Dte Energy Company · NYSE:DTE
Dte Energy — Q3 2023 Earnings Presentation
26 slides from Dte Energy's earnings presentation, Nov 1, 2023
Slide 1: 3Q Earnings Conference Call
3Q Earnings Conference Call November 1, 2023
Slide 2: Safe harbor statement
Safe harbor statement The information contained herein is as of the date of this document. 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 “anticipa
Slide 3: Participants
Participants Jerry Norcia – Chairman and CEO Dave Ruud – Executive Vice President and CFO Barbara Tuckfield – Director of Investor Relations 3
Slide 4: Progressing on utility focused investment plan
Progressing on utility focused investment plan • Advancing on building the grid of the future and our path to cleaner generation − Distribution Grid Plan provides roadmap to reliability improvement and acceleration of automation − Integrated Resource Plan (IRP) supports acceleration of coal plant re
Slide 5: Headwinds
Overcame a significant portion of the ~$370 million of unprecedented operating earnings1 headwinds through one-time cost management initiatives and opportunities throughout the portfolio 4Q 2022 1H 2023 3Q 2023 Total impact $100 million headwind $165 million headwinds $106 million headwinds = ~$370
Slide 6: Executing on significant customer-focused capital investment plan while maintaining affordability
Executing on significant customer-focused capital investment plan while maintaining affordability Investing in customer-focused initiatives… …while maintaining affordability Modernizing electric grid ✓ Distinctive continuous improvement culture drives cost Preparing for impacts of increased extreme
Slide 7: 3Q 2023 operating earnings variance
3Q 2023 operating earnings1 variance (millions, except EPS) 2022 2023 Variance Primary drivers Cooler weather, higher storm expenses, higher rate base costs DTE Electric $363 $268 ($95) and 2022 accelerated deferred tax amortization partially offset by one-time O&M cost reductions One-time O&M cost
Slide 8: Overcoming majority of unprecedented headwinds; revised guidance
Overcoming majority of unprecedented headwinds; additional storm and unfavorable weather in 3Q exceed considerable one-time cost saving effort (millions, except EPS) 2023 original 2023 revised Primary drivers guidance guidance Headwinds from lower-than-expected rate order, higher DTE Electric $1,010
Slide 9: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile Strong balance sheet supports robust customer-focused investment agenda, building the grid of the future and transition to cleaner generation • Consistently generating healthy cash flows • Maintaining solid investment-grade credit rating
Slide 10: Increased utility investment focused on improved reliability and cleaner generation
Increased utility investment focused on improved reliability and cleaner generation; well-positioned for long-term growth ✓ Highly engaged team committed to delivering best-in-class results for our customers, communities and investors ✓ Significant effort from our team to offset the majority of the
Slide 11: Appendix
Appendix 11
Slide 12: Weather impact on sales
Weather impact on sales DTE Electric DTE Gas Cooling degree days1 Heating degree days3 % YTD YTD % % YTD YTD % 3Q 2022 3Q 2023 3Q 2022 3Q 2023 Change 2022 2023 Change Change 2022 2023 Change Actuals 680 498 (27%) 980 682 (30%) Actuals 110 77 (30%) 4,314 3,640 (16%) Normal 637 643 1% 884 895 1% Norma
Slide 13: YTD cash flow and capital expenditures
YTD cash flow and capital expenditures Cash flow Capital expenditures (billions) (millions) YTD 3Q YTD 3Q YTD 3Q YTD 3Q 2022 2023 2022 2023 Cash from operations1 $1.4 $2.4 DTE Electric Capital expenditures (2.4) (2.9) Base infrastructure $836 $676 Free cash flow ($1.0) ($0.5) Cleaner generation 23 3
Slide 14: 2023 cash flow and capital expenditures guidance
2023 cash flow and capital expenditures guidance Cash flow Capital expenditures (billions) (millions) 2023 2023 guidance guidance Cash from operations1 $3.2 DTE Electric Capital expenditures (4.2) Base infrastructure $1,200 Free cash flow ($1.0) Cleaner generation 500 Dividends (0.8) Distribution in
Slide 15: Environmental, social and governance efforts are key priorities
Environmental, social and governance efforts are key priorities; aspiring to be the best in the industry Award-winning commitment to ESG priorities Environment • Transitioning towards net zero1 emissions at both utilities • Accelerating transition to cleaner generation • Protecting our natural resou
Slide 16: IRP outlines accelerated path to cleaner energy
IRP outlines accelerated path to cleaner energy First 5 years (2023 - 2027) Generation mix1 (MWh %) • Ceasing coal use at one Belle River unit in 2025 and remaining unit in 2026; converting to 1,300 MW natural gas peaking resource 1% 3% 2% 14% • Adding 1,200 MW of solar 22% 17% 3% 32% • Adding 350 M
Slide 17: MIGreenPower program continues significant growth
MIGreenPower program continues significant growth 1,600 • Allows customers to attribute up to 100% of electricity use business customers to renewable sources • One of the largest voluntary renewable programs in the nation • Two largest renewable energy purchases from a utility announced with Ford Mo
Slide 18: Natural Gas Balance program reducing GHG emissions
Natural Gas Balance program reducing GHG emissions 2021 program inception • Offering an affordable way to balance 25% to 100% of customers’ GHG emissions • RNG will be sourced by transforming landfill emissions and wastewater treatment plant by-products into usable gas 12,700 • Carbon offset program
Slide 19: Progressing on EV initiatives
Progressing on EV initiatives Charging Forward Program 2019 • Promoting EV education, infrastructure and adoption program inception • Providing residential and commercial rebates, infrastructure support and fleet advisory services • Offering unique solutions such as home charger installation financi
Slide 20: Committed to Diversity, Equity and Inclusion; creating a safe and welcoming environment
Committed to Diversity, Equity and Inclusion (DEI); creating a safe and welcoming environment Employee groups create an inclusive environment where differences Health and safety of our people is a priority are celebrated and a sense of belonging exists for all employees • Multiple safety committees
Slide 21: Building on the momentum of the last decade, committed to Michigan investments
Building on the momentum of the last decade, committed to Michigan investments and supplier diversity 2022 Michigan spend (millions) $2.5b invested in Michigan businesses in 2022 65,000 jobs created since 2010 $20 $900m invested with Detroit suppliers in 2022 $19 invested with suppliers owned by wom
Slide 22: Economic development fuels Michigan's growth
Economic development fuels Michigan’s growth ✓ Michigan ranked in the top 10 by CNBC for America’s Top States for Business in 2023 ✓ $4 billion General Motors investment to convert an assembly plant to produce full-size electric pickup trucks, creating 2,300 jobs ✓ $1.6 billion Our Next Energy inves
Slide 23: Governance framework provides shareholder rights and enables sustainable value creation
Governance framework provides shareholder rights and enables sustainable value creation Best-in-class governance practices Composition of DTE Board of Directors1 • Lead Independent Director 1 7 • All board committees are composed exclusively of independent Directors 36% 91% gender or • Stock ownersh
Slide 24: Executive management compensation plan is aligned with our stakeholder priorities
Executive management compensation plan is aligned with our stakeholder priorities Annual or long-term incentive metrics • Employee engagement Our team • Employee safety • Customer satisfaction Our customers • Customer complaints • System reliability • Customer satisfaction Our communities • Customer
Slide 25: 3Q 2022 and 3Q 2023 reconciliation of reported to operating earnings
3Q 2022 and 3Q 2023 reconciliation of reported to operating earnings (non- GAAP) and operating EPS (non-GAAP) (Earnings per share2) Adjustments key A) Certain adjustments resulting from derivatives being marked-to-market without revaluing the underlying non-derivative contracts and assets — recorded
Slide 26: Reconciliation of reported to operating earnings (non-GAAP); Definition of net zero
Reconciliation of reported to operating earnings (non-GAAP) Use of Operating Earnings Information – Operating earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations. DTE Energy management believes that operating earnings provide a meaningful representati