Dte Energy Company · NYSE:DTE
Dte Energy — Q2 2017 Earnings Presentation
25 slides from Dte Energy's earnings presentation, Jul 26, 2017
Slide 1: 2nd Quarter 2017 Earnings Conference Call
Click to edit Master title style 2nd Quarter 2017 Earnings Conference Call July 26, 2017 EXHIBIT 99.2
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
• Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Investor Relations Director 3 Participants
Slide 4: Overview, Long-Term Growth Update, 2nd Quarter 2017 Financial Update
4 • Overview • Long-Term Growth Update • 2nd Quarter 2017 Financial Update
Slide 5: Strong results in 2nd quarter and increasing operating EPS guidance
• Increasing 2017 operating EPS guidance midpoint $0.11 to $5.42 • Announced plan to reduce carbon emissions by more than 80 percent • Ranked 2nd in residential customer satisfaction** in Midwest at DTE Electric • Gas Storage & Pipelines (GSP) ‒ Achieved milestone at Bluestone Pipeline & Gathering ‒
Slide 6: Committed to providing cleaner energy and reducing carbon emissions by over 80%
6 Committed to providing cleaner energy to customers and reducing carbon emissions by over 80% Carbon emissions reduction goals • Retiring aging coal-fired plants - ending use of coal by 2040 • Adding 3,500 megawatts of natural gas-fired energy capacity to supply 24/7 power and ensure reliability •
Slide 7: Long-Term Growth Update
7 • Overview • Long-Term Growth Update • 2nd Quarter 2017 Financial Update
Slide 8: Bluestone achieved 1.0 Bcf/d delivery milestone; NEXUS and Link continue to progress
8 Bluestone achieved 1.0 Bcf/d delivery milestone; NEXUS and Link continue to progress • Construction ready ‒ Right-of-way acquisition essentially completed ‒ Majority of permits granted • Two FERC nominees approved by the Senate Energy and Natural Resources Committee; two additional candidates anno
Slide 9: Recent developments support P&I's long-term growth plan
• Commenced operations of recently acquired landfill gas plant • Began construction of new landfill gas plant ‒ Contract signed 2Q 2017 ‒ Targeting in-service 1H 2018 • Advanced discussions for several other landfill gas opportunities 9 Recent developments support P&I’s long-term growth plan Landfil
Slide 10: 2nd Quarter 2017 Financial Update
10 • Overview • Long-Term Growth Update • 2nd Quarter 2017 Financial Update
Slide 11: 2nd quarter 2017 operating earnings by segment
2Q 2016 2Q 2017 Change DTE Electric 135$ 148$ 13$ DTE Gas 13 1 (12) Gas Storage & Pipelines 35 40 5 Power & Industrial Projects 17 30 13 Corporate & Other (23) (32) (9) Growth segments** 177$ 187$ 10$ Growth segments operating EPS 0.98$ 1.05$ 0.07$ Energy Trading -$ 4$ 4$ DTE Energy 177$ 191$ 14$ Op
Slide 12: Increasing 2017 operating EPS guidance midpoint by $0.11
DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth segments** Growth segments operating EPS Energy Trading DTE Energy Operating EPS* Avg. Shares Outstanding $610 - $624 143 - 151 140 - 150 90 - 100 (64) - (60) $919 - $965 $5.12 - $5.38 $5 - $15 $924 - $
Slide 13: Summary
* Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix 13 Summary • Increasing 2017 operating EPS* guidance given strong financial performance • Transforming generation fleet to reduce carbon emissions by more than 80 percent • Driving utility growth through
Slide 14: Contact us
DTE Energy Investor Relations dteenergy.com/investors (313) 235-8030 14 Contact us
Slide 15: DTE Energy
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Slide 16: DTE Electric variance analysis
• Cooler weather Variance to normal weather – 2Q 2016: $14 – 2Q 2017: $1 • Rate implementation supports infrastructure improvements to enhance customer reliability $135 $148($8) ($13) $3 Primary DriversOperating Earnings* Variance (millions) 2Q 2016 Operating Earnings 2Q 2017 Operating Earnings Weat
Slide 17: Cash flow and capital expenditures
YTD 2016 YTD 2017 DTE Electric Distribution Infrastructure $224 $313 New Generation 55 34 Replacement & Other 361 390 $640 $737 DTE Gas Base Infrastructure $93 $112 NEXUS Related 14 48 Main Replacement 50 71 $157 $231 Non-Utility $184 $243 Total $981 $1,211 YTD 2016 YTD 2017 Cash From Operations $1.
Slide 18: Cash flow and capital expenditures guidance support growth target
2016 Actual 2017 Guidance DTE Electric Distribution infrastructure $567 $690 New generation 131 45 Replacement & other 805 725 $1,503 $1,460 DTE Gas Base infrastructure $177 $200 NEXUS related 94 90 Main replacement 124 145 $395 $435 Non-Utility $1,533 $900 - $1,100 Total $3,431 $2,795 - $2,995 2016
Slide 19: Cash flow and balance sheet remain strong
21% 2016 2017-2019E 51% 2016 2017-2019E Leverage* Funds from Operations** / Debt* Target 50% - 53% Target 20% + * Debt excludes a portion of DTE Gas’ short-term debt and considers 50% of the junior subordinated notes and 100% of the convertible equity units as equity ** Funds from Operations (FFO) i
Slide 20: Earnings impact of weather
Earnings impact of weather Cooling degree days ** Includes choice of 2,486 YTD 2016 and 2,393 YTD 2017 Heating degree days Earnings impact of weather Weather Normal Electric Sales* DTE Electric service territory Variance from normal weather (GWh) Variance from normal weather 2Q 2016 2Q 2017 % change
Slide 21: DTE Electric and DTE Gas Regulatory update
DTE Electric and DTE Gas Regulatory update 21 DTE Gas DTE Electric • Expect to file late 2017 / early 2018 • General rate case - April 2017 (U-18255) – Requested rate recovery: $231 million; 10.5% ROE Staff testimony: August 2017 Cross examination: October 2017 Self implementation: November 20
Slide 22: 2nd quarter and YTD 2017 Energy Trading reconciliation of operating earnings to economic net income
*** Economic gross margin is the change in net fair value of realized and unrealized purchase and sale contracts including certain non-derivative contract costs ** Consists of 1) the income statement effect of not recognizing changes in the fair market value of certain non-derivative contracts inclu
Slide 23: 2nd quarter 2017 reconciliation of reported to operating earnings
2Q 2017 Net Income (millions)* After-tax items: DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth Segments Energy Trading DTE Energy Reported Earnings $138 $1 $40 $30 ($32) $177 $0 $177 PSCR disallowance 10 10 10 Certain mark-to- market transactions 4
Slide 24: 2nd quarter 2016 reconciliation of reported to operating earnings
2Q 2016 Net Income (millions)* After-tax items: DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth Segments Energy Trading DTE Energy Reported Earnings $135 $13 $35 $15 ($23) $175 ($23) $152 Plant closure 2 2 2 Certain mark-to- market transactions 23 23
Slide 25: Use of Operating Earnings Information
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 representation of the company’s earnings from ongoing operations a