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 EXHIBIT 99.2
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
• Gerry Anderson – Chairman and CEO • Jerry Norcia – President and COO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Investor Relations Director Participants 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 guidance
* Reconciliation of operating EPS (non-GAAP) to reported earnings included in the appendix 2017 has started strong and we are confident in achieving our operating EPS* guidance 5 • On track to achieve 2017 operating EPS guidance range of $5.15 to $5.46 ‒ Faced largest storm in company’s 100+ year hi
Slide 6: Largest weather event in our history: safe and efficient restoration
During the largest weather event in our history, we executed a safe and efficient restoration effort 6 The weather event impacted 800,000 (nearly 40%) of our electric customers and affected every county in our service territory • Deployed over 3,000 linemen and support crews • Smart meter technology
Slide 7: Long-Term Growth Update
• Overview • Long-Term Growth Update • 1st Quarter 2017 Financial Update and Summary 7
Slide 8: GSP continues to make progress across its portfolio
• NEXUS Pipeline ‒ Targeting year-end 2017 in-service date with second quarter FERC certificate ‒ Earnings not affected by in-service date • Millennium Pipeline ‒ Expansion received favorable FERC environmental assessment 0.2 Bcf/d of firm transportation service In-service 2H 2018 • Link* Latera
Slide 9: P&I expanding portfolio with landfill gas and CHP projects
• Acquisition of existing landfill gas plant ‒ Closed April 24, 2017 • Construction of new landfill gas plant ‒ Permitting and right-of-way complete ‒ Expect to begin operations 1H 2018 • Construction of combined heat and power (CHP) plant ‒ Expect approval mid-2017 ‒ In-service 2H 2019 • Projects c
Slide 10: 1st Quarter 2017 Financial Update and Summary
• Overview • Long-Term Growth Update • 1st Quarter 2017 Financial Update and Summary 10
Slide 11: 1Q 2017 Operating Earnings by Segment
1Q 2016 1Q 2017 Change DTE Electric 127$ 106$ (21)$ DTE Gas 87 107 20 Gas Storage & Pipelines 30 45 15 Power & Industrial Projects 21 30 9 Corporate & Other (7) 16 23 Growth segments** 258$ 304$ 46$ Growth segments operating EPS 1.43$ 1.70$ 0.27$ Energy Trading 16$ 18$ 2$ DTE Energy 274$ 322$ 48$ Op
Slide 12: 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 • On track
Slide 13: Contact Us
DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 Contact Us
Slide 14: Appendix
a DTE Energy
Slide 15: DTE Electric Variance Analysis
• Warmer weather Variance to normal weather – 2016: ($8) – 2017: ($13) • O&M primarily planned outage projects and timing $127 $106 ($5) ($6) ($15) ($23) Primary Drivers Operating Earnings* Variance (millions) 1Q 2016 Operating Earnings 1Q 2017 Operating Earnings Weather Storm Rate Implementation O&
Slide 16: Cash Flow and Capital Expenditures
1Q 2016 1Q 2017 DTE Electric Distribution Infrastructure $111 $156 New Generation 13 9 Replacement & Other 191 243 $315 $408 DTE Gas Base Infrastructure $58 $75 NEXUS Related 2 22 Main Replacement 19 28 $79 $125 Non-Utility $57 $134 Total $451 $667 1Q 2016 1Q 2017 Cash From Operations $0.7 $0.8 Capi
Slide 17: Weather and DTE Electric Weather Normal Sales
Cooling degree days ** Includes choice of 1,164 1Q 2016 and 1,204 1Q 2017 Heating degree days Earnings impact of weather Earnings impact of weather Weather Normal Electric Sales* DTE Electric service territory Variance from normal weather (GWh) Variance from normal weather 1Q 2016 1Q 2017 % change A
Slide 18: Regulatory Update – Electric and Gas
DTE Gas DTE Electric • Expect rate case filing in 1-2 years • 4Q 2016 order – $122 million – 10.1% ROE • Annual rate cases 2018+ • 1Q 2017 order – $184 million – 10.1% ROE • Filed rate case April 19, 2017 – Requested rate recovery: $231 million – Test year: November 1, 2017 to October 31, 2018 – Sel
Slide 19: 2017 Guidance
2017 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 $610 - $624 143 - 151 140 - 150 90 - 100 (64) - (60) $919 - $965 $5.12 - $5.38 $5
Slide 20: 2017 Guidance: Capex and Cash Flow
2017 Guidance DTE Electric Distribution Infrastructure $690 New Generation 45 Replacement & Other 725 $1,460 DTE Gas Base Infrastructure $200 NEXUS Related 90 Main Replacement 145 $435 Non-Utility $900 - $1,100 Total $2,795 - $2,995 2017 Guidance Cash From Operations $1.9 Capital Expenditures (3.0)
Slide 21: Cash flow and balance sheet remain strong
21% 2016 2017-2019E 51% 2016 2017-2019E Leverage* Funds from Operations** / Debt* Target 50% - 53% Target 20% + * Debt excludes a portion of DTE Gas’ short-term debt and considers 50% of the junior subordinated notes and 100% of the convertible equity units as equity ** Funds from Operations (FFO) i
Slide 22: Energy Trading Operating Earnings
$16 $18 • Economic net income equals economic gross margin*** minus O&M expenses and taxes • DTE Energy management uses economic net income as one of the performance measures for external communications with analysts and investors • Internally, DTE Energy uses economic net income as one of the measu
Slide 23: 1st Quarter 2017 Reconciliation of Reported to Operating Earnings
1Q 2017 Net Income (millions)* After-tax items: DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth Segments Energy Trading DTE Energy Reported Earnings $106 $107 $45 $30 $16 $304 $96 $400 Certain mark-to- market transactions – – – – – – (78) (78) Operat
Slide 24: 1st Quarter 2016 Reconciliation of Reported to Operating Earnings
1Q 2016 Net Income (millions)* After-tax items: DTE Electric DTE Gas Gas Storage & Pipelines Power & Industrial Projects Corporate & Other Growth Segments Energy Trading DTE Energy Reported Earnings $127 $87 $30 $17 ($7) $254 ($7) $247 Plant closure – – – 4 – 4 – 4 Certain mark-to- market transactio
Slide 25: Use of Operating Earnings Information
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 operations a