Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (June 2015)
48 slides from Dte Energy's investor presentation, Jun 2, 2015
Slide 1: Business Update June 3, 2015
EXHIBIT 99.1 Business Update June 3, 2015
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: Gallup's Great Workplace Award for third year in a row
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 with Business and Large Residential Gas Service Providers
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 capability 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: Earnings growth opportunities and contingency planning support 5% to 6% 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 11: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 11
Slide 12: 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 12 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 13: Michigan energy policy reform taking shape in 2015
Michigan energy policy reform taking shape in 2015 13 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 14: Michigan's regulatory environment is viewed as constructive
Michigan’s regulatory environment is viewed as constructive; we work hard to earn this every day 14 Source: Barclays, April 2015 Top Tier
Slide 15: Investing over $11 billion in capital projects through 2019
We will invest over $11 billion in capital projects to drive growth through 2019 (billions) 15 ~$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 16: Transforming generation mix by replacing coal with natural gas and renewables
DTE will be transforming its generation mix by replacing coal with natural gas and renewables DTE Electric Generation Capacity (GW) Coal Retirements 2030 Scenario* ~6.7 2015* 16 Gas / Renewables Additions ~3.4 ~2.2 ~12.3 (~3.5) ~3.7 ~12.5 • 2015 acquisitions of ~1 GW of natural gas capacity allow us
Slide 17: 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 18: 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) 18
Slide 19: DTE Electric expects to implement new rates in July 2015
DTE Electric expects to implement new rates in July 2015; final order by year end* * Current base rate proceeding excludes ~$1 billion of renewables and energy optimization rate base which are recovered through surcharges 19 (millions) • First electric general rate case in over 4 years • Primarily r
Slide 20: 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 21: DTE Gas system expansion supported by proposed NEXUS interconnects
DTE Gas system expansion supported by proposed NEXUS interconnects 21 • $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 22: Focusing on minimizing the customer rate impact
$ * 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 23: Gas Storage & Pipelines developing asset portfolio with multiple growth platforms
DTE Gas DTE Storage Proposed NEXUS Pipeline Marcellus Shale Bluestone Pipeline Utica Shale Michigan Gathering Bluestone Gathering System Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms 23
Slide 24: 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 25: 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 26: 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 26
Slide 27: 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 27 • On-site energy and utility services for industrial, commercial and institutional customers; 10-20 year contracts • Coke and pulverized coal for steel customers; 10-15 year cont
Slide 28: 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 $70 New Project Development / Acquisitions Renewable Energy Reduced Emissions Fuel Industrial Energy
Slide 29: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 29
Slide 30: Summary
Summary * Reconciliation to GAAP reported earnings included in the appendix 30 • Utility investments and strategic growth opportunities in our non-utility businesses expected to provide 5% - 6% annual EPS* growth going forward • On track to achieve 2015 operating earnings guidance; strong first quar
Slide 31: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 31
Slide 32: Appendix
se DTE Energy Appendix
Slide 33: First Quarter 2015 Operating Earnings Variance
33 DTE Energy First Quarter 2015 Operating Earnings Variance 1Q 2014 1Q 2015 Change DTE Electric 136$ 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 34: Confident in 2015 operating EPS guidance
We remain confident in our 2015 operating EPS* guidance (millions, except EPS) 2015 Guidance 1Q 2015 Actuals* 34 * 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 35: 2015 Cash Flow and Capital Expenditure Guidance
2015 Cash Flow and Capital Expenditure Guidance (billions) 35 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 36: 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 37: 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 38: 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 39: DTE Electric filed a rate case in December 2014
DTE Electric filed a rate case in December 2014* Plant additions Working capital O&M Sales / revenues Return and capital structure Other (millions) Electric Base Rate Increase Total rate increase • First electric general rate case in over 4 years • ROE request of 10.75% • MPSC order expected by Dece
Slide 40: DTE Electric plans $7.5 billion of investments over 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 41: DTE Gas plans nearly $1.6 billion of investments over 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 42: 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 42
Slide 43: 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 44: 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 45: First Quarter 2015 Reconciliation of Reported to Operating Earnings
First Quarter 2015 Reconciliation of Reported to Operating Earnings 45 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: First Quarter 2014 Reconciliation of Reported to Operating Earnings
First Quarter 2014 Reconciliation of Reported to Operating Earnings 46 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 47: 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 48: 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