Dte Energy Company · NYSE:DTE
Dte Energy — Q3 2015 Earnings Presentation
29 slides from Dte Energy's earnings presentation, Oct 23, 2015
Slide 1: 3rd Quarter 2015 Earnings Conference Call
3rd Quarter 2015 Earnings Conference Call October 23, 2015 EXHIBIT 99.2
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
• 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 Participants
Slide 4: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 4
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
We continue to make progress on many fronts • Michigan energy policy • 2015 utility rate proceedings • 2015 operating EPS guidance increased • 2016 operating EPS early outlook • 2015 cash and capital guidance update • Non-utility projects − Millennium update − NEXUS Pipeline update 6
Slide 7: Lansing leaders are working toward constructive energy policy reform
Lansing leaders are working toward constructive energy policy reform 7 Senator Mike Nofs Energy and Technology Committee Chair Valerie Brader Executive Director for the Michigan Agency for Energy Representative Aric Nesbitt Energy Policy Committee Chair Governor Rick Snyder Clean 1 2 Reliable 4 Affo
Slide 8: Current comprehensive energy legislation policy proposals address a number of key issues
Retail Open Access Integrated Resource Planning Regulatory Senate 8 • One-time election • Cost pre-approval process • Fair net-metering 5 year requirement Position House 3 year requirement • Capacity requirement • Venue for renewable generation and energy efficiency decisions • 10-month rate case
Slide 9: 2015 operating EPS guidance and 2016 early outlook midpoints provide solid growth
Our 2015 operating EPS* guidance and 2016 early outlook midpoints provide solid growth 9 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) $3.33 $3.64 $3.75 $3.94 $4.09 $4.60 $2.12 $2.24 $2.35 $2.48 $2.62 $2.76 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 10: We are reaffirming our 2015 operating EPS guidance and 2016 early outlook
We are reaffirming our 2015 operating EPS* guidance and 2016 early outlook (millions, except EPS) * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2015 Guidance 2016 Early Outlook 2015 YTD DTE Electric DTE Gas Gas Storage & Pipelines Po
Slide 11: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 11
Slide 12: DTE Energy Third Quarter 2015 Operating Earnings Variance
12 DTE Energy Third Quarter 2015 Operating Earnings Variance 3Q 2014 3Q 2015 Change DTE Electric 135$ 214$ 79$ DTE Gas (16) (11) 5 Gas Storage & Pipelines 20 27 7 Power & Industrial Projects 38 32 (6) Corporate & Other 1 (9) (10) Growth segments** 178$ 253$ 75$ Growth segments operating EPS 1.00$ 1.
Slide 13: DTE Electric Variance Analysis
* Reconciliation to GAAP reported earnings included in the appendix Drivers • Warmer weather in 3Q 2015 Variance to normal weather - 3Q 2014: ($33) - 3Q 2015: $4 • July 1st rate implementation • Lower 3Q 2015 storm expense and 3Q 2014 lean • Other primarily rate base growth (property taxes, deprecia
Slide 14: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 14
Slide 15: Cash Flow Summary YTD 2015
Cash Flow Summary YTD 2015 Cash Flow and Capital Expenditures (billions) Capital Expenditures Summary (millions) ** Includes Main Renewal / Meter Move-out / Pipeline Integrity YTD 2014 YTD 2015 Cash From Operations* $1.2 $1.5 Capital Spending (1.5) (1.7) Free Cash Flow ($0.3) ($0.2) Asset Sales & Ot
Slide 16: We are revising our 2015 cash flow and capital expenditures guidance
Cash Flow Summary We are revising our 2015 cash flow and capital expenditures guidance (billions) Capital Expenditures Summary (millions) ** Includes Main Renewal / Meter Move-out / Pipeline Integrity Prior Guidance Revised Guidance Cash From Operations* $1.7 $1.8 Capital Spending (2.6) (2.5) Free C
Slide 17: Strong balance sheet remains a key priority and supports growth
25% 21% 2014 2015E 2016-2018E 51% 52% 2014 2015E 2016-2018E Leverage* Strong balance sheet remains a key priority and supports 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* Ta
Slide 18: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 18
Slide 19: Summary
Summary * Reconciliation to GAAP reported earnings included in the appendix 19 • We are confident in this year’s performance and recently increased our 2015 operating EPS* guidance midpoint to $4.69 for our growth segments and $4.78 for DTE Energy • Constructive outcomes expected in both Michigan’s
Slide 20: Detroit is in the midst of a revitalization
Detroit is in the midst of a revitalization 20 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Slide 21: Appendix
Appendix
Slide 22: NEXUS project nearing next major milestone
Right of way, field work, design, planning NEXUS project nearing next major milestone • 50% ownership with Spectra Energy • 1.5 Bcf/d pipeline • ~250 miles of pipe • DTE expected investment $1 billion 2014 2015 2016 2017 2018 Construction Commercial operation Contracted for pipe In-service 4Q17 EPCM
Slide 23: Michigan's economy continues to improve
$410 $417 $426 $434 $443 2013 2014 2015E 2016E 2017E (billions) Michigan’s economy continues to improve 8.5% 7.1% 5.5% 5.4% 5.3% 2013 2014 2015E 2016E 2017E 2,439 2,244 2,371 2,444 2,434 2013 2014 2015E 2016E 2017E (000s) 15.1 15.8 17.6 19.7 21.9 2013 2014 2015E 2016E 2017E (000s) Gross State Produc
Slide 24: Weather and DTE Electric Weather Normal Sales
Weather and DTE Electric Weather Normal Sales * Includes adjustments for temperature normalization and customer outages due to weather 24 Cooling degree days Heating degree days DTE Electric service territory DTE Gas service territory 3Q 2014 3Q 2015 % change 3Q 2014 3Q 2015 % change Actuals 408 605
Slide 25: DTE Energy Third Quarter Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Third Quarter Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of 1) the income statement effect of not recognizing changes in the fair market value of certain non- derivative contracts including physical inventory and capacity contracts for transportation,
Slide 26: DTE Energy YTD Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy YTD Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of 1) the income statement effect of not recognizing changes in the fair market value of certain non- derivative contracts including physical inventory and capacity contracts for transportation, transmiss
Slide 27: Third Quarter 2015 and September YTD Reconciliation of Reported to Operating Earnings
Third Quarter 2015 and September YTD Reconciliation of Reported to Operating Earnings 27 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 earnin
Slide 28: 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 29: 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