DTE Energy Company · NYSE:DTE
DTE Energy — Q3 2009 Earnings Presentation
28 slides from DTE Energy's earnings presentation, Oct 30, 2009
Slide 1: Business and Financial Update
Business and Financial Update October 30, 2009
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: the length and severity of ongoing economic decline resulting in lower demand, customer conservation and inc
Slide 3: Participants
Participants • Dave Meador, Executive Vice President and CFO • Peter Oleksiak, Vice President and Controller • Nick Khouri, Vice President and Treasurer • Lisa Muschong, Director of Investor Relations 3
Slide 4: Agenda: Overview, Earnings Results, Cash Flow, Summary
• Overview • 3rd Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 4
Slide 5: Q3 2009 Overview
Q3 2009 Overview • Solid utility results – Utilities have continued to perform well in a difficult environment – Continuous improvement initiatives remain on track • Non-utility performance remains on track – Energy Trading headed for a strong year – Positive signs in the steel industry for Power &
Slide 6: 2009 Operating Earnings Guidance
2009 Operating Earnings* Guidance ($ millions, except EPS) 2009 YTD 2009 Guidance Detroit Edison $317 $365 - $385 MichCon 23 70 • Revised guidance upwards at our October 19th Analyst Meeting Gas Midstream 37 45 - 50 Unconventional Gas Production (6) (7) • YTD results are tracking in-line with full-y
Slide 7: Agenda: 3rd Quarter 2009 Earnings Results
• Overview • 3rd Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 7
Slide 8: 3rd Quarter 2009 Operating Earnings Per Share
3rd Quarter 2009 Operating Earnings Per Share* $0.95 Detroit Edison MichCon** Non-Utility Corporate & Other $0.95 ($0.14) $0.15 ($0.01) Unconventional Power and Gas Midstream Energy Trading Gas Production Industrial Projects $0.08 $0.04 ($0.01) $0.04 * Reconciliation to GAAP reported earnings includ
Slide 9: 3rd Quarter 2009 Operating Earnings Variance
3rd Quarter 2009 Operating Earnings Variance Operating Earnings* Drivers ($ millions, except EPS) Detroit Edison 3Q 2009 3Q 2008 Change • Weaker economy, cooler weather and higher Detroit Edison $ 156 $ 159 $ (3) benefit expense; partially offset by rate increases and cost reductions MichCon (23) (1
Slide 10: Detroit Edison Variance Analysis
Detroit Edison Variance Analysis Detroit Edison Operating Earnings* Variance Drivers ($ millions) • Temperature-normal sales down 7% $159 ($22) $59 $156 • Cooler weather Q3 2009 ($25) • O&M driven by higher benefit ($5) ($8) expense and intra-year timing of ($2) maintenance activities partially offs
Slide 11: Detroit Edison Sales Volumes
Detroit Edison Sales Volumes Service Area Sales Volume Temperature Normalized (GWh) Q3 2009 Q3 2008 % Change Residential 4,473 4,573 -2% Commercial 4,902 5,056 -3% Industrial 2,573 3,323 -23% • Temperature-normal sales Other 800 787 2% volumes down 7% Q3 2009 Subtotal 12,748 13,740 -7% Choice 343 32
Slide 12: MichCon Variance Analysis
MichCon Variance Analysis MichCon Operating Earnings* Variance Drivers ($ millions) • Seasonal third quarter loss is typical • Higher benefit expense partially offset by continuous improvement initiatives ($13) • Other driven by higher depreciation and interest in 2009 and a tax refund rn tin 8 ($5)
Slide 13: Agenda: Cash Flow and Capital Expenditures
• Overview • 3rd Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 13
Slide 14: YTD September 2009 Cash Flow
YTD September 2009 Cash Flow DTE Energy Cash Flow Drivers ($ billions) • Free cash flow YTD is $900 million compared YTD YTD with ($400) million last year 09/30/09 09/30/08 • Positive cash at nearly every business line Adjusted Cash From Operations* $1.7 $0.7 • Expect flat 4th quarter cash from oper
Slide 15: YTD September 2009 Capital Expenditures
YTD September 2009 Capital Expenditures DTE Energy Capital Expenditures Drivers ($ millions) YTD 9/30/09 YTD 9/30/08 Detroit Edison • Total capital YTD is $231 million below prior Operational $562 $470 year, ~20% lower Environmental 78 181 • Detroit Edison approximately flat YTD $640 $651 MichCon •
Slide 16: Agenda: Summary
• Overview • 3rd Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 16
Slide 17: Investment Thesis
Investment Thesis • Strong regulated growth plan – Regulatory framework now very constructive – Dedicated funding and earnings mechanisms for renewables and energy optimization • Non-utility businesses provide 5%-6% Average Annual EPS diversification of geography and Growth earnings • Track record o
Slide 18: Contact Us
Contact Us DTE DTE Energy Energy Investor Investor Relations Relations www.dteenergy.com/investors www.dteenergy.com/investors 313-235-8030 313-235-8030 18
Slide 19: Appendix
DTE Energy: Appendix
Slide 20: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ($ millions) Energy Trading YTD Operating $73 $(9) Earnings* $64 • Economic net income ($ millions, after-tax) equals economic gross margin*** minus O&M 2009 2008 expenses and taxes. • DTE Energy management Realized $55
Slide 21: Barnett Shale Operating Metrics
Barnett Shale Operating Metrics Reserves (Bcfe) Acreage Position (000’s Acres) 2009 YTD Results • Drilled 6 new wells 432 62 Net 336 Proven 60 Developed • Net Production of 4 Bcfe 167 15 14 Acres 144 • Capital Expenditures $16 million Net 265 Probable 46 47 Undeveloped • Production down slightly due
Slide 22: 2009 Capital Expenditures & Cash Flow Guidance
2009 Capital Expenditures & Cash Flow Guidance Capital Expenditures Summary Cash Flow Summary ($ millions) ($ billions) 2009 2008 2009 2008 Guidance Actuals Guidance Actual Detroit Edison Operational $700 $675 Adjusted Cash Environmental 100 269 From Operations* $1.6 $1.3 $800 $944 Capital Spending
Slide 23: Reconciliation of 3Q 2009 Reported to Operating Earnings
Reconciliation of 3Q 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 me
Slide 24: Reconciliation of 3Q 2008 Reported to Operating Earnings
Reconciliation of 3Q 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 me
Slide 25: Reconciliation of YTD September 2009 Reported to Operating Earnings
Reconciliation of YTD September 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 per
Slide 26: Reconciliation of YTD September 2008 Reported to Operating Earnings
Reconciliation of YTD September 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 per
Slide 27: 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 28: Reconciliation of Cash from Operations to Adjusted Cash from Operations
Reconciliation of Cash from Operations to Adjusted Cash from Operations Use of Adjusted Cash From Operations - DTE Energy management believes that adjusted cash from operations provide a more meaningful representation of the company's cash from ongoing operations and uses adjusted cash from operatio