DTE Energy Company · NYSE:DTE
DTE Energy — Q1 2017 Earnings Presentation
25 slides from DTE Energy's earnings presentation, Apr 26, 2017
Slide 1: 1st Quarter 2017 Earnings Conference Call
Click to edit Master title style 1st Quarter 2017 Earnings Conference Call April 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
• Overview • Long-Term Growth Update • 1st Quarter 2017 Financial Update and Summary 4
Slide 5: 2017 has started strong and we are confident in achieving our operating EPS guidance
2017 has started strong and we are confident in achieving our operating EPS* guidance • On track to achieve 2017 operating EPS guidance range of $5.15 to $5.46 ‒ Faced largest storm in company’s 100+ year history ‒ Experienced third warmest 1st quarter • Filed electric rate case on April 19th • Gas
Slide 6: During the largest weather event in our history, we executed a safe and efficient restoration effort
During the largest weather event in our history, we executed a safe and efficient restoration effort (thousands) The weather event impacted Largest Number of Customer Outages Due to 800,000 (nearly 40%) of our Weather Events electric customers and affected every county in our service territory 800 •
Slide 7: Long-Term Growth Update
• Overview • Long-Term Growth Update • 1st Quarter 2017 Financial Update and Summary 7
Slide 8: GSP continues to make progress across its portfolio
GSP continues to make progress across its portfolio • Link* Lateral & Gathering ‒ Renegotiated agreement with key shipper Significantly extends contract duration Materially increases volumes • NEXUS Pipeline ‒ Targeting year-end 2017 in-service date with second quarter FERC certificate ‒ Earning
Slide 9: P&I expanding portfolio with landfill gas and combined heat and power projects
P&I expanding portfolio with landfill gas and combined heat and power projects • Acquisition of existing landfill gas plant Landfill Gas ‒ Closed April 24, 2017 Projects • Construction of new landfill gas plant ‒ Permitting and right-of-way complete ‒ Expect to begin operations 1H 2018 • Constructio
Slide 10: 1st Quarter 2017 Financial Update and Summary
• Overview • Long-Term Growth Update • 1st Quarter 2017 Financial Update and Summary 10
Slide 11: Operating Earnings Variance
Operating Earnings* Variance (millions, except EPS) Operating Earnings Primary Drivers 1Q 2016 1Q 2017 Change DTE Electric DTE Electric $ 127 $ 106 $ (21) • Warmer weather, storm expenses and higher O&M offset by rate DTE Gas 87 107 20 implementation Gas Storage & Pipelines 30 45 15 DTE Gas Power &
Slide 12: Summary
Summary • Confident we will achieve our 2017 operating EPS* guidance given our solid first quarter results • Utility growth plan driven by infrastructure investments focused on improving reliability and the customer experience • Strategic and sustainable growth in non-utility businesses continues •
Slide 13: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Slide 14: Appendix
oe DTE Energy Appendix
Slide 15: DTE Electric Variance Analysis
DTE Electric Variance Analysis (millions) Operating Earnings* Variance Primary Drivers • Warmer weather $28 ($6) $127 ($5) ($23) Variance to normal weather ($15) – 2016: ($8) $106 – 2017: ($13) • O&M primarily planned outage projects and timing 1Q 2016 Weather Storm Rate Rate O&M / 1Q 2017 Operating
Slide 16: Cash Flow and Capital Expenditures
Cash Flow and Capital Expenditures (billions) (millions) Cash Flow Capital Expenditures 1Q 2016 1Q 2017 1Q 2016 1Q 2017 Cash From Operations $0.7 $0.8 DTE Electric Distribution Infrastructure $111 $156 Capital Expenditures (0.5) (0.7) New Generation 13 9 Free Cash Flow $0.2 $0.1 Replacement & Other
Slide 17: 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 1Q 2016 1Q 2017 % change 1Q 2016 1Q 2017 % change Actuals - - Actuals 2,917 2,793 (4%) Normal - - Normal 3,321 3,263 (2%) Deviation from normal 0% 0% Deviati
Slide 18: Regulatory Update – Electric and Gas
Regulatory Update – Electric and Gas DTE Electric DTE Gas • Annual rate cases 2018+ • Expect rate case filing in 1-2 years • 1Q 2017 order • 4Q 2016 order – $184 million – $122 million – 10.1% ROE – 10.1% ROE • Filed rate case April 19, 2017 – Requested rate recovery: $231 million – Test year: Novem
Slide 19: Operating EPS guidance supports 5% - 7% growth
Operating EPS* guidance supports 5% - 7% growth (millions, except EPS) 1Q 2017 2017 Actuals Guidance DTE Electric $106 $610 - $624 DTE Gas 107 143 - 151 Gas Storage & Pipelines 45 140 - 150 Power & Industrial Projects 30 90 - 100 Corporate & Other 16 (64) - (60) Growth segments** $304 $919 - $965 Gr
Slide 20: Cash flow and capital expenditures guidance support growth target
Cash flow and capital expenditures guidance support growth target (billions) (millions) Cash Flow Capital Expenditures 2017 2017 Guidance Guidance Cash From Operations $1.9 DTE Electric Distribution Infrastructure $690 Capital Expenditures (3.0) New Generation 45 Free Cash Flow ($1.1) Replacement &
Slide 21: Cash flow and balance sheet remain strong
Cash flow and balance sheet remain strong Leverage* Target 50% - 53% • No equity issuances planned for 2017 51% ‒ Acquisition related equity of $675 million in late 2019 (through convertible equity units) 2016 2017-2019E ‒ No additional equity planned through 2019 Funds from Operations** / Debt* • $
Slide 22: 1st Quarter 2017 Energy Trading Reconciliation of Operating Earnings to Economic Net Income
1st Quarter 2017 Energy Trading Reconciliation of Operating Earnings* to Economic Net Income (millions) $18 $1 $19 • Economic net income Operating Earnings* equals economic gross (millions, after-tax) margin*** minus O&M expenses and taxes 1Q 2016 1Q 2017 • DTE Energy management uses economic net in
Slide 23: 1st Quarter 2017 Reconciliation of Reported to Operating Earnings (non-GAAP)
1st 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: 1st Quarter 2016 Reconciliation of Reported to Operating Earnings (non-GAAP)
1st 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