Dte Energy Company · NYSE:DTE
Dte Energy — Q1 2014 Earnings Presentation
37 slides from Dte Energy's earnings presentation, Apr 25, 2014
Slide 1: 1st Quarter 2014 Earnings Conference Call
1st Quarter 2014 Earnings Conference Call April 25, 2014 EXHIBIT 99.3
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 The information contained herein is as of the date of this presentation. Many factors may impact forward-looking statements including, but not limited to, the following: impact of regulation by the FERC, MPSC, NRC and other applicable governmental proceedings and regulations,
Slide 3: Participants
Participants • Peter Oleksiak – Senior Vice President and CFO • Jeff Jewell – Vice President and Controller • Mark Rolling – Vice President and Treasurer • Anastasia Minor – Executive Director, Investor Relations 3
Slide 4: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • First Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 4
Slide 5: Our business strategy is fundamental to how we create value for investors
Our business strategy is fundamental to how we create value for our investors Utility growth plan driven by infrastructure investments Strategic, transparent, low-risk growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive regulatory structure a
Slide 6: We remain committed to delivering 5% to 6% operating EPS growth
2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E 2017E 2018E $3.33 $4.09 $3.75 $3.64 $2.12 $2.24 $2.35 $2.48 $2.12 * Reconciliation to GAAP reported earnings included in the appendix We remain committed to delivering 5% to 6% operating EPS* growth (dollars) Operating EPS* 7.2% CAGR 2008-2014 Di
Slide 7: We remain confident in our 2014 operating earnings guidance
We remain confident in our 2014 operating earnings* guidance (millions, except EPS) 2014 YTD Actuals 2014 Guidance DTE Electric $136 $520 - $530 DTE Gas 129 120 - 126 Gas Storage & Pipelines 21 78 - 86 Power & Industrial Projects 15 75 - 85 Energy Trading $8 $0 Corporate & Other (9) (49) - (45) DTE
Slide 8: Michigan economic indicators highlight continued growth over the next few years
Michigan economic indicators highlight continued growth over the next few years 8 Michigan leads the country in new manufacturing job creation 7.1% 13.4% 8.8% 7.6% 7.1% 2007 2009 2013 2014E 2015E Lower Unemployment Rate Source: IHS Detroit named one of seven new entrepreneur tech hubs $368 $314 $353
Slide 9: DTE Electric's next rate case filing will be more than years after last rate order
DTE Electric’s next rate case filing will be more than 3 years after last rate order 9 2011 • Amortize revenue decoupler liability over 12 months • File case mid-2014 • Self-implement rates early 2015 2014 2015 • Suspend decoupler amortization* in 2H’14; complete balance in 1H’15 • File case late 20
Slide 10: Financial Overview
Financial Overview * Reconciliation to GAAP reported earnings included in the appendix • We are confident in achieving our 2014 operating earnings* guidance • 1Q 2014 operating earnings* per share are $1.69 vs. $1.34 in 1Q 2013 ‒ Extremely cold weather vs. normal weather last year ‒ Higher earnings
Slide 11: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • First Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 11
Slide 12: DTE Energy First Quarter 2014 Operating Earnings Per Share
DTE Energy First Quarter 2014 Operating Earnings Per Share* Gas Storage & Pipelines $0.12 Power & Industrial Projects $0.08 * Reconciliation to GAAP reported earnings included in the appendix Energy Trading $0.05 Corporate & Other ($0.06) DTE Gas $0.73 Non-Utility $0.25 DTE Electric $0.77 $1.69 12
Slide 13: DTE Energy First Quarter 2014 Operating Earnings Variance
1Q 2013 1Q 2014 Change DTE Electric 115$ 136$ 21$ DTE Gas 96 129 33 Gas Storage & Pipelines 17 21 4 Power & Industrial Projects 12 15 3 Corporate & Other (13) (9) 4 Growth segments** 227$ 292$ 65$ Growth segments operating EPS 1.30$ 1.64$ 0.34$ Energy Trading 7$ 8$ 1$ DTE Energy 234$ 300$ 66$ Operat
Slide 14: Extremely cold weather was a significant operating earnings driver at both utilities
Extremely cold weather was a significant operating earnings* driver at both utilities * Reconciliation to GAAP reported earnings included in the appendix $115 $13 (millions) $14 $136 ($6) 14 $96 $129 $28 $5 DTE Electric DTE Gas
Slide 15: The favorable 1Q weather creates contingency for potential summer weather variability
The favorable 1Q weather creates contingency for potential summer weather variability * Reconciliation to GAAP reported earnings included in the appendix 15 • Extremely cold weather this year has resulted in a strong start for the two utilities • Summer weather remains the largest source of earnings
Slide 16: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • First Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 16
Slide 17: DTE Energy First Quarter 2014 Cash Flow
1Q 2013 1Q 2014 Cash From Operations* $0.6 $0.5 Capital Spending (0.4) (0.5) Free Cash Flow $0.2 $0.0 Asset Sales - - Dividends (0.1) (0.1) Net Cash $0.1 ($0.1) Debt Financing: Issuances $0.4 $0.2 Redemptions (0.3) (0.1) Change in Debt $0.1 $0.1 DTE Energy First Quarter 2014 Cash Flow Cash Flow Summ
Slide 18: DTE Energy First Quarter 2014 Capital Expenditures
1Q 2013 1Q 2014 DTE Electric Operational $211 $308 Environmental 34 41 Renewable Energy 10 5 $255 $354 DTE Gas Operational $39 $30 Main Renewal / Meter Move Out / Pipeline Integrity 14 14 $53 $44 Non-Utility $81 $102 Total $389 $500 DTE Energy First Quarter 2014 Capital Expenditures Capital Expendit
Slide 19: Strong balance sheet remains a key priority and supports growth
2013 2014E * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Leverage* Funds from Operations / Debt* 2013 2014E 49% 52% Target 50% - 52% 23% 22% Target 20% - 22% Strong balance sheet remains a key priority and supports
Slide 20: Overview, Earnings Results, Cash Flow and Balance Sheet, Summary
• Overview • First Quarter 2014 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 20
Slide 21: Summary
• We are on track to meet our operating earnings* guidance in 2014 • Delaying next electric rate case filing to late 2014 or early 2015 • Cash flow and balance sheet metrics remain strong • Utility investments and strategic, low-risk growth opportunities in our non-utility businesses expected to pro
Slide 22: Contact Us
Contact Us DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 22
Slide 23: Appendix
mo DTE Energy: Appendix
Slide 24: DTE Electric Variance Analysis
DTE Electric Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix $115 $13 (millions) $14 $136 • Extremely cold weather in 1Q 2014; near-normal weather in 1Q 2013 Variance to normal weather - 1Q 2013: $0 - 1Q 2014: $13 • One quarter of revenue decoupler mechanism (RD
Slide 25: DTE Gas Variance Analysis
DTE Gas Variance Analysis * Reconciliation to GAAP reported earnings included in the appendix $96 (millions) • Extremely cold weather in 1Q 2014; near-normal weather in 1Q 2013 Variance to normal weather - 1Q 2013: $3 - 1Q 2014: $31 • Other primarily weather-driven higher storage and transportation
Slide 26: DTE Energy 2014 Cash Flow Guidance
2013 2014 Actual Guidance Cash From Operations* $2.2 $1.6 Capital Spending (1.9) (2.3) Free Cash Flow $0.3 ($0.7) Asset Sales - - Dividends (0.4) (0.5) Net Cash ($0.1) ($1.2) Debt Financing: Issuances $1.2 $2.1 Redemptions (1.1) (0.9) Change in Debt $0.1 $1.2 DTE Energy 2014 Cash Flow Guidance Cash
Slide 27: DTE Energy 2014 Capital Expenditure Guidance
DTE Energy 2014 Capital Expenditure Guidance 2013 2014 Actual Guidance DTE Electric Operational $999 $1,080 Environmental 165 280 Renewable Energy 161 240 $1,325 $1,600 DTE Gas Operational $132 $150 Main Renewal / Meter Move-out / Pipeline Integrity 77 90 $209 $240 $366 $490 Total $1,900 $2,330 Non-
Slide 28: DTE Energy Trading Reconciliation of Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of Operating Earnings* to Economic Net Income ** Consists of 1) the income statement effect of not recognizing changes in the fair market value of certain non-derivative contracts including physical inventory and capacity contracts for transportation, transmission a
Slide 29: 1Q 2014 Reconciliation of Reported to Operating Earnings
29 1Q 2014 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 136$ 129$ 21$ 15$ (17)$ 284$ 42$ 326$ NY state tax law change - - - - 8 8 - 8 Mark to market transactions - - - - - - (34) (34) Oper
Slide 30: 1Q 2013 Reconciliation of Reported to Operating Earnings
30 1Q 2013 DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Corporate and Other Growth Segments Energy Trading DTE Energy Reported Earnings 115$ 96$ 17$ 12$ (13)$ 227$ 7$ 234$ Operating Adjustments 1Q 2013 - - - - - - - - Operating Earnings 115$ 96$ 17$ 12$ (13)$ 227$ 7$
Slide 31: 2013 Reconciliation of Reported to Operating Earnings
2013 Reconciliation of 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 32: 2012 Reconciliation of Reported to Operating Earnings
2012 Reconciliation of Reported to Operating Earnings 2012 DTE Energy DTE Electric DTE Gas Gas Storage and Pipelines Power and Industrial Projects Energy Trading Corporate and Other Unconventional Gas Reported Earnings 610$ 483$ 115$ 61$ 42$ 12$ (47)$ (56)$ Coke oven gas settlement 7 - - - 7 - - - C
Slide 33: 2011 Reconciliation of Reported to Operating Earnings
2011 Reconciliation of Reported to Operating Earnings 2011 DTE Energy DTE Electric DTE Gas Gas Storage & Pipelines Power & Indust. Projects Energy Trading Corporate & Other Unc. Gas Prod. Reported Earnings 711$ 434$ 110$ 57$ 38$ 52$ 23$ (3)$ Michigan Corporate Income Tax Adjustment (87) - - - - - (8
Slide 34: 2010 Reconciliation of Reported to Operating Earnings
2010 Reconciliation of Reported to Operating Earnings * Deferral of previously expensed cost to achieve as allowed for in June 3, 2010 MPSC order (case - U-15985) 2010 DTE Energy DTE Electric DTE Gas Gas Storage & Pipelines Power & Indust. Projects Energy Trading Corporate & Other Unc. Gas Prod. epo
Slide 35: 2009 Reconciliation of Reported to Operating Earnings
2009 Reconciliation of Reported to Operating Earnings 2009 DTE Energy DTE Electric DTE Gas Gas Storage & Pipelines Power & Indust. Projects Energy Trading Corporate & Other Unc. Gas Prod. Reported Earnings 532$ 376$ 80$ 49$ 31$ 75$ (73)$ (6)$ Gain on Sale - gathering and treating assets (before good
Slide 36: 2008 Reconciliation of Reported to Operating Earnings
2008 Reconciliation of Reported to Operating Earnings 2008 DTE Energy DTE Electric DTE Gas Gas Storage & Pipelines Power & Indust. Projects Energy Trading Corporate & Other Unc. Gas Prod. Syn Fuel Reported Earnings 546$ 331$ 85$ 38$ 40$ 42$ (97)$ 87$ 20$ Performance Excellence Process 6 - 4 - 1 1 -
Slide 37: Reconciliation of Other Reported to Operating Earnings
Reconciliation of Other 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 meas