Dte Energy Company · NYSE:DTE
Dte Energy — Q2 2021 Earnings Presentation
25 slides from Dte Energy's earnings presentation, Jul 27, 2021
Slide 1: DTE 2Q 2021 Earnings Conference Call
DTE 2Q 2021 EARNINGS CONFERENCE CALL JULY 27, 2021
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: Participants
Participants Jerry Norcia – President and CEO Dave Ruud – Senior Vice President and CFO Barbara Tuckfield – Director Investor Relations 3
Slide 4: 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 • Building on our diversity, equity and inclusion focus with acceleration of commitment to build an even better workplace Customers •
Slide 5: Continuing to deliver successful operational results
Continuing to deliver successful operational results DTE Electric • Targeting net zero carbon emissions by 2050 − Retired River Rouge Power Plant in 2Q 2021 • Voluntary renewables program MIGreenPower is one of the largest in the country with over 35,000 customers and 950 MW of subscriptions DTE Gas
Slide 6: Strong financial start to 2021; maintaining 5% - 7% long-term operating EPS growth target
Strong financial start to 2021; maintaining 5% - 7% long-term operating EPS1 growth target Operating earnings Strong start to 2021 ✓ Increasing 2021 operating EPS guidance from a midpoint of 70% $5.51 per share to $5.77 per share ✓ Moving year-over-year growth in operating EPS guidance from 90% util
Slide 7: 2Q 2021 operating earnings variance
2Q 2021 operating earnings1 variance (millions, except EPS) 2020 2021 Variance Primary drivers Higher commercial sales, rate implementation and DTE Electric $219 $238 $19 warmer weather in 2021 offset by non-qualified benefit plan investment gains in 2020 DTE Gas 11 7 (4) Warmer weather in 2021 offs
Slide 8: Raising 2021 operating EPS guidance
Raising 2021 operating EPS1 guidance (millions, except EPS) Current guidance Revised guidance Primary drivers Warmer than normal weather, DTE Electric $826 - $840 $853 - $867 sustained continuous improvement and uncollectible expense favorability DTE Gas 202 - 212 202 – 212 Power & Industrial Projec
Slide 9: 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 in 2021; $2 billion issued in total in the past four years 2021 - 2023 • Strong investment-grade credit rating $1.3 − Targeting ~16% FFO1 / Debt2 • Significant debt p
Slide 10: Positioned for success in 2021 and beyond
Positioned for success in 2021 and beyond Total shareholder return2 ✓ Increasing 2021 operating EPS1 guidance 270% ✓ On track to achieve 5% - 7% long-term operating EPS growth from 2020 original guidance midpoint ✓ Successfully executed DTM spin which positions DTE as a predominantly pure-play utili
Slide 11: Visit us: DTE Investor Relations
VISIT US: DTE INVESTOR RELATIONS 2020 ESG REPORT CORPORATE CITIZENSHIP HIGHLIGHTS
Slide 12: Appendix
Appendix DTE
Slide 13: Revising 2021 cash flow and capital expenditures guidance to reflect DTM spin impacts
Revising 2021 cash flow and capital expenditures guidance to reflect DTM spin impacts Cash flow Capital expenditures (billions) Current Revised (millions) Current Revised guidance guidance guidance guidance Cash from operations1 $3.0 $2.7 DTE Electric Capital expenditures (4.2) (3.9) Base infrastruc
Slide 14: Cash flow and capital expenditures actuals
Cash flow and capital expenditures actuals Cash flow Capital expenditures (billions) YTD 2020 YTD 2021 (millions) YTD 2020 YTD 2021 Cash from operations1 $1.7 $1.9 DTE Electric Capital expenditures (2.2) (1.9) Base infrastructure $475 $327 Free cash flow ($0.5) $0.0 New generation 502 701 Dividends
Slide 15: Weather impact on sales
Weather impact on sales DTE Electric DTE Gas Cooling degree days Heating degree days % YTD YTD % % YTD YTD % 2Q 2020 2Q 2021 2Q 2020 2Q 2021 Change 2020 2021 Change Change 2020 2021 Change Actuals 259 308 19% 259 308 19% Actuals 957 788 (18%) 3,847 3,839 0% Normal 215 233 8% 215 233 8% Normal 781 79
Slide 16: 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 (U-20940) − Effective: May 15, 2020 − Received order: June 2021 − Effective: January 1, 2022 − Rate recovery: $188 mi
Slide 17: Environmental, social and governance 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 18: Award-winning commitment to being a top ESG employer in the country
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 19: Environmental sustainability is critical to the creation of 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 20: 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 20
Slide 21: 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 Employee resource groups promote a safe and welcoming • Led by our CEO and key executive leaders, including a Director of environment and offer professional developme
Slide 22: Governance framework provides shareholder rights and enables sustainable value creation
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 23: 2021 Energy Trading reconciliation of operating earnings to economic net income
2021 Energy Trading reconciliation of operating earnings1 to economic net income (millions) Energy Trading reconciliation • Economic net income equals economic gross margin3 minus O&M 2Q 2020 2Q 2021 expenses and taxes Operating earnings $5 $21 • DTE Energy management uses economic net income as one
Slide 24: 2Q 2020 and 2Q 2021 reconciliation of reported to operating earnings
2Q 2020 and 2Q 2021 reconciliation of reported to operating earnings (non- GAAP) and operating EPS (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
Slide 25: 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