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DTE Projects 2004-2005 Operating Earnings

DTE Projects 2004-2005 Operating Earnings

In reviewing the company's progress in 2004 and its priorities for 2005, DTE Energy CEO Anthony F. Earley Jr. said he expects the company will report 2004 operating (non-GAAP) earnings guidance of $2.40 to $2.50 per share. For 2005, Earley said the preliminary estimate for 2005 operating earnings guidance is between $3.30 and $3.60 per share.

During the business update meeting for analysts and investors in New York, Earley said the 2004 operating earnings guidance includes expected earnings of $180 million to $190 million from Detroit Edison. The DTE lead exec added that the primary drivers of 2004 earnings are strong performance from the non-utility businesses and the process of resolving rate cases at Detroit Edison and MichCon.

"Our consistent strategy has DTE Energy well-positioned for future growth," Earley said. "We have nearly completed a regulatory cycle that strengthens our gas and electric utilities, and we expect to continue our eight-year record of growth in our non-utility businesses. In 2005, we will continue our regulatory efforts to modify Michigan's Customer Choice program and focus on effectively redeploying our cash flow to strengthen our balance sheet and to invest in future growth opportunities."

For the Detroit-based company's preliminary 2005 operating earnings guidance, Earley said the key drivers of the growth over 2004 earnings guidance are the impacts of rate relief at Detroit Edison and MichCon, and continued growth in non-utility businesses.

During the meeting, DTE Energy President Gerard M. Anderson provided the company's plan for redeployment of $1.65 billion in cash flow expected to be generated in 2005 through 2008 by the company's non-utility businesses.

"Our objectives in redeploying this cash are to further strengthen our balance sheet and improve our credit metrics, and to exceed the shareholder value associated with our synfuel business, which produces strong cash flows through 2008," Anderson said.

He noted that the company's first priority for cash redeployment is to reduce long-term debt by $600 million to $700 million between 2005 and 2008 to further strengthen its balance sheet and improve its credit metrics.

DTE Energy will also continue to invest in non-utility businesses that meet its strict risk-return and value creation criteria. The company said that these growth investments are expected to range from $600 million to $900 million over the 2005 to 2008 period, with remaining cash to be returned to shareholders through a stock buyback program.

The diversified energy company is involved in the development and management of energy-related businesses and services nationwide. DTE Energy's largest operating subsidiaries are Detroit Edison, an electric utility serving 2.1 million customers in Southeastern Michigan, and MichCon, a natural gas utility serving 1.2 million customers in Michigan.

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