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
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 – Investor Relations Director 3
Slide 4: Overview, Long-Term Growth Update, 2nd Quarter 2017 Financial Update
• Overview • Long-Term Growth Update • 2nd Quarter 2017 Financial Update 4
Slide 5: Strong results in 2nd quarter and increasing operating EPS guidance
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 & Pip
Slide 6: Committed to providing cleaner energy and reducing carbon emissions by over 80%
Committed to providing cleaner energy to customers and reducing carbon emissions by over 80% Carbon emissions reduction goals 2005 30% Early 2020s 45% 2030 75% >80% 2040 2050 • Retiring aging coal-fired plants - ending use of coal by 2040 • Adding 3,500 megawatts of natural gas-fired energy capacity
Slide 7: Overview, Long-Term Growth Update, 2nd Quarter 2017 Financial Update
• Overview • Long-Term Growth Update • 2nd Quarter 2017 Financial Update 7
Slide 8: Bluestone achieved 1.0 Bcf/d delivery milestone; NEXUS and Link continue to progress
Bluestone achieved 1.0 Bcf/d delivery milestone; NEXUS and Link continue to progress Bluestone Pipeline & Gathering NEXUS • Construction ready ‒ Right-of-way acquisition 1.0 essentially completed Bcf/d ‒ Majority of permits granted 2017 • Two FERC nominees approved by the • Achieved Senate Energy an
Slide 9: Recent developments support P&I's long-term growth plan
Recent developments support P&I’s long-term growth plan Landfill Gas Projects Industrial Central Energy Plant • Commenced operations of recently • Both Boards approved in 2Q 2017 acquired landfill gas plant ‒ Currently finalizing agreements • Began construction of new landfill gas ‒ Targeting in-ser
Slide 10: Overview, Long-Term Growth Update, 2nd Quarter 2017 Financial Update
• Overview • Long-Term Growth Update • 2nd Quarter 2017 Financial Update 10
Slide 11: 2nd quarter operating earnings were strong, up $14 million versus prior year
2nd quarter operating earnings* were strong, up $14 million versus prior year (millions, except EPS) Operating Earnings Primary Drivers 2Q 2016 2Q 2017 Change DTE Electric DTE Electric $ 135 $ 148 $ 13 • Rate implementation partially offset by return to normal May 2017 weather DTE Gas 13 1 (12) DTE
Slide 12: Increasing 2017 operating EPS guidance midpoint by $0.11
Increasing 2017 operating EPS* guidance midpoint by $0.11 (millions, except EPS) Original Revised Guidance Guidance DTE Electric $610 - $624 $610 - $624 DTE Gas 143 - 151 143 - 151 Gas Storage & Pipelines 140 - 150 145 - 155 Power & Industrial Projects 90 - 100 100 - 110 Corporate & Other (64) - (60
Slide 13: Summary
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 infrastructure investments focused on improving reliability and the customer experience • Continuin
Slide 14: Contact us
Contact us DTE Energy Investor Relations dteenergy.com/investors (313) 235-8030 14
Slide 15: Appendix
Appendix
Slide 16: DTE Electric variance analysis
DTE Electric variance analysis (millions) Operating Earnings* Variance Primary Drivers $31 ($8) $3 $148 • Cooler weather $135 ($13) Variance to normal weather – 2Q 2016: $14 – 2Q 2017: $1 • Rate implementation supports infrastructure improvements to enhance customer reliability 2Q 2016 Weather Rate
Slide 17: Cash flow and capital expenditures
Cash flow and capital expenditures (billions) (millions) Cash Flow Capital Expenditures YTD 2016 YTD 2017 YTD 2016 YTD 2017 Cash From Operations $1.3 $1.2 DTE Electric Distribution Infrastructure $224 $313 Capital Expenditures (1.0) (1.2) New Generation 55 34 Free Cash Flow $0.3 $0.0 Replacement & O
Slide 18: Cash flow and capital expenditures guidance support growth target
Cash flow and capital expenditures guidance support growth target (billions) (millions) Cash Flow Capital Expenditures 2016 2017 2016 2017 Actual Guidance Actual Guidance Cash from operations $2.1 $1.9 DTE Electric Capital expenditures (3.4) (3.0) Distribution infrastructure $567 $690 New generation
Slide 19: Cash flow and balance sheet remain strong
Cash flow and balance sheet remain strong Leverage* Target 50% - 53% • Update on equity issuances: ‒ No equity issuances planned for 51% 2017 ‒ Acquisition related equity of $675 million in late 2019 (through convertible equity units) 2016 2017-2019E ‒ No additional equity planned through 2019 Funds
Slide 20: 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 2Q 2016 2Q 2017 % change 2Q 2016 2Q 2017 % change Actuals 274 232 (15%) Actuals 838 668 (20%) Normal 215 215 0% Normal 774 786 2% Deviation from normal 27% 8
Slide 21: DTE Electric and DTE Gas Regulatory update
DTE Electric and DTE Gas Regulatory update DTE Electric • 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 2017 Briefs: November 2017 Final order: by April
Slide 22: 2nd quarter and YTD 2017 Energy Trading reconciliation of operating earnings
2nd quarter and YTD 2017 Energy Trading reconciliation of operating earnings* to economic net income 2Q 2016 2017 Operating Earnings* $0 $4 • Economic net income equals economic gross margin*** minus O&M expenses and Accounting Adjustments** 12 (2) taxes Economic Net Income $12 $2 • DTE Energy manag
Slide 23: 2nd quarter 2017 reconciliation of reported to operating earnings (non-GAAP)
2nd quarter 2017 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 pr
Slide 24: 2nd quarter 2016 reconciliation of reported to operating earnings (non-GAAP)
2nd quarter 2016 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 pr
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 repres