Dte Energy Company · NYSE:DTE
Dte Energy — FY2022 Earnings Presentation
22 slides from Dte Energy's earnings presentation, Feb 23, 2023
Slide 1: Year-end Earnings Conference Call
Year-end Earnings Conference Call February 23, 2023
Slide 2: Safe harbor statement
Safe harbor statement The information contained herein is as of the date of this document. 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 “anticipa
Slide 3: Participants
Participants Jerry Norcia – Chairman, President and CEO Dave Ruud – Senior Vice President and CFO Barbara Tuckfield – Director of Investor Relations 3
Slide 4: Fully engaged team committed to delivering best-in-class results for our customers, communities and investors
Fully engaged team committed to delivering best-in-class results for our customers, communities and investors Operating EPS guidance midpoint Best-in-class engagement, health and safety of our employees • Received Gallup Great Workplace Award for 10th consecutive year, achieving top decile employee
Slide 5: Increased customer-focused utility investment in 5-year plan supports 6% - 8% operating EPS growth through 2027
Increased customer-focused utility investment in 5-year plan supports 6% - 8% operating EPS1 growth through 2027 (billions) 5-year utility capital investment 95% of 5-year investment supports growth plan in utilities 2023 - 2027 $21.6 $18.1 $3.6 DTE Gas DTE Electric $3.1 $18 $18 DTE Electric $15 ~$2
Slide 6: DTE Electric: transformational investments in generation and distribution
DTE Electric: transformational investments in generation and distribution; signed two of the largest voluntary utility contracts in the country DTE Electric investment Significant progress on voluntary renewables in 2022 (billions) • Signed solar contracts with Ford and Stellantis; two of the larges
Slide 7: Significant progress on utility initiatives supports cleaner generation with focus on affordability
Significant progress on utility initiatives supports cleaner generation with focus on affordability • Integrated Resource Plan (IRP) filing prioritizes electric reliability with a focus on decarbonization and affordability − Outlines generation transformation to achieve carbon reduction of 85% in 20
Slide 8: DTE Gas: replacing aging infrastructure to ensure reliability and transition to net zero emissions
DTE Gas: replacing aging infrastructure to ensure reliability and transition to net zero emissions Successful 2022 DTE Gas investment • Completed 220 miles of main renewal; on track for additional 13-year (billions) investment plan $3.6 • Ranked first for residential customer satisfaction by J.D. Po
Slide 9: DTE Vantage: strategic focus on decarbonization solutions for customers
DTE Vantage: strategic focus on decarbonization solutions for customers Strong project development in 2022 and 2023 • Placed one RNG project and one custom energy solutions project in service in 2022 DTE Vantage operating earnings2 • Placing three RNG projects and one custom energy solutions project
Slide 10: 2022 operating earnings variance
2022 operating earnings1 variance (millions, except EPS) 2021 2022 Variance Primary drivers 2021 tree trim deferral, accelerated deferred tax amortization DTE Electric $864 $961 $97 in 2022 and lower O&M expenses partially offset by higher rate base costs and lower sales Rate implementation and cool
Slide 11: Implementing lean actions to ensure a successful 2023
Implementing lean actions to ensure a successful 2023 DTE’s robust planning process • Following our proven planning process to identify opportunities without impacting safety or reliability Annually create detailed 5-year plan with lean and invest strategies across the portfolio • Strong history of
Slide 12: 2023 operating EPS guidance midpoint provides 7% growth over 2022 original guidance midpoint
2023 operating EPS1 guidance midpoint provides 7% growth over 2022 original guidance midpoint (millions, except EPS) 2023 guidance Drivers / comments DTE Electric $1,010 - $1,030 Distribution and cleaner generation investments Continued main renewal and other infrastructure DTE Gas 262 - 272 improve
Slide 13: Maintaining strong cash flow, balance sheet and credit profile
Maintaining strong cash flow, balance sheet and credit profile Continued balance sheet strength… …while providing a healthy dividend • Targeting equity issuances of $0 - $100 million annually • Increased 2023 annualized dividend 7.6% to $3.81 per share through 2025 • Over 100 consecutive years of pa
Slide 14: Delivered strong results in 2022; well-positioned for long-term growth
Delivered strong results in 2022; well-positioned for long-term growth Delivering growth above Midwest pure-play utility peer average ✓ Strong operational and financial performance in 2022 ✓ 2023 operating EPS1 guidance midpoint of $6.25 provides 7% growth from 2022 original guidance midpoint ✓ Robu
Slide 15: Appendix
Appendix DTE
Slide 16: Weather impact on sales
Weather impact on sales DTE Electric DTE Gas Cooling degree days1 Heating degree days3 2021 2022 % Change % % 4Q 2021 4Q 2022 2021 2022 Change Change Actuals 1,028 980 (5%) Actuals 1,935 2,108 9% 5,845 6,422 10% Normal 875 899 3% Normal 2,191 2,177 (1%) 6,323 6,314 0% Deviation Deviation 17% 9% (12%
Slide 17: Cash flow and capital expenditures
Cash flow and capital expenditures Cash flow Capital expenditures (billions) (millions) 2022 2023 2022 2023 actuals guidance actuals guidance Cash from operations1 $2.0 $3.2 DTE Electric Capital expenditures (3.4) (4.2) Base infrastructure $1,044 $1,200 Free cash flow ($1.4) ($1.0) New generation 11
Slide 18: IRA supports cleaner energy transition and customer affordability
IRA supports cleaner energy transition and customer affordability Supports accelerated clean energy transition and customer affordability and eliminates the need for tax equity structures • Wind and solar production tax credit • Production tax credit for existing nuclear generation • Clean fuel prod
Slide 19: IRP accelerates transition to cleaner energy future while ensuring reliability
IRP accelerates transition to cleaner energy future while ensuring reliability First 5 years (2023 - 2027) Generation mix1 • Retire one unit at Belle River in 2025 and remaining unit in 2026 (MWh %) — Convert Belle River to 1,300 MW natural gas peaking 3% 3% 3% 5% 6% 6% resource in 2025 - 2026 2% 1%
Slide 20: 2021 and 2022 reconciliation of reported to operating earnings (non-GAAP) and operating EPS
2021 and 2022 reconciliation of reported to operating earnings (non-GAAP) and operating EPS (non-GAAP) (Earnings per share2) Adjustments key on following slide 1. Excluding tax related adjustments, the amount of income taxes was calculated based on a combined federal and state income tax rate, consi
Slide 21: 2021 and 2022 reconciliation of reported to operating earnings (non-GAAP) and operating EPS
2021 and 2022 reconciliation of reported to operating earnings (non-GAAP) and operating EPS (non-GAAP) Adjustments key A. MPSC disallowance of certain capital project costs previously recorded — recorded in Operating Expenses — Asset (gains) losses and impairments, net B. (Gain) loss on sale of asse
Slide 22: Reconciliation of reported to operating earnings (non-GAAP) Definition of net zero
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 meaningful representati