DTE Energy Co.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 1 May 2026: press release. Guidance figures: 2 kept. The quarter’s numbers.

Key takeaways

Reported EPS was $1.19: Reported net income attributable to DTE Energy was $247 million, or $1.19 per diluted share, against $445 million, or $2.14, a year earlier.
Operating EPS was $1.95: Operating earnings were $407 million, or $1.95 per diluted share, versus $436 million, or $2.10 a year earlier. Operating earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations.
DTE Electric earnings rose sharply: DTE Electric segment earnings were $218 million, or $1.05 per diluted share, with no adjustments. Its operating earnings a year earlier were $147 million.
March storm outages cut 60%: During severe March winds, outages were 60% lower than similar historical events, and 99% of affected customers had power restored within 48 hours.
Google pays its own energy costs: Under the agreement, Google pays the full cost of its energy use, including new generation, storage, transmission and distribution for the data center.
Rate request driven by investment: The requested base rate increase reflects continued infrastructure investment and rising operations and maintenance costs needed for safe, reliable gas delivery. Source

“At DTE, providing safe, reliable and affordable energy to our customers is our highest priority”
Joi Harris, DTE Energy’s president and CEO

Guidance

Area	Period	Figure	Against last quarter
Operating EPS	2026	$7.59 - $7.73	Kept
Capital investment in utilities	2026	over $6 billion	Kept
DTE Gas capital expenditures Source	2026	approximately $900 million
DTE Gas base rate increase requested Source	twelve months ending September 30, 2027	$163 million net increase
DTE Gas requested return on equity Source	rate case	10.25%
DTE Gas revenue deficiency Source	rate case	$238 million, net of $75 million IRM roll-in
Google contract affordability benefit	life of the contract	nearly $1.7 billion
Pension transfer to DTE Electric Source	2026	up to $25 million
DTE Gas fixed-consideration revenue Source	2026 (remaining performance obligations)	$95 million

What changed from last quarter

Guidance kept: Operating EPS guidance for 2026 was confirmed at $7.59 to $7.73, with no change stated.
New: In March, DTE Energy submitted energy contracts to the MPSC to support a planned Google data center in Van Buren Township.
New: Reliability investments were supported by an MPSC rate order issued in February.

Earnings and operating results

Reported EPS was $1.19: Reported net income attributable to DTE Energy was $247 million, or $1.19 per diluted share, against $445 million, or $2.14, a year earlier.
Operating EPS was $1.95: Operating earnings were $407 million, or $1.95 per diluted share, versus $436 million, or $2.10 a year earlier. Operating earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations.
DTE Gas revenue and income rose: DTE Gas Company reported operating revenues of $923 million, up from $868 million, and net income of $209 million, up from $205 million. Source

Segments and utility results

DTE Electric earnings rose sharply: DTE Electric segment earnings were $218 million, or $1.05 per diluted share, with no adjustments. Its operating earnings a year earlier were $147 million.
DTE Gas segment earnings edged up: DTE Gas segment earnings were $210 million, or $1.01 per diluted share, against $206 million, or $0.99, in the first quarter of 2025.
Non-utility operations reported a loss: Non-utility operations reported a $137 million loss. On an operating basis they earned $23 million, against $73 million a year earlier.
Corporate and Other turned to loss: Corporate and Other reported a $44 million loss, compared with $10 million of earnings a year earlier. Operating earnings were also a $44 million loss.

“DTE is in a very exciting period, as we continue our customer-focused reliability investments and pursue opportunities like data centers that benefit existing customers”
David Ruud, DTE vice chairman and CFO

Reliability and customer base

Electric distribution spending of $400 million: DTE Electric invested $400 million in the first quarter to improve reliability and resilience of the electric grid.
March storm outages cut 60%: During severe March winds, outages were 60% lower than similar historical events, and 99% of affected customers had power restored within 48 hours.
Electric and gas customer counts: DTE Electric serves 2.3 million customers in Southeast Michigan, and DTE Gas serves 1.4 million customers across Michigan.

Data center load and growth

Google pays its own energy costs: Under the agreement, Google pays the full cost of its energy use, including new generation, storage, transmission and distribution for the data center.
Michigan growth includes data centers: Management cited new growth in Michigan, including data centers and other major investments, and said it supports these projects for the state's economy.
Data center load on Michigan grid: The company describes the Google load as a planned 1 gigawatt data center, with its contracts already submitted to the MPSC.

“As we move forward, we remain focused on managing operational costs and keeping bills as low as possible, creating lasting value for Michigan families, businesses and communities.”
David Ruud, DTE vice chairman and CFO

Gas costs and revenue lines

Cost of gas rose, O&M fell: Cost of gas was $373 million, against $326 million. Operation and maintenance was $149 million, down from $154 million. Source
Depreciation and taxes rose slightly: Depreciation and amortization was $58 million, up from $54 million. Taxes other than income were $38 million, against $37 million. Source
Other revenue rose on adjustments: Other revenue was $109 million, up from $63 million. The line includes regulatory revenue adjustments, including the GCR, which can move with gas costs. Source

Rate case and bill pricing

Rate request driven by investment: The requested base rate increase reflects continued infrastructure investment and rising operations and maintenance costs needed for safe, reliable gas delivery. Source
Rate case filed November 2025: DTE Gas filed the rate case with the MPSC; the request covers net base rates on a projected twelve-month basis ending September 2027. Source
Fixed grid costs spread wider: Management said adding Google spreads fixed grid costs across a wider customer base, which it expects to reduce bill pressure on existing customers.

Cash flow and financing

Operating cash flow of $407 million: DTE Gas generated $407 million from operating activities, against $405 million a year earlier, while plant spending rose to $166 million. Source
Plant spending rose to $166 million: Plant and equipment expenditures were $166 million, up from $125 million, and no notes receivable from affiliates were advanced this quarter. Source
Short-term debt reduced, dividends paid: Other short-term borrowings were reduced by $80 million. Dividends paid on common stock were $56 million, against $55 million. Source
Revolver undrawn, covenant ratio 0.48: The company had no commercial paper or revolver borrowings outstanding. The $300 million facility expires October 2030, and the covenant ratio is 0.48 to 1 against a 0.65 limit. Source

Workforce and recognition

Gallup workplace recognition, 14th year: DTE was named a Gallup Exceptional Workplace for the 14th consecutive year, placing it in the top 6% of companies globally.
Best and Brightest recognition, 2026: DTE earned 2026 Best and Brightest recognition nationally and in metropolitan Detroit.
Represented workforce and contracts: About 1,150 employees, or 67% of the total, are represented by bargaining units, and none of their contracts expire within one year. Source

Environmental remediation and recovery

Former gas plant site cleanup progress: The company owns or previously owned 14 former manufactured gas plant sites. Eight are closed and five more are partially closed; cleanup continues over several years. Source
Remediation accrual unchanged at $25 million: The company held $25 million accrued for remediation at both March 31, 2026 and December 31, 2025. These amounts are not discounted to present value. Source
MPSC cost recovery mechanism for sites: The MPSC set a deferral and rate recovery mechanism for investigation and remediation costs at former MGP sites. Source

Coming up, as management said on 1 May 2026

Final MPSC order on rate case: Management expects a final MPSC order in the DTE Gas rate case in September 2026. Source
Fixed-price gas supply through 2029: DTE Gas has fixed-price contracts for portions of its expected natural gas supply through March 2029. Source

Figures management reported

Figure	Reported
Rate cases Source	DTE Gas requested a $163 million net base rate increase and a 10.25% return on equity, up from 9.8%
Capital plan	Over $6 billion utility investment in 2026; DTE Gas 2026 capital expenditures about $900 million
Load growth	Planned 1 gigawatt Google data center in Van Buren Township, with energy contracts submitted to the MPSC

Risks management discussed

Regulatory: Changes in remediation techniques, contamination extent or regulatory requirements could change the estimated remedial action costs at the sites. Source
Regulatory: The status of the EPA Good Neighbor Rule remains uncertain while litigation continues; the company does not expect a significant financial impact at this time. Source
Regulatory: Michigan areas are likely to be designated non-attainment under the PM2.5 standard, and long-term financial impacts cannot be assessed yet. Source

Earlier plans management reported on

Not stated: The company describes its reliability investments as building on a commitment to fewer and shorter power disruptions for customers.
Not stated: Management anticipates the MPSC-approved ten-year amortization of MGP costs will prevent a material adverse impact on results of operations. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

DTE Gas Company

Unaudited Consolidated Financial Statements as of and for the Three Months Ended March 31, 2026

TABLE OF CONTENTS

	Page
Definitions	1
Consolidated Statements of Operations (Unaudited)	2
Consolidated Statements of Comprehensive Income (Unaudited)	3
Consolidated Statements of Financial Position (Unaudited)	4
Consolidated Statements of Cash Flows (Unaudited)	6
Consolidated Statements of Changes in Shareholder's Equity (Unaudited)	7
Notes to Consolidated Financial Statements (Unaudited)	8
Note 1 - Organization and Basis of Presentation	8
Note 2 - Significant Accounting Policies	9
Note 3 - New Accounting Pronouncements	11
Note 4 - Revenue	11
Note 5 - Regulatory Matters	12
Note 6 - Fair Value	13
Note 7 - Financial and Other Derivative Instruments	14
Note 8 - Short-Term Credit Arrangements and Borrowings	14
Note 9 - Commitments and Contingencies	14
Note 10 - Retirement Benefits and Trusteed Assets	15

Table of Contents

DEFINITIONS

ASU

Accounting Standards Update issued by the FASB

Company

DTE Gas Company and subsidiary companies

Customer Choice

Michigan legislation giving customers the option of retail access to alternative suppliers for natural gas

DTE Energy

DTE Energy Company, directly or indirectly the parent of DTE Electric Company, DTE Gas, and numerous non-utility subsidiaries

DTE Gas

DTE Gas Company (an indirect wholly-owned subsidiary of DTE Energy) and subsidiary companies

EGLE

Michigan Department of Environment, Great Lakes, and Energy, formerly known as Michigan Department of Environmental Quality

EPA

U.S. Environmental Protection Agency

FASB

Financial Accounting Standards Board

FERC

Federal Energy Regulatory Commission

GCR

A Gas Cost Recovery mechanism authorized by the MPSC that allows DTE Gas to recover through rates its natural gas costs

MGP

Manufactured Gas Plant

MPSC

Michigan Public Service Commission

TCJA

Tax Cuts and Jobs Act of 2017, which reduced the corporate Federal income tax rate from 35% to 21%

Topic 606

FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended

VIE

Variable Interest Entity

Table of Contents

DTE Gas Company

Consolidated Statements of Operations (Unaudited)

	Three Months Ended
	March 31,
	2026	2025
	(In millions)
Operating Revenues	$923	$868
Operating Expenses
Cost of gas	373	326
Operation and maintenance	149	154
Depreciation and amortization	58	54
Taxes other than income	38	37
	618	571
Operating Income	305	297
Other (Income) and Deductions
Interest expense	35	32
Interest income	(1)	(2)
Non-operating retirement benefits, net	(1)	(1)
Other income	(2)	(1)
Other expenses	2	1
	33	29
Income Before Income Taxes	272	268
Income Tax Expense	63	63
Net Income	$209	$205

Table of Contents

DTE Gas Company

Consolidated Statements of Comprehensive Income (Unaudited)

	Three Months Ended
	March 31,
	2026	2025
	(In millions)
Net Income	$209	$205
Other comprehensive income	-	-
Comprehensive Income	$209	$205

Table of Contents

DTE Gas Company

Consolidated Statements of Financial Position (Unaudited)

	March 31,	December 31,
	2026	2025
	(In millions)
ASSETS
Current Assets
Cash and cash equivalents	$135	$31
Accounts receivable (less allowance for doubtful accounts of $25 and $17, respectively)
Customer	437	422
Affiliates	26	10
Other	4	2
Inventories
Gas	11	45
Materials and supplies	39	38
Gas customer choice deferred asset	16	39
Notes receivable
Other	3	3
Regulatory assets	52	12
Other	45	31
	768	633
Investments	53	54
Property
Property, plant, and equipment	9,321	9,212
Accumulated depreciation and amortization	(2,098)	(2,072)
	7,223	7,140
Other Assets
Regulatory assets	547	559
Notes receivable	49	49
Prepaid pension costs - affiliates	134	130
Prepaid postretirement costs - affiliates	309	298
Other	50	42
	1,089	1,078
Total Assets	$9,133	$8,905

Table of Contents

DTE Gas Company

Consolidated Statements of Financial Position (Unaudited) - Continued

	March 31,	December 31,
	2026	2025
	(In millions, except shares)
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accounts payable
Affiliates	$77	$30
Other	174	208
Accrued interest	46	31
Short-term borrowings
Affiliates	1	1
Other	-	80
Gas inventory equalization	125	-
Regulatory liabilities	2	40
Other	45	59
	470	449
Long-Term Debt	3,043	3,043
Other Liabilities
Deferred income taxes	1,072	1,031
Regulatory liabilities	1,016	1,006
Asset retirement obligations	211	208
Accrued pension liability - affiliates	11	11
Accrued postretirement liability - affiliates	2	2
Other	39	39
	2,351	2,297
Commitments and Contingencies (Notes 5 and 9)
Shareholder's Equity
Common stock ($1 par value, 15,100,000 shares authorized, and 10,300,000 shares issued and outstanding for both periods)	1,803	1,803
Retained earnings	1,466	1,313
Total Shareholder's Equity	3,269	3,116
Total Liabilities and Shareholder's Equity	$9,133	$8,905

Table of Contents

DTE Gas Company

Consolidated Statements of Cash Flows (Unaudited)

	Three Months Ended
	March 31,
	2026	2025
	(In millions)
Operating Activities
Net Income	$209	$205
Adjustments to reconcile Net Income to Net cash from operating activities:
Depreciation and amortization	58	54
Allowance for equity funds used during construction	(1)	-
Deferred income taxes	36	49
Changes in assets and liabilities:
Accounts receivable, net	(33)	(78)
Inventories	33	49
Prepaid pension costs - affiliates	(4)	(4)
Prepaid postretirement benefit costs - affiliates	(11)	(11)
Accounts payable	34	(2)
Gas inventory equalization	125	121
Accrued pension liability - affiliates	-	(1)
Regulatory assets and liabilities	(50)	(10)
Other current and noncurrent assets and liabilities	11	33
Net cash from operating activities	407	405
Investing Activities
Plant and equipment expenditures	(166)	(125)
Notes receivable from affiliates	-	(202)
Other	(1)	-
Net cash used for investing activities	(167)	(327)
Financing Activities
Short-term borrowings, net - affiliates	-	(14)
Short-term borrowings, net - other	(80)	(9)
Dividends paid on common stock	(56)	(55)
Net cash used for financing activities	(136)	(78)
Net Increase in Cash and Cash Equivalents	104	-
Cash and Cash Equivalents at Beginning of Period	31	-
Cash and Cash Equivalents at End of Period	$135	$ -
Supplemental disclosure of non-cash investing and financing activities
Plant and equipment expenditures in accounts payable	$57	$47

Table of Contents

DTE Gas Company

Consolidated Statements of Changes in Shareholder's Equity (Unaudited)

	Common Stock		Additional Paid-in Capital	Retained Earnings
	Shares	Amount			Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2025	10,300	$10	$1,793	$1,313		$3,116
Net Income	-	-	-	209		209
Dividends declared on common stock	-	-	-	(56)		(56)
Balance, March 31, 2026	10,300	$10	$1,793	$1,466		$3,269

	Common Stock		Additional Paid-in Capital	Retained Earnings
	Shares	Amount			Total
	(Dollars in millions, shares in thousands)
Balance, December 31, 2024	10,300	$10	$1,743	$1,238		$2,991
Net Income	-	-	-	205		205
Dividends declared on common stock	-	-	-	(55)		(55)
Balance, March 31, 2025	10,300	$10	$1,743	$1,388		$3,141

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Corporate Structure

DTE Gas is a public utility engaged in the purchase, storage, transportation, distribution, and sale of natural gas to approximately 1.4 million customers throughout Michigan and the sale of storage and transportation capacity. The Company is regulated by the MPSC and certain activities are regulated by the FERC. In addition, the Company is regulated by other federal and state regulatory agencies including the EPA and EGLE.

Basis of Presentation

The Consolidated Financial Statements should be read in conjunction with the Notes to Consolidated Financial Statements included in the Company's 2025 Consolidated Financial Statements furnished on Form 8-K.

The accompanying Consolidated Financial Statements are prepared using accounting principles generally accepted in the United States of America. These accounting principles require management to use estimates and assumptions that impact reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from the Company's estimates.

The Consolidated Financial Statements are unaudited but, in the Company's opinion include all adjustments necessary to present a fair statement of the results for the interim periods. All adjustments are of a normal recurring nature, except as otherwise disclosed in these Consolidated Financial Statements and Notes to Consolidated Financial Statements. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2026.

Principles of Consolidation

The Company consolidates all majority-owned subsidiaries and investments in entities in which it has controlling influence. Non-majority owned investments are accounted for using the equity method when the Company is able to significantly influence the operating policies of the investee. When the Company does not influence the operating policies of an investee, the equity investment is valued at cost minus any impairments, if applicable. The Company eliminates all intercompany balances and transactions.

The Company evaluates whether an entity is a VIE whenever reconsideration events occur. The Company consolidates VIEs for which it is the primary beneficiary. If the Company is not the primary beneficiary and an ownership interest is held, the VIE is accounted for under the equity method of accounting. When assessing the determination of the primary beneficiary, the Company considers all relevant facts and circumstances, including: the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. The Company performs ongoing reassessments of all VIEs to determine if the primary beneficiary status has changed.

The Company holds a variable interest in a natural gas pipeline entity through purchases under a long-term transportation capacity contract. The Company does not have a controlling influence in and does not consolidate the pipeline entity. As of March 31, 2026, the carrying amount of liabilities in the Company's Consolidated Statements of Financial Position that relate to its variable interest under the long-term contract are primarily related to working capital accounts and generally represent the amounts owed by the Company for transportation associated with the current billing cycle under the contract. The Company has not provided any significant form of financial support associated with the long-term contract. There is no material potential exposure to loss as a result of the Company's variable interest through the long-term contract.

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

Tax rates are affected by estimated annual permanent items, regulatory adjustments, and discrete items that may occur in any given period, but are not consistent from period to period. The table below summarizes how the Company's effective income tax rates have varied from the statutory federal income tax rate:

	Three Months Ended March 31,
	2026	2025
Statutory federal income tax rate	21.0%	21.0%
Increase (decrease) due to:
State and local income taxes, net of federal benefit	5.4	5.4
TCJA regulatory liability amortization	(2.9)	(2.9)
Other	(0.4)	(0.1)
Effective income tax rate	23.1%	23.4%

The Company had federal and state income tax payables with DTE Energy of $19 million at March 31, 2026 which are included in Accounts payable - Affiliates on the Consolidated Statements of Financial Position. The Company had federal and state income tax receivables with DTE Energy of $8 million at December 31, 2025, which are included in Accounts receivable - Affiliates on the Consolidated Statements of Financial Position.

Allocated Stock-Based Compensation

The Company received an allocation of costs from DTE Energy associated with stock-based compensation of $4 million and $3 million for the three months ended March 31, 2026 and 2025, respectively.

Financing Receivables

Financing receivables are primarily composed of trade receivables, notes receivable, and unbilled revenue. The Company's financing receivables are stated at net realizable value.

The Company monitors the credit quality of financing receivables on a regular basis by reviewing credit quality indicators and monitoring for trigger events, such as a credit rating downgrade or bankruptcy. Credit quality indicators include, but are not limited to, ratings by credit agencies where available, collection history, collateral, counterparty financial statements and other internal metrics. Utilizing such data, the Company has determined three internal grades of credit quality. Internal grade 1 includes financing receivables for counterparties where credit rating agencies have ranked the counterparty as investment grade. To the extent credit ratings are not available, the Company utilizes other credit quality indicators to determine the level of risk associated with the financing receivable. Internal grade 1 may include financing receivables for counterparties for which credit rating agencies have ranked the counterparty as below investment grade; however, due to favorable information on other credit quality indicators, the Company has determined the risk level to be similar to that of an investment grade counterparty. Internal grade 2 includes financing receivables for counterparties with limited credit information and those with a higher risk profile based upon credit quality indicators. Internal grade 3 reflects financing receivables for which the counterparties have the greatest level of risk, including those in bankruptcy status.

The following represents the Company's financing receivables by year of origination, classified by internal grade of credit risk, including current year-to-date gross write-offs, if any. The related credit quality indicators and risk ratings utilized to develop the internal grades have been updated through March 31, 2026.

	Year of Origination
	2026	2025	2024 and Prior	Total
	(In millions)
Notes receivable, internal grade 2	$1	$4	$13	$18
Net investment in leases, internal grade 1	$ -	$ -	$34	$34

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

The allowance for doubtful accounts on accounts receivable for the Company is generally calculated using an aging approach that utilizes rates developed in reserve studies. The Company establishes an allowance for uncollectible accounts based on historical losses and management's assessment of existing and future economic conditions, customer trends and other factors. Customer accounts are generally considered delinquent if the amount billed is not received by the due date, which is typically in 21 days, however, factors such as assistance programs may delay aggressive action. The Company generally assesses late payment fees on trade receivables based on past-due terms with customers. Customer accounts are written off when collection efforts have been exhausted. The time period for write-off is 150 days after service has been terminated.

The allowance for doubtful accounts for other receivables is generally calculated based on specific review of probable future collections based on receivable balances generally in excess of 30 days. Existing and future economic conditions, customer trends and other factors are also considered. Receivables are written off on a specific identification basis and determined based upon the specific circumstances of the associated receivable.

Notes receivable are primarily comprised of a finance lease receivable and loans that are included in Notes Receivable on the Consolidated Statements of Financial Position.

The Company establishes an allowance for credit loss for principal and interest amounts due that are estimated to be uncollectible in accordance with the contractual terms of the note receivable. In determining the allowance for credit losses for notes receivable, the Company considers the historical payment experience and other factors that are expected to have a specific impact on the counterparty's ability to pay including existing and future economic conditions. Notes receivable are typically considered delinquent when payment is not received for periods ranging from 60 to 120 days. If amounts are no longer probable of collection, the Company may consider the note receivable impaired, adjust the allowance, and cease accruing interest (nonaccrual status).

Cash payments received on nonaccrual status notes receivable, that do not bring the account contractually current, are first applied to the contractually owed past due interest, with any remainder applied to principal. Accrual of interest is generally resumed when the note receivable becomes contractually current.

The following tables present a roll-forward of the activity for the Company's financing receivables credit loss reserves:

	Trade accounts receivable	Other receivables	Total
	(In millions)
Beginning reserve balance, January 1, 2026	$16	$1	$17
Current period provision	14	-	14
Write-offs charged against allowance	(9)	-	(9)
Recoveries of amounts previously written off	3	-	3
Ending reserve balance, March 31, 2026	$24	$1	$25

	Trade accounts receivable	Other receivables	Total
	(In millions)
Beginning reserve balance, January 1, 2025	$21	$1	$22
Current period provision	25	-	25
Write-offs charged against allowance	(42)	-	(42)
Recoveries of amounts previously written off	12	-	12
Ending reserve balance, December 31, 2025	$16	$1	$17

Uncollectible expense is primarily comprised of the current period provision for allowance for doubtful accounts. Uncollectible expense was $14 million and $16 million for the three months ended March 31, 2026 and 2025, respectively.

There are no material amounts of past due financing receivables for the Company as of March 31, 2026.

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

NOTE 3 - NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Pronouncements

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The Company adopted the ASU effective January 1, 2026 on a prospective basis and elected not to apply the practical expedient, with no impact on the Company's financial position or results of operations.

Recently Issued Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, as amended. The amendments in this update require disaggregated disclosure of income statement expense captions into specified categories in disclosures with the footnotes to the financial statements. The ASU is effective for the Company for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. The guidance may be applied on a prospective or retrospective basis. Early adoption is permitted. The Company will apply the guidance upon the effective date.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update modernize the accounting guidance for the costs to develop software for internal use. The amendments remove all references to a sequential software development method (referred to as "project stages") throughout ASC 350-40 and clarifies the threshold entities apply to begin capitalizing eligible costs. The ASU is effective for the Company for annual and interim periods beginning after December 15, 2027. The guidance may be applied on a prospective, retrospective, or modified transition basis. Early adoption is permitted. The Company is currently assessing the impact of this standard on its Consolidated Financial Statements.

NOTE 4 - REVENUE

Disaggregation of Revenue

The following is a summary of disaggregated revenues for the Company:

	Three Months Ended March 31,
	2026	2025
	(In millions)
Gas sales	$684	$683
End User Transportation	91	91
Intermediate Transportation	39	31
Other	109	63
Total Gas operating revenues	$923	$868

(a)Includes revenue adjustments related to various regulatory mechanisms, including the GCR, which may vary based on changes in the cost of gas.

Revenues included the following which were outside the scope of Topic 606:

	Three Months Ended March 31,
	2026	2025
	(In millions)
Other revenues	$4	$3

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

Transaction Price Allocated to the Remaining Performance Obligations

In accordance with optional exemptions available under Topic 606, the Company did not disclose the value of unsatisfied performance obligations for (1) contracts with an original expected length of one year or less, (2) with the exception of fixed consideration, contracts for which revenue is recognized at the amount to which the Company has the right to invoice for goods provided and services performed, and (3) contracts for which variable consideration relates entirely to an unsatisfied performance obligation.

Such contracts consist of varying types of performance obligations, including the supply and delivery of energy related products and services. Contracts with variable volumes and/or variable pricing have also been excluded as the related consideration under the contract is variable at inception of the contract. Contract lengths vary from cancellable to multi-year.

The Company expects to recognize revenue for the following amounts related to fixed consideration associated with remaining performance obligations in each of the future periods noted:

	(In millions)
2026	$95
2027	120
2028	107
2029	90
2030	76
2031 and thereafter	168
	$656

NOTE 5 - REGULATORY MATTERS

2025 Gas Rate Case Filing

DTE Gas filed a rate case with the MPSC on November 13, 2025 requesting a net increase in base rates of $163 million based on a projected twelve-month period ending September 30, 2027, and an increase in return on equity from 9.8% to 10.25%. The net increase is based on a total revenue deficiency of $238 million, net of the IRM roll-in of $75 million. The requested net increase in base rates was primarily due to continued infrastructure investment and increasing operations and maintenance costs needed to ensure the continued safe and reliable delivery of natural gas to customers. A final MPSC order in this case is expected in September 2026.

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

NOTE 6 - FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company makes certain assumptions it believes that market participants would use in pricing assets or liabilities, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. Credit risk of the Company and its counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which was immaterial at March 31, 2026 and December 31, 2025. The Company believes it uses valuation techniques that maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. All assets and liabilities are required to be classified in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and its placement within the fair value hierarchy. The Company classifies fair value balances based on the fair value hierarchy defined as follows:

Level 1 - Consists of unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the reporting date.
Level 2 - Consists of inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.
Level 3 - Consists of unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

As of March 31, 2026, the Company had $143 million recorded at fair value on a recurring basis and classified as Level 1 assets. These assets included $130 million of cash equivalents and $13 million of equity securities recorded in Cash and cash equivalents and Investments, respectively, on the Consolidated Statements of Financial Position. At December 31, 2025, the Company had $44 million recorded at fair value on a recurring basis and classified as Level 1 assets. The assets included $31 million of cash equivalents and $13 million of equity securities recorded in Cash and cash equivalents and Investments, respectively, on the Consolidated Statements of Financial Position. For both periods, the assets exclude the cash surrender value of life insurance investments.

The following table presents the carrying amount and fair value of financial instruments:

	March 31, 2026				December 31, 2025
	Carrying	Fair Value			Carrying	Fair Value
	Amount	Level 1	Level 2	Level 3	Amount	Level 1	Level 2	Level 3
	(In millions)
Notes receivable - Other, excluding lessor finance leases	$18	$ -	$ -	$18	$18	$ -	$ -	$18
Short-term borrowings - Affiliates	$1	$ -	$ -	$1	$1	$ -	$ -	$1
Short-term borrowings - Other	$ -	$ -	$ -	$ -	$80	$ -	$80	$ -
Long-term debt	$3,043	$ -	$1,680	$1,094	$3,043	$ -	$1,551	$1,221

(a)Carrying value also includes unamortized debt discounts and issuance costs.

For further fair value information on financial and derivative instruments, see Note 7 to the Consolidated Financial Statements, "Financial and Other Derivative Instruments."

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

NOTE 7 - FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

The Company recognizes all derivatives at their fair value as Derivative assets or liabilities on the Consolidated Statements of Financial Position unless they qualify for certain scope exceptions, including the normal purchases and normal sales exception. Further, derivatives that qualify and are designated for hedge accounting are classified as either hedges of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); or as hedges of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge). For cash flow hedges, the derivative gain or loss is deferred in Accumulated other comprehensive income (loss) and later reclassified into earnings when the underlying transaction occurs. For fair value hedges, changes in fair values for the derivative and hedged item are recognized in earnings each period. For derivatives that do not qualify or are not designated for hedge accounting, changes in fair value are recognized in earnings each period.

The Company's primary market risk exposure is associated with commodity prices, credit, and interest rates. The Company has risk management policies to monitor and manage market risks. The Company purchases, stores, transports, distributes, and sells natural gas, and buys and sells transportation and storage capacity. The Company has fixed-priced contracts for portions of its expected natural gas supply requirements through March 2029. Substantially all of these contracts meet the normal purchases and normal sales exception and are therefore accounted for under the accrual method. Forward transportation and storage contracts are generally not derivatives and are therefore accounted for under the accrual method.

NOTE 8 - SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

The Company has a $300 million unsecured revolving credit agreement that can be used for general corporate borrowings but is intended to provide liquidity support for the Company's commercial paper program. Borrowings under the revolver are available at prevailing short-term interest rates. The facility will expire in October 2030. As of March 31, 2026, the Company did not have any commercial paper or revolver borrowings outstanding.

The unsecured revolving credit agreement requires the Company to maintain a total funded debt to capitalization ratio of no more than 0.65 to 1. In the agreement, "total funded debt" means all indebtedness of the Company and its consolidated subsidiaries, including finance lease obligations, hedge agreements, and guarantees of third parties' debt, but excluding contingent obligations, nonrecourse and junior subordinated debt, and, except for calculations at the end of the second quarter, certain short-term debt. "Capitalization" means the sum of (a) total funded debt plus (b) "consolidated net worth," which is equal to consolidated total equity of the Company and its consolidated subsidiaries (excluding pension effects under certain FASB statements), as determined in accordance with accounting principles generally accepted in the United States of America. At March 31, 2026, the total funded debt to total capitalization ratio for the Company was 0.48 to 1 and was in compliance with this financial covenant.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

Environmental

Contaminated and Other Sites - Prior to the construction of major interstate natural gas pipelines, gas for heating and other uses was manufactured locally from processes involving coal, coke, or oil. The facilities, which produced gas, have been designated as MGP sites. The Company owns or previously owned 14 former MGP sites. Investigations have revealed contamination related to the by-products of gas manufacturing at each site. Cleanup of eight MGP sites is complete, and those sites are closed. The Company has also completed partial closure of five additional sites. Cleanup activities associated with the remaining sites will continue over the next several years. The MPSC has established a cost deferral and rate recovery mechanism for investigation and remediation costs incurred at former MGP sites. In addition to the MGP sites, the Company is also in the process of cleaning up other contaminated sites, including gate stations, gas pipeline releases, and underground storage tank locations. At both March 31, 2026 and December 31, 2025, the Company had $25 million accrued for remediation. These costs are not discounted to their present value. Any change in assumptions, such as remediation techniques, nature and extent of contamination, and regulatory requirements, could impact the estimate of remedial action costs for the sites and affect the Company's financial position and cash flows. The Company anticipates the cost amortization methodology approved by the MPSC, which allows for amortization of the MGP costs over a ten-year period beginning with the year subsequent to the year the MGP costs were incurred, will prevent the associated investigation and remediation costs from having a material adverse impact on the Company's results of operations.

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

Air - In March 2023, the EPA published the Good Neighbor Rule, which includes provisions for compressor engines operated for the transportation of natural gas. In June 2024, the United States Supreme Court issued an opinion granting emergency applications to stay the Good Neighbor Rule. The stay will remain in effect during other litigation. The status of the rule remains uncertain as litigation is ongoing. At this time, the Company does not expect a significant financial impact.

In March 2024, the EPA finalized the National Ambient Air Quality Standards 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 the Company operates will be designated as non-attainment in the future and the state will be required to develop a State Implementation Plan 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.

Guarantees

In certain limited circumstances, the Company enters into contractual guarantees. The Company may guarantee another entity’s obligation in the event it fails to perform and may provide guarantees in certain indemnification agreements. The Company may also provide indirect guarantees for the indebtedness of others.

Labor Contracts

There are several bargaining units for the Company's approximate 1,150 represented employees, which represents 67% of the Company's total employees. None of the represented employees have contracts expiring within one year.

Purchase Commitments

The Company has made certain commitments in connection with 2026 annual capital expenditures that are expected to be approximately $900 million.

Other Contingencies

The Company is involved in certain other legal, regulatory, administrative, and environmental proceedings before various courts, arbitration panels, and governmental agencies concerning claims arising in the ordinary course of business. These proceedings include certain contract disputes, additional environmental reviews and investigations, audits, inquiries from various regulators, and pending judicial matters. The Company cannot predict the final disposition of such proceedings. The Company regularly reviews legal matters and records provisions for claims that it can estimate and are considered probable of loss. The resolution of these pending proceedings is not expected to have a material effect on the Consolidated Financial Statements in the periods they are resolved.

For a discussion of contingencies related to regulatory matters, see Note 5 to the Consolidated Financial Statements, "Regulatory Matters."

NOTE 10 - RETIREMENT BENEFITS AND TRUSTEED ASSETS

The Company participates in various plans that provide defined benefit pension and other postretirement benefits for DTE Energy and its affiliates. The plans are primarily sponsored by DTE Energy's subsidiary, DTE Energy Corporate Services, LLC, and cover substantially all employees of the Company. Plan participants of all plans are solely DTE Energy and affiliate participants.

The Company accounts for its participation in the represented qualified pension plan by applying single-employer accounting. Non-represented participation in qualified pension plans, and non-represented and represented participation in non-qualified pension plans, are accounted for by applying multiemployer accounting. Participation in other postretirement benefit plans is accounted for by applying multiple-employer accounting. Within multiemployer and multiple-employer plans, participants pool plan assets for investment purposes and to reduce the cost of plan administration. The primary difference between plan types is that assets contributed in multiemployer plans can be used to provide benefits for all participating employers, while assets contributed within a multiple-employer plan are restricted for use by the contributing employer.

Table of Contents

DTE Gas Company

Notes to Consolidated Financial Statements (Unaudited) - (Continued)

The following table details the components of net periodic benefit costs (credits) for represented pension benefits and total other postretirement benefits:

	Pension Benefits		Other Postretirement Benefits
	2026	2025	2026	2025
	(In millions)
Three Months Ended March 31,
Service cost	$2	$2	$1	$1
Interest cost	6	6	4	4
Expected return on plan assets	(8)	(8)	(11)	(10)
Amortization of:
Net actuarial loss	2	2	1	1
Net periodic benefit cost (credit)	$2	$2	$(5)	$(4)

DTE Energy's subsidiaries accounted for under multiemployer guidance are responsible for their share of qualified and non-qualified pension benefit costs. The Company's allocated portion of pension benefit costs for non-represented plans included in regulatory assets and liabilities, operation and maintenance expense, and capital expenditures was $1 million and nominal for the three months ended March 31, 2026 and 2025, respectively. These amounts may include recognized contractual termination benefit charges, curtailment gains, and settlement charges.

Pension and Other Postretirement Contributions

The Company is not expecting to make any contributions to the represented or non-represented qualified pension plans or postretirement benefit plans in 2026. Plans may be updated at the discretion of management and depending on economic and financial market conditions. The Company anticipates transferring up to $25 million from its non-represented qualified pension plan to DTE Electric Company during 2026 in exchange for cash consideration. In 2025, the Company transferred $25 million of qualified pension plan funds to DTE Electric Company in exchange for cash consideration.