UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended June 30, 2003

Commission file number 333-51066

The registrant meets the conditions set forth in General Instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this Form with the reduced disclosure format.

THE DETROIT EDISON SECURITIZATION FUNDING LLC
(a Michigan limited liability company)
(Exact name of registrant as specified in its charter)


Michigan		38-0478650
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2000 2nd Avenue, Detroit, Michigan		48226-1279
(Address of principal executive offices)		(Zip Code)

313-235-8000
Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes x		No o

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act.


Yes o		No x

TABLE OF CONTENTS


	Item 2. Management’s Narrative Analysis of the Results of Operations
PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
		Statement of Operations
		Statement of Financial Position
		Statement of Cash Flows
		Statement of Member’s Equity
		Notes to Financial Statements
PART II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
906 Certification of Chief Executive Officer
906 Certification of Chief Financial Officer
Monthly Servicer Certificate dated May 12, 2003
Monthly Servicer Certificate dated June 13, 2003
Monthly Servicer Certificate dated July 15, 2003
Amended Trade Receivables Purchase & Sale Agrmnt
Amended Trade Receivables Purchase & Sale Agrmnt

THE DETROIT EDISON SECURITIZATION FUNDING LLC

QUARTERLY REPORT ON FORM 10-Q
QUARTER ENDED JUNE 30, 2003

TABLE OF CONTENTS


			PAGE
			NUMBER

PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
		Statement of Operations		5

		Statement of Financial Position		6

		Statement of Cash Flows		7

		Statement of Member’s Equity		8

		Notes to Financial Statements		9

		Independent Accountants’ Report		10

	Item 2. Management’s Narrative Analysis of the Results of Operations			3

PART II — OTHER INFORMATION
	Item 1. Legal Proceedings			11

	Item 5. Other Information			11

	Item 6. Exhibits and Reports on Form 8-K			11

SIGNATURE				12

FORWARD-LOOKING STATEMENTS

Certain information presented herein includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve certain risks and uncertainties that may cause actual future results to differ materially from those contemplated, projected, estimated or budgeted in such forward-looking statements. Securitization bondholders may suffer payment delays or losses if the Detroit Edison Securitization Funding LLC’s (“Company’s”) assets are not sufficient to pay interest or the scheduled principal of the securitization bonds. Funds for payments are dependent upon the Securitization Property and the right to collect the securitization surcharge over a period limited by Michigan statute to 15 years. In addition, collections are dependent on the level of The Detroit Edison Company (Detroit Edison) electric deliveries to customers.

MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

The Results of Operations discussion for the Company is presented in accordance with General Instruction H(2) (a) of Form 10-Q.

The Company is a special purpose entity established by Detroit Edison to recover certain stranded costs, called Securitization Property by Michigan statute. The stranded costs primarily represent Detroit Edison’s unamortized investment in the 1,150 megawatt Fermi 2 nuclear power plant that was classified as a regulatory asset. On March 9, 2001 the Company issued securitization bonds (“Bonds”) and used the net proceeds to purchase Securitization Property from Detroit Edison. The Company receives revenues that are intended to recover its costs and service its debt. Amortization expense associated with the Securitization Property is adjusted as necessary so that expenses equal revenues and interest income.

For the three-month period ended June 30, 2003, the Company earned $40,401,000 in surcharge revenues and $180,000 in interest income compared to $48,768,000 in surcharge revenues and $250,000 in interest income for the three-month period ended June 30, 2002. The decrease in surcharge revenues is due to changes in surcharge rates and weather driven lower electricity sales by Detroit Edison. Amortization expense consists of amortization of the Securitization Property, overcollateralization fee, and over-recovery of securitization surcharge (“SC”). The amortization expense for the three-month periods ended June 30, 2003 and 2002 was $14,728,000 and $22,087,000, respectively. The decrease in amortization expense reflects the adjustment needed to have revenues and interest income equal expenses. The lower amount was primarily attributable to the decrease in surcharge revenues. During the 2003 three-month period, the Company also incurred interest expense of $25,203,000, amortization of issuance cost of $351,000, servicing fees of $219,000, and administrative fees of $63,000 compared to interest expense of $26,302,000, amortization of issuance cost of $322,000, servicing fees of $219,000, and administrative fees of $63,000 for the 2002 three-month period.

For the six-month period ended June 30, 2003, the Company earned $85,081,000 in surcharge revenues and $443,000 in interest income compared to $98,519,000 in surcharge revenues and $544,000 in interest income for the six-month period ended June 30, 2002. The decrease in surcharge revenues is due to changes in surcharge rates and weather driven lower electricity sales by Detroit Edison. The amortization expense for the six-month periods ended June 30, 2003 and 2002 was $33,359,000 and $44,912,000, respectively. The decrease in amortization expense

reflects the adjustment needed to have revenues and interest income equal expenses. The lower amount was primarily attributable to the decrease in surcharge revenues. During the 2003 six-month period, the Company also incurred interest expense of $50,818,000, amortization of issuance cost of $743,000, servicing fees of $438,000, and administrative fees of $125,000 compared to interest expense of $52,910,000, amortization of issuance cost of $633,000, servicing fees of $438,000, and administrative fees of $125,000 for the 2002 six-month period.

Detroit Edison, as Servicer, collects a surcharge from its customers for the benefit of the Company and the Securitization Bondholders. The surcharge is adjusted annually to provide sufficient funds for timely payments related to the Bonds. This surcharge rate was modified to $0.00336 on March 1, 2003 compared to $0.00392 that became effective March 1, 2002.

THE DETROIT EDISON SECURITIZATION FUNDING LLC
STATEMENT OF OPERATIONS (UNAUDITED)


		Three Months Ended						Six Months Ended
		June 30						June 30

		2003			2002			2003			2002

(in Thousands)
Operating Revenues		$	40,401		$	48,768		$	85,081		$	98,519

Operating Expenses
	Amortization expense		14,728			22,087			33,359			44,912
	Servicing fees		219			219			438			438
	Administrative fees		63			63			125			125
	Other		17			25			41			45

			15,027			22,394			33,963			45,520

Operating Income			25,374			26,374			51,118			52,999

Interest Expense and Other
	Interest expense		25,203			26,302			50,818			52,910
	Interest income		(180	)		(250	)		(443	)		(544	)
	Amortization of debt issuance costs		351			322			743			633

			25,374			26,374			51,118			52,999

Net Income		$	—		$	—		$	—		$	—

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC
STATEMENT OF FINANCIAL POSITION


		June 30
		2003		December 31
		(Unaudited)		2002

(in Thousands)
ASSETS
Current Assets
	Cash and cash equivalents	$	—	$	—
	Restricted cash		83,485		94,757
	Accounts receivable		21,520		23,564
	Accrued unbilled revenues		7,149		8,309

			112,154		126,630

Securitized Regulatory Assets
	Securitization property, less accumulated amortization of $148,925 and $106,743, respectively		1,570,790		1,612,973
	Unamortized bond issuance cost, less accumulated amortization of $2,623 and $1,880, respectively		27,662		28,405

			1,598,452		1,641,378

		$	1,710,606	$	1,768,008

LIABILITIES AND MEMBER’S EQUITY
Current Liabilities
	Accrued interest	$	33,604	$	34,428
	Accounts payable to member		375		375
	Current portion of securitization bonds payable		86,726		88,266
	Regulatory liability		40,959		50,095

			161,664		173,164

Non-Current Liabilities and Deferred Credits
	Securitization bonds payable		1,538,734		1,584,948
	Other		1,458		1,146

			1,540,192		1,586,094

Member’s Equity			8,750		8,750

		$	1,710,606	$	1,768,008

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC
STATEMENT OF CASH FLOWS (UNAUDITED)


			Six Months Ended
			June 30

			2003			2002

(in Thousands)
Operating Activities
	Net income		$	—		$	—
	Adjustments to reconcile net income to net cash from operating activities:
		Amortization		34,102			45,510
	Changes in current assets and liabilities:
		Accounts receivable		3,204			(3,934	)
		Interest payable		(824	)		(611	)

Net cash from operating activities				36,482			40,965

Investing Activities
	Restricted cash			11,272			(5,568	)

Net cash from (used for) investing activities				11,272			(5,568	)

Financing Activities
	Payment of bonds			(47,754	)		(35,395	)

Net cash used for financing activities				(47,754	)		(35,395	)

Net Increase in Cash and Cash Equivalents				—			2
Cash and Cash Equivalents at Beginning of the Period				—			2,872

Cash and Cash Equivalents at End of the Period			$	—		$	2,874

Supplementary Cash Flow Information
	Interest paid		$	51,642		$	53,522

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC
STATEMENT OF MEMBER’S EQUITY (UNAUDITED)


		Six Months Ended
		June 30

		2003		2002

(in Thousands)
Balance beginning of period		$	8,750	$	8,750
Add:
	Member’s contribution		—		—

Balance end of period		$	8,750	$	8,750

See Notes to Financial Statements (Unaudited)

THE DETROIT EDISON SECURITIZATION FUNDING LLC
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 — GENERAL

The financial statements included herein should be read in conjunction with the notes to financial statements contained in the 2002 Annual Report to the Securities and Exchange Commission on Form 10-K.

The accompanying 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 could differ from those estimates.

The financial statements are unaudited, but in the opinion of the Company, include all adjustments necessary for a fair statement of the results for the interim periods. 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.

NOTE 2 — LONG-TERM DEBT

The Company retired $47,754,000 of Bonds during the first quarter of 2003.

INDEPENDENT ACCOUNTANTS’ REPORT

To the Managers of
The Detroit Edison Securitization Funding LLC

We have reviewed the accompanying condensed statement of financial position of The Detroit Edison Securitization Funding LLC as of June 30, 2003, the related condensed statements of operations for the three-month and six-month periods ended June 30, 2003 and 2002 and the condensed statements of cash flows and member’s equity for the six-month periods ended June 30, 2003 and 2002. These interim financial statements are the responsibility of The Detroit Edison Securitization Funding LLC’s management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the statement of financial position of The Detroit Edison Securitization Funding LLC as of December 31, 2002 and the related statements of operations, cash flows and member’s equity for the year then ended (not presented herein); and in our report dated February 11, 2003, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed statement of financial position as of December 31, 2002 is fairly stated, in all material respects, in relation to the statement of financial position from which it has been derived.

/s/DELOITTE & TOUCHE LLP

Detroit, Michigan
August 14, 2003

OTHER INFORMATION

LEGAL PROCEEDINGS
None.

OTHER INFORMATION
None.

EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits


Exhibit
Number		Description

Filed:

99-36		Monthly Servicer Certificate dated May 12, 2003

99-37		Monthly Servicer Certificate dated June 13, 2003

99-38		Monthly Servicer Certificate dated July 15, 2003

99-39		Amendment dated as of May 28, 2003 to the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, and an Amendment and Restatement thereof, dated as of October 1, 1991, and as further amended by an Amendment dated as of February 28, 1994, an Amendment dated as of February 1, 1999, an Amendment dated as of January 27, 2000 and an Amendment dated as of January 25, 2001, among The Detroit Edison Company, as seller, Citibank, N.A., and Citicorp North America, Inc.

99-40		Amendment No. 2 dated as of May 28, 2003 to the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, an Amendment and Restatement thereof, dated as of October 1, 1991, an Amendment and Restatement thereof dated as of March 9, 2001 and an Amendment dated as of January 17, 2003, among The Detroit Edison Company, as seller, Corporate Asset Funding Company, Inc., Citibank, N.A., and Citicorp North America, Inc.

Furnished:

32-1		Chief Executive Officer Section 906 Certification of Periodic Report

32-2		Chief Financial Officer Section 906 Certification of Periodic Report

(b) Reports on Form 8-K

During the quarterly period ended June 30, 2003, the Company did not file any Current Reports on Form 8-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE DETROIT EDISON
		SECURITIZATION FUNDING LLC

Date:	August 13, 2003	/s/ DANIEL G. BRUDZYNSKI

		Daniel G. Brudzynski
		Chief Accounting Officer and Controller

Exhibit Index


Exhibit
Number		Description

Filed:

99-36		Monthly Servicer Certificate dated May 12, 2003

99-37		Monthly Servicer Certificate dated June 13, 2003

99-38		Monthly Servicer Certificate dated July 15, 2003

99-39		Amendment dated as of May 28, 2003 to the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, and an Amendment and Restatement thereof, dated as of October 1, 1991, and as further amended by an Amendment dated as of February 28, 1994, an Amendment dated as of February 1, 1999, an Amendment dated as of January 27, 2000 and an Amendment dated as of January 25, 2001, among The Detroit Edison Company, as seller, Citibank, N.A., and Citicorp North America, Inc.

99-40		Amendment No. 2 dated as of May 28, 2003 to the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, an Amendment and Restatement thereof, dated as of October 1, 1991, an Amendment and Restatement thereof dated as of March 9, 2001 and an Amendment dated as of January 17, 2003, among The Detroit Edison Company, as seller, Corporate Asset Funding Company, Inc., Citibank, N.A., and Citicorp North America, Inc.

Furnished:

32-1		Chief Executive Officer Section 906 Certification of Periodic Report

32-2		Chief Financial Officer Section 906 Certification of Periodic Report

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

DETROIT EDISON SECURITIZATION FUNDING LLC 10-Q