Dte Energy Company · NYSE:DTE
Dte Energy — AGA Financial Forum 2021
56 slides from Dte Energy's conference presentation, May 19, 2021
Slide 1: DTE Energy AGA Financial Forum
DT E E N E R GY AG A FINANCIAL FORUM M AY 1 9 - 2 0 , 2 0 21
Slide 2: Safe harbor statement
Safe harbor statement The information contained herein is as of the date of this document. DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this document as a result of new information or future events or developments. Words such as “anticipa
Slide 3: Introduction
Introduction DTE Energy DT Midstream Appendix 3
Slide 4: Positioned to deliver significant shareholder value
Positioned to deliver significant shareholder value Continuing long track record of delivering value for shareholders with strong performance in 2020; well-positioned for 2021 ✓ Targeting 5% - 7% long-term operating EPS1 growth from 2020 original guidance midpoint ✓ 2021 operating EPS guidance provi
Slide 5: Spin generates a combined dividend expected to be higher than current
Spin generates a combined dividend that is expected to be higher than DTE’s current, pre-transaction dividend ($ per share) Annualized dividend • Increased annualized dividend per share every year since ~$4.70 - $4.803 2010 $4.341 • 7% dividend increase in 2021 • Spin generates a combined dividend t
Slide 6: DTE Energy
Introduction DTE Energy DT Midstream Appendix 6
Slide 7: Focusing on our employees, customers and communities while delivering for investors
Focusing on our employees, customers and communities while delivering for investors Employees • Recognized as a Gallup Great Workplace for the ninth consecutive year • Demonstrating a safe start to 2021 with industry-leading low OSHA rate • Building on our diversity, equity and inclusion focus with
Slide 8: Numerous benefits for DTE Energy as a predominantly pure-play regulated utility
New slide Numerous benefits for DTE Energy as a predominantly pure-play regulated utility Enhanced strategic ✓ Premier, predominantly pure-play regulated electric and natural Operating earnings transformation focus gas utility 55% Investments in ✓ Substantially growing rate base with $17 billion of
Slide 9: Two high-quality utilities operating in a constructive regulatory environment
Two high-quality utilities operating in a constructive regulatory environment Michigan Public Service Commission Ranking of U.S. regulatory jurisdictions1 (Michigan in tier 1) Tier 1 7 Tier 2 9 Dan Scripps Katherine Peretick Tremaine Phillips Chair Commissioner Commissioner Tier 3 18 2021 - 2025 MPS
Slide 10: DTE Electric progressing on key initiatives; accelerating distribution and generation investments
DTE Electric progressing on key initiatives; accelerating distribution and generation investments Electric investment (billions) Advancing our clean energy investments and plan to accelerate the modernization of our electric grid $14 • Progressing toward net zero carbon emissions target by 2050 $2 $
Slide 11: MIGreenPower offers DTE Electric customers renewable energy solutions
New slide MIGreenPower offers DTE Electric customers simple and affordable renewable energy solutions supporting wind and solar projects DTE Electric - MIGreenPower DTE Electric carbon emissions reductions • Program initiation: February 2017 • Over 30,000 customers 32% 50% • Over 900 MW subscribed 8
Slide 12: DTE Gas progressing on key initiatives; replacing aging infrastructure
DTE Gas progressing on key initiatives; replacing aging infrastructure to reduce greenhouse gas emissions Gas investment Advancing our clean energy investments and upgrading and replacing aging (billions) infrastructure $3.5 • Targeting net zero greenhouse gas emissions by 2050 Additional $3.0 $0.5
Slide 13: CleanVision Natural Gas Balance helps reduce DTE Gas customers' carbon footprint
New slide CleanVision Natural Gas Balance helps reduce the carbon emissions footprint of DTE Gas customers through carbon offsets and RNG DTE Gas – Natural Gas Balance • Program initiation: January 2021 DTE Gas greenhouse gas emissions reductions • Customers: 2,400+ • RNG will be sourced by transfor
Slide 14: Delivering premium results through disciplined planning and management
Delivering premium results through disciplined planning and management 2010 - 2020 operating EPS1 CAGR highest among Total shareholder return2 well above industry Midwest pure-play utility peers average 7.2% 7.0% 7.0% 290% 5.9% 5.6% 2.4% 73% 45% 1-year 5-year 10-year Midwest pure-play peers DTE S&P
Slide 15: Maintaining long-term operating EPS growth of 5% - 7%
Maintaining long-term operating EPS1 growth of 5% - 7% while becoming a predominantly pure-play utility DTE annualized operating EPS2 excluding Midstream • 7.4% operating EPS growth (excluding Midstream) from 2020 original guidance midpoint to 2021 guidance midpoint • Continuing 5% - 7% long-term op
Slide 16: Continuous improvement culture drives strong cost management vs. peers
Distinctive continuous improvement culture drives strong track record of cost management vs. peer average All 10,000+ employees engaged in CI to surface and Average annual percentage change in O&M costs solve problems 2008 - 2019 Electric utility1 • Controlling costs while improving the customer exp
Slide 17: DT Midstream
Introduction DTE Energy DT Midstream Appendix 17
Slide 18: Well-positioned to be a premier, independent midstream company
New slide Well-positioned to be a premier, independent midstream company with assets in premium basins connected to major demand markets Our competitive strengths Our strategy • Experienced management team • Disciplined capital deployment supported by strong fundamentals ‒ Proven record of asset ope
Slide 19: Premier, independent, gas-focused midstream C-Corp with diverse portfolio
New slide Premier, independent, mid-cap, gas-focused midstream C-Corp with a diverse portfolio of pipeline and gathering platforms D T Mi ds tream , Inc . P i pel i ne & Other G at heri ng 52% adj us ted E B IT D A 1 i n Q1 2021 48% adj us t ed E B IT D A i n Q 1 2021 U nc ons ol i dat e d J V C ons
Slide 20: Experienced, best-in-class management team
New slide Experienced, best-in-class management team with a proven track record of success Robert Skaggs, Jr. David Slater Christopher Zona Executive Chairman President and CEO COO Over 35 years of experience in the energy Over 30 years of experience in the energy Over 28 years of experience in the
Slide 21: Leading the industry in environmental, social and governance efforts
New slide Leading the industry in environmental, social and governance efforts Environmental Annual GHG emissions • Transitioning towards net zero greenhouse gas emissions by 2050; among the first in the (million metric tons / year) midstream sector to establish such goal • Among the first U.S. comp
Slide 22: Board of Directors committed to ethical and transparent governance
New slide Board of Directors committed to ethical and transparent governance practices Wright Lassiter, III Elaine Pickle Peter Tumminello Lead Independent Director Director Director Current president and CEO of Henry Ford Currently a senior audit partner at Ernst Recently retired group president of
Slide 23: Fully integrated platform transporting production to end markets
New slide Fully integrated platform transporting production from premier, low-cost dry natural gas formations, to end markets and key demand centers Pipeline & Other connect world-class basins to high-quality markets Eastern Canada Northeast • 900 miles of FERC-regulated interstate pipelines that ha
Slide 24: Industry demand markets feature positive long-term growth outlooks
New slide Industry demand markets feature positive long-term growth outlooks Gulf Coast demand Midwest demand Northeast and Mid-Atlantic demand1 Eastern Canada demand (Bcf/d) (Bcf/d) (Bcf/d) (Bcf/d) 39% 13% 5% 21% 54.6 14.8 14.1 2.9 19.3 14.0 17.1 2.4 39.2 7.5 8.1 11.6 8.4 1.6 Other2 11.4 8.4 1.5 In
Slide 25: Assets are backed by well-positioned, high-quality resources
New slide Assets are backed by well-positioned, high-quality resources 2022 - 2024 drill supply curve1 $ / MMBtu (Bcf/d) 3.5 3.0 2.5 ~18 Bcf/d of new supply is needed to meet expected demand 2.0 1.5 Susquehanna Gathering / Bluestone Blue Union / LEAP 1.0 Appalachia Gathering System / Stonewall Gas G
Slide 26: Industry-leading disciplined growth
New slide Industry-leading disciplined growth Adjusted EBITDA (millions) Positioned for future success 7% • Targeting strong financial metrics in 2021 $710 - $750 − Consistent with historical performance, on track to $665 - $703 achieve 2021 adjusted EBITDA1 of $710 - $750 million and operating earn
Slide 27: Diversified asset base providing critical infrastructure
New slide Diversified asset base providing critical infrastructure and fully integrated wellhead to end market service Q1 2021 adjusted Q1 2021 adjusted Q1 2021 adjusted EBITDA1 by segment EBITDA by demand area EBITDA by supply area Pipeline & Other Gathering Gulf Coast Midwest Marcellus / Utica Hay
Slide 28: Consistent track record of successful development
New slide Consistent track record of successful development underpinned by premium financial returns which have outpaced other midstream companies Historical adjusted EBITDA1 growth (millions) $710 $82 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ✓ Washington 10 expansion (2008 &
Slide 29: Highly stable cash flows backed by long-term fee-based contracts
New slide Highly stable cash flows backed by long-term fee-based contracts 2020 revenue from demand-based contracts and MVCs / flowing gas • Revenue is predominantly from MVCs / demand charges and currently flowing gas 98% • Substantially all fee-based revenue with no commodity price exposure ~90% −
Slide 30: Pipeline & Other segment comprised of critical, low-risk infrastructure
New slide Pipeline & Other segment is comprised of critical, low-risk infrastructure Q1 2021 contribution composition1 Stable cash flows • Revenue is predominantly from MVCs / demand charges and currently flowing gas • Substantially all fee-based revenue Contract type Customer type with no commodity
Slide 31: High-quality Pipeline & Other segment backed by strong customers
New slide High-quality Pipeline & Other segment backed by strong customers and fee-based demand charges Av e r a g e Q 1 2 0 2 1 s e g me n t O wn e r s h i p contract Overview K e y c u s t o me r s contribution1 tenor • NEXUS is a 256-mile, 1.4 Bcf/d pipeline linking Appalachia supply with ~9 year
Slide 32: High-quality Pipeline & Other segment backed by strong customers
New slide High-quality Pipeline & Other segment backed by strong customers and fee-based demand charges Q1 2021 Av e r a g e s e g me n t contract Overview K e y c u s t o me r s contribution1 tenor • 155-mile, 1.0 Bcf/d pipeline connecting Haynesville supply to the Gulf Coast LEAP ~9 years • Suppor
Slide 33: Gathering segment features strategically-located assets
New slide Gathering segment features strategically-located assets serving top-tier supply Q1 2021 contribution composition1 Premier supply basins • Gathering assets serve the Marcellus / Utica and Haynesville, which are the largest and among the most economic dry gas basins in the U.S. Contract type
Slide 34: Assets backed by substantial MVCs, acreage dedications and contract enhancements
New slide Well-positioned assets are backed by substantial MVCs, acreage dedications and strong contract enhancements Q1 2021 Av e r a g e s e g me n t contract Overview K e y c u s t o me r s contribution1 tenor • 343-mile gathering system in Haynesville basin in Louisiana and east Texas Blue Union
Slide 35: Visibility into highly accretive growth projects
New slide Visibility into highly accretive growth projects P l a t f o r ms Regulation Phase G r o wt h o p p o r t u n i t i e s Blue Union Gathering Early Gathering build-outs LEAP Lateral Early Gathering build-outs / compression / market connections NEXUS Pipeline FERC Early Compression / market
Slide 36: Visit us: DTE Investor Relations
VISIT US: D T E I N V E S T O R R E L AT I O N S 2020 ESG REPORT 2 01 9 - 2 0 2 0 C O R P O R AT E CITIZENSHIP HIGHLIGHTS
Slide 37: Appendix
Introduction DTE Energy DT Midstream Appendix 37
Slide 38: On track to achieve 2021 operating EPS guidance
On track to achieve 2021 operating EPS1 guidance (millions, except EPS) 2021 guidance DTE Electric $826 - $840 DTE Gas 202 - 212 Gas Storage & Pipelines 296 - 312 Power & Industrial Projects 147 - 163 Energy Trading 15 - 25 Corporate & Other (148) - (138) DTE Energy $1,338 - $1,414 Operating EPS $6.
Slide 39: Cash flow and capital expenditures guidance
Cash flow and capital expenditures guidance Cash flow Capital expenditures (billions) (millions) 2021 2021 guidance1 guidance1 Cash from operations2 $3.0 DTE Electric Base infrastructure $1,030 Capital expenditures (4.2) Free cash flow ($1.2) New generation 950 Distribution infrastructure 1,030 Divi
Slide 40: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile (billions) Planned equity issuances • Issued $1 billion in green bonds 2021 - 2023 • Strong investment-grade credit rating $1.3 − Spin transaction is credit enhancing allowing FFO1 / Debt2 target to be lowered from 18% to ~16% • $4.1 bil
Slide 41: Utilities have provided solid rate base growth while achieving authorized returns
New slide Utilities have provided solid rate base growth while achieving authorized returns DTE Electric rate base DTE Electric ROE (billions) $18.9 $20.4 10.3% 10.1% 10.0% 10.0% 9.9% $15.6 $16.5 $17.7 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Authorized ROE Earned ROE DTE Gas rate base DTE
Slide 42: DTE Electric and DTE Gas regulatory update
DTE Electric and DTE Gas regulatory update DTE Electric DTE Gas • General rate case final order (U-20561) • Voluntary renewable plan (U-20713) • General rate case filed February 2021 − Effective: May 15, 2020 − Filed settlement: April 2021 (U-20940) − Rate recovery: $188 million − Additional 420 MW
Slide 43: ESG efforts are key priorities
Environmental, social and governance efforts are key priorities; aspiring to be the best in the industry Environmental Transitioning towards net zero greenhouse gas emissions Delivering clean and reliable energy to customers Protecting our natural resources Social Focusing on the diversity, safety,
Slide 44: Award-winning commitment to being a top ESG employer
Award-winning commitment to being a top ESG employer in the country Superior corporate citizenship Ambassadors Championing Veteran friendly employer America’s Most Responsible and community involvement Excellence Award for commitment Companies 2021 to supporting minority businesses Gallup Great Work
Slide 45: Environmental sustainability is critical to long-term shareholder value
Environmental sustainability is critical to the creation of long-term shareholder value Driving collaboration in the fight against climate change • Leading by example with aggressive goal to achieve net zero carbon emissions by 2050 • Active participant in coalitions that advocate for strong environ
Slide 46: Continuing the journey to provide clean and reliable energy
Continuing the journey to provide clean and reliable energy to customers Current renewable energy portfolio 1,800 MW capacity Planned capacity additions 2020 – 20251 • Wind: 850 MW • Solar: 935 MW • Blue Water Energy Center: 1,100 MW Planned coal capacity retirements 2020 – 2025 • 2021 River Rouge:
Slide 47: More than doubling renewable energy by 2024
More than doubling renewable energy by 2024 Cleaner generation mix 1% 2% 17% 20% 25 – 30% Renewables 18% 20 - 25% Natural gas 20% 77% 20% Nuclear & other 45% 30% Coal 2005 2023E 2030E River St. Trenton Belle Monroe Rouge Clair Channel River 2021 2022 2030 2040 47
Slide 48: A force for growth and prosperity in Michigan communities
A force for growth and prosperity in the Michigan communities we serve World class volunteerism improves our communities Our efforts include education and mentoring programs and contributes to employee engagement Partnering with a correctional facility to train inmates to Consistently recognized as
Slide 49: Health and safety of our people is a priority
Health and safety of our people is a priority • Multiple safety committees spanning all levels of the company providing input into seasonal safety plans, addressing unique challenges of each business unit • Regular employee safety training − Leading industry OSHA rate in 2020 with safest year on rec
Slide 50: Committed to diversity, equity and inclusion
Committed to diversity, equity and inclusion, creating an environment where all are welcome Office of Diversity, Equity and Inclusion 9 active employee resource groups that promote a safe and • Led by our CEO and key executive leaders, including a Director of welcoming environment, and offer profess
Slide 51: Committed to Michigan investments and supplier diversity
Building on the momentum of the last decade, DTE is committed to Michigan investments and supplier diversity 51
Slide 52: Governance framework provides shareholder rights
Governance framework provides shareholder rights and enables sustainable value creation ✓ Lead Independent Director ✓ Stock ownership guidelines for non-employee Directors ~9yr average tenure 3 Directors since 2018 added ✓ Majority voting standard Board diversity ✓ Annual Director elections 2 Best-i
Slide 53: Executive compensation plan aligned with core priorities
Executive management compensation plan is aligned with our core priorities Priorities Performance-based compensation elements Annual incentive metrics Long-term metrics • Employee engagement Highly engaged employees • Employee safety Top decile customer • Customer satisfaction satisfaction • Custome
Slide 54: 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 represe
Slide 55: Adjusted EBITDA and distributable cash flow are non-GAAP measures
New slide Adjusted EBITDA and distributable cash flow (DCF) are non-GAAP measures Adjusted EBITDA is defined as GAAP net income attributable to DT Midstream before expenses for interest, taxes, depreciation and amortization, further adjusted to include our proportional share of net income from our e
Slide 56: Reconciliation of net income attributable to DT Midstream to Adjusted EBITDA
New slide Reconciliation of net income attributable to DT Midstream to Adjusted EBITDA (millions) 2008 2020 1. Includes share of our equity method investees’ earnings before taxes, depreciation and amortization, which we refer to as “EBTDA.” A reconciliation Net income attributable to DT Midstream $