Dte Energy Company · NYSE:DTE
Dte Energy — AGA Financial Forum 2016
39 slides from Dte Energy's conference presentation, May 13, 2016
Slide 1: AGA Financial Forum Business Update
EXHIBIT 99.1 AGA Financial Forum Business Update May 15 - 17, 2016
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, FERC, MPSC, NRC, and CFTC, as well as other applicable governmental proceedings and regulations, including any associated impact on rate structures; the
Slide 3: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 3
Slide 4: DTE Energy's growth is driven by strong, stable utilities and complementary non-utility businesses
DTE Energy’s growth is driven by strong, stable utilities and complementary non-utility businesses 4 DTE Electric • Electric generation and distribution • 2.2 million customers DTE Gas • Natural gas transmission, storage and distribution • 1.2 million customers Complementary Non-Utility Businesses S
Slide 5: Our focus on employees and customers has provided a solid framework for success
Our focus on employees and customers has provided a solid framework for success 5 5 Received Gallup’s Great Work Place Award for the 4th consecutive year Only utility to be recognized Top quartile in residential customer satisfaction* for both DTE Electric and DTE Gas Recognized by Fortune M
Slide 6: Our focus on regulatory construct and CI capability has contributed to a solid framework
Our focus on regulatory construct and CI capability has contributed to a solid framework for success 6 6 Regulatory environment in Michigan ranked in 1st tier* * Barclays report April 2016 On track for 10th consecutive year of meeting or exceeding initial operating EPS** guidance Continuous Im
Slide 7: Energy legislation continues to move forward
7 Energy legislation continues to move forward • Recent activity − Senate hearings introduced substitute bills (SB437 and SB438) − Testimony from key stakeholders • Key provisions include − Capacity requirements for all electricity providers − Integrated resource planning pre-approval process − Ener
Slide 8: We remain confident in delivering 5%-6% operating EPS growth target
$4.82 $2.35 $2.48 $2.62 $2.76 $2.92 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 We remain confident in delivering 5%-6% operating EPS* growth target 8 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) Operating EPS Dividend Actuals Forecast Dividend per sh
Slide 9: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 9
Slide 10: Distribution and generation infrastructure improvements drive capital investments through 2020
~$13 $8.2 Distribution infrastructure, maintenance, new generation $1.6 Base investments, infrastructure renewal, NEXUS related $2.0-$2.6 Gathering investments, NEXUS, pipeline expansions $0.6-$0.9 Cogeneration, on-site energy 2016 – 2020 Current Plan 10 ~$10 2011 – 2015 Actual P&I GSP Gas Electric
Slide 11: Electric generation and infrastructure renewal will significantly increase investment in the decade ahead
Electric generation and infrastructure renewal will significantly increase investment in the decade ahead 32% DTE Electric Investment $8.2 $9.7 2016-2020 2021-2025 $7.1 2011-2015 New generation Distribution infrastructure 11 Maintenance and other projects (billions) ~$18 billion next 10 years The el
Slide 12: Of the $18 billion investment, we will invest $6.5 billion on distribution infrastructure
Of the $18 billion investment over the next 10 years, we will invest $6.5 billion on distribution infrastructure 32% 2016-2025 ~$18 Maintenance and other projects New generation Distribution infrastructure DTE Electric Total Investment 12 (billions) • $6.5 billion over next 10 years • Potential to i
Slide 13: DTE Electric has already begun to retire its coal-fired generation
DTE Electric has already begun to retire its coal-fired generation 2015 - 2016 2017 - 2020 2021 - 2025 2026 - 2030 Coal-fired Generation Retirement Timeline (MW) 13 Total Retirements Note: Estimated amounts. Timing and mix of generation impacted by MISO capacity requirements and Michigan and EPA pol
Slide 14: Significant emissions reductions have already been achieved
Significant emissions reductions have already been achieved and we continue on the path to clean energy 32% 14 2005 2015 2030 CO2 Emissions 16% Reduction 2005 2015 2030 2005 2015 2030 NOX Emissions SO2 Emissions • Emissions reductions are largely due to $2 billion in controls installed at Monroe Pow
Slide 15: Strengthening and expanding our gas infrastructure will reduce leaks and lost gas
Strengthening and expanding our gas infrastructure will reduce leaks and lost gas while creating and supporting Michigan jobs 15 2011-2015 2016-2020 $1.1 $1.6 DTE Gas Investment Base infrastructure Infrastructure renewal NEXUS related (billions) • $200 million through 2017 • Primarily additional com
Slide 16: We remain focused on customer affordability
Average Annual Residential Bill* DTE Electric We remain focused on customer affordability 16 $1,223 $1,225 2012 2013 2014 2015 2016E 2017E Average Annual Residential Bill** DTE Gas $910 2012 2013 2014 2015 2016E 2017E 9% Flat ** Assumes normal weather and implementing $180 million rate increase begi
Slide 17: Gas Storage & Pipelines has an asset portfolio with multiple growth platforms
17 Gas Storage & Pipelines has an asset portfolio with multiple growth platforms NEXUS Pipeline DTE Gas DTE Storage Marcellus Shale Utica Shale Bluestone Pipeline Bluestone Gathering System Michigan Gathering Millennium Pipeline Vector Pipeline (40%) • Bi-directional pipe • Firm capacity/demand-base
Slide 18: NEXUS project is progressing and originates in the most economical geology
18 NEXUS project is progressing and originates in the most economical geology in the country • Project on track for 4th quarter 2017 in-service • Recent accomplishments − Increased interconnect agreements from 1.4 Bcf/d to 1.75 Bcf/d − Ordered compressors − Continued to advance work with FERC and ot
Slide 19: Strong results from the Utica and Marcellus region are increasing expectations for the basin
0 5 10 15 20 25 30 2010 2015 2020 2025 2016 Forecast Utica / SW Marcellus Supply Growth (Bcf/d) Actuals 2012 Forecast 2013 Forecast 2014 Forecast 2015 Forecast Strong results from the Utica and Marcellus region are increasing expectations for the basin 19 Source: IHS CERA US Shale Basin Economics (N
Slide 20: Gas Storage & Pipelines is focused on continued success in pipeline and gathering
Gas Storage & Pipelines is focused on continued success in pipeline and gathering • Accelerated Marcellus development in 2015 delivered 30% year over year earnings growth • Earnings growth driven by both pipeline and gathering platforms • Assessing investment opportunities given current sector dynam
Slide 21: Power & Industrial Projects operates within three distinct business lines in 17 states
Power & Industrial Projects operates within three distinct business lines in 17 states DTW Airport, Michigan Gallia Fuels Project, Ohio Mt. Poso Waste Wood Project, California • On-site utility services for industrial and commercial customers • Coke and pulverized coal for steel customers • Wood-fir
Slide 22: Power & Industrial Projects is focused on replacing REF earnings over the 5 year outlook
Power & Industrial Projects is focused on replacing REF earnings over the 5 year outlook • 2016 earnings in line with 2015 actuals • Higher REF earnings offset by lower steel related earnings Near-Term • Grow cogeneration portfolio • Pursue strategic asset acquisitions • Maximize REF opportunities t
Slide 23: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 23
Slide 24: Summary
Summary • Confident we will achieve our 2016 operating EPS* guidance... ...extending our streak to 10 consecutive years meeting or exceeding guidance • Utilities continue to invest in infrastructure improvements... ...which will fundamentally renew Michigan’s infrastructure and enhance customer reli
Slide 25: DTE Energy Investor Relations
DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 25 Contact Us
Slide 26: Appendix
Appendix
Slide 27: DTE Energy 1st Quarter 2016 Operating Earnings Variance
DTE Energy 1st Quarter 2016 Operating Earnings* Variance 1Q 2015 1Q 2016 Change DTE Electric 136$ 127$ (9)$ DTE Gas 111 87 (24) Gas Storage & Pipelines 27 30 3 Power & Industrial Projects 33 21 (12) Corporate & Other (25) (7) 18 Growth segments** 282$ 258$ (24)$ Growth segments operating EPS 1.58$ 1
Slide 28: We are confident we will achieve our 2016 operating EPS guidance
We are confident we will achieve our 2016 operating EPS* guidance * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2016 Guidance 2015 Actuals DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Gro
Slide 29: Cash Flow Summary
Cash Flow Summary DTE Energy 2016 Cash Flow and Capital Guidance 2015 Actual 2016 Guidance Cash From Operations* $1.9 $1.8 Capital Spending (2.3) (2.7) Free Cash Flow ($0.4) ($0.9) Asset Sales & Other $0.1 - Dividends (0.5) (0.5) Net Cash ($0.8) ($1.4) Debt Financing: Issuances $1.1 $1.9 Redemptions
Slide 30: A strong balance sheet remains a key priority to support growth
25% 21% 2014 2015 2016-2018E 51% 52% 2014 2015 2016-2018E Leverage* A strong balance sheet remains a key priority to support growth * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Funds from Operations** / Debt* Targ
Slide 31: DTE Electric plans $8.2 billion of investments over the next 5 years
DTE Electric plans $8.2 billion of investments over the next 5 years 2015A 2016E 2017E 2018E 2019E 2020E Distribution infrastructure New generation Maintenance and other projects* 2016E - 2020E Total $14.8B ~$19.8B YE Rate Base** $662M ~$886M Depreciation * Includes power reliability, existing gener
Slide 32: DTE Gas plans $1.6 billion of investments over the next 5 years
DTE Gas plans $1.6 billion of investments over the next 5 years 2015A 2016E 2017E 2018E 2019E 2020E 2016E - 2020E Total Base infrastructure Main Replacement* NEXUS related $1,600 $200 $600 $800 $3.3B ~$4.6B - $4.7B YE Rate Base** $102M ~$137M Depreciation ** Includes working capital (millions) $273
Slide 33: DTE rate case highlights
Approved by MPSC on December 11, 2015 Filed December 18, 2015 Filed February 1, 2016 DTE Electric Rate Case 2014 DTE Gas Rate Case 2015 DTE Electric Rate Case 2016 DTE rate case highlights • Rate recovery: $243 million • Test year: July 1, 2015 to June 30, 2016 • Return on Equity: 10.3% • Cost of Ca
Slide 34: Michigan's economy continues to improve
8.5% 7.1% 5.4% 5.0% 4.9% 2013 2014 2015 2016E 2017E Michigan’s economy continues to improve 34 Source: IHS 15.1 15.8 18.6 21.9 22.7 2013 2014 2015 2016E 2017E Unemployment Rate Housing Start Ups (000s) Greatest improved state addressing 21st century challenges*** Lowest unemployment since 2001 7th m
Slide 35: Interconnect agreements provide strong support on the NEXUS path up to 1.75 Bcf/d
Interconnect agreements provide strong support on the NEXUS path up to 1.75 Bcf/d 35
Slide 36: First Quarter 2016 Reconciliation of Reported to Operating Earnings
1Q 2016 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 127$ 87$ 30$ 17$ (7)$ 254$ (7)$ 247$ Plant closure - - - 4 - 4 - 4 Certain mark-to-market transactions - - - - - - 23 23 Operating Earn
Slide 37: Use of Operating Earnings Information
37 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 measurement for external communications with analysts an
Slide 38: 2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings
2011 – 2015 Full Year Reconciliation of Reported to Operating Earnings 38 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 prima
Slide 39: Use of Operating Earnings Information
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 measurement for external communications with analysts and i