1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 31, 2001
(Amendment to Form 8-K dated May 31, 2001)
DTE ENERGY COMPANY
(Exact name of registrant as specified in its charter)
STATE OF MICHIGAN 1-11607 38-3217752
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
DTE Energy Company
2000 2nd Avenue, Detroit, Michigan 48226-1279
(Address of principal executive offices)
Registrant's telephone number, including area code: (313) 235-4000
N/A
(Former name or former address, if changed since last report)
2
Item 1. Not Applicable.
Item 2. Acquisition or Disposition of Assets.
On May 31, 2001, DTE Energy Company, a Michigan corporation (the
"Company"), and MCN Energy Group Inc., a Michigan corporation ("MCN"), completed
the merger between the Company and MCN as contemplated by the Agreement and Plan
of Merger, dated as of October 4, 1999 and as amended as of November 12, 1999
and as further amended as of February 28, 2001 (the "Amended Merger Agreement"),
among DTE, MCN and DTE Enterprises, Inc., a Michigan corporation and
wholly-owned subsidiary of DTE ("DTE Enterprises"). In accordance with the terms
and subject to the conditions set forth in the Amended Merger Agreement, MCN
merged with and into DTE Enterprises with DTE Enterprises as the surviving
corporation (the "Merger"). As a result of the merger, MCN is now a wholly-owned
subsidiary of DTE.
At the time of the merger, each share of MCN common stock
outstanding immediately prior to the Effective Time (as defined in the Amended
Merger Agreement) was converted into the right to receive either (i) $24 in cash
or (ii) 0.715 of a share of DTE common stock, subject to the proration and
allocation and tax adjustment procedures set forth in the Amended Merger
Agreement and further described in the Company's Registration Statement on Form
S-4 dated April 9, 2001 (no. 333-89175).
On May 30, 2001, DTE issued senior debt in an aggregate amount of
$1,350,000,000. Substantially all of the net proceeds from this offering were
used to fund the cash consideration for its merger with MCN.
Prior to the Merger, MCN was an integrated energy company
primarily involved in natural gas production, gathering, processing,
transmission, storage and distribution and energy marketing. DTE and DTE
Enterprises intend to continue to use the majority of the assets of MCN for the
foregoing business purposes.
Items 3-6. Not Applicable.
Items 7(a). Financial Statements of Businesses Acquired.
We incorporate by reference the documents filed with the SEC and
listed below:
- 2 -
3
Audited consolidated financial statements of MCN, and the notes
related thereto, included on pages 61 through 117 of MCN's Annual Report on Form
10-K for the year ended December 31, 2000, filed on March 15, 2001. (File No.
1-10070)
Unaudited consolidated financial statements of MCN, and the notes
related thereto, included on pages 20 through 43 of MCN's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2001, filed on May 14, 2001. (File No.
1-10070)
Item 7(b). Pro Forma Financial Information.
The following unaudited pro forma information reflects the
historical combined condensed consolidated statements of income of DTE and MCN
after accounting for the merger as a purchase business combination. Accordingly,
the following information should be read together with the historical
consolidated financial statements and the related notes thereto, of both DTE and
MCN. The unaudited pro forma combined condensed consolidated statements of
income assume the merger became effective as of the beginning of the periods
presented.
The following unaudited pro forma information does not include a
combined condensed consolidated balance sheet since the merger is reflected in
DTE's consolidated financial statements on Form 10-Q for the quarter ended June
30, 2001, filed on August 14, 2001.
The information presented below is not necessarily indicative of
the results of operations that might have occurred had the merger actually
closed on January 1, 2000. The information is not necessarily indicative of the
future results of operations of DTE after the merger.
The unaudited pro forma combined condensed consolidated statements
of income do not reflect the non-recurring costs and expenses associated with
integrating the operations of the two companies, nor any of the anticipated
recurring expense savings arising from the integration.
Allocations included in the pro forma statements are preliminary
and may be revised up to one year from the date of merger due to fair value
adjustments of assets and liabilities. Accordingly, the final value of the
purchase price and its allocation may differ from the amounts shown in the
unaudited pro forma combined condensed consolidated statements of income that
follow.
As of January 1, 2001, DTE and MCN adopted Statement of Financial
Accounting Standards (SFAS) No. 133 Accounting for Derivative Instruments and
Hedging Activities," as amended and interpreted.
- 3 -
4
DTE ENERGY COMPANY AND MCN ENERGY GROUP INC.
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME
BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE AND EXTRAORDINARY ITEM
SIX MONTHS ENDED JUNE 30, 2001
(1) (4) (1) (4) (2) (3) (5)
DTE PRO FORMA PRO FORMA
(AS REPORTED) MCN ADJUSTMENT COMBINED
--------------- ------------- ------------ ------------
(MILLIONS, EXCEPT PER SHARE AMOUNTS)
Operating Revenues............................................. $ 3,632 $ 1,544 $ - $ 5,176
---------- ----------- ---------- -----------
Operating Expenses
Fuel, purchased power and gas............................. 1,856 1,241 (7)(e) 3,090
Operation and maintenance................................. 854 176 4 (c) 1,034
Depreciation, depletion and amortization.................. 372 57 18 (a) 447
Taxes other than income................................... 158 31 - 189
Restructuring charge...................................... 236 - - 236
(Gains) loss from sales of assets and tax credits......... - (128) 128 (d) -
---------- ----------- ---------- -----------
Total Operating Expenses................ 3,476 1,377 143 4,996
Operating Income............................................... 156 167 (143) 180
Interest Expense and Other
Interest expense.......................................... 195 49 41 (b) 285
Preferred stock dividends of subsidiary................... 2 10 - 12
Other - net............................................... (6) (2) (3)(d) (11)
---------- ----------- ---------- -----------
Total Interest Expense and Other........ 191 57 38 286
Income (Loss) Before Income Taxes.............................. (35) 110 (181) (106)
Income Taxes (Benefit)......................................... (83) 45 (57)(f) (95)
---------- ----------- ---------- -----------
Income (Loss) Before Cumulative Effect of Accounting Change.... $ 48 $ 65 $ (124) $ (11)
========== =========== ========== ===========
Average Common Shares Outstanding
Basic..................................................... 144 168
========== ===========
Diluted................................................... 144 168
========== ===========
Earnings (Loss) per Common Share Before
Accounting Change
Basic..................................................... $ 0.34 $ (0.07)
========== ===========
Diluted................................................... $ 0.34 $ (0.07)
========== ===========
See "Notes to Unaudited Pro Forma Combined Condensed Consolidated Statements of
Income" on page 6.
- 4 -
5
DTE ENERGY COMPANY AND MCN ENERGY GROUP INC.
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2000
(1) (1) (2) (3) (5)
DTE MCN PRO FORMA PRO FORMA
(AS REPORTED) (AS REPORTED) ADJUSTMENT COMBINED
--------------- ------------- ------------ ------------
(MILLIONS, EXCEPT PER SHARE AMOUNTS)
Operating Revenues $ 5,597 $ 2,791 $ - $ 8,388
---------- ----------- ---------- -----------
Operating Expenses
Fuel, purchased power and gas............................ 2,233 2,022 (16)(e) 4,239
Operation and maintenance 1,480 370 7 (c) 1,857
Depreciation, depletion and amortization................. 758 138 43 (a) 939
Taxes other than income.................................. 296 71 - 367
Property write-downs and restructuring charges........... - 10 - 10
Gains from sales of assets and tax credits............... - (17) - (17)
---------- ----------- ---------- -----------
Total Operating Expenses............. 4,767 2,594 34 7,395
Operating Income 830 197 (34) 993
Interest Expense and Other
Interest expense......................................... 336 123 99 (b) 558
Preferred stock dividends of subsidiary.................. - 28 - 28
Joint Venture Loss (Income).............................. 26 (100) 80 (d) 6
Other - net.............................................. (9) (18) - (27)
---------- ----------- ---------- -----------
Total Interest Expense and Other..... 353 33 179 565
Income Before Income Taxes.................................... 477 164 (213) 428
Income Taxes (Benefit)........................................ 9 55 (59) (f) 5
---------- ----------- ---------- -----------
Net Income.................................................... $ 468 $ 109 $ (154) $ 423
========== =========== ========== ===========
Average Common Shares Outstanding
Basic.................................................... 143 88 172
========== =========== ===========
Diluted.................................................. 143 89 172
========== =========== ===========
Earnings per Common Share
Basic.................................................... $ 3.27 $ 1.23 $ 2.46
========== =========== ===========
Diluted.................................................. $ 3.27 $ 1.22 $ 2.46
========== =========== ===========
See "Notes to Unaudited Pro Forma Combined Condensed Consolidated Statements of
Income" on page 6.
- 5 -
6
NOTES TO UNAUDITED PRO FORMA COMBINED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
1. Certain revenues and expenses of DTE and MCN have been reclassified.
2. Routine sales and purchases between DTE and MCN are not material and have
not been eliminated in the Unaudited Pro Forma Combined Condensed Consolidated
Statements of Income.
3. DTE applies the provisions of Accounting Principles Board Opinion (APB) No.
25, Accounting for Stock Issued to Employees, for its incentive compensation
plans. MCN applied the provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, for its incentive compensation plans. The impact of adjusting
MCN's recorded compensation expense under SFAS No. 123 to the provisions of APB
No. 25 is not material, and therefore, is not reflected in the pro forma
adjustments.
4. MCN reflects results of operations of MCN for five months ended May 31,
2001. DTE (As Reported) includes results of operations for MCN for the month of
June 2001.
5. The Unaudited Pro Forma Combined Condensed Consolidated Statements of
Income are based on the following assumptions:
(a) Reflects the amortization of purchase price in excess of the
amounts assigned to identifiable assets and liabilities of MCN
using the straight-line method over 40 years. In accordance with
the adoption of SFAS No. 142, "Goodwill and Other Intangible
Assets", on January 1, 2002, the amortization of goodwill will
cease and goodwill will be tested for impairment on an annual
basis.
(b) Reflects the interest expense related to the issuance of $1.350
billion in long-term debt of DTE to finance the cash
consideration of the merger. Interest expense is assumed at
7.37%, which includes the effect of the amortization of the
merger debt hedges.
(c) Reflects the elimination of net gain and transition adjustments
related to pension and other post-retirement benefits.
(d) Reflects adjustments to gains on MCN's sales of investments in
joint ventures and other assets to reflect values that would have
been assigned to such investments and assets in the allocation of
the purchase price as of the beginning of the periods presented.
- 6 -
7
(e) Reflects adjustments for storage and transport costs.
(f) The estimated provision for income taxes related to the pro forma
adjustments is based on the statutory federal income tax rate of
35%. Amortization of goodwill has not been tax affected.
Item 7(c). Exhibits.
(i) Filed Herewith
15.1 Awareness letter of Deloitte & Touche LLP
23.1 Consent of Deloitte & Touche LLP, independent accountants.
(ii) Incorporated by reference
2.1 Amended and restated Agreement and Plan of Merger (Exhibit 2.1 to reg.
no. 333-89175)
- 7 -
8
SIGNATURE
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 hereunto duly authorized.
DTE ENERGY COMPANY
By: /s/ DANIEL G. BRUDZYNSKI
----------------------------------
Daniel G. Brudzynski
Chief Accounting Officer,
Vice President and Controller
Date: August 14, 2001
- 8 -
9
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
15.1 Awareness letter of Deloitte & Touche LLP
23.1 Consent of Deloitte & Touche LLP, independent accountants