Dte Energy Company · NYSE:DTE
Dte Energy — Q2 2014 Earnings Presentation
30 slides from Dte Energy's earnings presentation, Jul 25, 2014
Slide 1: 2nd Quarter 2014 Earnings Conference Call
2nd Quarter 2014 Earnings Conference Call July 25, 2014 EXHIBIT 99.3
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: Participants
Participants • Peter Oleksiak – Senior Vice President and CFO • Jeff Jewell – Vice President and Controller • Mark Rolling – Vice President and Treasurer • Anastasia Minor – Executive Director, Investor Relations 3
Slide 4: Overview
• Overview • Second Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 4
Slide 5: Our business strategy is fundamental to how we create value for our 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 raised its annualized 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 19% 21% 25% 12% 19% 14% 14% 11% 7% 17% 19% 8% YTD 3 YR 5 YR 10 YR DTE S&P500 Utilities S&P500 Historical Total Shareholder Return CAGR* * As of June 30, 2014 Source: Bloomberg
Slide 8: We see strong opportunities in our growth segments that support our 5-6% EPS growth outlook
Utility Non-Utility • Bluestone expansions will bring total capacity to 1.0 Bcf in 2014-2016 • NEXUS has sufficient commitment from producers and utilities to move to next phase of development; binding open season through August 21 to finalize volume commitments • Relocation of 8th REF unit complete
Slide 9: We remain confident in our 2014 operating earnings guidance
We remain confident in our 2014 operating earnings* guidance (millions, except EPS) 2014 YTD Actuals 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) D
Slide 10: Second Quarter 2014 Earnings Results
• Overview • Second Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 10
Slide 11: DTE Energy Second Quarter 2014 Operating Earnings Per Share
DTE Energy Second Quarter 2014 Operating Earnings Per Share* Gas Storage & Pipelines $0.10 Power & Industrial Projects $0.07 * Reconciliation to GAAP reported earnings included in the appendix Energy Trading ($0.05) Corporate & Other ($0.10) DTE Gas ($0.02) Non-Utility $0.12 DTE Electric $0.73 $0.73
Slide 12: DTE Energy Second Quarter 2014 Operating Earnings Variance
2Q 2013 2Q 2014 Change DTE Electric 89$ 129$ 40$ DTE Gas 8 (4) (12) Gas Storage & Pipelines 16 18 2 Power & Industrial Projects 11 13 2 Corporate & Other (13) (18) (5) Growth segments** 111$ 138$ 27$ Growth segments operating EPS 0.63$ 0.78$ 0.15$ Energy Trading (2)$ (10)$ (8)$ DTE Energy 109$ 128$
Slide 13: DTE Electric Variance Analysis
DTE Electric Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix (millions) • Favorable weather in Q2 2014 Variance to normal weather - 2Q 2013: ($2) - 2Q 2014: $3 • Revenue decoupler mechanism (RDM) amortization in first half of 2014 • O&M primarily lower benefit e
Slide 14: DTE Gas Variance Analysis
DTE Gas Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix (millions) • Warmer weather in 2Q 2014 vs. 2Q 2013 Variance to normal weather - 2Q 2013: $4 - 2Q 2014: $1 • O&M primarily timing and increased uncollectible expense, partially offset by lower benefit expens
Slide 15: Contingency exists for potential weather variability and O&M reinvestment
Contingency exists for potential weather variability and O&M reinvestment * Reconciliation to GAAP reported earnings included in the appendix 2014 Guidance YTD Weather $4.20 - $4.40 $0.27 2014 Operating EPS* Guidance Range ($0.27) Contingency Balance of year weather • 28% fewer CDDs July month to
Slide 16: Cash Flow and Balance Sheet Metrics
• Overview • Second Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 16
Slide 17: DTE Energy YTD 2014 Cash Flow
YTD 2013 YTD 2014 Cash From Operations* $1.3 $1.1 Capital Spending (0.9) (1.1) Free Cash Flow $0.4 $0.0 Asset Sales - - Dividends (0.2) (0.2) Net Cash $0.2 ($0.2) Debt Financing: Issuances $0.3 $0.6 Redemptions (0.5) (0.7) Change in Debt ($0.2) ($0.1) DTE Energy YTD 2014 Cash Flow Cash Flow Summary
Slide 18: DTE Energy YTD 2014 Capital Expenditures
YTD 2013 YTD 2014 DTE Electric Operational $419 $584 Environmental 72 82 Renewable Energy 116 166 $607 $832 DTE Gas Operational $70 $64 Main Renewal / Meter Move Out / Pipeline Integrity 32 29 $102 $93 Non-Utility $211 $161 Total $920 $1,086 DTE Energy YTD 2014 Capital Expenditures Capital Expenditu
Slide 19: 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 20: Summary
• Overview • Second Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 20
Slide 21: Summary
• We are on track to meet our operating earnings* guidance in 2014 with contingency for balance of year unfavorable weather and utility reinvestment • Raised annualized dividend over 5% marking the fifth consecutive year of an increase • Cash flow and balance sheet metrics remain strong • Utility in
Slide 22: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 22
Slide 23: Appendix
mo DTE Energy: Appendix
Slide 24: DTE Energy 2014 Cash Flow Guidance
2013 2014 Actual Guidance Cash From Operations* $2.2 $1.6 Capital Spending (1.9) (2.3) Free Cash Flow $0.3 ($0.7) Asset Sales - - Dividends (0.4) (0.5) Net Cash ($0.1) ($1.2) Debt Financing: Issuances $1.2 $2.1 Redemptions (1.1) (0.9) Change in Debt $0.1 $1.2 DTE Energy 2014 Cash Flow Guidance Cash
Slide 25: DTE Energy 2014 Capital Expenditure Guidance
DTE Energy 2014 Capital Expenditure Guidance 2013 2014 Actual Guidance DTE Electric Operational $999 $1,080 Environmental 165 280 Renewable Energy 161 240 $1,325 $1,600 DTE Gas Operational $132 $150 Main Renewal / Meter Move-out / Pipeline Integrity 77 90 $209 $240 $366 $490 Total $1,900 $2,330 Non-
Slide 26: Energy Trading Reconciliation of Operating Earnings to Economic Net Income (2Q 2014)
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of 1) the income statement effect of not recognizing changes in the fair market value of certain non-derivative contracts including physical inventory and capacity contracts for transportation, transmission a
Slide 27: Energy Trading Reconciliation of Operating Earnings to Economic Net Income (YTD 2014)
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of 1) the income statement effect of not recognizing changes in the fair market value of certain non-derivative contracts including physical inventory and capacity contracts for transportation, transmission a
Slide 28: Second Quarter and June Year To Date 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 29: 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 30: 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