Form 8-K DTE ENERGY CO For: Oct 23 Filed by: DTE Electric Co
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________
FORM 8-K
_____________________________
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 23, 2015
Commission File Number | Exact Name of Registrant as Specified in its Charter, State of Incorporation, Address of Principal Executive Offices and Telephone Number | IRS Employer Identification No. |
1-11607 | DTE Energy Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000 | 38-3217752 |
1-2198 | DTE Electric Company (a Michigan corporation) One Energy Plaza Detroit, Michigan 48226-1279 313-235-4000 | 38-0478650 |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
DTE Energy Company (DTE Energy) is furnishing the Securities and Exchange Commission (SEC) with its earnings release issued October 23, 2015, announcing financial results for the quarter ended September 30, 2015. Copies of the earnings release and the slide presentation, including supplemental financial information, are furnished as Exhibits 99.1 and 99.2 and incorporated herein by reference. In its earnings release and the slide presentation discussed below, DTE Energy reaffirms its 2015 operating earnings guidance of $4.65-$4.91 per share and its 2016 early outlook operating earnings guidance range of $4.80-$5.05 per share.
Item 7.01. Regulation FD Disclosure.
DTE Energy is furnishing the SEC with its slide presentation issued October 23, 2015. A copy of the slide presentation is furnished as Exhibit 99.2 and incorporated herein by reference.
In its earnings release, slide presentation and this filing, DTE Energy discusses 2015 and 2016 operating earnings guidance. It is likely that certain items that impact the company's 2015 and 2016 reported results will be excluded from operating results. Reconciliations to the comparable 2015 and 2016 reported earnings guidance are not provided because it is not possible to provide a reliable forecast of specific line items. These items may fluctuate significantly from period to period and may have a significant impact on reported earnings.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 | Earnings Release of DTE Energy Company dated October 23, 2015. |
99.2 | Slide Presentation of DTE Energy Company dated October 23, 2015. |
Forward-Looking Statements:
This Form 8-K contains forward-looking statements that are subject to various assumptions, risks and uncertainties. It should be read in conjunction with the “Forward-Looking Statements” section in DTE Energy's and DTE Electric Company's (“DTE Electric”) 2014 Forms 10-K and 2015 Forms 10-Q (which sections are incorporated by reference herein), and in conjunction with other SEC reports filed by DTE Energy and DTE Electric that discuss important factors that could cause DTE Energy's and DTE Electric's actual results to differ materially. DTE Energy and DTE Electric expressly disclaim any current intention to update any forward-looking statements contained in this report as a result of new information or future events or developments.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
Date: October 23, 2015
DTE ENERGY COMPANY (Registrant) | |
/s/PETER B. OLEKSIAK Peter B. Oleksiak Senior Vice President and Chief Financial Officer | |
DTE ELECTRIC COMPANY (Registrant) | |
/s/PETER B. OLEKSIAK Peter B. Oleksiak Senior Vice President and Chief Financial Officer | |
EXHIBIT INDEX
Exhibit Number | Description |
99.1 | Earnings Release of DTE Energy Company dated October 23, 2015. |
99.2 | Slide Presentation of DTE Energy Company dated October 23, 2015. |
EXHIBIT 99.1
October 23, 2015
DTE Energy reports third quarter 2015 results
DETROIT -- DTE Energy (NYSE: DTE) today reported third quarter 2015 earnings of $265 million, or $1.47 per diluted share, compared with $156 million, or $0.88 per diluted share in 2014. Higher reported earnings in the third quarter were predominately due to a return to a more normal level of weather and storm activity at the electric utility.
Operating earnings for the third quarter 2015 were $252 million, or $1.40 per diluted share, compared with 2014 operating earnings of $181 million, or $1.02 per diluted share. Operating earnings exclude non-recurring items, certain mark-to-market adjustments and discontinued operations. Reconciliations of reported earnings to operating earnings are included at the end of this news release.
In reflecting on the third quarter, Gerry Anderson, DTE Energy’s chairman and CEO, commented, “I am really pleased with our third quarter financial results, but I am also really pleased with a number of other recent accomplishments by the company that are important to our state, as well as the communities and customers we serve.”
Anderson noted the following recent developments as examples:
• | DTE spearheaded solar initiatives in Ann Arbor Township, Romulus and Ypsilanti, Mich., during the third quarter. Combined, these initiatives will encompass the placement of approximately 9,500 solar panels. These investments help make DTE the state’s largest investor in solar and move DTE in the direction of a cleaner and more diversified energy portfolio. |
• | DTE is pleased with the progress of moving forward the NEXUS pipeline which will support the security of Michigan’s energy future and provide access to a low-cost natural gas supply for our customers and the next generation of gas-fired power plants. |
• | JD Power released its 2015 residential gas utilities customer satisfaction survey results which ranked DTE’s gas utility second overall in the Midwest Large Segment Region. This is the fifth consecutive year DTE Energy has ranked in the top quartile. The study surveyed utility customers on six factors including billing and payment, corporate citizenship, price, communications, customer service and field service. |
• | DTE is on track to spend $900 million in 2015 in support of the Pure Michigan Business Connect Program which connects DTE to Michigan-based suppliers of goods and services. DTE’s Michigan spend helps create and sustain approximately 7,500 Michigan jobs. |
• | DTE released its 2014-2015 Corporate Citizenship Report which describes DTE’s investments, environmental sustainability and the health of its communities. |
DTE reiterates operating EPS guidance for 2015
DTE Energy recently raised its 2015 operating earnings per share guidance range to $4.65 to $4.91 from $4.48 to $4.72.
“This move was driven by continued strong performance within our non-utility businesses, which provided us with the platform to increase our guidance for 2015,” said Peter Oleksiak, DTE Energy senior vice president and chief financial officer.
This earnings announcement, as well as a package of slides including supplemental information, is available at www.dteenergy.com/investors.
DTE Energy plans to conduct a conference call with the investment community hosted by Oleksiak at 9 a.m. EDT today, to discuss third quarter 2015 earnings results. Investors, the news media and the public may listen to a live internet broadcast of the call at www.dteenergy.com/investors. The telephone dial-in numbers are U.S. and Canada toll free: (888) 516-2377 or International toll: (719) 457-2715. The passcode is 963665. The internet broadcast will be archived on the company’s website. An audio replay of the call will be available from noon today to noon Friday, Nov. 6. To access the replay, dial U.S. and Canada toll free (888) 203-1112 or International toll (719) 457-0820 and enter passcode 963665.
DTE Energy is a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide. Its operating units include an electric utility serving 2.1 million customers in Southeastern Michigan and a natural gas utility serving 1.2 million customers in Michigan. The DTE Energy portfolio includes non-utility energy businesses focused on power and industrial projects, natural gas pipelines, gathering and storage, and energy marketing and trading. As one of Michigan's leading corporate citizens, DTE Energy is a force for growth and prosperity in the 450 Michigan communities it serves in a variety of ways, including philanthropy, volunteerism and economic progress. Information about DTE Energy is available at dteenergy.com, twitter.com/dte_energy and facebook.com/dteenergy.
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 measurement for external communications with analysts and investors. Internally, DTE Energy uses operating earnings to measure performance against budget and to report to the Board of Directors.
In this release, DTE Energy discusses 2015 operating earnings guidance. It is likely that certain items that impact the company's 2015 reported results will be excluded from operating results. Reconciliations to the comparable 2015 reported earnings guidance are not provided because it is not possible to provide a reliable forecast of specific line items. These items may fluctuate significantly from period to period and may have a significant impact on reported earnings.
The information contained herein is as of the date of this release. DTE Energy expressly disclaims any current intention to update any forward-looking statements contained in this release as a result of new information or future events or developments. Words such as “anticipate,” “believe,” “expect,” “projected,” “aspiration” and “goals” signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various assumptions, risks and uncertainties. This release contains forward-looking statements about DTE Energy’s financial results and estimates of future prospects, and actual results may differ materially.
Many factors may impact forward-looking statements including, but not limited to, the following: impact of regulation by the EPA, FERC, MPSC, NRC, and CFTC as well as other applicable governmental proceedings and regulations, including any associated impact on rate structures; the amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals or new legislation, including legislative amendments and retail access programs; economic conditions and population changes in our geographic area resulting in changes in demand, customer conservation and increased thefts of electricity and, for DTE Energy, natural gas; environmental issues, laws, regulations, and the increased costs of remediation and compliance, including actual and potential new federal and state requirements; health, safety, financial, environmental and regulatory risks associated with ownership and operation of nuclear facilities; changes in the cost and availability of coal and other raw materials, purchased power and natural gas; the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions; volatility in the short-term natural gas storage markets impacting third-party storage revenues related to DTE Energy; volatility in commodity markets, deviations in weather and related risks impacting the results of DTE Energy’s energy trading operations; access to capital markets and the results of other financing efforts which can be affected by credit agency ratings; instability in capital markets which could impact availability of short and long-term financing; the timing and extent of changes in interest rates; the level of borrowings; the potential for increased costs or delays in completion of significant construction projects; changes in and application of federal, state and local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings and audits; the effects of weather and other natural phenomena on operations and sales to customers, and purchases from suppliers; unplanned outages; the cost of protecting assets against, or damage due to, terrorism or cyber attacks; employee relations and the impact of collective bargaining agreements; the risk of a major safety incident at an electric distribution or generation facility and, for DTE Energy, a gas storage, transmission or generation facility; the availability, cost, coverage and terms of insurance and stability of insurance providers; cost reduction efforts and the maximization of plant and distribution system performance; the effects of competition; changes in and application of accounting standards and financial reporting regulations; changes in federal or state laws and their interpretation with respect to regulation, energy policy and other business issues; contract disputes, binding arbitration, litigation and related appeals; and the risks discussed in our public filings with the Securities and Exchange Commission. New factors emerge from time to time. We cannot predict what factors may arise or how such factors may cause our results to differ materially from those contained in any forward-looking statement. Any forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. This release should also be read in conjunction with the “Forward-Looking Statements” sections in each of DTE Energy’s and DTE Electric’s 2014 Form 10-K and 2015 Forms 10-Q (which sections are incorporated herein by reference), and in conjunction with other SEC reports filed by DTE Energy and DTE Electric.
# # #
For further information, members of the media may call:
Stephanie Beres or Scott Simons, DTE Energy, (313) 235-5555
Analysts, for further information call:
Anastasia Minor (313) 235-8466
Joyce Leslie (313) 235-3209
DTE Energy Company | |||||||||||||||
Consolidated Statements of Operations (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
(In millions, except per share amounts) | |||||||||||||||
Operating Revenues | $ | 2,598 | $ | 2,595 | $ | 7,850 | $ | 9,223 | |||||||
Operating Expenses | |||||||||||||||
Fuel, purchased power, and gas | 1,053 | 1,119 | 3,393 | 4,550 | |||||||||||
Operation and maintenance | 817 | 860 | 2,436 | 2,512 | |||||||||||
Depreciation and amortization | 196 | 293 | 625 | 855 | |||||||||||
Taxes other than income | 91 | 86 | 282 | 268 | |||||||||||
Asset (gains) losses and impairments, net | 1 | (2 | ) | 9 | (10 | ) | |||||||||
2,158 | 2,356 | 6,745 | 8,175 | ||||||||||||
Operating Income | 440 | 239 | 1,105 | 1,048 | |||||||||||
Other (Income) and Deductions | |||||||||||||||
Interest expense | 116 | 107 | 341 | 323 | |||||||||||
Interest income | (4 | ) | (2 | ) | (10 | ) | (7 | ) | |||||||
Other income | (55 | ) | (55 | ) | (155 | ) | (136 | ) | |||||||
Other expenses | 17 | 11 | 36 | 29 | |||||||||||
74 | 61 | 212 | 209 | ||||||||||||
Income Before Income Taxes | 366 | 178 | 893 | 839 | |||||||||||
Income Tax Expense | 102 | 21 | 250 | 229 | |||||||||||
Net Income | 264 | 157 | 643 | 610 | |||||||||||
Less: Net Income (Loss) Attributable to Noncontrolling Interests | (1 | ) | 1 | (4 | ) | 4 | |||||||||
Net Income Attributable to DTE Energy Company | $ | 265 | $ | 156 | $ | 647 | $ | 606 | |||||||
Basic Earnings per Common Share | |||||||||||||||
Net Income Attributable to DTE Energy Company | $ | 1.47 | $ | 0.88 | $ | 3.61 | $ | 3.42 | |||||||
Diluted Earnings per Common Share | |||||||||||||||
Net Income Attributable to DTE Energy Company | $ | 1.47 | $ | 0.88 | $ | 3.61 | $ | 3.42 | |||||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic | 179 | 177 | 179 | 177 | |||||||||||
Diluted | 180 | 177 | 179 | 177 | |||||||||||
Dividends Declared per Common Share | $ | 0.73 | $ | 0.69 | $ | 2.11 | $ | 2.00 | |||||||
DTE Energy Company | |||||||||||||||||||||||||
Segment Net Income (Unaudited) | |||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
(in Millions) | Reported Earnings | Adjustments | Operating Earnings | Reported Earnings | Adjustments | Operating Earnings | |||||||||||||||||||
DTE Electric | $ | 214 | $ | — | $ | 214 | $ | 135 | $ | — | $ | 135 | |||||||||||||
DTE Gas | (11 | ) | — | (11 | ) | (16 | ) | — | (16 | ) | |||||||||||||||
Non-utility Operations | |||||||||||||||||||||||||
Gas Storage and Pipelines | 27 | — | 27 | 20 | — | 20 | |||||||||||||||||||
Power and Industrial Projects | 32 | — | 32 | 38 | — | 38 | |||||||||||||||||||
Energy Trading | 12 | (13 | ) | A | (1 | ) | (22 | ) | 25 | A | 3 | ||||||||||||||
Total Non-utility operations | 71 | (13 | ) | 58 | 36 | 25 | 61 | ||||||||||||||||||
Corporate and Other | (9 | ) | — | (9 | ) | 1 | — | 1 | |||||||||||||||||
Net Income Attributable to DTE Energy Company | $ | 265 | $ | (13 | ) | $ | 252 | $ | 156 | $ | 25 | $ | 181 | ||||||||||||
Adjustments key | |||||||||||||||||||||||||
A) Certain mark to market adjustments | |||||||||||||||||||||||||
DTE Energy Company | |||||||||||||||||||||||||
Segment Diluted Earnings Per Share (Unaudited) | |||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Reported Earnings | Adjustments | Operating Earnings | Reported Earnings | Adjustments | Operating Earnings | ||||||||||||||||||||
DTE Electric | $ | 1.19 | $ | — | $ | 1.19 | $ | 0.76 | $ | — | $ | 0.76 | |||||||||||||
DTE Gas | (0.06 | ) | — | (0.06 | ) | (0.09 | ) | — | (0.09 | ) | |||||||||||||||
Non-utility Operations | |||||||||||||||||||||||||
Gas Storage and Pipelines | 0.15 | — | 0.15 | 0.11 | — | 0.11 | |||||||||||||||||||
Power and Industrial Projects | 0.17 | — | 0.17 | 0.21 | — | 0.21 | |||||||||||||||||||
Energy Trading | 0.07 | (0.07 | ) | A | — | (0.12 | ) | 0.14 | A | 0.02 | |||||||||||||||
Total Non-utility operations | 0.39 | (0.07 | ) | 0.32 | 0.20 | 0.14 | 0.34 | ||||||||||||||||||
Corporate and Other | (0.05 | ) | — | (0.05 | ) | 0.01 | — | 0.01 | |||||||||||||||||
Net Income Attributable to DTE Energy Company | $ | 1.47 | $ | (0.07 | ) | $ | 1.40 | $ | 0.88 | $ | 0.14 | $ | 1.02 | ||||||||||||
Adjustments key | |||||||||||||||||||||||||
A) Certain mark to market adjustments | |||||||||||||||||||||||||
DTE Energy Company | |||||||||||||||||||||||||
Segment Net Income (Unaudited) | |||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
(in Millions) | Reported Earnings | Adjustments | Operating Earnings | Reported Earnings | Adjustments | Operating Earnings | |||||||||||||||||||
DTE Electric | $ | 449 | $ | 12 | A | $ | 461 | $ | 400 | $ | — | $ | 400 | ||||||||||||
DTE Gas | 93 | — | 93 | 109 | — | 109 | |||||||||||||||||||
Non-utility Operations | |||||||||||||||||||||||||
Gas Storage and Pipelines | 79 | — | 79 | 59 | — | 59 | |||||||||||||||||||
Power and Industrial Projects | 73 | 10 | B | 83 | 66 | — | 66 | ||||||||||||||||||
Energy Trading | — | 24 | C | 14 | 6 | (5 | ) | C | 1 | ||||||||||||||||
(10 | ) | D | |||||||||||||||||||||||
Total Non-utility operations | 152 | 24 | 176 | 131 | (5 | ) | 126 | ||||||||||||||||||
Corporate and Other | (47 | ) | — | (47 | ) | (34 | ) | 8 | E | (26 | ) | ||||||||||||||
Net Income Attributable to DTE Energy Company | $ | 647 | $ | 36 | $ | 683 | $ | 606 | $ | 3 | $ | 609 | |||||||||||||
Adjustments key | |||||||||||||||||||||||||
A) 2011/2012 PSCR disallowance | |||||||||||||||||||||||||
B) Contract termination | |||||||||||||||||||||||||
C) Certain mark to market adjustments | |||||||||||||||||||||||||
D) Natural gas pipeline refund | |||||||||||||||||||||||||
E) New York state tax law change | |||||||||||||||||||||||||
DTE Energy Company | |||||||||||||||||||||||||
Segment Diluted Earnings Per Share (Unaudited) | |||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||
Reported Earnings | Adjustments | Operating Earnings | Reported Earnings | Adjustments | Operating Earnings | ||||||||||||||||||||
DTE Electric | $ | 2.51 | $ | 0.07 | A | $ | 2.58 | $ | 2.26 | $ | — | $ | 2.26 | ||||||||||||
DTE Gas | 0.52 | — | 0.52 | 0.62 | — | 0.62 | |||||||||||||||||||
Non-utility Operations | |||||||||||||||||||||||||
Gas Storage and Pipelines | 0.44 | — | 0.44 | 0.33 | — | 0.33 | |||||||||||||||||||
Power and Industrial Projects | 0.40 | 0.05 | B | 0.45 | 0.37 | — | 0.37 | ||||||||||||||||||
Energy Trading | — | 0.14 | C | 0.08 | 0.03 | (0.02 | ) | C | 0.01 | ||||||||||||||||
(0.06 | ) | D | |||||||||||||||||||||||
Total Non-utility operations | 0.84 | 0.13 | 0.97 | 0.73 | (0.02 | ) | 0.71 | ||||||||||||||||||
Corporate and Other | $ | (0.26 | ) | — | (0.26 | ) | (0.19 | ) | 0.04 | E | (0.15 | ) | |||||||||||||
Net Income Attributable to DTE Energy Company | $ | 3.61 | $ | 0.20 | $ | 3.81 | $ | 3.42 | $ | 0.02 | $ | 3.44 | |||||||||||||
Adjustments key | |||||||||||||||||||||||||
A) 2011/2012 PSCR disallowance | |||||||||||||||||||||||||
B) Contract termination | |||||||||||||||||||||||||
C) Certain mark to market adjustments | |||||||||||||||||||||||||
D) Natural gas pipeline refund | |||||||||||||||||||||||||
E) New York state tax law change | |||||||||||||||||||||||||
3rd Quarter 2015 Earnings Conference Call October 23, 2015 EXHIBIT 99.2
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: impact of regulation by the EPA, FERC, MPSC, NRC and CFTC as well as other applicable governmental proceedings and regulations, including any associated impact on rate structures; the amount and timing of cost recovery allowed as a result of regulatory proceedings, related appeals or new legislation, including legislative amendments and Retail Access programs; economic conditions and population changes in our geographic area resulting in changes in demand, customer conservation and increased thefts of electricity and, for DTE Energy, natural gas; environmental issues, laws, regulations, and the increased costs of remediation and compliance, including actual and potential new federal and state requirements; health, safety, financial, environmental and regulatory risks associated with ownership and operation of nuclear facilities; changes in the cost and availability of coal and other raw materials, purchased power and natural gas; the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions; volatility in the short-term natural gas storage markets impacting third-party storage revenues related to DTE Energy; volatility in commodity markets; deviations in weather and related risks impacting the results of DTE Energy’s energy trading operations; access to capital markets and the results of other financing efforts which can be affected by credit agency ratings; instability in capital markets which could impact availability of short and long-term financing; the timing and extent of changes in interest rates; the level of borrowings; the potential for increased costs or delays in completion of significant construction projects; changes in and application of federal, state and local tax laws and their interpretations, including the Internal Revenue Code, regulations, rulings, court proceedings and audits; the effects of weather and other natural phenomena on operations and sales to customers, and purchases from suppliers; unplanned outages; the cost of protecting assets against, or damage due to, terrorism or cyber attacks; employee relations and the impact of collective bargaining agreements; the risk of a major safety incident at an electric distribution or generation facility and, for DTE Energy, a gas storage, transmission or generation facility; the availability, cost, coverage and terms of insurance and stability of insurance providers; cost reduction efforts and the maximization of plant and distribution system performance; the effects of competition; changes in and application of accounting standards and financial reporting regulations; changes in federal or state laws and their interpretation with respect to regulation, energy policy and other business issues; contract disputes; binding arbitration, litigation and related appeals; and the risks discussed in our public filings with the Securities and Exchange Commission. New factors emerge from time to time. We cannot predict what factors may arise or how such factors may cause our results to differ materially from those contained in any forward-looking statement. Any forward-looking statements speak only as of the date on which such statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. This presentation should also be read in conjunction with the “Forward-Looking Statements” sections in each of DTE Energy’s and DTE Electric’s 2014 Forms 10-K and 2015 Forms 10-Q (which sections are incorporated herein by reference), and in conjunction with other SEC reports filed by DTE Energy and DTE Electric. 2
• 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 Participants
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 4
Our business strategy is fundamental to how we create value for our investors 5 5% - 6% Annual EPS Growth Attractive Dividend Strong Balance Sheet Utility growth plan driven by infrastructure investments Strategic and transparent growth opportunities in non-utility businesses provide diversity in earnings and geography Constructive regulatory structure and continued cost savings enable utilities to earn their authorized returns Operational excellence and customer satisfaction that are distinctive in our industry Strong BBB credit rating; grow dividends with earnings
We continue to make progress on many fronts • Michigan energy policy • 2015 utility rate proceedings • 2015 operating EPS guidance increased • 2016 operating EPS early outlook • 2015 cash and capital guidance update • Non-utility projects − Millennium update − NEXUS Pipeline update 6
Lansing leaders are working toward constructive energy policy reform 7 Senator Mike Nofs Energy and Technology Committee Chair Valerie Brader Executive Director for the Michigan Agency for Energy Representative Aric Nesbitt Energy Policy Committee Chair Governor Rick Snyder Clean 1 2 Reliable 4 Affordable 3 Flexible John Quackenbush MPSC Chair
Retail Open Access Integrated Resource Planning Regulatory Senate 8 • One-time election • Cost pre-approval process • Fair net-metering 5 year requirement Position House 3 year requirement • Capacity requirement • Venue for renewable generation and energy efficiency decisions • 10-month rate case completion • Potential revenue decoupling Current comprehensive energy legislation policy proposals address a number of key issues
Our 2015 operating EPS* guidance and 2016 early outlook midpoints provide solid growth 9 * Reconciliation to GAAP reported earnings included in the appendix (dollars per share) $3.33 $3.64 $3.75 $3.94 $4.09 $4.60 $2.12 $2.24 $2.35 $2.48 $2.62 $2.76 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Operating EPS Dividend Actuals Forecast $4.78 $4.69 5.8% increase $2.92 2015 Operating EPS Guidance Midpoint Total DTE Energy $4.78 Growth segments $4.69 $4.93 2016 Operating EPS Early Outlook Midpoint $4.93
We are reaffirming our 2015 operating EPS* guidance and 2016 early outlook (millions, except EPS) * Reconciliation to GAAP reported earnings included in the appendix ** Total DTE Energy excluding Energy Trading 2015 Guidance 2016 Early Outlook 2015 YTD 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 $554 - $570 128 - 134 95 - 100 95 - 100 (50) - (46) $822 - $858 $4.59 - $4.79 $10 - $20 $832 - $878 179 $4.65 - $4.91 $588 - $604 135 - 141 102 - 110 95 - 105 (50) - (46) $870 - $914 $4.80 - $5.05 $0 $870 - $914 181 $4.80 - $5.05 $461 93 79 83 (47) $669 $3.73 $14 $683 179 $3.81 10
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 11
12 DTE Energy Third Quarter 2015 Operating Earnings Variance 3Q 2014 3Q 2015 Change DTE Electric 135$ 214$ 79$ DTE Gas (16) (11) 5 Gas Storage & Pipelines 20 27 7 Power & Industrial Projects 38 32 (6) Corporate & Other 1 (9) (10) Growth segments** 178$ 253$ 75$ Growth segments operating EPS 1.00$ 1.40$ 0.40$ Energy Trading 3$ (1)$ (4)$ DTE Energy 181$ 252$ 71$ Operating EPS 1.02$ 1.40$ 0.38$ Avg. Shares Outstanding 177 180 Operating Earnings* * Reconciliation to GAAP reported earnings included in the appendix Drivers DTE Electric • Primarily favorable weather and rate implementation DTE Gas • Reinvest spend in 3Q 2014 and increase in IRM surcharge*** Non-Utility • Gas Storage & Pipelines driven by higher pipeline and gathering earnings • Power & Industrial Projects lower due to steel earnings Corporate & Other • Timing of taxes Energy Trading • Economic net income* not yet realized for accounting purposes (millions, except EPS) *** Infrastructure Recovery Mechanism surcharge ** Total DTE Energy excluding Energy Trading
* Reconciliation to GAAP reported earnings included in the appendix Drivers • Warmer weather in 3Q 2015 Variance to normal weather - 3Q 2014: ($33) - 3Q 2015: $4 • July 1st rate implementation • Lower 3Q 2015 storm expense and 3Q 2014 lean • Other primarily rate base growth (property taxes, depreciation and interest) Operating Earnings* Variance (millions) 13 $135 $37 $38 $19 ($15) $214 DTE Electric Variance Analysis
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 14
Cash Flow Summary YTD 2015 Cash Flow and Capital Expenditures (billions) Capital Expenditures Summary (millions) ** Includes Main Renewal / Meter Move-out / Pipeline Integrity YTD 2014 YTD 2015 Cash From Operations* $1.2 $1.5 Capital Spending (1.5) (1.7) Free Cash Flow ($0.3) ($0.2) Asset Sales & Other - $0.1 Dividends (0.3) (0.4) Net Cash ($0.6) ($0.5) Debt Financing: Issuances $1.8 $1.0 Redemptions (1.2) (0.5) Change in Debt $0.6 $0.5 YTD 2014 YTD 2015 DTE Electric Operational $845 $918 Environmental 119 106 New Generation 179 261 $1,143 $1,285 DTE Gas Operational $99 $134 Main Replacement** 53 61 $152 $195 Non-Utility $238 $219 Total $1,533 $1,699 * Includes $0 and ~$200 million of equity issued for employee benefit programs in YTD 2014 and YTD 2015, respectively 15
Cash Flow Summary We are revising our 2015 cash flow and capital expenditures guidance (billions) Capital Expenditures Summary (millions) ** Includes Main Renewal / Meter Move-out / Pipeline Integrity Prior Guidance Revised Guidance Cash From Operations* $1.7 $1.8 Capital Spending (2.6) (2.5) Free Cash Flow ($0.9) ($0.7) Asset Sales & Other $0.1 $0.1 Dividends (0.5) (0.5) Net Cash ($1.3) ($1.1) Debt Financing: Issuances $1.6 $1.4 Redemptions (0.3) (0.3) Change in Debt $1.3 $1.1 Prior Guidance Revised Guidance DTE Electric Operational $1,270 $1,270 Environmental 100 100 New Generation 450 450 $1,820 $1,820 DTE Gas Operational $200 $200 Main Replacement** 80 80 $280 $280 Non-Utility $400 - $500 $350 Total $2,500 - $2,600 $2,450 * Includes impact of ~$200 million of equity issued for employee benefit programs 16
25% 21% 2014 2015E 2016-2018E 51% 52% 2014 2015E 2016-2018E Leverage* Strong balance sheet remains a key priority and supports growth * Debt excludes securitization, a portion of DTE Gas’ short-term debt, and considers 50% of the Junior Subordinated Notes as equity Funds from Operations** / Debt* Target 50% - 53% Target 20% - 22% • Completed 2015 equity issuances of $200 million − Targeting ~$800 million of equity issuances next 3 years • DTE Gas issued $165 million of long-term debt in July 2015 • $1.8 billion of available liquidity as of September 30, 2015 • Consistently maintain strong balance sheet metrics 17 ** Funds from Operations (FFO) is calculated using operating earnings
• Overview • Third Quarter 2015 Earnings Results • Cash Flow and Balance Sheet Metrics • Summary 18
Summary * Reconciliation to GAAP reported earnings included in the appendix 19 • We are confident in this year’s performance and recently increased our 2015 operating EPS* guidance midpoint to $4.69 for our growth segments and $4.78 for DTE Energy • Constructive outcomes expected in both Michigan’s energy policy reform and DTE’s regulatory filings • Utility investments and strategic growth opportunities in our non-utility businesses expected to provide 5% - 6% annual EPS growth going forward EEI conference presentation is November 10 at 11:15 AM EST with Gerry Anderson – Chairman & CEO Webcast access: www.dteenergy.com/investors
Detroit is in the midst of a revitalization 20 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030 DTE Energy Investor Relations www.dteenergy.com/investors (313) 235-8030
Appendix
Right of way, field work, design, planning NEXUS project nearing next major milestone • 50% ownership with Spectra Energy • 1.5 Bcf/d pipeline • ~250 miles of pipe • DTE expected investment $1 billion 2014 2015 2016 2017 2018 Construction Commercial operation Contracted for pipe In-service 4Q17 EPCM* executed * Engineering, procurement, construction and project management contract FERC pre-filing FERC filing 4Q15 Completed 22
$410 $417 $426 $434 $443 2013 2014 2015E 2016E 2017E (billions) Michigan’s economy continues to improve 8.5% 7.1% 5.5% 5.4% 5.3% 2013 2014 2015E 2016E 2017E 2,439 2,244 2,371 2,444 2,434 2013 2014 2015E 2016E 2017E (000s) 15.1 15.8 17.6 19.7 21.9 2013 2014 2015E 2016E 2017E (000s) Gross State Product Auto Production Lower Unemployment Rate Housing Starts Up Source: IHS 23
Weather and DTE Electric Weather Normal Sales * Includes adjustments for temperature normalization and customer outages due to weather 24 Cooling degree days Heating degree days DTE Electric service territory DTE Gas service territory 3Q 2014 3Q 2015 % change 3Q 2014 3Q 2015 % change Actuals 408 605 48% Actuals 159 74 -53% Normal 580 580 Normal 130 134 3% Deviation from normal -30% 4% Deviation from normal 22% -45% YTD 2014 YTD 2015 % change YTD 2014 YTD 2015 % change Actuals 648 835 29% Actuals 4,916 4,564 -7% Normal 795 795 Normal 4,079 4,138 1% Deviation from normal -18% 5% Deviation from normal 21% 10% Earnings impact of weather Earnings impact of weather Variance from normal weather (millions, after-tax) Variance from normal weather (millions, after-tax) DTE Electric 3Q YTD DTE Gas 3Q YTD 2014 ($33) ($17) 2014 $1 $32 2015 $4 $12 2015 ($1) $17 YTD 2014 YTD 2015 % change Residential 11,558 11,568 0% Commercial 15,117 15,197 1% Industrial** 9,330 9,117 -2% Other 439 209 -52% TOTAL SALES*** 36,444 36,091 -1% Weather Normal Electric Sales* - DTE Electric Service Area (Includes El ctric Choice) (GWh) *** Includes 3,848 of Choice in 2014 and 3,723 in 2015 ** 2015 Industrial sales adjusted for steel resolution
DTE Energy Third Quarter 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 and storage. These contracts are not marked-to-market, instead are recognized for accounting purposes on an accrual basis; and 2) Operating Adjustments for unrealized marked-to-market changes of certain derivative contracts 3Q 2015 Economic Net Income Accounting Adjustments** 3Q 2015 Operating Earnings* $3 $14 • 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 measures to review performance against financial targets and budget * Reconciliation to GAAP reported earnings included in the appendix *** Economic gross margin is the change in net fair value of realized and unrealized purchase and sale contracts including certain non-derivative contract costs Operating Earnings* Realized Unrealized O&M / Other 3Q 2014 3Q 2015 $4 ($3) 14 11 (12) (12) (millions, after-tax) $3 ($1) 3Q 2014 Operating Earnings* 3Q 2014 Economic Net Income Accounting Adjustments** $11 ($1) $15 $14 (millions) 25
DTE Energy YTD 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 and storage. These contracts are not marked-to-market, instead are recognized for accounting purposes on an accrual basis; and 2) Operating Adjustments for unrealized marked-to-market changes of certain derivative contracts YTD 2015 Economic Net Income Accounting Adjustments** YTD 2015 Operating Earnings* $1 $36 • 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 measures to review performance against financial targets and budget * Reconciliation to GAAP reported earnings included in the appendix *** Economic gross margin is the change in net fair value of realized and unrealized purchase and sale contracts including certain non-derivative contract costs Operating Earnings* Realized Unrealized O&M / Other YTD 2014 YTD 2015 $25 $25 24 11 (35) (35) (millions, after-tax) $1 $14 YTD 2014 Operating Earnings* YTD 2014 Economic Net Income Accounting Adjustments** $35 $14 $39 $53 26 (millions)
Third Quarter 2015 and September YTD Reconciliation of Reported to Operating Earnings 27 Use of Operating Earnings Information – DTE Energy management believes that operating earnings provide a more meaningful representation of the company’s earnings from ongoing operations and uses operating earnings as the primary performance measurement for external communications with analysts and investors. Internally, DTE Energy uses operating earnings to measure performance against budget and to report to the Board of Directors. Operating earnings are presented both with and without Energy Trading. The term “Growth Segments” refers to DTE Energy without Energy Trading and represents the business segments that management expects to generate earnings growth going forward. 3Q'15 3Q'14 YTD '15 YTD '14 3Q'15 3Q'14 YTD '15 YTD '14 DTE Energy Reported Earnings 265$ 156$ 647$ 606$ 1.47$ 0.88$ 3.61$ 3.42$ DTE Electric 2011/2012 PSCR* disallowance 12 0.07 DTE Gas Gas Storage & Pipelines Power & Industrial Projects Contract termination 10 0.05 Corporate & Other NY state tax law change 8 0.04 Energy Trading Natural gas pipeline refund (10) (0.06) Certain mark to market adjustments (13) 25 24 (5) (0.07) 0.14 0.14 (0.02) DTE Energy Operating Earnings 252$ 181$ 683$ 609$ 1.40$ 1.02$ 3.81$ 3.44$ Net Income (millions) EPS * Power Supply Cost Recovery
2009 – 2014 Full Year 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 measurement for external communications with analysts and investors. Internally, DTE Energy uses operating earnings to measure performance against budget and to report to the Board of Directors. 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 DTE Energy Report Earnings 532$ 630$ 711$ 610$ 661$ 905$ 3.24$ 3.74$ 4.18$ 3.55$ 3.76$ 5.10$ DTE Electric Chrysler bad debt 4 0.02 Settlement with Detroit Thermal (3) (0.02) Fermi 1 asset retirement obligation 9 0.05 DTE Gas Performance excellence process (20) (0.12) Gas Storage & Pipelines Power & Industrial Projects Chrysler bad debt 1 0.01 General Motors bad debt 3 0.02 Coke oven gas settlement 7 0.04 Chicago Fuels terminal sale 2 0.01 Pet coke mill impairment 1 0.01 Asset impairment 4 0.02 Energy Trading Certain mark-to-market transactions 55 (102) 0.31 (0.57) Corporate & Other Antrim hedge 3 0.01 Michigan corporate income tax adj. (87) (0.50) I t ent impairment 5 0.03 NY state tax law change 8 0.04 Unconventional Gas Discontinued operations 6 8 3 56 0.03 0.04 0.02 0.33 DTE Energy Operating Earnings 549$ 615$ 636$ 676$ 720$ 816$ 3.33$ 3.64$ 3.75$ 3.94$ 4.09$ 4.60$ Net Income (millions) EPS 28
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 measurement for external communications with analysts and investors. Internally, DTE Energy uses operating earnings to measure performance against budget and to report to the Board of Directors. In this presentation, DTE Energy provides guidance for future period operating earnings. It is likely that certain items that impact the company’s future period reported results will be excluded from operating results. A reconciliation to the comparable future period reported earnings is not provided because it is not possible to provide a reliable forecast of specific line items. These items may fluctuate significantly from period to period and may have a significant impact on reported earnings. For comparative purposes, 2009 through 2012 operating earnings exclude the Unconventional Gas Production segment that was classified as a discontinued operation on 12/31/2012. Reconciliation of Other Reported to Operating Earnings 29