Slide 1: 2nd Quarter 2013 Earnings Conference Call
2nd Quarter 2013 Earnings Conference Call July 26, 2013 Exhibit 99.3
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 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 FERC, MPSC, NRC and other applicable governmental proceedings and regulations,
Slide 3: Participants
Participants 3 • Dave Meador – Executive Vice President and CFO • Peter Oleksiak – Senior Vice President of Finance • Dan Brudzynski – Vice President, Treasurer & Investor Relations • Anastasia Minor – Director, Investor Relations
Slide 4: Agenda: Business Update
• Business Update • Second Quarter 2013 Earnings Results • Cash Flow and Capital Expenditures • Summary 4
Slide 5: Our business strategy is fundamental to how we create value for investors
Our business strategy is fundamental to how we create value for our investors Utility growth plan driven by mandated investments Meaningful, transparent, low-risk growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive regulatory structure and co
Slide 6: We remain committed to delivering on our targets
2008A 2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E $3.80 We remain committed to delivering on our targets * Reconciliation to GAAP reported earnings included in the appendix; 2008 – 2012 operating EPS adjusted for Unconventional Gas Production discontinued operations $3.33 $3.75 $3.64 Divid
Slide 7: Strong growth opportunities in our utilities
7 DTE Electric DTE Gas • Mandated capital investment and ongoing transitioning of generation portfolio supports $6.4 billion capital investment through 2017 • Rate case deferral strategy through 2014 • Cost control lowers operating costs and supports customer affordability • Near term $90 million re
Slide 8: Non-utility segments provide additional long-term growth opportunities
8 Gas Storage & Pipelines Power & Industrial Projects • Targeting 10%-15% earnings growth with 10%-12% ROIC • Multiple asset platforms with expansion opportunities • Partnerships with established pipeline / E&P players • Manage risk exposure through long-term contracts • Targeting ~20% earnings grow
Slide 9: Michigan economic indicators highlight continued recovery in 2013
Michigan economic indicators highlight continued recovery in 2013 9 Michigan leads the country in new manufacturing job creation Michigan ranked #7 on Corporate Income Tax ranking 1,144 1,578 1,912 2,252 2,447 2009 2010 2011 2012 2013E Increased Auto Production (000s) 13.4% 12.7% 10.4% 8.9% 8.3% 200
Slide 10: Governor appoints new commissioner to Michigan Public Service Commission
Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Greg White Commissioner Appointed: 12/4/09 Term Ends: 7/2/15 Source: MPSC website - www.michigan.gov/mpsc - July 2013 • Sally Talberg appointed to a six year term beginning July 2013 • Previous work experience includes • Energy efficienc
Slide 11: Agenda: Second Quarter 2013 Earnings Results
• Business Update • Second Quarter 2013 Earnings Results • Cash Flow and Capital Expenditures • Summary 11
Slide 12: Overview
Overview * Reconciliation to GAAP reported earnings included in the appendix Year to date operating earnings* are $1.96 per share vs. $1.78 over same period last year and DTE is on track to meet our earnings target for the year DTE Energy 2Q 2013 operating earnings* per share of $0.62 vs. $0.87 in 2
Slide 13: Second Quarter 2013 Operating Earnings Per Share
DTE Energy Second Quarter 2013 Operating Earnings Per Share* 13 Gas Storage & Pipelines $0.09 Power & Industrial Projects $0.06 * Reconciliation to GAAP reported earnings included in the appendix Energy Trading ($0.01) Corporate & Other ($0.08) DTE Gas $0.05 Non-Utility $0.14 DTE Electric $0.51 $0.6
Slide 14: Second Quarter 2013 Operating Earnings Variance
DTE Electric 127$ 89$ (38)$ DTE Gas 4 8 4 Gas Storage & Pipelines 17 16 (1) Power & Industrial Projects 10 11 1 Energy Trading 4 (2) (6) Corporate & Other (15) (13) 2 DTE Energy 147$ 109$ (38)$ Operating EPS 0.87$ 0.62$ (0.25)$ Avg. Shares Outstanding 171 175 DTE Energy Second Quarter 2013 Operating
Slide 15: DTE Electric Variance Analysis
DTE Electric Variance Analysis 15 * Reconciliation to GAAP reported earnings included in the appendix $127 ($23) (millions) $12 ($20) Drivers Operating Earnings* Variance ($7) $89 • Abnormally hot weather in 2Q 2012 Variance to normal weather - 2Q 2012: $21 - 2Q 2013: ($2) • O&M driven by generation
Slide 16: DTE Electric on track to achieve full year operating earnings target
DTE Electric on track to achieve its full year operating earnings* target 16 * Reconciliation to GAAP reported earnings included in the appendix $483 ($12) (millions) $20 ($18) ($9) ~$485 ($25) $10 $30 $5 First Half of Year ($19) (actuals) Last Half of Year ~$20 (estimates)
Slide 17: DTE Gas Variance Analysis
DTE Gas Variance Analysis 17 * Reconciliation to GAAP reported earnings included in the appendix $4 (millions) ($7) $6 • Cooler weather in 2Q 2013 Variance to normal weather - 2Q 2012: ($2) - 2Q 2013: $4 • Lower benefits expense due to plan changes • One time $5 million revenue decoupler true-up in
Slide 18: On track to achieve 2013 operating earnings guidance at all segments
We are on track to achieve our 2013 operating earnings* guidance at all of our segments Guidance drivers 2013 Guidance* 2013 YTD** Actuals (millions, except EPS) DTE Electric • Load and renewables growth, lower benefits expense partially offset by O&M reinvestment $204 $480 - $490 DTE Gas 104 115 -
Slide 19: Agenda: Cash Flow and Capital Expenditures
• Business Update • Second Quarter 2013 Earnings Results • Cash Flow and Capital Expenditures • Summary 19
Slide 20: DTE Energy YTD 2013 Cash Flow
YTD 2012 YTD 2013 Cash From Operations* $1.2 $1.3 Capital Spending (0.9) (0.9) Free Cash Flow $0.3 $0.4 Asset Sales - - Dividends (0.2) (0.2) Net Cash $0.1 $0.2 Debt Financing: Issuances $0.5 $0.3 Redemptions (0.5) (0.5) Change in Debt $0.0 ($0.2) DTE Energy YTD 2013 Cash Flow Cash Flow Summary (bil
Slide 21: DTE Energy YTD 2013 Capital Expenditures
YTD 2012 YTD 2013 DTE Electric Operational $458 $419 Environmental 66 72 Renewable Energy 86 116 $610 $607 DTE Gas Operational $70 $70 Main Renewal / Meter Move Out / Pipeline Integrity 28 32 $98 $102 Non-Utility $142 $211 Total $850 $920 DTE Energy YTD 2013 Capital Expenditures Capital Expenditures
Slide 22: Strong balance sheet remains a key priority and supports growth
2012 2013E 22 * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity • Issued $175 million of equity to date – Targeting $300 million for the year • Successfully extended credit facility to mature in 2018 • $1.6 billion of
Slide 23: Agenda: Summary
• Business Update • Second Quarter 2013 Earnings Results • Cash Flow and Capital Expenditures • Summary 23
Slide 24: Summary
• 2Q 2013 operating EPS* of $0.62 driven by cooler weather in 2Q 2013, O&M reinvestment in generation and distribution reliability, solid performance from non-utility businesses, and benefit plan changes • Confident in meeting year end operating earnings target • Mandated utility investments and mea
Slide 25: Contact Us
Contact Us 25 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Slide 26: Appendix
mo DTE Energy: Appendix
Slide 27: City of Detroit to exit electricity distribution business
Due to the recent MPSC approval to defer costs related to transitioning City of Detroit Public Lighting Department (PLD) retail customers to DTE, existing PLD customers’ meters will be converted to DTE meters in the next 6 to 12 months. Pending MPSC approval of the recently filed transitional struct
Slide 28: DTE Energy 2014 Operating Earnings Early Outlook
2014 Drivers 2014 Early Outlook* 2013 Guidance* (millions, except EPS) DTE Electric $480 - $490 $515 - $525 DTE Gas Full year of Infrastructure Recovery Mechanism; continuous improvement 115 - 120 120 - 126 Gas Storage & Pipelines Bluestone pipeline and gathering 65 - 70 72 - 78 Power & Industrial P
Slide 29: DTE Energy 2013 Cash Flow Guidance
2012 2013 Actual Guidance Cash From Operations* $2.2 $1.8 Capital Spending (2.1) (2.2) Free Cash Flow $0.1 ($0.4) Asset Sales 0.3 - Dividends (0.4) (0.4) Net Cash $0.0 ($0.8) Debt Financing: Issuances $0.8 $1.6 Redemptions (0.8) (0.8) Change in Debt $0.0 $0.8 DTE Energy 2013 Cash Flow Guidance Cash
Slide 30: DTE Energy 2013 Capital Expenditure Guidance
30 DTE Energy 2013 Capital Expenditure Guidance 2012 2013 Actual Guidance DTE Electric Operational $823 $1,020 Environmental 161 335 Renewable Energy 246 200 $1,230 $1,555 DTE Gas Operational $146 $140 Main Renewal / Meter Move-out / Pipeline Integrity 74 80 $220 $220 $594 $400 Total $2,044 $2,175 N
Slide 31: Reduced Emissions Fuel earnings contribution should continue to grow
Reduced Emissions Fuel earnings contribution should continue to grow 31 2012 2013E 2014E - 2017E • Operations target met at five placed units • 6th unit operational at year end • 7th unit sited; online 3Q 2013 • Marketing two remaining units to potential host sites • Optimizing operations • Continue
Slide 32: DTE Energy Trading Reconciliation: Operating Earnings to Economic Net Income (2Q 2013)
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of the income statement effect of not recognizing changes in the fair market value of certain non- derivative contracts including physical inventory and capacity contracts for transportation, transmission and
Slide 33: DTE Energy Trading Reconciliation: Operating Earnings to Economic Net Income (YTD 2013)
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of the income statement effect of not recognizing changes in the fair market value of certain non- derivative contracts including physical inventory and capacity contracts for transportation, transmission and
Slide 34: Reconciliation of 2Q 2013 Reported to Operating Earnings
34 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 an
Slide 35: Reconciliation of YTD June 30, 2013 Reported to Operating Earnings
35 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 an
Slide 36: Reconciliation of 2Q 2012 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 measurement for external communications with analysts and i
Slide 37: Reconciliation of YTD June 30, 2012 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 measurement for external communications with analysts and i
Slide 38: Reconciliation of 2012 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 measurement for external communications with analysts and i
Slide 39: Reconciliation of 2011 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 measurement for external communications with analysts and i
Slide 40: Reconciliation of 2010 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 measurement for external communications with analysts and i
Slide 41: Reconciliation of 2009 Reported to Operating Earnings
Reconciliation of 2009 Reported to Operating Earnings 41 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 42: Reconciliation of 2008 Reported to Operating Earnings
Reconciliation of 2008 Reported to Operating Earnings 42 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 43: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other 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 performance m