Dte Energy Company · NYSE:DTE
Dte Energy — FY2017 Earnings Presentation
28 slides from Dte Energy's earnings presentation, Feb 16, 2018
Slide 1: Year End 2017 Earnings Conference Call
Year End 2017 Earnings Conference Call February 16, 2018 EXHIBIT 99.2
Slide 2: Safe Harbor Statement
2 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 associa
Slide 3: Participants
3 • Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Director, Investor Relations Participants
Slide 4: Overview, Financial Update, Long-Term Growth Update
4 • Overview • Financial Update • Long-Term Growth Update
Slide 5: Focus on employees and customers resulted in a successful year in 2017
5 Focus on employees and customers resulted in a successful year in 2017 * J.D. Power 2017 Electric and Gas Utility Customer Satisfaction Study for Midwest utilities. Visit jdpower.com • Employee engagement in Gallup’s top 4% worldwide • Gallup’s Great Workplace Award for 5th consecutive year • AGA’
Slide 6: Growth plans are well supported and deliver results for DTE and Michigan
6 Growth plans are well supported and deliver results for DTE and Michigan • Energy legislation implementation progressing • Tax reform supports affordability agenda • Rate cases progressing at both utilities Strong political and regulatory context • Substantial reliability investments at both utili
Slide 7: Delivered strong 2017 financial results, raising 2018 operating EPS guidance
7 Delivered strong 2017 financial results, raising 2018 operating EPS* guidance midpoint by $0.10 $5.31 $5.59 $5.68 $5.78 2017 Original guidance 2017 Actual 2018 Early outlook 2018 Guidance Operating EPS * Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix
Slide 8: Maintaining customer affordability while investing in our utilities
8 Maintaining customer affordability while investing in our utilities 2012 20172012 2017 2012 2017 Average industrial rate 2012 2017 Average annual residential bill Average industrial rate Average annual residential bill DTE Gas DTE Electric
Slide 9: Tax reform benefits customers and is operating EPS accretive
9 Tax reform benefits customers and is operating EPS* accretive Good for DTE 2018 impact − Non-utility businesses are clear winners with higher earnings − Earnings increase drives additional $0.10 operating EPS 2019 - 2022 impact − 5% - 7% operating EPS growth target from increased 2018 guidance −
Slide 10: Overview, Financial Update, Long-Term Growth Update
10 • Overview • Financial Update • Long-Term Growth Update
Slide 11: 2017 operating earnings by segment
11 2016 2017 Change DTE Electric 622$ 617$ (5)$ DTE Gas 138 149 11 Gas Storage & Pipelines 127 160 33 Power & Industrial Projects 95 124 29 Corporate & Other (59) (69) (10) Growth segments** 923$ 981$ 58$ Growth segments operating EPS 5.14$ 5.48$ 0.34$ Energy Trading 25 20 (5) DTE Energy 948$ 1,001$
Slide 12: 2018 Guidance
12 2018 Guidance 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 $648 - $662 152 - 160 185 - 195 115 - 135 (100) - (90) $1,000 - $1,062 $5.54 - $
Slide 13: Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet
13 Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet 20% 2017 2018-2020E 51% 2017 2018-2020E Leverage** Funds from Operations*** / Debt** Target 50% - 54% Target 18% - 19% Issue incremental equity of $300 million* 2018-2020 due to tax reform Issue $300 m
Slide 14: Overview, Financial Update, Long-Term Growth Update
14 • Overview • Financial Update • Long-Term Growth Update
Slide 15: Reliability investments at utilities support long-term growth
15 Reliability investments at utilities support long-term growth and increase customer satisfaction DTE Electric DTE Gas • Accelerating the replacement of aging cast-iron and unprotected steel pipe • Strengthening and renewing gas infrastructure • Progressing on new 1,100 MW natural gas power plant
Slide 16: Gas Storage & Pipelines continues to expand its portfolio
16 Gas Storage & Pipelines continues to expand its portfolio in the most prolific geology in the country 2017 Accomplishments • NEXUS pipeline construction is advancing in Michigan and on track for late 3Q in-service date ‒ Right-of-way clearing and compressor station work is well underway • Bluesto
Slide 17: Power & Industrial Projects continues growing industrial energy and renewables businesses
17 Power & Industrial Projects continues growing industrial energy and renewables businesses 2017 Accomplishments 2018 Growth • Incremental earnings of ~$15 million from new projects achieves one-third of the 5-year goal ‒ Completed agreement with Ford Motor Company to build, own, and operate large-
Slide 18: Summary
18 • Strong 2017 results continue track record of 9th consecutive year of exceeding original guidance • Tax reform is good for customers, accretive for shareholders ‒ Provides lower rates for customers of ~3% ‒ Increases 2018 operating EPS* guidance midpoint by $0.10, serving as new base for 5% - 7%
Slide 19: Contact us
19 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 Contact us
Slide 20: DTE Energy
oe DTE Energy
Slide 21: DTE Electric variance analysis
21 • Cooler weather Variance to normal weather – 2016: $59 – 2017: ($6) • Rates supporting infrastructure improvements to enhance customer reliability • Rate base growth (depreciation, property tax and interest) • Other is primarily reliability related spend in 2016 $622 $617($65) ($16) $37 Primary
Slide 22: Weather and DTE Electric Weather Normal Sales
22 Weather and DTE Electric Weather Normal Sales YTD 2016 YTD 2017 % change 4Q 2016 4Q 2017 % change Actuals 1,123 849 (24%) Actuals 2,010 2,273 13% Normal 803 803 0% Normal 2,185 2,190 0% Deviation from normal 40% 6% Deviation from normal (8%) 4% YTD 2016 YTD 2017 % change Actuals 5,812 5,834 0% No
Slide 23: 2017 cash flow and capital expenditures actuals
23 2016 Actual 2017 Actual Cash From Operations $2.1 $2.1 Capital Expenditures (3.4) (2.6) Free Cash Flow ($1.3) ($0.5) Asset Sales & Other - - Dividends (0.5) (0.6) Net Cash ($1.8) ($1.1) Debt Financing: Issuances $2.7 $1.5 Redemptions (0.9) (0.4) Change in Debt $1.8 $1.1 Cash Flow (billions) Capit
Slide 24: 2018 cash flow and capital expenditures guidance
24 2017 Actual 2018 Guidance Cash From Operations* $2.1 $2.0 Capital Expenditures (2.6) (3.6) Free Cash Flow ($0.5) ($1.6) Asset Sales & Other - - Dividends (0.6) (0.6) Net Cash ($1.1) ($2.2) Debt Financing: Issuances $1.5 $2.3 Redemptions (0.4) (0.1) Change in Debt $1.1 $2.2 (billions) (millions) 2
Slide 25: 2017 Energy Trading reconciliation of operating earnings to economic net income
25 2017 Energy Trading reconciliation of operating earnings* to economic net income 2017 2016 2017 Operating Earnings $25 $20 Accounting Adjustments** 15 9 Economic Net Income $40 $29 • Economic net income equals economic gross margin*** minus O&M expenses and taxes • DTE Energy management uses econ
Slide 26: Reconciliation of 2017 reported to operating earnings
26 Reconciliation of 2017 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 me
Slide 27: Reconciliation of 2016 reported to operating earnings
27 Reconciliation of 2016 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 me
Slide 28: Use of Operating Earnings Information
28 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 operation