Good day and welcome to the DTE Energy Third Quarter 2015 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Anastasia Minor. Please go ahead.

Thank you, Kyle, and good morning everyone. Welcome to our third quarter 2015 earnings call. Before we get started, I'd like to remind you to read the Safe Harbor statement on Page 2, including the reference to forward-looking statements. Our presentation also includes reference to operating earnings, which is the non-GAAP financial measure. Please refer to the reconciliation of GAAP net income to operating earnings provided in the appendix of today's presentation. We also are now including additional data in the appendix which we have historically provided in a supplemental document. With us this morning is Peter Oleksiak, our Senior Vice President and CFO; Jeff Jewell, our Vice President and Controller; and Mark Rolling, our Vice President and Treasurer. We also have members of our management team with us to call on during the Q&A session. I'd like to turn it over to Peter to start our call this morning.

Thanks, Anastasia, and good morning everyone and thank you for joining us today. Those of you who know me know that I always like to start off with a quick update on my Detroit Tigers. The Tigers looked towards the future at the July trade deadline this year, and [indiscernible] best pitcher, outfielder and closer. With that they slipped firmly into last place by the end of the season. I guess all I can say is, there's always next year and our focus now is on the Red Wings making another playoff run, and I will not be mentioning the Lions or the Pistons on this call. DTE is continuing to have a successful year in 2015. As you know, we raised our operating earnings guidance a few weeks ago at our Analyst Day. I feel very confident that we will be able to comfortably achieve our guidance. We had a very successful third quarter and we expect a solid quarter to finish the year. We also provided a 2016 early outlook during our Analyst Day and I'm confident we can reach our 2016 EPS targets as well. Jeff and Mark will be going through third quarter results in more detail, but before we move on to that, I'd like to do a quick overview of our business strategy as well as some highlights of what's happening at DTE. Turning to Slide 5, Slide 5 provides an overview of the business strategy and investment thesis. Our growth plans for next 10 years at both utilities are highly visible. Electric utility growth is driven by the renewal of our generation fleet and replacing and upgrading the electric distribution system. Our gas utility growth is driven by infrastructure investments, the mainline replacement, pipe replacement and a system expansion to accommodate the increased…

Thanks, Peter, and good morning everyone. I'll be going over quarter-over-quarter earnings results on Page 12, and on Page 13 I will provide more detail into DTE Electric's quarter-over-quarter operating earnings variance. Now turning to Page 12, for the quarter DTE Energy's operating earnings were $252 million or $1.40 per share, and for reference, our reported earnings were $1.47 per share. You can find the reconciliation of the third quarter reported to operating earnings on Page 27. For the quarter, our growth segments operating earnings in 2015 were $75 million or $0.40 per share higher than 2014. The Electric segment was higher by $79 million. This favorability was due to warmer weather, self implemented rates and lower storm expenses in 2015. I'll provide more detail on Page 13. DTE Gas was higher by $5 million. This was primarily driven by reinvestment spend in 2014 and increased revenue associated with the infrastructure recovery mechanism surcharge. Gas Storage and Pipelines earnings were $7 million favorable to the prior year. This increase was primarily due to increased volumes on the Bluestone pipeline and increased investments in our gathering assets. Our Power and Industrial Projects segment was lower by $6 million versus 2014, due primarily to timing of major coke battery maintenance project expenses and a steel related installment sale contract that ended in the second quarter of 2015. Our Corporate and Other segment came in unfavorable by $10 million versus last year. This variance was mainly due to timing of federal and state tax accruals. These items were considered in our year-end guidance. Again, the overall growth segment results for the quarter were $253 million or $1.40 per share. Energy Trading posted a $1 million operating loss for the quarter and economic net income of $14 million. Both the power and gas business…

Thanks, Jeff, and good morning everyone. In addition to the solid earnings results, our cash flow and balance sheet are strong and continue to support our long-term growth plan. Slide 15 lays out our cash flow and CapEx through the third quarter. Cash from operations is $1.5 billion and we saw strong performance across all business units, putting us a little ahead of our plan for the year. We invested $1.7 billion of CapEx through the third quarter, and on the right side of the page you can see the breakout by business unit. DTE Electric is up due to higher operational investments and higher new generation spend with the acquisition of a gas [indiscernible] back in the first quarter, partially offset by the timing of some wind investments between years. And year to date, the non-utilities are on pace with last year. To fund this CapEx program and the refinance maturing debt, we issued $1 billion in long-term debt this year. Let me turn now to Slide 16 and the revised cash flow and CapEx guidance that Peter touched on. As I mentioned a moment ago, we are seeing strong cash flow this year and therefore we are increasing our cash from operations guidance by $100 million. We're also making a small change to our CapEx guidance, and on the right side of the page you can see the breakout of capital spending by business unit. We still expect to spend a little over $1.8 billion at DTE Electric and $280 million at DTE Gas, and we expect our non-utility businesses to invest $350 million for the year or about $100 million lower than the low point of the original guidance. Now this change captures the timing of some of the growth progress upon industrial and will have no…

Thanks Mark. Let me finish the presentation with a quick summary on Slide 19, and then we can open the line for questions. We had three solid quarters so far this year and we are confident that this year's performance will allow us to achieve our 2015 EPS guidance. We also anticipate constructive outcomes this year in both utility regulatory filings as well as the Michigan's energy policy reform. Our balance sheet and cash flow metrics remain strong and our investments in our utility and non-utility businesses support our target 5% to 6% EPS growth going forward. I thank you all for joining our call this morning and I hope to see many of you at the EEI conference in a couple of weeks. Gerry Anderson will be giving a formal presentation on November 10th that will be Webcasted on our Investor Relations Web-site. So we hope you all can join us. Now I'd like to open up for questions that you have, so Kyle, you can open up the line for questions.

[Operator Instructions] We'll take our first question from Michael Weinstein with UBS.

It's actually Julien here. So quick first question, perhaps obvious, given the trailing 12 months, what are you thinking here in terms of the fourth quarter and implied results, it seems perhaps it could even be potentially down year-over-year, is there something about reinvestment, [indiscernible] et cetera, you might imagine?

I'd like to reiterate that we are kind of confident with the earnings guidance that we've put out there. The electric utility in particular last year was in a lean mode. That's really, if you're looking quarter over quarter, kind of a fourth to fourth, that's what you're seeing emptying there.

Got it. So does that actually mean that there is added strength or more of a tailwind that you are reinvesting in fourth quarter into 2016, or perhaps as you just alluded, was in more of a 4Q 2014 phenomenon such that this is more of a normalized pace in 4Q 2015?

It's more the latter, the last year's fourth quarter phenomenon.

Got it, excellent. And then perhaps secondly, just of late any developments on the gathering front with Southwestern?

Our gathering business is going very well, and as you know, our raising of guidance in that segment in particular was with the volumes associated with the gathering with the Southwestern Energy. So the well performance is great, the drilling program continues to be strong in that region and our gathering earnings are flowing nicely there.

Great. All right, I'll leave it there. Thank you.

We'll take our next question from Daniel Eggers with Credit Suisse.

Just on the legislation in Michigan with the hearings done, do you guys have a read in when something can get formalized or resolved between the House and the Senate and vote where this finally gets cauterized, is there something that we can look forward or a schedule that you guys see right now?

It is not a firm schedule, but as I mentioned, the extensive hearing process is done, and as you know, you mentioned that as well. There's some finalization of language that will happen both in the committee and the House and then they'll move it, both the Senate and the House, and from there there'll be reconciliation. We are anticipating that will start happening as early as next month, early next month, but going more likely into the month of December.

So a conference next month between the House and the Senate and a vote in December seems realistic at this point?

Right, yes, that's a possibility.

Okay. And then I guess your second question, when you think about the – it looks like you're going to the idea that Choice has to get a firm capacity kind of somewhere between three and five years, is that something that you guys would look at providing or are you not going to be in the business of offering capacity to those customers?

No, we are not in the business of offering capacity to those customers. We'll offer to our customers.

Okay. What is the year to date weather benefit on that after the good third quarter?

Jeff, if you have that?

Ask that one more time, just make sure we're answering what you're looking for.

How much year-to-date weather benefit have you guys gotten? You gave the quarter, I don't know if you have the year handy.

So for the full year, if you go back to Page 24 in the pack, I think that's what you're asking, so I'll just guide you back there. So the first is – I'm on the left-hand side there in the middle, DTE Electric 2015, you can see what that was for the quarter and we talked about that. And for the year to date, you can see it's at $12 million.

Got it, thank you. I should've [looked it up] [ph] myself.

[Indiscernible] was down negative $17 million for the year.

Okay. And my last question just on the pipeline tap-ins now that you're 1.4 Bcf of potential customers, when do those start converting either into contracts or something more substantial and what should we be tracking other than just kind of these quarterly updates?

That will happen over time as the pipe gets built. That 1.4 Bcf is non-binding but we do anticipate that a number of that will potentially turn into nice investments for us, lateral or gathering couple of opportunities. They are more likely – that will happen once we are done with the construction of the pipe.

Okay. Thank you, guys.

We'll take our next question from Matt Tucker with KeyBanc Capital Markets.

Just wanted to follow-up on the guidance and the full year guidance kind of implying that the fourth quarter would be down year-over-year, you already commented on some reinvestment at Electric. It looks like the non-utility segments, the guidance also implies earnings would be lower year-over-year. Could you talk about what might be driving that or should we kind of expect that the Electric reinvestment could offset some of the earnings there?

The electric utility, I mentioned I'm feeling comfortable with the guidance range we have out there. There was a phenomenon last year fourth quarter around lean. We're in a normal investment cycle this year in the fourth quarter. But our non-utility businesses are performing strong. On a year to date basis, there is strong performance, and if that strong performance continues in the fourth quarter, those businesses will more likely end up in the upper end of those ranges.

Great, thanks. And just hoping you could provide a little more color on the change in timing in the CapEx at Power and Industrial Projects.

Mark, you want to take that one?

Sure. So that as you mentioned is timing related. When we did our original guidance for the year and we provided a range this year on the non-utility businesses, recognizing that those businesses and the timing of the project show-up has some variability. As we are close to the year-end, we have better visibility as to what's going to occur here in late 2015 versus what may occur early in 2016. So it's a timing related item at Power and Industrial. Specifically, if you step back and look at our early outlook for 2016 and our growth plan that we provided at our Investor Day, this has no impact on any of that, it's really the timing item.

Got it. And is there any specific projects that you did highlight there?

I'll add just a little commentary to Mark's comments. Power and Industrial Projects in particular, we do have an acquisition strategy there where if opportunistic we'll acquire small on-site related projects, and they have the tendency to be kind of lumpy in terms of when they show up, and when they do show up – we had one back a few years ago with the Duke project on the on-site project. So there, I don't want to be too concerned. When they do show up, sometimes they show up and they are relatively sizable. We like to have a placeholder in with a capital for that business unit in particular. So it's really just timing related to these small acquisitions related to in the Power and Industrial segment.

Understood. Thanks guys.

[Operator Instructions] We'll take our next question from Jonathan Arnold from Deutsche Bank.

I just wanted to revisit just timing of the legislature. I know you'll lay that when you know the steps, you see it. Are there some deadlines that we need to hit in order for this to be all accomplished in calendar 2015, when do the session end and at what point would we need to see it out of conference, how much wiggle room is there I guess?

It is not a firm schedule. The augment deadline was before they moved to the holiday break and which would be the back half of December, but the momentum we are seeing right now with the hearings being concluded, they said there'll be some tweaking of the language in both the House and the Senate, and then at that point a reconciliation. The good thing is both the House and the Senate, essentially with Aric Nesbitt's move to move a bit closer to where Mike Nofs is at, I see that process hopefully happening relatively quick once it starts.

Okay. Thank you, Peter. That was it.

We'll take our next question from Shar Pourreza with Guggenheim Partners.

Just one question on the decoupler, I know it's a little bit preliminary, but Peter, are you looking for a full decoupler which takes any kind of load out of your earnings mix or sort of more of a partial decoupler that accounts for energy efficiency in DSM?

We'll explore all the options. First is to kind of get that option for the electric utility to have a decoupler in legislation. That's being proposed right now. So we like that to give us that option of flexibility. As we are thinking about it, we really would want it fully focused on the energy efficiency, that's our early thinking at this moment.

Got it. Okay, so you have some potential leverage to macro probably, okay. And then just on the pipe, 1.4 is non-binding, it's a little bit preliminary, but is there any indication that you could reach that to laterals and compressors from a demand side or it's too early?

The overall pipe we are putting in is 1.5 B, that's expandable to 2 B with compression. The major market when this pipe first was put in was Dawn, and Michigan is Michigan, goes from a coal plant to gas plant conversion. So it's really nice. Actually this Ohio market is actually showing up as well that wasn't originally anticipated. We kind of knew that when we placed this pipe, we deliberately placed it in the Northeast Ohio around these industrial centers. So we are hoping that this 1.4 B, a portion of that gets converted over to this industrial load, which then once we [indiscernible] to get a lateral in gathering, but we feel comfortable right now that we'll be able to expand the pipe to meet that. It will be a nice problem to have.

Yes, exactly. Thanks Peter.

We have no further questions in queue at this time. I would now like to turn the call back over to management for any additional or closing remarks.

I'd like to just thank everybody for this morning joining us on the call, and once again we're going to be at EEI and hope to see many of you there. Have a great day.