Dte Energy Company · NYSE:DTE
Dte Energy — Q1 2021 Earnings Presentation
27 slides from Dte Energy's earnings presentation, Apr 27, 2021
Slide 1: DTE 1Q 2021 Earnings Conference Call
DTE 1Q 2021 EARNINGS CONFERENCE CALL APRIL 27, 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: Participants
Participants Jerry Norcia – President and CEO David Slater – President and CEO-Elect, DTM Dave Ruud – Senior Vice President and CFO Barbara Tuckfield – Director Investor Relations 3
Slide 4: Focusing on our employees, customers and communities while delivering for investors
Focusing on our employees, customers and communities while delivering for investors Employees • Recognized as a Gallup Great Workplace for the ninth consecutive year • Demonstrating a safe start to 2021 with industry-leading low OSHA rate • Building on our diversity, equity and inclusion focus with
Slide 5: Advancing on environmental initiatives across our businesses
Advancing on environmental initiatives across our businesses ✓ Began operations on three new wind parks with a total capacity of 455 MW ✓ Filed settlement agreement for incremental voluntary renewable energy sources of 420 MW in 2022 and 380 MW from 2023 - 2025 ✓ Reached 900 MW of voluntary renewabl
Slide 6: Strong start to 2021; spin progressing on track
Strong start to 2021; spin progressing on track Progressing on financial targets ✓ 1Q 2021 operating EPS1 of $2.44, up $0.78 from last year ✓ On track to achieve 2021 operating EPS guidance range of $6.88 to $7.262 ✓ Targeting 5% - 7% long-term operating EPS growth from 2020 original guidance base ✓
Slide 7: Midstream business off to strong start in 2021; well-positioned for future success
Midstream business off to strong start in 2021; well-positioned for future success Continuing to deliver success in 2021 ✓ Executing across all platforms ✓ On track to achieve $710 - $750 million of adjusted EBITDA1 in 2021 Establishing best-in-class ESG agenda ✓ Announced net zero emissions target
Slide 8: Spin is on track for mid-year execution
Spin is on track for mid-year execution Achieved progress to date ✓ Initiated Form 10 process and review period with SEC ✓ February Rating agency discussions Upcoming milestones on track ✓ Form 10 public filing and effectiveness being declared by SEC ✓ Debt raise ✓ Analyst and investor outreach ✓ Wh
Slide 9: 1Q 2021 operating earnings variance
1Q 2021 operating earnings1 variance (millions, except EPS) 2020 2021 Variance Primary drivers Rate implementation, non-qualified benefit plan losses DTE Electric $94 $208 $114 in 2020 and colder weather in 2021 DTE Gas 121 169 48 Rate implementation and colder weather in 2021 Gas Storage & Pipeline
Slide 10: Positioned for success in 2021 and beyond
Positioned for success in 2021 and beyond ✓ Continuing strong growth with 2021 operating EPS1 guidance providing 7% growth over 2020 original guidance ✓ On track to achieve 5% - 7% long-term operating EPS growth from 2020 Total shareholder return2 original guidance midpoint ✓ Executing spin to posit
Slide 11: Visit us: DTE Investor Relations
VISIT US: DTE INVESTOR RELATIONS 2020 ESG REPORT CORPORATE CITIZENSHIP HIGHLIGHTS
Slide 12: Appendix
Appendix DTE
Slide 13: On track to achieve 2021 operating EPS guidance
On track to achieve 2021 operating EPS1 guidance (millions, except EPS) 2021 guidance DTE Electric $826 - $840 DTE Gas 202 - 212 Gas Storage & Pipelines 296 - 312 Power & Industrial Projects 147 - 163 Energy Trading 15 - 25 Corporate & Other (148) - (138) DTE Energy $1,338 - $1,414 Operating EPS $6.
Slide 14: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile (billions) Planned equity issuances • Issued $1 billion in green bonds 2021 - 2023 • Strong investment-grade credit rating $1.3 − Spin transaction is credit enhancing allowing FFO1 / Debt2 target to be lowered from 18% to ~16% • $4.1 bil
Slide 15: Cash flow and capital expenditures guidance
Cash flow and capital expenditures guidance1 Cash flow Capital expenditures (billions) (millions) 2021 2021 guidance guidance Cash from operations2 $3.0 DTE Electric Base infrastructure $1,030 Capital expenditures (4.2) Free cash flow ($1.2) New generation 950 Distribution infrastructure 1,030 Divid
Slide 16: Cash flow and capital expenditures actuals
Cash flow and capital expenditures actuals Cash flow Capital expenditures (billions) (millions) 1Q 2020 1Q 2021 1Q 2020 1Q 2021 Cash from operations1 $1.0 $1.1 DTE Electric Capital expenditures (1.3) (0.7) Base infrastructure $270 $190 Free cash flow ($0.3) $0.4 New generation 415 100 Distribution i
Slide 17: Weather impact on sales
Weather impact on sales DTE Electric DTE Gas Cooling degree days Heating degree days 1Q 2020 1Q 2021 % Change 1Q 2020 1Q 2021 % Change Actuals - - 0% Actuals 2,890 3,051 6% Normal - - 0% Normal 3,288 3,212 (2%) Deviation from normal 0% 0% Deviation from normal (12%) (5%) Operating earnings1 impact o
Slide 18: 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) • Voluntary renewable plan (U-20713) • General rate case filed February 2021 (U-20940) − Effective: May 15, 2020 − Filed settlement: April 2021 − Effective: January 1, 2022 − Rate recovery: $188
Slide 19: 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 20: 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 21: 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 22: 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 22
Slide 23: Committed to diversity, equity and inclusion
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, including a Director of welcoming environment and offer professi
Slide 24: 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 25: 2021 Energy Trading reconciliation of operating earnings to economic net income
2021 Energy Trading reconciliation of operating earnings1 to economic net income (millions) Energy Trading reconciliation • Economic net income equals economic gross margin3 minus O&M expenses and taxes 1Q 2020 1Q 2021 Operating earnings $14 $14 • DTE Energy management uses economic net income as on
Slide 26: 2020 - 2021 reconciliation of reported to operating earnings and operating EPS
2020 - 2021 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 27: Reconciliation of reported to operating earnings, Adjusted EBITDA and distributable cash flow
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