Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (June 2016)
41 slides from Dte Energy's investor presentation, Jun 6, 2016
Slide 1: Business Update June 6, 2016
Business Update June 6, 2016 EXHIBIT 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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; the
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: Our focus on employees and customers has provided a solid framework for success
Our focus on employees and customers has provided a solid framework for success 6 6 Received Gallup’s Great Work Place Award for the 4th consecutive year Only utility to be recognized Top quartile in residential customer satisfaction* for both DTE Electric and DTE Gas Recognized by Fortune M
Slide 7: Our focus on regulatory construct and CI capability has contributed to a solid framework for success
Our focus on regulatory construct and CI capability has contributed to a solid framework for success 7 7 Regulatory environment in Michigan ranked in 1st tier* * Barclays report March 2016 On track for 10th consecutive year of meeting or exceeding initial operating EPS** guidance Continuous Im
Slide 8: Energy legislation continues to move forward
8 Energy legislation continues to move forward • Recent activity − Senate hearings introduced substitute bills (SB437 and SB438) − Bills passed through committee and moved to full Senate • Key provisions include − Capacity requirements for all electricity providers − Integrated resource planning pre
Slide 9: We remain confident in delivering 5%-6% operating EPS growth target
$4.82 $2.35 $2.48 $2.62 $2.76 $2.92 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 We remain confident in delivering 5%-6% operating EPS* growth target 9 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) Operating EPS Dividend Actuals Forecast Dividend per sh
Slide 10: DTE consistently provides value to its shareholders
DTE consistently provides value to its shareholders 10 * Source: Bloomberg (as of 4/30/16) 2009 2010 2011 2012 2013 2014 2015 Annualized Dividend per Share $2.12 $2.92 114% 243% 88% 162% DTE Energy S&P 500 Utilities 10-YR 5-YR Total Shareholder Return* Top quartile (dollars per share) Over 100 conse
Slide 11: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 11
Slide 12: 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 12 ~$10 2011 – 2015 Actual P&I GSP Gas Electric
Slide 13: 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 13 Maintenance and other projects (billions) ~$18 billion next 10 years The el
Slide 14: Of the $18 billion investment over the next years, we will invest $6.5 billion on distribution infrastructure
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 14 (billions) • $6.5 billion over next 10 years • Potential to i
Slide 15: DTE Electric has already begun to retire its coal-fired generation
DTE Electric has already begun to retire its coal-fired generation 2015 - 2016 2017 - 2020 2021 - 2025 2026 - 2030 Coal-fired Generation Retirement Timeline (MW) 15 Total Retirements Note: Estimated amounts. Timing and mix of generation impacted by MISO capacity requirements and Michigan and EPA pol
Slide 16: We are paving the way for cleaner energy
We are paving the way for cleaner energy 32% 16 • Retiring less-efficient coal-fired generation • Developing largest utility-owned solar array east of the Mississippi • Purchased 2 natural gas combustion turbine plants • Invested $2 billion in emissions reduction technology • Drove over $2 billion i
Slide 17: Significant emissions reductions have already been achieved and we continue on the path to clean energy
Significant emissions reductions have already been achieved and we continue on the path to clean energy 32% 17 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 18: Strengthening and expanding our gas infrastructure will reduce leaks and lost gas
Strengthening and expanding our gas infrastructure will reduce leaks and lost gas while creating and supporting Michigan jobs 18 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 19: We remain focused on customer affordability
Average Annual Residential Bill* DTE Electric We remain focused on customer affordability 19 $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 20: Gas Storage & Pipelines has an asset portfolio with multiple growth platforms
20 Gas Storage & Pipelines has an asset portfolio with multiple growth platforms NEXUS Pipeline DTE Gas DTE Storage Marcellus Shale Utica Shale Bluestone Pipeline Bluestone Gathering System Michigan Gathering Millennium Pipeline Vector Pipeline (40%) • Bi-directional pipe • Firm capacity/demand-base
Slide 21: NEXUS project is progressing and originates in the most economical geology in the country
21 NEXUS project is progressing and originates in the most economical geology in the country • Project on track for 4th quarter 2017 in-service • Recent accomplishments − Increased interconnect agreements from 1.4 Bcf/d to 1.75 Bcf/d − Ordered compressors • Received FERC Notice of Schedule 2nd quart
Slide 22: Strong results from the Utica and Marcellus region are 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 22 Source: IHS CERA US Shale Basin Economics (N
Slide 23: 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 24: 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 25: Power & Industrial Projects is focused on replacing REF earnings over the 5 year outlook
Power & Industrial Projects is focused on replacing REF earnings over the 5 year outlook • 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 L
Slide 26: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 26
Slide 27: We are confident we will achieve our 2016 operating EPS guidance
We are confident we will achieve our 2016 operating EPS* guidance * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2016 Guidance 2015 Actuals DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Gro
Slide 28: Cash Flow Summary
Cash Flow Summary DTE Energy 2016 Cash Flow and Capital Guidance 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 Redemption
Slide 29: 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 30: Overview, Long-Term Growth Update, Financial Update, Summary
• Overview • Long-Term Growth Update • Financial Update • Summary 30
Slide 31: Summary
Summary • Confident we will achieve our 2016 operating EPS* guidance... ...extending our streak to 10 consecutive years meeting or exceeding guidance • Utilities continue to invest in infrastructure improvements... ...which will fundamentally renew Michigan’s infrastructure and enhance customer reli
Slide 32: DTE Energy Investor Relations
DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 32 Contact Us
Slide 33: Appendix
Appendix
Slide 34: We manage the business through established base, lean and invest plans
We manage the business through established base, lean and invest plans 34 • We enter each year with prepared “lean” and “invest” plans • Developing three plans allows us to be flexible and adapt to external forces such as weather
Slide 35: 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 36: 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 (millions) $273
Slide 37: Michigan's economy continues to improve
8.5% 7.1% 5.4% 5.0% 5.0% 2013 2014 2015 2016E 2017E Michigan’s economy continues to improve 37 Source: IHS 15.1 15.8 18.6 21.4 22.6 2013 2014 2015 2016E 2017E Unemployment Rate Housing Start Ups (000s) $407 $414 $419 $425 $432 2013 2014 2015 2016E 2017E Gross State Product (billions) Top decile in G
Slide 38: DTE rate case highlights
Approved by MPSC on December 11, 2015 Filed December 18, 2015 Filed February 1, 2016 DTE Electric Rate Case 2014 DTE Gas Rate Case 2015 DTE Electric Rate Case 2016 DTE rate case highlights • Rate recovery: $243 million • Test year: July 1, 2015 to June 30, 2016 • Return on Equity: 10.3% • Cost of Ca
Slide 39: Interconnect agreements provide strong support on the NEXUS path up to 1.75 Bcf/d
Interconnect agreements provide strong support on the NEXUS path up to 1.75 Bcf/d 39
Slide 40: 2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings
2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings 40 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 41: 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