Dte Energy Company · NYSE:DTE
Dte Energy — AGA Financial Forum 2015
46 slides from Dte Energy's conference presentation, May 15, 2015
Slide 1: AGA Financial Forum Business Update May 17-19, 2015
AGA Financial Forum Business Update May 17-19, 2015 EXHIBIT 99.1
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 EPA, FERC, MPSC, NRC and CFTC as well as other applicable governmental proceedin
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 DTE Electric Electric generation and distribution DTE Gas Natural gas transmission, storage and distribution Complementary Non-Utility Businesses Strong, Stable and Growing Utilities Fully Regulated by
Slide 5: 5%-6% Annual EPS Growth, Attractive Dividend, Strong Balance Sheet
5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet Our system of priorities is fundamental to how we create value for our investors 5
Slide 6: DTE Energy earned Gallup's Great Workplace Award for the third year
DTE Energy has earned Gallup’s Great Workplace Award for the third year in a row 6 2013, 2014, 2015 • Winners recognized for extraordinary ability to create an engaged workforce culture • Annual award granted to a handful of companies worldwide • DTE Energy is the only utility company to ever receiv
Slide 7: Highest in Customer Satisfaction in Midwest natural gas service
DTE Energy has achieved “Highest in Customer Satisfaction With Business and Large Residential Natural Gas Service Providers in the Midwest”* J.D. Power Gas Utility Residential Gas Customer Satisfaction Ranking Midwest Region: Large Segment 2007 2012 2013 2014 R es id e n ti a l J.D. Power Gas Utilit
Slide 8: Continuous improvement leads the industry in cost management
DTE’s continuous improvement capability has enabled us to lead the industry in cost management * Source: SNL Financial, FERC Form 1; major US Electric Utilities with O&M > $800 million; excluding fuel and purchased power ** Source: SNL Financial, FERC Form 2; gas distribution companies with greater
Slide 9: Committed to delivering 5% to 6% operating EPS growth
* Reconciliation to GAAP reported earnings included in the appendix (dollars per share) We remain committed to delivering 5% to 6% operating EPS* growth $3.33 $3.64 $3.75 $3.94 $4.09 $4.60 $4.60 $2.12 $2.24 $2.35 $2.48 $2.62 $2.76 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EPS Dividend A
Slide 10: Overview / Long-Term Growth Update / Summary
• Overview • Long-Term Growth Update • Summary 10
Slide 11: Michigan's economy has been revitalized and Detroit continues its rebirth
Michigan’s economy has been revitalized and the City of Detroit is continuing its economic rebirth 11 Unemployment rate in Michigan lowest since 2001 Michigan improved 8 spots in state ranking of growth in Real Gross Domestic Product* Detroit metro area ranks 8th in the U.S. for number of new or exp
Slide 12: Michigan energy policy reform taking shape in 2015
Michigan energy policy reform taking shape in 2015 12 Governor Rick Snyder Representative Aric Nesbitt Senator Mike Nofs “I am calling for the legislature to help us reform this system before the summer break, so that we can give ourselves as much time as possible to make a smooth transition.” Gover
Slide 13: Michigan's regulatory environment is viewed as constructive
Michigan’s regulatory environment is viewed as constructive; we work hard to earn this every day 13 Source: Barclays, April 2015 Top Tier
Slide 14: Policy will transform generation mix from coal to natural gas and renewables
Federal and state policy will lead to transformation of our generation mix by replacing coal with natural gas and renewables 14 DTE Electric Generation Output 2014 2030 Scenario* Gas / Renewables Coal Nuclear / other ~70% ~30% ~50% ~20% ~20% ~10% * Ultimate timing and mix of generation impacted by M
Slide 15: Electric utility investing $7.5 billion in three key areas through 2019
Our electric utility is investing $7.5 billion in three key areas through 2019 $5.7 billion Distribution infrastructure renewal Power plant reliability Compliance Gas plant acquisition Generation asset base renewal $1.4 billion $400 million $7.5 billion Targeting 5% - 6% growth Base Infrastructure N
Slide 16: Generation replacement will significantly increase DTE Electric's investment
Generation replacement will significantly increase DTE Electric’s investment over the next 10 years DTE Electric Total Investment ~$7.5 ~$9.0 2015-2019 2020-2024 ~$6.0 2010-2014 New generation investment (billions) 16
Slide 17: Gas utility making $1.6 billion of reliability and infrastructure investments
Our gas utility is making $1.6 billion of reliability and infrastructure investments through 2019 Strengthen and expand infrastructure Main renewal, meter move-out and pipeline integrity Compression Targeting 7% - 8% growth Base Infrastructure Infrastructure Renewal Nexus Related Total $825 million
Slide 18: NEXUS project provides incremental growth opportunity at gas utility
NEXUS project provides incremental growth opportunity at our gas utility 18 • $125 million of NEXUS related investment at DTE Gas through 2017 • Spend primarily for additional compression • Supported by long-term transport agreement with NEXUS
Slide 19: Recovery of DTE Gas capital investments will require periodic rate cases
Recovery of DTE Gas capital investments will require periodic rate cases Capital Investment and Recovery 2015 - 2019 Infrastructure recovery mechanism Base rates (depreciation) Customer growth / Continuous improvement Periodic rate cases Capital Investment Recovery Mechanism (billions) ~$1.6 19
Slide 20: Minimizing customer rate impact as we continue to grow
$ * Includes ~$300 million surcharge reduction for renewable energy, power supply cost recovery (PSCR) and choice incentive mechanism implemented 1Q 2014 and net reduction of ~$300 million due to elimination of securitization surcharge and PSCR increase in 1Q 2015 As we continue to grow, we are focu
Slide 21: Gas Storage & Pipelines developing asset portfolio with multiple growth platforms
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms DTE Gas DTE Storage Proposed NEXUS Pipeline Marcellus Shale Bluestone Pipeline Utica Shale Michigan Gathering 21 Bluestone Gathering System
Slide 22: Gas Storage & Pipelines platforms drive growth through new projects and expansions
Gas Storage & Pipelines platforms drive growth through new projects and expansions Pipeline Platform Gathering Platform Storage Platform • Bluestone Pipeline • Millennium Pipeline • Vector Pipeline • Proposed NEXUS Pipeline • Bluestone Gathering • Michigan Gathering • 91 Bcf of working capacity • St
Slide 23: Gas Storage & Pipelines operating earnings potential is $145 million by 2019
Gas Storage & Pipelines’ operating earnings* potential is $145 million by 2019 2013A 2014A 2015E 2016E 2017E 2018E 2019E * Reconciliation to GAAP reported earnings included in the appendix Pipeline Platform** Gathering Platform Storage Platform New Project Development (Other gathering and pipeline e
Slide 24: Power & Industrial Projects focused in three key business lines
Power & Industrial Projects is focused in three key business lines across the country Industrial Energy Services Renewable Energy Reduced Emissions Fuel 24
Slide 25: Power & Industrial Projects pursuing new opportunities in each business line
Power & Industrial Projects is pursuing new opportunities in each business line in order to achieve growth aspirations 25 • On-site energy and utility services for industrial, commercial and institutional customers • Coke and pulverized coal for steel customers • 8MW cogeneration project in-service
Slide 26: Power & Industrial Projects targeting $145 million of operating earnings by 2019
Power & Industrial Projects is targeting $145 million of operating earnings* by 2019 through growth in each of its business lines 2013A 2014A 2015E 2016E 2017E 2018E 2019E ~$145 $35 $70 $85 ($65) $20 $70 New Project Development / Acquisitions Renewable Energy Reduced Emissions Fuel Industrial Energy
Slide 27: Overview / Long-Term Growth Update / Summary
• Overview • Long-Term Growth Update • Summary 27
Slide 28: Summary
Summary * Reconciliation to GAAP reported earnings included in the appendix 28 • Utility investments and strategic growth opportunities in our non-utility businesses expected to provide 5% - 6% annual EPS* growth going forward • On track to achieve 2015 operating earnings guidance; strong first quar
Slide 29: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 29
Slide 30: Appendix
se DTE Energy Appendix
Slide 31: DTE Energy First Quarter 2015 Operating Earnings Variance
31 DTE Energy First Quarter 2015 Operating Earnings Variance 1Q 2014 1Q 2015 Change DTE Electric 136$ 136$ -$ DTE Gas 129 111 (18) Gas Storage & Pipelines 21 27 6 Power & Industrial Projects 15 33 18 Corporate & Other (9) (25) (16) Growth segments** 292$ 282$ (10)$ Growth segments operating EPS 1.64
Slide 32: Earnings growth opportunities and contingency support 5% to 6% operating EPS growth
Our strong earnings growth opportunities coupled with our contingency planning gives us confidence in our ability to deliver 5% to 6% operating EPS* growth Utility Earnings Growth Non-Utility Earnings Growth DTE Earnings Growth Share Dilution Contingency DTE EPS Growth Non-Utilities 5% - 7% 5% - 6%
Slide 33: Confident in 2015 operating EPS guidance
We remain confident in our 2015 operating EPS* guidance (millions, except EPS) 2015 Guidance 1Q 2015 Actuals* 33 * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects C
Slide 34: 2015 Cash Flow and Capital Expenditure Guidance
2015 Cash Flow and Capital Expenditure Guidance (billions) 34 Capital Expenditures Summary Cash Flow Summary (millions) 2014 2015 Actual Guidance Cash From Operations $1.8 $1.7 Capital Sending (2.1) (2.6) Free Cash Flow ($0.3) ($0.9) Asset Sales & Other - 0.1 Dividends (0.5) (0.5) Net Cash ($0.8) ($
Slide 35: Strong balance sheet remains a key priority and supports growth
Leverage* 49% 51% 23% 25% Strong balance sheet remains a key priority and supports 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* Target 50% - 53% Target 20% - 22% 5 • 2015 fin
Slide 36: Michigan economic indicators highlight continued growth
Michigan economic indicators highlight continued growth over the next few years 8.8% 7.4% 6.6% 6.3% 6.1% 6.0% 2013 2014 2015E 2016E 2017E 2018E 408 414 424 431 437 443 2013 2014E 2015E 2016E 2017E 2018E (billons) 2,433 2,242 2,479 2,604 2,746 2,817 2013 2014 2015E 2016E 2017E 2018E (000s) 15.2 15.7
Slide 37: The Michigan Public Service Commission is the state regulator
The Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities Source: MPSC website - www.michigan.gov/mpsc Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Greg White Commissioner Appointed: 12/4/09 Term Ends: 7/2/15 • The MPSC establishes fair and
Slide 38: Investing over $11 billion in capital projects through 2019
We will invest over $11 billion in capital projects to drive growth through 2019 (billions) 38 ~$11.2 – $11.8 $0.6 – $0.8 $1.5 – $1.9 $1.6 $7.5 Power & Industrial Projects Gas Storage & Pipelines DTE Gas DTE Electric On-site energy, cogeneration Gathering investments, NEXUS, additional pipeline expa
Slide 39: DTE Electric plans $7.5 billion of investments over the next 5 years
DTE Electric plans $7.5 billion of investments over the next 5 years 2014A 2015E 2016E 2017E 2018E 2019E Base New Generation Other Projects* Environmental Distribution Reliability 2015E - 2019E Total $13.3B ~$17.5B YE Rate Base** $595M ~$820M Depreciation * Includes AMI, Ludington expansion and othe
Slide 40: DTE Gas plans nearly $1.6 billion of investments over the next 5 years
DTE Gas plans nearly $1.6 billion of investments over the next 5 years 2014A 2015E 2016E 2017E 2018E 2019E 2015E - 2019E Total Base Gas Renewal NEXUS related $224 $280 $350 $360 $280 $280 $1,550 $125 $600 $825 $3.1B ~$4.4B - $4.5B YE Rate Base* $99M ~$130M Depreciation * Includes working capital (mi
Slide 41: The NEXUS project has reached major milestones
The NEXUS project has reached major milestones • ~250 mile pipeline to provide natural gas from Marcellus and Utica shales to Michigan, Ohio, Chicago and Ontario • 1.5 Bcf/d capacity; DTE’s expected investment is ~$700 million • Agreements executed with LDCs and several key shippers; additional disc
Slide 42: Gas Storage & Pipelines assets have expansion opportunities
Gas Storage & Pipelines assets have expansion opportunities to accommodate increased demand Pipeline Assets Capacity Bcf/ d In-Service Millennium Pipeline 0.8 Future Expansion (planning phase) 0.2 - 0.5 2017+ Total Planned Capacity 1.0 - 1.3 Bluestone Pipeline (bi-directional)* 0.8 Expansion #2 0.1
Slide 43: First Quarter 2015 Reconciliation of Reported to Operating Earnings
First Quarter 2015 Reconciliation of Reported to Operating Earnings 43 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
Slide 44: First Quarter 2014 Reconciliation of Reported to Operating Earnings
First Quarter 2014 Reconciliation of Reported to Operating Earnings 44 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
Slide 45: 2009-2014 Full Year Reconciliation of Reported to Operating Earnings
2009 – 2014 Full Year Reconciliation of 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
Slide 46: 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