Slide 1: Year End 2015 Earnings Conference Call
Year End 2015 Earnings Conference Call February 10, 2016 EXHIBIT 99.2
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
• Gerry Anderson – Chairman and CEO • Peter Oleksiak – Senior Vice President and CFO • Jerry Norcia – President & COO, DTE Electric and Gas Storage & Pipelines • Anastasia Minor – Executive Director, Investor Relations 3 Participants
Slide 4: Agenda: 2015 Accomplishments, Policy, Growth, Financial, Summary
• 2015 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 4
Slide 5: Our system of priorities is fundamental to how we create value
Our system of priorities is fundamental to how we create value for our shareholders 5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet 5
Slide 6: Benefiting from our distinctive continuous improvement capability
Benefiting from our distinctive continuous improvement capability • Reduced average customer outage minutes by 65% • Maintained top-quartile reliability for 4th consecutive year at fossil generation plants • Surpassed 2.9 million advanced meter installations; 80% complete • Nearing top-decile perfor
Slide 7: 2015 Accomplishments: Financial, Investment, Regulatory
Financial Growth / Value DTE Energy 2015 Operating EPS*** of $4.82 compared to original EPS guidance midpoint of $4.60 • Earned allowed ROE at electric and gas utilities • Delivered 14% non-utility year over year growth • Increased annualized dividend 5.8% to $2.92 per share Invested $2.4 billion, m
Slide 8: Agenda: Energy Policy Update
• 2015 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 8
Slide 9: Energy legislation continues to be a priority for the state
9 • Key elements focus on: Retail open access capacity and reliability requirements Integrated resource planning Renewable energy and energy efficiency • Moved package of bills out of House Energy Committee last year • Focus of activity is now in Senate Energy legislation continues to be a prior
Slide 10: Policy will transform generation mix from coal to gas and renewables
Federal and state policy will lead to transformation of our generation mix by replacing coal with natural gas and renewables DTE Electric Capacity (GW) 2015 2030 Scenario* Gas Coal Nuclear / other 55% 25% 30-45% 15% 15% 20% * Ultimate timing and mix of generation impacted by MISO capacity requiremen
Slide 11: Agenda: Long-Term Growth Update
• 2015 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 11
Slide 12: Confident about delivering 5%-6% operating EPS growth target
$2.35 $2.48 $2.62 $2.76 $2.92 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 We remain confident about delivering our 5%-6% operating EPS* growth target 12 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) Operating EPS Dividend Actuals Forecast $4.73 2015 Op
Slide 13: Infrastructure improvements drive capital investments through 2020
~$13 $8.2 Distribution infrastructure, maintenance, new generation $1.6 Base investments, infrastructure renewal, NEXUS related $2.0-$2.6 Gathering investments, NEXUS, pipeline expansions $0.6-$0.9 Cogeneration, on-site energy 2016 – 2020 Current Plan 13 ~$10 2011 – 2015 Actual P&I GSP Gas Electric
Slide 14: Plan to invest ~$6.5 billion in distribution infrastructure
Over the next 10 years we plan to invest ~$6.5 billion in distribution infrastructure 32% 2016-2025 ~$18 Maintenance and other projects New generation Distribution infrastructure DTE Electric Total Investment Base Case Base Infrastructure redesign Infrastructure resilience Technology ~$6.5 14 (billi
Slide 15: Areas of greatest need for electric distribution improvements
We have identified areas of greatest need for electric distribution system improvements 32% Infrastructure Resilience • Replace aging infrastructure • Focus on worst performing areas Technology Enhancements • Increase control capabilities • Provide greater visibility Infrastructure Redesign • Addres
Slide 16: Managing customer affordability with requested rate increases
(dollars) Average Annual Residential Bill* DTE Electric We are managing customer affordability even with requested rate increases 16 $1,223 $1,225 2012 2013 2014 2015 2016E 2017E Average Annual Residential Bill** DTE Gas $910 $830 2012 2013 2014 2015 2016E 2017E * Assumes average usage per year time
Slide 17: DTE Electric industrial rates below national average
DTE Electric industrial rates have declined 22% since 2013 and are below the national average 17 * August 2015 2015 Industrial Electric Rate* by State (¢ / kWh) 1st quartile DTE 2015* WA RI 2nd quartile 3rd quartile 4th quartile US and Great Lakes average 6.9¢
Slide 18: Gas Storage & Pipelines positioned around premium shale plays
18 NEXUS Pipeline DTE Gas DTE Storage Marcellus Shale Utica Shale Bluestone Pipeline Bluestone Gathering System Michigan Gathering Gas Storage & Pipelines is well positioned around premium shale plays in North America Headquarters Regional offices
Slide 19: Marcellus and Utica development drives NEXUS and Millennium investment
The Marcellus and Utica Shale development will drive on-going investment in our NEXUS and Millennium pipelines • Millennium expansion: ~200 MMcf/day – FERC pre-filing 1Q16; in-service expected 2H18 • Valley Lateral: ~130 MMcf/day on new 8 mile lateral – FERC filing 4Q15; in-service expected 2Q17 • W
Slide 20: Gas Storage & Pipelines focused on pipeline and gathering
Gas Storage & Pipelines is focused on continued success in pipeline and gathering • Accelerated Marcellus development in 2015 delivered 30% year over year earnings growth • Earnings growth driven by both pipeline and gathering platforms • Assessing investment opportunities given current sector dynam
Slide 21: Power & Industrial Projects serves customers from sites in 17 states
Power & Industrial Projects serves its customers from 66 sites in 17 states 21 Industrial Energy Services Renewable Energy Reduced Emissions Fuel
Slide 22: Power & Industrial Projects focused on replacing REF earnings
Power & Industrial Projects is focused on replacing REF earnings over the 5 year outlook • 2016 earnings in line with 2015 actuals • Higher REF earnings offset by lower steel related earnings Near-Term • Grow cogeneration portfolio • Pursue strategic asset acquisitions • Maximize REF opportunities t
Slide 23: Agenda: Financial Update
• 2015 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 23
Slide 24: DTE Energy 2015 Operating Earnings Variance
DTE Energy 2015 Operating Earnings* Variance 24 2014 2015 Change DTE Electric 528$ 562$ 34$ DTE Gas 140 132 (8) Gas Storage & Pipelines 82 107 25 Power & Industrial Projects 90 95 5 Corporate & Other (44) (48) (4) Growth segments** 796$ 848$ 52$ Growth segments operating EPS 4.48$ 4.73$ 0.25$ Energy
Slide 25: DTE Electric Variance Analysis
* Reconciliation to GAAP reported earnings included in the appendix Drivers • Warmer weather in 2015 Variance to normal weather - 2014: ($14) - 2015: $1 • July 1st rate implementation supporting infrastructure improvements • Rate base growth (depreciation, property tax and interest) • Lower customer
Slide 26: Confident we will achieve 2016 operating EPS guidance
We are confident we will achieve our 2016 operating EPS* guidance * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2016 Guidance 2015 Actuals DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Gro
Slide 27: Bonus depreciation lowers planned equity issuances
Previous Plan Current Plan Planned Equity Issuances 2016-2018 Extension of bonus depreciation is key driver of lower planned equity issuances • Bonus depreciation provides a total estimated cash benefit of $300 to $400 million over 5 year period • Lower planned equity compared to previous forecast 2
Slide 28: A strong balance sheet remains a key priority
25% 21% 2014 2015 2016-2018E 51% 52% 2014 2015 2016-2018E Leverage* A strong balance sheet remains a key priority to support 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* Targ
Slide 29: Agenda: Summary
• 2015 Accomplishments • Energy Policy Update • Long-Term Growth Update • Financial Update • Summary 29
Slide 30: Summary
Summary • Exceeded our operating EPS* growth target with historical growth of 6.5% • Targeting 5% to 6% operating EPS* growth ‒ 2015 growth segments provided a 5.6% year over year increase ‒ Grow dividends in line with earnings • Meaningful investment opportunities drive continued development in the
Slide 31: DTE Energy Investor Relations
Detroit is in the midst of a revitalization 31 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Slide 32: Appendix
Appendix
Slide 33: Sally Talberg appointed chair of the MPSC
John Quackenbush Commissioner Appointed: 9/15/11 Term Ends: 3/31/16 Sally Talberg Chair Appointed: 7/3/13 Term Ends: 7/2/19 Norm Saari Commissioner Appointed: 8/2/15 Term Ends: 7/2/21 Source: State of Michigan website - www.michigan.gov/ • In January 2016, Governor Snyder appointed Sally Talberg as
Slide 34: DTE rate case highlights
Approved by MPSC on December 11, 2015 Filed December 18, 2015 Filed February 1, 2016 DTE Electric Rate Case 2014 DTE Gas Rate Case 2015 DTE Electric Rate Case 2016 34 DTE rate case highlights • Rate recovery: $243 million • Test year: July 1, 2015 to June 30, 2016 • Return on Equity: 10.3% • Cost of
Slide 35: NEXUS project is on track; FERC filing completed
NEXUS project is on track; FERC filing completed in November 35 Right of way, field work, design, planning • 50% ownership with Spectra Energy • 1.5 Bcf/d pipeline • ~250 miles of pipe • DTE expected investment of $1 billion 2014 2015 2016 2017 2018 Construction Commercial operation Contracted for p
Slide 36: Bluestone volumes better than original forecast
Bluestone volumes have been significantly better than original forecast 36 0 200 400 600 800 1,000 Bluestone Average Daily Volume (MMcf/day) Original Forecast Actuals
Slide 37: Power & Industrial Projects operates within three business lines
DTW Airport, Michigan Gallia Fuels Project, Ohio Mt. Poso Waste Wood Project, California • On-site utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • Wood-fired power plants • Landfill gas to energy projects • Projects reduce emissions from coal
Slide 38: Cash Flow Summary 2015
Cash Flow Summary 38 DTE Energy 2015 Cash Flow Actuals Drivers 2014 Actual 2015 Actual Cash From Operations* $1.8 $1.9 Capital Spending (2.1) (2.3) Free Cash Flow ($0.3) ($0.4) Asset Sales & Other - $0.1 Dividends (0.5) (0.5) Net Cash ($0.8) ($0.8) Debt Financing: Issuances $2.0 $1.1 Redemptions (1.
Slide 39: Capital Expenditures Summary
Capital Expenditures Summary 39 DTE Energy 2015 Capital Expenditure Actuals Drivers * Includes Main renewal / Meter Move-out / Pipeline Integrity 2014 Actual 2015 Actual DTE Electric Operational $1,187 $1,335 Environmental 169 136 Renewables / New Generation 205 316 $1,561 $1,787 DTE Gas Operational
Slide 40: 2016 Cash Flow and Capital Guidance
Cash Flow Summary 40 DTE Energy 2016 Cash Flow and Capital Guidance 2015 Actual 2016 Guidance Cash From Operations* $1.9 $1.8 Capital Spending (2.3) (2.7) Free Cash Flow ($0.4) ($0.9) Asset Sales & Other $0.1 - Dividends (0.5) (0.5) Net Cash ($0.8) ($1.4) Debt Financing: Issuances $1.1 $1.9 Redempti
Slide 41: Weather and DTE Electric Weather Normal Sales
Weather and DTE Electric Weather Normal Sales 41 * Includes adjustments for temperature normalization and customer outages due to weather *** Includes 5,043 of Choice in 2014 and 4,870 in 2015 ** 2015 Industrial sales adjusted for steel resolution YTD 2014 YTD 2015 % change YTD 2014 YTD 2015 % chang
Slide 42: Energy Trading Reconciliation to Economic Net Income
(millions) DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income 2015 Economic Net Income Accounting Adjustments** 2015 Operating Earnings* $20 $57 • Economic net income equals economic gross margin*** minus O&M expenses and taxes • DTE Energy management uses economic net i
Slide 43: 2015 Reconciliation of Reported to Operating Earnings
2015 Reconciliation of Reported to Operating Earnings 43 2015 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 542$ 132$ 107$ 16$ (48)$ 749$ (22)$ 727$ 2011/2012 PSCR* disallowance 12 12 12 Tr
Slide 44: 2014 Reconciliation of Reported to Operating Earnings
2014 Reconciliation of Reported to Operating Earnings 44 2014 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 528$ 140$ 82$ 90$ (57)$ 783$ 122$ 905$ Investment impairment 5 5 5 NY state tax l
Slide 45: 2011-2015 Full Year Reconciliation of Reported to Operating Earnings
2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings 45 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 prima
Slide 46: 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