DTE - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the DTE Energy Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Barbara Tuckfield, Director of Investor Relations. ahead. go Please

Barbara Tuckfield

good and Thank morning, you, everyone.

statements. get remind to we of presentation, to would on like to read the forward-looking reference the I everyone including the X Before Page started, Safe statement Harbor

a Dave Our Ruud, presentation also operating of Jerry measure. this references over presentation. to President earnings reconciliation and provided CEO-Elect refer CEO; of And the Slater, CFO. earnings Appendix morning David non-GAAP of to With which to start today's operating the Please it and Vice GAAP financial Norcia, call President earnings, Senior includes now, this are is to and to in the turn and President morning. Midstream; I'll Jerry us

Jerry Norcia

us growth. will This provide hope and things a a we update Well, performance staying we of well transaction. questions. before provide healthy I will on today. morning, recap Ruud is business Then and thanks, by an your positioned year on and and for highlights I of Dave the David morning Barb, the provide everyone giving safe. good start everyone, will take details how for give in off and financial XXXX you Midstream our and joining are Slater up future spin business our wrap some review thanks

our our own head on the on how characterize ensure year, in X. past incredible on employees of challenges to cannot with everyone's confronted is start pandemic took we COVID-XX prouder challenging also achieved every of best customers. and year strong for company. on I them this many safety priority these XXXX our record, proud XXXX, the the as and has their customers safety performance. you Slide track how navigating at of so success. proud disrupting delivered extraordinary been achievement success of of top so our reflected our to I our our family this created incredible record DTE I’m all continuing safest always let's And the responded year be pride. pandemic. part thoughts our a So DTE of communities to I’m our continuing was of through incredibly our and In clearly DTE. people We and and I for safety safety achieved a my results, very team while for deliver word engagement lives. while know financial think as our

engagement, top stepped on throughout and culture team remained And long-term for corporate communities globally in year. customers defines our We employee eighth sauce team employee delivery that a of consecutive the Gallup and repeated said, Workplace engagement Great goals. up X% Gallup and were our Additionally, earning the secret highly I is our DTE among for strong value our times our creation supporting engaged these our Best-in-class the through ranked provides by tough foundation XXXX. success as our Award. in

by the found rate ways supported Public Commission, rates filings, Our impacted Michigan payment not XXXX. through significantly unchanged plans assuring COVID-XX. for customers team tablets million creative access which Detroit Public for the Internet initiative DTE customers led keeping education well School to as by Service effectively provided show that as case We were $XX that XX,XXX to would interrupted. a students, streamlined be

when DTE masks in XXXX. The unprecedented were million to PPE managers, and Foundation low. relief We emergency also donated hospitals ways supplies to efforts pandemic-related contributed first responders in over two

and could plan executed impacts. minimize customers our followed to quickly team plan. worked put how economic then the and to company, affect how in plan ensure and a Finally, together proud execute I’m to communities through our analyzed response We strong pandemic We financial of incredibly performance. on the place that our

improvement DTE the opportunities to the continuous well of on years and accomplishments culture fronts work discuss want set to who all our XXXX successful our future. been many the efficiency a embraced across increase the I led in since employees XX,XXX and on up of I This to year have over found for of workforce businesses. I’ll with congratulate slide. of delivered our company. DTE of best our all family XXXX next Our one

cash economic the which plan, use earnings. some also year fueled DTE, of XXXX execution XXXX very was flows strong increase able As nicely strength was in positioning us mentioned, the I we our of operations, and XXXX. were to for investment of response really success by led of strong a to that to for our

EPS. EPS was operating XXXX XXXX the improvement. original over represents growth higher XXth our X% nearly XX% exceeded XXXX This of continuous commitment than and Our our we midpoint. year guidance This consecutive to team’s demonstrates midpoint. operating $X.XX is original DTE’s deliver success XXXX guidance results our

increased for our the X% increase. We dividend dividend a consecutive also XXXX, year marking XXth of

approval many received affordability Electric an rate onetime and filing. sales. in refund next successes COVID-XX-related achieved help customer will customers regulatory unexpected In our XXXX. addition maintain positions case to DTE DTE Electric voluntary its to operational defer solid for for to This and innovative financials, DTE further

was continue work cases. in August. a approved by case constructive to delay ways rate will Gas settlement, on We rate innovative the DTE to reached which MPSC

customers achieved us steady for regulatory both to through As XXXX certainty allows utilities in keep base that XXXX. rate a result,

are we these achievements more to XXXX minutes. of a into in proud on detail go our few as energy continue affordable commitment to provide I utilities for customers. the accomplishments We will very our reliable,

for our pipeline future finalized strong projects cogeneration private ahead and customers, continues Central environment. of by today’s our new non-utility XXXX, operational and project. in R&D and for small and in on focus budget additional schedule a development In the businesses delivering RNG cogeneration placed business. REF began continue a feat to achieved P&I, backfill growth. the we Midstream in not This our Energy also Our to cadence and accompanied project Plant, XXXX. At successes under service Ford also DTE pipeline sunsetting an lead we Wisconsin of completion, to a operationalized

Turning for XXXX. well to continued set achievements for XXXX future discuss in DTE how in our is Slide us success. success X. up I’ll positioned have Overall,

Our XXXX X% from The DTE we in comes provides operating original as work vast heavily modernization we renewal utility over infrastructure the growth DTE grid Gas, growth EPS are majority midpoint investing guidance. of businesses. XXXX cleaner Electric, continue At the of our of At main as well $X.XX our our generation. improvements. and guidance

investments. in steady our continue through and growth We strategic sustainable businesses non-utility our

year. me the and transaction our know, David is progressing you executing track that say significant of business are independent this positions you let are will Midstream As on believe as give spin Midstream separation Slater companies. C-Corp for but DTE in we both predominantly a company. utility transaction more unlocks and completion This midstream just the establishes this the investors value truly details, for planned, gas We we pure-play as as year. an of

growth investors. attractive Utilities DTE our delivering long-term operating EPS and XXXX of returns, DTE and to Index, guidance track provide growing the beating to to we S&P X% dividend will consistently are our We has shareholder delivering X% a continue original our long plan XXX investors. reaffirming That for record for midpoint. to from an continue premium

this EPS guidance early said, are positioned exceeded we we continue in year, well that our for XX we of have I years. to straight in feel midpoint As operating the XXXX. And streak

the progressed of successes key on navigating some highlight of I’ll utilities X. Electric. XXXX Both Slide the DTE while missions in pandemic. to Turning

wind Electric, Polaris energy well which to our Michigan, DTE grid. modernization For Electric the turbines park, investments XXX in In megawatts as included accelerate power. park has that of the is DTE XX generating clean as wind commissioned electric of the XXXX, investments largest with

exceed continues in of XXX this enrolled. expectations. year. program with past and the program MIGreenPower, its in program, the is Our XX,XXX voluntary megawatts The our have the doubled Enrollment renewables to to-date high commitments kind nation customers of over largest

an further rates investors. also a Commission to and as approved We our facilitate home and about zero The enrollments network continue from by from Commission to for affordability unexpected customers allowing Public work excited helped Electric refund pandemic, of an us steady rates and load to Michigan grow. forces due XXXX. opportunity emissions us with even across approved additional to increases to plan, by our the Service found customer delay Electric onetime net the allows customers to with stations electric expansion the from filing. our next base customers customer customer innovative steady company rate keep DTE for to for case case towards this companies to These residential fast-charging electric also DTE rate and during this Midwest. additional working vehicles This defer provide other this accomplishments plan joining our certainty to announced be COVID-XX. longer. regulatory usage its assist To carbon target construction the commitment see a of we continue program promote

DTE forward which for we forward, the reliability our as At for Looking our infrastructure bright the growth. XX% electric investments capital in included energy a Electric. are investments These of increase prior EEI is focused to Conference, company five-year compared cleaner on plan. as plan, well future capital rolled and

targeting and load plan, implementation growth. Electric and the position of X% the future. growth infrastructure operating We’re also this Through future is creating substations earnings X% for aging to DTE the current in addressing to long-term grid

of new homes natural mitigate We emissions in to growth. by facility Moving gas announced initiatives innovative for progressed DTE to outages. We a gas DTE major suppliers a achieve well customers in and renewable customers. offsets first I’ll on also and for project pipeline future and key a This and use for successes of of Gas voluntary X, and Michigan. XXXX. of purchase This project to zero the is program average greenhouse a XXX% renewal Slide opportunities transmission its XX% we and on net the emissions. emission-reduction XXXX incorporates work, to redundancy modification describe program installation customer includes kind gas the Northern Gas. offset program provide positioned progressed Recently, is announced to carbon

also with in a and We completing improvements during of pause the have begin three including Gas project, phases renewal Spain. phase in of to main height miles, the for this in the June. DTE upgrades the renewal work main first pandemic XXXX, the completed second operational XXX in continued scheduled despite

could continue create rate Finally, that capital issued a plan DTE DTE we case includes of that to continuous be through XXXX. regulatory opportunities affordability additional included Gas ways certainty current as The and headroom provides in August investment improvement. to supports find and settlement Gas potentially for plans

on and transmission Our continues improving filed satisfaction. to these case Upgrading or technology. system DTE rate month reducing in and cycle, the MPSC of our XXXX. a gas effective recently Gas for rates investments usual case new support in reliability be XX our five infrastructure DTE customers. in of pipeline rate our investment renewal, enhanced and and infrastructure our replacing aging Gas customer plan year costs focuses integrity main path with With will

David successful Before I representing to year you had him walk spin on transaction and Midstream let congratulate elected Board Chairman industry give end turn you. it serve through over the the the Pipelines. who Slater, to to being on of over group me the progress, Gas David, on will Interstate as of updates

David Slater

words. our be next the forward The to Slide that in on year I and the Thanks, kind of I’ll X. for and the will future. look understand period industry, defining regulators gas Jerry, lower policymakers carbon start for a importance natural ensuring

execution spin. EBITDA last us our Jerry go We all export discuss transaction is a Midstream year million, we This schedule summer, results Gulf successes across gathering all the year our service of the We in is the underway, midyear for keeps the our then a to now addition of As This on Interstate platforms of strong earlier, that to XXX markets. portfolio. this our a LEAP great systems and $XXX and Coast across Form-XX schedule placed over last is strong plan. platforms, firmly our spin mile, which spin producing mentioned above adjusted transaction. recently ahead asset extends well pipeline inch and achieved was budget. under LNG of financial process. system initiated I’ll our It and delivered XX of

capacity. see strong executed year contract three utility, we in Ohio NEXUS continue and Overall, well with be interest contracted. also portfolio to NEXUS continues to We on our a

announced a announce to in goal. the customers evolve are zero sustainability major recently Midstream significant connected us XXXX, available Midstream and markets tool first net one to wanted this companies by near-term a mention We become to such debt maturities. for making Our of I target the to have use solid positions, premium emissions targets intend also minimal to over a believe time every reach Midstream. and will our sector opportunity to in that

will flows contracts, focused the capital highly the visible flexible, independent on well-capitalized by and to opportunity counterparties and the and position Midstream and advance We With the are an these The to strength create to remain cash creation Midstream our of positive of company a stable the of company supported assets growth fuel leverage further C-Corp outlook. deployment balance disciplined sheet. has attributes our a value. our provide and long-term

has new Now a and is let’s Midstream The journey. become turn allow positioned as Midstream the been transformation progress steady, legacy DTE’s on naming We has leader solid, build to company will that transformed felt success strategic it over to business us last Slide decade XX. we industry the our on DTE an Midstream to of today.

As SEC well began Form process month. initial expected XX completion is underway by earlier, spin We the I the this the said with registration earlier midyear.

with Throughout events rating this analysts hold very our a I leadership and investors leading about we team. with debt the roadshow and optimistic to second be planning am in feeling be are agencies and will in initiating a hosting We process, quarter. raise will June. the

both Jeff on we will of a leadership DTE qualified Bob last is our of and Midstream. Bob I delivering the for Energy, years, announce Risk He that Vice confident have that Jeff am join can positioned team. with a and CFO results. Board. worked of is have the to future. I am Midstream delighted the will well highly Jewell, you is solid be become Officer are Executive mentioned tell currently Skaggs him record As I track President, for Treasurer I has call, and pleased DTE of that expert Chief earnings and Chairman the who I the to

strong record track million will million record of assets deliver XXXX EBITDA $XXX and of to Our and $XXX a ratio initial seasoned debt-to-EBITDA track allow will range financial continue a times an to with results with team, unique portfolio is and a structure success optionality proven after X leadership to our forward times set of us targeted dividend continue and strong year. this of X capital significant investors. to the provide generates spin looking And flow talking for provide value will and record ratio I’m cash coverage that between opportunities and of flexibility. to you positioned our financial will spin strategic create now completion. The The well to success. many Midstream this year

turn it I’ll to financial over discuss Dave Now to Ruud DTE’s performance.

Dave Ruud

continue opportunities for delivering allowed employees and year and Thanks, customers. that brought David. operational strong share financial Good to of was XXXX hard providing deliver its including our results and morning, work the everyone. challenges, our of great stakeholders, us our to while service for

to the across to mentioned, Jerry economic weather. we all offset response quick warm business and performance whole As plan the financial our our team, incredible impacts performance were and achieve the the of from pandemic executed we able action on lines. winter our of With solid

share $X.X financial Slide on for XX review $X.XX results. into Let year. our me translates earnings Total year-end per year start the were to operating for This billion. the

earnings page to were to start DTE You utilities. at of top $XXX the including can the million home the the EPS reconciliation was primarily more with higher This in segment, million earnings of Electric our people reported by review base implementation, during GAAP new find a breakdown rate costs. by $XX our year higher working for and detailed I’ll XXXX than residential to sales offset due the year. rate from growth appendix. from

year. cost implementation last revenue were was by growth on than savings, base The earnings warmer-than-normal onetime and higher recovery million weather and offset $XXX DTE the $XX Operating was Moving to driven million, Gas. primarily rate infrastructure by O&M rate cost. increase earnings mechanism new

last were of service by year, the down for Storage the platforms strong our Union higher third with Operating in Pipelines of moving row. GSP placing $XX and year to This million in our million. full $XXX the Gas than was driven each a and performance LEAP earnings primarily summer. last keep page on Let’s earnings business Blue pipeline

due energy increase projects, and On offset to business from by sales. next see million operating row, the Power a services XXXX This you steel-related our industrial RNG million. Industrial $XX and is $XXX new can segment were

is On higher business gas million can due last you million. in Trading see were to performance $X year This portfolio. at than operating earnings the $XX Energy row, the our next our mainly

Other Finally, earned million which DTE per primarily share expense. due unfavorable was by interest $X.XX XXXX. is than Corporate $X.XX $X Overall, year-over-year XXXX, per share and higher in to higher

Let’s move XX. to Slide

our guidance. provided process the As later Jerry reflect spin earnings approach mentioned, any the We remind separation we this be are operating we would that as you not will does XXXX post-transaction reaffirming like to guidance and the strategic date. in guidance impacts,

Our XXXX X% midpoint. share, per XXXX per guidance our from midpoint $X.XX range The is operating EPS to is original $X.XX which of guidance growth share. $X.XX

the are that XXXX normalize to the comparing XXXX items actual midpoint XXXX results guidance onetime We to included the our a such was unique in original guidance XXXX year. given

experienced offset to number projected and COVID-related we These Our sales, are XXXX normalize voluntary which to customers. the residential part sales electric XXXX. by include results nonrecurring items, of a begin in refund were higher to in

we investment conservative Trading also earnings COVID. planning had during experienced higher-than-planned and to control interest returns, higher Energy earnings, cost onetime nonutility and due We and

are We cleaner another year be XXXX segment. in and Electric, DTE in growth generation At driven with each strong by distribution growth investments. projecting will

at hold our for project DTE and see and improvements said cogeneration Gas that organic and P&I. will and GSP As gathering in have continued flat main platforms, across work growth investment RNG continued continue provide our customers. rates growth will pipeline we we to to electric worked all will for other customers. base enhanced reliability development continue infrastructure and before, renewal its drive

Midstream gas business. Michigan-based a Slide growth. talk predominantly of our transaction premium utilities and long-term potential regulated utility. full the about to to DTE premier move pure-play, our XX The natural high-growth, unlocks let’s spin and Now regulated becomes

forma original business, X.X% guidance our Midstream impacts. operating pro If EPS growing midpoint, post-spin our from we are you excluding at XXXX at look

average operating we come than financial addition, XX% maintaining are XXXX from end about $X.X the despite the will of and of utilities, outlook through this In are growth the our during billion guidance mandatory growth of operational X% over earnings time, XXXX years. the the will our includes early which conversion plan the Over five earnings REF of significant from our Overall, two from their optimistic earnings that higher growth at in to operating years our business year. feel and we which of operating the deliver our original milestones XXXX units EPS X% sunsetting that performance. of and operating equity

to turn briefly discuss equity Let’s balance XX to plan. Slide our and sheet issuance

focus maintaining We balance units continue flows solid is have to convertible needs the end and on issuances plan starting to our of flows equity XXXX metrics. to the equity strong strong in low in XXXX, sheet cash XXXX. and equity Due minimal DTE planned our beyond the in in continues in cash

We are metrics. our maintaining cash our focus and flow on leverage

credit-enhancing, be have FFO-to-debt lower we position. the to As will a from spin approximately while XX% before, us to XX% allowing mentioned maintaining our transaction credit target solid

We put of billion onset action resulted on continue in fast that we to at liquidity $X.X strong ensure as the the to available top-tier having the pandemic of last end of management liquidity focus year. cash at

Now we can then and the I’ll up it for up Q&A. call, wrap open

achieved is hard Throughout in had clean, have work of to family. we of and strong pandemic, demonstrated safe, greatly our today, the deliver very safety The DTE of a result the continue the and As our every member clearly, remarkable affordable able year we to XXXX. incredibly were a year to impacted engagement performance. this team so DTE customers. energy And reliable DTE by

pandemic unprecedented communities to customers were assist in also able and ways. We the during our

success Our and guidance our joining XXth dividend DTE today, thank into I our up and can that, in of the consecutive for for us the while delivered With also increasing positioning future. year XXXX open team we you and line our questions. exceeding original for DTE midpoint

Operator

go Your first question ahead. Please [Operator Weinstein Michael from morning comes Instructions] this Credit from Suisse.

Michael Weinstein

Hi, good morning, guys.

Jerry Norcia

Good Michael. morning,

Michael Weinstein

be filing to go have you filing? you’re it highest could that would of with maybe comes of the the the rate as some And electric Hey, priorities up going what eventually? focus through

Jerry Norcia

out, build be primary The plan, our Sure. to capital investment electric focus continuing modernize grid. will our

be working investments capital of in front the in center generation our and So clean in good investments along filing, continued system with will order. in that wires the business typical to investment course, and, maintain

the be would those priorities. key So

Michael Weinstein

growth think along Right. growth a those And maintain that do growth that the backfill from to X% that segment what of – X% segment target come the most the the as same elimination going GT&S that is was will – lines, rate you from, contributing? high forward, of where you considering pretty

Jerry Norcia

Yes.

plans on renewable obviously large gas for as our think be that both shown P&I we electric and growth cogeneration, business. drive focused natural a growth to needs capital that and nice EEI, profile we’ve our deployed, infrastructure business I backlog very is have on gas of in there. And then will segment at

DTE large on based to of X% behalf good inventory we growth. see deploy of a rate EPS to capital overall, of a our that customers, growth need So post-spin strong on we for very X%

Michael Weinstein

first-year Right. that equity or right, plan? the through entire the needs, hear early, end And the just I did just is plan low the that of

Jerry Norcia

Dave that? Ruud, you to do want take

Dave Ruud

see Sure. you $X.X converts over XXXX. during besides do period. be in of end the come plan of But three-year billion low we’ll we that our that, the at period, equity Yes, think in, the

Michael Weinstein

For the right? entire period,

Dave Ruud

years, three entire sorry. The Yes.

Michael Weinstein

flow? driven Okay. better more cash just results, And by is that

Dave Ruud

strong really had positions XXXX better. in even us that flow We Yes. cash

Michael Weinstein

It’s I targets? credit more in laxness, not a guess, agency reflection of – rating your a rating

Dave Ruud

talked see the we agencies, the were have have Well, you the that can will But it that rating on of targeting to slides spin. XX% and credit-enhancing prior the we at for this also one be to we FFO-to-debt company.

are in that able FFO-to-debt XX% there. consistent a to on be place a to reposition XX% and our ratings still our we and positions so And

Michael Weinstein

Or equity flow about more expected? of Is needs? is you just mostly of at low than end, cash having the that driver it a though, being

Dave Ruud

to push of we be down equity additional the equity was needs or cash lower how us end to this talked we this at were end lower EEI, to of lower that… the And When – part to needs. our of able now

Michael Weinstein

you. I’ve Thank All got. right. That’s all

Jerry Norcia

you. Thank

Operator

comes ahead. Tonet from Jeremy question go Please JPMorgan. next from Your

Jeremy Tonet

good morning. Hi,

Jerry Norcia

Good morning.

Jeremy Tonet

there see as Midstream seen if flows producer this operations to the gas off I week. start as ramifications activity, the could you kind want maybe that, of here. side, if your of guess, to might have that if been the I even to to just different nation, through some temperatures impacts wanted And coming frigid might on far Just prices the past seeing if, just be or we’ve trying that higher influence what think of,

Jerry Norcia

I’ll So operated assets across platforms. that of saying by start quite our all well our

our Some in perhaps southern our Slater of customers that little issues, David a in I’ll describe let had but platform more detail.

David Slater

Sure. Thanks, Jeremy, very given for on night. that’s the question, it’s and every topical, news the

off, to Midstream assets performed to in So the yes, the team They really coming of of so operated sure proud in and well. that take first advance field. reliably, it system operating our that in saw our weather make has. actions I’m started

like seen perspective driven of affect breaking extended looks the today the said, and time, freeze-offs, Louisiana, period and very well Texas by it’s a weather We it tomorrow. weather does frigid That is really customer/producer And from in production. that, have an area. over

online weekend We over back expect week. that next volumes those into will the of and the come beginning

So there been it’s production and occurred bouncing that going quickly. back but be – a to reduction short-term has fairly

Jeremy Tonet

That’s helpful. first I’m in the wondering Trading Energy create could just the thinking quarter? day. benefit that on could markets opportunities then if the Got in that you side about the volatility it. And

Jerry Norcia

Trading positions. Energy long. operations, that this, say our at And we’re got very typically, small I’ll we’ve Well,

sure. for seen So Trading favorability have Energy roll we through some will business that the

Jeremy Tonet

you earnings as now? across kind about business. other here? on just you helpful. that talked any as shape year, a see see far the shape ramp provide think the That’s we you in growth across it across the of year about as Or as can Midstream it. color the earnings I’m you year And of just the just Midstream, wondering, Got of do

Jerry Norcia

David, do want to you take that?

David Slater

I take Sure. that. can

should significant I the fairly over think the don’t lumpiness see I across year. steady be it Jeremy. year, any

So it steady. fairly be should

Jeremy Tonet

your Midstream in last Got about publicly versus you think you traded much if about you of you this think other thoughts are there, sure when to comps you’re others, kind not provide could position point. just what one comps? it your discuss a the is on it. to here. on what a compares at think when you out think closest And I’m Midstream, I But how any business, if able Maybe business

Jerry Norcia

David?

David Slater

when about the and Jeremy, be Equitrans two They in focused referenced in past, I talked size. Yes. we’ve Equitrans the that would Williams, is the this similar Appalachia.

composition, than of We larger But they in again, and similar of then composition. to But than are. Williams, and we’re diversified in are gas more the they’re portfolio we primarily them. portfolio And terms size are. focus on terms

clean in So we those that with two going as of that I a portfolio to strong proxies. are the pretty and a to believe of point we’re have kind strong, future front us.

So expect we to multiple EBITDA. on have our trade strong a to

Jeremy Tonet

That’s I’ll it. stop helpful. very Got Thank you. there.

Operator

ahead. Dumoulin-Smith comes question Bank go of next Your Please from America. from Julian

Julian Dumoulin-Smith

Hey, good the Thanks morning, team. for time.

Jerry Norcia

Good morning, Julien.

Julian Dumoulin-Smith

about just the happened various is of last here more do book your indeed, got mind. think clarify a impact? exposures I Couple want intact? Energy response across morning. Good then what’s in I’ve to that, Trading Texas, question. how clarifications, if you you don’t Number its one, the respect to And with substantive

Jerry Norcia

those Julien, level, positions. typically small highest as in the we ourselves find at we but long positions, I have So mentioned,

impact certainly the for trends has So actually provided days. our the in commodity several prices trading business, favorable on last

Julian Dumoulin-Smith

Excellent. Okay.

some here? Obviously, to trading a onetime about of Sorry, there I some clarify can to I successful off it think XXXX about specifically. just XXXX. it items, XXXX. as noticed as of then onetime into cost-savings goes? here forward you flow the that well, items, speak do about if separately, I Then them of into and just cash How do XXXX those number And that wanted tailwinds if probably taking get can. including in how you putting XXXX. in just moving think again you very I But steps are down,

a you little bit? If to can that speak

Jerry Norcia

I Julien, us extremely So XXXX XXXX. say that for positions well would

higher year and or the seeing we our guidance are our begins also progresses inside still towards of As the but midpoint and the guidance. likely end here, trending favorability beyond

shaping So year the quarters progress add the about XXXX flows really or earnings the we’ll I do but but – about that feel on thoughts want is here, very positive about up. feeling you for year? more some starting to Dave Ruud, progress, this strong speak cash to as as it’s more how

Dave Ruud

Sure. Yes.

right, driven the But Act, cash by really some for particularly exactly the us good which – really impacts You’re performance business. a good Julien. XXXX from in we strong for was from us, did year CARES have gave primarily favorability. some onetime also

So is good too. repeat, it’s for cash feel we than those XXXX things solid as won’t we for XXXX onetime a cash year – adjust that XXXX, still lower but

Julian Dumoulin-Smith

Excellent, right. guys. very much, Thank you

Jerry Norcia

Thanks.

Operator

Research Partners. from comes Jonathan Please ahead. question next from Vertical Arnold Your go

Jonathan Arnold

Hey, good morning, guys.

Jerry Norcia

Good morning.

Jonathan Arnold

end second. the I just I’m just low Just that. unit Isn’t slow zero? maybe excluding to… a back on just equity range the of I on really the want for –

Jerry Norcia

Dave?

Dave Ruud

Yes, the – next case zero, don’t all the we’re are end the there see for and issuances three need some much end, beyond there at something here saying the equity issuance we internal equity low a just in at low years. conversion we’re or is but just over

Jonathan Arnold

That’s the each we $XXX then would it and million. and that an QX – are if quarter, seem looked And quarter have more hearing, seasonality ratably. point follow what the of of saying anomaly like Midstream. a your and is the to you. back really million, was then fourth I I around we I of the up third just just big the step just XX-ish XXXX, Yes. kind It quarter, to sort guidance $XX was thank occurs over that QX to which mean, in was had wanted in what this question it clarify. should was And but to to on range, much because

reminder I happen it wanted to just So get will in a maybe QX.

Jerry Norcia

Slater? David

David Slater

few QX. forward, in I onetime I’m through thinking look QX, as bumps I I any again, now. the think Yes. have been right may don’t rolled out see loud that quarter-by-quarter just in there large a portfolio But here items

a think view is probably appropriate. I So ratable

Jonathan Arnold

onetime just on on And then was Good better enough. one What your some Did than came segment looked fourth more going the little corporate there Or thing like numbers there? the final for a good a were color. have – conservatism? in Just you bit it some results? guidance year. maybe they in quarter,

Jerry Norcia

Dave?

Dave Ruud

Yes.

protect upside we ourselves up. have interest returns interest did from things the caused did guidance in we and that revised investment onetime conservatism played any there. well quarter that it would some come did higher. variability then to still income to go other as from When nailed that call, our some third see we as And expense, there some out, You on

Jonathan Arnold

those have quantify been? you Okay. what might Can onetimers

Dave Ruud

interest There that kind They they expense none add increase. not was of was down. they together, big. small, us are all of give were kind really some like But when them

expense down. slightly that income, And Act had CARES we interest the through. then up returns So to also. related that some came were some is again, investment There interest

kind of So together there’s in. came that three

Jonathan Arnold

just may, I go of picture. if your And you at electric Jerry, more you. look it? you And for Is to there would – about? side? think to how big accelerating starting Thank sort net if could about that so, you’re Is potentially the Right. zero something XXXX

Jerry Norcia

about accelerate are we We for scenarios are thinking – schedule coal to opportunity retirement understand Jonathan. it, internally, I an running right our is now many there assets. our

to megawatts retire forecasted which operation. coal X,XXX still Plant, you very currently, River XXXX. we’re have And Power know, our Belle As in is about a we large

looking our at large decade; first almost our that we’re ways a this is megawatts. to Power retirement lens then Monroe – which and accelerate that, X,XXX in very facility, Plant, is our coal So which

of accelerate up the at retirement We’re potentially ways XXXX. looking to from that

So right that And required will in much are detail IRP into we an And of XXXX. on but deep that, we come to that more file we’re now. all then. analysis to

Jonathan Arnold

Okay.

the So, long sort some a you’re way, there out? updates doing might kind – of of it’s because be interim along way

Jerry Norcia

the updates along way. interim be There’ll Yes.

that. We expect

Jonathan Arnold

time. for Thank Okay. your you

Jerry Norcia

Thank you.

Operator

next from go ISI. question Durgesh Our comes Please Evercore Chopra from ahead.

Durgesh Chopra

morning. team. Hey, Good

Jerry Norcia

morning. Good

Durgesh Chopra

Good morning. rate dividends just have right years, on are business, when that to question, part be what as – should you to suggests You’re Am doing growth saying I look? Just higher about should for how just to what higher are of dividends? start going one the materially peers in else, we sort should me. the expect of versus Midstream can Or extent the a And for many five-year a thinking answered. way? of the us than the That off, right? the projections? Maybe think that about pre-spin. how two post-spin a the the we a we Midstream any that you terms Like these color expect sort roadshows. guys give expect Everything you of to – from the question business,

Jerry Norcia

do David, you take to want that?

David Slater

it. take I’ll Yes, you And Dave fill can in. Ruud,

to the with and on start the I’ll what expect roadshow. maybe roadshow So

be company. basically a that first guidance to – stand-alone the So DTE time the provide will for the for opportunity as Midstream for

color. So as be we think work more through to a down lot lock the debt a position we’ll provide raise and sort of variables, clarity I of in and then

to midstream the best-in-class space. provide in goal guidance Our is

normal what’s space. midstream the in different the know, than what’s utility As you there is normal space,

as that distinctive really will be our the be visibility much goal in company So into provide regard. to and

dividend we’ll some In should the if we’re you the any add I Ruud, you communicating exact around details have dividend the in publicly ratio. Dave know But the that dividend, the color And on question. We’ve roadshow. number to terms to not X coverage provided a expect dividend. again, times more wanted of don’t of the

Dave Ruud

in why I looks than XXXX would that can in together XXXX. higher have explain been

each peers is for consistent in have with that So that the the industry. company best dividend we goal a to that's have

put And so the David a been would have two Midstream, together, approximately consistent dividend flow what of in we'll results consistent have distributed cash ratio. to that higher a set a flow. equating that a we've been then that's And really where times for cash DTE, distributable with dividend peers as payout and and with XX%. around to ratio When if payout times performing two dividend you we'll it's those mentioned, of result highest coverage a a have in ratio, the higher dividend a those

would otherwise have company than been look higher what how been it that's XXXX the together. has So what makes

Durgesh Chopra

for it. Thanks that color, Understood. guys. Appreciate

Operator

ahead. Fleishman Your go from Please Wolfe next comes question Steve from Research.

Steve Fleishman

Thanks morning. all good for the updates. Hey,

Jerry Norcia

Steve. morning, Good

Steve Fleishman

morning, Good Jerry.

interested for Thank natural So long, Dave, Midstream, give go don't on transition? and but high – question, fits you. the that maybe to have your guess, of both I net gas INGAA, was target energy view you of for more zero of level decarbonization as I just You could how just in head incoming actually also level. and just high

David Slater

Sure. now. Thanks, the a and question Yes, topical very that's in right Steve. good country

in this January, decade. XXXX of getting So first announced end business we for Midstream net of target a a the by XX% of there the way milestone zero with off, by the

level, be there'll actions of carries to decarbonize lots significant Steve, that that, that say the infrastructure I'd we'll but the natural there So energy around take opportunity very gas. is highest a at

Just in every to frame it up, it we carries about day a America. energy North third of consume the

it's I pathway for system believe decarbonize energy system. opportunity exists the the So a electric and distribution natural on the a successfully distribution energy just is gas as DTE massive grid. same to decarbonized and has

important. So time, I policy capital I that going is that's expect that those to the investments over framework take investments think enable and to creating capital

to the So the to I'm industry XXXX. INGAA that two INGAA, I now ago committed is zero of of behalf kind a weeks a on at aspiration industry announced and conversation net by pivoting the statement

in lower So move new industry definitely direction to and move a participants desire closely to amongst work with carbon the societal there's to just the administration and this requirements all footprint. a

think task a that is I think us deployed call this great investment to across before be broadly. technology, going I we to happen quickly. working allow the the technology again, in that to with create what I'll And now So to lot opportunities on-the-shelf framework, regulators is infrastructure. to right have create the industry of time, the can That's over – the

Steve Fleishman

you. of but I've it to lot save great. I'll for another ups a got Okay, that, follow time. Thank

Operator

go Andrew from ahead. Scotiabank. Your Weisel from next Please question comes

Andrew Weisel

Hey, guys. Good morning, everybody.

Jerry Norcia

Andrew. morning, Good

Andrew Weisel

cost want follow I to on question first My the cuts. up

offsetting of tremendous course a did pandemic your from headwinds and in job improvement. constant usual XXXX the You the

You My is as mentioned XXXX. are being one-time in what's well you those how on your that of to opposed nature? savings latest positions question much sustainable permanent or for thinking it

Jerry Norcia

that you is we to some as the it work Well, the by we in as of learnings in program success a into billion electric but to I'll at plan relates business order XXXX. saw reductions. then that that also did I'll was to pulled result forward the a turn long-term certainly, XXXX lot for strengthens in And our XXXX investments we start, That experienced driven the it in over cost modernization of grid. Ruud, the Dave expect we electric of in EEI, accelerate $X the our

nature, Ruud and reductions one-time those in describe cost of I'll some Dave well. let are some those of Now as

Dave Ruud

Yes, you're right, Jerry.

at initiatives as is implemented additional we always forward normal look in in goal as have did We through going of we consistently As be the we XXXX, to looking at see much that processes, XXXX, can. our to our keep but reductions. we some going costs,

remotely. be had and some we I'm by We some us. had capital, and due our stay more going to and of work that will real to work year working this work things confident of real we're efficiencies delays Some of those, some But with find people of are some learned will we having more in COVID. the people course, one-time. how to

for to and Again So at customers. we're our half more additional ways Jerry we're as cost to of to a continue then take room help be to that what XXXX and that we have saw, can roll in look that serve so said, continue able lot savings. to find need in capital that going trying learned to we probably to somewhere be forward, we able of we what going

Andrew Weisel

Terrific. Okay.

think heard. half, I regulatory annual front, an I the been filer. Then about on historically So you’ve

of cases facing? customers it shift? Could paradigm electric something Now gas. both is this given challenges onetime unique the a you’re and are a so staying rate thing economic out your be for many Or of

Jerry Norcia

certainly, continue customers, will to Well, We do delay the that’s for cases rate target creative long as can. we benefit think ways that to we’ll we look possibly a as to and our that.

exploring the with We to that right do are staff. ways now commission

creative filing, electric as delay our we’re looking more the but a progresses, that rate So even perhaps ways now, that case. to at Right and we’ll on to that’s related year May further. we’re targeting report

but on on ways to to more our customers. on come investments that, reduce of the working So always impact our

Andrew Weisel

a curveball shortages one, supply I’m a here. you last the are all automakers any operations exposure with a and from bit margin. huge of or reduced aware for terms auto But of manufacturing or in impacting that isn’t disruptions you seeing their chip around for chain, Great. headlines One those the customers? well volume

Jerry Norcia

that? thoughts year. our anything year, this further Dave earnings to seen on But Ruud, that’s any our not We’ve guidance this impactful

Dave Ruud

agree, the Jerry. point, this haven’t I At we impacts. seen No.

was overall, the – back pandemic. the load industrial from in of a at outside our customers well has it really key Our few points low come where

we’re yet. impacts those And so have – not we seen

Andrew Weisel

Okay. Terrific. Thank much. you very

Operator

from Sophie from Karp go question Please next ahead. KeyBanc. Your comes

Sophie Karp

Thank Hi. Good for you morning. questions. taking my

Jerry Norcia

Good morning.

Sophie Karp

I guys. questions two have for you,

creative we you be to case, your should similar we what you First, see to Or gas the fairly straightforward? litigation expect like some if to might the approaches gas in electric? case just can measures done recently discuss rate had

Jerry Norcia

pretty meter It’s Yes. we newbuild case replacement expect point straightforward. to about program gas be really program. our rate our main this At and in time, our

really all about infrastructure renewal. it’s So

So we expect it pretty straightforward. be to

Sophie Karp

electricity, of question. secondly, the And a generators of right, high-level and in heating Would and you. bit and the people Texas, affect couldn’t the roles utilities around failed Do failure moving building electric electric Thank with it. the basically dynamic little grid heat situation or a their Got conversation see of can and gas infrastructure mix their homes. in in the forward? you failed electrification sort that

Jerry Norcia

– baseload allow regulated sure market good that can enough long-term good for we the generation such say a deregulated planning be making you that is sources reliable around of we’re What to that making Michigan capacity highly expect market here in and well-functioning have that a conversation planning, I certain Well, about certainly, sure will generation. and there’s I markets. and

So position I in feel really good about our Michigan.

pretty a of there’ll I be markets. think about in robust suitability probably capacity deregulated the conversation states,

Sophie Karp

you. Thank

Operator

from Please Your Mizuho. go Crowdell comes question from next Anthony ahead.

Anthony Crowdell

morning, Jerry. morning, Good Hey, good Dave.

Jerry Norcia

Anthony. morning, Good

David Slater

Anthony. Hi,

Anthony Crowdell

question cost Well with it on of storage? at know, then I related a Or case? is I of in high gas has Hey, to know it how of volatility Congratulations chance on But and of – Midwest just does follow-up. because there a gas? a just first I fab. kind customer that have want Michigan bills? the it’s And natural I off guess, little I really previous follows ramp prices rate also. is impact deferred gas could it, new experienced utility. your of the future the balance the And bills the you’ve my parts of I if deserved. or position that sheet maybe volatility Jeff. other does experienced sit for questions. a ETE guess, to don’t mean, if have Or your customer up some

Jerry Norcia

Anthony. question, Sure. Great

muted was volatility prompt the say then for already that’s much year, enters of country, it I’ll the than usually so the rest in the in XX%. the about terms utility, it’s one. Two, our Michigan XX% was gas then first, the winter, that third fixed more price. it’s in and when So year, And of it XX%;

if we commodity a hedging program, good So have you for will, prices.

impacts So have, was I on this in it Michigan, volatility, will would though our negligible say, muted even customers.

Anthony Crowdell

And Great. of follow-up earlier. little off I guess, the question is a Sophie’s

at about gas maybe a do that’s fuel as bridge describe it talked the Just think investing We I view get about weather, same it. cold just do natural state, leave also community. talked how differently. guess treated or maybe gas, I’ll – that. as to I’m policymakers curious, we’ve or they we you things when share I the guess? in – view different or regulators your view But talk to I LDCs they

Jerry Norcia

Detroit and couple this, of say days got a future And Michigan, our five to our we regulators in State It degrees minus when of degrees. I to tell I’ll view to Well, they minus energy gas and in legislators when here current as ago. speak five status. was to you the fundamental it’s

comfortable. and natural there’s they and sure gas our deliver I warm ability that homes for think very a strong to to appreciation to make businesses stay

highly our our is cold valued and customers in regulators. So climates, our and legislators by by natural gas by

Anthony Crowdell

so much. Thanks Great.

you a Looking with catching forward game wind guys. to

Jerry Norcia

Look to forward well. it you. as Thank

Operator

Your comes Sachs. Goldman Please go David question next ahead. from from Fishman

David Fishman

morning. good Hey,

Jerry Norcia

morning. Good

David Fishman

RNG here. on a Just question

especially Paul think on announce over years. the of the your evolve similar But was has I companies kind LCFS as so far. wondering been on past We’ve couple a pretty kind just you’ve has start market how perspective economics thorough seen of to guys’ tightened. for of seen range of projects, RNG I the

start over returns likely could for I competition to just technology outweighs this So or overall demand carbon just impact time. was low wondering if

Jerry Norcia

And have a seen entrants. unlevered new seeing we’re strong IRRs by still being I pipeline not opportunities. growth our of impacted David, So

the five projects. say order I years. would cash and to feedbacks able in of still find We’re originate to still simple really the strong-returning three are And RNG

David Fishman

just where think And how kind of of P&I? a I the is conservative. around being to of you and a guidance, up it But kind the more most your basis what’s Or when business, of of to approach? Thank bit kind Do of kind of about about RFS I’m five-year guide LCFS one-year conservative also thinking kind just Okay. similar little the – they then ends been wondering guess, you prices? currently trade? the you and your you. tends on both It take

Jerry Norcia

Well, we’re little that the continue in regulators. of several the stable a and space very RFS by And bit – market requirements the LCFS interest a been they market to well that seeing very years. the to California make has volatility market over had defined last advance The attractive. and

took things see we a that. markets. to the see things market will really around with and federal leadership do So needed And continue new and conservative requirements where have to pretty stabilization to and year, And to volume and – trend the that administration of so. certainty think at I we we But of view see we stabilize. that stabilization started the are continue EPA, was starting last we saw more there, it

stabilizing our federal makes as attractive well it So a projects to R&D stable have LCFS a market. strong, quite market as

David Fishman

Trading potentially of about you or term just hedge. provide I Energy can last able the past, projects, contracts, that. That of into something or – or question to in in you five like that years know guys makes sense. the do bit maybe little you talked or… But enter XX these on have longer have a are you’ve And kind some even to of then – much interest it with a

Jerry Norcia

go now ahead. – Right

David Fishman

No.

Jerry Norcia

We’re out far seeing has take – company our been as three as trading contracts years. able to actually

have we a so hedging pretty And program. robust

some contracts open. nature. a fixed-price bit have that we are And longer-term course, leave also bilateral in We then, little of

we’re that’s now. So approaching that market right way the

David Fishman

good all appreciate insights. year. Congrats the I Okay. on a

Jerry Norcia

Thank you.

Operator

comments. we for Norcia the turn that time the have to our I to concludes Jerry call. Q&A like This And back portion of would for final it

Jerry Norcia

saying I’ll during of proud again that thank our XXXX. everyone, close today. delivered look, I’m team extremely us how by for and joining Well, we’ve just you,

healthy to safe. achieve X% target are a our in great positioned well X% everyone and to the morning, stay future. operating hope And We growth earnings I and has

Operator

Ladies and this Thank concludes for once gentlemen, conference participating. you call. today's again

disconnect. now may You

DTE Energy (DTE) 19 Feb 212020 Q4 Earnings call transcript