Dte Energy Company · NYSE:DTE
Dte Energy — FY2019 Earnings Presentation
26 slides from Dte Energy's earnings presentation, Feb 5, 2020
Slide 1: DTE Year End 2019 Earnings Conference Call
DTE YEAR END 2019 EARNINGS CONFERENCE CALL FEBRUARY 5, 2020 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain information presented herein includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, and businesses of DTE Energy. Words such as “anticipate,” “belie
Slide 3: Participants
Participants Jerry Norcia – President and CEO Peter Oleksiak – Senior Vice President and CFO Barbara Tuckfield – Director Investor Relations 3
Slide 4: Strong operational and financial performance in 2019
Strong operational and financial performance in 2019 Operating EPS1 9.0% $6.30 • Delivered strong financial results in 2019 $6.15 ‒ Operating EPS growth rate of 9.0% from 2018 original guidance $5.78 ‒ Exceeded original guidance midpoint for 11th consecutive year ‒ Increased dividend 7%; targeting 7
Slide 5: Positioned for continued growth from strong 2020 guidance
Positioned for continued growth from strong 2020 guidance Operating EPS1 • 2020 operating EPS guidance midpoint provides 7.5% growth from 2019 original guidance 7.5% • Well-positioned for 5% – 7% operating EPS growth through 2024 • Continued investment in utilities $6.61 ‒ Investing 80% of 5-year ca
Slide 6: Delivering premium operating EPS results through disciplined planning and management
Delivering premium operating EPS 1 results through disciplined planning and management History of exceeding operating EPS guidance Robust planning Annually create detailed 5-year plan $6.30 Includes earnings contingency across the portfolio $2.90 Weekly detailed executive management review of first
Slide 7: Commitment to strong culture provides a solid framework for success
Commitment to strong culture provides a solid framework for success Safety National Safety Council’s top 2% of companies surveyed in safety culture Employee engagement Top 3% in the world by Gallup; 7 consecutive Gallup Great Workplace Awards Customer satisfaction Top quartile at both utilities for
Slide 8: DTE Electric: infrastructure investments drive strong growth
DTE Electric: infrastructure investments drive strong growth Advanced on clean energy initiatives in 2019 • Accelerated carbon emissions reduction ‒ 80% carbon emissions reduction by 2040 ‒ Net zero carbon emissions by 2050 • Progressed on new natural gas power plant • Accelerated investments in Cha
Slide 9: DTE Gas: replacing aging infrastructure improves cost, performance and productivity
DTE Gas: replacing aging infrastructure improves cost, performance and productivity Transformational investments in 2019 • Completed 180 miles of main renewal • Continued technology investment to reduce manual meter reads and improve operational efficiency Investing in infrastructure; progressing on
Slide 10: Gas Storage & Pipelines: high-quality assets with revenue certainty
Gas Storage & Pipelines: high-quality assets with revenue certainty is the foundation for 2019 success and long-term growth 2019 accomplishments 85% of total revenue covered by fixed • Successfully integrated disciplined revenue contracts and flowing gas acquisitions with growth potential and connec
Slide 11: Power & Industrial Projects: continuing consistent growth in key focus areas
Power & Industrial Projects: continuing consistent growth in key focus areas 2019 accomplishments • Acquired one large industrial energy services project and secured the development of two additional projects • Began commercial operation of integrated RNG facilities in Wisconsin – recognized by the
Slide 12: 2019 operating earnings variance
2019 operating earnings1 variance (millions, except EPS) 2018 2019 Variance Primary drivers Rate implementation and one-time items offset by DTE Electric $ 669 $ 716 $ 47 rate base growth costs and cooler weather Rate implementation and cooler weather offset by DTE Gas 159 181 22 rate base growth co
Slide 13: Continuing long track record of delivering premium shareholder returns
Continuing long track record of delivering premium shareholder returns Strong operational and financial performance in 2019; 1 well-positioned for future growth 5% – 7% operating EPS1 growth through 2024 from 2 2020 base 3 7% dividend growth extended through 20212 Driving utility growth by investing
Slide 14: Contact Us
CONTACT US DTE Investor Relations www.dteenergy.com/investors 313.235.8030 14
Slide 15: Appendix
Appendix DTE
Slide 16: Clear line of sight for growth supported by investment in utility infrastructure
Clear line of sight for growth supported by investment in utility infrastructure and disciplined non-utility opportunities (billions) 2020 – 2024 DTE Energy investment $19 billion $15 Electric: Distribution infrastructure, $12 cleaner generation, maintenance Gas: Base infrastructure, main $3 80% ren
Slide 17: 2020 operating earnings guidance
2020 operating earnings1 guidance (millions, except EPS) 2020 operating earnings guidance DTE Electric $759 - $773 DTE Gas 185 - 193 Gas Storage & Pipelines 277 - 293 Power & Industrial Projects 133 - 148 Energy Trading 15 - 25 Corporate & Other (122) - (132) DTE Energy $1,247 - $1,300 Operating EPS
Slide 18: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile (billions) • $1.6 billion of available liquidity at year-end Planned equity issuances 2019 2020 – 2022 $1.3 • Maintaining strong investment-grade credit rating and FFO1/Debt2 target at 18% Convertible equity units $0.1 – $0.4 $0.1 – $0.3
Slide 19: Weather impact on sales
Weather impact on sales Cooling degree days – DTE Electric service area Heating degree days – DTE Gas service area 2018 2019 % change 4Q 2018 4Q 2019 % change Actuals 1,175 863 (27%) Actuals 2,310 2,289 (1%) Normal 803 803 0% Normal 2,182 2,197 1% Deviation from normal 46% 7% Deviation from normal 6
Slide 20: Cash flow and capital expenditures
Cash flow and capital expenditures Cash flow Capital expenditures (billions) (millions) 2019 2020 2019 2020 actual guidance actual guidance Cash from operations1 $ 2.6 $ 3.0 DTE Electric Capital expenditures (6.0) (4.5) Base infrastructure $ 868 $ 680 Free cash flow $ (3.4) $ (1.5) New generation 39
Slide 21: DTE Electric and DTE Gas regulatory update
DTE Electric and DTE Gas regulatory update DTE Electric DTE Gas • General rate case – filed July 2019 • General rate case – filed November 2019 (U-20561) (U-20642) ‒ Effective: May 2020 ‒ Effective: October 2020 ‒ Rate recovery: $351 million ‒ Rate recovery: $204 million ‒ ROE: 10.5% ‒ ROE: 10.5% ‒
Slide 22: 2019 Energy Trading reconciliation to economic net income
2019 Energy Trading reconciliation of operating earnings 1 to economic net income (millions) • Economic net income equals economic gross Energy Trading reconciliation margin3 minus O&M expenses and taxes • DTE Energy management uses economic net 2018 2019 income as one of the performance measures Op
Slide 23: 2018 – 2019 reconciliation of reported to operating earnings
2018 – 2019 reconciliation of reported to operating earnings (non-GAAP) 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 24: 2018 – 2019 reconciliation of reported to operating EPS
2018 – 2019 reconciliation of reported to operating EPS (non-GAAP) 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 perf
Slide 25: 2008 reconciliation of reported to operating EPS
2008 reconciliation of reported to operating EPS (non-GAAP) 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
Slide 26: Reconciliation of reported to operating earnings
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 more meaningful represe