Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (May 2018)
38 slides from Dte Energy's investor presentation, May 14, 2018
Slide 1: Business Update May 15-16, 2018
EXHIBIT 99.1 Business Update May 15-16, 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: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 3
Slide 4: DTE Energy overview
DTE Energy overview Leader in ~$19B Winner market cap of 6 consecutive continuous Gallup Great Workplace Awards improvement 10,000 employees Fortune 300 company 100+ years of continuous dividend payments Top quartile in residential customer satisfaction for both DTE Electric & Michigan’s largest inv
Slide 5: Growth driven by strong, stable utilities and complementary non-utility businesses
Growth driven by strong, stable utilities and complementary non-utility businesses 75% - 80% Utility 20% - 25% Non-utility Growth driven by investments aimed at Growth driven by strategic opportunities improving reliability DTE Electric Gas Storage & Pipelines (GSP) Electric generation Transport, st
Slide 6: Employee and customer focus provides a solid framework for success
Employee and customer focus provides a solid framework for success Employee Customer Safety Engagement Satisfaction st* AGA’s Safety Achievement Gallup’s Great Workplace Both utilities ranked 1 by Award Award business customers* th ...2nd consecutive year …6 consecutive year Both utilities ranked 2n
Slide 7: 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 Operating EPS • On track to achieve 2018 operating EPS* guidance range of $5.57 to $5.99 +9% • Targeting 5% - 7% operating EPS growth through 2022 $5.78 $5.68 • Growing dividend 7% through 2020** $5.59 $5.31 • Fi
Slide 8: DTE has a track record of delivering long-term value to its shareholders
DTE has a track record of delivering long-term value to its shareholders DTE Operating EPS* Total Shareholder Return** DTE outperforms S&P 500 utilities $5.59 309% $4.60 $3.94 DTE Energy S&P 500 Utilities $2.82 163% 82% 59% 43% 28% 20072007 20122012 20142014 20172017 3-YR 5-YR 10-YR * Reconciliation
Slide 9: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 9
Slide 10: Growth fueled by investment in utility infrastructure and generation along with midstream opportunities
Growth fueled by investment in utility infrastructure and generation along with midstream opportunities (billions) DTE Energy Investment Electric $10.4 billion $17 Distribution infrastructure, maintenance, new generation $12 Gas $2.1 billion Base infrastructure, main renewal, NEXUS related GSP $2.8
Slide 11: DTE Electric overview
DTE Electric overview Upgrading Transitioning to distribution lines cleaner energy DTE Electric service territory $16.5B ~11,000 2017 rate megawatt system 2.2M base capacity customers $10.4B Founded 5-year capital plan 1886 (2018-2022) 11
Slide 12: Strong track record of cost management
Strong track record of cost management is a direct result of our focus on continuous improvement Average annual percentage change in O&M costs 2008 – 2016 Electric utility* Controlling costs while improving the customer experience Continuous improvements 3% Productivity enhancements 1% DTE Pee
Slide 13: Maintaining customer affordability while investing in our utilities
Maintaining customer affordability while investing in our utilities DTE Electric 2012 2017 2012 2017 Average annual residential bill Average industrial rate DTE Gas 2012 2017 2012 2017 Average annual residential bill Average industrial rate 13
Slide 14: Generation and distribution infrastructure replacement will continue to improve service
Generation and distribution infrastructure replacement will continue to improve service (billions) DTE Electric Investment New generation Transitioning generation portfolio to more sustainable energy $10.4 Distribution infrastructure $7.8 Progress to best in class in reliability Base infrastructure
Slide 15: Transitioning portfolio to cleaner more sustainable generation by reducing CO2 emissions
Transitioning portfolio to cleaner more sustainable generation by reducing CO2 emissions CO 2 30% by ~2022 45% by 2030 75% by 2040 > 80% by 2050 reduction plan* Planned River St. Trenton Belle Monroe Rouge Clair Channel River Retirements** 2020 2030 2040 2050 Planned additions*** A steady march towa
Slide 16: Increasing reliability and customer satisfaction with distribution investments
Increasing reliability and customer satisfaction with distribution investments Infrastructure Improves circuit reliability up to 70% resilience Addresses substation load growth Infrastructure and aging infrastructure redesign Technology Targets 100% remote monitoring enhancement Tree Improves distri
Slide 17: DTE Gas overview
DTE Gas overview Renewing 4,000 miles of cast iron and unprotected distribution main DTE Gas service territory $2.1B 139 Bcf 5-year capital plan storage 1.3M (2018-2022) capacity customers Founded $4.0B 2017 rate base 1849 19,000 miles distribution main 17
Slide 18: Improving service to customers through infrastructure renewal and replacement
Improving service to customers through infrastructure renewal and replacement (billions) DTE Gas Investment NEXUS related Compression $2.1 Infrastructure renewal Proposing accelerated 15 year main renewal cycle $1.6 Base infrastructure Transmission, compression, distribution, storage 2013 - 2017 201
Slide 19: Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity
Replacing aging infrastructure achieves a fundamental shift in performance, cost and productivity Minimizes leaks - reducing costs and improving customer Main satisfaction - Filed proposal to increase renewal pace of main renewal Reduces manual meter reading – improving Meter operational efficiencie
Slide 20: GSP overview
GSP overview 5 pipelines, 1,600 miles ??? of pipe and Transport, store gathering lines and gather natural gas $2.8B – $3.4B 91 Bcf 5-year capital plan of storage (2018-2022) Serves markets in Midwest, Northeast, Mid-Atlantic, and Southeast 20
Slide 21: Expanding strategic footprint in the most prolific dry gas geology in the country
Expanding strategic footprint in the most prolific dry gas geology in the country Michigan Northeast Gathering Ontario Market Bluestone Birdsboro Midwest Link Lateral & Gathering Mid-Atlantic & LNG Southeast Gulf 21
Slide 22: GSP is focused on continued success
GSP is focused on continued success • Continuing progress on NEXUS Growth Plan ‒ Finalizing agreements with two new industrial Operating earnings* customers 2022 target ‒ Completing pipeline construction milestones $280 - $290 million ‒ Active contract negotiations with additional Capital investment
Slide 23: P&I overview
P&I overview Geographic diversity Industrial energy services, renewable energy, and reduced emissions fuel $0.8B – $1.2B 5-year capital plan (2018-2022) Leading developer of energy related businesses in North America 191 MW renewable plant capacity 23
Slide 24: P&I is focused on progress toward long-term growth
P&I is focused on progress toward long-term growth Growth Plan • Continued development of industrial energy projects Operating earnings* ‒ Beginning stages of construction on Ford Motor 2022 target Company complex $65 - $75 million ‒ Advancing discussions on new CHP plant ‒ Pursuing strong pipeline
Slide 25: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 25
Slide 26: Summary
Summary • Strong start to the year gives us confidence in achieving 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 sustainable growth • Cont
Slide 27: Appendix
3 DTE Energy Appendix 2
Slide 28: Recognized by ESG analysts for our sustainability efforts
Recognized by environmental, social and governance analysts for our sustainability efforts • Environmental Leadership ‒ Generation portfolio shift to renewables and gas (including one of the largest solar arrays in the Midwest) ‒ Greenhouse gas reduction program in place with targets and deadlines •
Slide 29: DTE is committed to producing cleaner energy
DTE is committed to producing cleaner energy Over 10% of DTE Electric energy supply is from renewable energy sources More than 3.6 million MWh of renewable electricity in 2017 Carbon emissions reduction goals -30% -45% -75% >-80% 2005 ~2022 2030 2040 2050 Largest solar energy producer in Michigan 29
Slide 30: Confident in achieving 2018 operating EPS guidance
Confident in achieving 2018 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 $1,000
Slide 31: 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 $800 million of equity 2018-2020 51% ‒ $300 million in 2018 using internal mechanisms • $1.4 billion of available liquidity at 2017 2018-2020E March 31, 2018 • Maintain stro
Slide 32: Both utilities increase customer reliability with investment plans over the next 5 years
Both utilities increase customer reliability with investment plans over the next 5 years (millions) DTE Electric DTE Gas Targeting 6% - 7% growth Targeting 7% - 8% growth $10,400 $2,100 $10 NEXUS related $2,000 New generation Main $1,140 renewal $4,300 Distribution infrastructure Base $4,100 Base $9
Slide 33: 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 34: Utility regulatory update
Utility 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 recovery mechanism)
Slide 35: Reconciliation of reported to operating earnings
Reconciliation of reported to operating earnings Full Year 2007, 2012 and 2014 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
Slide 36: 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 37: Reconciliation of 2017 reported to operating earnings
Reconciliation of 2017 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 38: 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