Dte Energy Company · NYSE:DTE
Dte Energy — Non-Deal Roadshow (June 2018)
51 slides from Dte Energy's roadshow presentation, Jun 22, 2018
Slide 1: Business Update Australian Investor Meetings June 26-27, 2018
EXHIBIT 99.1 Business Update Australian Investor Meetings June 26-27, 2018
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, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, as well as other applicable governmental proceedings and regulations, including any associate
Slide 3: Agenda: Overview
• Overview • Long-Term Growth Update • Financial Performance • Environmental, Social, Governance (ESG) Commitment • Summary 3
Slide 4: DTE Energy overview
DTE Energy overview Leader in ~$18B Winner market cap of 6 consecutive continuous Gallup Great Workplace Awards improvement 10,000 employees Fortune 300 company 100+ years of continuous dividend payments Top quartile in residential customer satisfaction for both DTE Electric & Michigan’s largest inv
Slide 5: Growth driven by strong, stable utilities and complementary non-utility businesses
Growth driven by strong, stable utilities and complementary non-utility businesses 75% - 80% Utility 20% - 25% Non-utility Growth driven by investments aimed at Growth driven by strategic opportunities improving reliability DTE Electric Gas Storage & Pipelines • Electric generation and • Transport,
Slide 6: System of priorities and aspiration
Success is tied to continued focus on our system of priorities and aspiration To be the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve 6
Slide 7: Employee and customer focus provides a solid framework for success
Employee and customer focus provides a solid framework for success Employee Customer Safety Engagement Satisfaction AGA’s Safety Achievement Gallup’s Great Workplace Both utilities ranked 1st by Award Award business customers* nd th ...2 consecutive year …6 consecutive year Both utilities ranked 2nd
Slide 8: Track record of cost management
Strong track record of cost management is a direct result of our focus on continuous improvement Average annual percentage change in O&M costs 2008 – 2016 Electric utility* Controlling costs while improving the customer experience ✓ Continuous improvements 3% ✓ Productivity enhancements 1% ✓ DTE Pee
Slide 9: Maintaining customer affordability while investing in our utilities
Maintaining customer affordability while investing in our utilities DTE Electric 2012 2017 2012 2017 Average annual residential bill Average industrial rate DTE Gas 2012 2017 2012 2017 Average annual residential bill Average industrial rate 9
Slide 10: Michigan's regulatory environment continues to be constructive
Michigan’s regulatory environment continues to be constructive Ranking of state utility regulatory environments* (Michigan in Tier 1) Solid regulatory climate Tier 1 5 States driven by ✓ Constructive and consistent regulatory outcomes Tier 2 13 States ✓ Solid ROEs ✓ Unique recovery mechanisms Tier 3
Slide 11: Strong track record supports long-term shareholder value
Strong track record supports commitment to deliver long-term value to shareholders Total Shareholder Return DTE outperforms S&P 500 utilities DTE Energy 5% - 7% S&P 500 Utilities 253% ~3% Dividend yield* Operating EPS** 146% growth rate 7% dividend through 2022 83% growth rate 66% through 2020*** 43
Slide 12: Base, lean and invest plans provide consistent success
Managing our business through established base, lean and invest plans has provided consistent success Invest FAVORABLE WEATHER Base UNFAVORABLE Lean WEATHER • Along with our base plan, we enter each year with prepared “lean” and “invest” plans • Developing three plans allows us to be flexible and ad
Slide 13: Michigan's economy is strong
Michigan’s economy is strong Gross State Product (billions) $451 $430 $440 $412 $422 2014 2015 2016 2017 2018E 11th top state for business in 2017* 9th best state to make a living in 2017** Michigan has the highest number of manufacturing jobs since 2007*** Lowest unemployment in Michigan since 2000
Slide 14: Agenda: Long-Term Growth Update
• Overview • Long-Term Growth Update • Financial Performance • Environmental, Social, Governance (ESG) Commitment • Summary 14
Slide 15: Growth fueled by investment in utility infrastructure, generation and midstream
Growth fueled by investment in utility infrastructure and generation along with midstream opportunities (billions) DTE Energy Investment Electric $10.4 billion $17 Distribution infrastructure, maintenance, new generation $12 Gas $2.1 billion Base infrastructure, main renewal, NEXUS related GSP $2.8
Slide 16: DTE Electric overview
DTE Electric overview Upgrading Transitioning to distribution lines cleaner energy DTE Electric service territory $16.5B ~11,000 2017 rate megawatt system 2.2M base capacity customers $10.4B Founded 5-year capital plan 1886 (2018-2022) 16
Slide 17: Generation and distribution infrastructure replacement will improve service
Generation and distribution infrastructure replacement will continue to improve service (billions) DTE Electric Investment New generation Transitioning generation portfolio to more sustainable energy $10.4 Distribution infrastructure $7.8 Progress to best in class in reliability Base infrastructure
Slide 18: Committed to generating cleaner energy
Committed to generating cleaner energy for our customers Carbon emissions reduction goals* -30% -45% -75% >-80% 2005 ~2022 2030 2040 2050 50% clean energy by 2030 25% renewables by 2030 >80% carbon reduction by 2050 18 * CO2 percentage reductions from 2005 levels
Slide 19: Replacing coal with renewables and natural gas
Replacing coal with renewables and natural gas Planned Retirements (~6,400 MW) River St. Trenton Belle Monroe Rouge Clair Channel River 2020 2030 2040 2050 Planned Additions (~7,500 MW*) 2018-2022 1,000 MW Additional renewables capacity (TBD) 2018-2022 15 MW 2022 Additional natural gas capacity (TBD
Slide 20: Increasing reliability and customer satisfaction with distribution investments
Increasing reliability and customer satisfaction with distribution investments Infrastructure Improves circuit reliability resilience Addresses substation load growth Infrastructure and aging infrastructure redesign Technology Targets 100% remote monitoring enhancement Tree Improves distribution rel
Slide 21: DTE Gas overview
DTE Gas overview Renewing 4,000 miles of cast iron and unprotected distribution main DTE Gas service territory $2.1B 139 Bcf 5-year capital plan storage 1.3M (2018-2022) capacity customers Founded $4.0B 2017 rate base 1849 19,000 miles distribution main 21
Slide 22: Improving service through infrastructure renewal and replacement
Improving service to customers through infrastructure renewal and replacement (billions) DTE Gas Investment NEXUS related Compression $2.1 Infrastructure renewal Proposing accelerated 15 year main renewal cycle $1.6 Base infrastructure Transmission, compression, distribution, storage 2013 - 2017 201
Slide 23: Replacing aging infrastructure shifts performance, cost and productivity
Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity Minimizes leaks - reducing costs and improving customer Main satisfaction - Filed proposal to increase renewal pace of main renewal Reduces manual meter reading - improving operational Meter efficiencie
Slide 24: GSP overview
GSP overview 5 pipelines, 1,600 miles ??? of pipe and Transport, store gathering lines and gather natural gas $2.8B – $3.4B 91 Bcf 5-year capital plan of storage (2018-2022) Serves markets in Midwest, Northeast, Mid-Atlantic, and Southeast 24
Slide 25: Expanding strategic footprint in prolific dry gas geology
Expanding strategic footprint in the most prolific dry gas geology in the country Michigan Northeast Gathering Ontario Market Bluestone Birdsboro Midwest Link Lateral & Gathering Mid-Atlantic & LNG Southeast Gulf 25
Slide 26: GSP has an asset portfolio with multiple growth platforms
GSP has an asset portfolio with multiple growth platforms Millennium Pipeline (26.25%) 0.8 Bcf/d • 0.1 Bcf/d expansion 4Q18 • 0.2 Bcf/d expansion 2H18 • Firm capacity/demand-based contracts Bluestone Pipeline & Gathering 1.1 Bcf/d • Bi-directional pipe • Firm capacity/demand-based contracts • Gather
Slide 27: GSP is focused on continued success
GSP is focused on continued success Growth Plan • Continuing progress on NEXUS Operating earnings* ‒ Finalizing agreements with two new industrial 2022 target customers $280 - $290 million ‒ Construction progressing on budget and on schedule Capital investment 2018 - 2022 ‒ Active contract negotiati
Slide 28: P&I overview
P&I overview Geographic diversity Industrial energy services, renewable energy, and reduced emissions fuel $0.8B – $1.2B 5-year capital plan (2018-2022) Leading developer of energy related businesses in North America 191 MW renewable plant capacity 28
Slide 29: Capitalizing on growth opportunities in key business areas
Capitalizing on growth opportunities in our key business areas Finalized new large combined Industrial energy heat and power (CHP) project and continuing to develop services strong queue of opportunities Integrating two Renewable Renewable Natural Gas (RNG) acquisitions and in advanced discussions o
Slide 30: P&I is focused on progress toward long-term growth
P&I is focused on progress toward long-term growth Growth Plan • Continued development of industrial energy projects Operating earnings* ‒ Initial stages of construction on Ford Motor 2022 target Company complex $65 - $75 million ‒ Advancing discussions on new CHP plant ‒ Pursuing strong pipeline of
Slide 31: Agenda: Financial Performance
• Overview • Long-Term Growth Update • Financial Performance • Environmental, Social, Governance (ESG) Commitment • Summary 31
Slide 32: Confident in achieving 2018 operating EPS guidance
Confident in achieving 2018 operating EPS* guidance (millions, except EPS) 1Q 2018 2018 Actuals Guidance DTE Electric $142 $648 - $662 DTE Gas 111 152 - 160 Gas Storage & Pipelines 62 185 - 195 Power & Industrial Projects 42 115 - 135 Corporate & Other (16) (100) - (90) Growth segments** $341 $1,000
Slide 33: Issuing $300 million of equity in 2018 with strong cash flow and balance sheet
Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet Leverage* Target 50% - 54% • Issue $800 million of equity 2018-2020 51% ‒ $300 million in 2018 using internal mechanisms • $1.4 billion of available liquidity at 2017 2018-2020E March 31, 2018 • Maintain stro
Slide 34: Agenda: ESG Commitment
• Overview • Long-Term Growth Update • Financial Performance • Environmental, Social, Governance (ESG) Commitment • Summary 34
Slide 35: Recognized by ESG analysts for sustainability goals
Recognized by environmental, social and governance analysts for our sustainability goals • Environmental leadership ‒ Generation portfolio shift to renewables and gas (including one of the largest solar arrays in the Midwest) ‒ Greenhouse gas reduction program in place with targets and deadlines • S
Slide 36: Accelerating plans to produce cleaner energy
Accelerating plans to produce cleaner energy and targeting at least 50% clean energy by 2030 ~280 DTE owned Generation mix wind turbines in- 1% 2% 10% service with 65 more 20% 2% 25% - Renewables 30% expected in 2018 24% 20% - Natural gas 25% 77% Nuclear & other 64% 20% 30% Coal 2005 2017 2030* Over
Slide 37: Balanced mix of cleaner, affordable and reliable energy sources
Creating a balanced mix of cleaner, affordable and reliable energy sources for customers DTE Energy accelerates plans for cleaner energy in Michigan May 18, 2018 Targeting at least 50% clean energy goal by 2030…at least 25% renewable energy DTE Electric among first energy companies in nation to issu
Slide 38: Committed to operating in an ethical and socially responsible manner
Committed to operating in an ethical and socially responsible manner • Over 55,000 employee volunteer hours in 2017 • Received the 2018 Business Diversity Innovation Award from the Edison Electric Institute • Recognized by DiversityInc as a top- five utility in the nation for: – Hiring and promoting
Slide 39: A force for growth in the communities where we live and serve
Maximizing our efforts to be a force for growth in the communities where we live and serve ✓ Strengthen our communities ✓ Catalyze economic growth Education & ✓ Employment Broaden relationships with partners and stakeholders Political Economic Leadership Progress Community Environmental Transformati
Slide 40: Agenda: Summary
• Overview • Long-Term Growth Update • Financial Performance • Environmental, Social, Governance (ESG) Commitment • Summary 40
Slide 41: Summary
Summary • Driving utility growth through infrastructure investments focused on improving reliability and the customer experience • Expanding non-utility businesses through strategic and sustainable growth • Delivering strong operating EPS* and dividend growth that drive premium total shareholder ret
Slide 42: Appendix
es DTE Energy Appendix
Slide 43: Visit our website for updates on our force for growth initiatives
Visit our website for updates on our force for growth initiatives Learn more at DTEImpact.com One Energy Plaza, Detroit, MI 48226-1221 impact@dteenergy.com 43
Slide 44: DTE continues to provide exceptional customer satisfaction
DTE continues to provide exceptional customer satisfaction Residential Electric Residential Gas Business Electric Business Gas Utility* Utility* Utility** Utility** Goal Goal DTE DTE DTE DTE * J.D. Power 2017 Electric and Gas Utility Residential Midwest Customer Satisfaction Study. Visit jdpower.com
Slide 45: Utility regulatory update
Utility regulatory update DTE Electric DTE Gas • General rate order - April 2018 (U-18255) • General rate case - November 2017 (U-18999) – Effective: May 2018 – Prior to tax reform, requested rate – Rate recovery: $65 million recovery: $85 million ($57 million net of infrastructure recovery mechanis
Slide 46: Michigan Public Service Commission is the state regulator
Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities • Establishes fair and reasonable rates and administers terms and conditions of service for Michigan’s utility customers • Composed of three members appointed by the Governor with the advice and confirmat
Slide 47: Both utilities increase customer reliability with 5-year investment plans
Both utilities increase customer reliability with investment plans over the next 5 years (millions) DTE Electric DTE Gas Targeting 6% - 7% growth Targeting 7% - 8% growth $10,400 $2,100 $10 NEXUS related $2,000 New generation Main $1,140 renewal $4,300 Distribution infrastructure Base $4,100 Base $9
Slide 48: 2018 cash flow and capital expenditures guidance
2018 cash flow and capital expenditures guidance (billions) (millions) Cash Flow Capital Expenditures 2018 2018 Guidance Guidance Cash From Operations* $2.0 DTE Electric Base Infrastructure $750 Capital Expenditures (3.6) New Generation 340 Free Cash Flow ($1.6) Distribution Infrastructure 810 $1,90
Slide 49: Tax reform benefits customers and is operating EPS accretive
Tax reform benefits customers and is operating EPS* accretive ✓ Good for utility customers − Near-term rates ~3% lower driven by changes in current tax rates − Future rates decline from the deferred tax re-measurement ✓ Good for DTE 2018 impact − Non-utility businesses are clear winners with higher
Slide 50: 1st quarter 2018 reconciliation of reported to operating earnings
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 pr
Slide 51: 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 repres