Slide 1: DTE Energy Business Update
DTE ENERGY BUSINESS UPDATE MARCH 3, 2021
Slide 2: Safe harbor statement
Safe harbor statement The information contained herein is as of the date of this document. DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this document as a result of new information or future events or developments. Words such as “anticipa
Slide 3: Focusing on our employees, customers and communities while delivering on our financial targets
Focusing on our employees, customers and communities while delivering on our financial targets Employees • Achieved safest year on record in 2020 • Ranked by Gallup among the top companies globally for employee engagement • Devoted to diversity, equity, inclusion and a discrimination-free culture fo
Slide 4: Achieved significant success in 2020 across all business units
Achieved significant success in 2020 across all business units Delivered strong financial results Operating EPS ✓ Operating EPS1 growth of 14% from 2019; 8.8% above 2020 original guidance, continuing a trend of among best growth in industry 7.9% CAGR $7.19 ✓ Exceeded original guidance midpoint for 1
Slide 5: Positioned for success in 2021 and beyond
Positioned for success in 2021 and beyond Operating EPS 7% Focusing on continued growth in 2021 ✓ Continuing strong growth with 2021 operating EPS1 guidance providing $7.07 7% growth over 2020 original guidance $6.61 ✓ Utility growth from distribution, modernization and cleaner generation investment
Slide 6: Two high-quality utilities operating in a constructive regulatory environment
Two high-quality utilities operating in a constructive regulatory environment Ranking of U.S. regulatory jurisdictions1 DTE Electric ROE (Michigan in tier 1) Tier 1 7 10.3% 10.3% 10.1% 10.0% 10.0% Tier 2 9 2015 2016 2017 2018 2019 Tier 3 18 Authorized ROE Earned ROE DTE Gas ROE Tier 4 9 Tier 5 8 10.
Slide 7: DTE Electric progressed on key initiatives in 2020; accelerating distribution and generation investments
DTE Electric progressed on key initiatives in 2020; accelerating distribution and generation investments Electric investment Advanced our clean energy investments and plan to accelerate the modernization (billions) of our electric grid $14 • Progressed toward net zero carbon emissions target by 2050
Slide 8: DTE Gas progressed on key initiatives in 2020; replacing aging infrastructure
DTE Gas progressed on key initiatives in 2020; replacing aging infrastructure to reduce greenhouse gas emissions Gas investment (billions) Advanced our clean energy investments and upgrading and replacing aging $3.5 infrastructure Additional $3.0 $0.5 opportunity • Announced innovative program to ac
Slide 9: Midstream continuing track record of success; well-positioned for the future
Midstream continuing track record of success; well-positioned for the future Key markets Achieved success in 2020 • Placed LEAP in service ahead of schedule and under budget; Ontario Northeast Blue Union and LEAP executing on plan • Delivered solid operational results across existing platforms • Gen
Slide 10: Midstream will be a uniquely positioned C-corp with a strong leadership team
Midstream will be a uniquely positioned C-corp with a strong leadership team Executing Midstream separation • Establishes Midstream as an independent, natural gas midstream C-corp with assets in premium basins connected to major demand markets Seasoned leadership team with proven track record • Spin
Slide 11: Maintaining long-term operating EPS growth of 5% - 7% while becoming a predominantly pure-play utility
Maintaining long-term operating EPS1 growth of 5% - 7% while becoming a predominantly pure-play utility DTE annualized proforma2 operating EPS excluding Midstream • 7.4% proforma (excluding Midstream) operating EPS growth from 2020 original guidance midpoint to 2021 guidance midpoint • Continuing 5%
Slide 12: Spin generates a combined dividend expected to be higher than DTE's current dividend
Spin generates a combined dividend that is expected to be higher than DTE’s current, pre-transaction dividend ($ per share) Annualized dividend • Increased annualized dividend per share every year since ~$4.70 - $4.803 2010 $4.341 • 7% dividend increase in 2021 • Spin generates a combined dividend t
Slide 13: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile (billions) Planned equity issuances • Issued $173 million of equity in 2020 through internal 2021 - 2023 mechanisms • Strong investment-grade credit rating $1.3 − Spin transaction is credit enhancing allowing FFO1 / Debt2 target to be lo
Slide 14: Environmental, social and governance efforts are key priorities
Environmental, social and governance efforts are key priorities; aspiring to be the best in the industry Environmental Transitioning towards net zero greenhouse gas emissions Delivering clean and reliable energy to customers Protecting our natural resources Social Focusing on the diversity, safety,
Slide 15: Award-winning commitment to being a top ESG employer in the country
Award-winning commitment to being a top ESG employer in the country Superior corporate citizenship Ambassadors Championing Veteran friendly employer America’s Most Responsible and community involvement Excellence Award for commitment Companies 2021 to supporting minority businesses Gallup Great Work
Slide 16: Environmental sustainability is critical to the creation of long-term shareholder value
Environmental sustainability is critical to the creation of long-term shareholder value Driving collaboration in the fight against climate change • Leading by example with aggressive goal to achieve net zero carbon emissions by 2050 • Active participant in coalitions that advocate for strong environ
Slide 17: More than doubling renewable energy by 2024
More than doubling renewable energy by 2024 Cleaner generation mix 1% 2% 17% 20% 25 – 30% Renewables 18% 20 - 25% Natural gas 20% 77% 20% Nuclear & other 45% 30% Coal 2005 2023E 2030E River St. Trenton Belle Monroe Rouge Clair Channel River 2021 2022 2030 2040 17
Slide 18: A force for growth and prosperity in the Michigan communities we serve
A force for growth and prosperity in the Michigan communities we serve World class volunteerism improves our communities Our efforts include education and mentoring programs and contributes to employee engagement Partnering with a correctional facility to train inmates to Consistently recognized as
Slide 19: Health and safety of our people is a priority
Health and safety of our people is a priority • Multiple safety committees spanning all levels of the company providing input into seasonal safety plans, addressing unique challenges of each business unit • Regular employee safety training − Leading industry OSHA rate in 2020 with safest year on rec
Slide 20: Committed to diversity, equity and inclusion, creating an environment where all are welcome
Committed to diversity, equity and inclusion, creating an environment where all are welcome Office of Diversity, Equity and Inclusion 9 active employee resource groups that promote a safe and • Led by our CEO and key executive leaders welcoming environment, and offer professional development, networ
Slide 21: Building on the momentum of the last decade, DTE is committed to Michigan investments and supplier diversity
Building on the momentum of the last decade, DTE is committed to Michigan investments and supplier diversity 21
Slide 22: Governance framework provides shareholder rights and enables sustainable value creation
Governance framework provides shareholder rights and enables sustainable value creation ✓ Lead Independent Director ✓ Stock ownership guidelines for non-employee Directors ~9yr average tenure 3 Directors since 2018 added ✓ Majority voting standard Board diversity ✓ Annual Director elections 2 Best-i
Slide 23: Executive management compensation plan is aligned with our core priorities
Executive management compensation plan is aligned with our core priorities Priorities Performance-based compensation elements Annual incentive metrics Long-term metrics • Employee engagement Highly engaged employees • Employee safety Top decile customer • Customer satisfaction satisfaction • Custome
Slide 24: Visit us: DTE Investor Relations 2020 ESG Report
VISIT US: DTE INVESTOR RELATIONS 2020 ESG REPORT 2019 - 2020 CORPORATE CITIZENSHIP HIGHLIGHTS
Slide 25: Appendix
Appendix DTE
Slide 26: 2021 guidance provides 7% operating EPS growth over 2020 original guidance
2021 guidance provides 7% operating EPS1 growth over 2020 original guidance (millions, except EPS) 2020 original 2021 guidance Primary drivers guidance midpoint Distribution, modernization and cleaner generation DTE Electric $766 $826 - $840 investments Continued main renewal and other infrastructur
Slide 27: Cash flow and capital expenditures
Cash flow and capital expenditures Cash flow Capital expenditures (billions) (millions) 2020 2021 2020 2021 actuals guidance1 actuals guidance1 Cash from operations2 $3.7 $3.0 DTE Electric Base infrastructure $872 $1,030 Capital expenditures (4.5) (4.2) Free cash flow ($0.8) ($1.2) New generation 84
Slide 28: DTE Electric and DTE Gas regulatory update
DTE Electric and DTE Gas regulatory update DTE Electric DTE Gas • General rate case final order (U-20561) • General rate case filed February 2021 (U-20940) − Effective: May 15, 2020 − Effective: January 1, 2022 − Rate recovery: $188 million − Rate recovery: $195 million − ROE: 9.9% − ROE: 10.25% − C
Slide 29: Spin transaction underway with completion expected mid-2021
Spin transaction underway with completion expected mid-2021 • Spin-off of Midstream designed to be tax-free • Immediately after closing, DTE shareholders will: Structure − Retain current DTE shares − Receive pro-rata dividend of Midstream shares • Expected close mid-year 2021 • Multiple workstreams
Slide 30: Numerous benefits for DTE Energy as a predominantly pure-play regulated utility
Numerous benefits for DTE Energy as a predominantly pure-play regulated utility Enhanced strategic ✓ Premier, predominantly pure-play regulated electric and natural Operating earnings transformation focus gas utility 70% 90% Investments in ✓ Substantially growing rate base with $17 billion of utilit
Slide 31: Midstream will be well-positioned with experienced leadership and unique, high-quality assets
Midstream will be well-positioned with experienced leadership and unique, high-quality assets Enhanced strategic ✓ Positioned to be a premier, publicly traded natural gas midstream company with high-quality assets strategically focus located in premium basins connected to major demand markets Experi
Slide 32: 2008 reconciliation of reported to operating EPS (non-GAAP)
2008 reconciliation of reported to operating EPS (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 primary performance
Slide 33: 2019 - 2020 reconciliation of reported to operating earnings (non-GAAP) and operating EPS
2019 - 2020 reconciliation of reported to operating earnings (non-GAAP) and operating EPS (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 oper
Slide 34: Reconciliation of reported to operating earnings (non-GAAP)
Reconciliation of reported to operating earnings (non-GAAP) 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 represe
Slide 35: Adjusted EBITDA and distributable cash flow (DCF) are non-GAAP measures
Adjusted EBITDA and distributable cash flow (DCF) are non-GAAP measures (millions) Adjusted EBITDA is calculated using net income, the most comparable GAAP measure and adding back expenses for interest, taxes, depreciation and amortization. Adjusted EBITDA also includes an adjustment for DTE’s propo