DTE Energy DTE · USD

SEGMENT AND RELATED INFORMATIONDTE Energy sets strategic goals, allocates resources, and evaluates performance based on the four reportable segments below. DTE Electric is a standalone registrant with one reportable segment.Electric segment consists principally of DTE Electric, which is engaged in the generation, purchase, distribution, and sale of electricity to approximately 2.3 million residential, commercial, and industrial customers in southeastern Michigan.Gas segment consists principally of DTE Gas, which is engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.4 million residential, commercial, and industrial customers throughout Michigan and the sale of storage and transportation capacity.DTE Vantage segment is comprised primarily of renewable energy projects that sell electricity and pipeline-quality gas and projects that deliver custom energy solutions to industrial, commercial, and institutional customers.Energy Trading segment consists of energy marketing and trading operations.Corporate and Other includes various holding company activities, holds certain non-utility debt, and holds certain investments, including funds supporting regional development and economic growth.The chief operating decision maker (CODM) at DTE Energy is the Financial Objectives committee, which is comprised of the Chief Executive Officer, Chief Financial Officer, and other executive leaders of DTE Energy. The CODM at DTE Electric is comprised of the Chief Executive Officer and Chief Financial Officer. The CODMs assess performance for the reportable segments detailed above and decide how to allocate resources based on Net Income (Loss) Attributable to DTE Energy Company and monitoring budget versus actual results. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.Inter-segment billing for goods and services exchanged between segments is based upon tariffed or market-based prices of the provider. Such billing primarily consists of power sales, sale and transportation of natural gas, and renewable natural gas sales in the segments below, as well as charges from Electric to other segments for use of the shared capital assets of DTE Electric.

REVENUESignificant Accounting PolicyRevenue is measured based upon the consideration specified in a contract with a customer at the time when performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service or a series of distinct goods or services to the customer. The Registrants recognize revenue when performance obligations are satisfied by transferring control over a product or service to a customer. The Registrants have determined control to be transferred when the product is delivered, or the service is provided to the customer.Rates for DTE Electric and DTE Gas include provisions to adjust billings for fluctuations in fuel and purchased power costs, cost of natural gas, and certain other costs. Revenues are adjusted for differences between actual costs subject to reconciliation and the amounts billed in current rates. Under or over recovered revenues related to these cost recovery mechanisms are included in Regulatory assets or liabilities on the Registrants' Consolidated Statements of Financial Position and are recovered or returned to customers through adjustments to the billing factors.For discussion of derivative contracts, see Note 13 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."Disaggregation of RevenueThe following is a summary of revenues disaggregated by segment for DTE Energy:Year Ended December 31, 202520242023(In millions)Electric(a)Residential$3,144 $3,045 $2,847 Commercial2,195 2,263 2,114 Industrial652 715 732 Other(b)944 270 125 Total Electric operating revenues$6,935 $6,293 $5,818 GasGas sales$1,521 $1,307 $1,324 End User Transportation255 246 250 Intermediate Transportation87 83 85 Other(b)189 162 89 Total Gas operating revenues$2,052 $1,798 $1,748 Other segment operating revenuesDTE Vantage$696 $753 $809 Energy Trading$6,477 $3,843 $4,612 _______________________________________(a)Revenues generally represent those of DTE Electric, except $50 million, $16 million, and $14 million of Other revenues related to DTE Sustainable Generation for the years ended December 31, 2025, 2024, and 2023, respectively.(b)Includes revenue adjustments related to various regulatory mechanisms, including the PSCR at the Electric segment and GCR at the Gas segment, and interconnection sales in the Electric segment. Revenues related to these mechanisms may vary based on changes in the cost of fuel, purchased power, and gas.

COMMITMENTS AND CONTINGENCIESEnvironmentalDTE ElectricAir — DTE Electric is subject to the EPA ozone and fine particulate transport and acid rain regulations that limit power plant emissions of SO2 and NOX. The EPA and the state of Michigan have also issued emission reduction regulations relating to ozone, fine particulate, regional haze, mercury, and other air pollution. These rules have led to controls on fossil-fueled power plants to reduce SO2, NOX, mercury, and other emissions. Additional rule making may occur over the next few years which could require additional controls for SO2, NOX, and other hazardous air pollutants.In March 2024, the EPA finalized the NAAQS for fine particulate matter, particles of pollution with diameters generally 2.5 micrometers and smaller (PM2.5). It is likely that areas of Michigan in which DTE Electric operates will be designated as non-attainment in the future, and the state will be required to develop a SIP for such areas. However, the EPA has announced its intention to review the standard. No impact is expected in the near term, and any long-term financial impacts cannot be assessed at this time.In April 2024, the EPA finalized new rules to address emissions of GHGs from existing, new, modified, or reconstructed sources in the power sector. In June 2025, the EPA proposed a rule to repeal the GHG standards along with an alternative to eliminate various portions of the standards. The EPA intends to finalize the repeal or alternative in early 2026. The financial impacts of the new rules are still being assessed.Pending or future legislation or other regulatory actions could have a material impact on DTE Electric's operations and financial position and the rates charged to its customers. Potential impacts include expenditures for environmental equipment beyond what is currently planned, financing costs related to additional capital expenditures, the purchase of emission credits from market sources, higher costs of purchased power, and the retirement of facilities where control equipment is not economical. DTE Electric would seek to recover these incremental costs through increased rates charged to its utility customers, as authorized by the MPSC.To comply with air pollution requirements, DTE Electric has spent approximately $2.4 billion. DTE Electric does not anticipate additional capital expenditures for air pollution requirements, subject to the results of future rulemakings.

INCOME TAXESIncome Tax SummaryDTE Energy files a consolidated federal income tax return. DTE Electric is a part of the consolidated federal income tax return of DTE Energy. DTE Energy and its subsidiaries file consolidated and/or separate company income tax returns in various states and localities, including a consolidated return in the State of Michigan. DTE Electric is part of the Michigan consolidated income tax return of DTE Energy. The federal, state and local income tax expense for DTE Electric is determined on an individual company basis with no allocation of tax expenses or benefits from other affiliates of DTE Energy. DTE Electric had federal income tax receivables with DTE Energy of $1 million and $5 million at December 31, 2025 and 2024, respectively. Income tax receivables with DTE Energy are included in Accounts receivable – Affiliates on the DTE Electric Consolidated Statements of Financial Position.The Registrants' total Income Tax Expense varied from the statutory federal income tax rate for the following reasons:Year Ended December 31, 202520242023(In millions)DTE EnergyAmountPercentageAmountPercentageAmountPercentageIncome tax expense at U.S. Federal Statutory Tax Rate$326 21.0 %$288 21.0 %$329 21.0 %Tax CreditsProduction tax credits(161)(10.4)%(174)(12.7)%(91)(5.8)%Investment tax credits(94)(6.1)%(128)(9.3)%(44)(2.8)%Other(5)(0.3)%(4)(0.3)%(5)(0.3)%Other AdjustmentsTCJA regulatory liability amortization(65)(4.2)%(66)(4.8)%(63)(4.0)%Other(4)(0.1)%4 0.2 %— — %Nontaxable or Nondeductible ItemsAFUDC equity(20)(1.3)%(17)(1.2)%(7)(0.5)%Other6 0.5 %(3)(0.3)%(4)(0.2)%Changes in Tax Laws or Rates Enacted in the Current Period16 1.0 %— — %— — %Changes in Valuation Allowances 7 0.4 %6 0.5 %— — %Changes in Prior Year Unrecognized Tax Benefits— — %— — %(12)(0.8)%Foreign Tax EffectsCanada1 — %1 0.1 %— — %State and Local Income Taxes, Net of Federal Effect (a)$81 5.2 %$59 4.3 %$66 4.2 %Income Tax Expense (Benefit) at Effective Tax Rate$88 5.7 %$(34)(2.5)%$169 10.8 %_______________________________________(a)State taxes in Michigan made up the majority (greater than 50 percent) of the tax effect in this category for all years presented. State and local income taxes in 2025 includes $14 million expense due to an Illinois tax law change.Year Ended December 31, 202520242023(In millions)DTE ElectricAmountPercentageAmountPercentageAmountPercentageIncome tax expense at U.S. Federal Statutory Tax Rate$257 21.0 %$218 21.0 %$179 21.

STOCK-BASED COMPENSATIONIn May 2025, DTE Energy's shareholders approved the replacement of the Long-Term Incentive Plan, as amended and restated effective May 20, 2021 ("Prior Plan") with the 2025 Long Term Incentive Plan ("2025 Plan"). No new awards will be granted under the Prior Plan. At December 31, outstanding stock-based incentives were in the form of restricted stock and performance stock units. The 2025 Plan permits the grant of options, stock appreciation rights, restricted stock, restricted stock units, performance stock units, and other stock-based awards. With the exception of incentive stock options, awards may be granted to employees, the Board of Directors, and consultants. As a result of a stock award, a settlement of an award of performance stock units, or by exercise of a participant's stock option, DTE Energy may deliver common stock from its authorized but unissued common stock and/or from outstanding common stock acquired by or on behalf of DTE Energy in the name of the participant. Key provisions of the stock incentive program are:•Authorized limit is 4,663,434 shares of common stock; and•Prohibits the grant of a stock option with an exercise price that is less than the fair market value of DTE Energy’s stock on the date of the grant.DTE Energy records compensation expense at fair value over the vesting period for all awards it grants.The following table summarizes the components of stock-based compensation for DTE Energy:Year Ended December 31, 202520242023(In millions)Stock-based compensation expense$60 $54 $48 Tax benefit$10 $10 $9 Restricted Stock AwardsStock awards granted under the plan are restricted for varying periods, generally for three years. Participants have all rights of a shareholder with respect to a stock award, including the right to receive dividends and vote the shares. Prior to vesting in stock awards, the participant: (i) may not sell, transfer, pledge, exchange, or otherwise dispose of shares and (ii) shall not retain custody of the share certificates.The stock awards are recorded at cost that approximates fair value on the date of grant. The cost is amortized to compensation expense over the vesting period.The fair value of awards vested were not material for the years ended December 31, 2025, 2024, and 2023. Compensation cost charged against income was $17 million for the year ended December 31, 2025 and $14 million for the years ended December 31, 2024 and 2023.

LEASESLesseeLeases at DTE Energy and DTE Electric are primarily comprised of various forms of land easements, coal railcars, buildings, equipment, and computer hardware, leases with terms ranging from approximately 2 to 52 years. A lease is deemed to exist when the Registrants have the right to control the use of identified property, plant or equipment, as conveyed through a contract, for a certain period of time and consideration paid. The right to control is deemed to occur when the Registrants have the right to obtain substantially all of the economic benefits of the identified assets and the right to direct the use of such assets.In accordance with ASC Subtopic 980-842, Regulated Operations - Leases, DTE Electric recognizes expense for operating leases using the timing that conforms to the regulatory rate treatment as rental payments are recovered from customers.Lease liabilities are determined utilizing the discount rate implicit in the lease when it is readily determinable. When the rate implicit in the lease is not readily determinable, the incremental borrowing rate is used. The incremental borrowing rates for DTE Electric and DTE Gas have been determined utilizing respective secured borrowing rates for first mortgage bonds with like tenors of remaining lease terms. Incremental borrowing rates for non-utility entities have been determined utilizing an implied secured borrowing rate based upon an unsecured rate for a similar tenor of remaining lease terms, which is then adjusted for the estimated impact of collateral.The Registrants have certain leases which contain renewal or purchase options. Where the renewal options were deemed reasonably certain to occur, the impacts of such options were included in the determination of the right of use assets and lease liabilities. The Registrants have determined that it is not reasonably certain that purchase options will be utilized and have not included the impact in the determination of right of use assets and lease liabilities for the subject leases.Certain leases of the Registrants contain escalation clauses whereby the payments are adjusted for consumer price or labor indices, as well as non-index based escalations for percentage increases. The Registrants also have leases with variable payments based upon the usage of the leased assets.

ACQUISITIONElectric Segment AcquisitionEffective August 14, 2025, DTE Sustainable Generation closed on the purchase of a 123 MW cogeneration facility, located in Michigan, from Osaka Gas USA Corporation. The acquisition adds generating capacity to DTE Energy's portfolio. Direct transaction costs, primarily related to advisory fees, were immaterial and were included in Operation and maintenance in DTE Energy's Consolidated Statements of Operations for the period incurred. The fair value of consideration provided for the acquisition was approximately $216 million, including working capital adjustments, which was paid in cash.The acquisition was accounted for using the acquisition method of accounting for business combinations. Accordingly, the cost was allocated to the underlying net assets based on their respective fair values as shown below:(In millions)Cash$6 Contract intangibles57 Property, plant, and equipment, net135 Working capital, other assets and liabilities18 Total$216 The intangible assets recorded pertain to existing customer contracts and were estimated by applying the income approach, based on discounted projected cash flows attributable to the existing agreements. The contract intangible assets are amortized on a straight-line basis with remaining useful lives of 5 years in conjunction with the associated contracts' remaining terms. The pro forma financial information has not been presented for DTE Energy because the effects of the acquisition were not material to DTE Energy’s Consolidated Statements of Operations.The acquired project constitutes non-utility operations and related revenues are classified accordingly as Operating Revenues — Non-utility operations within DTE Energy's Consolidated Statements of Operations and the Electric segment Results of Operations. Refer to Note 22 to the Consolidated Financial Statements, "Segment and Related Information.

DTE Energy maintains cybersecurity measures designed to protect its physical and digital infrastructure in order to provide safe and reliable delivery of energy to customers. These measures serve to maintain compliance with regulations and protect the confidentiality, integrity and availability of confidential and proprietary information, DTE Energy’s computing resources, and the electrical and gas systems. The cybersecurity structure of DTE Electric is overseen in alignment with the enterprise-wide framework established by DTE Energy.To protect against cybersecurity threats, DTE Energy employs a dedicated cybersecurity team led by the Chief Information Officer. The cybersecurity team is responsible for implementing proper safeguards to mitigate the risk of cyber threats, including but not limited to firewalls, continuous monitoring, and training. DTE Energy also engages with third parties to conduct cybersecurity maturity assessments to provide an independent and objective view of our cybersecurity and assess opportunities for improvement. The National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF) is the basis for these assessments to manage cyber risks, mature and monitor existing security controls, and communicate security posture coherently. The NIST CSF provides a common language to understand, manage, and express cyber risks internally and externally.Another component of DTE Energy’s cybersecurity team is the Cybersecurity Defense Center (CSDC), which has the primary responsibility for monitoring and responding to cybersecurity incidents. The CSDC maintains an incident response plan designed to protect against, detect, evaluate, and respond to and recover from a cyber incident. The CSDC may receive incident reports from DTE Energy employees, corporate security, or external sources. The incident response plan is intended to be flexible so it may be adapted to an array of potential scenarios. Depending on the incident, the CSDC may decide to engage external resources for assistance with responding to the incident. DTE Energy regularly conducts exercises to help ensure the plan’s effectiveness and overall preparedness.DTE Energy engages third-party service providers to assist with managing various aspects of its business. These service providers are subject to due diligence reviews of their information security programs prior to onboarding.