Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (September 2014)
40 slides from Dte Energy's investor presentation, Sep 29, 2014
Slide 1: Business Update September 29 - 30, 2014
Business Update September 29 - 30, 2014 EXHIBIT 99.1
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, CFTC and other applicable governmental proceedings and regula
Slide 3: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 3
Slide 4: DTE Energy is an integrated energy company
DTE Electric DTE Gas DTE Energy is an integrated energy company 4 Complementary Non-Utility Businesses Strong, Stable and Growing Utilities • Electric generation and distribution • Fully regulated by Michigan Public Service Commission • Natural gas transmission, storage and distribution • Fully regu
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 infrastructure investments Strategic, transparent, low-risk growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive regulatory structure a
Slide 6: Operating EPS and dividend per share growth
2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E $3.33 $4.09 $3.75 $3.64 $2.12 $2.24 $2.35 $2.48 $2.12 * Reconciliation to GAAP reported earnings included in the appendix DTE has raised its annual dividend over 5% to $2.76 marking the fifth consecutive year of an increase in line wi
Slide 7: DTE has delivered total shareholder return above market indices
DTE has delivered total shareholder return above market indices 7 16% 20% 22% 11% 12% 13% 12% 10% 8% 18% 17% 8% YTD 3 YR 5 YR 10 YR DTE S&P500 Utilities S&P500 Historical Total Shareholder Return CAGR* * As of July 31, 2014 Source: Bloomberg
Slide 8: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 8
Slide 9: Michigan economic indicators highlight continued growth
Michigan economic indicators highlight continued growth over the next few years 9 7.1% 13.4% 8.8% 7.5% 7.0% 6.7% 2007 2009 2013 2014E 2015E 2016E Source: IHS 420 366 408 415 425 434 2007 2009 2013 2014E 2015E 2016E (billons) Michigan #8 most competitive for job creation 2,295 1,144 2,433 2,292 2,414
Slide 10: Michigan's regulatory environment ranks among the best in the country
Michigan’s regulatory environment ranks among the best in the country Data source: Standard & Poor’s, January 2014 10 MI Strong Strong / Adequate Adequate
Slide 11: Upward pressure on customer rates will be minimized
Upward pressure on customer rates will be minimized by cost controls, surcharge reductions and load growth $650 million* of surcharge reductions File rate case late 2014 Targeting to stay close to rate neutral (2013 vs. 2018) DTE Electric Targeting to file rate case 2017 or after Rate incre
Slide 12: DTE Electric regulatory timeline
DTE Electric regulatory timeline Final Order 10/20/2011 (U-16472) Estimated General Rate Case Filing Late 2014 12 Legislative/MPSC Cost Allocation Initiatives 2014 Revenue Neutral Case* filed Sep 2014 Implement Rates** Mid 2015 Final General Rate Case Order Late 2015 ** Includes estimated implementa
Slide 13: DTE Electric will increase rate base ~$3 billion since 2011 rate order
$10.7 2011A 2012 - 2014 Rate Base Additions 2014E DTE Electric will increase rate base ~$3 billion since 2011 rate order with no new rates DTE Electric Rate Base* (billions) • Base rates flat over this period • DTE Electric has continued to earn its authorized ROE through: • CI initiatives and struc
Slide 14: DTE's CI capability has enabled us to lead the industry in cost management
DTE’s CI 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 than 300,000 customer
Slide 15: Our electric utility is investing $6.7 billion in three key growth areas
Our electric utility is investing $6.7 billion in three key growth areas through 2018 • Environmental requirements • $280 million in 2014 • Power plant reliability • Expanded distribution reliability program • Advanced Metering Infrastructure • $1.1 billion in 2014 • 10% renewable energy standard by
Slide 16: New natural gas and wind capacity will replace coal retirements
New natural gas and wind capacity will replace coal retirements and increase DTE Electric total average annual investment 16 2014 ~2025 Scenario ~11.3 ~11.9 • New capacity by acquisition or new build • Ultimate timing and mix of generation impacted by MISO capacity requirements and Michigan and EPA
Slide 17: Our gas utility is making $1.2 billion of reliability investments
Our gas utility is making $1.2 billion of reliability and pipeline integrity investments through 2018 • Capital recovered through the Infrastructure Recovery Mechanism • ~4,000 miles of distribution main to be replaced • $90 million investment in 2014 • Strengthen and expand distribution system • Co
Slide 18: Gas Storage & Pipelines is developing an asset portfolio
Gas Storage & Pipelines is developing an asset portfolio with multiple growth platforms 18 Pipeline Gathering Storage
Slide 19: Gas Storage & Pipelines platforms drive growth through new projects
Bluestone Gathering • Long-term agreement with Southwestern in Marcellus shale Michigan Gathering • Lateral additions ongoing New Developments • Working with interested parties in Marcellus, Utica and Michigan shales Gas Storage & Pipelines platforms drive growth through new projects and expansions
Slide 20: NEXUS is the leading proposed project to bring Utica gas to market
NEXUS is the leading proposed project to bring Utica and Southwest Marcellus natural gas to market 20 • Successful binding open season concluded August 21, 2014. Final contract negotiations underway • On track for 1.5 Bcf/d, providing opportunity to increase investment • Utilizes existing corridors
Slide 21: Gas Storage & Pipelines operating earnings potential of $130 million by 2018
2012A 2013A 2014E 2015E 2016E 2017E 2018E $78 - $86 Gas Storage & Pipelines operating earnings* potential of $130 million by 2018 * Reconciliation to GAAP reported earnings included in the appendix (millions) Pipeline Platform Gathering Platform Storage Platform New Project Development (NEXUS; other
Slide 22: Power & Industrial Projects is focused in three key business lines
Power & Industrial Projects is focused in three key business lines Wood-fired Plant Cassville, WI • Fuel that reduces emissions from coal-fired plants • 9 units, 5 states • Utility contracted • Utility services at industrial sites • Coke and pulverized coal for steel customers • 36 projects, 11 stat
Slide 23: Power & Industrial Projects is executing on its growth plans
Power & Industrial Projects is executing on its growth plans Industrial Energy Services • Cogen project being constructed to serve Ohio manufacturer expected to commence operations by end of year • Organic growth generated from 2012 acquisition of on-site energy portfolio Renewables • Began commerci
Slide 24: Power & Industrial Projects is targeting $155 million of operating earnings by 2018
2012A 2013A 2014E 2015E 2016E 2017E 2018E Power & Industrial Projects is targeting $155 million of operating earnings* by 2018 through growth in each of its business lines ~$155 (millions) $35 $70 $85 ($65) $30 $70 New Project Development / Acquisitions Renewable Energy Reduced Emissions Fuel Indust
Slide 25: Overview, Long-Term Growth Update, Summary
• Overview • Long-Term Growth Update • Summary 25
Slide 26: Summary
Summary • Long-term plan supports continued 5% - 6% operating EPS growth • Constructive regulation, coupled with a focus on operational excellence and strong customer satisfaction, supports meaningful growth at the utilities • Solid earnings growth at non-utility businesses • Gas Storage & Pipelines
Slide 27: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 27
Slide 28: Appendix
mo DTE Energy: Appendix
Slide 29: Energy regulation passed in 2008 established a more constructive regulatory environment
Energy regulation passed in 2008 established a more constructive regulatory environment Key components of the 2008 Energy Legislation Regulatory Structures Fully Regulated Fully Deregulated Michigan 29 Regulatory Structure Changes • File & Use Rates with 6 month self- implementation • Final order in
Slide 30: MPSC is the state regulator for electric and gas utilities
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 - September 2014 • The MPSC establishes fair and reasonable rates and administers fair terms and conditions of service for Michigan
Slide 31: We remain confident in our 2014 operating earnings guidance
We remain confident in our 2014 operating earnings* guidance (millions, except EPS) 2014 2Q YTD 2014 Guidance DTE Electric $265 $520 - $530 DTE Gas 125 120 - 126 Gas Storage & Pipelines 39 78 - 86 Power & Industrial Projects 28 75 - 85 Energy Trading ($2) $0 Corporate & Other (27) (49) - (45) DTE En
Slide 32: We are on track to achieve 2014 cash flow guidance
2014 2014 2Q YTD Guidance Cash From Operations $1.1 $1.6 Capital Spending (1.1) (2.3) Free Cash Flow $0.0 ($0.7) Asset Sales - - Dividends (0.2) (0.5) Net Cash ($0.2) ($1.2) Debt Financing: Issuances $0.6 $2.1 Redemptions (0.7) (0.9) Change in Debt ($0.1) $1.2 We are on track to achieve 2014 cash fl
Slide 33: Strong balance sheet remains a key priority and supports growth
2013 2014E * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Leverage* Funds from Operations / Debt* 2013 2014E 49% 52% Target 50% - 52% 23% 22% Target 20% - 22% Strong balance sheet remains a key priority and supports
Slide 34: 2014-2016 cash from operations and equity issuances plan
34 2014 – 2016 cash from operations and equity issuances plan supports utility capital spend and a strong balance sheet (billions) * Excludes securitization ** Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Equity $0.
Slide 35: DTE Electric plans $6.7 billion of investments over the next 5 years
2014E - 2018E Total 2008-2012 Average 2013A 2014E 2015E 2016E 2017E 2018E DTE Electric plans $6.7 billion of investments over the next 5 years $1,325 $1,600 $1,300 $1,100 $1,350 $1,000 * Includes AMI, Ludington expansion and other investments **Includes working capital Base New Generation Other Proj
Slide 36: DTE Gas plans $1.2 billion of investments over the next years
DTE Gas plans $1.2 billion of investments over the next 5 years 2013A 2014E 2015E 2016E 2017E 2018E $240 $240 $240 $240 $240 2014E - 2018E $500 $700 $1,200 Base Main Renewal, Meter Move-Out, Pipeline Integrity (millions) 36 $2.9B $3.5 - $3.7B YE Rate Base* $95M $114M Depreciation *Includes working c
Slide 37: Gas Storage & Pipelines assets have expansion opportunities
Pipeline Assets Capacity Bcf/ d In-Service Millennium Pipeline 0.8 Future Expansion (planning phase) 0.2 - 0.5 2017 + Total Planned Capacity 1.0 - 1.3 Bluestone Pipeline (bi-directional) 0.6 Expansion #1 0.2 3Q 2014 Expansion #2 0.1 2Q 2015 Expansion #3 0.1 2Q 2016 Total Planned Capacity 1.0 Vector
Slide 38: Second Quarter and June YTD Reconciliation of Reported to Operating Earnings
Second Quarter and June Year To Date 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
Slide 39: 2008-2013 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 performance measurement for external communications with analysts and i
Slide 40: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other 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 meas