Dte Energy Company · NYSE:DTE
Dte Energy — Q3 2013 Earnings Presentation
33 slides from Dte Energy's earnings presentation, Oct 25, 2013
Slide 1: 3rd Quarter 2013 Earnings Conference Call
3rd Quarter 2013 Earnings Conference Call October 25, 2013 EXHIBIT 99.3
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 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,
Slide 3: Participants
Participants 3 • 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
Slide 4: Agenda: Overview
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 4
Slide 5: Our business strategy is fundamental to how we create value for our investors
Our business strategy is fundamental to how we create value for our investors Utility growth plan driven by environmental and renewable energy investments Meaningful, transparent, low-risk growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive r
Slide 6: We remain committed to delivering on our targets
2008A 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E $3.80 We remain committed to delivering on our targets * Reconciliation to GAAP reported earnings included in the appendix $3.33 $3.75 $3.64 Dividend per share 5.4% CAGR 2009-2013 (Annualized) Operating EPS* 7% CAGR 2008-2014 Guidance Midpo
Slide 7: Michigan economic indicators highlight continued recovery in 2013
Michigan economic indicators highlight continued recovery in 2013 Michigan leads the country in new manufacturing job creation Michigan ranked #7 on Corporate Income Tax ranking 1,144 1,578 1,912 2,252 2,448 2009 2010 2011 2012 2013E Increased Auto Production (000s) 13.4% 12.7% 10.4% 8.9% 8.3% 2009
Slide 8: Overview
Overview * Reconciliation to GAAP reported earnings included in the appendix • We are confident in achieving our 2013 operating earnings* guidance and are narrowing the guidance range while maintaining the $4.05 midpoint target • Year to date 2013 operating earnings* are $3.09 per share vs. $3.08 in
Slide 9: Agenda: Third Quarter 2013 Overview
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 9
Slide 10: DTE Energy Third Quarter 2013 Operating Earnings Per Share
DTE Energy Third Quarter 2013 Operating Earnings Per Share* 10 Gas Storage & Pipelines $0.09 Power & Industrial Projects $0.15 * Reconciliation to GAAP reported earnings included in the appendix Energy Trading ($0.03) Corporate & Other ($0.03) DTE Gas ($0.07) Non-Utility $0.21 DTE Electric $1.02 $1.
Slide 11: DTE Energy Third Quarter 2013 Operating Earnings Variance
DTE Electric 194$ 179$ (15)$ DTE Gas 4 (13) (17) Gas Storage & Pipelines 14 16 2 Power & Industrial Projects 22 27 5 Energy Trading 1 (6) (7) Corporate & Other (9) (5) 4 DTE Energy 226$ 198$ (28)$ Operating EPS 1.30$ 1.13$ (0.17)$ Avg. Shares Outstanding 172 176 DTE Energy Third Quarter 2013 Operati
Slide 12: DTE Electric Variance Analysis
DTE Electric Variance Analysis 12 * Reconciliation to GAAP reported earnings included in the appendix $194 ($40) (millions) $14 $11 Drivers Operating Earnings* Variance $179 • Return to normal weather in 3Q 2013 vs. 3Q 2012 Variance to normal weather - 3Q 2012: $40 - 3Q 2013: $ - • Other margin driv
Slide 13: DTE Gas Variance Analysis
DTE Gas Variance Analysis 13 * Reconciliation to GAAP reported earnings included in the appendix $4 (millions) • Results return to a more typical 3Q level • One-time items include 2012 lean initiatives • O&M reinvestment in gas distribution reliability projects • Other includes higher depreciation a
Slide 14: Narrowing 2013 guidance range and maintaining $4.05 EPS midpoint
We are narrowing our 2013 guidance* range and maintaining our $4.05 EPS midpoint target 2013 Guidance Drivers Prior Guidance* (millions, except EPS) DTE Electric $383 $480 - $490 DTE Gas 91 115 - 120 Gas Storage & Pipelines 49 65 - 70 Power & Industrial Projects 50 60 - 70 Energy Trading (1) 10 - 30
Slide 15: Agenda: Cash Flow and Capital Expenditures
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 15
Slide 16: DTE Energy YTD 2013 Cash Flow
YTD 2012 YTD 2013 Cash From Operations* $1.7 $1.7 Capital Spending (1.2) (1.4) Free Cash Flow $0.5 $0.3 Asset Sales - - Dividends (0.3) (0.3) Net Cash $0.2 $0.0 Debt Financing: Issuances $0.5 $0.8 Redemptions (0.7) (0.8) Change in Debt ($0.2) $0.0 DTE Energy YTD 2013 Cash Flow Cash Flow Summary (bil
Slide 17: DTE Energy YTD 2013 Capital Expenditures
YTD 2012 YTD 2013 DTE Electric Operational $599 $682 Environmental 105 125 Renewable Energy 151 139 $855 $946 DTE Gas Operational $98 $99 Main Renewal / Meter Move Out / Pipeline Integrity 55 56 $153 $155 Non-Utility $233 $286 Total $1,241 $1,387 DTE Energy YTD 2013 Capital Expenditures Capital Expe
Slide 18: We are increasing our 2013 cash flow guidance
2013 2013 Prior Revised Guidance Guidance Cash From Operations* $1.8 $1.9 Capital Spending (2.2) (2.1) Free Cash Flow ($0.4) ($0.2) Asset Sales - - Dividends (0.4) (0.4) Net Cash ($0.8) ($0.6) Debt Financing: Issuances $1.6 $1.4 Redemptions (0.8) (0.8) Change in Debt $0.8 $0.6 We are increasing our
Slide 19: Strong balance sheet remains a key priority and supports growth
2012 2013E 19 * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Leverage* Funds from Operations / Debt* 2012 2013E 50% 50% Target 50% - 52% 22% 22% Target 21% - 22% Strong balance sheet remains a key priority and suppo
Slide 20: Agenda: Summary
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 20
Slide 21: Summary
• We are on track to meet our operating earnings* guidance and have narrowed the guidance range while maintaining the $4.05 midpoint target • We are increasing our 2013 cash flow guidance • Balance sheet and cash flow metrics remain strong • Utility investments and meaningful, low-risk growth opport
Slide 22: Contact Us
Contact Us 22 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Slide 23: Appendix
mo DTE Energy: Appendix
Slide 24: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income (Q3)
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of the income statement effect of not recognizing changes in the fair market value of certain non- derivative contracts including physical inventory and capacity contracts for transportation, transmission and
Slide 25: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income (YTD)
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of the income statement effect of not recognizing changes in the fair market value of certain non- derivative contracts including physical inventory and capacity contracts for transportation, transmission and
Slide 26: Reconciliation of Reported to Operating Earnings 2013 Quarterly Views
Reconciliation of Reported to Operating Earnings 2013 Quarterly Views 1 Asset impairment Note: Quarterly earnings per share may not equal full year totals, since quarterly computations are based on weighted average common shares outstanding during each quarter $ EPS Reported Earnings Operating Adjus
Slide 27: Reconciliation of Reported to Operating Earnings 2012 Quarterly Views
Reconciliation of Reported to Operating Earnings 2012 Quarterly Views 1 Discontinued Operations of Unconventional Gas Note: Quarterly earnings per share may not equal full year totals, since quarterly computations are based on weighted average common shares outstanding during each quarter Net Income
Slide 28: 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 measurement for external communications with analysts and i
Slide 29: Reconciliation of 2011 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 measurement for external communications with analysts and i
Slide 30: Reconciliation of 2010 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 measurement for external communications with analysts and i
Slide 31: Reconciliation of 2009 Reported to Operating Earnings
Reconciliation of 2009 Reported to Operating Earnings 31 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 me
Slide 32: Reconciliation of 2008 Reported to Operating Earnings
Reconciliation of 2008 Reported to Operating Earnings 32 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 me
Slide 33: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other Reported to Operating Earnings 33 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 m