DTE Energy Q2 2024 Earnings Report

DTE Energy EPS Results

• Actual EPS: $1.43
• Consensus EPS: $1.21
• Beat/Miss: Beat by +$0.22
• One Year Ago EPS: $0.99

DTE Energy Revenue Results

• Actual Revenue: $2.88 billion
• Expected Revenue: $2.65 billion
• Beat/Miss: Beat by +$223.88 million
• YoY Revenue Growth: N/A

DTE Energy Announcement Details

• Quarter: Q2 2024
• Date: 7/25/2024
• Time: Before Market Opens
• Conference Call Date: Thursday, July 25, 2024
• Conference Call Time: 8:30AM ET

DTE Energy (NYSE:DTE) is an integrated energy company headquartered in Detroit, Michigan, that combines regulated utility operations with non-utility energy businesses. Its regulated subsidiaries operate electric and natural gas utility services that deliver generation, transmission and distribution to residential, commercial and industrial customers. The company’s utility segment focuses on maintaining and upgrading energy delivery infrastructure, ensuring reliable service and meeting regulatory requirements in its service territory.

Beyond its regulated utilities, DTE Energy operates non-utility businesses that develop, own and operate power generation and energy-related projects. These activities include development and operation of generation assets, energy marketing and trading, and large-scale energy services for commercial and industrial customers. The non-utility operations pursue a mix of conventional and cleaner generation technologies and offer project development and long-term contracting solutions.

Headquartered in Detroit, the company predominantly serves customers across Michigan through its electric and gas distribution networks, while its non-utility businesses undertake projects and commercial activities in broader energy markets. DTE’s operations encompass customer service, grid management, power plant operation and energy project development, positioning it as a vertically integrated provider of energy delivery and related services.

DTE Energy is governed by a corporate board and senior management team and is publicly traded. The company has communicated strategic priorities that include modernizing infrastructure, enhancing reliability and pursuing cleaner energy solutions across its businesses. Its combination of regulated utility service and competitive energy businesses aims to balance stable customer service with growth from project development and commercial energy activities.

DTE Energy Q2 2024 Earnings Call Transcript

Key Takeaways

• Strong Q2 performance: Operating EPS of $1.43 and $296 million in earnings reinforces full-year guidance and supports long-term 6–8% operating EPS growth target.
• Constructive rate cases underway: Progressing toward favorable outcomes for both DTE Electric and DTE Gas rate filings to fund the $25 billion grid modernization plan.
• Reliability investments ramping up: Deploying 10,000 smart grid devices by 2029, automated reclosers saving over 250,000 customer outage minutes, and completing a five-year tree-trimming cycle.
• Clean energy and storage expansion: Broke ground on a 220 MW battery energy storage system (largest in the Great Lakes), with My Green Power subscriptions at 2,500 MW and ongoing RNG and CCS project development.
• Robust financial position: Maintaining investment-grade ratings with a 15–16% FFO-to-debt ratio, minimal equity issuances, and active debt hedging to support customer-focused investments.

Presentation

[Operator]

Good morning. My name is Eric, and I'll be your conference operator today. At this time, I would like to welcome everyone to the DTE Energy Q2 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Matt Krupinski, Director of Investor Relations. Please go ahead.

[Matt Krupinski, Head of Investor Relations at DTE Energy]

Thank you, and good morning, everyone. Before we get started, I'd like to remind you to read the safe harbor statement on page two of the presentation, including the reference to forward-looking statements. Our presentation also includes references to operating earnings, which is a non-GAAP financial measure. Please refer to the reconciliation of GAAP earnings to operating earnings provided in the appendix. With us this morning are Jerry Norcia, Chairman and CEO, Joi Harris, President and COO, and Dave Ruud, Executive Vice President and CFO. Now I'll turn it over to Jerry to start the call this morning.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Thanks, Matt, and good morning, everyone, and thanks for joining us. I hope everyone is enjoying the summer and staying healthy and safe. This morning, I will discuss how DTE is on track to achieve our targets this year and highlight achievements we have made through the first half of the year as we continue to deliver for all of our key stakeholders. Joi will provide you with an update on our capital investment agenda and the great work we are doing to enhance reliability as we continue to build the grid of the future while continuing to focus on customer affordability. And Dave will provide a financial update and wrap things up before we take your questions. Let me start on slide four.

[Jerry Norcia, Chairman and CEO at DTE Energy]

We had a very strong first half of 2024, and we are in a great position to deliver on our targets across the company this year. Our success is a result of our commitment to deliver for our customers and our communities, and as I've said many times, this starts with the efforts of our highly engaged employees. As I mentioned earlier this year, the engagement of our team was recognized by receiving the Gallup Great Workplace Award for the 12th year in a row. We were also recognized with the Best Employers Award for Excellence in Health and Well-being. This award recognizes companies for their commitment to advancing employee well-being through innovative initiatives, identifying the importance of health equity and an effective culture of employee engagement. I am proud of our team for receiving these awards and being recognized for our outstanding engagement.

[Jerry Norcia, Chairman and CEO at DTE Energy]

This engagement is why I am confident that we will continue to deliver for our customers and our communities. On the customer front, our team has done great work to support our customers through the few storms we faced this year. Providing our customers with safe and reliable service is paramount to our company's success, which is why one of our key focus areas in 2024 is improving our storm restoration process. We have made great progress on that front, as evidenced by achieving some of our fastest restorations for the storms that we have had this year, as we work towards restoring all customers within 48 hours after a storm. We also had a period of extreme heat where temperatures in our service territory hit 90 degrees for six consecutive days last month.

[Jerry Norcia, Chairman and CEO at DTE Energy]

This was one of the longest heat waves that we have had at DTE in the last 20 years. I'm very proud that our system held up extremely well under these conditions, but I'm even more proud of our team's efforts to take care of our customers in a number of ways during this time. We distributed hundreds of fans to nonprofit agencies to keep customers cool and delivered nearly 100,000 bottles of water to 30 community partner agencies across Southeast Michigan. In addition, the DTE Foundation partnered with United Way to provide 500 rides to cooling centers to help keep customers safe, and to complete nearly 3,000 wellness checks for our most vulnerable customers as the heat intensified.

[Jerry Norcia, Chairman and CEO at DTE Energy]

We take pride in supporting the communities where we live and serve, and we are recognized for our service, as DTE was honored to be named to The Civic 50 for the seventh consecutive year. This award, presented by Points of Light, recognizes the most community-minded companies in the nation, and it is a testament to our team to receive this award. I'd also like to highlight the expansion of our Energy Efficiency Academy, which is DTE's workforce development program that supports the growing demand for energy-efficient home repairs in Detroit, while also building a local workforce that further benefits the community. Building on the academy's successful first year, we are expanding with more partners in Detroit, as well as planning an advanced training program in the Grand Rapids area.

[Jerry Norcia, Chairman and CEO at DTE Energy]

This has been a great program to help those interested in working in the clean energy industry, and a majority of the participants have secured full-time employment. Financially, we are in great position to deliver on our earnings targets this year. Our long-term operating EPS growth rate remains strong at 6%-8%, with 2023 original guidance as the base for this growth. We will continue to have a strong balance sheet and credit ratings to support our customer-focused capital investment plan. We remain committed to deliver premium shareholder returns that our investors have come to expect. Importantly, our strong financial health, along with the constructive regulatory environment in which we operate, supports the significant investments we are making for our customers, and it allows us to invest more than the cash we generate from our operations to further improve reliability and transition to cleaner generation.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Again, the ability to invest above our cash flows is only made possible by constructive regulatory outcomes. Let's turn to slide five to highlight some of the achievements across our portfolio. As I mentioned, we are on track to achieve our full year guidance in 2024, and we are positioning ourselves to continue to deliver strong results in 2025, as well as throughout our long-term plan. On the regulatory front, we continue to progress toward constructive rate case outcomes for both DTE Electric and DTE Gas. Our electric rate case outlines the customer-focused investments we need to make to build a smarter, stronger, more resilient electric grid of the future for our customers, and to further our transition to cleaner generation. This filing underpins the next important step in our long-term investment plan to achieve grid reliability and transform to cleaner generation, while maintaining affordability for our customers.

[Jerry Norcia, Chairman and CEO at DTE Energy]

We expect intervener testimony in the electric case tomorrow, and we look forward to working together with all the parties ahead of the scheduled final order in January. At DTE Gas, our rate case filing supports the important investments necessary to continue to renew our gas infrastructure, which will further minimize leaks and reduce costs. We are in discussions with intervening parties prior to a final order scheduled in November. We continue to make significant strides in our reliability efforts this year, and our customers are seeing the benefits of this work. Joi will provide some detail on our progress in this area, but I'll just mention the efforts we are making in automating our electric system. We installed a couple of 100 automated reclosers last year, and we are ramping up the effort this year.

[Jerry Norcia, Chairman and CEO at DTE Energy]

We'll move from the 100s to the 1000s in a very short time as we work to automate our entire system. To put the impact of the reclosers into perspective, the operation of the devices already installed have saved over 250,000 customer minutes of outages this year alone. This demonstrates the significant impact these can make in improving reliability for our customers. To support our advancements in cleaner generation, last month, we broke ground on the battery energy storage system that we highlighted on the Q1 call. This project is a 220-megawatt system at the site of the former Trenton Channel Power Plant, and is expected to be operational in 2026 and will be the largest standalone battery energy storage project in the Great Lakes region.

[Jerry Norcia, Chairman and CEO at DTE Energy]

The project supports our integrated resource plan and Michigan's new statewide energy storage target, both of which align with DTE's net zero carbon reduction goals. We continue to see strong growth in our voluntary renewables program at DTE Electric. Our MIGreenPower program currently has nearly 2,500 megawatts subscribed and nearly 100,000 residential customer subscriptions. At DTE Gas, we are progressing on our gas main renewal program as we continue to modernize the gas transmission system. At DTE Vantage, we continue to advance Custom Energy Solutions, RNG, and carbon capture and sequestration projects. We highlighted the Ford Motor Company Custom Energy Solutions project earlier this year to support Ford's new plant in Tennessee. The project is underpinned by a long-term fixed-fee contract and is scheduled to go into operation later this year.

[Jerry Norcia, Chairman and CEO at DTE Energy]

We also began construction on a RNG project that is expected to go into service in the second half of the year. Let's move to slide six to highlight how DTE is well positioned for growth. Southeast Michigan continues to be a great region for economic development, attracting many large companies that contribute to the progress of our state and its residents. General Motors, Henry Ford Health, and the University of Michigan are among the large companies putting major investments into our service territory, providing significant economic development, including providing thousands of jobs. We continue to collaborate with partners throughout the state to target key business segments to drive further economic growth, particularly in the areas of battery manufacturing, hydrogen, and data centers. As you all know, data center development and the impact of the potential load from these centers has been an important focus over the last year.

[Jerry Norcia, Chairman and CEO at DTE Energy]

DTE is very well positioned to serve data centers. We are in discussions with a number of potential customers on development opportunities and ensuring that these projects are good for all of our customers. The pending sales and use tax exemption legislation in Michigan would lower the cost of operating data centers, and the governor has indicated a great willingness to sign these bills if they come to her desk, which we expect in the fall or subsequent periods. So to wrap up my comments, I'll just say I continue to be very excited about our start in 2024 and how we are well positioned to continue to deliver now and into the future for our customers, our communities, and our investors. Now I'll turn it over to Joi to give some highlights on our investment agenda and reliability improvements. Joi, over to you.

[Joi Harris, President and COO at DTE Energy]

Thanks, Jerry, and good morning, everyone. I'm happy to be here with all of you today and excited for the opportunities that we have in front of us as we continue to make significant investments in our system, investments that are really making a difference for our customers in improving reliability and continuing our transition to cleaner generation. I'll start on slide seven to review our long-term capital plan. Then I'll provide you with some examples of how our commitment to strengthen our grid is really having an impact on our customer's experience. Over the next five years, we are on track to make significant customer-focused capital investments across our businesses, with about 95% of our $25 billion dollar investment slated for our utilities. We are focused on modernizing our grid to ensure we can continue to provide safe, reliable, and affordable energy.

[Joi Harris, President and COO at DTE Energy]

We are also making significant investments to transform the way we produce power as we shift towards renewables and natural gas and away from coal generation. An important part of our clean energy transition is our voluntary renewable program, MIGreenPower, which continues to be the largest green tariff program in the country. Additionally, at our gas utility, we continue our important main renewal work, which strengthens and improves our natural gas infrastructure and further reduces greenhouse gas emissions. DTE makes all of these investments with a sharp focus on customer affordability, using our distinctive continuous improvement culture to drive cost management and savings for our customers. The shift from coal to cleaner energy sources also helps to further reduce O&M costs, and our diverse energy mix helps to reduce fuel costs as well, and allows us to maintain flexibility to adapt to future technology advancements.

[Joi Harris, President and COO at DTE Energy]

Finally, our transition to renewable energy is supported by the IRA, helping us to continue to achieve customer affordability goals and further enhance opportunities for growth at DTE Vantage. Let's move to slide eight to highlight our reliability improvement work and how it's making an impact in improving the customer experience. We are making a lot of progress on building the grid of the future. We are progressing in four major areas as we work on improving reliability for our customers. First, we are quickly transitioning to a smarter grid. As Jerry mentioned, we are adding significantly more technology to our system by installing 10,000 smart devices, effectively automating our entire system by 2029. These devices, or Automated Reclosers, allow us to pinpoint and isolate issues during an outage and reroute power so we can restore many of our customers within minutes while crews make repairs.

[Joi Harris, President and COO at DTE Energy]

Perhaps most important, these devices will automatically de-energize a line when it senses a fault, such as a wire on the ground, helping to keep our customers safe. Secondly, we are aggressively updating our existing infrastructure. We are replacing and upgrading poles, cross arms, transformers, and other pole top and substation equipment. We are making great progress in this area. Last year alone, we inspected and updated our pole top equipment across more than 1,700 miles. Our hardening program in Detroit is a great example of this work. On average, customers experience an 80% improvement in reliability in the first year following hardening. The third focus is to rebuild significant portions of our grid. While updating equipment is certainly important, we are also completely rebuilding the oldest portions of our grid.

[Joi Harris, President and COO at DTE Energy]

I'll give you a few examples of where this work is happening and the significant impact it's having. We are investing over $100 million in two projects on Detroit's east side. These projects involve constructing two substations and replacing approximately 300 miles of overhead and underground infrastructure with new, more durable equipment. We also have an undergrounding pilot in Detroit that continues to move forward. These pilots are critical as we gain experience on ways to improve our processes and bring down the cost of undergrounding. In this pilot, we're doing both gas upgrades and electric undergrounding at the same time to achieve meaningful cost savings and reduce inconvenience for our customers. We also have a number of projects outside of Detroit across our service territory. This work on rebuilding these areas of our grid is having a significant impact.

[Joi Harris, President and COO at DTE Energy]

Customers experience a 90% increase in reliability where we've executed on this rebuilding work. And finally, we remain heavily focused on our tree trimming efforts, as this remains one of the most effective methods to improve reliability. Trees account for half of the time our customers are without power, and in areas where tree trimming is up to date, customers experience significant improvements in reliability. We have trimmed nearly 40,000 miles of trees since 2015, and we expect to have our entire system on a five-year tree trim cycle by the end of next year. So as you can see, we are doing intense, focused work to improve our system for our customers, and our distribution grid plan lays out our journey to building the grid of the future through our necessary customer-focused investments.

[Joi Harris, President and COO at DTE Energy]

With that, I'll turn it over to Dave to give you a financial update.

[Dave Ruud, EVP and CFO at DTE Energy]

Thanks, Joi, and good morning, everyone. Let me start on slide nine to review our Q2 financial results. Operating earnings for the quarter were $296 million. This translates into $1.43 per share. You can find a detailed breakdown of EPS by segment, including our reconciliation to GAAP reported earnings in the appendix. I will start the review at the top of the page with our utilities. DTE Electric earnings were $279 million for the quarter. This is $101 million higher than the Q2 of 2023. The main drivers of the earnings variance were implementation of base rates and warmer weather, partially offset by higher rate base costs. Moving on to DTE Gas.

[Dave Ruud, EVP and CFO at DTE Energy]

Operating earnings were $12 million lower than the Q2 of 2023, driven by warmer weather and higher rate base costs, partially offset by increased revenue from the IRM. Let's move to DTE Vantage on the third row. Operating earnings were $14 million for the Q2 of 2024. This is a $12 million decrease from 2023 due to a combination of some timing and one-time items, primarily in our Custom Energy Solutions and steel-related businesses. We continue to be highly confident in our full year guidance for Vantage. Compared to the first half of 2024, earnings in the second half will be notably higher. This is driven by the shape of earnings for projects in our Custom Energy Solutions and RNG portfolios, and some new projects that come online in the second half of the year.

[Dave Ruud, EVP and CFO at DTE Energy]

On the next row, you can see Energy Trading finished the quarter with earnings of $31 million. This is a $5 million decrease from last year, primarily due to lower performance of the physical gas portfolio. We are continuing to experience really strong results through the first half of the year as we realize strong contracted margins in our physical power portfolio and stronger performance in our gas portfolio. With these stronger contracted margins, we should experience some upside at Energy Trading for the year. However, for now, we are maintaining our conservative guidance for this business. Finally, Corporate and Other was favorable by $18 million quarter-over-quarter due to the timing of taxes, which will reverse through the balance of the year, bringing us within the current full year guidance range for our corporate and other segment.

[Dave Ruud, EVP and CFO at DTE Energy]

Overall, DTE earned $1.43 per share in the Q2. As Jerry said, we had a great first half of the year, and we are well positioned to achieve our targets in 2024. Additionally, we are continuing to work to position ourselves to deliver strong results in 2025 and through our long-term plan. Let's move to slide 10 to highlight our strong balance sheet and credit profile. As Joi discussed, we need to continue to invest heavily into our utilities to improve reliability and move toward cleaner generation. This customer-focused investment is supported by our robust cash from operations, which is shown on our cash and capital guidance slide in the appendix. Due to these strong cash flows, we still have minimal equity issuances in our plan, as we are targeting annual issuances of $0-$100 million through 2026.

[Dave Ruud, EVP and CFO at DTE Energy]

Our long-term financial plan incorporates debt refinancing and new issuances to fund our capital investment plan, and is consistent with our 6%-8% long-term operating EPS growth target. We've eliminated the interest rate risk of our 2024 debt issuances at all-in rates that are better than what we had in our plan. And we continue to manage future issuances beyond 2024 through an active hedging program and other opportunities that mitigate interest rate variability. So, for example, we have eliminated interest rate risk on nearly half of the debt refinancing needs at the parent company in 2025. We continue to focus on maintaining our strong investment-grade credit rating and solid balance sheet metrics as we target an FFO to debt ratio of 15%-16%. Let me wrap up on slide 11, and then we'll open the line for questions.

[Dave Ruud, EVP and CFO at DTE Energy]

Our team continues our commitment to deliver for all of our stakeholders. Our robust capital plan supports our customers as we execute on the critical investments that we need to make to improve reliability and transition to cleaner generation while focusing on customer affordability. DTE is well positioned to serve increased load as opportunities for development continue in our service territory. The 2024 operating EPS guidance midpoint provides 7% growth over the 2023 original guidance midpoint, and we continue to target long-term operating EPS growth of 6%-8%. We are well positioned to deliver the premium total shareholder returns that our investors have come to expect, with a strong balance sheet that supports our future capital investment plan. With that, I thank you for joining us today, and we can open the line for questions.

[Operator]

At this time, I would like to remind everyone, in order to ask a question, please press star followed by the number one on your telephone keypad. Your first question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Hi, good morning.

[Dave Ruud, EVP and CFO at DTE Energy]

Good morning, Jeremy. Hey.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Just wanted to pick up, I guess, on prior conversations with regards to any updates you might be able to share with conversations with hyperscalers or negotiations, and how you see, I guess, the timeline of these negotiations developing, given the background of the Michigan sales and use tax legislation and, you know, I guess lack of clarity on coming to fruition at this point?

[Jerry Norcia, Chairman and CEO at DTE Energy]

Jeremy, I would say the conversations and engagement with the hyperscalers continue. I would say that there's still very strong interest by multiple parties, and they are awaiting the results of the legislative effort. We were targeting there was a target for the legislature to get that done in the spring, but I think the budget deliberations kind of overtook that process. There's still very strong bipartisan support both in the House and the Senate, and the governor still is indicating strong willingness to sign it if it comes to her desk, which we expect to happen sometime this fall and, or the balance of this year.

[Jerry Norcia, Chairman and CEO at DTE Energy]

I think as soon as that happens, I think we'll start to get a little more serious traction on landing some data centers.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. That's very helpful there. And then, just turning to the quarter and some of the results there, was curious in the corporate and other, the, the timing of taxes, if you might be able to, I guess, quantify a bit more the impact there, and should we expect that to kind of, reverse in future quarters?

[Dave Ruud, EVP and CFO at DTE Energy]

Yeah. Hi, Jeremy, this is Dave. Yeah, that, that, the timing of taxes will reverse as we go. This is really an effective tax rate adjustment, so it adjusts the, the consolidated year-to-date income tax expense for what we think will be the annual tax rate at the end of the year, and it does come to zero at the end. So we did see some favorability from that of about $0.10 in the quarter, and that will, that will adjust again as we go through the year.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. That's very helpful. Just one last quick one for me. If you might be able to share any color for the Q2 earnings, how much came from tax equity at Vantage, and how we should think about that, I guess, trajectory here?

[Dave Ruud, EVP and CFO at DTE Energy]

Yeah, there was, there really wasn't anything that was tax-related, ITC or PTC, at Vantage in the, in the Q2. You know, we, I will say we're-- yeah, you can see that we, we have a lot backloaded at Vantage through the year. We're really confident in our full year guidance there. A lot of it is project related that comes through the second half, and, you know, a little bit will be, tax as well in the second half as we go through the, as we go through the year, but we're really confident in our guidance of $1.25-$1.35 there.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. That's really helpful. And just actually one last one, if I could. Energy trading, is there any other incremental color you could provide with regards to the type of activities happening there in U.S., on the outside, and how to kind of model or think about, you know, how that will ebb and flow over time?

[Dave Ruud, EVP and CFO at DTE Energy]

Yeah, you saw in the quarter, and for the year so far, we're off to a really strong start there, and that's driven by really two areas. One is our power FRS portfolio, so these are contracted and hedged positions that we do. And, you know, there is a shape to those through the year, and, you know, we expect that that shape will, it should increase through the end of the year. And then our gas portfolio, we have some structured contracts there as well, and we're able to take advantage of some of those. They're contracted and hedged also. So yeah, we had a good first half.

[Dave Ruud, EVP and CFO at DTE Energy]

We're really about on our guidance for the year right now, but we want to go through the summer, see how that plays out with the weather, and see how it works for the rest of the year. But, you know, as you saw, we did have a very good first half of the year in Energy Trading.

[Jerry Norcia, Chairman and CEO at DTE Energy]

These are multi-year contracts, so we expect some of that, some of those high-margin, high margins that are contracted to continue to provide benefit, sometime into the future beyond this year as well.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. That's very helpful. Thank you for taking my question.

[Operator]

Your next question comes from the line of Shahriar Pourreza with Guggenheim Partners. Please go ahead.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Hey, guys. Good morning.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Morning, Shar.

[Dave Ruud, EVP and CFO at DTE Energy]

Hi, Shar.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Morning, morning. Just real quick on the rate case filing. Obviously, it's in early innings, testimony's tomorrow. The provisions and kind of the mechanisms remain unchanged. Do you feel, I guess, there would be an opportunity for a settlement after testimony, or do the parties once again kind of want to litigate a path? I guess, how are you overall thinking about a settlement at this juncture, whether it's partial or non-unanimous, to help take issues off the table? Thanks.

[Joi Harris, President and COO at DTE Energy]

Morning, Shar. Yes.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Morning.

[Joi Harris, President and COO at DTE Energy]

So we are anticipating testimony tomorrow. If we can get to a contested settlement, our chances of settlement increase, but if not, there are a lot of interveners in this case. Obviously, we, we'd like to settle, but if we don't settle, we feel pretty confident in our ability to receive a constructive outcome regardless. So it's a pretty straightforward case. It's all about the capital we need to invest to improve the reliability for our customers. We hope that the Commission is seeing that in our testimony, and it's pretty strong testimony in that regard.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. Did any of the rate design proposals in the case cause any kind of contention as we're thinking about that settlement path?

[Joi Harris, President and COO at DTE Energy]

Not really. Most of the interveners are picking up on what at least we've seen in the past. There's some interest in just our path forward on our retirement of our plant and then also some another environmental pieces. But generally speaking, there isn't much rate design that is contested in the case.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. Okay, great. And then maybe just a question on Vantage. I mean, obviously, the business mix has changed over the years. Do you kind of anticipate growing the existing platform for services and RNG? Would you lean on one or the other? And as the opportunity sort of for carbon capture, potentially, you know, load services for industrial and data centers increases- ... I guess, how do you, how do you find Vantage repositioning? Is there even a need to look for some optimization there?

[Jerry Norcia, Chairman and CEO at DTE Energy]

Sure. The two most significant opportunities that we continue to pursue are, you know, Greenfield RNG, and we've got-

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Mm-hmm

[Jerry Norcia, Chairman and CEO at DTE Energy]

... a good backlog of those projects. And then secondly, our Custom Energy Solutions, which is sort of behind the fence, industrial installation, where we're, you know, providing cogen services, water services, compressed air services. Those are nice long-term contracts, fixed fee, without commodity risk. Those are the two primary areas of focus. CCS still is an emerging opportunity for us. We've got a number of parties that have committed to working with us contractually, to test the feasibility of carbon capture and storage, and we're in the middle of a handful of those opportunities right now. So more, more to come on that, before it becomes a, you know, a business line that starts to create value.

[Jerry Norcia, Chairman and CEO at DTE Energy]

But, we feel good about it, but, we're also very focused on the first two business lines that I mentioned.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Okay, got it. Sorry, Jerry, just the optimization, is there any need to do some portfolio optimization there?

[Jerry Norcia, Chairman and CEO at DTE Energy]

If we see two things, one is the business growing beyond our 10%. We're very committed to the 90-10, 90-10 mix between utility and non-utility. That would be one potential trigger. And secondly, if there were significant equity needs at DTE, that would be a second trigger to perhaps look at asset optimization and rotation. Right now, we don't, in our current forecast, we, we don't see that need, but, so it doesn't really create incremental value for us to, to rotate assets.

[Jeremy Tonet, Managing Director of Equity Research at JPMorgan]

Got it. Okay, that's pretty consistent. Thanks, guys. Appreciate it.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Thanks, Shar.

[Operator]

The next question comes from the line of Durgesh Chopra with Evercore ISI. Please go ahead.

[Durgesh Chopra, Managing Director at Evercore]

Hey, team. Good morning. Thank you for taking my questions.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Good morning.

[Durgesh Chopra, Managing Director at Evercore]

Good morning, Jerry. Just want to start off on 2024 expectations for 2024. Maybe just can you remind us, where do you sit year to date in terms of weather impacts? I think it was -$0.28 in 1Q, and here it's, it's slightly positive. So maybe just, is it the $0.20, $0.27 net number that we see in the first half, and you have mitigation underway? Maybe just reconcile that for us.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Yeah, we show the weather impact slide. It's in the deck on page 14. You can see at year to date at Electric, we're still -4, and at Gas, - $0.23. But as you know, we build in some contingency for weather throughout the year, and so, you know, we're really confident that we're gonna be able to meet what we need to do for the second half of the year and, you know, hopefully see some good weather, which will allow us to invest some more for our customers in 2024. You know, pull forward some of the investment we need to do for our customers from later years into 2024 and help out even more.

[Durgesh Chopra, Managing Director at Evercore]

Got it. That's helpful. So basically, slight offset to 1Q weather and still on track for 2024 with your sort of contingency measures in place. Okay. Joi, thanks for sharing all the details on the operational things you're doing, vegetation management, et cetera. Just wondering, you know, how's the Liberty Consulting review going? And as you make these operational changes, how is that getting factored into the review study and what to expect there as we await a report in fall here?

[Joi Harris, President and COO at DTE Energy]

Yeah. Thanks, Durgesh. I say that the audit is wrapping up. The auditors have completed their interviews, and they've done field visits. We've gotten positive feedback on our interaction with them. It's been a very collaborative process up till now, and we anticipate that will continue as we get the report in September. The initial feedback is very much in line with, you know, the agenda that we set forward in our plans. We may see some shifts in programming slightly, but generally speaking, we've seen nothing to indicate that there will be any surprises in September.

[Durgesh Chopra, Managing Director at Evercore]

Perfect. Thanks again for the time.

[Operator]

Next question comes from the line of David Arcaro with Morgan Stanley. Please go ahead.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Hey, good morning. Thanks so much for taking my questions.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Morning, David.

[Dave Ruud, EVP and CFO at DTE Energy]

Hey, David.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Hey, let's see. Just wondering if you could give an update on how you're seeing the Performance-Based Rates, potentially shape up, from here, any progress and the direction of that new structure?

[Jerry Norcia, Chairman and CEO at DTE Energy]

Sure. So there's been a lot of, you know, interaction and collaboration with the staff on this PBR process, and I would say we're landing on metrics that we feel are really valuable to our customers. So I think we've got strong alignment on the metrics. And I think the process we're in now, David, is to make sure that we've got strong consensus on the initial targets, and also on making sure that there's symmetry in the targets. So those are the two remaining things that we're working with the Staff and the Commission staff on. So we feel like it's progressing well, the fact that it's lining up quite nicely with things that we think are very important to move for our customers.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Got it. Thanks. That's helpful. And then, maybe on the data center side, wondering if you could, just provide any color or context in terms of how much demand that you're seeing in terms of, the data center pipeline, any quantification that you might be able to offer, and do you think there are characteristics of your service territory of Michigan that could attract those customers, even without the legislation?

[Jerry Norcia, Chairman and CEO at DTE Energy]

Yeah, I would say that, two things, several things that make Michigan attractive. One is, you know, natural disasters are not a part of the Michigan's, repertoire, so I think that makes it attractive. The access to water, fresh water, cool water, and also our climate, being cooler, are all attractive. And of course, our energy, rates and the fact that we've got capacity available that we could offer, immediately, I think makes us, attractive. So those are the attractive features. I think what will make us even more attractive is the, sales and use tax exemption. But there are some aggregators that, already have a sales and use tax exemption that got passed in 2015.

[Jerry Norcia, Chairman and CEO at DTE Energy]

So I think we're seeing some action. We will see some action from them irregardless of the sales and use tax that's really targeting the hyperscalers, if you will. So, more to come on this. You asked about how much demand are we seeing? You know, obviously, there are a lot of big numbers floating around in the industry. We're seeing demand numbers in the thousands of megawatts. So that seems encouraging, and we want to work to landing the very first one. Hopefully, that'll. I believe that the sales and use tax exemption is kinda holding some of that momentum back, but once that gets passed, I think that'll break loose a bit.

[David Arcaro, Executive Director of Equity Research at Morgan Stanley]

Great. Okay, thanks. Appreciate it.

[Operator]

Your next question comes from the line of Michael Sullivan with Wolfe Research. Please go ahead.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Hey there, everyone. Good morning.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Morning.

[Dave Ruud, EVP and CFO at DTE Energy]

Hey, Michael.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Hey, hey, guys. Just picking up on some of these earlier questions. So it sounds like the trading business is tracking better than expected or maybe just being conservative for now, but is there any offset year to date at the other segments? Like, is that weather at the utilities, or has that been offset and it's really a net-net, the entire range is biased higher 'cause of trading, or is there an offset somewhere?

[Dave Ruud, EVP and CFO at DTE Energy]

I'd say we're in a good place across our businesses right now. We did see some challenging weather in gas. We had really cool winter so far and, or a very warm winter so far in gas. So we saw some challenge there, but we're working through that. But overall, we feel good about all of our businesses right now, and we feel good about the opportunity that's gonna give us to invest for our customers here in 2024, as we can pull forward some expenses and do some additional maintenance on our projects or in our lines for our customers.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Yeah, Michael, just to add to that, I would say that, we're feeling like we're going to have a really strong year. And we deferred a lot of non-critical maintenance last year, that we'd like to pull back into the plan for the benefit of our customers, and also for the benefit of creating success in 2025. So I would say in this moment, we're back to our traditional planning process, where, we feel really good about 2024, and, we're looking at what opportunities do we have to eliminate some of the, sort of non-critical maintenance backlog, that eventually becomes critical if you don't get it done.

[Jerry Norcia, Chairman and CEO at DTE Energy]

So we're looking to pull that forward, which will not only benefit this year, but benefit our customers, but it'll also benefit our planning for 2025, which we are deep into at this point in time.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Okay, that makes a lot of sense. Appreciate the color. I think also in the quarter, this was adjusted out of earnings, but the gain on sale on equity investment at Vantage, can you give any more color on what that was?

[Dave Ruud, EVP and CFO at DTE Energy]

Yeah, there was a sale of one of our landfill gas projects, and we got a gain on that, on that sale as we were, exiting one of those projects.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Yeah, we saw value in exiting. It was a partnership that we were exiting, and we saw a good value there, so we took advantage of it.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Okay, great. And then just last one for me is just how you're thinking about the election and what that means for your future planning, mainly with respect to resource planning and maybe some of the tax credits that you're realizing, if anything, could change on the margin there in a Trump presidency, Republican sweep scenario.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Sure. So, great question. You know, you all are aware that last year we had some mandates as it relates to a clean energy standards and also an RPS standard that was passed by the state. Any type of federal, you know, change in politics, I don't think will affect that. We will be mandated and required to achieve the RPS standard as well as the clean energy standard, which drives a significant amount of investment for us. The other fact also is that, you know, we'll require an act of Congress to change the IRA, and it would have to be a very significant majority in order to overcome the fact that a lot of these investments are going into, in our service territory, Republican-dominated territories, and there'll be significant interest.

[Jerry Norcia, Chairman and CEO at DTE Energy]

We see significant interest from those legislators to get the economic development, get the property taxes and the jobs that come with, you know, billions of dollars of investment. So we're seeing, at a local level, really strong support for our solar developments. Permitting is moving quite nicely for us, a lot of community support. So, even though the politics could change, it would have to, the political landscape would have to change drastically in order to make a difference. So just to summarize, the RPS standard and the state mandates will drive the investment, and, if the IRA was to change, it would make it perhaps less affordable, but we'd be looking for offsets. But we view that as a low probability event.

[Michael Sullivan, Director of Equity Research at Wolfe Research]

Thanks so much. Appreciate all the color.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Thank you.

[Operator]

Your next question comes from the line of Andrew Weisel with Scotiabank. Please go ahead.

[Andrew Weisel, Managing Director and Equity Research Analyst at Scotiabank]

Hi. Thank you. Good morning.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Good morning.

[Andrew Weisel, Managing Director and Equity Research Analyst at Scotiabank]

Two operational questions for you. First, on the tree trimming side, you're targeting a five-year cycle by the end of 2025. Where do you currently stand? Where have you been historically? And is there any challenge to getting to that target, or should it be pretty straightforward to get there?

[Joi Harris, President and COO at DTE Energy]

It should be pretty straightforward to get there. We may have some trailing areas that we may have to revisit. We are right now, we've got about 80% on that five-year cycle, so, we're cleaning up some of the areas. We revised our tree trim standard. We found that we had to go back to certain areas because the tree growth happened a lot quicker than we anticipated. So, I think, Andrew, we can anticipate that the five-year cycle will get us back on track, and then we'll go back and revisit again and make sure that those areas that we did trim, that the tree growth stays as we anticipate. We may even expand it even further because we're seeing certain areas, the growth is much higher and more quickly returning than what we had initially anticipated.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Andrew, you'll recall that we got a tree trim surge approved by the commission, where we, you know, took our investment in tree trim from $65 million a year to $200 million a year, about a handful of years ago. Actually, six years ago.

[Joi Harris, President and COO at DTE Energy]

Six years.

[Jerry Norcia, Chairman and CEO at DTE Energy]

You know, that excess tree trim surge is being securitized, which is helping us smooth the impact for our customers while it provides that benefit to our customers over a longer period of time. We do have the financial resources to complete the surge, and as Joi said, we're actually fine-tuning it, and probably we'll keep it going for a while as we go back and take down even more vegetation.

[Joi Harris, President and COO at DTE Energy]

Yeah.

[Jerry Norcia, Chairman and CEO at DTE Energy]

It's having really a positive impact on reliability where we've done it.

[Andrew Weisel, Managing Director and Equity Research Analyst at Scotiabank]

Great to hear. Then, more broadly, Joi, on slide eight, you outlined a lot of those reliability efforts in the four categories. Are all of those efforts and the related spending fully embedded in the five-year CapEx plan, or would achieving some of those require incremental spending above and beyond the $25 billion five-year plan? And how much of that relies on the rate case outcome, both the current one and obviously future cases between now and then?

[Joi Harris, President and COO at DTE Energy]

Andrew, it's all embedded in the plan, and it is contingent on the rate case outcome. We'll hear tomorrow, you know, staff position. We also have the audit, and we hope that, you know, just based on the feedback that we've gotten from the audit, that the auditors were supportive of at least the way we've laid out the plan. Now, there may be some movement between the programs based on their feedback, but generally speaking, the feedback we've gotten from the auditors supports our agenda.

[Andrew Weisel, Managing Director and Equity Research Analyst at Scotiabank]

Sounds great. Thank you so much.

[Operator]

Next question comes from the line of Julian Dumoulin-Smith with Jefferies. Please go ahead.

[Julien Dumoulin-Smith, Equity Analyst at Jefferies]

Hey, good morning, team. Thank you, guys, very much.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Good morning, Julian.

[Julien Dumoulin-Smith, Equity Analyst at Jefferies]

Appreciate it.

[Julien Dumoulin-Smith, Equity Analyst at Jefferies]

Hey, nice to chat with you guys again. Hey, just to come back-

[Jerry Norcia, Chairman and CEO at DTE Energy]

Good to hear your voice.

[Julien Dumoulin-Smith, Equity Analyst at Jefferies]

... on this next. Yeah, thank you. Appreciate it. Just to come back to this nexus of affordability and growing tension between accelerating load growth and obviously the need to prioritize reliability and affordability, how do you think about, you know, as you look at the expanding pie of opportunities, this balance between PPA and self-build, especially in light of the latitude afforded under the energy law? And even in light of what you know today, how do you think about that balance, just as you try to ensure ongoing affordability and a palatable CapEx budget?

[Jerry Norcia, Chairman and CEO at DTE Energy]

So I'll start now, and Dave can add. So when we self-build, we find that we're more competitive, which means we're end up being more affordable for our customers. You know, PPAs with the Financial Compensation Mechanism makes our product more expensive to our customers, so it chews up affordability room. So that's thought number one. Thought number two, from an investor set, from a customer perspective, self-build is much more compelling than PPAs with an adder. Now, secondly, for investors, owning assets provides more value, and I think the EPS value is 2-3x for owning versus PPA. And that's fundamentally driven by the fact that these intermittent resources, you know, the FCM only applies to the output of the product.

[Jerry Norcia, Chairman and CEO at DTE Energy]

So that's what fundamentally reduces the value of an FCM for investors. So that, I'm not sure if that answers your question, Julian, but those are the two thoughts I can offer. Dave, did you want to add to that?

[Dave Ruud, EVP and CFO at DTE Energy]

We do have PPAs built into our plan. We do have some PPAs built into our plan, but, you know, when it comes to our balance sheet can handle the amount of capital that we're investing, and as Jerry says, better for our customers and better for our shareholders to do that.

[Julien Dumoulin-Smith, Equity Analyst at Jefferies]

... Excellent. Yep, sounds like self-build remains the priority here for sure. And then related here, just a small nuance. Can you talk a little bit more about the Custom Energy Solutions and steel-related businesses? Just any dynamics there on an ongoing basis as it pertains to Vantage? I know you've talked a little bit about it, but just to go back on that, that comment.

[Dave Ruud, EVP and CFO at DTE Energy]

Well, we see good opportunities across the Custom Energy Solutions business, in particular, as, you know, we're doing the central plant services for some more, more projects within, within the country. So we have a good pipeline of projects there that we feel we can continue to grow and continue to, to drive. We have the project we talked about last quarter with Ford that is, coming online in two stages this year. Some has come online, and more will come online. The second half will come online at the end of the year, so we feel really good about that, about that business. And then our, our steel-related business is, just a solid performer for us.

[Julien Dumoulin-Smith, Equity Analyst at Jefferies]

Wonderful, guys. We'll speak to you soon. All right, all the best.

[Dave Ruud, EVP and CFO at DTE Energy]

Thanks, Julien.

[Operator]

Your next question comes from the line of Anthony Crowdell with Mizuho. Please go ahead.

[Anthony Crowdell, Managing Director at Mizuho]

Hey, good morning, team.

[Dave Ruud, EVP and CFO at DTE Energy]

Morning, Anthony.

[Anthony Crowdell, Managing Director at Mizuho]

Hey, I have two questions, one of them for Dave. He had previously told me he gets upset without a lot of questions. Just, Dave, I, I'm just curious, when you think about levels of spending have been, you know, maybe at all-time highs, not just DTE, across the industry, more severe spending, you know, more severe storms. Do you ever think about the company has a very healthy credit cushion right now, probably 200-300 basis points on your FFO to debt metrics. Do you ever wonder if that's enough, given where we are right now in this cycle of spend?

[Dave Ruud, EVP and CFO at DTE Energy]

That's a good question, Andrew. Yeah, we do target the 15%-16% FFO to debt. We think it gives us some—you know, it does give us some good headroom to the downgrade thresholds. And, you know, we met with all the rating agencies over the last quarter, and I think they're pretty confident in the level that we're at, too. So we feel good about where we are with our balance sheet and our balance sheet metrics on that.

[Anthony Crowdell, Managing Director at Mizuho]

Great. And then just one follow-up, I think it's kind of to an earlier question. You mentioned a lot of the economic growth on slide six, a lot of opportunity, and then when I look at slide 14, as you highlighted earlier, where you look at the demand growth or the customer growth or load growth for the year, it's trending about 1%. When you get all those economic activities in service, what are you seeing as long-term sales growth?

[Dave Ruud, EVP and CFO at DTE Energy]

We do see it about in that range for, like, our base economic sales growth. What, you know, data centers and how that comes in could play in a little differently. And then when we look out a little bit further, EV load is another thing that could drive some of our residential load up a little more, kind of in the long term as well. But kind of pretty consistent with what we're seeing right now is what our longer-term forecast is.

[Anthony Crowdell, Managing Director at Mizuho]

Great. Thanks for taking my questions.

[Dave Ruud, EVP and CFO at DTE Energy]

Yeah. Thanks for the question, too, Anthony.

[Operator]

Your next question comes from the line of Travis Miller with Morningstar. Please go ahead.

[Travis Miller, Senior Equity Analyst at Morningstar]

Thank you. Good morning, everyone.

[Dave Ruud, EVP and CFO at DTE Energy]

Morning.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Hey, Travis.

[Travis Miller, Senior Equity Analyst at Morningstar]

You answered most of my questions, but just got a couple of little things here. With respect to the rate case, are there any new interveners that either you're seeing file or you expect to file here versus the last rate case or rate cases?

[Joi Harris, President and COO at DTE Energy]

Yeah, there are new interveners in the gas case for sure, and new interveners in the electric case. But as I said before, even with the level of intervention we're seeing now, you know, the MPSC would have to move to likely a contested settlement, and that would increase our chances of settlement. Aside from that, we still feel confident that we can get a constructive outcome regardless. But yeah, a lot of activity in the rate case space, more than we've seen in recent history.

[Travis Miller, Senior Equity Analyst at Morningstar]

Sure. Any way to bucket what those new interveners want or their agenda or what they're contesting or not contesting?

[Joi Harris, President and COO at DTE Energy]

Well, we'll know with certainty tomorrow, for sure.

[Travis Miller, Senior Equity Analyst at Morningstar]

Sure.

[Joi Harris, President and COO at DTE Energy]

But what we've seen in the gas case is some environmental groups, more environmental interests in natural gas. That's generally what we're seeing.

[Jerry Norcia, Chairman and CEO at DTE Energy]

You know, what happened in the legislation last year, there was an increase in intervener funding-

[Travis Miller, Senior Equity Analyst at Morningstar]

Mm-hmm.

[Jerry Norcia, Chairman and CEO at DTE Energy]

and, that has spurred more interveners 'cause there's more money. So I think that's part of the, part of the challenge that we have and, and why there's been so much more activity is that, the funding allowed by legislation, has created much more activity.

[Travis Miller, Senior Equity Analyst at Morningstar]

Very interesting how that works. One other question here. All the discussion about reliability, which obviously making it in the rate cases also, is that the more of a positive in terms of giving you support to get more investment, get more, more spending approved, or are you seeing it more as a negative right now in terms of pushback on potential rate increases? If you could characterize those.

[Joi Harris, President and COO at DTE Energy]

I would say I think we're all aligned in that we want to approve the reliability of the grid. The question becomes, you know, how—what's the best way to do that? And we believe that, you know, that was the purpose of the audit, is to examine and get everyone aligned on how we go forward in improving the reliability near term and then into the future. So I think the audit results will go a long way in building, you know, I'd say alignment and consensus on what the path forward should be.

[Jerry Norcia, Chairman and CEO at DTE Energy]

... Yeah, and I would say that the audit really came as a result of the commission wanting to make sure that we were doing all we could to drive reliability improvements. And so I would expect. I don't believe that this audit will say we should spend less on reliability improvements. I think it will, like Joi said here a few times today, I think it may shift things between different buckets. But overall, I think there'll be a strong endorsement to continue to invest heavily in reliability, especially driven by the age of our system. I think that has become pretty evident in the audit that it requires significant investment, as we are proposing, to improve the quality of that system over time.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay, great. Will those audit results be able to make it into this rate case, or will it be future rate cases?

[Joi Harris, President and COO at DTE Energy]

Well, the audit comes out in September. It can't be a part of the record necessarily, so it probably won't make it formally into this rate case.

[Jerry Norcia, Chairman and CEO at DTE Energy]

But it may influence-

[Joi Harris, President and COO at DTE Energy]

It may influence.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Yeah. As the buckets of investment, perhaps.

[Travis Miller, Senior Equity Analyst at Morningstar]

Okay. Okay, great. Thanks so much. Appreciate the time.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Thank you.

[Operator]

I will now turn the call back over to Jerry Norcia for closing remarks. Please go ahead.

[Jerry Norcia, Chairman and CEO at DTE Energy]

Well, thank you, everyone, for joining us today. I'll just close by saying we're feeling really positive about 2024 as well as our position for future years, and I hope you have a great morning, and stay healthy and safe.

[Operator]

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.

Participants

Executives

• Dave Ruud, EVP and CFO
• Jerry Norcia, Chairman and CEO
• Joi Harris, President and COO
• Matt Krupinski, Head of Investor Relations

Analysts

• Andrew Weisel, Managing Director and Equity Research Analyst at Scotiabank
• Anthony Crowdell, Managing Director at Mizuho
• David Arcaro, Executive Director of Equity Research at Morgan Stanley
• Durgesh Chopra, Managing Director at Evercore
• Jeremy Tonet, Managing Director of Equity Research at JPMorgan
• Julien Dumoulin-Smith, Equity Analyst at Jefferies
• Michael Sullivan, Director of Equity Research at Wolfe Research
• Travis Miller, Senior Equity Analyst at Morningstar