DTE Energy Company · NYSE:DTE
DTE Energy — Q1 2015 Earnings Presentation
27 slides from DTE Energy's earnings presentation, Apr 24, 2015
Slide 1: 1st Quarter 2015 Earnings Conference Call
1st Quarter 2015 Earnings Conference Call April 24, 2015
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 EPA, FERC, MPSC, NRC and CFTC as well as other applicable governmental proceedin
Slide 3: Participants
Participants • Peter Oleksiak – Senior Vice President and CFO • Jeff Jewell – Vice President and Controller • Mark Rolling – Vice President and Treasurer • Anastasia Minor – Executive Director, Investor Relations 3
Slide 4: Overview agenda
• Overview • First Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 4
Slide 5: Our business strategy is fundamental to how we create value
Our business strategy is fundamental to how we create value for our investors Utility growth plan driven by infrastructure 5% - 6% Annual investments EPS Growth Strategic and transparent growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive reg
Slide 6: We continue to make progress on many fronts
We continue to make progress on many fronts Michigan energy policy 2015 utility rate orders DTE Electric gas plant acquisitions Non-utility projects ‒ Millennium successful open season ‒ NEXUS Pipeline FERC pre-filing process ‒ 8MW on-site cogeneration project in-service ‒ REF updates 6
Slide 7: Michigan's economy has been revitalized
Michigan’s economy has been revitalized and the City of Detroit is continuing its economic rebirth Unemployment rate in Michigan Detroit metro area ranks 8th in lowest since 2001 the U.S. for number of new or expansion projects** Michigan improved 8 spots in Detroit Mayor Mike Duggan is state rankin
Slide 8: Michigan energy policy reform taking shape in 2015
Michigan energy policy reform taking shape in 2015 “I am calling for the legislature to help us reform this system before the summer break, so that we can give ourselves as much time as possible to make a smooth transition.” Governor Rick Snyder, March 2015 Governor Rick Snyder “We need to make sure
Slide 9: We remain committed to delivering 5% to 6% operating EPS growth
We remain committed to delivering 5% to 6% operating EPS* growth (dollars per share) Guidance midpoint $4.60 $4.60 Operating EPS* 6.7% CAGR 2009 – 2014 $4.09 $3.94 $3.75 $3.64 $3.33 EPS Dividend per share 5.4% CAGR 2009 – 2014 $2.76 (Annualized) $2.62 $2.48 Dividend $2.35 $2.24 $2.12 2009 2010 2011
Slide 10: We remain confident in our 2015 operating EPS guidance
We remain confident in our 2015 operating EPS* guidance (millions, except EPS) 2015 YTD 2015 Actuals* Guidance DTE Electric $136 $554 - $570 DTE Gas 111 128 - 134 Gas Storage & Pipelines 27 80 - 88 Power & Industrial Projects 33 90 - 100 Corporate & Other (25) (50) - (46) Growth segments** $282 $802
Slide 11: First Quarter 2015 Earnings Results agenda
• Overview • First Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 11
Slide 12: DTE Energy First Quarter 2015 Operating Earnings Variance
DTE Energy First Quarter 2015 Operating Earnings Variance Operating Earnings* Drivers (millions, except EPS) 1Q 2014 1Q 2015 Change DTE Electric DTE Electric $ 136 $ 136 $ - • Rate base growth expense offset by lower O&M in 1Q 2015 DTE Gas 129 111 (18) DTE Gas Gas Storage & Pipelines 21 27 6 • More
Slide 13: Cash Flow and Balance Sheet Metrics agenda
• Overview • First Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 13
Slide 14: DTE Energy First Quarter 2015 Cash Flow
DTE Energy First Quarter 2015 Cash Flow (billions) Cash Flow Summary Drivers 1Q 2014 1Q 2015 • Cash from operations improved due to performance at both the utilities and non- Cash From Operations $0.5 $0.8 utilities Capital Spending (0.5) (0.7) Free Cash Flow $0.0 $0.1 • Capital expenditures higher
Slide 15: DTE Energy First Quarter 2015 Capital Expenditures
DTE Energy First Quarter 2015 Capital Expenditures (millions) Capital Expenditures Drivers 1Q 2014 1Q 2015 • DTE Electric capital higher due to purchase DTE Electric of combustion turbine in 2015 Operational $308 $272 Environmental 41 38 • Non-utility capital lower due to completion of Renewable Ene
Slide 16: Strong balance sheet remains a key priority and supports growth
Strong balance sheet remains a key priority and supports growth Leverage* Target 50% - 53% • 2015 financing plan is on track ‒ Issued ~$200 million of equity YTD; 51% 53% targeting $800 to $900 million 2015 – 49% 51% 2017 ‒ DTE Electric issued $500 million of 2014 2015E 30-year, 3.70% debt in March
Slide 17: Summary agenda
• Overview • First Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 17
Slide 18: Summary
Summary • Strong first quarter performance • On track to meet our operating earnings* guidance and balance sheet metrics in 2015 • Expect constructive outcome in both Michigan’s energy policy reform and DTE’s regulatory filings • Utility investments and strategic growth opportunities in our non-util
Slide 19: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 AGA conference presentation is May 18 at 9:45 AM PT With Steve Kurmas – President and COO Webcast access: www.dteenergy.com/investors 19
Slide 20: Appendix
se DTE Energy: Appendix
Slide 21: First quarter 2015 operating earnings variance
First quarter 2015 operating earnings* variance (millions) DTE Electric DTE Gas $136 ($3) ($12) $15 $136 $129 ($11) ($7) $111 1Q 2014 Weather Rate base O&M and 1Q 2015 1Q 2014 Weather Other 1Q 2015 Other * Reconciliation to GAAP reported earnings included in the appendix 21
Slide 22: 2015 Cash Flow and Capital Expenditure Guidance
2015 Cash Flow and Capital Expenditure Guidance (billions) (millions) Cash Flow Summary Capital Expenditures Summary 2014 2015 2014 2015 Actual Guidance Actual Guidance Cash From Operations $1.8 $1.7 DTE Electric Operational $1,187 $1,270 Capital Sending (2.1) (2.6) Environmental 169 100 Free Cash F
Slide 23: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income (millions) $8 $20 • Economic net income Operating Earnings* $12 equals economic gross (millions, after-tax) margin*** minus O&M expenses and taxes 1Q 2015 1Q 2014 • DTE Energy management uses economic net income Realized
Slide 24: First Quarter 2015 Reconciliation of Reported to Operating Earnings
First Quarter 2015 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 per
Slide 25: First Quarter 2014 Reconciliation of Reported to Operating Earnings
First Quarter 2014 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 per
Slide 26: 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 27: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other 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 meas