Dte Energy Company · NYSE:DTE
Dte Energy — Corporate Update (August 2020)
47 slides from Dte Energy's corporate update, Aug 10, 2020
Slide 1: DTE Business Update August 11, 2020
EXHIBIT 99.1 DTE BUSINESS UPDATE AUGUST 11, 2020 1
Slide 2: Safe harbor statement
Safe harbor statement Certain information presented herein includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, and businesses of DTE Energy. Words such as “anticipate,” “belie
Slide 3: Focusing on employees, customers and communities; positioned to deliver on financial targets
Focusing on our employees, customers and communities; positioned to deliver on our financial targets Employees Investors • Ensuring the health and safety of our • Reaffirming 2020 operating EPS1 guidance employees • Confirming 5% – 7% operating EPS growth Successfully implemented work from target
Slide 4: Supporting stakeholders and delivering on financial targets
Supporting employees, customers and communities and delivering on financial targets • Executing plan to achieve 2020 operating earnings1 guidance • Confirming 5% – 7% operating EPS growth target • Driving utility growth by investing 80% of total 5- year capital in utility infrastructure and cleaner
Slide 5: Continuous improvement culture drives strong cost management vs. peers
Distinctive continuous improvement culture drives strong track record of cost management vs. peer average All 10,000+ employees engaged in CI to Average annual percentage change in surface and solve problems O&M costs 2008 – 2018 Electric utility1 • Controlling costs while improving the customer exp
Slide 6: Consistently earning authorized ROE in a constructive regulatory environment
Consistently earning authorized ROE in a constructive regulatory environment Ranking of U.S. regulatory jurisdictions1 DTE Electric ROE (Michigan in tier 1) Tier 1 8 10.3% 10.3% 10.1% 10.0% 10.0% Tier 2 9 2015 2016 2017 2018 2019 Authorized ROE Earned ROE Tier 3 18 DTE Gas ROE Tier 4 9 Tier 5 7 10.5
Slide 7: Delivering premium results through disciplined planning and management
Delivering premium results through disciplined planning and management Delivering total shareholder return2 well above History of exceeding operating EPS1 guidance industry average $6.30 329% 241% $2.90 70% 5-Year 10-Year 15-Year S&P 500 Utilities DTE 1. Reconciliation of operating earnings (non-GAA
Slide 8: Increased dividend every year since 2010; 7% dividend growth through 2021
Increased dividend every year since 2010; 7% dividend growth through 20211 ($ per share) Annualized dividend 6.1% CAGR • Increased annualized dividend per 7.1% CAGR $4.05 share every year since 2010 6.1% average increase over that time $3.08 7.1% average increase since 2016 • Continuing 7% divid
Slide 9: Executing on our economic response plan
Executing on our economic response plan Economic impact update • Overall tracking below the $60 million impact originally forecasted Electric residential sales better than anticipated; commercial and industrial sales in-line with May start scenario COVID-19 costs tracking to plan Economic respon
Slide 10: On track to achieve 2020 operating earnings guidance
On track to achieve our 2020 operating earnings1 guidance with robust economic response plan and additional growth (millions, except EPS) 2020 guidance Primary drivers DTE Electric $759 - $773 Weather and economic response plan DTE Gas 185 - 193 Gas Storage & Pipelines 277 - 293 Strong 1H performanc
Slide 11: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile (billions) • Maintaining strong investment-grade credit rating and FFO1/Debt2 target at 18% Planned equity issuances 2020 – 2022 • $3.4 billion of available liquidity at end of 2Q 2020 $1.3 Convertible equity units Credit ratings S&P Moo
Slide 12: Clear line of sight for growth supported by utility investment
Clear line of sight for growth supported by investment in utility infrastructure and disciplined non-utility opportunities (billions) 2020 – 2024 DTE Energy investment $19 billion Electric: Distribution infrastructure, $12 cleaner generation, maintenance $15 Gas: Base infrastructure, main $3 renewal
Slide 13: Potential $2 billion upside to 5-year utility investment plan
Potential $2 billion upside to 5-year utility investment plan with visible infrastructure investment (billions) Utility investment plan $1.0 – $1.5 billion additional electric investments above 5-year plan Additional ~$2 opportunity • Additional voluntary renewables Current 600 MW in plan with lon
Slide 14: DTE Electric: providing clean, reliable and affordable energy
DTE Electric: providing customers clean, reliable and affordable energy DTE Electric • Constructive regulatory approvals provide certainty to plan General rate case order issued in May supports investment plans Order issued in July delays rate case filing to 2021, maintains financial health and
Slide 15: Transformational investments in generation and distribution
Transformational investments in generation and distribution provide customers cleaner, more reliable energy (billions) 2020 – 2024 electric investment Transformational investments Cleaner energy $3 Delivering 80% carbon emissions reduction by 2040 $5 $12 billion Infrastructure renewal Addressing sub
Slide 16: Continuing to secure a greener future
Continuing to secure a greener future Net zero Wind carbon emissions by 2050 • 15 wind parks • Polaris is largest operating wind park in Michigan Solar • 31 solar parks 80% • Lapeer solar park one of the largest solar parks carbon emissions east of the Mississippi reduction by 2040 Voluntary renewab
Slide 17: DTE Gas: advancing toward net zero emissions
DTE Gas: advancing toward net zero emissions through infrastructure investments and innovative planning DTE Gas • Announced first-of-its-kind plan to reduce greenhouse gas emissions to net zero by 2050 Partnering with suppliers and customers across the natural gas chain Reducing 6 million metric
Slide 18: Replacing aging infrastructure reduces methane emissions
Replacing aging infrastructure reduces methane emissions while improving performance, cost and productivity (billions) 2020 – 2024 gas investment Transformational investments Main renewal Minimizing leaks to reduce costs and $1.4 improve customer satisfaction $3 billion $1.6 Pipeline/transmission in
Slide 19: Comprehensive plan to achieve net zero greenhouse gas emissions
Unique and comprehensive plan to achieve net zero greenhouse gas emissions Working with suppliers Aspiring to procure net zero natural gas to serve the needs of customers by 2050 Emissions reductions (Million metric tons, annually) Advocating for consistent reporting and measuring of emissions Incor
Slide 20: Non-utility businesses complement utility growth
Non-utility businesses complement utility growth and provide portfolio mix to manage business cycles Non-utility value creation Extension of our utility business core competencies Delivering higher than utility into other geographies returns Contributing over the last 10 years: Proven ability of ear
Slide 21: GSP: continuing to deliver successful results
GSP: continuing to deliver successful results; well-positioned for future growth Percentage of revenue from demand-based contracts or MVCs/flowing gas Gas Storage & Pipelines • LEAP placed in-service August 1; on time 100% and under budget 92% 93% • Assets are well-positioned for future growth Loc
Slide 22: Delivering higher operating earnings with increased certainty
Delivering higher operating earnings1 with increased certainty (millions) • Continued organic growth from well-positioned platforms GSP operating earnings Supported by strong contracts 9.5% CAGR Connected to power and industrial markets • Adjusted EBITDA2 and allocated debt2 $400 – $420 Produc
Slide 23: Associated gas supply decreases, demand for dry gas increases
As associated gas supply decreases due to lower oil prices, demand for other sources of dry gas increase • The quality of the resource underlying our assets ensures gas will continue to flow on our systems 2021 – 2023 drilling supply curve (Bcf/d) Additionally, our assets are well- positioned in s
Slide 24: P&I: underpinned by strong growth in RNG and industrial energy services
P&I: underpinned by strong growth in RNG and industrial energy services Power & Industrial Projects • RNG and industrial energy services projects drive long-term growth Finalized cogeneration agreement in June Operationalized large Wisconsin RNG and Ford Motor projects this year • Developing hig
Slide 25: Operating earnings underpinned by RNG and cogeneration opportunities
Operating earnings1 are underpinned by RNG and cogeneration growth opportunities (millions) P&I operating earnings Industrial energy services Developing new cogeneration projects to $133 – $148 improve customer environmental attributes $125 – $135 and lower energy costs Renewable energy REF2 Expandi
Slide 26: ESG efforts are key priorities
Environmental, social and governance efforts are key priorities Environmental Delivering clean and reliable energy to customers Transitioning towards net zero greenhouse gas emissions Protecting our natural resources Social Focusing on the safety, well-being and success of our employees Commitment t
Slide 27: 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 27
Slide 28: Continuing to secure a greener future for continuous generation
Continuing to secure a greener future for continuous generation Blue Water Energy Center Ludington Hydropower Plant 1 largest pumped storage reduction in CO2 emissions nd 70% 2 facility in the U.S. 1 95% reduction in SO2 and NOx 175k homes powered 850k homes powered $800m turbine upgrades by 2020 $1
Slide 29: Promoting environmental sustainability through stewardship and conservation
Promoting environmental sustainability through stewardship and conservation • Received Corporate Conservation Leadership award from the Wildlife Habitat Council for leadership in wildlife management • 36 sites certified under the Wildlife Habitat Council • Taking care of land, water and living creat
Slide 30: Strong culture provides a solid framework for success
Commitment to strong culture provides a solid framework for success Safety National Safety Council’s top 2% of companies surveyed in safety culture Employee engagement Top 3% in the world by Gallup; 8 consecutive Gallup Great Workplace Awards Customer satisfaction Top quartile at both utilities for
Slide 31: World class volunteerism and community service
World class volunteerism and community service 5,610 Volunteers $16m value of in-kind services since 2015 101,618 hours volunteered 1,335 nonprofits helped 31
Slide 32: Employee resource groups create diversity and inclusion
Promoting employee resource groups creates an atmosphere of diversity and inclusion Black LGBTQ group Young professionals professionals group group Family Differently- Latinx oriented group abled group professionals group Women’s group Asian and Middle Veteran Eastern group empowerment group 32
Slide 33: Award-winning commitment to being a top ESG employer
Our award-winning commitment to being a top ESG employer in the country Superior corporate Company diversity Top quartile in Named as one of citizenship and customer satisfaction America’s best large community employers involvement Outstanding Inclusion of women- Overall excellence contribution to A
Slide 34: Outperforming industry average in ESG scores
Outperforming industry average in ESG scores A 75 • Continuing to make progress on ESG performance BBB 50 Improved MSCI rating from BBB to A • Aspiring to be the best in the industry MSCI Sustainalytics DTE Energy Industry average 34
Slide 35: Environmental, social and governance 2020 ESG Report
Environmental, social and governance 2020 ESG Report DTE Investor Relations www.dteenergy.com/investors 313.235.8030 35
Slide 36: Appendix
Appendix DTE
Slide 37: DTE Energy overview
DTE Energy 70% – 75% utility DTE Electric Electric generation and distribution DTE Gas Natural gas transmission, storage and distribution 25% – 30% non-utility Gas Storage & Pipelines (GSP) Transport, store and gather natural gas Power & Industrial Projects (P&I) DTE Energy Own and operate energy re
Slide 38: Cash flow and capital expenditures guidance
Cash flow and capital expenditures guidance Cash flow Capital expenditures (billions) (millions) 2020 2020 guidance guidance Cash from operations1 $3.0 DTE Electric Capital expenditures (4.5) Base infrastructure $680 Free cash flow ($1.5) New generation 1,050 Distribution infrastructure 850 Dividend
Slide 39: 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 (U-20642): filed settlement Effective: May 15, 2020 agreement July 2020 Rate recovery: $188 million Order expected before September 25, 2020 ROE: 9.9% Effective: Oc
Slide 40: Longer-term demand increases will require continued production growth
Longer-term demand increases will require continued production growth through new drilling U.S. natural gas demand forecast (Bcf/d) • Longer-term natural gas supply/demand fundamentals remain attractive; shorter-term gas prices 130 +2% remain challenged CAGR 120 110 • Gas demand is forecasted to gro
Slide 41: Drilling needed to hold natural gas production flat
It is necessary to drill 19 Bcf/d of new natural gas supply on an annual basis to hold production flat Annual decline of U.S. natural gas supply • Given decline profiles of flowing wells, from currently-flowing wells (Bcf/d) new production is needed to just keep supply flat Wood Mackenzie forecast
Slide 42: Well-positioned platforms provide confidence in accretive growth
Well-positioned platforms provide confidence in securing highly accretive growth Platforms Regulation Phase Growth Opportunities • $2.2 – $2.7 billion of investment in 2020 – 2024 Blue Union Early Gathering build-outs $1.0 billion of growth Gathering build-outs/compression/ contractually secured o
Slide 43: Blue Union and LEAP asset additions to portfolio
Blue Union and LEAP asset additions to portfolio provide great value and growth Perryville Hub • Premier assets in high-quality Haynesville Carthage Hub basin Southeast Power Markets Existing fully contracted gathering system Gulf South Fully contracted large-diameter Texas markets gathering pip
Slide 44: 2018 – 2019 reconciliation of reported to operating EPS
2018 – 2019 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 perf
Slide 45: 2008 reconciliation of reported to operating EPS
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 46: Reconciliation of reported to operating earnings
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 47: Adjusted EBITDA and Allocated Debt are non-GAAP measures
Adjusted EBITDA and Allocated Debt are non-GAAP measures 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 proportional share of joint ven