DTE Energy Company · NYSE:DTE
DTE Energy — Q2 2016 Earnings Presentation
29 slides from DTE Energy's earnings presentation, Jul 26, 2016
Slide 1: 2nd Quarter 2016 Earnings Conference Call
2nd Quarter 2016 Earnings Conference Call July 26, 2016
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: Participants
Participants • Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Director, Investor Relations 3
Slide 4: Overview / 2nd Quarter 2016 Financial Update / Summary
• Overview • 2nd Quarter 2016 Financial Update • Summary 4
Slide 5: We continue to make progress on many fronts
We continue to make progress on many fronts Financial performance Strong year-to-date financial results 2016 operating EPS* guidance raised 7th consecutive year with a dividend increase Regulatory framework New commissioner appointed to MPSC Regulatory proceedings progressing in a constructive manne
Slide 6: Achieved strong results in the 2nd quarter and are increasing operating EPS guidance
Achieved strong results in the 2nd quarter and are increasing operating EPS* guidance for the year • 2nd quarter 2016 operating EPS* of $0.98, up $0.22 from last year • 2016 operating EPS guidance range raised to $4.91 - $5.19 ̶ Guidance midpoint raised by $0.12 • Annualized dividend increased $0.16
Slide 7: Raising 2016 operating EPS guidance to a midpoint of $5.05
Raising 2016 operating EPS* guidance to a midpoint of $5.05 (dollars per share) 2016 Operating EPS Guidance Midpoint Growth segments $4.97 Total DTE Energy $5.05 Original guidance $4.93 $5.05 $4.82 Operating EPS $4.93 6.5% CAGR 2011 – 2015 $3.75 Operating EPS 5.5% increase Dividend per $3.08 share 5
Slide 8: Paving the way to cleaner energy for our customers
Paving the way to cleaner energy for our customers Electric Capacity Shift (GW) 12.4 12 - 13 • Announced retirement of 2.5 GW of less-efficient coal-fired generation 15% Nuclear/Other – Capacity will be retired by 2023 15% – Combination of baseload gas and 10% 15%-30% Renewables solar/wind renewable
Slide 9: NEXUS project is progressing and originates in the most economical geology
NEXUS project is progressing and originates in the most economical geology in the country • Project on track for 4th quarter 2017 in- service • FERC Notice of Schedule issued 2nd quarter 2016 • Draft Environmental Impact Statement DTE (EIS) received on July 8, 2016 Gas • Final EIS expected by Novemb
Slide 10: Overview / 2nd Quarter 2016 Financial Update / Summary
• Overview • 2nd Quarter 2016 Financial Update • Summary 10
Slide 11: 2nd Quarter 2016 Operating Earnings Variance
2nd Quarter 2016 Operating Earnings* Variance (millions, except EPS) Operating Earnings Drivers 2Q 2015 2Q 2016 Change DTE Electric DTE Electric $ 111 $ 135 $ 24 • Warmer weather in May and June and rate implementation partially offset by DTE Gas (7) 13 20 2015 revenue decoupler amortization Gas Sto
Slide 12: Increasing our 2016 operating EPS guidance
Increasing our 2016 operating EPS* guidance (millions, except EPS) 2016 2016 2016 YTD 2Q Original Revised Actuals Guidance Guidance DTE Electric $262 $584 - $600 $589 - $605 DTE Gas 100 135 - 141 135 - 141 Gas Storage & Pipelines 65 105 - 115 110 - 115 Power & Industrial Projects 38 90 - 100 90 - 10
Slide 13: June YTD 2016 Cash Flow and Capital Expenditures
June YTD 2016 Cash Flow and Capital Expenditures (billions) (millions) Cash Flow Summary Capital Expenditures Summary YTD YTD YTD YTD 2015 2016 2015 2016 DTE Electric Cash From Operations* $1.2 $1.3 Distribution Infrastructure $288 $224 Capital Spending (1.2) (1.0) New Generation 253 55 Free Cash Fl
Slide 14: Strong balance sheet remains a key priority and supports growth
Strong balance sheet remains a key priority and supports growth Leverage* Target 50% - 53% • Strong year-to-date cash performance; 2016 financing plan is on track − $100 million equity issuance 51% 52% possible, but may not be necessary − Issued $300 million of 60-year, 5.375% junior subordinated 20
Slide 15: Overview / 2nd Quarter 2016 Financial Update / Summary
• Overview • 2nd Quarter 2016 Financial Update • Summary 15
Slide 16: Summary
Summary • Raising 2016 operating EPS* guidance by $0.12... ...in light of strong year-to-date performance • Increasing dividend for 7th consecutive year... ...as we continue to grow dividends with earnings • Investing in utilities and strategic growth opportunities in our non-utility businesses... .
Slide 17: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 17
Slide 18: Appendix
se DTE Energy: Appendix
Slide 19: DTE Electric Variance Analysis
DTE Electric Variance Analysis (millions) Operating Earnings* Variance Drivers $35 ($19) • Warmer weather in May and June 2016 ($8) $135 $16 Variance to normal weather $111 - 2Q 2015: ($2) - 2Q 2016: $14 • July 1st 2015 rate implementation supporting infrastructure improvements to enhance reliabilit
Slide 20: 2016 Cash Flow and Capital Guidance
2016 Cash Flow and Capital Guidance (billions) (millions) Cash Flow Summary Capital Expenditures Summary 2015 2016 2015 2016 Actual Guidance Actual Guidance Cash From Operations* $1.9 $1.8 DTE Electric Capital Spending (2.3) (2.7) Distribution Infrastructure $579 $610 New Generation 316 150 Free Cas
Slide 21: Weather and DTE Electric Weather Normal Sales
Weather and DTE Electric Weather Normal Sales Cooling degree days Heating degree days DTE Electric service territory DTE Gas service territory 2Q 2015 2Q 2016 % change 2Q 2015 2Q 2016 % change Actuals 230 274 19% Actuals 699 838 20% Normal 215 215 0% Normal 780 774 -1% Deviation from normal 7% 27% D
Slide 22: 2nd Quarter Trading Reconciliation of Operating Earnings to Economic Net Income
2nd Quarter Trading Reconciliation of Operating Earnings* to Economic Net Income (millions) $12 $12 • Economic net income Operating Earnings* equals economic gross (millions, after-tax) margin*** minus O&M $0 expenses and taxes 2Q 2016 2Q 2015 2Q 2016 Operating Accounting 2Q 2016 Economic • DTE Ener
Slide 23: June YTD Trading Reconciliation of Operating Earnings to Economic Net Income
June YTD Trading Reconciliation of Operating Earnings* to Economic Net Income (millions) $14 $30 $16 • Economic net income Operating Earnings* equals economic gross (millions, after-tax) margin*** minus O&M expenses and taxes YTD 2016 YTD 2015 • DTE Energy management YTD 2016 Operating Accounting YT
Slide 24: 2nd Quarter 2016 Reconciliation of Reported to Operating Earnings
2nd Quarter 2016 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 perfo
Slide 25: June YTD 2016 Reconciliation of Reported to Operating Earnings
June YTD 2016 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 performa
Slide 26: 2nd Quarter 2015 Reconciliation of Reported to Operating Earnings
2nd 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 perfo
Slide 27: June YTD 2015 Reconciliation of Reported to Operating Earnings
June YTD 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 performa
Slide 28: 2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings
2011 – 2015 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: 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