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  1. Financial Review David E. Meador February 6, 2004

  2. Safe Harbor Statement The information contained in this document is as of the date of this press release. DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this document as a result of new information or future events or developments. Words such as “anticipate,” “believe,” “expect,” “projected” and “goals” signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various assumptions, risks and uncertainties. This press release contains forward-looking statements about DTE Energy’s financial results and estimates of future prospects, and actual results may differ materially. Factors that may impact forward-looking statements include, but are not limited to, timing and extent of changes in interest rates; access to the capital markets and capital market conditions and other financing efforts which can be affected by credit agency ratings requirements; ability to utilize Section 29 tax credits or sell interest in facilities producing such credits; the level of borrowings; the effects of weather and other natural phenomena on operations and actual sales; economic climate and growth in the geographic areas in which DTE Energy does business; unplanned outages; the cost of protecting assets against or damage due to terrorism; nuclear regulations and risks associated with nuclear operations; the grant of rate relief by the MPSC for the utilities; changes in the cost of fuel, purchased power and natural gas; the effects of competition; the implementation of electric and gas customer choice programs; the implementation of electric and gas utility restructuring in Michigan; environmental issues, including changes in the climate, and regulations, and the contributions to earnings by non-regulated businesses. This press release should also be read in conjunction with the forward-looking statements in DTE Energy’s, MichCon’s and Detroit Edison’s 2002 Form 10-K Item 1, and in conjunction with other SEC reports filed by DTE Energy, MichCon and Detroit Edison.

  3. Overview • 2003 was a challenging year • With ongoing regulatory and legislative proceedings, 2004 will also be under pressure from an earnings perspective • Mitigating financial impacts from customer choice remains a key priority • Due to regulatory proceedings, we cannot provide specific 2004 earnings guidance at this time • During this transition period, our balance sheet remains strong with synfuel cash flow offsetting utility weakness

  4. Outline • 2003 Results • 2004 Preview • Regulated Utilities • Non-Regulated • Cash & Balance Sheet Update

  5. Q4 2003 Summary • Operating EPS* of $0.94 per diluted share, down $0.25 per share from comparable 2002 levels • Key drivers in the quarter include: • Milder weather resulting in lower electric and gas margins • Higher benefits and uncollectable expenses • Lower quarter-over-quarter synfuel production • Large inventory valuation gains within Co-Energy Portfolio in Q4 2002, not repeated in 2003 * Reconciliation to GAAP reported earnings included in the appendix

  6. Q4 2003 Operating Performance Business Unit View $0.94 Operating Earnings per Share* ($0.05) Energy Distribution Corporate & Other $0.85 ($0.01) $0.15 Energy Resources Energy Gas Power Generation Regulated Power Distribution Gas Distribution $0.13 $0.61 $0.01 Energy Services Non Reg Energy Gas Holding Company DTE Energy Technologies $0.29 ($0.02) $0.02 ($0.05) Coal Services Non Regulated Energy Tech Investments $0.01 $0.00 Biomass Energy $0.01 Trading & Co-Energy Portfolio ($0.04) Overheads & Other ($0.03) * Reconciliation to GAAP reported earnings included in the appendix

  7. 2003 Financial Summary • Year-end leverage ended at 49%*, below our targeted range of 50-55% • Closed the sale of International Transmission Company • Successfully offset a significant portion of higher pension and benefit expenses • Resolved synfuel IRS/PLR issue and recommenced facility sales • Experienced increased negative financial impact from Electric Choice • Results were also negatively impacted by mild weather, catastrophic storm restoration and the blackout * Excludes securitization debt, MichCon short-term debt and quasi-equity instruments

  8. 2003 Operating Performance Business Unit View $3.09 Operating Earnings per Share* ($0.28) Energy Distribution Corporate & Other $2.84 $0.09 $0.44 Energy Resources Energy Gas Power Generation Regulated Power Distribution Gas Distribution $0.27 $1.50 $0.18 Energy Services Non Reg Energy Gas Holding Company DTE Energy Technologies $1.18 ($0.09) $0.17 ($0.23) Coal Services Non Regulated Energy Tech Investments $0.05 ($0.05) Biomass Energy $0.03 Trading & Co-Energy Portfolio $0.17 Overheads & Other ($0.09) * Reconciliation to GAAP reported earnings included in the appendix

  9. DTE Energy 2002 vs. 2003 Variance 2002 2003 ($ millions) Operating Earnings* $586 $521 Key Drivers: • Weather demand • Electric Choice impact / regulatory deferrals • Storm restoration costs • Benefit cost escalation • Uncollectable expenses • Non-regulated growth Regulated Electric $352 $282 $46 Regulated Gas $66 $228 Non-Regulated** $207 Holding Company ($39) ($35) * Reconciliation to GAAP reported earnings included in the appendix ** Includes Energy Technology Investment *** Excludes earnings from discontinued operations (International Transmission Company) $3.09 $3.55*** Earnings Per Share*

  10. Regulated Electric2002 vs. 2003 Variance Operating Earnings (after tax)* ($ millions) • 2003 after-tax Electric Choice lost margin impact of ($78M), year-over-year impact of ($46M) • Substantial regulatory deferrals supporting 2003 earnings • Cooler year-over-year weather and storms • Benefit inflation • O&M cost reductions ($46) $25 ($74) $352 $31 ($22) $282 $70 ($54) 2002 2003 Choice Margin Loss Pension and Benefits Primarily Cost Reductions & Other Other Regulatory Deferrals Weather Storms Choice Regulatory Deferrals * Reconciliation to GAAP reported earnings included in the appendix

  11. Regulated Gas2002 vs. 2003 Variance Operating Earnings (after tax)* ($ millions) $10 ($20) $66 • Normal weather in 2003 • Increased pension and benefit costs • Higher uncollectable expense driven by higher gas prices and local economy ($10) $46 2002 2003 Pension & Benefits Uncollectables Weather * Reconciliation to reported earnings included in the appendix

  12. Non-Regulated2003 Review Operating Earnings (after tax)* ($ millions) 2002 2003 • Higher year-over year synfuel production, partially offset by the absence in 2003 of coke battery tax credits • Power Generation gains from contract restructuring of $20M • Gain on the sale of the Portland pipeline of $10M • Solid growth in realized earnings at Energy Trading • Discontinued equity accounting at Plug Power in November 2003 $ 136 $ 197 Synfuels 52 (7) Coke Batteries 9 9 On Site Energy Projects (5) 4 Power Generation 13 8 Coal Services 7 6 Biomass Energy 25 29 Energy Trading & CoEnergy Portfolio (22) (23) Energy Resources overheads & interest 26 29 Upstream & Midstream Gas (16) (15) DTE Energy Technologies (10) (9) Energy Technology Investments** (8) - Other $ 207 $ 228 Total * Reconciliation to reported earnings included in the appendix ** Primarily Plug Power losses

  13. 2003 Results • 2004 Preview • Regulated Utilities • Non-Regulated • Cash & Balance Sheet Update

  14. 2004 Preview • Managing the regulatory agenda, including the financial impact of Electric Choice, is the top priority • Despite near-term uncertainty, successful regulatory resolution is expected to provide longer-term financial stability • Given the current regulatory and legislative proceedings, we cannot provide specific utility earnings guidance for 2004 at this time • The management team remains focused on continued cost control and value creation

  15. Graduated Rate ReliefRequested in Filings MichCon Requested Incremental Rate Relief ($ millions) Detroit Edison Requested Incremental Rate Relief ($ millions) $194 $40 $525 $175 $154 $56 $294* Final Interim Total 2005 Total 2006 2005 2004 2004 Calendar Year Revenue Increase $240** $110 $175 $55** $139 * Takes into account the financial impact of rate caps ** Assumed interim rates effective 3/1/2004 for Detroit Edison, 8/1/2004 for MichCon

  16. Electric Choice • Q4 2003 had the largest migration of customers to Electric Choice to date, resulting in an increased 2004 projection of electric choice losses • Choice growth will likely continue to accelerate in 2004, before regulatory and legislative actions can be implemented • Our objective relative to the Electric Choice program is to support a balanced program whereby we recover, in a timely basis, all implementation costs and net margin loss caused by the Electric Choice program. This will be aggressively pursued through both the regulatory and legislative process

  17. Volume and MarginImpact of Electric Choice Detroit Edison Pre-Tax Net Margin Loss($ Millions) Detroit Edison Electric Choice Sales Loss (GWh) 11,000 $240 6,200 9,000 2003 Exit Point $190 2003 Exit Point $120 2,990 $50 1,085 $15 2004E 2003 2004E 2001 2002 2003 2002 2001 Total 2003 Detroit Edison Territory Sales: 52,600 GWh

  18. 2004 Recovery Framework Range of Mechanisms Economic Loss of Electric Choice Deferral for Future Recovery • Regulatory asset will be recorded using the current approach • Interim / Final Order should provide recovery through a transition charge and bundled price increase Transition Charge Bundled Price Increase • Subject to annual true-up mechanism

  19. Financial Recovery of 2004 Choice Deficiency The various recovery scenarios will lead to significantly different outcomes

  20. Detroit Edison 2004 Factors and Sensitivities 2004 Sensitivities (after tax) 2004 Factors • Choice Net Margin Impact • Timing and outcome of legislative process • Level and Timing of Interim and Final Rates • Staff report recommended $289M with the PSCR reinstated • Modification of PSCR mechanism • Cost economics and our ability to mitigate One Month Delay in Interim Rates (based on company filing) ($13M) +/- $17M 50bps change in ROE 5% change in capital structure +/- $18M PSCR mechanism – per month ($10M)

  21. MichCon 2004 Factors and Sensitivities 2004 Sensitivities (after tax) 2004 Factors • Level and Timing of Interim Rates • Requested $154M • Cost economics and our ability to mitigate • Public funding of low income energy assistance One Month Delay in Interim Rates (varies due to seasonality) ($3-10M) 50bps change in ROE +/- $4M 5% change in capital Structure +/- $4M

  22. 2003 Results • 2004 Preview • Regulated Utilities • Non-Regulated • Cash & Balance Sheet Update

  23. Tax Credit History Tax Credits Profile ($Millions) $553 $548 $543 • 2003 net income from synfuels was $197M with $228M of credits to our account • We have sold 64% of synfuel production capacity and expect to sell substantially all of our remaining capacity by year-end • Effectively all of the coke batteries credits sunset at the end of 2002 • The synfuel credits sunset at the end of 2007 • The cash benefit of the tax credit carryforward will be realized through 2008 as a reduction to taxes paid Synfuels Sold Biomass $443 Synfuels Retained Coke Batteries $387 $353 146 529 100 524 519 400 13 13 $184 $132 182 $113 228 $80 13 30 1998 1999 2000 2001 2002 2003 2004E 2005E 2006E 2007E Synfuel Tons Produced (millions) 13.3 15.3 18.7 18.7 18.7

  24. Synfuel Net Income Summary $ millions • Synfuel tons produced are expected to increase from 13M in 2003 tons to 13-17M tons in 2004 • Assumes remaining units are sold during 2004 • Net income declines despite higher production as a higher percentage of credits are sold • 2004 net income will range from $150-190M • In 2004, the structure of net income largely shifts from being reported as an income tax benefit to being reported in operating results Net 2003A Credits Income Credits Retained $228 $134 Credits Sold 146 63 $374 $197 2004E* Net Credits Income Credits Retained $30 $20 Credits Sold 400 150 $430 $170 * 2004 data assumes midpoint of $150-190M net income range

  25. Synfuel Cash Flow Summary • Year-over-year cash is expected to improve by ~$335M as units are sold • Improvements are driven by: • Higher tons • Additional selldowns • Lower AMT payments in 2004 • 2004 cash will range from $130-150M $ millions 2003A 2004E* Cash from Operations ($280) - Operating Losses ($60) 80 Production Payment** 195 ($200) $135 * 2004 data assumes midpoint of $150-190M net income range ** Accounted for as investing activity on cash flow statement

  26. Long-Term SynfuelNet Cash Flow Outlook ($ millions) 2005E 2004E 2006E 2007E 2008E $45 $390 $355 $380 $135 Synfuel Cash Flow Tax Credit Carryforward Utilized* 130 140 0 90 90 $135 $445 $530 $135 $510 Net Cash Flow • 2005 cash improvement driven by higher tons produced and higher after-tax cash value per credit • Using a discount rate between 6-9% produces a per share value between $8-9 * Includes annual tax credits generated from ongoing minority interest ownership

  27. Synfuel Summary • All units have PLRs • Four units are currently under audit with an expected completion by Spring 2004 • Earnings and cash will depend on timing of selldowns and production levels • We are on track to deliver significant earnings and improved cash flows

  28. Non-Regulated 2004 Outlook Operating Earnings (after tax)* ($ millions) 2003A 2004E • Timing of synfuel sales • Restructured coke battery contracts • Closing the utility outsourcing deal • Continued weakness in generation pricing • Drive to profitability in Energy Technologies • Discontinued equity accounting at Plug Power $ 197 $150-190 Synfuels (7) 6-8 Coke Batteries 9 18-22 On Site Energy Projects 4 (16) Power Generation 8 14-16 Coal Services 6 6 Biomass Energy 29 35-40 Energy Trading & CoEnergy Portfolio (23) (33) Energy Resources overhead & interest 29 18-20 Upstream & Midstream Gas (15) (4) DTE Energy Technologies (9) - Energy Technology Investments & Other $ 228 $194-249 Total * Reconciliation to reported earnings included in the appendix

  29. 2003 Results • 2004 Preview • Regulated Utilities • Non-Regulated • Cash & Balance Sheet Update

  30. Financial Objectives • Maintain strong balance sheet and solid investment grade rating • 2003 year-end leverage declined to 49%* • Generate strong cash flows • Solid 2003 adjusted cash from operations of over $1 billion • Synfuels turns from cash negative in 2003 to cash positive in 2004 • Capital expenditures declined $233M in 2003, mostly due to lower NOx spending • Conservative and sound financial policies • Continue dividend of $2.06 per share, with a current yield of 5.3% * Excludes securitization debt, MichCon short-term debt and quasi-equity instruments

  31. DTE Energy Leverage • Continued balance sheet strength is a key strategic goal for DTE • Throughout the industry’s financial turmoil, DTE’s debt/capital has remained within the targeted 50-55% range • Liquidity remains strong with over $1B of excess borrowing power • Possible 2004 pension contribution of ~$170M may be funded with stock, further strengthening the balance sheet DTE Energy Leverage* 60% 55% Targeted 50-55% Range 50% 45% 40% 1999 2000 2001 2002 2003 * Excludes securitization debt, MichCon short-term debt and quasi-equity instruments

  32. DTE Energy 2003 Cash Flows ($ millions) 2002A 2003A • Including Synfuel production payments, Cash from Operations was over $1 billion in 2003 • Cash from Operations was reduced in 2003 by the $222M contribution to the pension plan. Without the pension contribution, Cash from Operations would have reached $1.2B • Capital Expenditures declined 25% from 2002 to 2003, in large part due to a $176M reduction in required spending on NOx remediation • Net cash in 2003, after asset sales and dividend payments, was positive by over $600M Cash from Operations $996 $950 Synfuel Production Payments* 32 89 Adjusted Cash from Operations $1,028 $1,039 Capital Expenditures (984) (751) 9 Asset Sales 669 Dividends (338) (346) Cash Flow ($285) $611 * Accounted for as ‘investing activity’

  33. DTE Energy 2004 Cash Flows 2004E • Cash flows in 2004, similar to net income, are uncertain. Final results depend on: • Timing and amount of rate relief • Electric Choice • Timing of synfuel sales • Without action, internal cash will not entirely fund the dividend • However, the cash initiative successfully implemented in 2003 will continue this year, with a minimum goal of internally funding the dividend • Leverage is expected to remain at the low end of our range ($ millions) 2003A Low High Cash from Operations $950 $800 $1,050 Synfuel Production Payment* 89 175 225 Adjusted Cash from Operations $1,039 $975 $1,275 Capital Expenditures (751) (750) (1,060) 669 Asset Sales 40 40 Dividends (346) (346) (353) Cash Flow $611 ($81) ($98) * Accounted for as ‘investing activity’

  34. DTE Energy Capital Expenditures Capital Expenditures (2004 Based on Rate Case Filings) • Based on utility rate case filings, 2004 capital expenditures will be approximately $1 billion • These capital expenditures are largely incurred at the two regulated utilities • We intend to match actual 2004 capital spending with available cash flows. Until utility rate cases are resolved, capital spending will remain at 2003 levels ($ millions) 2003A 2004E Detroit Edison $516 $672 NOx 64 38 MichCon 98 139 Non Regulated & Corporate* 211 73 Total $1,060 $751 * 2004 includes $55M of corporate capital

  35. DTE Energy’s Commitment to the Dividend Dividend Yield • Despite recent earnings pressure to date the dividend has remained stable at $2.06 per share • Management is committed to maintaining dividend at current level • As cash flows improve DTE intends, in the absence of new investments that meet our return requirements, to return excess cash to shareholders or pay down debt 6.5% 5.3% 5.2% 4.9% 4.8% 4.4% $2.06 Dividend 1998 1999 2000 2001 2002 2003

  36. Summary • 2004 will be a transition year with our goal to have the right outcome on Choice and the regulatory cases, which will lay the groundwork for the future • Utility cash and earnings will depend on timing and amount of rate relief and legislative actions • With continued non-regulated earnings growth, the portfolio is providing stability during utility transitions • We will make selected investments that meet our criteria, however until the utilities’ cash flow is more certain, larger investments are off the table • The balance sheet remains strong as we move through this transition year

  37. Closing Remarks Anthony F. Earley Jr. February 6, 2004

  38. Why Invest in DTE? • Balanced business model – regulated / non-regulated • Basic utilities form core operations • Consistent, successful non-regulated strategy • Regulatory clarity should be achieved this year • Healthy balance sheet with commitment to investment grade credit ratings • Current stock price reflects uncertainties that should be resolved in next 6 – 9 months • Multi-year investment returns are attractive • Solid dividend with attractive 5.3% yield

  39. Appendix

  40. Key Electric Choice Statistics ($ millions) Calendar Year Statistics: 2001 2002 2003 2004E Choice Volumes - Calendar Year (Gwh) 1,085 2,990 6,200 11,000 % of Total Load 2% 6% 12% 20% Calendar Year margin loss (pre tax) $15 $50 $120 $240 Calendar Year margin loss (after tax) $10 $33 $78 $156 Year over Year margin loss (after tax) $23 $45 $78 Choice PA141 Regulatory Asset (pre tax) $10 $58 TBD Choice PA141 Regulatory Asset (after tax) $7 $38 TBD Choice Transition Charge TBD Bundled Price Increase TBD Choice Income Impact with regulatory asset offset (after tax) $26 $40 Year End "Run Rate" Statistics: Choice Volumes - Year end rate annualized (Gwh) 1,200 3,600 9,000 12,000 % of Total Load 2% 7% 17% 22% Year end "exit" margin annualized loss (pre tax) $65 $190 $290 Year end "exit" margin annualized loss (after tax) $42 $124 $189

  41. Detroit EdisonPublic Act 141 Related Regulatory Assets ($ millions) Pre-tax 2003 2001 2002 Q1 Q2 Q3 Q4 Total Choice Lost Margin $0 $10 $6 $6 $8 $38 $58 Recovery Choice Implementation 26 23 5 5 4 13 27 Costs Environmental 0 10 14 9 10 10 43 Compliance (NOx)* Other 5 8 2 2 5 3 12 Total $31 $51 $27 $22 $27 $64 $140 * Return on asset, deferred depreciation and O&M

  42. Holding Company Quarterly Effective Tax Rate Adjustment – Synfuel Related • Each quarter an accounting adjustment is made to reconcile back to DTE’s overall effective rate for the year • The effective tax rate adjustments net to zero for the total year • This adjustment is recognized in reported earnings but is removed from operating earnings • Variables which affect this adjustment include: • the amount and profile of pre-tax earnings • the level and calendarization of tax credits generated • Changes in the synfuel production profile has significantly impacted the size of the adjustments in 2003 $ millions 82 70 19 11 (5) (25) 2002 (45) 2003 (107) Q1 Q2 Q3 Q4

  43. Synfuel Portfolio Yearly Production Ownership Capacity Interest Manufactuer (000 tons) Sold Facilities Belews Creek 1% EarthCo 2,960 Buckeye (2) 1% EarthCo 5,920 Clover* 5% EarthCo 2,640 Smith Branch* 5% EarthCo 2,750 14,270 Retained Facilties Indy Coke 100% EarthCo 2,640 Red Mountain 100% Covol 1,577 River Hill* 100% Covol 1,577 Utah* 100% Covol 1,600 7,394 * Currently under audit

  44. Synfuel Results Synfuels Produced (millions of tons) Synfuels Net Income ($millions) 2002 2002 2003 2003 4.4 70 4.3 68 4.1 53 3.2 48 2.0 28 27 1.6 1.4 22 1.3 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total 2002 Net Income: $136M Total 2003 Net Income: $197M Total 2002 Production: 8.8M Tons Total 2003 Production: 13.6M Tons

  45. Synfuel Net IncomeReporting Structure $ millions 2003A 2004E ($46) Reported in Income $220 Reported in Income Taxes 243 (50) $197 Net Income $170 Memo: Effective Tax Rate (34.4%) (A) (A) Tax expense can be estimated as pre-tax income X 35% less $50M

  46. Mechanics of a Synfuel Tax Credit Marginal Analysis Illustrative – After Tax Retain Sell • As facilities are sold, net income per credit declines but cash increases • Ranges are illustrative, actual net income and cash impact per credit will depend on: • facilities sold, timing and terms • DTE Energy’s corporate tax position • varied operational efficiencies of facilities • $0.40 - $0.60 / credit • incur operating losses • interests monetized at a slight discount • $0.60 - $0.70 / credit • incur operating losses • full value of credit recognized Net Income • ($1.00) – ($1.20) / credit • incur operating losses • AMT paid on incremental credits retained (current tax position carries credits forward) • Positive cash flows come in the future • $0.40 – $0.55 / credit • incur operating losses • realize selldown cash proceeds Cash Flow

  47. Rate Relief Requests

  48. Reconciliation of Operating Earnings to Reported Earnings Operating Earnings to Reported Earnings Reconciliation Earnings Per Share Net Income ($ millions) DTE Energy DTE Energy Regulated Regulated Non- Holding Full Year 2003 Consolidated Consolidated Electric Gas Regulated Company Operating 3.09 521 282 46 228 (35) Blackout Costs (0.10) (16) (16) Adjustment of EITF 98-10 accounting change (Flowback) 0.10 16 16 Loss on sale of steam heating business (0.08) (14) (14) Disallowance of gas costs (0.10) (17) (17) Contribution to DTE Energy Foundation (0.06) (10) (10) Adjustment for discontinued operations of ITC 0.03 5 5 Gain on sale of ITC 0.37 63 63 Asset retirement obligations (SFAS 143) (0.07) (11) (6) (1) (4) Adjustment of EITF 98-10 accounting change (cumulative effect) (0.09) (16) (16) Reported 3.09 521 314 28 225 (46)

  49. Reconciliation of Operating Earnings to Reported Earnings Operating Earnings to Reported Earnings Reconciliation Earnings Per Share Net Income ($ millions) DTE Energy Net Income Regulated Regulated Non- Holding Consolidated ($ millions) Electric Gas Regulated Company Full Year 2002 Operating 3.55 586 352 66 207 (39) Adjustment for discontinued operations of ITC 0.28 46 - - - - Intercompany Gain 4 Reported 3.83 632 356 66 207 (39) Earnings Per Share Net Income Q4 2003 DTE Energy DTE Energy Consolidated Consolidated Operating 0.94 159 Tax credit driven normalization 0.42 70 Reported 1.36 229