Dte Energy Company · NYSE:DTE
Dte Energy — EEI Financial Conference 2016
46 slides from Dte Energy's conference presentation, Nov 4, 2016
Slide 1: EEI Financial Conference November 6-8, 2016
1 2016 EEI Financial Forum Click to edit Master title style 1 EEI Financial Conference November 6-8, 2016 EXHIBIT 99.1
Slide 2: Safe Harbor Statement
2016 EEI Financial Forum 2 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 imp
Slide 3: We will continue to deliver long-term value to shareholders and an enhanced customer experience
2016 EEI Financial Forum 3 We will continue to deliver long-term value to shareholders and an enhanced customer experience Sharpening long-term investment approach to increase customer satisfaction and shareholder value Increasing operating EPS* growth rate to 5% - 7% from 5% - 6% Providing 20
Slide 4: Overview, Long-Term Growth Update, Summary
2016 EEI Financial Forum 4 • Overview • Long-Term Growth Update • Summary
Slide 5: Growth is driven by strong, stable utilities and complementary non-utility businesses
2016 EEI Financial Forum 5 Growth is driven by strong, stable utilities and complementary non-utility businesses DTE Electric • Electric generation and distribution • 2.2 million customers • Fully regulated Gas Storage & Pipelines • Transport and store natural gas • 5 pipelines, 91 Bcf of storage Po
Slide 6: Success is tied to our aspiration and system of priorities
2016 EEI Financial Forum 6 Success is tied to our aspiration and continued focus on our system of priorities To be the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve CUSTOMER
Slide 7: Highly engaged and safe workforce is necessary to achieve our aspiration
2016 EEI Financial Forum 7 Highly engaged and safe workforce is necessary to achieve our aspiration Winner of 4 consecutive Gallup Great Workplace Awards (2012, 2013, 2014, 2015) American Gas Association’s Safety Achievement Award (lowest OSHA recordable rate among AGA members) Employee safety year-
Slide 8: DTE continues to move toward best in class in customer satisfaction
2016 EEI Financial Forum 8 DTE continues to move toward best in class in customer satisfaction Residential Electric Utility Residential Gas Utility DTE DTE Areas of Focus Improving power reliability Enhancing customer channels Assisting low-income customers Goal Goal
Slide 9: Continuous improvement has enabled us to be an industry leader in cost management
2016 EEI Financial Forum 9 Continuous improvement has enabled us to be an industry leader in cost management * Source: SNL Financial, FERC Form 1; major US Electric Utilities with O&M > $800 million; excluding fuel and purchased power ** Source: SNL Financial, FERC Form 2; gas distribution companies
Slide 10: Michigan's regulatory environment is one of the best in the country
2016 EEI Financial Forum 10 Minimal regulatory lag Solid ROEs Unique recovery mechanisms Source: Barclays, March 2016 Top Tier Michigan’s regulatory environment is one of the best in the country
Slide 11: Overview, Long-Term Growth Update, Summary
2016 EEI Financial Forum 11 • Overview • Long-Term Growth Update • Summary
Slide 12: Design detailed roadmap for the transformation of our business
2016 EEI Financial Forum 12 Design detailed roadmap for the transformation of our business that ties near-term work to long-term success providing 30% - 40% cost reductions over the next decade Apply continuous improvement Use innovative technology to fundamentally improve customer experiences
Slide 13: 2017-2021 Capital Plan
2016 EEI Financial Forum 13 2017 – 2021 Plan 2012 – 2016 Plan $12 billion $13.5 billion 2017 – 2021 Capital Plan Electric................ $8.4 billion Distribution infrastructure, maintenance, new generation Gas ..................... $1.8 billion Base investments, infrastructure renewal, NEXUS relat
Slide 14: Increasing operating EPS growth target to 5%-7% from 5%-6%
2016 EEI Financial Forum 14 (dollars per share) Operating EPS growth rate of 6.8% from 2011 - 2016 Growth of 6.5% from 2016 original guidance to 2017 early outlook Increasing growth segment operating EPS target to 5% - 7% Growth enabled through: No equity issuances until late 2019 Optimizing
Slide 15: Increasing annualized dividend in 2017 by 7.1%
2016 EEI Financial Forum 15 (dollars per share) 2011 2016 2017 $2.35 $3.08 5-year dividend growth rate of 5.6% from 2011 - 2016 Increasing dividend 7.1% for 2017 Targeting annual dividend increases of ~7% in 2018 and 2019 Phase-in payout ratio to be in-line with peer average More than 100 year
Slide 16: DTE Electric
2016 EEI Financial Forum 16 DTE Electric
Slide 17: Generation and distribution infrastructure replacement will improve service to customers
2016 EEI Financial Forum 17 Generation and distribution infrastructure replacement will improve service to customers over the next 10 years DTE Electric Investment New generation • Retire 60% of coal fleet; replacing with clean energy Distribution infrastructure • Move electric reliability to 1st qu
Slide 18: Gas generation and renewables will replace coal fired generation
2016 EEI Financial Forum 18 Gas generation and renewables will replace coal fired generation Belle River St. Clair River Rouge Retirements* Additions* Wind / Solar Trenton New gas plant * Timing and mix is subject to change 2024 - 2030 New gas plant Wind / Solar 2017 - 2023 2017 - 2023 2024 - 2030 ~
Slide 19: Distribution reliability investments focus on customer satisfaction and efficiencies
2016 EEI Financial Forum 19 Distribution reliability investments focus on increasing customer satisfaction and driving efficiencies Tree Trimming Infrastructure Redesign Infrastructure Resilience Technology Enhancements Enhanced program has resulted in a 70% reliability improvement on trimmed circui
Slide 20: DTE Gas
2016 EEI Financial Forum 20 20 DTE Gas
Slide 21: Infrastructure renewal and replacement will improve service to customers
2016 EEI Financial Forum 21 Infrastructure renewal and replacement will improve service to customers over the next 10 years DTE Gas Investment NEXUS related compression Infrastructure renewal • Strengthen gas infrastructure by reducing planned main replacement cycle by half Base infrastructure • Tra
Slide 22: Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity
2016 EEI Financial Forum 22 Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity Main Replacement Pipeline Integrity Meter Move Out Systematically replaces poor performing unprotected main - minimizing leaks and improving customer satisfaction Drives prod
Slide 23: Gas Storage & Pipelines (GSP)
2016 EEI Financial Forum 23 Gas Storage & Pipelines (GSP)
Slide 24: GSP has an asset portfolio with multiple growth platforms
2016 EEI Financial Forum 24 GSP has an asset portfolio with multiple growth platforms Growth Platforms Purposefully located in the best geology in North America Bluestone Pipeline & Gathering Millennium Pipeline NEXUS Pipeline Link* Lateral & Gathering Michigan Assets Strategically located
Slide 25: Pipeline and gathering platforms provide unique opportunities and synergies
2016 EEI Financial Forum 25 Pipeline and gathering platforms provide unique opportunities and synergies for long-term growth Bluestone Pipeline & Gathering • 0.1 Bcf/d expansion 4Q16 • Well positioned for future expansions • Bi-directional capabilities serving pipeline constrained Northeast markets
Slide 26: GSP has a solid track record for earnings results
2016 EEI Financial Forum 26 GSP has a solid track record for earnings results and expects to continue this success * Reconciliation to GAAP reported earnings included in the appendix GSP Operating Earnings* 2011 2016E 2021E $115 - $120 $195 - $215 $57 (millions) Pipeline and gathering platforms st
Slide 27: Power & Industrial Projects (P&I)
2016 EEI Financial Forum 27 Power & Industrial Projects (P&I)
Slide 28: P&I operates three distinct business lines across the United States
2016 EEI Financial Forum 28 P&I operates three distinct business lines across the United States In d u st ri a l E n e rg y Se rv ice s R e n e w a b le E n e rg y R e d u ce d Em iss io n s F u e l (R E F ) • On-site utility services for industrial and commercial customers • Coke and pulverized coa
Slide 29: Focus on strategic opportunities in utility-like projects and asset acquisitions
2016 EEI Financial Forum 29 Focus on strategic opportunities in utility-like projects and asset acquisitions for future growth U ti li ty -L ik e P ro ject s A sset A c q u is it io n Distinct capabilities Experience with large industrial and commercial customers History of executing utility-lik
Slide 30: P&I's new project growth will offset expiration of REF earnings
2016 EEI Financial Forum 30 P&I’s new project growth will offset expiration of reduced emissions fuel earnings (millions) P&I Operating Earnings* Replace short-term REF earnings with long-term contracted value Development of cogeneration and utility-like services Asset acquisition Capital invest
Slide 31: Overview, Long-Term Growth Update, Summary
2016 EEI Financial Forum 31 • Overview • Long-Term Growth Update • Summary
Slide 32: Summary
2016 EEI Financial Forum 32 Summary Value driven utility investments provide an excellent customer experience while ensuring affordable rates Constructive regulatory environment and continued cost savings enable utilities to earn authorized returns Strategic and transparent growth opportunities in n
Slide 33: Appendix
2016 EEI Financial Forum 33 Appendix
Slide 34: 2017 early outlook has a midpoint of $5.25 per share
2016 EEI Financial Forum 34 2017 early outlook has a midpoint of $5.25 per share; growth from original 2016 guidance midpoint is consistent with 5% - 7% target * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2016 Current Guidance 2017
Slide 35: We recently revised our 2016 cash flow and capital expenditures guidance
2016 EEI Financial Forum 35 We recently revised our 2016 cash flow and capital expenditures guidance Capital Expenditures Summary Prior Guidance Revised Guidance DTE Electric Distribution Infrastructure $610 $610 New Generation 150 150 Maintenance & Other 790 790 $1,550 $1,550 DTE Gas Base Infrastru
Slide 36: A strong balance sheet remains a key priority and supports growth
2016 EEI Financial Forum 36 A strong balance sheet remains a key priority and supports growth 21% 2016E 2017-2019E 52% 2016 2017-2019E Leverage* * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Funds from Operations**
Slide 37: DTE Electric plans $8.4 billion of investments over the next 5 years
2016 EEI Financial Forum 37 DTE Electric plans $8.4 billion of investments over the next 5 years with a focus on increasing customer reliability * Includes power reliability, existing generation maintenance, AMI, Ludington expansion and other investments ** Includes working capital and rate base ass
Slide 38: Customer reliability will be improved through $1.8 billion of planned investments at DTE Gas
2016 EEI Financial Forum 38 Customer reliability will be improved through $1.8 billion of planned investments over the next 5 years at DTE Gas 2016E 2017E 2018E 2019E 2020E 2021E 2017E - 2021E Total Base infrastructure Main Replacement* NEXUS related $1,800 $100 $700 $1,000 ~$3.6B ~$5.0B - $5.1B YE
Slide 39: Energy legislation ensures future reliability in Michigan
2016 EEI Financial Forum 39 Energy legislation ensures future reliability in Michigan • Key provisions include − Capacity requirements for all electricity providers − Integrated resource planning pre- approval process − 10 month final rate order − Energy efficiency related incentives and revenue dec
Slide 40: The MPSC is the state regulator for electric and gas utilities
2016 EEI Financial Forum 40 The Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities Source: MPSC website - www.michigan.gov/mpsc Norm Saari (R) Commissioner Appointed: 7/2/15 Term Ends: 7/2/21 Rachel Eubanks (I) Commissioner Appointed: 8/1/16 Term Ends: 7/
Slide 41: Regulatory Update – Electric and Gas
2016 EEI Financial Forum 41 Regulatory Update – Electric and Gas • Self implemented general rates 3Q DTE Gas DTE Electric 2017 2016 2018+ • Self implemented general rates 4Q • Final rate order and IRM ruling 4Q • Final rate order 1Q • File rate case 2Q • Annual rate cases • Expect rate case filing 2
Slide 42: GSP is well positioned in one of the most economic shale basins in North America
2016 EEI Financial Forum 42 GSP is well positioned in one of the most economic shale basins in North America $ / MMBtu $0 $1 $2 $3 $4 $5 Marcellus Shale NE Marcellus Shale SW Source: Credit Suisse February 2016 report and Wright and Company US Shale Basin Economics NYMEX Gas Price Required for 15% A
Slide 43: NEXUS continues to move forward with expected in service 4Q 2017
2016 EEI Financial Forum 43 NEXUS continues to move forward with expected in service 4Q 2017 Natural Gas LDC Industrial Customer Power Generation Marcellus / Utica Dry Gas Core DTE Gas Vector • Contractors secured • Draft environmental impact statement (DEIS) complete • Procurement update – Compress
Slide 44: Acquisition of attractive gas midstream assets complements our existing business
2016 EEI Financial Forum 44 Acquisition of attractive gas midstream assets complements our existing business Closed on purchase of Link* Lateral & Gathering Connects geographically and strategically to our existing assets Provides access to high quality reserves in the SW Marcellus / Dry Utica Br
Slide 45: Reconciliation of 2011 Reported to Operating Earnings
2016 EEI Financial Forum 45 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 t
Slide 46: Reconciliation of Other Reported to Operating Earnings
2016 EEI Financial Forum 46 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