Dte Energy Company · NYSE:DTE
Dte Energy — Q1 2018 Earnings Presentation
25 slides from Dte Energy's earnings presentation, Apr 25, 2018
Slide 1: 1st Quarter 2018 Earnings Conference Call
EXHIBIT 99.2 1st Quarter 2018 Earnings Conference Call April 25, 2018
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Many factors impact forward-looking statements including, but not limited to, the following: impact of regulation by the EPA, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, as well as other applicable governmental proceedings and regulations, including any associa
Slide 3: Participants
3 • Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Director, Investor Relations Participants
Slide 4: Overview, Financial Update, Long-Term Growth Update
4 • Overview • Financial Update • Long-Term Growth Update
Slide 5: 2018 has started out strong and we remain confident in delivering on our financial plan
5 2018 has started out strong and we remain confident in delivering on our financial plan • On track to achieve 2018 operating EPS* guidance range of $5.57 to $5.99 • Targeting 5% - 7% operating EPS growth from 2018 guidance base through 2022 • Filed plan to double renewable energy capacity by early
Slide 6: Initiative to double renewable energy capacity
6 Launched initiative that will provide renewable resources that exceed the required 15% renewable portfolio standard plan to add 1,000 MW of carbon- free electricity from new wind and solar projects in Michigan Proposed renewable energy capacity from 1,000 MW to 2,000 MW Doubling completion date of
Slide 7: Overview, Financial Update, Long-Term Growth Update
7 • Overview • Financial Update • Long-Term Growth Update
Slide 8: 1st quarter 2018 operating earnings vs 1st quarter 2017
8 1Q 2017 1Q 2018 Change DTE Electric 106$ 142$ 36$ DTE Gas 107 111 4 Gas Storage & Pipelines 45 62 17 Power & Industrial Projects 30 42 12 Corporate & Other 16 (16) (32) Growth segments** 304$ 341$ 37$ Growth segments operating EPS 1.70$ 1.91$ 0.21$ Energy Trading 18 1 (17) DTE Energy 322$ 342$ 20$
Slide 9: 2018 Guidance
9 2018 Guidance DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth segments** Growth segments operating EPS Energy Trading DTE Energy Operating EPS $648 - $662 152 - 160 185 - 195 115 - 135 (100) - (90) $1,000 - $1,062 $5.54 - $5.88 $5 - $20 $1,005 - $1
Slide 10: Overview, Financial Update, Long-Term Growth Update
10 • Overview • Financial Update • Long-Term Growth Update
Slide 11: Reliability investments at utilities support long-term growth
11 Capital investment 2018 - 2022 $10.4 billion Reliability investments at utilities support long-term growth and increase customer satisfaction DTE Electric DTE Gas Capital investment 2018 - 2022 $2.1 billion • Received electric rate order and will file future cases to incorporate impact of tax ref
Slide 12: Non-utilities continue to focus on growth projects
12 Non-utilities continue to focus on growth projects to fuel long-term growth Gas Storage & Pipelines Power & Industrial Projects Operating earnings* 2022 target $65 - $75 million Capital investment 2018 - 2022 $0.8 - $1.2 billion Operating earnings* 2022 target $280 - $290 million Capital investme
Slide 13: Summary
13 • Delivered solid first quarter results and remain confident in achieving our 2018 operating EPS* guidance • Driving utility growth through infrastructure investments focused on improving reliability and the customer experience • Expanding non-utility businesses through strategic and sustainable
Slide 14: DTE Energy Investor Relations
14 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 Contact us
Slide 15: Appendix
15 Appendix
Slide 16: Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet
16 Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet 20% 2017 2018-2020E 51% 2017 2018-2020E Leverage** Funds from Operations*** / Debt** Target 50% - 54% Target 18% - 19% *** Funds from Operations (FFO) is calculated using operating earnings, reconciliation
Slide 17: DTE Electric variance analysis
17 • Return to normal weather Variance to normal weather – 2017: ($13) – 2018: $0 $106 $142 $13 $22 $1 Primary DriversOperating Earnings* Variance 1Q 2017 Operating Earnings 1Q 2018 Operating Earnings Weather Rate Case Impact Rate Base Growth DTE Electric variance analysis ($10)$10 Storm Other (mill
Slide 18: Weather and DTE Electric weather normal sales
18 Weather and DTE Electric weather normal sales 1Q 2017 1Q 2018 % change 1Q 2017 1Q 2018 % change Actuals - - 0% Actuals 2,793 3,187 14% Normal - - 0% Normal 3,263 3,251 (0%) Deviation from normal 0% 0% Deviation from normal (14%) (2%) 1Q ($13) $0 1Q ($0.07) 1Q $0.00 ($21) ($4) (GWh) 1Q 1Q 2017 1Q
Slide 19: 2018 cash flow and capital expenditures actuals
19 1Q 2017 1Q 2018 Cash From Operations* $0.8 $0.8 Capital Expenditures (0.7) (0.6) Free Cash Flow $0.1 $0.2 Asset Sales & Other - - Dividends (0.1) (0.2) Net Cash $0.0 $0.0 Debt Financing: Issuances $0.5 $0.0 Redemptions (0.5) 0.0 Change in Debt $0.0 $0.0 Cash Flow Capital Expenditures 1Q 2017 1Q 2
Slide 20: 2018 cash flow and capital expenditures guidance
20 2018 Guidance Cash From Operations* $2.0 Capital Expenditures (3.6) Free Cash Flow ($1.6) Asset Sales & Other - Dividends (0.6) Net Cash ($2.2) Debt Financing: Issuances $2.3 Redemptions (0.1) Change in Debt $2.2 2018 cash flow and capital expenditures guidance 2018 Guidance DTE Electric Base Inf
Slide 21: DTE Electric and DTE Gas regulatory update
21 DTE GasDTE Electric • General rate case - November 2017 (U-18999) – Prior to tax reform, requested rate recovery: $85 million ($57 million net of infrastructure recovery mechanism) – Final order: September 2018 • Expect to file rate cases every ~2 years • General rate order - April 2018 (U-18255)
Slide 22: Energy Trading reconciliation of operating earnings to economic net income
22 1st quarter 2018 Energy Trading reconciliation of operating earnings* to economic net income 1Q 2017 2018 Operating Earnings $18 $1 Accounting Adjustments** 1 7 Economic Net Income $19 $8 • Economic net income equals economic gross margin*** minus O&M expenses and taxes • DTE Energy management us
Slide 23: 1st quarter 2018 reconciliation of reported to operating earnings
23 1st quarter 2018 reconciliation of reported to operating earnings (non-GAAP) 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
Slide 24: 1st quarter 2017 reconciliation of reported to operating earnings
24 1st quarter 2017 reconciliation of reported to operating earnings (non-GAAP) 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
Slide 25: Use of Operating Earnings Information
25 Use of Operating Earnings Information – Operating earnings exclude non-recurring items, certain mark-to- market adjustments and discontinued operations. DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operation