Dte Energy Company · NYSE:DTE
Dte Energy — Investor Day (September 2015)
119 slides from Dte Energy's investor day presentation, Sep 28, 2015
Slide 1: Investor Event September 28, 2015
Investor Event September 28, 2015 EXHIBIT 99.1
Slide 2: DTE Energy
DTE Energy
Slide 3: Safety Moment
Safety Moment 3
Slide 4: 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 EPA, FERC, MPSC, NRC and CFTC as well as other applicable governmental proceedin
Slide 5: Management Overview
Management Overview 5 Gerry Anderson Chairman & CEO David Meador Vice Chairman & CAO Steven Kurmas President & COO Jerry Norcia President & COO Electric/GSP Peter Oleksiak Senior VP & CFO Mark Stiers President & COO DTE Gas David Ruud President Power & Industrial David Johnson VP Customer Service &
Slide 6: Mayor Mike Duggan
Mayor Mike Duggan 6
Slide 7: DTE is having another successful year and expects to continue to grow earnings
DTE is having another successful year and expects to continue to grow earnings in the future 2015 Original Guidance 2015 Revised Guidance 2016 Early Outlook $4.60 $4.78 $4.93 Operating Earnings* per Share (guidance midpoint) • Increasing 2015 earnings guidance • 2016 early outlook represents 5% grow
Slide 8: Solid operating EPS growth, expected to continue at 5% to 6%
We have delivered solid operating EPS* growth and expect to continue to grow at 5% to 6% * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) 8 2015 Operating EPS Guidance Midpoint Growth segments $4.69 Total DTE Energy $4.78 2016 Operating EPS Early Outlook Midpoi
Slide 9: DTE increased its dividend again in 2015
DTE increased its dividend again in 2015 2009 2010 2011 2012 2013 2014 2015 $2.12 $2.92 Annualized Dividend ($ per share) $2.76 • Increased dividend 5.8% in 2015 • Expect to continue to grow dividends as earnings grow 9
Slide 10: DTE has consistently delivered total shareholder return above the peer average
DTE has consistently delivered total shareholder return above the peer average Source: Bloomberg 10 Total Shareholder Return 49% • Total return in top quartile of S&P 500 Utilities for 3, 5 and 10 years 3-YR 105% 166% 10-YR 5-YR S&P 500 Utilities DTE Electric 35% 74% 106% Top quartile
Slide 11: Our performance over the past decade had a number of drivers
Our performance over the past decade had a number of drivers 11 • Eight consecutive years of operating EPS growth... ...through the heart of the financial crisis • Large growth investment in our utilities... ...which averaged $1.4 billion annually over the last 5 years • The persistence of a healthy
Slide 12: Our future success is tied to our Aspiration
Our future success is tied to our Aspiration and a force for growth and prosperity in the communities where we live and serve To be the best-operated energy company in North America 12
Slide 13: Best Operated Scorecard to make this Aspiration real
We have implemented a Best Operated Scorecard to make this Aspiration real 13
Slide 14: Our system of priorities
We achieve our Aspiration by continued focus on our system of priorities 14
Slide 15: Our goal today is to explain how our management model delivers results
Our goal today is to explain how commitment to our management model will provide consistent, superior results for our owners 15 5%-6% Operating EPS Growth Attractive Dividend
Slide 16: Conditions exist to continue our success
We believe conditions exist to continue our success 16 • Our utilities will fundamentally renew Michigan’s energy infrastructure in the decade ahead... ...leading to persistent, higher capital expenditures • Michigan’s legislature is poised to pass energy legislation... ... that will build upon the
Slide 17: Highly Engaged Employees
Highly Engaged Employees Option Highly Engaged Employees
Slide 18: A highly engaged workforce is critical to achieving our Aspiration
A highly engaged workforce is critical to achieving our Aspiration 3-time winner of the Gallup Great Workplace award Gallup Engagement Score compared to other companies (Percentile) 50th 91st 2008 2009 2010 2011 2012 2013 2014 Maintain top-decile 2015+ goal 18
Slide 19: Progress in employee engagement with represented employees
We have made significant progress in employee engagement with represented employees Gallup Engagement Score Represented and DTE Overall compared to other companies (Percentile) 2008 2009 2010 2011 2012 2013 2014 Our union employees, standalone, have engagement equivalent to the world’s top quartile
Slide 20: Recognized for our employee development program
We have been recognized for our employee development program DTE received Gallup’s Development By Design Award DTE is taking an integrated approach to learning and development Our path to superior performance 20
Slide 21: Distinctive CI Capability
Distinctive CI Capability Option Distinctive CI Capability
Slide 22: Continuous improvement leads the industry in cost management
DTE’s continuous improvement capability has enabled us to lead the industry in cost management * Source: SNL Financial, FERC Form 1; major US Electric Utilities with O&M > $800 million; excluding fuel and purchased power ** Source: SNL Financial, FERC Form 2; gas distribution companies with > 300,00
Slide 23: Engaging all 10,000 employees to see and solve problems
To continue uncovering improvement opportunities we engage all 10,000 employees to see and solve problems 10,000 employees 1,060 huddles Every day INVOLVED IN Engaged in SOLVING PROBLEMS 23
Slide 24: CI problem solving gets to root causes
Our CI problem solving allows us to get to root causes, prevent recurrence and achieve results CI video 24
Slide 25: CI connects every employee to our Aspiration
Our CI approach connects every employee to our Aspiration through a cascade of goals and metrics Long-term strategy to achieve Aspiration Short-term tactics & targets to achieve strategy Plans & scorecards to monitor progress Metrics that drive problem solving toward progress 25
Slide 26: CI program benchmarked by industry peers
Our CI program continues to be benchmarked by industry peers and outside organizations 26
Slide 27: Top-decile Customer Satisfaction
Top-decile Customer Satisfaction PHOTO(S) Option Top-decile Customer Satisfaction
Slide 28: Strong customer satisfaction results
Engaged employees focusing on improving our customers’ experiences have led to strong satisfaction results J.D. Power Rank vs. Midwest Peers Note: DTE Energy received the highest numerical score in the Midwest in the proprietary J.D. Power 2015 Gas Utility Business Customer Satisfaction Study SM. Ba
Slide 29: Power quality and reliability remains the largest gap
Power quality and reliability remains the largest gap to top performer 29 2010 2011 2012 2013 2014 Power Quality & Reliability (J.D. Power Residential Electric Scores) Top Performer DTE Electric
Slide 30: Significant improvement in reducing defects and complaints
We have seen significant improvement in reducing defects and complaints 30 10.4% 8.6% 2011 2012 2013 2014 Customer Interaction Defect Rate 3,083 2,051 2011 2012 2013 2014 Public Service Commission Customer Complaints 17% reduction 33% reduction
Slide 31: Focusing on high bill defects
One of the many areas we are focusing on for significant improvement is high bill defects 31 2.4% 0.8% 2013 2014 2015 High Bill Defect Rate Bill Perception Managing Usage Bill Explanation Bill Amount High Bill Defect Rate by Area 67% reduction
Slide 32: New ways for customers to interact with DTE Energy
We are creating highly satisfying experiences by offering customers new ways to interact with DTE Energy DTE Mobile App DTE Insight App Payment Kiosks Tracks real time usage – first to provide this app Promotes energy savings tools Serves urban customers in stores Seeking partnerships to exp
Slide 33: Strong Political and Regulatory Context
Option Strong Political and Regulatory Context
Slide 34: EPA's Clean Power Plan will transform the electric industry
The EPA’s Clean Power Plan has set forth significant carbon reduction goals which will transform the electric industry The most transformational policy in the history of the electric industry Will cut CO2 emissions by 32% by 2030, compared to 2005 Initial compliance plans to be submitted by Septe
Slide 35: Clean Power Plan presents an opportunity for Michigan
The EPA’s Clean Power Plan presents an opportunity for Michigan to transition to a cleaner energy future 2012 2014 2022 2023 2024 2025 2026 2027 2028 2029 2030 Michigan CO2 Mass-Based Target (Million tons) 16% 32% 10% 35
Slide 36: DTE's transformation will meet EPA and Michigan requirements
DTE’s transformation will meet both EPA and Michigan’s planning requirements 2012 2030 Scenario* Nuclear / Other Gas Renewables Coal ~60% ~15% ~5% ~20% ~25% 30% - 45% 15% - 30% ~15% DTE Electric Capacity Mix * Estimated amounts. Timing and mix of generation impacted by MISO capacity requirements and
Slide 37: Near-term decisions to position for future generation mix
We are focused on identifying near-term decisions to position ourselves for future generation mix scenarios ~1.3 GW 2015 - 2022 Transformation Timeline Gas/Renewable Capacity Additions* Coal Retirements* ~1.1 - 1.2 GW ~2.2 GW ~2.2 - 3.3 GW 2023 - 2030 Develop & implement SIP EPA Clean Power Plan Act
Slide 38: Lansing leaders working toward energy policy reform
Lansing leaders are working toward constructive energy policy reform 38 Senator Mike Nofs Energy and Technology Committee Chair Valerie Brader Executive Director for the Michigan Agency for Energy Representative Aric Nesbitt Energy Policy Committee Chair Governor Rick Snyder Clean 1 2 Reliable 4 Aff
Slide 39: Michigan plans to control its energy future
Michigan plans to control its energy future 39 • Michigan will develop its own state carbon implementation plan to ensure it retains control of its energy future • The plan will involve multi-agency collaboration ‒ Michigan Agency for Energy ‒ Michigan Public Service Commission ‒ Department of Envir
Slide 40: Energy legislation policy proposals address key issues
Current comprehensive energy legislation policy proposals address a number of key issues Retail Open Access Integrated Resource Planning Regulatory Senate 40 • One-time election • Cost pre-approval process • Fair net-metering 5 year requirement Position House 3 year requirement • Capacity requirem
Slide 41: Activities to finalize energy legislation are underway
Activities to finalize energy legislation are underway 41 • Draft legislation developed in both House and Senate • Multiple House and Senate hearings have been held ‒ 12 hearings by the House Energy Policy Committee ‒ 8 hearings by the Senate Energy and Technology Committee • Valerie Brader, Executi
Slide 42: Michigan Public Service Commission
Michigan Public Service Commission MPSC Chair The Honorable John Quackenbush 42
Slide 43: Clear Growth & Value Creating Strategy
Clear Growth & Value Creating Strategy DTE Gas Power & Industrial Projects (P&I) Gas Storage & Pipelines (GSP) DTE Electric
Slide 44: ~$13 billion in capital projects to drive growth through 2020
We will invest ~$13 billion in capital projects to drive growth through 2020 44 (billions) ~$13 $8.2 Distribution infrastructure, maintenance, new generation $1.6 Base investments, infrastructure renewal, NEXUS related $2.0-$2.6 Gathering investments, NEXUS, pipeline expansions $0.6-$0.9 Cogeneratio
Slide 45: Investment needs at our utilities outstrip our plans
The investment needs at our utilities far outstrip what is included in our plans 45 Generation capacity Gas/renewables mix Distribution infrastructure up to $8 billion Long-term Potential Additional Investment Gas infrastructure Opportunity to reprioritize or increase investment
Slide 46: DTE Electric Targeting 6% - 7% growth
DTE Electric Targeting 6% - 7% growth
Slide 47: Electric utility faces a period of sustained investment
Our electric utility faces a period of significant, sustained investment 32% 47 • Large generation investments due to Clean Power Plan and Michigan’s state implementation plan (SIP) • Distribution renewal investments even larger than those in generation • Together drive our rate base to 6% to 7% ann
Slide 48: Investment over the next 10 years
Generation and infrastructure replacement will significantly increase investment over the next 10 years 32% DTE Electric Total Investment ~$8.2 ~$9.7 2016-2020 2021-2025 ~$7.1 2011-2015 New generation (billions) Distribution infrastructure 48 Maintenance and other projects
Slide 49: Generation mix shifts from coal to gas and renewables
Our generation mix shifts from coal to natural gas and renewables as we address the EPA’s Clean Power Plan 32% Coal Retirements 2030 Scenario* ~6.7 2015* Gas / Renewables Additions* ~2.2 ~2.2 ~12.3 (~3.5) ~25% 15%-30% ~15% Nuclear / Other Gas Renewables Coal ~1.2 30%-45% DTE Electric Capacity (GW) *
Slide 50: Coal retirement timeline
Coal retirements will commence in the 5 year window and then accelerate after 2020 32% 2015 2016 - 2020 2021 - 2025 ~1,825 MW ~125 MW ~550 MW 2026 - 2030 ~1,000 MW DTE Coal Retirement Timeline (Scenario*) * Estimated amounts. Timing and mix of generation impacted by MISO capacity requirements and Mi
Slide 51: Overview of DTE Electric's distribution system
Overview of DTE Electric’s distribution system 32% DTE Electric service territory 7,600 square miles 51 2.1 million customers 432,000 distribution transformers 45,000 miles of distribution lines (30,000 overhead, 15,000 underground) 1 million poles Significant system build out from 1940-1970
Slide 52: Why is the distribution system a focus?
Why is the distribution system a focus for us? 32% Historical spend on storm and reactive repair 2010 2011 2012 2013 2014 +7% CAGR 52 2010 2011 2012 2013 2014 Top Performer DTE Electric Power Quality & Reliability (J.D. Power Residential Electric Scores)
Slide 53: Four key areas to improve distribution reliability
We will focus on four key areas to improve distribution reliability 53 Infrastructure Redesign Infrastructure Resilience Technology Enhancements Tree Trimming
Slide 54: Enhanced tree trimming program
Investing in an enhanced tree trimming program will provide the greatest near-term improvement in system reliability 32% Customer Minutes Interrupted (2011-2013) • Tree-related outages have driven the majority of customer interruptions in recent years Equipment 12% Tree Related 67% All Other 21% 54
Slide 55: Areas of greatest need for capital investment
We have identified areas of greatest need for capital investment 32% Infrastructure Resilience • Replace aging infrastructure • Focus on worst performing areas Technology Enhancements • Increase control capabilities • Provide greater visibility Infrastructure Redesign • Address overloaded substation
Slide 56: Plan to invest $6.6 billion to $10.6 billion in distribution infrastructure
Over the next 10 years we plan to invest $6.6 billion to $10.6 billion in distribution infrastructure 32% 2016-2025 (billions) ~$18 Maintenance and other projects New generation Distribution infrastructure DTE Electric Total Investment Base Case Potential Investment Base Infrastructure renewal Infra
Slide 57: Sharp declines in business rates
We enter this period of heavy investment on the heels of sharp declines in business rates 57 15%* Large Industrial Customers 9%* Commercial Customers • $600 million of surcharge reductions in 2014 and 2015 • Business cost of service rates implemented in 2015 • These reductions are after $230 million
Slide 58: Minimizing residential bill impact
As we continue to grow, we are also focused on minimizing residential bill impact (dollars) 58 $1,215 $1,136 2013 2015E Average Annual Electric Residential Bill • Residential electric bills are down over 6% • Surcharge reductions offset by 2015 rate increase
Slide 59: Energy efficiency savings could provide room for reliability improvements
Energy efficiency savings could provide room for needed reliability improvements Customer bill impact (2014) 59 • Energy efficiency lowers annualized bill… • ...providing opportunity for increased reliability investment … • ...resulting in improved system reliability and customer experience Distribu
Slide 60: Electric load forecast
Our electric load forecast shows both underlying growth and energy efficiency savings Current Load Underlying Growth Energy Efficiency Planning Scenario Electric Load Forecast GWh ~1% ~(1%) ~flat 60
Slide 61: Incremental investment in our territory driving additional load
We are seeing incremental investment in our service territory driving additional load DTE Electric service territory 61 New business/expansions Prospective projects may add up to 0.5% of additional load
Slide 62: DTE Gas Targeting 7% - 8% growth
DTE Gas Targeting 7% - 8% growth
Slide 63: Investment in our gas utility will increase significantly
Investment in our gas utility will increase significantly over the next 5 years 63 2011-2015 2016-2020 ~$1.1 ~$1.6 DTE Gas Total Investment (billions) Base infrastructure Infrastructure renewal NEXUS related
Slide 64: DTE Gas system expanded to support NEXUS interconnection
The DTE Gas system will be expanded to support the proposed NEXUS interconnection • $200 million of NEXUS related investment at DTE Gas through 2017 • Spend primarily for additional compression • Supported by long-term transport agreement with NEXUS DTE Gas service area NEXUS DTE Gas 64
Slide 65: Expanding main replacement to reduce cycle by half
Expanding to 160 miles per year would reduce planned main replacement cycle by half ~$80 Investment (millions) Miles ~80 miles ~$130 ~160 miles Current Gas Renewal Plan (50 years) Proposed Gas Renewal Plan (25 years) Investment* (millions) Miles * Consists of main replacement (~$99m), meter move-out
Slide 66: After 2020 we will still be investing heavily
After 2020 we will still be investing heavily in our gas utility 66 Investment beyond 2020: Infrastructure renewal*: $2.0 - $2.2 billon Transmission and compression: $0.2 - $0.5 billion Distribution: TBD 2016-2020 ~$1.6 DTE Gas Total Investment ($ billions) * Includes main renewal and meter move
Slide 67: Lower customer bills allow room for infrastructure investments
Lower customer bills allow room for needed infrastructure investments Average customer bill is expected to decrease nearly 25% from 2010 $1,167 $1,027 $956 $904 $911 $878 2010 2011 2012 2013 2014 2015E Average Annual Gas Residential Bill* (dollars) 67 * Weather normalized
Slide 68: Recovery of capital investments requires periodic rate cases
Recovery of DTE Gas capital investments will require periodic rate cases Capital Investment and Recovery 2016 - 2020 Infrastructure recovery mechanism Base rates (depreciation) Customer growth and cost reductions Periodic rate cases Capital Investment Recovery Mechanism (billions) ~$1.6 68 Next gas
Slide 69: Gas Storage & Pipelines
Gas Storage & Pipelines
Slide 70: GSP asset portfolio with multiple growth platforms
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms 70 Proposed NEXUS Pipeline Michigan Gathering DTE Gas DTE Storage Marcellus Shale Utica Shale Bluestone Pipeline Bluestone Gathering System
Slide 71: Bluestone volumes better than original forecast
Bluestone volumes have been significantly better than original forecast 71 0 200 400 600 800 1,000 1,200 Bluestone Average Daily Volume (MMcf/day) Original forecast Actuals Forecast
Slide 72: Bluestone assets evolved more quickly and at larger scale
Bluestone assets have evolved more quickly and at larger scale than expected • Executing an accelerated build- out plan • Will reach 1 Bcf/d in 2Q 2016 • Southwestern Energy is our largest customer – Continues to invest in Marcellus – Strong well results driving accelerated drilling program • Added
Slide 73: Contractual commitments expand the Millennium pipeline
Contractual commitments materially expand the Millennium pipeline • Expansion – 200+ MMcf/day – In-service expected 4Q 2017 • Valley Lateral: ~125 MMcf/day on new 8 mile lateral • Working with interested parties on additional expansion opportunities BLUESTONE Valley Lateral Expansion 73
Slide 74: Increasing ownership and investment in NEXUS
DTE is increasing ownership and investment in NEXUS Gas Pipeline • 50% ownership with Spectra Energy • 1.5 Bcf/d pipeline • ~250 miles of pipe • DTE expected investment $1 billion • In-service 4Q 2017 74 Increased ownership percentage from 33% to 50%
Slide 75: Strong supply in Utica and Southwest Marcellus
We continue to see strong supply in Utica and Southwest Marcellus 75 Source: Credit Suisse July 2015 report; Utica – Dry Gas estimate per DTE analysis; IHS CERA 0 5 10 15 20 25 2010 2015 2020 2025 Utica / SW Marcellus Supply Growth (Bcf/d) Actuals 2012 Forecast 2013 Forecast 2014 Forecast 2016 Forec
Slide 76: Gas demand in the Great Lakes area is increasing
Gas demand in the Great Lakes area is increasing • Great Lakes demand expected to increase • Driven by power generation coal to gas conversions • Utica / Marcellus also poised to displace significant existing demand 76 Great Lakes Total Gas Demand (Bcf/d) 2014 2025 2030 ~13.8 ~15.5 ~16.6 Residential
Slide 77: Ohio market support on the NEXUS path
The Ohio market has provided strong support on the NEXUS path 77 Interconnect agreements with local distribution companies, industrials and power generators in Ohio – 1.4 Bcf/d of opportunity Close proximity to significant additional power generation load
Slide 78: Actively developing several new investments
We are actively developing several new investments 78 Proposed NEXUS Pipeline Marcellus Shale Utica Shale Bluestone Pipeline Bluestone Gathering System • Gathering opportunities in Appalachian Basin • Lateral opportunities with link to: ‒ End use markets ‒ Power plants • Bolt-on acquisition in advan
Slide 79: GSP targeting operating earnings of $170 million by 2020
2014A 2015E 2016E 2017E 2018E 2019E 2020E * Reconciliation to GAAP reported earnings included in the appendix Pipeline Platform** Gathering Platform Storage Platform New Project Development (Other gathering and pipeline expansions) ~$170 $85 $45 $15 $25 ** Includes NEXUS at 50% ownership $82 $95 - $
Slide 80: Power & Industrial Projects
Power & Industrial Projects
Slide 81: P&I operates within three distinct business lines
P&I operates within three distinct business lines DTW Airport, Michigan Gallia Fuels Project, Ohio Mt. Poso Waste Wood Project, California • On-site energy and utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • Wood-fired power plants • Landfill
Slide 82: P&I serves its customers from sites in multiple states
P&I serves its customers from 69 sites in 17 states 82 Industrial Energy Services Renewable Energy Reduced Emissions Fuel
Slide 83: Focusing on cogeneration to continue growth
We are focusing on cogeneration to continue growth 83 • Established current asset base and experience ‒ ~500 MW of generation at 29 locations • Strong pipeline of projects in development ‒ Commenced operations in 1Q 2015 at chemical industry customer • Energy market dynamics support significant inve
Slide 84: Optimizing reduced emissions fuel business
We continue to optimize reduced emissions fuel business 84 Picture • Operations at 9th DTE owned project to begin 4Q 2015 • Initiated operations at 3rd party owned site in 2Q 2015 • Evaluating additional facility relocations to larger sites • Executing tax equity partnerships to optimize cash flows
Slide 85: P&I new project growth will offset REF expirations in 2020
P&I’s new project growth will offset reduced emissions fuel expirations in 2020 2014A 2015E 2016E 2017E 2018E 2019E 2020E ~$105 $30 $50 $60 ($65) $30 New Project Development / Acquisitions Renewable Energy Reduced Emissions Fuel Industrial Energy Services Corporate allocations, interest, overheads $
Slide 86: Superior Financial Performance
Superior Financial Performance
Slide 87: DTE has a strong investment thesis
DTE has a strong investment thesis 87 Solid growth at our business segments DTE Electric... generation renewal and distribution reliability DTE Gas... infrastructure renewal program Non-utility... pipelines, laterals, gathering, cogeneration Constructive political and regulatory landscape Michigan
Slide 88: System of priorities framework to earn authorized ROEs
1 9 7 3 1 9 7 5 1 9 7 7 1 9 7 9 1 9 8 1 1 9 8 3 1 9 8 5 1 9 8 7 1 9 8 9 1 9 9 1 1 9 9 3 1 9 9 5 1 9 9 7 1 9 9 9 2 0 0 1 2 0 0 3 2 0 0 5 2 0 0 7 2 0 0 9 2 0 1 1 2 0 1 3 Our system of priorities provides a framework to earn our authorized ROEs during periods of high capital investment U.S. Electric Ut
Slide 89: Confident our growth plan will deliver value to shareholders
We are confident our growth plan will deliver value to our shareholders 89 ** Compared to S&P 500 utilities. Source: Bloomberg 2015 operating EPS Guidance midpoint $4.78 total DTE $4.69 growth segments 2016 operating EPS early outlook midpoint $4.93 Providing 5% - 6% growth Significant capital inves
Slide 90: Operating earnings growth and contingency planning
DTE Operating Earnings Growth Share Issuance Contingency DTE Operating EPS* Growth Non-Utilities 7% - 8% 5% - 6% * Reconciliation to GAAP reported earnings included in the appendix Strong growth opportunities coupled with contingency planning gives us confidence in our ability to deliver 5% to 6% op
Slide 91: Base, lean and invest plans
We manage the business through established base, lean and invest plans • We enter each year with prepared “lean” and “invest” plans • Developing three plans allows us to be flexible and adapt to external forces 91
Slide 92: Increasing 2015 guidance and issuing 2016 early outlook
We are increasing our 2015 operating EPS* guidance and issuing 2016 early outlook (millions, except EPS) * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2015 Revised Guidance 2016 Early Outlook 2015 Original Guidance DTE Electric DTE G
Slide 93: Equity only 10% of total capital spend
Equity only 10% of total capital spend The 2016 to 2018 cash from operations and equity issuance plans support our capital spending and a strong balance sheet Sources of $9.8 billion Uses of $9.8 billion (billions) Cash from Operations $6.8 Debt $2.2 Equity $0.8 Capital Spending $8.1 Dividends $1.7
Slide 94: A strong balance sheet remains a key priority
A strong balance sheet remains a key priority and supports our growth Leverage* 23% 25% * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Target 50% - 53% Target 20% - 22% 5 ** Funds from Operations (FFO) is calculated
Slide 95: Our system of priorities creates value for shareholders
Our system of priorities is fundamental to how we create value for our shareholders 95 5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet 95
Slide 96: Questions?
Questions?
Slide 97: A force for growth in the communities where we live and serve
A force for growth in the communities where we live and serve
Slide 98: Our future success is tied to our Aspiration
Our future success is tied to our Aspiration and a force for growth and prosperity in the communities where we live and serve To be the best-operated energy company in North America 98
Slide 99: Major investor in the State of Michigan and Detroit
$5 billion over the next 5 years We are a major investor in the State of Michigan and Detroit We are committed to buying from Michigan- based firms and encourage others to follow Our Michigan spend helps create and support ~7,500 jobs Michigan-Based Supplier Spend ($ millions) 2010 2011 2012 2013 20
Slide 100: Detroit-based supplier spend
We are a major investor in the State of Michigan and Detroit Our spend with Detroit-based suppliers is helping to spur the city’s recovery $80 $100 $125 $140 $155 $160 2010 2011 2012 2013 2014 2015 Goal 100 Detroit-Based Supplier Spend ($ millions)
Slide 101: Renewing Detroit's lighting and electrical infrastructure
We are renewing Detroit’s lighting and electrical infrastructure 101 Lighting: Overseeing ~$180 million program to fully upgrade street lights Electrical: Investing ~$300 million to transition municipal customers to our grid
Slide 102: Completing work with Detroit's lighting authority in 2016
We look to complete our work with Detroit’s lighting authority in 2016 Map of Detroit Work Completed through 2014 2015 Work 2016 Work 102
Slide 103: Revitalizing our downtown neighborhood
We are revitalizing our downtown neighborhood and later this year we will break ground on the Grand River Public Space 103
Slide 104: Serving our communities in a variety of other ways
We are serving our communities in a variety of other ways $10 million of additional funding in 2014 Low income assistance Impactful volunteer program Thousands of employees donate time to hundreds of organizations Youth development 550 youth summer jobs across Michigan; 300 interns and co-ops 104
Slide 105: Detroit is in the midst of a revitalization
Detroit is in the midst of a revitalization Detroit revitalization video 105
Slide 106: Detroit is in the midst of a revitalization
Detroit is in the midst of a revitalization Detroit revitalization video 106
Slide 107: Appendix
=e DTE Energy Appendix
Slide 108: 2015 operating EPS guidance and 2016 early outlook
2015 operating EPS* guidance and 2016 early outlook 108 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) $3.33 $3.64 $3.75 $3.94 $4.09 $4.60 $2.12 $2.24 $2.35 $2.48 $2.62 $2.76 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Operating EPS Dividend Actual
Slide 109: 2015 Cash Flow and Capital Expenditures Guidance
2015 Cash Flow and Capital Expenditures Guidance 109 (billions) Capital Expenditures Summary Cash Flow Summary 2014 2015 Actual Guidance Cash From Operations* $1.8 $1.7 Capital Spending (2.1) (2.6) Free Cash Flow ($0.3) ($0.9) Asset Sales & Other - 0.1 Dividends (0.5) (0.5) Net Cash ($0.8) ($1.3) De
Slide 110: Michigan Public Service Commission
The Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Norm Saari Commissioner Appointed: 8/2/15 Term Ends: 7/2/21 Source: State of Michigan website - www.michigan.gov/ • The MPSC establishes
Slide 111: DTE Electric plans $8.2 billion of investments over the next 5 years
DTE Electric plans $8.2 billion of investments over the next 5 years 2015E 2016E 2017E 2018E 2019E 2020E Distribution infrastructure New generation Maintenance and other projects* 2016E - 2020E Total ~$14.5B ~$19.4B YE Rate Base** ~$663M ~$888M Depreciation * Includes power reliability, existing gen
Slide 112: DTE Gas plans $1.6 billion of investments
DTE Gas plans $1.6 billion of investments over the next 5 years 2015E 2016E 2017E 2018E 2019E 2020E 2016E - 2020E Total Base infrastructure Infrastructure renewal* NEXUS related $1,600 $200 $650 $750 ~$3.3B ~$4.5B - $4.6B YE Rate Base** ~$102M ~$136M Depreciation ** Includes working capital (million
Slide 113: GSP assets have expansion opportunities
Gas Storage & Pipelines assets have expansion opportunities to accommodate increased demand Pipeline Assets Capacity Bcf/ d In-Service Millennium Pipeline 0.8 Expansion #1 0.2+ 4Q 2017 Total Planned Capacity ~1.0 Bluestone Pipeline (bi-directional)* 0.9 Expansion #3 0.1 2Q 2016 Total Planned Capacit
Slide 114: DTE regulatory filing timeline
DTE regulatory filing timeline DTE Gas • Filed expanded Infrastructure Recovery Mechanism (IRM) 2015 • Filed cost of service rates and general rate case DTE Electric 2014 2016 • Business cost of service rates implemented 3Q • Self implement general rates 3Q • Final rate order 4Q • Expect rate case f
Slide 115: Michigan's economy continues to improve
410 417 426 435 442 2013 2014 2015E 2016E 2017E (billons) Michigan’s economy continues to improve 8.5% 7.1% 5.6% 5.6% 5.5% 2013 2014 2015E 2016E 2017E 2,433 2,243 2,386 2,522 2,485 2013 2014 2015E 2016E 2017E (000s) 15.1 15.8 16.9 19.8 21.8 2013 2014 2015E 2016E 2017E (000s) Gross State Product Auto
Slide 116: Non-utility business net cash flows
Non-utility business net cash flows * Reconciliation to GAAP reported earnings included in the appendix 1.90.9 1.0 Power & Industrial Total Non-Utility Gas Storage & Pipelines Shale Gas Asset Sales & Other Net Cash Flow Operations & Asset Sales Capital Expenditures (1.8) 2.8 Non-Utility Net Cash Flo
Slide 117: Non-Utility Cash Flow Reconciliation
Non-Utility Cash Flow Reconciliation 117 Non-Utility Cash Flow Reconciliation Fiscal Years 2005 - 2014 $ billions Notes 2005 - 2014 Cash from operations DTE Energy (consolidated) A $17.0 Less: DTE Electric & DTE Gas B (14.4) Adjustments C (0.7) Non-utility cash from operations 2.0 Proceeds from asse
Slide 118: 2009 – 2014 Reconciliation of Reported to Operating Earnings
2009 – 2014 Full Year Reconciliation of 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
Slide 119: Use of Operating Earnings Information
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 measurement for external communications with analysts and i