DTE Energy Company · NYSE:DTE
DTE Energy — Q1 2018 Earnings Presentation
25 slides from DTE Energy's earnings presentation, Apr 25, 2018
Slide 1: 1st Quarter 2018 Earnings Conference Call
EXHIBIT 99.2 1st Quarter 2018 Earnings Conference Call April 25, 2018
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, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, as well as other applicable governmental proceedings and regulations, including any associate
Slide 3: Participants
Participants • Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Director, Investor Relations 3
Slide 4: Overview
• Overview • Financial Update • Long-Term Growth Update 4
Slide 5: 2018 has started out strong and we remain confident in delivering on our financial plan
2018 has started out strong and we remain confident in delivering on our financial plan • On track to achieve 2018 operating EPS* guidance range of $5.57 to $5.99 • Targeting 5% - 7% operating EPS growth from 2018 guidance base through 2022 • Filed plan to double renewable energy capacity by early 2
Slide 6: Proposed plan to double renewable energy capacity
Launched initiative that will provide renewable resources that exceed the required 15% renewable portfolio standard Proposed Doubling Targeting plan to add 1,000 MW of carbon- renewable energy capacity completion date of 2022 free electricity from new wind and from 1,000 MW to 2,000 MW solar project
Slide 7: Financial Update
• Overview • Financial Update • Long-Term Growth Update 7
Slide 8: 1st quarter 2018 operating earnings variance
1st quarter 2018 operating earnings* variance (millions, except EPS) Operating Earnings Primary Drivers DTE Electric 1Q 2017 1Q 2018 Change • Lower storm expenses, return to normal DTE Electric $ 106 $ 142 $ 36 weather and rate implementation DTE Gas 107 111 4 DTE Gas Gas Storage & Pipelines 45 62 1
Slide 9: Solid 1st quarter results support operating EPS guidance
Solid 1st quarter results support operating EPS* guidance (millions, except EPS) 1Q 2018 2018 Actuals Guidance DTE Electric $142 $648 - $662 DTE Gas 111 152 - 160 Gas Storage & Pipelines 62 185 - 195 Power & Industrial Projects 42 115 - 135 Corporate & Other (16) (100) - (90) Growth segments** $341
Slide 10: Long-Term Growth Update
• Overview • Financial Update • Long-Term Growth Update 10
Slide 11: Reliability investments at utilities support long-term growth
Reliability investments at utilities support long-term growth and increase customer satisfaction DTE Electric • Received electric rate order and will file future cases to incorporate impact of tax reform benefit on customers Capital investment 2018 - 2022 • Filed 5-year distribution plan $10.4 billi
Slide 12: Non-utilities continue to focus on growth projects
Non-utilities continue to focus on growth projects to fuel long-term growth Gas Storage & Pipelines • Completing NEXUS pipeline construction milestones; active contract negotiations Operating earnings* with additional shippers 2022 target $280 - $290 million • Continuing to add investment in Link •
Slide 13: Summary
Summary • Delivered solid first quarter results and remain confident in achieving our 2018 operating EPS* guidance • Driving utility growth through infrastructure investments focused on improving reliability and the customer experience • Expanding non-utility businesses through strategic and sustain
Slide 14: Contact us
Contact us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 14
Slide 15: Appendix
Appendix Ms DTE Energy 15
Slide 16: Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet
Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet Leverage** Target 50% - 54% • Issue incremental equity of $300 million* 2018-2020 due to tax 51% reform • Issue $300 million in 2018 using internal mechanisms 2017 2018-2020E ‒ Approximately $200 million issu
Slide 17: DTE Electric variance analysis
DTE Electric variance analysis (millions) Operating Earnings* Variance Primary Drivers $10 ($10) $22 $1 $142 • Return to normal weather $13 Variance to normal weather $106 – 2017: ($13) – 2018: $0 1Q 2017 Weather Storm Rate Case Rate Base Other 1Q 2018 Operating Impact Growth Operating Earnings Earn
Slide 18: Weather and DTE Electric weather normal sales
Weather and DTE Electric weather normal sales Cooling degree days Heating degree days DTE Electric service territory DTE Gas service territory 1Q 2017 1Q 2018 % change 1Q 2017 1Q 2018 % change Actuals - - 0% Actuals 2,793 3,187 14% Normal - - 0% Normal 3,263 3,251 (0%) Deviation from normal 0% 0% De
Slide 19: 2018 cash flow and capital expenditures actuals
2018 cash flow and capital expenditures actuals (billions) (millions) Cash Flow Capital Expenditures 1Q 2017 1Q 2018 1Q 2017 1Q 2018 Cash From Operations* $0.8 $0.8 DTE Electric Capital Expenditures (0.7) (0.6) Base Infrastructure $243 $193 Free Cash Flow $0.1 $0.2 New Generation 9 2 Distribution In
Slide 20: 2018 cash flow and capital expenditures guidance
2018 cash flow and capital expenditures guidance (billions) (millions) Cash Flow Capital Expenditures 2018 2018 Guidance Guidance Cash From Operations* $2.0 DTE Electric Base Infrastructure $750 Capital Expenditures (3.6) New Generation 340 Free Cash Flow ($1.6) Distribution Infrastructure 810 $1,90
Slide 21: DTE Electric and DTE Gas regulatory update
DTE Electric and DTE Gas regulatory update DTE Electric DTE Gas • General rate order - April 2018 (U-18255) • General rate case - November 2017 (U-18999) – Effective: May 1 – Prior to tax reform, requested rate – Rate recovery: $65 million recovery: $85 million ($57 million net of infrastructure rec
Slide 22: 1st quarter 2018 Energy Trading reconciliation of operating earnings to economic net income
1st quarter 2018 Energy Trading reconciliation of operating earnings* to economic net income • Economic net income equals economic 1Q gross margin*** minus O&M expenses and taxes 2017 2018 • DTE Energy management uses economic Operating Earnings $18 $1 net income as one of the performance Accounting
Slide 23: 1st quarter 2018 reconciliation of reported to operating earnings (non-GAAP)
1st quarter 2018 reconciliation of reported to operating earnings (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 pr
Slide 24: 1st quarter 2017 reconciliation of reported to operating earnings (non-GAAP)
1st quarter 2017 reconciliation of reported to operating earnings (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 pr
Slide 25: Reconciliation of reported to operating earnings (non-GAAP)
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 repres