Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (May 2015)
43 slides from Dte Energy's investor presentation, May 4, 2015
Slide 1: Business Update May 4, 2015
Business Update May 4, 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: Our system of priorities is fundamental to how we create value
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 achieved highest customer satisfaction in the Midwest
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 7: Earnings growth opportunities give confidence in 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 8: We remain 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 9: Overview / Long-Term Growth Update / Summary
• Overview • Long-Term Growth Update • Summary 9
Slide 10: 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 10 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 11: Michigan energy policy reform taking shape in 2015
Michigan energy policy reform taking shape in 2015 11 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 12: We will invest over $11 billion in capital projects through 2019
We will invest over $11 billion in capital projects to drive growth through 2019 (billions) 12 ~$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 13: Policy will transform generation mix, replacing coal with natural gas and renewables
Federal and state policy will lead to transformation of our generation mix by replacing coal with natural gas and renewables 13 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 14: 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 15: 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) 15
Slide 16: 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 17: Focusing on minimizing the customer rate impact as we 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 18: Continuous improvement has enabled industry-leading 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 19: Gas Storage & Pipelines is developing an 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 19 Bluestone Gathering System
Slide 20: 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 21: 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 22: 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 23: Power & Industrial Projects is 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 23
Slide 24: Power & Industrial Projects is pursuing new opportunities in each business line
Power & Industrial Projects is pursuing new opportunities in each business line in order to achieve growth aspirations 24 • 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 25: 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 $70 New Project Development / Acquisitions Renewable Energy Reduced Emissions Fuel Industrial Energy
Slide 26: Overview / Long-Term Growth Update / Summary
• Overview • Long-Term Growth Update • Summary 26
Slide 27: Summary
Summary * Reconciliation to GAAP reported earnings included in the appendix 27 • Utility investments and strategic growth opportunities in our non-utility businesses expected to provide 5% - 6% annual EPS* growth going forward ‒ Utility distribution investments and generation replacement are key gro
Slide 28: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 28
Slide 29: Appendix
se DTE Energy Appendix
Slide 30: The MPSC is the state regulator for electric and gas utilities
The Michigan Public Service Commission (MPSC) is the state regulator for electric and gas utilities Source: MPSC website - www.michigan.gov/mpsc Sally Talberg Commissioner Appointed: 7/3/13 Term Ends: 7/2/19 Greg White Commissioner Appointed: 12/4/09 Term Ends: 7/2/15 • The MPSC establishes fair and
Slide 31: Utility regulatory timeline
DTE Gas • Filed expanded Infrastructure Recovery Mechanism (IRM) 2015 • Filed cost of service rates and general rate case DTE Electric 2014 2016+ • Business cost of service rate order 2Q • Self implement rates 3Q • Final rate order 4Q • Periodic rate cases • IRM review and ruling • Begin expanded IR
Slide 32: Michigan economic indicators highlight continued growth
Michigan economic indicators highlight continued growth over the next few years 8.8% 7.4% 6.6% 6.3% 6.1% 6.0% 2013 2014 2015E 2016E 2017E 2018E 408 414 424 431 437 443 2013 2014E 2015E 2016E 2017E 2018E (billons) 2,433 2,242 2,479 2,604 2,746 2,817 2013 2014 2015E 2016E 2017E 2018E (000s) 15.2 15.7
Slide 33: First Quarter 2015 Operating Earnings Variance
33 DTE Energy First Quarter 2015 Operating Earnings Variance 1Q 2014 1Q 2015 Change DTE Electric 136$ 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: We remain confident in our 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: 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: 2015 Cash Flow and Capital Expenditure Guidance
2015 Cash Flow and Capital Expenditure Guidance (billions) 36 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 37: 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 38: 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 39: 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 4Q 2017 Total Planned Capacity 1.0 - 1.3 Bluestone Pipeline (bi-directional)* 0.8 Expansion #2 0.
Slide 40: First Quarter 2015 Reconciliation of Reported to Operating Earnings
First Quarter 2015 Reconciliation of Reported to Operating Earnings 40 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 41: First Quarter 2014 Reconciliation of Reported to Operating Earnings
First Quarter 2014 Reconciliation of 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
Slide 42: 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 43: 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