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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): July 24, 2019


Commission File Number: 1-11607
DTE Energy Company
Michigan
 
38-3217752
(State or other jurisdiction of incorporation or organization)
 
(I.R.S Employer Identification No.)
Commission File Number: 1-2198
DTE Electric Company
Michigan
 
38-0478650
(State or other jurisdiction of incorporation or organization)
 
(I.R.S Employer Identification No.)
Registrants address of principal executive offices: One Energy Plaza, Detroit, Michigan 48226-1279
Registrants telephone number, including area code: (313) 235-4000


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:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
 
Trading Symbol(s)
 
Name of Exchange on which Registered
Common stock, without par value
 
DTE
 
New York Stock Exchange
 
 
 
 
 
2012 Series C 5.25% Junior Subordinated Debentures due 2062
 
DTQ
 
New York Stock Exchange
 
 
 
 
 
2016 Series B 5.375% Junior Subordinated Debentures due 2076
 
DTJ
 
New York Stock Exchange
 
 
 
 
 
2016 Series F 6.00% Junior Subordinated Debentures due 2076
 
DTY
 
New York Stock Exchange
 
 
 
 
 
2017 Series E 5.25% Junior Subordinated Debentures due 2077
 
DTW
 
New York Stock Exchange
 
 
 
 
 
6.50% Corporate Units
 
DTV
 
New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




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 July 24, 2019, announcing financial results for the quarter ended June 30, 2019. A copy 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 increased its 2019 operating earnings guidance range from $5.97-$6.33 to $6.02-$6.38 per share.

Item 7.01. Regulation FD Disclosure.

DTE Energy is furnishing the SEC with its slide presentation issued July 24, 2019. 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 2019 operating earnings guidance. It is likely that certain items that impact the company's 2019 reported results will be excluded from operating results. Reconciliations to the comparable 2019 reported earnings guidance are not provided because it is not possible to provide a reliable forecast of specific line items (i.e. future non-recurring items, certain mark-to-market adjustments and discontinued operations). 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 July 24, 2019.

99.2 Slide Presentation of DTE Energy Company dated July 24, 2019.

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) 2018 Form 10-K and 2019 Form 10-Qs (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: July 24, 2019
 
 
 
 
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 99.1


DTE Energy reports strong second quarter 2019 results, raises guidance
•
Earned AGA Safety Achievement Award
•
Recognized as top corporate citizen in Michigan
•
Continued support of Michigan businesses
 
DETROIT, July 24, 2019 - DTE Energy (NYSE:DTE) today reported second quarter 2019 earnings of $182 million, or $0.99 per diluted share, compared with $234 million, or $1.29 per diluted share in 2018.
 
Operating earnings for the second quarter 2019 were $183 million, or $0.99 per diluted share, compared with 2018 operating earnings of $247 million, or $1.36 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.  

“The company’s second quarter performance builds on the success of the first quarter, resulting in a strong first half of 2019. We are ahead of plan and are entering the second half of the year in good shape,” said Jerry Norcia, DTE Energy president and CEO. Norcia also noted the following recent company accomplishments: 

•
Earned AGA Safety Achievement Award: Received third American Gas Association Safety Achievement Award for excellence in employee safety. The award, based on safety results in 2018, recognizes companies that have the lowest number of employee injuries and illnesses.

•
Ranked as one of the country's top corporate citizens by Points of Light:  Only Michigan company named to the Civic 50 - the top 50 companies nationwide in corporate citizenship - by Points of Light, the world's largest organization dedicated to volunteer service. DTE was also recognized as the leading energy company nationally.

•
Continued support of Michigan businesses: Spent over $1 billion with Michigan-based companies in the first half of this year, executing its commitment to the Pure Michigan Business Connect local supplier initiative. This includes $480 million spent in the city of Detroit.

•
Earned EEI Emergency Assistance Award: Edison Electric Institute presented DTE Energy with the Emergency Assistance Award for its outstanding power restoration efforts for a neighboring utility after an ice storm hit the west side of Michigan in February. 

•
Ranked as a best employer nationally: Ranked on Indeed’s list of Top Employers in 2019 and was named one of Forbes’ Best Employers in Michigan. 

•
Launched Charging Forward program: Launched plans to bring electric vehicles to more Michigan residents and businesses through its new Charging Forward program which includes incentives, customer education and charging infrastructure growth.

 
Outlook for 2019 
 
DTE Energy increases 2019 operating EPS guidance from $5.97 - $6.33 to $6.02 - $6.38.
 
“The solid financial results we have achieved during the first half of the year give us confidence in increasing our 2019 earnings guidance. While last year’s second quarter operating earnings were boosted by record setting temperatures, we are on track to realize our financial and operational goals for this year,” said Peter Oleksiak, DTE Energy senior vice president and CFO.





This earnings announcement and presentation slides are available at dteenergy.com/investors. 
 
The company will conduct a conference call to discuss earnings results at 9 a.m. ET. Investors, the news media and the public may listen to a live internet broadcast of the call at dteenergy.com/investors. The telephone dial-in numbers in the U.S. and Canada are toll free: (800) 458-4121 or international: (323) 794-2093. The passcode is 5739101. The webcast will be archived on the DTE website at dteenergy.com/investors. An audio replay of the call will be available from noon today to noon Wednesday, August 7, 2019. To access the replay, dial U.S. and Canada toll free (888) 203-1112 or international toll (719) 457-0820 and enter the passcode 5739101. 
 

About DTE Energy 
DTE Energy (NYSE: DTE) 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 company serving 2.2 million customers in Southeastern Michigan and a natural gas company serving 1.3 million customers in Michigan. The DTE portfolio includes energy businesses focused on natural gas pipelines, gathering and storage, power and industrial projects, renewable natural gas, and energy marketing and trading. As an environmental leader, DTE will reduce carbon dioxide and methane emissions by more than 80 percent by 2040 to produce cleaner energy while keeping it safe, reliable and affordable. DTE is committed to being a force for good in the communities where it serves through volunteerism, education and employment initiatives, philanthropy and economic progress. Information about DTE is available at dteenergy.com, empoweringmichigan.com, twitter.com/DTE_Energy and facebook.com.

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 2019 operating earnings guidance. It is likely that certain items that impact the company's 2019 reported results will be excluded from operating results. Reconciliations to the comparable 2019 reported earnings guidance are not provided because it is not possible to provide a reliable forecast of specific line items (i.e. future non-recurring items, certain mark-to-market adjustments and discontinued operations). 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,” “may,” “could,” “projected,” “aspiration,” “plans” 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 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 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 the our geographic area resulting in changes in demand, customer conservation, and thefts of electricity and, for DTE Energy, natural gas; the operational failure of electric or gas distribution systems or infrastructure; impact of volatility of prices in the oil and gas markets on DTE Energy's gas storage and pipelines operations; impact of volatility in prices in the international steel markets on DTE Energy's power and industrial projects operations; the risk of a major safety incident; environmental issues, laws, regulations, and the increasing costs of remediation and compliance, including actual and potential new federal and state requirements; the cost of protecting assets against, or damage due to, cyber incidents and terrorism; health, safety, financial, environmental, and regulatory risks associated with ownership and operation of nuclear facilities; 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; changes in the cost and availability of coal and other raw materials, purchased power, and natural gas; advances in technology that produce power, store power or reduce power consumption; changes in the financial condition of significant customers and strategic partners; the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions; 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 capital 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; employee relations and the impact of collective bargaining agreements; 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 the Registrants' public filings with the Securities and Exchange Commission.

For further information, members of the media may call:
Pete Ternes, DTE Energy, 313.235.5555                 

For further information, analysts may call:
Barbara Tuckfield, DTE Energy, 313.235.1018
John Dermody, DTE Energy, 313.235.8750











DTE Energy Company
Segment Net Income (Unaudited)
 
 
 
Three Months Ended June 30,
 
2019
 
2018
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
(In millions)
DTE Electric
$
133

 
$
(11
)
A
 
$
3

 
 
$
134

 
$
163

 
$
—


 
$
—


 
$
163

 
 
 
13

B
 
(4
)
 
 
 
 
 
 
—


 
—


 
 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
DTE Gas
8

 
(6
)
A
 
2

 
 
4

 
14

 
—


 
—


 
14

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Non-utility operations
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Gas Storage and Pipelines
50

 
—


 
—

 
 
50

 
60

 
—


 
—


 
60

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Power and Industrial Projects
29

 
—


 
—

 
 
29

 
43

 
—


 
—


 
43

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Energy Trading
(6
)
 
5

C
 
(1
)
 
 
(2
)
 
(5
)
 
17

C
 
(4
)

 
8

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Total Non-utility operations
73

 
5


 
(1
)
 
 
77

 
98

 
17


 
(4
)

 
111

 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Corporate and Other
(32
)
 
—


 
—


 
(32
)
 
(41
)
 
—


 
—


 
(41
)
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 

 
 
Net Income Attributable to DTE Energy Company
$
182

 
$
1


 
$
—

 
 
$
183

 
$
234

 
$
17


 
$
(4
)

 
$
247

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
* Excluding tax related adjustments, the amount of income taxes was calculated using a combined federal and state income tax rate of 26% for the three months ended June 30, 2019 and 27% for the three months ended June 30, 2018.
 
Adjustments key
A) MPSC approval of the deferral for the new customer billing system post-implementation expenses — recorded in Operating Expenses — Operation and maintenance
B) MPSC disallowance of power plant capital expenses — recorded in Operating Expenses — Asset (gains) losses and impairments, net
C) Certain adjustments resulting from derivatives being marked-to-market without revaluing the underlying non-derivative contracts and assets — recorded in Operating Expenses — Fuel, purchased power, and gas — non-utility
 






DTE Energy Company
Segment Diluted Earnings Per Share (Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
2019
 
2018
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
(In millions)
DTE Electric
$
0.72

 
$
(0.06
)
A
 
$
0.02

 
 
$
0.73

 
$
0.90

 
$
—

 
 
$
—


 
$
0.90

 
 
 
0.07

B
 
(0.02
)
 
 
 
 
 
 
—


 
—

 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DTE Gas
0.04

 
(0.03
)
A
 
0.01

 
 
0.02

 
0.08

 
—

 
 
—


 
0.08

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-utility operations
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gas Storage and Pipelines
0.27

 
—


 
—

 
 
0.27

 
0.33

 
—

 
 
—

 
 
0.33

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Power and Industrial Projects
0.16

 
—


 
—

 
 
0.16

 
0.24

 
—


 
—


 
0.24

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Energy Trading
(0.04
)
 
0.02

C
 
(0.01
)
 
 
(0.03
)
 
(0.03
)
 
0.09

C
 
(0.02
)
 
 
0.04

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Non-utility operations
0.39

 
0.02


 
(0.01
)
 
 
0.40

 
0.54

 
0.09

 
 
(0.02
)
 
 
0.61

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate and Other
(0.16
)
 
—


 
—


 
(0.16
)
 
(0.23
)
 
—

 
 
—


 
(0.23
)
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to DTE Energy Company
$
0.99

 
$
—


 
$
—

 
 
$
0.99

 
$
1.29

 
$
0.09

 
 
$
(0.02
)
 
 
$
1.36

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Excluding tax related adjustments, the amount of income taxes was calculated using a combined federal and state income tax rate of 26% for the three months ended June 30, 2019 and 27% for the three months ended June 30, 2018.
 
(1) Per share amounts for the adjustments are based on the after-tax effect for each item, divided by the diluted weighted average common shares outstanding, as noted on the Consolidated Statements of Operations (Unaudited)
 
 
 
 
 
 
 
Adjustments key — see previous page
 
 
 
 
 
 





DTE Energy Company
Segment Net Income (Unaudited)
 
 
 
Six Months Ended June 30,
 
2019
 
2018
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
(In millions)
DTE Electric
$
280

 
$
(11
)
A
 
$
3


 
$
281

 
$
303

 
$
—


 
$
8

D
 
$
305

 
 
 
13

B
 
(4
)

 
 
 
 
 
2

E
 
(1
)

 
 
 
 
 
—


 
—


 
 
 
 
 
(9
)
F
 
2


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
DTE Gas
159

 
(6
)
A
 
2


 
155

 
118

 
—


 
8

D
 
125

 
 
 
—


 
—


 
 
 
 
 
1

E
 
—


 
 
 
 
 
—


 
—


 
 
 
 
 
(3
)
F
 
1


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Non-utility operations
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Gas Storage and Pipelines
98

 
—


 
—


 
98

 
122

 
—


 
—


 
122

 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Power and Industrial Projects
55

 
—


 
—


 
55

 
88

 
(4
)
F
 
1


 
85

 
 
 
—


 
—


 
 
 
 
 
—


 
—


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Energy Trading
26

 
(31
)
C
 
8


 
3

 
26

 
(23
)
C
 
6


 
9

 
 
 
 

 
 

 
 
 
 
 
—


 
—


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Total Non-utility operations
179

 
(31
)

 
8


 
156

 
236

 
(27
)

 
7


 
216

 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Corporate and Other
(35
)
 
—


 
—


 
(35
)
 
(62
)
 
—


 
5

D
 
(57
)
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Net Income Attributable to DTE Energy Company
$
583

 
$
(35
)

 
$
9


 
$
557

 
$
595

 
$
(36
)

 
$
30


 
$
589

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Excluding tax related adjustments, the amount of income taxes was calculated using a combined federal and state income tax rate of 26% for the six months ended June 30, 2019 and 27% for the six months ended June 30, 2018.
 
Adjustments key
A) MPSC approval of the deferral for the new customer billing system post-implementation expenses — recorded in Operating Expenses — Operation and maintenance
B) MPSC disallowance of power plant capital expenses — recorded in Operating Expenses — Asset (gains) losses and impairments, net
C) Certain adjustments resulting from derivatives being marked-to-market without revaluing the underlying non-derivative contracts and assets — recorded in Operating Expenses — Fuel, purchased power, and gas — non-utility
D) True-up of remeasurement of deferred taxes as a result of the enactment of the Tax Cuts and Jobs Act of 2017 — recorded in Income Tax Expense
E) Implementation costs related to a new customer billing system, net of authorized regulatory deferral — recorded in Operating Expenses — Operation and maintenance
F) One-time benefits expense reimbursement — recorded in Operating Expenses — Operation and maintenance






DTE Energy Company
Segment Diluted Earnings Per Share (Unaudited)
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
2019
 
2018
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
Reported
Earnings
 
Pre-tax Adjustments
 
Income
Taxes*
 
Operating
Earnings
 
(In millions)
DTE Electric
$
1.53

 
$
(0.06
)
A
 
$
0.02


 
$
1.54

 
$
1.68

 
$
—


 
$
0.04

D
 
$
1.69

 
 
 
0.07

B
 
(0.02
)

 
 
 
 
 
0.02

E
 
(0.01
)

 
 
 
 
 
—


 
—


 
 
 
 
 
(0.05
)
F
 
0.01


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
DTE Gas
0.87

 
(0.03
)
A
 
0.01


 
0.85

 
0.65

 
—


 
0.04

D
 
0.69

 
 
 
—


 
—


 
 
 
 
 
0.01

E
 
—


 
 
 
 
 
—


 
—


 
 
 
 
 
(0.02
)
F
 
0.01


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Non-utility operations
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Gas Storage and Pipelines
0.53

 
—


 
—


 
0.53

 
0.68

 
—


 
—


 
0.68

 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Power and Industrial Projects
0.30

 
—


 
—


 
0.30

 
0.49

 
(0.02
)
F
 
—


 
0.47

 
 
 
—


 
—


 
 
 
 
 
—


 
—


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Energy Trading
0.14

 
(0.17
)
C
 
0.04


 
0.01

 
0.14

 
(0.13
)
C
 
0.04


 
0.05

 
 
 
 

 
 

 
 
 
 
 
—


 
—


 
 
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Total Non-utility operations
0.97

 
(0.17
)

 
0.04


 
0.84

 
1.31

 
(0.15
)

 
0.04


 
1.20

 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Corporate and Other
(0.19
)
 
—


 
—


 
(0.19
)
 
(0.35
)
 
—


 
0.03

D
 
(0.32
)
 
 
 
 

 
 

 
 
 
 
 
 

 
 

 
 
Net Income Attributable to DTE Energy Company
$
3.18

 
$
(0.19
)

 
$
0.05


 
$
3.04

 
$
3.29

 
$
(0.19
)

 
$
0.16


 
$
3.26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Excluding tax related adjustments, the amount of income taxes was calculated using a combined federal and state income tax rate of 26% for the six months ended June 30, 2019 and 27% for the six months ended June 30, 2018.
 
(1) Per share amounts for the adjustments are based on the after-tax effect for each item, divided by the diluted weighted average common shares outstanding, as noted on the Consolidated Statements of Operations (Unaudited)
 
 
 
 
 
 
 
Adjustments key — see previous page
 
 
 
 
 
 



EXHIBIT 99.2 2Q 2019 Earnings Conference Call July 24, 2019

 
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 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 thefts of electricity and, for DTE Energy, natural gas; the operational failure of electric or gas distribution systems or infrastructure; impact of volatility of prices in the oil and gas markets on DTE Energy's gas storage and pipelines operations; impact of volatility in prices in the international steel markets on DTE Energy's power and industrial projects operations; the risk of a major safety incident; environmental issues, laws, regulations, and the increasing costs of remediation and compliance, including actual and potential new federal and state requirements; the cost of protecting assets against, or damage due to, cyber incidents and terrorism; health, safety, financial, environmental, and regulatory risks associated with ownership and operation of nuclear facilities; 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; changes in the cost and availability of coal and other raw materials, purchased power, and natural gas; advances in technology that produce power, store power, or reduce power consumption; changes in the financial condition of significant customers and strategic partners; the potential for losses on investments, including nuclear decommissioning and benefit plan assets and the related increases in future expense and contributions; 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 capital 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; employee relations and the impact of collective bargaining agreements; 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 the Registrants' public filings with the Securities and Exchange Commission. 2

 
Participants • Gerry Anderson – Executive Chairman • Jerry Norcia – President and CEO • Peter Oleksiak – Senior Vice President and CFO • Barbara Tuckfield – Director, Investor Relations 3

 
Increasing 2019 operating EPS* guidance due to a strong start to the year • Raising 2019 operating EPS guidance range to $6.02 – $6.38 • Targeting 5% – 7% operating EPS growth from 2019 original guidance through 2023 • Business update ‒ DTE Electric: implementing Charging Forward program for electric vehicles ‒ DTE Gas: progressing on reliability projects ‒ Gas Storage & Pipelines: acquired additional 30% of Link-SGG ‒ Power & Industrial: announcing new industrial energy services projects 4 * Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix

 
Reliability investments at utilities support growth plan and increase customer satisfaction DTE Electric • Progressing on regulatory front ‒ Filed rate case in July ‒ Received constructive order on renewable energy plan • Launched Charging Forward program to promote electric vehicle education, infrastructure and adoption • Upgrading Ludington Hydroelectric Plant • Advancing on Blue Water Energy Center DTE Gas • Progressing on accelerated main renewal program • Planning additional transmission renewal improvements 5

 
Strategic non-utility opportunities support strong future growth Gas Storage & Pipelines • Acquired an additional 30% of Link-SGG, increasing ownership from 55% to 85% • Acquiring Generation Pipeline, a supplier of natural gas to power and industrial customers in Ohio ‒ Closing 2H 2019 • Progressing on Link expansion Power & Industrial Projects • Finalizing three industrial energy services projects ‒ Development of strategic cogeneration project in Ontario ‒ Purchasing CHP plant to serve a commercial customer ‒ Developing on-site utility plant in Michigan • Finalized two greenfield RNG projects in Wisconsin 6

 
2Q 2019 operating earnings* variance (millions, except EPS) 2Q 2018 2Q 2019 Change Primary Drivers Weather and rate base growth costs offset by DTE Electric $ 163 $ 134 $ (29) new rates A timing item in 2018, weather and rate base DTE Gas 14 4 (10) growth costs offset by new rates Transition from AFUDC earnings at NEXUS and Gas Storage & Pipelines 60 50 (10) return to normal volumes across other platforms Power & Industrial Projects 43 29 (14) REF tax equity transactions in 4Q 2018 Lower gas portfolio earnings and timing of Energy Trading 8 (2) (10) realization of economic earnings Corporate & Other (41) (32) 9 Timing of taxes DTE Energy $ 247 $ 183 $ (64) Operating EPS $ 1.36 $ 0.99 $ (0.37) Avg. Shares Outstanding 181 184 7 * Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix

 
Increasing 2019 operating EPS* guidance midpoint by $0.05 (millions, except EPS) Original Guidance Revised Guidance DTE Electric $698 - $712 $703 - $717 DTE Gas 171 - 179 175 - 183 Gas Storage & Pipelines 208 - 218 208 - 218 Power & Industrial Projects 119 - 134 119 - 134 Energy Trading 15 - 25 15 - 25 Corporate & Other (112) - (102) (112) - (102) DTE Energy $1,099 - $1,166 $1,108 - $1,175 Operating EPS $5.97 - $6.33 $6.02 - $6.38 8 * Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix

 
We are on track to continue delivering strong results for customers and shareholders Total Shareholder Return* (Annualized) 19% • Raising 2019 operating earnings** guidance; on track to beat original guidance for 11th consecutive year 14% 14% 12% 12% • Targeting 5% - 7% operating 11% EPS growth and dividends 10% 8% • Driving utility growth through infrastructure investments focused on improving both reliability and the customer experience • Continuing strategic and sustainable growth in non-utility 2-YR 3-YR 5-YR 10-YR businesses DTE S&P 500 Utilities * Source: Bloomberg as of 6/30/2019 9 ** Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix

 
CONTACT US DTE Investor Relations www.dteenergy.com/investors 313.235.8030 10

 
Appendix 11

 
Cash flow and capital expenditures actuals (billions) (millions) Cash Flow Capital Expenditures YTD 2018 YTD 2019 YTD 2018 YTD 2019 DTE Electric Cash From Operations* $1.4 $1.4 Base Infrastructure $350 $316 Capital Expenditures (1.4) (1.8) New Generation 74 318 Free Cash Flow $0.0 ($0.4) Distribution Infrastructure 396 436 $820 $1,070 DTE Gas Dividends (0.3) (0.3) Base Infrastructure $116 $89 Net Cash ($0.3) ($0.7) NEXUS Related 13 - Main Renewal 78 135 $207 $224 Debt Financing Issuances $0.5 $1.4 Non-Utility $363 $500 Redemptions (0.2) (0.7) Change in Debt $0.3 $0.7 Total $1,390 $1,794 12 * Includes $0.20 billion and $0.17 billion of equity issued for employee benefit programs in 2018 and 2019, respectively

 
Cash flow and capital expenditures guidance (billions) (millions) Cash Flow Capital Expenditures 2019 2019 Guidance Guidance Cash From Operations* $2.4 DTE Electric Capital Expenditures (3.9) Base Infrastructure $820 Free Cash Flow ($1.5) New Generation 490 Distribution Infrastructure 890 $2,200 Dividends (0.7) Net Cash ($2.2) DTE Gas Base Infrastructure $270 Debt Financing** NEXUS Related - Issuances $2.3 Main Renewal 240 Redemptions (0.8) $510 Change in Debt $1.5 Non-Utility $900-$1,200 Equity Financing Issuances*** $0.7 Total $3,610-$3,910 * Includes $0.25 billion of equity issued for employee benefit programs ** Excludes the remarketing of $0.675 billion of securities related to the Link acquisition 13 *** Includes $0.675 billion issued in connection with the equity units related to the Link acquisition

 
Maintaining strong cash flow and balance sheet • Issuing $1.0 – $1.5 billion of equity in 2019 – 2021 ‒ Up to $250 million of equity in Funds from Operations* / Debt** 2019 using internal mechanisms; ~$165 million issued through 2Q Target • Supporting capital investments Target 19% 18% with strong cash from operations 18% • $2.4 billion of available liquidity at end of 2Q • Maintaining strong investment- 2018 2019E - 2021E grade credit rating • Issued $1.2 billion in green bonds in 2018 – 2019 * Funds from Operations is calculated using operating earnings 14 ** 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

 
Weather and DTE Electric weather normal sales Cooling degree days – DTE Electric service territory Heating degree days – DTE Gas service territory 2Q 2018 2Q 2019 % change 2Q 2018 2Q 2019 % change Actuals 323 150 (54%) Actuals 860 859 0% Normal 215 215 0% Normal 774 777 0% Deviation from normal 50% (30%) Deviation from normal 11% 11% YTD 2018 YTD 2019 % change YTD 2018 YTD 2019 % change Actuals 323 150 (54%) Actuals 4,047 4,279 6% Normal 215 215 0% Normal 4,025 4,022 0% Deviation from normal 50% (30%) Deviation from normal 1% 6% Earnings impact of weather – DTE Electric Earnings impact of weather – DTE Gas Variance from normal weather Variance from normal weather (millions, after-tax) 2Q YTD (millions, after-tax) 2Q YTD 2018 $31 $31 2018 $6 $2 2019 ($13) ($7) 2019 $3 $12 (per share) 2Q YTD (per share) 2Q YTD 2018 $0.17 $0.17 2018 $0.03 $0.01 2019 ($0.07) ($0.04) 2019 $0.02 $0.07 Weather normal sales – DTE Electric service area (GWh) YTD 2018 YTD 2019 % change Residential 7,063 6,975 (1.2%) Business & Other* 15,959 15,469 (3.1%) TOTAL SALES 23,022 22,444 (2.5%) 15 * Includes choice of 2,336 YTD 2018 and 2,237 YTD 2019

 
DTE Electric and DTE Gas regulatory update DTE Electric DTE Gas • General rate case - order received • General rate case - order received May 2019 (U-20162) September 2018 (U-18999) – Effective: May 2019 – Effective: October 2018 – Rate recovery: $273 million – Rate recovery: $47 million – ROE: 10.0% – ROE: 10.0% – Capital structure: 50% debt, 50% equity – Capital structure: 48% debt, 52% equity – Rate base: $17 billion – Rate base: $4.2 billion • General rate case – filed July 2019 (U-20561) • Expect to file rate cases every ~2 years – Effective: May 2020 – Rate recovery: $351 million – ROE: 10.5% – Capital structure: 50% debt, 50% equity – Rate base: $18.3 billion • Filed Integrated Resource Plan - March 2019 (U-20471) – PFD expected late 2019 – Order expected early 2020 16

 
2Q and YTD Energy Trading reconciliation of operating earnings* to economic net income (millions) 2Q 2018 2019 • Economic net income equals economic gross margin*** minus O&M expenses and Operating Earnings $8 ($3) taxes Accounting Adjustments** 7 5 • DTE Energy management uses economic Economic Net Income $15 $2 net income as one of the performance measures for external communications with analysts and investors YTD • Internally, DTE Energy uses economic net income as one of the measures to review performance against financial targets and 2018 2019 budget Operating Earnings $9 $2 Accounting Adjustments** 14 15 Economic Net Income $23 $17 * Reconciliation of operating earnings (non-GAAP) to reported earnings included in the appendix ** 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 17 *** Economic gross margin is the change in net fair value of realized and unrealized purchase and sale contracts including certain non-derivative contract costs

 
Reconciliation of reported to operating earnings (non-GAAP) 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. Adjustments key A) MPSC approval of the deferral for the new customer billing system post-implementation – recorded in Operating Expenses – Operation and maintenance B) MPSC disallowance of power plant capital expenses– recorded in Operating Expenses – Asset (gains) losses and impairments, net C) Certain adjustments resulting from derivatives being marked-to-market without revaluing the underlying non-derivative contracts and assets — recorded in Operating Expenses — Fuel, purchased power, and gas — non-utility 18

 
Reconciliation of reported to operating earnings (non-GAAP) 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. Adjustments key A) MPSC approval of the deferral for the new customer billing system post-implementation – recorded in Operating Expenses – Operation and maintenance B) MPSC disallowance of power plant capital expenses– recorded in Operating Expenses – Asset (gains) losses and impairments, net C) Certain adjustments resulting from derivatives being marked-to-market without revaluing the underlying non-derivative contracts and assets — recorded in Operating Expenses — Fuel, purchased power, and gas — non-utility 19

 
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 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 (i.e. future non-recurring items, certain mark-to- market adjustments and discontinued operations). These items may fluctuate significantly from period to period and may have a significant impact on reported earnings. 20