Dte Energy Company · NYSE:DTE
Dte Energy — Q1 2013 Earnings Presentation
26 slides from Dte Energy's earnings presentation, Apr 26, 2013
Slide 1: 1st Quarter 2013 Earnings Conference Call
1st Quarter 2013 Earnings Conference Call April 26, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement The information contained herein is as of the date of this presentation. Many factors may impact forward-looking statements including, but not limited to, the following: impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and regulations, i
Slide 3: Participants
Participants • Dave Meador – Executive Vice President and CFO • Peter Oleksiak – Senior Vice President of Finance • Dan Brudzynski – Vice President, Treasurer & Investor Relations • Anastasia Minor – Director, Investor Relations 3
Slide 4: Agenda: Overview, Earnings Results, Cash Flow, Summary
• Overview • First Quarter 2013 Earnings Results • Cash Flow and Capital Expenditure • Summary 4
Slide 5: Investment Thesis
Investment Thesis DTE Energy has a plan it believes will provide 5% - 6% long-term operating EPS growth, an attractive dividend yield and a strong balance sheet – Utility growth plan driven by mandated investments – Constructive regulatory structure and continued 5%-6% Average Annual EPS Growth cost
Slide 6: Overview
Overview DTE Energy 1Q 2013 operating earnings per share* of $1.34 vs. $0.91 in 1Q 2012 driven by: • Return to near-normal weather at both utilities after record warm winter in 2012 • Lower benefits expense due to plan changes • Rate case settlement at DTE Gas • Continued gas distribution system eff
Slide 7: Infrastructure Recovery Mechanism reduces regulatory risk and regulatory lag on investments
Infrastructure Recovery Mechanism reduces regulatory risk and regulatory lag on investments • MPSC approved Infrastructure Recovery Main Renewal, Meter Move-Out Mechanism as proposed & Pipeline Integrity • Covers five year period from 2013 to 2017, with projected investment of ~$400 million • Recove
Slide 8: Agenda: First Quarter 2013 Earnings Results
• Overview • First Quarter 2013 Earnings Results • Cash Flow and Capital Expenditure • Summary 8
Slide 9: DTE Energy First Quarter 2013 Operating Earnings Per Share
DTE Energy First Quarter 2013 Operating Earnings Per Share* $1.34 DTE Electric DTE Gas Non-Utility Corporate & Other $0.66 $0.55 $0.21 ($0.08) Gas Storage & Power & Industrial Energy Trading Pipelines Projects $0.04 $0.10 $0.07 * Reconciliation to GAAP reported earnings included in the appendix 9
Slide 10: DTE Energy First Quarter 2013 Operating Earnings Variance
DTE Energy First Quarter 2013 Operating Earnings Variance Operating Earnings* Drivers (millions, except EPS) 1Q 2012 1Q 2013 Change DTE Electric DTE Electric $ 96 $ 115 $ 19 • Return to near-normal weather in 1Q 2013 and lower benefits expense DTE Gas 52 96 44 DTE Gas Gas Storage & Pipelines 17 17 -
Slide 11: DTE Gas Variance Analysis
DTE Gas Variance Analysis DTE Gas Operating Earnings* Variance Drivers ($ millions) $5 $96 $6 $7 • Near-normal weather in 1Q 2013; $26 record warm weather in 1Q 2012 Variance to normal weather - 1Q 2012: ($23) $52 - 1Q 2013: $3 • Continuous improvement of distribution system driving lower lost gas e
Slide 12: Agenda: Cash Flow and Capital Expenditure
• Overview • First Quarter 2013 Earnings Results • Cash Flow and Capital Expenditure • Summary 12
Slide 13: DTE Energy First Quarter 2013 Cash Flow
DTE Energy First Quarter 2013 Cash Flow Cash Flow Summary Drivers (billions) 1Q 2012 1Q 2013 • Cash flow remains strong this year Cash From Operations* $0.6 $0.6 Capital Spending (0.4) (0.4) • 2013 first quarter results are consistent with last year and in line with guidance for the year Free Cash F
Slide 14: DTE Energy First Quarter 2013 Capital Expenditures
DTE Energy First Quarter 2013 Capital Expenditures Capital Expenditures Drivers (millions) 1Q 2012 1Q 2013 • DTE Electric lower driven by 2012 Fermi DTE Electric refueling outage Operational $238 $211 Environmental 29 34 Renewable Energy 17 10 • DTE Gas higher due to increased $284 $255 DTE Gas spen
Slide 15: Strong Balance Sheet Supports Growth
Strong Balance Sheet Supports Growth Leverage* • A strong balance sheet remains a key priority and leverage and cash flow metrics are within targeted ranges Target 50% - 52% • Series of recent credit improvements 50% 50% - Moody’s upgraded DTE Energy, DTE Electric and DTE Gas in February 2013 2012 2
Slide 16: Agenda: Summary
• Overview • First Quarter 2013 Earnings Results • Cash Flow and Capital Expenditure • Summary 16
Slide 17: Summary
Summary • 1Q 2013 operating EPS* of $1.34 driven by return to near-normal weather in 1Q 2013, continued improvement in distribution system at DTE Gas, solid performance from non-utility businesses, and benefit plan changes • Infrastructure Recovery Mechanism at DTE Gas approved by the MPSC as propos
Slide 18: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 18
Slide 19: Appendix
DTE Energy’ Appendix
Slide 20: DTE Electric Variance Analysis
DTE Electric Variance Analysis DTE Electric Operating Earnings* Variance Drivers ($ millions) $8 $115 $11 • Near-normal weather in 1Q 2013; $96 record warm weather in 1Q 2012 Variance to normal weather - 1Q 2012: ($11) - 1Q 2013: $0 • Lower benefits expense due to plan changes * Reconciliation to GA
Slide 21: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ($ millions) $2 $9 Energy Trading Operating $7 Earnings* • Economic net income ($ millions, after-tax) equals economic gross margin*** minus O&M 1Q 2013 1Q 2012 expenses and taxes. • DTE Energy management Realized $19 $2
Slide 22: DTE Energy 2013 Operating Earnings Guidance
DTE Energy 2013 Operating Earnings Guidance (millions, except EPS) 2012 2013 Actuals* Guidance* 2013 Drivers Renewables growth, continued cost control and normal DTE Electric $483 $475 - $485 weather DTE Gas 115 113 - 118 Normal weather and full year rate increase offset by 2012 one-time items Gas S
Slide 23: DTE Energy 2013 Cash Flow Guidance
DTE Energy 2013 Cash Flow Guidance Cash Flow Summary 2013 Drivers (billions) 2012 2013 Actual Guidance • 2013 cash from operations decrease due to higher benefit plan contributions, higher gas Cash From Operations* $2.2 $1.8 inventory purchases and lower surcharge Capital Spending (2.1) (2.2) collec
Slide 24: DTE Energy 2013 Capital Expenditure Guidance
DTE Energy 2013 Capital Expenditure Guidance Capital Expenditures Summary 2013 Drivers (millions) 2012 2013 DTE Electric Actual Guidance • Increased investment in operational capital for DTE Electric improved generation and distribution reliability Operational $823 $1,020 • Higher environmental capi
Slide 25: Reconciliation of 2012 Reported to Operating Earnings
Reconciliation of 2012 Reported to Operating Earnings Use of Operating Earnings Information – DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operations and uses operating earnings as the primary performance measu
Slide 26: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other Reported to Operating Earnings Use of Operating Earnings Information – DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operations and uses operating earnings as the primary performance meas