Dte Energy Company · NYSE:DTE
Dte Energy — FY2018 Earnings Presentation
22 slides from Dte Energy's earnings presentation, Feb 7, 2019
Slide 1: DTE Year End 2018 Earnings Conference Call
DTE Year End 2018 Earnings Conference Call February 7, 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement Many factors impact forward-looking statements including, but not limited to, the following: impact of regulation by the EPA, the FERC, the MPSC, the NRC, and for DTE Energy, the CFTC, as well as other applicable governmental proceedings and regulations, including any associate
Slide 3: Participants
Participants • Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Director, Investor Relations 3
Slide 4: Strong operational and financial performance in 2018; positioned for continued growth in 2019
Strong operational and financial performance in 2018; positioned for continued growth in 2019 Operating EPS* +13% • Delivered strong financial results in 2018 ‒ Operating EPS exceeded original guidance for 10th consecutive year $6.30 ‒ Cash flow $500 million above plan ‒ Dividend increased 7% $5.78
Slide 5: Employee and customer focus provided a solid framework for success
Employee and customer focus provided a solid framework for success Highly engaged employees • Ranked in Gallup’s top 3% worldwide for employee engagement • Earned Gallup Great Workplace Award for 6th consecutive year Employee safety • Placed in top 2% of National Safety Council’s safety culture surv
Slide 6: Focus on community and strong regulatory environment positions DTE to deliver growth
Focus on community and strong regulatory environment positions DTE to deliver growth Force for growth • Over 50% of employees involved in DTE volunteerism activities • Invested $1.7 billion in Michigan businesses • Ranked by Points of Light and J.D. Power* as one of the country’s top corporate citiz
Slide 7: 2018 operating earnings variance
2018 operating earnings* variance (millions, except EPS) 2017 2018 Change Primary Drivers Warmer summer weather and rate implementation offset by higher O&M, rate base DTE Electric $ 617 $ 669 $ 52 growth and reinvestment in system reliability DTE Gas 149 159 10 Cooler winter weather offset by highe
Slide 8: 2019 operating EPS guidance grows 6.4% from 2018 original guidance
2019 operating EPS* guidance grows 6.4% from 2018 original guidance (millions, except EPS) Operating EPS 2019 Operating Earnings +6.4% Guidance DTE Electric $698 - $712 $6.30 $6.15 DTE Gas 171 - 179 $5.78 Gas Storage & Pipelines 208 - 218 Power & Industrial Projects 119 - 134 Energy Trading 15 - 25
Slide 9: Reliability investments at utilities support growth and continue to increase customer satisfaction
Reliability investments at utilities support growth and continue to increase customer satisfaction DTE Electric • Delivering 50% clean energy by 2030 and reducing carbon emissions by more than 80% by 2050* • Doubling renewable portfolio • Building new natural gas power plant • Establishing service f
Slide 10: GSP is positioned for strong future growth
GSP is positioned for strong future growth Gas Storage & Pipelines • Pursuing growth in our core geography through additional expansions and strategic acquisitions • NEXUS is acquiring Generation Pipeline ‒ Purchase price between $150 - $200 million ‒ 355 MMcf/d fully contracted, 24-inch, 23 mile pi
Slide 11: P&I is positioned for strong future growth
P&I is positioned for strong future growth Power & Industrial Projects RNG • Expanding renewable energy business at landfill and agricultural sites • Finalizing agreements on two more RNG projects ‒ Continuing advanced discussions on additional RNG opportunities in 2019 Cogeneration • Developing new
Slide 12: Focus on culture and commitment to customers has delivered strong returns for shareholders
Focus on culture and commitment to customers has delivered strong returns for shareholders Total Shareholder Return* (Annualized) 17% 15% 15% • Exceeding original guidance for 10th consecutive year with strong 2018 results • Driving utility growth through infrastructure 9% investments focused on add
Slide 13: Contact us
Contact usUS CONTACT DTE Energy Investor Relations www.dteenergy.com/investors 313.235.8030 13
Slide 14: Appendix
Appendix 14
Slide 15: Maintaining strong cash flow and balance sheet
Maintaining strong cash flow and balance sheet Funds from Operations* / Debt** Target Target • Issuing $1.0 - $1.5 billion of equity in 19% 18% 2019 - 2021 18% ‒ Up to $250 million of equity in 2019 using internal mechanisms • Supporting capital investments with 2018 2019E - 2021E strong cash from o
Slide 16: DTE Electric variance analysis
DTE Electric variance analysis (millions) Operating Earnings* Variance Primary Drivers $37 ($40) $109 ($54) $669 • Warmer weather in 2018 $617 Variance to normal weather – 2017: ($6) – 2018: $103 2017 Weather Rate Case Rate Base Invest and 2018 Operating Impact Growth Other Operating Earnings O&M Ea
Slide 17: Weather and DTE Electric weather normal sales
Weather and DTE Electric weather normal sales Cooling degree days – DTE Electric service territory Heating degree days – DTE Gas service territory YTD 2017 YTD 2018 % change 4Q 2017 4Q 2018 % change Actuals 849 1,175 38% Actuals 2,273 2,310 2% Normal 803 803 0% Normal 2,190 2,182 0% Deviation from n
Slide 18: Cash flow and capital expenditures
Cash flow and capital expenditures (billions) (millions) Cash Flow Capital Expenditures 2018 2019 2018 2019 Actual Guidance Actual Guidance Cash From Operations* $2.7 $2.4 DTE Electric Capital Expenditures (3.4) (3.9) Base Infrastructure $781 $820 Free Cash Flow ($0.7) ($1.5) New Generation 333 490
Slide 19: 2018 Energy Trading reconciliation of operating earnings to economic net income
2018 Energy Trading reconciliation of operating earnings* to economic net income • Economic net income equals economic gross margin*** minus O&M expenses and taxes • DTE Energy management uses economic 2017 2018 net income as one of the performance measures for external communications with Operating
Slide 20: Reconciliation of reported to operating earnings (non-GAAP)
Reconciliation of reported to operating earnings (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 uses operating earnings as the primary performance
Slide 21: Reconciliation of reported to operating EPS (non-GAAP)
Reconciliation of reported to 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 uses operating earnings as the primary performance meas
Slide 22: 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 repres