DTE Energy Company · NYSE:DTE
DTE Energy — Q1 2009 Earnings Presentation
32 slides from DTE Energy's earnings presentation, Apr 30, 2009
Slide 1: Business and Financial Update
Business and Financial Update April 30, 2009
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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: access to capital markets and capital market conditions and the results of other financing efforts which can
Slide 3: Participants
Participants • Dave Meador, Executive Vice President and CFO • Peter Oleksiak, Vice President and Controller • Nick Khouri, Vice President and Treasurer • Lisa Muschong, Director of Investor Relations 3
Slide 4: Agenda: Overview, Q1 2009 Earnings, Cash Flow and Capex, Summary
• Overview • 1st Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 4
Slide 5: DTE Energy: A Focused, Integrated Energy Strategy
DTE Energy: A Focused, Integrated Energy Strategy • Achieve strong results in a challenging economic environment • Michigan legislation provides key new tools for DTE Energy • Two new utility growth platforms – RPS and EO – have dedicated funding mechanisms • 2009 plans are based on realistic assump
Slide 6: Q1 2009 Overview
Q1 2009 Overview Q1 2009 Results Balance Sheet / Liquidity • DTE Energy Q1 2009 operating • Generated ~$500 million of free cash earnings* per share of $1.10 vs. $0.77 flow in Q1 2009 in Q1 2008 • Successfully closed $1 billion credit • Positive results at our utilities driven facility; upsized from
Slide 7: 2009 Plan Remains on Track
2009 Plan Remains on Track • 6% annual load loss at Detroit Edison • Automotive uncertainty • Downturn in the steel industry • Increased benefit expense • Rate increase moratorium at MichCon 2009 Operating Our Goal to Preserve our Financial Strength and EPS* Guidance Earnings Level in 2009 is on Tra
Slide 8: Auto Bankruptcy Implications
Auto Bankruptcy Implications ($ millions) Average DTE Energy Detroit Edison Sales and Margin Receivables Exposure (after-tax)* Chrysler 2% GM $15 - $20 Chrysler 1% Chrysler 6 - 12 GM 3% GM 2% Key Automotive Suppliers** 5 - 10 $26 - $42 Percent of Percent of 2008 Sales Gross Margin Power & Industrial
Slide 9: Agenda: Overview, Q1 2009 Earnings, Cash Flow and Capex, Summary
• Overview • 1st Quarter 2009 Earnings Results • Cash Flow and Capital Expenditure • Summary 9
Slide 10: 1Q 2009 Operating Earnings per Share
1Q 2009 Operating Earnings per Share* $1.10 Detroit Edison MichCon** Non-Utility Corporate & Other $0.48 $0.37 $0.34 ($0.09) Power and Unconventional Gas Midstream Energy Trading Industrial Projects Gas Production $0.09 $0.24 $0.02 ($0.01) * Reconciliation to GAAP reported earnings included in the a
Slide 11: 1Q 2009 Operating Earnings Variance
1Q 2009 Operating Earnings Variance Operating Earnings* Drivers (millions) 1Q 2008 1Q 2009 Change Detroit Edison Detroit Edison $ 41 $ 78 $ 37 • December 2008 rate order, expiration of temporary rate reduction from show cause MichCon 59 61 2 settlement and O&M cost reductions partially offset by dec
Slide 12: Detroit Edison Variance Analysis
Detroit Edison Variance Analysis Detroit Edison Operating Earnings* Variance Drivers ($ millions) $6 $78 $26 • Temperature-normalized sales volumes down 9% year-over- year • December 2008 rate order $6 $41 ($23) $11 • Expiration of temporary rate reduction from show cause $11 settlement (expired Apr
Slide 13: Detroit Edison Sales Volumes are Tracking to Plan
Detroit Edison Sales Volumes are Tracking to Plan Service Area Sales Volume Temperature Normalized (GWh) Q1 2008 Q1 2009 % Change 2008 Actual 2009 Plan Residential 3,931 3,707 -6% GWh % Change* GWh % Change* Commercial 4,362 4,413 1% Q1 13,097 2% 11,869 -9% Industrial 3,516 2,629 -25% Q2 12,660 -2%
Slide 14: MichCon Variance Analysis
MichCon Variance Analysis MichCon Operating Earnings* Variance Drivers ($ millions) $5 ($1) $61 $59 ($2) • Higher conservation Q1 2009 • O&M reductions primarily driven by continuous improvement initiatives • Increased asset base in 2009 n rn tin 08 n rn tin 09 M gi io & Ea era 20 in g Ea era 20 in
Slide 15: Agenda: Overview, Q1 2009 Earnings, Cash Flow and Capex, Summary
• Overview • 1st Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 15
Slide 16: 1Q 2009 Cash Flow
1Q 2009 Cash Flow DTE Energy Cash Flow Drivers ($ billions) Q1 2008 Q1 2009 Adjusted Cash • Free Cash Flow reached ~$500 From Operations * $1.0 $0.8 million Q1 2009 Capital Spending (0.3) (0.3) • Free Cash Flow is down from 2008 Free Cash Flow $0.7 $0.5 due to the phasing out of synfuel cash in 2008
Slide 17: 1Q 2009 Capital Expenditures
1Q 2009 Capital Expenditures DTE Energy Capital Expenditures Drivers ($ millions) Q1 2008 Q1 2009 Detroit Edison • Detroit Edison up $50 million driven by Operational $159 $230 Q1 2009 planned plant maintenance Environmental 54 33 • MichCon down $24 million driven by $213 $263 completion of storage
Slide 18: DTE Energy – Liquidity Summary
DTE Energy – Liquidity Summary Available Liquidity ($ millions) As of 3/31/09 Bank Credit Revolver * $1,900 • Closed $1 billion revolving bank credit Cash on Hand 74 facility Total Capacity $1,974 – Demand was strong with 19 banks participating – Upsized from original $900 million Credit Lines Drawn
Slide 19: Agenda: Overview, Q1 2009 Earnings, Cash Flow and Capex, Summary
• Overview • 1st Quarter 2009 Earnings Results • Cash Flow and Capital Expenditures • Summary 19
Slide 20: DTE Energy: A Focused, Integrated Energy Strategy
DTE Energy: A Focused, Integrated Energy Strategy • Constructive regulatory environment • Managing economic risk • Realistic 2009 Plan • Investment opportunities support long term growth • Well supported dividend 20
Slide 21: Contact Us
Contact Us DTE DTE Energy Energy Investor Investor Relations Relations www.dteenergy.com/investors www.dteenergy.com/investors 313-235-8030 313-235-8030 21
Slide 22: Appendix
DTE Energy: Appendix
Slide 23: Energy Trading Reconciliation of 1Q 2009 Operating Earnings to Economic Net Income
DTE Energy Trading Reconciliation of 1Q 2009 Operating Earnings* to Economic Net Income • Economic net income ($ millions) equals economic gross margin*** minus O&M Energy Trading Q1 Operating $40 $9 expenses and taxes. Earnings* • DTE Energy management uses ($ millions, after-tax) $31 Economic Net
Slide 24: Barnett Shale Operating Metrics
Barnett Shale Operating Metrics Reserves (Bcfe) Acreage Position (000’s Acres) 432 60 60 336 14 Net 167 Proven 14 Developed 144 Acres 265 Net Probable 46 46 192 Undeveloped Acres YE2007 YE2008 YE2008 3/31/09 Gross Producing Wells Net Production Rate (Mmcfe/day) 156 162 16 17 YE2008 3/31/09 24 YE2008
Slide 25: 2009 Operating Earnings Guidance
2009 Operating Earnings Guidance 2009 Operating Earnings* Guidance Assumptions (millions) 2009 Guidance Detroit Edison $355 - $385 • Goal for 2009 is to preserve our financial MichCon 70 - 80 strength and earnings level Gas Midstream 40 - 45 • 2009 plan includes a 6% electric sales reduction (~3,000
Slide 26: 2009 Capital & Cash Flow Guidance
2009 Capital & Cash Flow Guidance Capital Summary Cash Flow Summary ($ millions) ($ billions) 2008 2009 2008 2009 Actuals Guidance Actuals Guidance Detroit Edison Adjusted Cash Operational $675 $700 From Operations * $1.3 $1.3 Environmental 269 100 Capital Spending (1.5) (1.1) $944 $800 MichCon Free
Slide 27: Reconciliation of 1Q 2009 Reported to Operating Earnings
Reconciliation of 1Q 2009 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: Reconciliation of 1Q 2009 Reported to Operating Earnings per Share
Reconciliation of 1Q 2009 Reported to Operating Earnings per Share 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 perf
Slide 29: Reconciliation of 1Q 2008 Reported to Operating Earnings
Reconciliation of 1Q 2008 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 1Q 2008 Reported to Operating Earnings per Share
Reconciliation of 1Q 2008 Reported to Operating Earnings per Share 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 perf
Slide 31: Reconciliation of 2009 Reported to Operating Earnings
Reconciliation of 2009 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: Reconciliation of Cash from Operations to Adjusted Cash from Operations
Reconciliation of Cash from Operations to Adjusted Cash from Operations Use of Adjusted Cash From Operations - DTE Energy management believes that adjusted cash from operations provide a more meaningful representation of the company's cash from ongoing operations and uses adjusted cash from operatio