Dte Energy Company · NYSE:DTE
Dte Energy — Investor Presentation (April 2018)
31 slides from Dte Energy's investor presentation, Apr 2, 2018
Slide 1: Business Update April 3-4, 2018
EXHIBIT 99.1 Business Update April 3-4, 2018
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: Overview, Financial Update, Long-Term Growth Update
3 • Overview • Financial Update • Long-Term Growth Update
Slide 4: Strong, stable utilities and complementary non-utility businesses
4 Natural gas transmission, storage and distribution 75% - 80% Utility Growth driven by investments aimed at improving reliability Electric generation and distribution DTE Electric DTE Gas Power & Industrial Projects (P&I) Gas Storage & Pipelines (GSP) Transport, store and gather natural gas Own and
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: Maintaining customer affordability while investing in our utilities
7 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 8: Michigan's regulatory environment continues to be constructive
8 Tier 5 Tier 4 Tier 3 Tier 2 Tier 1 2017 ranking of state utility regulatory environments* (Michigan in Tier 1) 5 States 13 States 15 States 12 States 5 States Michigan’s regulatory environment continues to be constructive Solid regulatory climate driven by ✓ Constructive and consistent regulatory
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: Delivered strong 2017 financial results, raised 2018 operating EPS guidance
10 Delivered strong 2017 financial results, raised 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 11: DTE has a track record of delivering long-term value to shareholders
11 2007 2012 2014 2017 $2.82 $3.94 $5.59 $4.60 10-YR5-YR S&P 500 Utilities DTE Energy 3-YR 40% 117% 281% 26% 87% 130% Total Shareholder Return** DTE outperforms S&P 500 utilities DTE Operating EPS* 2 2 2 DTE has a track record of delivering long-term value to its shareholders * Reconciliation of ope
Slide 12: Overview, Financial Update, Long-Term Growth Update
12 • Overview • Financial Update • Long-Term Growth Update
Slide 13: 2018 Guidance
13 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 14: Issuing $300 million of equity in 2018 while maintaining strong cash flow and balance sheet
14 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 15: 2018 cash flow and capital expenditures guidance
15 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 16: Overview, Financial Update, Long-Term Growth Update
16 • Overview • Financial Update • Long-Term Growth Update
Slide 17: Reliability investments at utilities support long-term growth
17 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 18: Gas Storage & Pipelines continues to expand its portfolio
18 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 19: Power & Industrial Projects continues growing industrial energy and renewables businesses
19 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 20: Summary
20 • 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 21: DTE Energy Investor Relations
21 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 Contact us
Slide 22: Appendix
22 Appendix
Slide 23: DTE Energy's debt maturities and credit ratings
23 DTE Energy’s debt maturities and credit ratings 2018 2019 2020 DTE Electric $0 $0 $632 DTE Gas 100 120 50 DTE Energy 0 1,375 0 Total $100 $1,495 $682 Long-term Debt Maturities Credit Ratings* DTE Electric A / Aa3 / A+ DTE Gas A / Aa3 / A DTE Energy BBB / Baa1 / BBB+ * Senior secured debt ratings
Slide 24: Transitioning portfolio to cleaner more sustainable generation
24 Transitioning portfolio to cleaner more sustainable generation by reducing CO2 emissions River Rouge Trenton Channel Belle River MonroePlanned Retiremen ts* * 2020 2030 2040 2050 Planned ad d iti o ns** * St. Clair CO2 reduction plan* 30% by ~2022 45% by 2030 75% by 2040 > 80% by 2050 ** ~3,300 M
Slide 25: DTE is committed to producing cleaner energy
25 DTE is committed to producing cleaner energy 2005 2020s 2030 2040 2050 Carbon emissions reduction goals -30% -45% -75% >-80% Over 10% of DTE Electric energy supply is from renewable energy sources Generated more than 3.6 million MWh of renewable electricity in 2017
Slide 26: DTE Electric and DTE Gas regulatory update
26 DTE GasDTE Electric • General rate case - November 2017 (U-18999) – Requested rate recovery: $85 million; 10.5% ROE – Final order by September 2018 • Rate cases 2-3 years • General rate case - April 2017 (U-18255) – Requested rate recovery: $231 million; 10.5% ROE ▪ Self implementation $125 milli
Slide 27: Expanding strategic footprint in the most prolific dry gas geology
27 Expanding strategic footprint in the most prolific dry gas geology in the country Link Lateral & Gathering Bluestone Mid-Atlantic & LNG Southeast Northeast Midwest Michigan Gathering Birdsboro Ontario Market Gulf
Slide 28: Positive trends continue with Michigan's economy
28 15.4 16.3 20.9 23.4 24.9 2014 2015 2016 2017 2018E Housing Start Ups (000s) Lowest unemployment in Michigan since 2000 7th top state for business* $412 $424 $434 $447 $458 2014 2015 2016 2017 2018E Gross State Product (billions) 7th best state to make a living in 2016*** * Source: CNBC ** Source:
Slide 29: Reconciliation of 2017 reported to operating earnings
29 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 30: Reconciliation of reported to operating earnings Full Year 2007, 2012 and 2014
30 Reconciliation of reported to operating earnings Full Year 2007, 2012 and 2014 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 t
Slide 31: Use of Operating Earnings Information
31 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