DTE Energy Company · NYSE:DTE
DTE Energy — Q3 2013 Earnings Presentation
33 slides from DTE Energy's earnings presentation, Oct 25, 2013
Slide 1: 3rd Quarter 2013 Earnings Conference Call
3rd Quarter 2013 Earnings Conference Call October 25, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement The information contained herein is as of the date of this presentation. Many factors may impact forward-looking statements including, but not limited to, the following: impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and regulations, i
Slide 3: Participants
Participants • Dave Meador – Executive Vice President and CFO • Peter Oleksiak – Senior Vice President of Finance • Dan Brudzynski – Vice President, Treasurer & Investor Relations • Anastasia Minor – Director, Investor Relations 3
Slide 4: Overview
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 4
Slide 5: Our business strategy is fundamental to how we create value
Our business strategy is fundamental to how we create value for our investors Utility growth plan driven by environmental and renewable energy investments Meaningful, transparent, low-risk growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive r
Slide 6: We remain committed to delivering on our targets
We remain committed to delivering on our targets (dollars) Early Operating Outlook EPS* Guidance Midpoint 7% CAGR Midpoint $4.27 2008-2014 $3.94 $4.05 $3.75 $3.80 $3.64 Dividend $3.33 per share 5.4% CAGR 2009-2013 $2.83 $2.62 (Annualized) $2.48 $2.35 $2.12 $2.12 $2.24 2008A 2009A 2010A 2011A 2012A 2
Slide 7: Michigan economic indicators highlight continued recovery in 2013
Michigan economic indicators highlight continued recovery in 2013 Increased Auto Production Housing Starts Up Lower Unemployment Rate (000s) (000s) 2,252 2,448 14.6 13.4% 12.7% 1,912 11.9 1,578 8.8 9.8 10.4% 8.9% 8.3% 1,144 6.8 2009 2010 2011 2012 2013E 2009 2010 2011 2012 2013E 2009 2010 2011 2012
Slide 8: Overview
Overview • We are confident in achieving our 2013 operating earnings* guidance and are narrowing the guidance range while maintaining the $4.05 midpoint target • Year to date 2013 operating earnings* are $3.09 per share vs. $3.08 in 2012 • 3Q 2013 operating earnings* per share are $1.13 vs. $1.30 in
Slide 9: Third Quarter 2013 Overview
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 9
Slide 10: DTE Energy Third Quarter 2013 Operating Earnings Per Share
DTE Energy Third Quarter 2013 Operating Earnings Per Share* $1.13 DTE Electric DTE Gas Non-Utility Corporate & Other $1.02 ($0.07) $0.21 ($0.03) Gas Storage & Power & Industrial Energy Trading Pipelines Projects $0.09 $0.15 ($0.03) * Reconciliation to GAAP reported earnings included in the appendix
Slide 11: DTE Energy Third Quarter 2013 Operating Earnings Variance
DTE Energy Third Quarter 2013 Operating Earnings Variance Operating Earnings* Drivers (millions, except EPS) DTE Electric 3Q 2012 3Q 2013 Change • Lower due to return to normal weather in 3Q 2013, DTE Electric $ 194 $ 179 $ (15) partially offset by lower benefits expense and increased temperature no
Slide 12: DTE Electric Variance Analysis
DTE Electric Variance Analysis Operating Earnings* Variance Drivers (millions) $194 ($40) • Return to normal weather in 3Q 2013 $14 $179 vs. 3Q 2012 $11 Variance to normal weather - 3Q 2012: $40 - 3Q 2013: $ - • Other margin driven by increased temperature normal sales volumes • Renewables driven by
Slide 13: DTE Gas Variance Analysis
DTE Gas Variance Analysis Operating Earnings* Variance Drivers (millions) • Results return to a more typical 3Q level $4 ($6) ($6) • One-time items include 2012 lean initiatives ($5) • O&M reinvestment in gas distribution reliability projects • Other includes higher depreciation ($13) and property t
Slide 14: Narrowing 2013 guidance range and maintaining $4.05 EPS midpoint
We are narrowing our 2013 guidance* range and maintaining our $4.05 EPS midpoint target (millions, except EPS) YTD** Prior Revised Actuals Guidance* Guidance* 2013 Guidance Drivers • Load and renewables growth, lower benefits DTE Electric $383 $480 - $490 $480 - $490 expense partially offset by O&
Slide 15: Cash Flow and Capital Expenditures
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 15
Slide 16: DTE Energy YTD 2013 Cash Flow
DTE Energy YTD 2013 Cash Flow Cash Flow Summary Drivers (billions) YTD 2012 YTD 2013 • Free cash flow lower due to increased capital Cash From Operations* $1.7 $1.7 spending on nuclear, reliability, and Capital Spending (1.2) (1.4) environmental projects at DTE Electric and increased investment in B
Slide 17: DTE Energy YTD 2013 Capital Expenditures
DTE Energy YTD 2013 Capital Expenditures Capital Expenditures Drivers (millions) YTD 2012 YTD 2013 DTE Electric • DTE Electric capital higher due to Operational $599 $682 increased nuclear, reliability and Environmental 105 125 environmental spending, partially offset by timing of investments in ren
Slide 18: We are increasing our 2013 cash flow guidance
We are increasing our 2013 cash flow guidance Cash Flow Summary Capital Expenditures Summary (billions) (millions) 2013 2013 2013 2013 Prior Revised Prior Revised Guidance Guidance Guidance Guidance DTE Electric Cash From Operations* $1.8 $1.9 Operational $1,020 $1,090 Capital Spending (2.2) (2.1) E
Slide 19: Strong balance sheet remains a key priority and supports growth
Strong balance sheet remains a key priority and supports growth Leverage* Target 50% - 52% • Financing plan for the year remains on track 50% 50% – Issued ~$300 million of equity and ~$800 million of debt 2012 2013E through September 30, 2013 • Successfully extended credit facility to mature in 2018
Slide 20: Summary
• Overview • Third Quarter 2013 Overview • Cash Flow and Capital Expenditures • Summary 20
Slide 21: Summary
Summary • We are on track to meet our operating earnings* guidance and have narrowed the guidance range while maintaining the $4.05 midpoint target • We are increasing our 2013 cash flow guidance • Balance sheet and cash flow metrics remain strong • Utility investments and meaningful, low-risk growt
Slide 22: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 22
Slide 23: Appendix
=> _ DTE Energy’: Appendix
Slide 24: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ($ millions) $14 $8 Operating Earnings* • Economic net income (millions, after-tax) ($6) equals economic gross margin*** minus O&M Q3 2013 Q3 2012 expenses and taxes • DTE Energy management Realized $15 $19 uses economic
Slide 25: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ($ millions) $23 $22 Operating Earnings* • Economic net income (millions, after-tax) equals economic gross margin*** minus O&M YTD 2013 YTD 2012 expenses and taxes $(1) • DTE Energy management Realized $46 $41 uses econo
Slide 26: Reconciliation of Reported to Operating Earnings 2013 Quarterly Views
Reconciliation of Reported to Operating Earnings 2013 Quarterly Views 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 p
Slide 27: Reconciliation of Reported to Operating Earnings 2012 Quarterly Views
Reconciliation of Reported to Operating Earnings 2012 Quarterly Views 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 p
Slide 28: Reconciliation of 2012 Reported to Operating Earnings
Reconciliation of 2012 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 29: Reconciliation of 2011 Reported to Operating Earnings
Reconciliation of 2011 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 30: Reconciliation of 2010 Reported to Operating Earnings
Reconciliation of 2010 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 31: Reconciliation of 2009 Reported to Operating Earnings
Reconciliation of 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 performance measu
Slide 32: Reconciliation of 2008 Reported to Operating Earnings
Reconciliation of 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 measu
Slide 33: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other 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 meas