Slide 1: DTE Energy: Mid-Year Business Update
DTE Energy: Mid-Year Business Update July 2, 2008
Slide 2: Safe Harbor Statement
Safe Harbor Statement The information contained herein is as of the date of this presentation. 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 "anti
Slide 3: Introduction and Presentation Outline
Introduction Gerry Anderson, President and COO Dave Meador, Executive Vice President and CFO Lisa Muschong, Director of Investor Relations Participants Presentation Outline Michigan Energy Legislation & Detroit Edison Rate Case Update Non-Utility Business Update Earnings Guidance Update
Slide 4: Legislation Will Be a Historical Step in Improving Michigan's Energy Policies
Legislation Will Be a Historical Step in Improving Michigan's Energy Policies Four bills passed Michigan House on April 17 on a bi-partisan vote and moved to Senate On June 27, two bills passed the Michigan Senate on a bi-partisan vote Completion of legislation backed by a broad coalition including
Slide 5: Michigan Legislation Continues to Move Forward
Michigan Legislation Continues to Move Forward House Bill 5524 House Version Senate Version Electric Choice reform Caps Choice at 10% of load Defines rules for customers returning to utility service Same Cost-of-service based electric rates (deskewing) Phases in cost-of-service based rates over a 5
Slide 6: Michigan Legislation Continues to Move Forward (cont.)
Michigan Legislation Continues to Move Forward (cont.) Legislation House Version Senate Version Renewable portfolio standard (HB 5548/5549, Senate Bill 213) 4% of energy from renewables in 2012 10% in 2015 Establishes cost caps and off-ramps to ensure costs are manageable Program funded by setting a
Slide 7: Detroit Edison General Rate Case
Detroit Edison General Rate Case 2006 Normalized Capital O&M Cost Savings Net Revenue / Fuel & Purchased Power Merger Control Premium Net Other (Incl. Benefits & Taxes) 2009 Request East -32 -32 254 265 208 208 271 284 West 254 129 118 57 63 13 North ($30) $130 $290 ($60) ($120) $60 $14 $284 Detroit
Slide 8: Sources and Uses of Monetization Proceeds and Synfuel Cash
Sources and Uses of Monetization Proceeds and Synfuel Cash Original Guidance Sources Monetization Proceeds $800M Antrim Peakers Monetization After-Tax Proceeds and Synfuel Cash Sources Core Barnett ~$2B Completed monetization efforts were a success with over $1 billion in total proceeds Monetization
Slide 9: Barnett Shale Properties Positioned to Produce Future Shareholder Value
Barnett Shale Properties Positioned to Produce Future Shareholder Value Fundamentals are very supportive Strong gas/oil prices Services readily available DTE development of Western assets progressing Economic success in all 5 areas where we have focused drilling activity 70% of revenue from natural
Slide 10: Power & Industrial (P&I) Update
Power & Industrial (P&I) Update Fundamentals in our P&I business have improved materially over the last year Earnings growing Forecasting continued growth ROIC strong Fundamentals in the asset sale/monetization market have weakened over last year Sellers' market has flipped to buyers' market Driven
Slide 11: Our Consistent Value-Focused Approach to Power & Industrial Investments
Our Consistent Value-Focused Approach to Power & Industrial Investments Continues to Be Successful * Reconciliation to GAAP reported earnings included in the appendix ** Assumes ~ 50/50 debt/equity 2007 2008 2009 Detroit Edison 21 27.5 45 5 0 5 $21 $25 - 35 (includes $5M of D&A expense deferred from
Slide 12: DTE Energy's Business Mix
DTE Energy's Business Mix 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 20.4 27.4 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 2008E Non-Regulated = 15% Regulated = 85% % of Operating Earnings* * Excludes Corporate and Other, reconciliation to GAAP reported earnings included in appendix Detroit E
Slide 13: Raising 2008 Operating Earnings Guidance, Maintaining EPS Guidance
Raising 2008 Operating Earnings Guidance, Maintaining EPS Guidance Prior 2008 Guidance New 2008 Guidance Operating Earnings* ($ millions) * Reconciliation to GAAP reported earnings included in the appendix ** Prior guidance assumed $275 million stock buyback in June 2008, new guidance assumes no sto
Slide 14: Raising 2009 Non-Utility Outlook to Reflect Higher P&I Earnings
Raising 2009 Non-Utility Outlook to Reflect Higher Power & Industrial Project Earnings 2008 Guidance* ($ millions) +6% 2009 Early Outlook* +13% +6% +14% Projected Average Shares Outstanding 163M 163M * Reconciliation to GAAP reported earnings included in the appendix ** Prior 2009 early outlook was
Slide 15: DTE Energy: A Focused, Integrated Energy Strategy
Execute strong regulated growth plan DTE Energy: A Focused, Integrated Energy Strategy Execute value-focused non-utility plan Continue to pay an attractive dividend Realize projected utility earnings growth Near-term: 7 - 9% per year Long-term: 5 - 6% per year Upside potential from renewables Manage
Slide 16: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors 313-235-8030
Slide 17: Appendix
Appendix DTE Energy s€
Slide 18: Our Sustainable Dividend is Very Competitive
Our Sustainable Dividend is Very Competitive As utility earnings increase, our payout ratio will improve, providing flexibility to consider further dividend increases Industry Dividend Yield PNW 0.065 ED 0.058 PGN 0.057 NI 0.052 WR 0.052 TEG 0.051 DTE 0.049 SCG 0.048 SO 0.047 XEL 0.047 CNP 0.045 VVC
Slide 19: Power & Industrial Projects Provide Utility-Like Services to Select, Energy-Intensive Industries
Power & Industrial Projects Provide Utility-Like Services to Select, Energy-Intensive Industries Coke Battery (metallurgical coal) Pulverized Coal Injection On-Site Energy Renewables Value Proposition Power & Industrial Asset Type Own interest in 4 coke batteries Expect to produce 2 million tons of
Slide 20: Power & Industrial Projects Has a Low Risk Business Strategy
Long-Term Contracts P&I projects have long-term contracts, typically from 10-20 years On-site advantage gives us a high probability of contract renewal Strong Customer Sites Invest at customer sites with long-term viability in relation to competitive facilities Limited Commodity Risk Contracts are s
Slide 21: Reconciliation of 2007 Reported to Operating Earnings
Reconciliation of 2007 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 measu
Slide 22: Reconciliation of 2007 Power & Industrial Reported Earnings to EBITDA
Reconciliation of 2007 Power & Industrial Reported Earnings to EBITDA Use of EBITDA Information - DTE Energy management believes that EBITDA provides a meaningful representation of the company's performance and uses EBITDA as a complementary performance measure with earnings.
Slide 23: Reconciliation of 2008 and 2009 Reported to Operating Earnings
Reconciliation of 2008 and 2009 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 performa