Dte Energy Company · NYSE:DTE
Dte Energy — Q1 2008 Earnings Presentation
36 slides from Dte Energy's earnings presentation, May 1, 2008
Slide 1: Business and Financial Update May 1, 2008
Business and Financial Update May 1, 2008
Slide 2: Safe Harbor Statement
Safe Harbor Statement The information contained herein is as of the date of this presentation. 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 "anti
Slide 3: Overview, 1st Quarter 2008 Earnings Results, Cash Flow and Capital Expenditures
Overview 1st Quarter 2008 Earnings Results Cash Flow and Capital Expenditures
Slide 4: Participants
Participants Dave Meador, Executive Vice President and CFO Peter Oleksiak, VP and Controller Nick Khouri, VP and Treasurer Lisa Muschong, Director of Investor Relations
Slide 5: DTE Energy: A Focused, Integrated Energy Strategy
Execute strong regulated growth plan DTE Energy: A Focused, Integrated Energy Strategy Execute value-focused non-utility plan Continue to pay an attractive dividend Realize projected utility earnings growth Near-term: 7 - 9% per year Long-term: 5 - 6% per year Upside potential from renewables Manage
Slide 6: Summary
Summary Solid overall utility results Utilities on track to earn authorized ROE of 11% in 2008 Strong non-utility results at Energy Trading and Power & Industrial Projects Tightening range on Detroit Edison and increasing Power & Industrial and Energy Trading forecast Raising 2008 earnings guidance
Slide 7: 1st Quarter 2008 Earnings Results
Overview 1st Quarter 2008 Earnings Results Cash Flow and Capital Expenditures
Slide 8: Q1 2008 Operating Earnings per Share
Q1 2008 Operating Earnings per Share* Detroit Edison $0.25 Unconventional Gas Production $0.01 Non-Utility $0.30 Coal & Gas Midstream $0.05 Corporate & Other ($0.14) MichCon** $0.37 $0.78 Power and Industrial Projects $0.06 * Reconciliation to GAAP reported earnings included in the appendix ** Inclu
Slide 9: Q1 2008 Operating Earnings Variance
Q1 2008 Operating Earnings Variance * Reconciliation to GAAP reported earnings included in the appendix 2006 DECO MichCOn coal UGP pip ET hold 112 106 103 100 100 100 106 129 6 3 3 0 6 28 5 129 ($ millions) 1Q 2007 Operating Earnings Detroit Edison MichCon Power & Industrial Projects Unconventional
Slide 10: Detroit Edison Variance Analysis
Detroit Edison Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix 2006 Volumes unc dd&a other 2008 48 48 48 44 41 41 5 5 4 3 1Q 2007 Operating Earnings ($5) $5 $48 1Q 2008 Operating Earnings $41 Other ($3) Volumes ($4) Uncollectible Expense Depreciation & Amortizat
Slide 11: MichCon Variance Analysis
2007 Weather Loast Gas uncollectible other 2008 62 62 65 62 59 59 3 4 7 3 MichCon Variance Analysis $62 Uncollectible Expense Weather $3 ($3) $59 1Q 2007 Operating Earnings 1Q 2008 Operating Earnings * Reconciliation to GAAP reported earnings included in the appendix ($7) Taxes / Other Other Margin
Slide 12: Non-Utility Variance Analysis
Non-Utility Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix ($ millions) Non-Utility Operating Earnings Variance* Drivers
Slide 13: Increasing 2008 Earnings Guidance
Increasing 2008 Earnings Guidance * Reconciliation to GAAP reported earnings included in the appendix ** Original guidance assumed $275 million stock buyback on 3/31/08; updated guidance assumes June buyback and $40 share price 2008 Operating Earnings Guidance * Updated Guidance Original Guidance ($
Slide 14: Cash Flow and Capital Expenditures
Overview 1st Quarter 2008 Earnings Results Cash Flow and Capital Expenditures
Slide 15: Q1 2008 Cash Flow
Q1 2008 Cash Flow Strong DTE consolidated cash flow in Q1 2008 Adjusted cash from operations totaled $1B compared to capital spending of $300M 2008 cash driven by intra-year timing, including the timing of synfuel cash payments and the normal quarterly cycle at MichCon ($ billions) DTE Energy Cash F
Slide 16: Q1 2008 Capital Expenditures
Q1 2008 Capital Expenditures Q1 2007 Q1 2008 Detroit Edison capital spending totaled $214M in Q1 2008, driven by environmental spending and normal operational improvements Non-utility capital spending in all segments; western Barnett development, gas midstream, and Power and Industrial Projects For
Slide 17: Positive Net Cash Flow Expected in 2008
Positive Net Cash Flow Expected in 2008 2008 Guidance DTE Energy Cash Flow Guidance ($ billions) 2008 Guidance 2008 Capex Guidance ($ billions) * Includes ($0.2) in monetization tax impacts
Slide 18: DTE Energy: A Focused, Integrated Energy Strategy
Execute strong regulated growth plan DTE Energy: A Focused, Integrated Energy Strategy Execute value-focused non-utility plan Continue to pay an attractive dividend Realize projected utility earnings growth Near-term: 7 - 9% per year Long-term: 5 - 6% per year Upside potential from renewables Manage
Slide 19: Upcoming Investor Events
Upcoming Investor Events AGA Financial Conference, May 5-6 in Miami Presentation May 5, 2008 9:05 ET Webcast at www.dteenergy.com/investors DTE Energy's Annual Meeting of Shareholders Presentation May 15, 2008 10:00 a.m. ET Webcast at www.dteenergy.com/investors DTE Energy Investor Relations www.dte
Slide 20: Appendix
Appendix DTE Energy s€
Slide 21: Load Continues to Grow During Michigan's Economic Restructuring
Load Continues to Grow During Michigan's Economic Restructuring Annualized Sales (GWh) Detroit Edison Service Area: Electric Sales (GWh) Includes Electric Choice Hemlock Semiconductor Creating Jobs in Michigan Temperature Normalized Actual 0.7% compound annual growth temperature normalized
Slide 22: Leverage
Leverage* * Excludes securitization debt and MichCon short-term borrowing **2008 assumes midpoint of applicable estimates Funds from Operations / Debt* A Strong Balance Sheet Continues to Be a Priority for DTE Energy 12/31/2006 12/31/2006 12/31/07E 0.534 0.515 0.52 12/31/2006 12/31/2006 12/31/07E 0.
Slide 23: DTE Energy Trading Earnings Reconciliation
DTE Energy Trading Earnings Reconciliation Total EITF 30.6 30.6 37.5 6.9 ** Consists of 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, transmission and storage
Slide 24: Barnett Shale Operating Metrics
Net Production Rate (Mmcfe/day) Gross Producing Wells 132 Reserves (Bcfe) Probable Proven Acreage Position (000's Acres) Net Undeveloped Acres Net Developed Acres YE2007 192 144 336 Barnett Shale Operating Metrics (Excludes Sold or Held for Sale Properties) 111 180 YE2006 291 11 3/31/08 41 52 10 38
Slide 25: Utility Earnings Growth 2007 - 2009
Utility Earnings Growth 2007 - 2009 * Reconciliation to GAAP reported earnings included in the appendix Original 2007 Guidance rate red rate case Detroit Edison 340 355 400 82 88 93 2007A 2009 Early Outlook 2008 Guidance $422 $435 - 460 $480 - 505 Detroit Edison $340 MichCon $82 $85 - 90 $350 - 370
Slide 26: Performance Excellence Process Reduces Fixed Cost Structure
Completed Projects Projects in Process Total Expected Program Benefits 260 Detroit Edison 260 70 330 PEP Benefits 2006 - 2008 O&M, Capital & Other $ millions, pre-tax Performance Excellence Process Reduces Fixed Cost Structure 2005 2006 2007 10300 9300 9075 Employees at Year End: Detroit Edison, Mic
Slide 27: Detroit Edison Growth Investments on Track
Detroit Edison Growth Investments on Track Investing ~$1.0B on Clean Air Act compliance at 3,000 MW coal-fired Monroe plant from 2008-2012 Potential ~$300M Advanced Metering Infrastructure (AMI) program coordinated with MichCon; pilot program in 2008 License application for new nuclear power plant a
Slide 28: MichCon Growth Investments on Track
MichCon Growth Investments on Track Potential ~$60M AMI program coordinated with Detroit Edison; pilot program in 2008 ~$100M meter relocation program $90M distribution system expansion in Western Michigan $90M Utility storage (17 Bcf) $50M Panhandle Pipeline lateral Major 2008 Expansion Projects Gr
Slide 29: Successful Non-Utility Monetization Plan
Successful Non-Utility Monetization Plan Original Guidance Current Guidance At least $800M Antrim Power & Industrial Peakers Monetization After-Tax Cash Proceeds Closed Closed Core Barnett ~$1.7B Closed Closing delayed due to choppy debt markets Pursuing alternative financing options Expect to buy b
Slide 30: Gas Pipelines and Storage Assets Are Well-Positioned for Growth
DTE Energy Gas Pipelines and Storage Assets Are Well-Positioned for Growth Vector Pipeline Expansion Gas Storage Vector MichCon Millennium Michigan NY City Canadian & Arctic Gas Rockies Gas - REX Gulf (LNG) Gas DTE Storage We are well positioned to capitalize on the strong Northeast US market dynami
Slide 31: Reconciliation of Q1 2008 Reported to Operating Earnings
Reconciliation of Q1 2008 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 me
Slide 32: Reconciliation of Q1 2008 Reported to Operating Earnings per Share
Reconciliation of Q1 2008 Reported to Operating Earnings per Share 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 perf
Slide 33: Reconciliation of Q1 2007 Reported to Operating Earnings
Reconciliation of Q1 2007 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 me
Slide 34: Reconciliation of 2007 Reported to Operating Earnings
Reconciliation of 2007 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 measu
Slide 35: Reconciliation of 2007 Reported to Operating Earnings per Share
Reconciliation of 2007 Reported to Operating Earnings per Share 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 perform
Slide 36: Reconciliation of 2008 and 2009 Reported to Operating Earnings
Reconciliation of 2008 and 2009 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