant to
delegation by the Environmental Protection Agency ("EPA") under the federal
Clean Water Act. On March 13, 1995, the EPA issued
18
19
its final rule promulgating the Water Quality Guidance for the Great Lakes.
This rule establishes water quality criteria for the Great Lakes region for
toxic pollutants. Each Great Lakes state, including Michigan, must revise its
water quality standards within two years to make them consistent with the
federal rule. Such new rules would be used to determine wastewater discharge
limitations in the Company's NPDES permits. Until Michigan adopts new water
quality standards, it is impossiblepresent and projected capacity purchases and
anticipated peak reductions due to determine what the impact onimplementation of various demand-side
management programs, including the Company
will be.R-10 interruptible rate. The 1996 and 1997
reserve margins are above the Company's current planning criterion, which
specifies a minimum reserve margin of 12%.
22
23
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(i) Exhibits filed herewith.
Exhibit
Number
-------
11-22 - Primary and Fully Diluted Earnings Per Share of Common Stock.
15-58 - Awareness Letter of Deloitte & Touche LLP regarding their report dated May 8, 1995.
27-3 - Financial Data Schedule for the period ended March 31,Exhibit
Number
-------
10-61 - Plan for Deferring the Payment of Directors' Fees
(June 1995).
10-62 - Retirement Plan for Non-Employe Directors (June 1995).
10-63 - Savings Reparation Plan (June 1995).
10-64 - Retirement Reparation Plan (June 1995).
10-65 - Benefit Equalization Plan (June 1995).
10-66 - Management Supplemental Benefit Plan (June 1995).
11-23 - Primary and Fully Diluted Earnings Per Share of Common
Stock.
15-59 - Awareness Letter of Deloitte & Touche LLP regarding
their report dated August 7, 1995.
27-4 - Financial Data Schedule for the period ended
June 30, 1995.
99-29 - Irrevocable Grantor Trust with respect to Savings
Reparation Plan (July 1995).
99-30 - Irrevocable Grantor Trust with respect to Retirement
Reparation Plan (July 1995).
99-31 - Irrevocable Grantor Trust with respect to Benefit
Equalization Plan (July 1995).
99-32 - Irrevocable Grantor Trust with respect to the
Management Supplemental Benefit Plan (July 1995).
(ii) Exhibits incorporated herein by reference.
4(a) - Restated Articles of Incorporation of the Company, as
filed December 10, 1991 with the State of Michigan,
Department of Commerce - Corporation and Securities
Bureau (Exhibit 4-117 to Form 10-Q for quarter ended
March 31, 1993).
23
24
Exhibit
Number
------
4(b) - Certificate containing resolution of the Board of
Directors establishing the Cumulative Preferred Stock,
7.75% Series as filed February 22, 1993 with the State of
Michigan, Department of Commerce - Corporation and
Securities Bureau (Exhibit 4-134 to Form 10-Q for quarter
ended March 31, 1993).
4(c) - Certificate containing resolution of the Board of
Directors establishing the Cumulative Preferred Stock,
7.74% Series, as filed April 21, 1993 with the State of
Michigan, Department of Commerce - Corporation and
Securities Bureau (Exhibit 4-140 to Form 10-Q for quarter
ended March 31, 1993).
4(d) - By-Laws of the Company as amended November 25, 1991
(Exhibit 4-118 to Form 10-K for year ended
December 31, 1991).
19
20
4(e) - Mortgage and Deed of Trust, dated as of October 1, 1924,
between the Company (File No. 1-2198) and Bankers Trust
Company as Trustee (Exhibit B-1 to Registration No.
2-1630) and indentures supplemental thereto, dated as of
dates indicated below, and filed as exhibits to the filings
as set forth below:
September 1, 1947 Exhibit B-20 to Registration No. 2-7136
October 1, 1968 Exhibit 2-B-33 to Registration No. 2-30096
November 15, 1971 Exhibit 2-B-38 to Registration No. 2-42160
January 15, 1973 Exhibit 2-B-39 to Registration No. 2-46595
June 1, 1978 Exhibit 2-B-51 to Registration No. 2-61643
June 30, 1982 Exhibit 4-30 to Registration No. 2-78941
August 15, 1982 Exhibit 4-32 to Registration No. 2-79674
October 15, 1985 Exhibit 4-170 to Form 10-K for year ended December 31, 1994
November 30, 1987 Exhibit 4-139 to Form 10-K for year ended December 31, 1992
July 15, 1989 Exhibit 4-171 to Form 10-K for year ended December 31, 1994
December 1, 1989 Exhibit 4-172 to Form 10-K for year ended December 31, 1994
February 15, 1990 Exhibit 4-173 to Form 10-K for year ended December 31, 1994
November 1, 1990 Exhibit 4-110 to Form 10-K for year ended December 31, 1990
April 1, 1991 Exhibit 4-111 to Form 10-Q for quarter ended March 31, 1991
24
25
Exhibit
Number
------
May 1, 1991 Exhibit 4-112 to Form 10-Q for quarter ended June 30, 1991
May 15, 1991 Exhibit 4-113 to Form 10-Q for quarter ended June 30, 1991
September 1, 1991 Exhibit 4-116 to Form 10-Q for quarter ended September 30, 1991
November 1, 1991 Exhibit 4-119 to Form 10-K for year ended December 31, 1991
January 15, 1992 Exhibit 4-120 to Form 10-K for year ended December 31, 1991
February 29, 1992 Exhibit 4-121 to Form 10-Q for quarter ended March 31, 1992
April 15, 1992 Exhibit 4-122 to Form 10-Q for quarter ended June 30, 1992
July 15, 1992 Exhibit 4-123 to Form 10-Q for quarter ended September 30, 1992
July 31, 1992 Exhibit 4-124 to Form 10-Q for quarter ended September 30, 1992
November 30, 1992 Exhibit 4-130 to Registration No. 33-56496
20
21
Exhibit
Number
------
January 1, 1993 Exhibit 4-131 to Registration No. 33-56496
March 1, 1993 Exhibit 4-141 to Form 10-Q for quarter ended March 31, 1993
March 15, 1993 Exhibit 4-142 to Form 10-Q for quarter ended March 31, 1993
April 1, 1993 Exhibit 4-143 to Form 10-Q for quarter ended March 31, 1993
April 26, 1993 Exhibit 4-144 to Form 10-Q for quarter ended March 31, 1993
May 31, 1993 Exhibit 4-148 to Registration No. 33-64296
June 30, 1993 Exhibit 4-149 to Form 10-Q for quarter ended June 30, 1993 (1993 Series AP)
June 30, 1993 Exhibit 4-150 to Form 10-Q for quarter ended June 30, 1993 (1993 Series H)
September 15, 1993 Exhibit 4-158 to Form 10-Q for quarter ended September 30, 1993
March 1, 1994 Exhibit 4-163 to Registration No. 33-53207
June 15, 1994 Exhibit 4-166 to Form 10-Q for quarter ended June 30, 1994
August 15, 1994 Exhibit 4-168 to Form 10-Q for quarter ended September 30, 1994
December 1, 1994 Exhibit 4-169 to Form 10-K for year ended December 31, 1994
25
26
Exhibit
Number
------
4(f) - Collateral Trust Indenture (notes), dated as of June 30, 1993 (Exhibit 4-152 to Registration No. 33-50325).
4(g) - First Supplemental Note Indenture, dated as of June 30, 1993 (Exhibit 4-153 to Registration No. 33-50325).
4(h) - Second Supplemental Note Indenture, dated as of September 15, 1993 (Exhibit 4-159 to Form 10-Q for
quarter ended September 30, 1993).
4(i) - Third Supplemental Note Indenture, dated as of August 15, 1994 (Exhibit 4-169 to Form 10-Q for quarter ended
September 30, 1994).
4(j) - Amended and Restated Standby Note Purchase Credit Facility, dated as of April 26, 1994, among The Detroit
Edison Company, The Bank of New York, The Toronto-Dominion Bank, acting through its Houston Agency,
Toronto-Dominion (Texas), Inc., as Administrative Agent and Citicorp Securities, Inc., as Remarketing Agent
(Exhibit 99-5 to Registration No. 33-50325).
21
22
Exhibit
Number
------
4(k) - Standby Note Purchase Credit Facility, dated as of August 17, 1994, among The Detroit Edison Company, Barclays
Bank PLC, as Bank and Administrative Agent, Bank of America, The Bank of New York, The Fuji Bank Limited, The
Long-Term Credit Bank of Japan, LTD, Union Bank and Citicorp Securities, Inc. and First Chicago Capital
Markets, Inc. as Remarketing Agents (Exhibit 99-18 to Form 10-Q for quarter ended September 30, 1994).
99(a) - Belle River Participation Agreement between the Company and Michigan Public Power Agency, dated as of
December 1, 1982 (Exhibit 28-5 to Registration No. 2-81501).
99(b) - Belle River Transmission Ownership and Operating Agreement between the Company and Michigan Public Power
Agency, dated as of December 1, 1982 (Exhibit 28-6 to Registration No. 2-81501.)
99(c) - 1988 Amended and Restated Loan Agreement, dated as of October 4, 1988, between Renaissance Energy Company
(an unaffiliated company) ("Renaissance") and the Company (Exhibit 99-6 to Registration No. 33-50325).
99(d) - First Amendment to 1988 Amended and Restated Loan Agreement, dated as of February 1, 1990, between the
Company and Renaissance (Exhibit 99-7 to Registration No. 33-50325).
99(e) - Second Amendment to 1988 Amended and Restated Loan Agreement, dated as of September 1, 1993, between the
Company and Renaissance (Exhibit 99-8 to Registration No. 33-50325).
26
27
Exhibit
Number
-------
99(f) - Third Amendment, dated as of August 31, 1994, to 1988 Amended and Restated Nuclear Fuel Heat Purchase
Contract, dated October 4, 1988, between The Detroit Edison Company and Renaissance Energy Company
(Exhibit 99-21 to Form 10-Q for quarter ended September 30, 1994).
99(g) - $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, among the Company, Renaissance and
Barclays Bank PLC, New York Branch, as Agent (Exhibit 99-12 to Registration No. 33-50325).
22
23
Exhibit
Number
------
99(h) - First Amendment, dated as of August 31, 1994, to $200,000,000 364-Day Credit Agreement, dated
September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party thereto
and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-19 to Form 10-Q for quarter ended September 30,
1994).
99(i) - $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, among the Company, Renaissance and
Barclays Bank PLC, New York Branch, as Agent (Exhibit 99-13 to Registration No. 33-50325).
99(j) - 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between the Company and
Renaissance (Exhibit 99-9 to Registration No. 33-50325).
99(k) - First Amendment to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated as of
February 1, 1990, between the Company and Renaissance (Exhibit 99-10 to Registration No. 33-50325).
99(l) - Second Amendment, dated as of September 1, 1993, to 1988 Amended and Restated Nuclear Fuel Heat Purchase
Contract between the Company and Renaissance (Exhibit 99-11 to Registration No. 33-50325).
99(m) - First Amendment, dated as of September 1, 1994, to $200,000,000 Three-Year Credit Agreement, dated as of
September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party thereto
and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-20 to Form 10-Q for quarter ended September 30,
1994).
27
28
(b) Reports on Form 8-K
DuringThe Company did not file any Reports on Form 8-K during the
firstsecond quarter of 1995, Registrant filed two reports on
Form 8-K: (i) In a report dated January 27, 1995, Registrant disclosed that,
subject to ratification of its Common Shareholders, Deloitte & Touche LLP had
been appointed as the Company's Independent Accountants for 1995; and (ii) in a
report dated March 1, 1995, Registrant released its audited consolidated
financial statements for 1994.
231995.
28
2429
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE DETROIT EDISON COMPANY
--------------------------------------
(Registrant)
Date May 8,August 7, 1995 /s/ SUSAN M. BEALE
---------------
--------------------------------------
Susan M. Beale
Vice President and Corporate Secretary
Date May 8,August 7, 1995 /s/ RONALD W. GRESENS
---------------
--------------------------------------
Ronald W. Gresens
Vice President and Controller
2429
2530
THE DETROIT EDISON COMPANY
QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTER ENDED MARCH 31,JUNE 30, 1995
EXHIBIT INDEX
FILE NO. 1-2198
Page No.
(i) Exhibits filed herewith.
Exhibit
Number
-------------
10 - 61 Plan for Deferring the Payment of Directors' Fees
(June 1995).
10 - 62 Retirement Plan for Non-Employe Directors (June 1995).
10 - 63 Savings Reparation Plan (June 1995).
10 - 64 Retirement Reparation Plan (June 1995).
10 - 65 Benefit Equalization Plan (June 1995).
10 - 66 Management Supplemental Benefit Plan (June 1995).
11 - 2223 Primary and Fully Diluted Earnings Per Share of
Common Stock.
15 - 5859 Awareness Letter of Deloitte & Touche LLP regarding
their report dated May 8,August 7, 1995.
27 - 34 Financial Data Schedule for the period ended
MarchJune 30, 1995.
99 - 29 Irrevocable Grantor Trust with respect to Savings
Reparation Plan (July 1995).
99 - 30 Irrevocable Grantor Trust with respect to Retirement
Reparation Plan (July 1995).
99 - 31 1995.Irrevocable Grantor Trust with respect to Benefit
Equalization Plan (July 1995).
99 - 32 Irrevocable Grantor Trust with respect to Management
Supplemental Benefit Plan (July 1995).
31
See Page Nos.
_____ through
_____ for
location
of Exhibits
Incorporated
by Reference
-------------------------
(ii) Exhibits incorporated hereby by reference.
4 (a) - Restated Articles of Incorporation of the
Company, as filed December 10, 1991 with the
State of Michigan.
4 (b) - Certificate containing resolution of the Board
of Directors establishing the Cumulative Preferred
Stock, 7.75% Series, as filed February 22, 1993
with the State of Michigan.
4 (c) - Certificate containing resolution of the Board
of Directors establishing the Cumulative Preferred
Stock, 7.74% Series, as filed April 21, 1993 with
the State of Michigan. 26
4 (d) - By-Laws of the Company as amended November 25, 1991.
4 (e) - Mortgage and Deed of Trust, dated as of October 1,
1924, between the Company and Bankers Trust Company
as Trustee and indentures supplemental thereto,
dated as of dates indicated below:
September 1, 1947
October 1, 1968
November 15, 1971
January 15, 1973
June 1, 1978
June 30, 1982
August 15, 1982
October 15, 1985
November 30, 1987
July 15, 1989
December 1, 1989
February 15, 1990
November 1, 1990
April 1, 1991
May 1, 1991
May 15, 1991
September 1, 1991
2
32
November 1, 1991
January 15, 1992
February 29, 1992
April 15, 1992
July 15, 1992
July 31, 1992
November 30, 1992
January 1, 1993
March 1, 1993
March 15, 1993
April 1, 1993
April 26, 1993
May 31, 1993
June 30, 1993
(1993 Series AP)
June 30, 1993
(1993 Series H)
September 15, 1993
March 1, 1994
June 15, 1994
August 15, 1994
December 1, 1994
4 (f) - Collateral Trust Indenture (Notes), dated as of
June 30, 1993.
4 (g) - First Supplemental Note Indenture, dated as of
June 30, 1993.
2
27
4 (h) - Second Supplemental Note Indenture, dated as of
September 15, 1993.
4 (i) - Third Supplemental Note Indenture, dated as of
August 15, 1994.
4 (j) - Amended and Restated Standby Note Purchase Credit
Facility dated as of April 26, 1994, among The
Detroit Edison Company, The Bank of New York, The
Toronto-Dominion Bank, acting through its Houston
Agency, Toronto-Dominion (Texas), Inc., as
Administrative Agent and Citicorp Securities, Inc.,
as Remarketing Agent.
4 (k) - Standby Note Purchase Credit Facility, dated as
of August 17, 1994, among The Detroit Edison
Company, Barclays Bank PLC, as Bank and
Administrative Agent, Bank of America, The Bank
of New York, The Fuji Bank Limited, The Long-Term
Credit Bank of Japan, LTD, Union Bank and Citicorp
Securities, Inc. and First Chicago Capital Markets,
Inc. as Remarketing Agents.
99(a) - Belle River Participation Agreement between the
Company and Michigan Public Power Agency, dated as
of December 1, 1982.
99(b) - Belle River Transmission Ownership and Operating
Agreement between the Company and Michigan Public
Power Agency, dated as of December 1, 1982.
3
33
99(c) - 1988 Amended and Restated Loan Agreement, dated
as of October 4, 1988, between Renaissance Energy
Company (an unaffiliated company) ("Renaissance")
and the Company.
99(d) - First Amendment to 1988 Amended and Restated Loan
Agreement, dated as of February 1, 1990, between
the Company and Renaissance.
99(e) - Second Amendment to 1988 Amended and Restated Loan
Agreement, dated as of September 1, 1993, between
the Company and Renaissance.
3
28
99(f) - Third Amendment, dated as of August 31, 1994, to
1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract, dated October 4, 1988, between
The Detroit Edison Company and Renaissance
Energy Company.
99(g) - $200,000,000 364-Day Credit Agreement, dated as of
September 1, 1993, among the Company, Renaissance
and Barclays Bank PLC, New York Branch, as Agent.
99(h) - First Amendment, dated as of August 31, 1994, to
$200,000,000 364-Day Credit Agreement, dated
September 1, 1993, among The Detroit Edison Company,
Renaissance Energy Company, the Banks party thereto
and Barclays Bank, PLC, New York Branch, as Agent.
99(i) - $200,000,000 Three-Year Credit Agreement, dated
September 1, 1993, among the Company, Renaissance
and Barclays Bank PLC, New York Branch, as Agent.
99(j) - 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract, dated October 4, 1988, between
the Company and Renaissance.
99(k) - First Amendment to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract, dated as of
February 1, 1990, between the Company and
Renaissance.
4
34
99(l) - Second Amendment, dated as of September 1, 1993,
to 1988 Amended and Restated Nuclear Fuel Heat
Purchase Contract between the Company and
Renaissance.
99(m) - First Amendment, dated as of September 1, 1994,
to $200,000,000 Three-Year Credit Agreement,
dated as of September 1, 1993, among The Detroit
Edison Company, Renaissance Energy Company, the
Banks party thereto and Barclays Bank, PLC, New
York Branch, as Agent.
45