Slide 1: Year End 2014 Earnings Conference Call
February 13, 2015 Year End 2014 Earnings Conference Call EXHIBIT 99.3
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, CFTC, EPA and other applicable governmental proceedings and reg
Slide 3: Participants
• Gerry Anderson – Chairman and CEO • Peter Oleksiak – Senior Vice President and CFO • Anastasia Minor – Executive Director, Investor Relations Participants 3
Slide 4: Agenda
• 2014 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 4
Slide 5: Our system of priorities is fundamental to how we create value
5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet Our system of priorities is fundamental to how we create value for our investors 5
Slide 6: We achieved top performance across our priorities in 2014
We achieved top performance across our priorities in 2014 Strengthening our distinctive continuous improvement capability • Project Management Institute named DTE one of three finalists for their global project management award • O&M expenses at 2008 levels • Utilities ranked among the top of the pe
Slide 7: 2014 accomplishments: financial, investment and regulatory
Financial Growth / Value DTE Energy 2014 Operating EPS* of $4.60 compared to the revised EPS guidance midpoint of $4.52 • Earned allowed ROE at electric and gas utilities • Total shareholder return** top quartile for the one, three and five year timeframes • Increased annualized dividend 5.3% to $2.
Slide 8: Agenda
• 2014 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 8
Slide 9: Michigan continues to have a constructive political and regulatory environment
Michigan continues to have a constructive political and regulatory environment Governor Rick Snyder Michigan Public Service Commission John Quackenbush Chairman Term Ends: 7/2/17 Sally Talberg Commissioner Term Ends: 7/2/19 Greg White Commissioner Term Ends: 7/2/15 9
Slide 10: The state has experienced leadership to drive energy policy changes
The state has experienced leadership to drive successful changes in energy policy “I am calling for the creation of an Agency on Energy… …we can all work together to come up with better policies.” From Governor Snyder’s State of the State address, January 20, 2015 10 Senator Mike Nofs Energy and Tec
Slide 11: Policy will transform our generation mix toward gas and renewables
Federal and state policy will lead to transformation of our generation mix by replacing coal with natural gas and renewables DTE Electric Generation Output 2014 2030 Scenario* Gas / Renewables Coal Nuclear / other ~70% ~30% ~50% ~20% ~20% ~10% * Ultimate timing and mix of generation impacted by MISO
Slide 12: Agenda
• 2014 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 12
Slide 13: Committed to 5%-6% operating EPS growth target
$4.60$4.60 $3.94 $3.75 $3.64 $3.33 $2.76 $2.62 $2.48 $2.35 $2.24 $2.12 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $4.09 Operating EPS* 6.7% CAGR 2009 – 2014 We remain committed to our 5%-6% operating EPS* growth target (per share) Dividend per share 5.4% CAGR 2009 – 2014 (Annualized) EPS
Slide 14: We will invest over $11 billion in capital projects through 2019
We will invest over $11 billion in capital projects to drive growth through 2019 (billions) ~$11.2 – $11.8 $0.6 – $0.8 $1.5 – $1.9 $1.6 $7.5 Power & Industrial Projects Gas Storage & Pipelines DTE Gas DTE Electric On-site energy, cogeneration Gathering investments, NEXUS, additional pipeline expansi
Slide 15: Minimizing the customer rate impact as we grow
$ * Includes ~$300 million surcharge reduction for renewable energy, power supply cost recovery (PSCR) and choice incentive mechanism implemented 1Q 2014 and net reduction of ~$300 million due to elimination of securitization surcharge and PSCR increase in 1Q 2015 As we continue to grow, we continue
Slide 16: Gas Storage & Pipelines asset portfolio with multiple growth platforms
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms DTE Gas DTE Storage Proposed NEXUS Pipeline Marcellus Shale Bluestone Gathering System Bluestone Pipeline Utica Shale Michigan Gathering 16
Slide 17: NEXUS and Vector pipelines have taken important steps forward
The NEXUS and Vector pipelines have taken important steps forward in recent months • Open season results finalized: - Executed 15+ year transport contracts with NEXUS Gas Transmission and Rover Pipeline LLC - Contracts firm up long-term utilization of Vector and will not require mainline expansion i
Slide 18: Gas Storage & Pipelines operating earnings potential is $145 million by 2019
Gas Storage & Pipelines’ operating earnings* potential is $145 million by 2019 $70 $45 $20 $10 Storage Platform 10% – 15% CAGR Pipeline Platform** Gathering Platform New Project Development 2019E ~$145 2018E 2017E 2016E 2015E $80 - $88 2014A $82 2013A $70 (millions) * Reconciliation to GAAP reported
Slide 19: Power & Industrial Projects pursuing new opportunities in each business line
Power & Industrial Projects is pursuing new opportunities in each business line in order to achieve growth aspirations • On-site energy and utility services for industrial, commercial and institutional customers • Several cogeneration projects currently under development • Wood-fired power plants an
Slide 20: Power & Industrial Projects targeting $145 million operating earnings by 2019
($65) $85 $70 $35 $20 2014A $90 2013A $70 Reduced Emissions Fuel Renewable Energy New Project Development / Acquisitions 2019E ~$145 2018E 2017E 2016E 2015E Industrial Energy Services Corporate allocations, interest, overheads 10% - 15% CAGR (millions) * Reconciliation to GAAP reported earnings incl
Slide 21: Agenda
• 2014 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 21
Slide 22: DTE Energy 2014 Operating Earnings Variance
DTE Energy 2014 Operating Earnings* Variance * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading Drivers (millions, except EPS) 2014 Change 2013 DTE Electric • Revenue decoupling mechanism amortization and lower O&M DTE Gas • Colder winter
Slide 23: Raising 2015 operating EPS guidance
We are raising our 2015 operating EPS* guidance from our previous early outlook * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading Drivers (millions, except EPS) 2015 Early Outlook 2015 Guidance 2014 Actuals* DTE Electric $528 $554 - $570
Slide 24: Growth segments provide 5.5% EPS growth with normal weather
* Reconciliation to GAAP reported earnings included in the appendix $0.04 $0.20 +5.5% 2015 Growth Segments Operating EPS* Guidance Midpoint $4.60 Non-Utility Performance Utility Performance Weather ($0.12) 2014 Growth Segment Operating EPS* $4.48 Growth segments provide 5.5% EPS growth with normal w
Slide 25: DTE Energy 2014 Cash Flow Actuals
2013 2014 Cash From Operations* $2.2 $1.8 Capital Spending (1.9) (2.1) Free Cash Flow $0.3 ($0.3) Asset Sales - - Dividends (0.4) (0.5) Net Cash ($0.1) ($0.8) Debt Financing: Issuances $1.2 $2.0 Redemptions (1.1) (1.2) Change in Debt $0.1 $0.8 DTE Energy 2014 Cash Flow Actuals • Cash from operations
Slide 26: DTE Energy 2015 Cash Flow Guidance
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) Debt Financing: Issuances $2.0 $1.6 Redemptions (1.2) (0.3) Change in Debt $0.8 $1.3 DTE Energy 2015 Cash Flow Gui
Slide 27: Strong balance sheet remains a key priority and supports growth
Leverage* 49% 51% 23% 25% Strong balance sheet remains a key priority and supports growth * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Funds from Operations** / Debt* Target 50% - 53% Target 20% - 22% 5 • Achieved
Slide 28: Agenda
• 2014 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 28
Slide 29: Summary
Summary • Exceeded our operating EPS* growth target with historical growth of nearly 7% • Targeting 5% to 6% operating EPS* growth ‒ 2015 growth segment guidance midpoint of $4.60 provides 5.5% EPS growth over 2014, with normal weather ‒ Grow dividends in line with earnings • Meaningful investment o
Slide 30: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 30 Credit Suisse Energy Summit presentation is February 25 at 10:25 AM MT with Peter Oleksiak – Senior Vice President and CFO Webcast access: www.dteenergy.com/investors
Slide 31: Appendix
se DTE Energy Appendix
Slide 32: DTE Energy 2014 Operating Earnings Per Share
DTE Energy 2014 Operating Earnings Per Share* Gas Storage & Pipelines $0.46 Power & Industrial Projects $0.51 * Reconciliation to GAAP reported earnings included in the appendix Energy Trading $0.12 Corporate & Other ($0.26) DTE Gas $0.79 Non-Utility $1.09 DTE Electric $2.98 $4.60 32
Slide 33: DTE Electric Variance Analysis
DTE Electric Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix Drivers • Cooler than normal weather in 2014 Variance to normal weather - 2013: $4 - 2014: ($14) • Revenue decoupling mechanism (RDM) amortization supports rate base growth (property taxes and deprecia
Slide 34: DTE Gas Variance Analysis
* Reconciliation to GAAP reported earnings included in the appendix $140$143 $19 ($12) O&M Weather 2014 Operating Earnings ($5) Other Reinvest ($5) 2013 Operating Earnings DTE Gas Variance Analysis • Colder than normal weather in 2014 Variance to normal weather - 2013: $17 - 2014: $36 • Higher O&M p
Slide 35: Utility regulatory timeline
DTE Gas • Filed expanded Infrastructure Recovery Mechanism (IRM) 2015 • Filed cost of service rates and general rate case DTE Electric 2014 2016+ • Revised business cost of service rates 2Q • Self implement general rates 3Q • Final rate order 4Q • Periodic rate cases • IRM review and ruling • Begin
Slide 36: DTE Energy 2015 Capital Expenditure Guidance
DTE Energy 2015 Capital Expenditure Guidance 2014 2015 Actual Guidance DTE Electric Operational $1,187 $1,270 Environmental 169 100 Renewable Energy / New Generation 205 450 $1,561 $1,820 DTE Gas Operational $143 $200Main Renewal / Meter Move-out / Pipeline Integrity 81 80 $224 $280 $309 $400 - $500
Slide 37: Gas Storage & Pipelines 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 Future Expansion (planning phase) 0.2 - 0.5 2017 + Total Planned Capacity 1.0 - 1.3 Bluestone Pipeline (bi-directional)* 0.8 Expansion #2 0.1
Slide 38: DTE Energy Trading: Operating Earnings to Economic Net Income
(millions, after-tax) Operating Earnings* $61 • Economic net income equals economic gross margin*** minus O&M expenses and taxes • DTE Energy management uses economic net income as one of the performance measures for external communications with analysts and investors • Internally, DTE Energy uses e
Slide 39: 2014 Reconciliation of Reported to Operating Earnings
2014 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 528$ 140$ 82$ 90$ (57)$ 783$ 122$ 905$ Investment impairment - - - - 5 5 - 5 NY state tax law change - - - - 8 8 - 8 Certain mark-to-marke
Slide 40: 2013 Reconciliation of Reported to Operating Earnings
2013 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 484$ 143$ 70$ 66$ (44)$ 719$ (58)$ 661$ Asset impairment - - - 4 - 4 - 4 Certain mark-to-market transactions - - - - - - 55 55 Operating E
Slide 41: 2009–2014 Full Year 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 42: 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