european investor update background material june/july 2004

European Investor Update

Background Material

June/July 2004

2

Safe Harbor Statement

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 2003 Form 10-K Item 1, and in conjunction with other SEC reports filed by DTE Energy, MichCon and Detroit Edison.

3

DTE Energy Geography

On-Site Energy Projects

Coke Batteries

Synfuels

Biomass

Regional Area of Focus

4

DTE Energy Overview

Utility Platform Non-Regulated Platform

• On-site Energy Projects• Steel-Related Projects• Power Generation with Services• Waste Coal Recovery

• Michigan Gas Production• Shale and Coalbed Methane• Landfill Gas

• Coal Transportation and Marketing

• Gas Pipelines and Storage• Energy Trading and Marketing

Power and Industrial Projects

Non-conventional Gas Production

Fuel Transportation and Marketing

Generates and distributes electricity throughout Southeastern Michigan

Produces, gathers, transmits, stores and distributes natural gas throughout Michigan

5

DTE Energy Business Segments

Regulated

Non Regulated

Detroit Edison Power Generation

EnergyServices

CoalServices

BiomassEnergy

Trading & Co-Energy Portfolio

EnergyResources

Detroit EdisonPower Distribution

DTE EnergyTechnologies

EnergyDistribution

MichConGas Distribution

Non RegEnergy Gas

EnergyGas

HoldingCompany

Energy TechInvestments

Corporate & Other

6

• Regulated Business Overview

• Non-Regulated Business Overview

• Financial Information

• Topical Issues– Environmental– Michigan Economy– Energy Technology

Outline

7

Profile of Detroit Edison and MichCon

Detroit Edison

MichCon

• Ninth largest electric utility in the U.S. with 2.1 million customers

• Over 11,000 MW of power generation, primarily coal fired

• Fermi 2 nuclear plant is a top industry performer

• 54,000 GWh in electric sales

• ~$3.7 billion in revenue

• Fifth largest natural gas utility in the U.S. with1.2 million customers

• 170 Bcf of gas sales

• 12% of national gas storage capacity with 124 Bcf of regulated gas storage

• ~$1.5 billion in revenue

MichConDistribution Services

Detroit EdisonDistribution Services

OverlappingDistribution Services Detroit

8

Profile of Detroit Edison and MichCon

• Detroit Edison has a balanced customer mix

• MichCon’s customers are largely stable residential users

• While important, the automobile sector accounts for only 14% of electric load and 10% of revenue at Detroit Edison

Detroit Edison2003 Total System Sales - 45,890 GWh

Residential 33%

Commercial 35%

Industrial 26%

Other 6%

Detroit Edison2003 Customer Volumes – 172 Bcf

Residential 75%

Commercial 24%

Industrial 1%

Excludes End User Transportation

9

Detroit Edison Generation Fleet

~11,000 MW TotalSummer Net Rated Capacity

Coal 63%

Nuclear 10%

Gas/Oil 9%

Peakers 10%

Pumped Storage 8%

~46,000 GWh Gross Generation2003 Generation Fuel Mix

Coal 81%

Nuclear 18%

Gas/Oil 1%

• Detroit Edison has a diversified generation portfolio anchored by lower cost, base load coal and nuclear generation

• With a focus on coal, Detroit Edison generally has limited exposure to more volatile natural gas prices

10

Detroit Edison Power Plant Portfolio

MW %

Fossil-Fueled Steam-Electric

Belle River 1,026 9.3

Conners Creek 215 1.9

Greenwood 785 7.1

Harbor Beach 103 0.9

Marysville 84 0.8

Monroe 3,045 27.6

River Rouge 510 4.6

St. Clair 1,415 12.8

Trenton Channel 730 6.6

Nuclear - Fermi 2 1,111 10.1

Hydroelectric Pumped Storage 917 8.3

9,941 90%

Oil or Gas-fueled Peaking Units 1,102 10.0

Total 11,043 100%

11

Detroit Edison Plants are Well-Positioned on the Regional Supply Curve

All costs include emissions ( NOx and SO2)

Hydro & Nuclear Coal Combined-Cycle & Steam (Gas) CT - Gas/Oil

ECAR Dispatch Curve - Summer 2005

$0.00

$20.00

$40.00

$60.00

$80.00

0 25,000 50,000 75,000 100,000 125,000

Cumulative MW

$/M

Wh

Min Annual Demand(44,000 MW)

Avg. Annual Demand(67,000 MW)

SummerPeakDemand(104,000 MW)

Detroit Edison Power Plant

12

Detroit EdisonResidential Electric Rates1992 - 2003

8

8.5

9

9.5

10

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

0

25

50

75

100

125

150

Residential Electric Rates ¢/KWh

-11%

1992–2003 Percent Change

Source: EEI Summer Typical Bill Survey

CPI+31%

CPI1992 = 100

13

Detroit EdisonCommercial Electric Rates1992-2003

7.854

9.8175

11.781

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

0

25

50

75

100

125

150

Commercial Electric Rates ¢/KWh

-12%


CPI+31%

CPI1992 = 100


14

Detroit EdisonIndustrial Electric Rates1992-2003

6

6.5

7

7.5

8

8.5

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

0

25

50

75

100

125

150

Industrial Electric Rates ¢/KWh

-16%


CPI

+31%

CPI1992 = 100


15





Outline

16

DTE Energy’s Approach to Non-Regulated Businesses

1998 1999 2000 2001 2002 2003

• Build around unique DTE Energy strengths

• Focus where competition is manageable

• Focus on value added/profit first, scale second

• Pursue closely inter-linked business lines

• Build outward from regional base of strength

• Build around broad portfolio, not a single platform

CAGR: ~40%

Non-Regulated Net Income($ millions)

$42

$68$84

$162

$205

$228

17

Non-Regulated Business Segments

Energy Services

Energy Marketing & Trading

Coal Services & Biomass

Gas Production & Storage, Pipelines and Processing

Develops and manages energy-related assets and services, including coke production, synfuel production, independent power plants, on-site energy projects and cogeneration services

Physical power marketing and structured transactions as well as enhancing returns from DTE’s power plant, pipeline and storage assets

Coal marketing and transportation, waste coal recovery and landfill gas recovery

Develops and produces natural gas in Northern Michigan, transports and stores natural gas

18

Using This Approach, DTE Energy Avoided Recent Industry Pitfalls

• Did not overpay for auctioned generation assets

• Avoided international investments

• Did not overemphasize trading business

• Predicted overbuild of merchant generation

• Did not pursue growth at the expense of the balance sheet

• Do not use overly complex and non-transparent financial structures

• Do not promote unrealistic earnings growth expectations

19

Profile of DTE Energy Services

Business Profile• Leverages DTE’s expertise with large

energy users, coal-based fuels and power generation

• Business lines include− Coal based fuels (coke batteries and

synfuels)− On-site energy projects− Power generation

* Synfuel facility in Price, Utah not shown

AL

ILIN

OHPA

NY

KY

WV

NC

MI

On-Site Energy ProjectsCoke Batteries

SynfuelsPower Generation

20

Profile of DTE Energy Trading

Business Profile

• Fundamental role of energy trading and marketing at DTE:– Add value to the company’s assets and

contractual positions, and to help manage the risks tied to these assets and positions

– Provide products and services to customers that lack required capabilities e.g. munis, co-ops

• Commodities marketed and traded include power, gas, coal and emissions credits

• 2003 combined net income for Energy Trading and CoEnergy Portfolio was $29M

Regions where 95% of DTE’s trading activityis concentrated

21

Profile of DTE Coal Services

Business Profile

• Leverages DTE’s scale as a coal user and its expertise in coal transportation and marketing

• Business lines include:– Coal marketing– Rail / water transportation– Railcar maintenance– Coal and emissions trading– Coal tolling– Waste coal recovery

• 2003 net income of $8M

Utility Customers / Tolling Sites

Detroit Edison Plants

Industrial or DTE Energy Services’ Sites

DTE Transportation Services Customer

DTE Dock

22

Profile of DTE Biomass Energy

Business Profile• DTE Biomass is a leading

landfill gas to energy producer– A niche business for DTE, with

modest competition, and opportunities for high and medium Btu production driven by high natural gas prices

– Owns and operates 34 projects in 13 states

– Extracts 28 Bcf of landfill gas annually

– Helped reduce DTE Energy’s overall CO2 emissions by 10%


Gas Sales

Steam Sales

Power Sales

Pipeline Quality Gas

Current Projects

23

Profile of Upstream and Midstream Gas

Business Profile

• Upstream Gas– Leverages DTE’s leading position in Michigan

gas production and our strong technical expertise and operating skills

– 25 Bcf of annual production from 1700 wells in northern Michigan

– DTE Gas Resources, which develops coalbed methane projects

• Midstream Gas– Value and returns enhanced by marketing and

trading opportunities, economic expansion of assets, and structuring/partnership opportunities

• 55 Bcf of unregulated gas storage in Michigan

• 40% equity interest in Vector pipeline


Gas Production, Gas Production, Gathering & Gathering & ProcessingProcessing

Vector

Gas StorageGas Storage

Coalbed MethaneFocus Areas

Cherokee Basin

Arkoma Basin

24

Historical Non-Regulated Business Returns

Average 2001 - 2003

2003 Invested Capital, $MM

Unlevered After-Tax Return on Capital

After-Tax ROE

Energy Services $810 21% 28%

Coal Services $60 23% >30%

Biomass Energy $40 14% 16%

Gas Production & Midstream Gas $440 7% 7%

Energy Trading* $10 N/A N/A

$ Millions

* Return on capital is not generally used as a metric for trading operations

25





Outline

26

2003 Financial Summary

Regulated

Non Regulated

PowerGeneration

EnergyServices

CoalServices

BiomassEnergy

EnergyResources

PowerDistribution

DTE EnergyTechnologies

EnergyDistribution

Gas Distribution

Non RegEnergy Gas

EnergyGas

HoldingCompany

Energy TechInvestments

Corporate & Other

Operating Earnings per Share*

$2.84 $0.44$0.09 ($0.28)

$1.50

$1.18

$0.18

$0.05

$0.03

$0.17

($0.09) $0.17

($0.05)

($0.23)

$3.09

Overheads & Other ($0.09)

$0.27

* Reconciliation to GAAP reported earnings included in the appendix

Trading & Co-Energy Portfolio

27

DTE Energy 2002 vs. 2003 Variance

Operating Earnings*

Holding Company

Regulated Electric

Non-Regulated**

$66Regulated Gas

$207

$3.55***

($39)

$352

2002

$46

$228

$3.09

($35)

$282

2003

• Weather demand

• Electric Choice impact / regulatory deferrals

• Storm restoration costs

• Benefit cost escalation

• Uncollectable expenses

• Non-regulated growth

Earnings Per Share*

$586 $521 Key Drivers:

($ millions)

* Reconciliation to GAAP reported earnings included in the appendix

** Includes Energy Technology Investment

*** Excludes earnings from discontinued operations (International Transmission Company)

28

Non-Regulated 2003 Review

• 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

* Reconciliation to reported earnings included in the appendix

** Primarily Plug Power losses

2002 2003

Synfuels 136$ 197$

Coke Batteries 52 (7)

On Site Energy Projects 9 9

Power Generation (5) 4

Coal Services 13 8

Biomass Energy 7 6

Energy Trading & CoEnergy Portfolio 25 29

Energy Resources overheads & interest (22) (23)

Upstream & Midstream Gas 26 29

DTE Energy Technologies (16) (15)

Energy Technology Investments** (10) (9)

Other (8) -

Total 207$ 228$

Operating Earnings (after tax)*($ millions)

29

2004 Outlook

• Detroit Edison net income is highly dependent on:– Timing and amount of rate relief– Implementation of Power Supply Cost Recovery Factor

(PSCR)– Resolution of customer choice

• MichCon net income is highly dependent on the timing and amount of rate relief

• Non-regulated net income will be driven by:– Timing and number of synfuel interests sold and synfuel

production levels– Growth in coal bed methane, waste coal recovery and on-

site energy projects

30

Non-Regulated 2004 Outlook

• 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

2003A 2004E

Synfuels 197$ $150-190

Coke Batteries (7) 6-8

On Site Energy Projects 9 18-22

Power Generation 4 (16)

Coal Services 8 14-16

Biomass Energy 6 6

Energy Trading & CoEnergy Portfolio 29 35-40

Energy Resources overhead & interest (23) (33)

Upstream & Midstream Gas 29 18-20

DTE Energy Technologies (15) (4)

Energy Technology Investments & Other (9) -

Total 228$ $194-249

* Reconciliation to reported earnings included in the appendix

Operating Earnings (after tax)*($ millions)

31

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 5.2%

* Excludes securitization debt, MichCon short-term debt and quasi-equity instruments

32

DTE Energy Leverage

• Despite the problems that have plagued the industry, DTE Energy has been able to maintain a strong balance sheet

• This was achieved without having to resort to a ‘back-to-basics’ strategy

• Despite the current challenges, DTE Energy’s leverage has not been negatively impacted

DTE Energy Leverage*

40%

45%

50%

55%

60%

1999 2000 2001 2002 2003

* Excludes securitization debt, MichCon short-term debt and quasi-equity instruments

33

DTE Energy 2004 Cash Flows

Cash from Operations $950 $800

Capital Expenditures (751) (750)

Dividends (346) (353)

Asset Sales 669 40

Cash Flow $611

($ millions)

$12

2003A Low

Synfuel Production Payment*

Adjusted Cash from Operations

89 175

$1,039 $975

$1,050

(1,060)

(353)

40

$2

High

225

$1,275

2004E

* Accounted for as ‘investing activity’

• 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

• 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

Cash Improvement Initiative 100 100

34

DTE EnergyCapital Expenditures

Detroit Edison

NOx

MichCon

Non Regulated & Corporate*

Total

• Based on utility rate case filings, 2004 capital expenditures will be approximately $1B

• 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)

$672

38

139

211

$1,060

2004E

Capital Expenditures(2004 Based on Rate Case Filings)

* 2004 includes $55M of corporate capital

$516

64

98

73

$751

2003A

35

DTE EnergyCurrent Credit Ratings

• Negative outlook from Moody’s and S&P reflects concerns over:

– Rate case outcomes

– Electric choice program and need for change

• Cash flow metrics should start improving with impact of rate cases and synfuel monetization

S&P Moody's Fitch

DTE Energy BBB+A, B Baa2 B BBB

Detroit Edison A- B A3 B A-

MichCon BBB+ B A2 C A

Last action 11/7/2003 1/28/2004 11/10/2003

Current Ratings

A) Corporate Credit Rating

B) Negative Outlook

C) Under review for possible downgrade

36

DTE Energy’s Commitment to the Dividend

• 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

4.8%

6.5%

5.3%4.9%

4.4%

5.2%

1998 1999 2000 2001 2002 2003

Dividend Yield

$2.06Dividend

37





Outline

38

Status of Multi-Emission Legislation in the U.S.

• Lack of consensus from the industry and political challenges prevented multi-emission legislation from being passed in 2003 – Presidential politics in 2004 continue to block its consideration

• DTE Energy played a leadership role in attempting to create consensus between companies taking a “just say no” position and those with more aggressive positions (primarily Eastern and nuclear utilities)

• Although legislation is stalled, the Administration has proposed regulations to control sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury (Hg) with similar reductions and timeframes as legislation DTE Energy supported

39

DTE Energy Estimated Cost of Environmental Compliance

-

200

400

600

800

1,000

1,200

Previous 2005-2010 2011-2015

NOx SO2 Mercury

($millions)

536

870

1,011

Total Estimated Capital: $2.4 Billion

• DTE Energy will seek to gain agreement with the Michigan Public Service Commission on the mechanism by which these environmental investments will be recovered:

– Another rate case that gives clear path for recovery

– Securitization of environmental capital

– Environmental wires charge (social benefit)

40

Air Issues Dominate DTE Energy’s Focus

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

Changes in Detroit Edison Power Plant Emissions and Generation(1974–2003)

PM SO2 NOxHg

CO2

MWhFossil

MWhSystem

-88%

-63%-60%

-12%

12%16%

39%

Landfill Methane Recovery and Carbon Sequestration Projects offset much of the CO2 increase

41

DTE Energy has Taken Significant Action on Climate Change and will Continue its Efforts

• DTE Energy’s carbon dioxide emissions continue below its 1990 level of 44.2 million tons. The company’s emissions for SO2, CO2

and NOx are 50-60% below the regional average

• DTE Biomass landfill gas projects eliminate substantial volumes of greenhouse gas (equivalent to approximately 10% of DTE’s fossil-fired carbon dioxide emissions)

• We have planted more than 20 million trees in Michigan since 1995. These trees will absorb about 6.6 million tons of carbon dioxide and produce 4.6 million tons of oxygen over a 50-year timeframe

• We continue to invest in high efficiency turbines at several of our plants which will reduce emissions by approximately 2%

42

DTE Energy’s Environmental Stewardship is Well-Recognized

DTE Energy’s relative environmental performance, as rated by Innovest Strategic Value Advisors, an internationally recognized investment research and advisory firm specializing in analyzing companies' performance on environmental, social, and strategic governance issues

43

DTE Energy is Actively Involved in Waste Coal Recovery Efforts

WasteCoal Fines

Raw Coal

Prep PlantMine

WashedCoal

Coal Buyer

RefusePond

• DTE Energy has sole rights to a proprietary waste coal recovery technology, “PepTec”

• The technology uses a chemical and mechanical process to separate clay from waste coal, thereby increasing Btu content of the coal

• Builds upon DTE Energy’s strong knowledge of coal markets and relationships with coal companies

• The large market potential for the recovery technology makes it a significant opportunity for DTE

– Amount of coal in U.S. waste coal pond is estimated to be over 1 billion tons with 30 million tons added each year

• Reclamation of coal fines from waste coal ponds also provides a significant environmental benefit

• Our first plant is operational and producing at a rate of ~250,000 tons per year

44





Outline

45

Michigan’s Economy has Diversified

1980 2001

Industrial54%

Services44%

Other 2%

Industrial46%

Services53%

Other 1%

Michigan Gross State Product (GSP) by Sector

Source: U.S. Department of Commerce, Bureau of Economic Analysis, “Regional Economic Accounts”

46

Diversification Assures a Steady Base, Countering the Cycles of Michigan's Manufacturing Industry

• Automotive, plastics, engineering and R&D, wood products, agribusiness and tourism

• Life sciences– Nearly $2 billion industry – Main sectors:

• Pharmaceuticals • Medical devices, instrumentation

and diagnostics • Research and ancillary services

– Over 540 firms including Pfizer, Lumigen and Pharmacia

• Information Technology– Home to major technology-

focused companies including Compuware, Dow Chemical, and EDS

• Alternative energy

• Advanced automotive technology

Traditional IndustriesTraditional Industries High-Tech IndustriesHigh-Tech Industries

Source: U.S. Dept. of Commerce, Michigan Economic Development Corporation

Services 21%

Agriculture, forest., fish

1%

Construction 5%

Finance / Insurance / Real Estate

16%

Retail trade 10% Wholesale

trade 7%

Government 11%

Transportation

& utilities6%

Manufacturing

23%

2001 Michigan Industries

47

Michigan Is Emerging As a Hotbed of Technology-focused Industry

• Michigan ranked fifth in the 2003 annual national ranking of corporate expansions and locations

• Michigan ranks fourth nationally for total employment in high tech industries – Employment in high tech industries accounts for 5.3% of

Michigan’s total workforce, exceeding the national average of 4.4%

• The University of Michigan is #1 in the nation for life sciences research, with $591 million in research expenditures in 2001

• Venture capital investment up in Michigan– More than $2.4 billion is under management by Michigan

venture capital firms– Software, Industrial, and Biotechnology firms continued to attract

the most investment capital

Source: Michigan Economic Development Corporation

48

Michigan’s Unemployment Tracks National Rate

Historical Comparison of UnemploymentMichigan v. United States

• Michigan’s economy and unemployment was once thought to be more severely impacted than the nation as a whole by downturns in the economy.

• While once true, the correlation no longer exists as Michigan’s unemployment now tracks with the national rate

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Jan-

1979

Jan-

1980

Jan-

1981

Jan-

1982

Jan-

1983

Jan-

1984

Jan-

1985

Jan-

1986

Jan-

1987

Jan-

1988

Jan-

1989

Jan-

1990

Jan-

1991

Jan-

1992

Jan-

1993

Jan-

1994

Jan-

1995

Jan-

1996

Jan-

1997

Jan-

1998

Jan-

1999

Jan-

2000

Jan-

2001

Jan-

2002

Jan-

2003

Jan-

2004

Un

emp

loym

ent

Rat

e (%

)

U.S. Michigan

Source: U.S. Bureau of Labor Statistics

49

Michigan’s Automobile Industry

0

0.2

0.4

0.6

0.8

1

1.2

2003 2004 2005 2006 2007 2008

General Motors

DaimlerChryslerFord

Mil

lio

ns

of

Ve h

icle

s P

rod

uc e

d

• The automobile sector accounts for 14% of Detroit Edison’s sales and 10% of revenue

• Within Detroit Edison’s service territory, the Big 3 automakers generally produce more popular and higher margin vehicles

• Over the past 15 years, area auto production volume has remained relatively constant while Detroit Edison’s electric load has increased by ~25%

• In the next five years, Big 3 auto production in Detroit Edison’s service territory is expected to remain relatively stable

Detroit Area Light Vehicle Production

50

Light Vehicle Production Forecast 2003 to 2008: Detroit Area versus Rest of U.S.

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

U.S. Detroit

DaimlerChrysler GeneralMotors

Ford

6% 6%

-5% 0% -3% 34%

Cha

nge

in P

rodu

ctio

n L

evel

• DaimlerChrysler’s forecasted Detroit area light vehicle production should match overall US production levels

• While General Motors is forecasting a decrease in US production, Detroit-area production will remain flat

• Ford Motor Company’s latest forecast indicates a sharp increase in production at Detroit-area plants, driven by :

– new product offerings in the sport utility and pick-up truck lines

– production of the Ford Focus (best selling car in the world) will move from Mexico to Wayne, Michigan

51





Outline

52

Alternative Energy Technologies Will Play a Role As the Energy System Evolves

• Increasing Demand• Need for Economic Growth

• Environmental Pressure• Energy Security Needs

• Supply and Infrastructure Constraints

CurrentEnergy System

• The current energy system is under pressure

• Incumbent fuels and technologies(oil, gas, coal, internal combustion engines) will likely still dominate

• Alternative technologies (renewables, fuel cells, distributed power, hydrogen) will become increasingly important as performance improves

53

DTE Energy Has Taken a Pragmatic Approach to New Energy Technologies

Basic Philosophy

• New energy technologies and approaches will play an increasing role in our energy system

• Need to be active in these markets to build expertise

Business Approach

• Invest limited capital

• Leverage existing skills and customer relationships

• Look for profitable market segments to build new businesses or expand existing businesses

• Exit when business opportunities don’t develop

54

DTE Energy Has a Long History of Technology Innovation in Conventional and Alternative Technologies

Electrostatic Precipitators

(1970s)

Low SulfurCoal

(1970s)

DTE Biomass Energy (1989)

Solar Currents(1996)

Plug Power(1997)

High Temperature Superconductors

(1998)

DTE Energy Technologies

(1998)

DTE Solar of California

(1999)Hydrogen PowerPark

(2003)

Peptec Waste Coal Technology

(2002)

55

DTE Biomass Energy

DTE Energy Technologies

DTE Energy Ventures

DTE Hydrogen Project

DTE Solar Projects

Today, DTE Energy Is a Leader in Alternative and Clean Energy Technologies

56

Appendix

57

Operating Earnings to Reported Earnings Reconciliation

Earnings Per Share

Full Year 2003DTE Energy

ConsolidatedDTE Energy

ConsolidatedRegulated

ElectricRegulated

GasNon-

RegulatedHolding

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 28 224 (45)

Net Income ($ millions)

Reconciliation of Operating Earnings to Reported Earnings

58

Operating Earnings to Reported Earnings Reconciliation

Earnings Per Share

Full Year 2002DTE Energy

ConsolidatedNet Income ($ millions)

Regulated Electric

Regulated Gas

Non-Regulated

Holding Company

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)

Q4 2003Earnings Per

Share Net Income

DTE Energy Consolidated

DTE Energy Consolidated

Operating 0.94 159

Tax credit driven normalization 0.42 70

Reported 1.36 229

Net Income ($ millions)

Reconciliation of Operating Earnings to Reported Earnings

european investor update background material june/july 2004

Documents

reg energy gas energy

dte energy business

storage energy trading

natural gas

forwardlooking statements

marketing gas pipelines

michigan slide

gas utility restructuring