Dte Energy Company · NYSE:DTE
Dte Energy — Corporate Update (September 2016)
40 slides from Dte Energy's corporate update, Sep 27, 2016
Slide 1: Business Update September 28, 2016
EXHIBIT 99.1 Business Update September 28, 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Many factors 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 proceedings and regulations, including any associated impact on rate structures; t
Slide 3: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 3
Slide 4: DTE Energy's growth is driven by strong, stable utilities and complementary non-utility businesses
DTE Energy’s growth is driven by strong, stable utilities and complementary non-utility businesses 4 DTE Electric • Electric generation and distribution • 2.2 million customers DTE Gas • Natural gas transmission, storage and distribution • 1.2 million customers Complementary Non-Utility Businesses S
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 5 5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet Utility growth plan driven by infrastructure investments Strategic and transparent growth opportunities in non-utility businesses provide diversity i
Slide 6: We continue to make progress on many fronts
6 Financial performance Strong year-to-date financial results 2016 operating EPS* guidance raised to a midpoint of $5.22 Acquisition of midstream assets Regulatory framework Regulatory proceedings progressing in a constructive manner, including a supportive position regarding NEXUS Operations DTE El
Slide 7: Agreement to purchase midstream assets in the SW Marcellus / Dry Utica for $1.3 billion
7 Entered into agreement to purchase midstream assets in the SW Marcellus / Dry Utica region for $1.3 billion • 100% of Appalachia Gathering System (AGS) and 55% of Stonewall Gas Gathering (SGG)* • Complements our existing gas midstream business • Expands our footprint in most prolific geography in
Slide 8: Energy legislation continues to move forward
8 Energy legislation continues to move forward • Key provisions include − Capacity requirements for all electricity providers − Integrated resource planning pre- approval process − Energy efficiency related incentives and revenue decoupling • 2008 law works well and includes − 10% retail open access
Slide 9: DTE consistently provides value to its shareholders
DTE consistently provides value to its shareholders 9 * Source: Bloomberg (as of 6/30/16) 2009 2010 2011 2012 2013 2014 2015 2016 Annualized Dividend per Share $2.12 $3.08 140% 280% 107% 184% DTE Energy S&P 500 Utilities 10-YR 5-YR Total Shareholder Return (TSR)* Top quartile (dollars per share) Ove
Slide 10: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 10
Slide 11: Distribution and generation infrastructure improvements drive capital investments through 2020
~$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 Cogeneration, on-site energy 2016 – 2020 Current Plan 11 ~$10 2011 – 2015 Actual P&I GSP Gas Electric
Slide 12: Electric generation and infrastructure renewal will significantly increase investment in the decade ahead
Electric generation and infrastructure renewal will significantly increase investment in the decade ahead 32% DTE Electric Investment $8.2 $9.7 2016-2020 2021-2025 $7.1 2011-2015 New generation Distribution infrastructure 12 Maintenance and other projects (billions) ~$18 billion next 10 years The el
Slide 13: $6.5 billion investment in distribution infrastructure over the next 10 years
Of the $18 billion investment over the next 10 years, we will invest $6.5 billion on distribution infrastructure 32% 2016-2025 ~$18 Maintenance and other projects New generation Distribution infrastructure DTE Electric Total Investment 13 (billions) • $6.5 billion over next 10 years • Potential to i
Slide 14: DTE Electric has already begun to retire its coal-fired generation
DTE Electric has already begun to retire its coal-fired generation 14 Note: Estimated amounts. Timing and mix of generation impacted by MISO capacity requirements and Michigan and EPA policies 2030 Scenario 55% 2015 20% 15% 12.4 25% 15%-30% 15% Nuclear/Other Gas Renewables Coal 10% 30%-45% Electric
Slide 15: Paving the way for cleaner energy for our customers
15 Paving the way for cleaner energy for our customers Generated/contracted enough electricity from renewable sources to power over 400,000 homes in 2015 • Announced retirement of 2.5 GW of less-efficient coal-fired generation – Capacity will be retired by 2023 – Combination of baseload gas and sola
Slide 16: Significant emissions reductions already achieved
Significant emissions reductions have already been achieved and we continue on the path to clean energy 32% 16 2005 2015 2030 CO2 Emissions 16% Reduction 2005 2015 2030 2005 2015 2030 NOX Emissions SO2 Emissions • Emissions reductions are largely due to $2 billion in controls installed at Monroe Pow
Slide 17: Strengthening and expanding our gas infrastructure
Strengthening and expanding our gas infrastructure will reduce leaks and lost gas while creating and supporting Michigan jobs 17 2011-2015 2016-2020 $1.1 $1.6 DTE Gas Investment Base infrastructure Infrastructure renewal NEXUS related (billions) • $200 million through 2017 • Primarily additional com
Slide 18: We remain focused on customer affordability
Average Annual Residential Bill* DTE Electric We remain focused on customer affordability 18 $1,223 $1,225 2012 2013 2014 2015 2016E 2017E Average Annual Residential Bill** DTE Gas $910 2012 2013 2014 2015 2016E 2017E 9% Flat ** Assumes normal weather and implementing $180 million rate increase begi
Slide 19: Gas Storage & Pipelines has an asset portfolio with multiple growth platforms
19 Gas Storage & Pipelines has an asset portfolio with multiple growth platforms DTE Gas Michigan Gathering Vector Pipeline (40%) • Bi-directional pipe • Firm capacity/demand-based contracts 1.3 Bcf/d Millennium Pipeline (26.25%) • 0.1 Bcf/d lateral expansion 2Q17 • 0.2 Bcf/d expansion 2H18 • Firm c
Slide 20: NEXUS project is progressing and originates in the most economical geology
20 NEXUS project is progressing and originates in the most economical geology in the country Natural Gas LDC Industrial Customer Power Generation Marcellus / Utica Dry Gas Core DTE Gas Vector • Project on track for 4th quarter 2017 in- service • FERC Notice of Schedule issued 2nd quarter 2016 • Draf
Slide 21: Strong results from Utica and Marcellus increasing expectations for the basin
0 5 10 15 20 25 30 2010 2015 2020 2025 2016 Forecast Utica / SW Marcellus Supply Growth (Bcf/d) Actuals 2012 Forecast 2013 Forecast 2014 Forecast 2015 Forecast Strong results from the Utica and Marcellus region are increasing expectations for the basin 21 Source: IHS CERA US Shale Basin Economics (N
Slide 22: Gas Storage & Pipelines is focused on continued success in pipeline and gathering
Gas Storage & Pipelines is focused on continued success in pipeline and gathering • Accelerated Marcellus development in 2015 delivered 30% year over year earnings growth • Earnings growth driven by both pipeline and gathering platforms • Assessing investment opportunities given current sector dynam
Slide 23: Power & Industrial Projects operates within three distinct business lines in 17 states
Power & Industrial Projects operates within three distinct business lines in 17 states DTW Airport, Michigan Gallia Fuels Project, Ohio Mt. Poso Waste Wood Project, California • On-site utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • Wood-fir
Slide 24: Power & Industrial Projects is pursuing additional strategic opportunities
Power & Industrial Projects is continuing to pursue additional strategic opportunities • 2016 earnings in line with 2015 actuals • Higher REF earnings offset by lower steel related earnings Near-Term • Grow cogeneration portfolio • Pursue strategic asset acquisitions • Maximize REF opportunities Lon
Slide 25: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 25
Slide 26: Increasing our 2016 operating EPS guidance
* Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading Prior 2016 Guidance 2016 YTD 2Q Actuals DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth segments** Growth segments operating EPS Energy T
Slide 27: 2016 Cash Flow and Capital Guidance
27 2016 Cash Flow and Capital Guidance Cash Flow Summary 2015 Actual 2016 Guidance Cash From Operations* $1.9 $1.8 Capital Spending (2.3) (2.7) Free Cash Flow ($0.4) ($0.9) Asset Sales & Other 0.1 - Dividends (0.5) (0.5) Net Cash ($0.8) ($1.4) Debt Financing: Issuances $1.1 $1.9 Redemptions (0.3) (0
Slide 28: A strong balance sheet remains a key priority to support growth
25% 21% 2014 2015 2016-2018E 51% 52% 2014 2015 2016-2018E Leverage* A strong balance sheet remains a key priority to support 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* Targ
Slide 29: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 29
Slide 30: Summary
• Raised 2016 operating EPS* guidance by $0.17 ($0.29 higher than original guidance) ...in light of strong year-to-date performance • Increased dividend for 7th consecutive year... ...as we continue to grow dividends with earnings • Investing in utilities and strategic growth opportunities in our no
Slide 31: Contact Us
DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 31 Contact Us
Slide 32: Appendix
Appendix
Slide 33: 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 2015A 2016E 2017E 2018E 2019E 2020E Distribution infrastructure New generation Maintenance and other projects* 2016E - 2020E Total $14.8B ~$19.8B YE Rate Base** $662M ~$886M Depreciation * Includes power reliability, existing gener
Slide 34: DTE Gas plans $1.6 billion of investments over the next years
DTE Gas plans $1.6 billion of investments over the next 5 years 2015A 2016E 2017E 2018E 2019E 2020E 2016E - 2020E Total Base infrastructure Main Replacement* NEXUS related $1,600 $200 $600 $800 $3.3B ~$4.6B - $4.7B YE Rate Base** $102M ~$137M Depreciation ** Includes working capital $273 $430 $375 $
Slide 35: Interconnect agreements provide strong support on the NEXUS path
Interconnect agreements provide strong support on the NEXUS path up to 1.75 Bcf/d 35
Slide 36: Michigan's economy continues to improve
8.5% 7.1% 5.4% 4.8% 4.9% 2013 2014 2015 2016E 2017E Michigan’s economy continues to improve 36 Source: IHS 15.1 15.8 18.6 21.4 22.6 2013 2014 2015 2016E 2017E Unemployment Rate Housing Start Ups (000s) $407 $413 $419 $429 $437 2013 2014 2015 2016E 2017E Gross State Product (billions) Top decile in G
Slide 37: DTE rate case highlights
Filed December 18, 2015 Filed February 1, 2016 DTE Gas - 2015 Docket U-17999* DTE Electric - 2016 Docket U-18014* DTE rate case highlights • Requested rate recovery: $183 million • Test year: November 1, 2016 to October 31, 2017 • Return on Equity: 10.75% • Self implement*: $103 million on or after
Slide 38: Use of Operating Earnings Information
38 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 an
Slide 39: 2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings
2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings 39 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 prima
Slide 40: 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