Good day and welcome to today's DTE Energy Second Quarter 2016 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to hand the conference over to Barb Tuckfield. Please go ahead.

Thank you, Stephie and good morning, everyone. Before we get started, I would 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 earning which is a non-GAAP financial measure. Please refer to the reconciliation of GAAP net income to operating cost provided in the appendix of today's presentation. With us this morning are Gerry Anderson, our Chairman and CEO; Jerry Norcia, our President and COO; and Peter Oleksiak, our Senior Vice President and CFO. We also have members of the management team with us to call on during the Q&A session. And now, I'll turn it over to Gerry to start this morning's call. Gerard M. Anderson - Chairman & Chief Executive Officer: Well, thank you, Barb, and good morning, everybody. Thanks very much for joining us. I'm going to start with an overview of our results in the second quarter, as well as some key developments of the company over the past quarter. Then, I'm going to turn things over to Peter for a financial update. Then we'll wrap up and take some Q&A. So moving on to slide five, we continue to make good progress on a number of fronts this year. So with a successful first half of the year under our belt, I feel really good about our year-to-date financial results. And based upon those strong results, we're increasing our operating earnings per share guidance. We'll talk a bit more about that in a minute. We also recently increased our dividend for the seventh consecutive year, which continues the over 100-year history of issuing dividends as a company. Rachael Eubanks was appointed by Governor Snyder to serve the remainder of John Quackenbush's six-year term that expires…

Certainly. Thank you. We will now take our first question from Michael Weinstein (20:48) from Credit Suisse. Please go ahead.

Hey. Go Tigers. Good morning. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Good morning. Gerard M. Anderson - Chairman & Chief Executive Officer: Good morning.

First question is about the $3 billion of additional investment from the retirement of coal generation by 2023. That's correct? Gerard M. Anderson - Chairman & Chief Executive Officer: Yeah. The timeframe – so we're going to work through (21:11) process and work through, with our regulators, the phasing of both the retirements and the investment, but we do expect that to play out by 2023. Yes.

Is that part of the $18 billion that you had previously announced for 10 years? Gerard M. Anderson - Chairman & Chief Executive Officer: Yes.

Okay. So that number of $18 billion doesn't change? Gerard M. Anderson - Chairman & Chief Executive Officer: That's correct.

Okay. And on NEXUS, I just wanted to – I think you mentioned this, but could you reiterate the level of interconnect agreements versus the capacity of the pipeline, and also how those interconnect agreements are being converted over to full contracts? Gerard M. Anderson - Chairman & Chief Executive Officer: Yeah. The pipeline is 1.5 Bcf, and the interconnect agreements are 1.75 Bcf. Those interconnects are independent of what we already have contracted on the pipeline (22:00). Maybe I'll hand it over to Jerry Norcia to talk about – probably the process and timing for converting those to contracts. Gerardo Norcia - President & Chief Operating Officer: Sure. Thanks, Gerry. So right now, the pipe is two-thirds full, and the environment, as we see it, is starting to improve significantly in that region, in the production region that NEXUS serves our gas pipes (22:21). So we're seeing renewed interest in terms of discussions from the producers, as well as, we're progressing a series of conversations along the pipeline in Ohio and in Michigan and other markets – in Ontario, as well as other parts of the Midwest, where customers are interested in (22:43) capacity. So we're confident that by the time the pipe goes into service, we will have more market commitment for this pipe (22:50).

Okay. Thanks. And now, hey, one last question. You're going to – you mentioned that you might push off the equity raise this year, but I noticed in the guidance, the share count isn't different. That's obviously just for convention, or...? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Yeah. We are still planning on the $100 million, but we're really monitoring that the summer regular the (23:14) weather, we get additional revenue, also the cash flow is coming into the year. So we are looking at potentially deferring it, the material right now does reflect the $100 million (23:23).

All right. Thank you very much. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you.

Thank you. We will now take our next question from Shahriar Pourreza from Guggenheim Partners. Please go ahead.

Good morning, everyone. Gerard M. Anderson - Chairman & Chief Executive Officer: Good morning, Shar.

So just on the NEXUS, the additional conversations you're sort of having in the Midwest, can you just maybe disclose whether that's with shippers or additional LDC or electric demand? Gerard M. Anderson - Chairman & Chief Executive Officer: I guess, primarily with other LDCs.

Yeah. Gerard M. Anderson - Chairman & Chief Executive Officer: (24:00) Ohio also involves power producers as well.

Okay. Got it. And it's too early to figure out whether this thing can be upsized to a little over 2 Bcf? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Correct. Gerard M. Anderson - Chairman & Chief Executive Officer: Yeah. That will be later. I think step one is, bring it in, get it well contracted for current capacity. And step two then is to take on expansions. And expansions, as we've talked in the past, they always bring good economic value. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: One of the things that we're finding, that I'll add, is the – a lot of the pipelines that are greenfield pipelines, that are proposing to take gas out of this region, are facing significant delays and oppositions. And right now, our pipe is not faced with that. So we feel that we may be one of the first greenfield pipes to the market.

Got it. That's helpful. And then, just on the coal retirements; is there any more upside to that retirement, because even if you shift to the latter part of the decade, you'll still have a little over 3.5 gigawatts of coal, or is that sort of you see that envision within the portfolio? Gerard M. Anderson - Chairman & Chief Executive Officer: So by the end of 2030, I think we'll have everything retired at our Monroe plant. The Monroe plant is the one plant that we invested in scrubbers and SCRs. It's a big plant, it's 3,000 megawatts. But that will be what remains, and essentially all the other coal will be retired and replaced through that plan of renewables and gas that I described.

Okay. That's helpful. And then just lastly, on the growth trajectory, on the earnings standpoint, how should we think about it off the higher base of $5.05? Is it sort of supportive? Are you comfortable at 5% to 6% growth off of $5.05, or still within that $4.93 is the base? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: We're indicating at this point it's off the original guidance. We'll continue to assess 2017 and beyond. But at this point, it's off the original guidance. Gerard M. Anderson - Chairman & Chief Executive Officer: So that's been pretty much our pattern, is that our original guidance, if we exceed, we grow earnings off the original guidance than the prior year. But I guess, I'd just keep pulling you back to actual performance, which has been 6.5%. So I think, our pattern is pretty well established at this point.

Thanks. Solid results. Congrats. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you. I appreciate it.

Thank you. We will now move on to our next question from Neel Mitra from Tudor Securities. Please go ahead. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: Hi. Good morning. Gerard M. Anderson - Chairman & Chief Executive Officer: Good morning, Neel. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Good morning, Neel. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: I had another question on the NEXUS pipeline. You expressed that there had been a lot of support from Michigan, (26:48) Attorney General come out with some opposition. Can you just remind us the process? Does the commission ultimately have to rule on the utility contracts, and when would that be? Gerard M. Anderson - Chairman & Chief Executive Officer: So let me comment on the Attorney General first. If you watch sort of energy discussions and dynamics in Michigan, our rate cases and most things, it gets filed around energy. There's usually a challenge of some sort or another, put out by the Attorney General. You just need to understand whether or not the challenge really is fundamental. But it's still – that's just the way of saying not unusual or surprised (27:32) dynamics. Don, maybe you can talk about timeframe for inclusion. Don Stanczak is here with us. He heads our Regulatory Affairs. He can talk about how the inclusion of NEXUS would play out at the utility (27:46).

So as Gerry indicated in his comments earlier, we've already put NEXUS in our PSCR cost recovery plan. I think it covers a five-year period, and of course, the first cost will actually incur within (28:02) 2017. So the real key will be our PSCR plan in 2017 and the reconciliation where we actually get recovery of those costs. Gerard M. Anderson - Chairman & Chief Executive Officer: And that was a case being reviewed, that I quoted from earlier, where the staff was (28:20) their comments. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: Got it. Okay. And then my second question. Could you just generally comment on what's going on in the Power & Industrial segment? Is it seasonality, because right now, I guess, you're at $38 million of earnings versus $90 million to $100 million for the full-year, and then in the presentation, you commented on maybe some weaker steel offset by more positive REF earnings? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Neel, there's two dynamics happening. Now, one of them you mentioned was the seasonality that will occur with our REF units, actually the first quarter with a little bit lower volumes given the warm weather, winter we're seeing actually reverse coming here in the summer with a hot weather we're experiencing. (29:08) there is back-end loading that will occur with our REF units. We did have some planned maintenance outages. We have wood waste renewable plant so that those planned outages did occur this year in the second quarter. So there is seasonality related to those earnings as well for the planned maintenance outages. We came into the year understanding the depressed steel market (29:32) into plan, and the onset was the REF units, and the volume related to REF, and that's playing out as designed. Gerard M. Anderson - Chairman & Chief Executive Officer: I guess, one comment would be that, just as in the E&P sector, you're beginning to feel the turn there. Same in steel, that there you're beginning to feel the turn in the steel sector. So I think it begins to bode well for 2017 and 2018 as that sector gets some win behind it. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. Great. Thank you. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Thank you.

Thank you. We will now move on to our next question from Paul Ridzon from KeyBanc. Gerard M. Anderson - Chairman & Chief Executive Officer: Hey, Paul.

Good morning. Congratulations on a solid quarter. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you.

Just kind of pick up at DTE Gas. Just wondering how much of that is kind of leaning out the business in response to the first quarter? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: It is. It is basically all of that. You look at the year-to-date results, year-over-year they're relatively flat. We knew going into the year, we're going to have a warm first quarter that did play out, and we plan for the rest of the year to make it up. And the second quarter, the O&M levels, in particular, were down quite a bit that helped offset those first quarter earnings. One thing we're looking at right now given the strength in our Electric utility, and we always like to manage typically on combined utility bases that we essentially will start investing back into the gas utility and getting those O&M levels back to normal levels.

So if we look for the balance of the year at gas, as far as O&M, have you caught up kind of where you want to be? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: We still have some investment we're going to making for the balance of the year. We are still committed to the guidance range as well for that segment.

And then, if you were to expand NEXUS from 1.5 Bcf to 2 Bcf, that's just incremental compression. What would that involve and what's the capital opportunity? Gerard M. Anderson - Chairman & Chief Executive Officer: Jerry, you want to take that? Gerardo Norcia - President & Chief Operating Officer: Sure. It would involve, to get to 2 Bcf a day, would involve some compression and some looping (31:41) on the 36-inch pipe.

And any sense of the capital? Gerardo Norcia - President & Chief Operating Officer: Not yet. That's something that we haven't worked out quite yet. We're trying to get to the 1.5 Bcf first, and then, I think, we'll quickly move to that 1.75 Bcf once the pipeline gets built, and people starts to get interested in more economic expansions.

And then lastly, is there anything going on behind the scenes in Lansing with regards to energy policy and legislation? Gerard M. Anderson - Chairman & Chief Executive Officer: So we continue to work this summer with some of the principles. I think what's likely come fall is that there will be activity again in the Senate. Kind of running out of time there with all the dynamics in the legislature between plants and roads and Detroit schools and things. So I think, there will be activity in the Senate. And then there'll be a chance that something could get passed in the Senate in the session in September, but we'll see. And then, I think, everybody will watch the election, and see what the election dynamics mean for the Michigan legislature, with the possibility that we would pick back up and pass legislation in the lame duck session at the end of the year. So if legislation is going to pass this year, would be in the lame duck. I guess I'd keep reminding folks that this is not so much a financial discussion, in fact it's not a financial discussion, really doesn't affect our five-year plan. But it is an energy reliability discussion. And at some point or another, we need to get – we need to be clear on who is building power plants for 10% of the market, and right now the answer is, nobody. And until we get policy in place that ensures that somebody does it, there's risk of reliability issues for the state. So if it doesn't happen this year, it'll happen at some point when it becomes clear that we need to take care of that.

Thank you for the update. Gerard M. Anderson - Chairman & Chief Executive Officer: You're welcome. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Thanks, Paul.

Thank you. Ladies and gentlemen, we'll now take our next question from Steve Fleishman from Wolfe Research. Please proceed.

Yeah. Hi. Good morning. The higher guidance for 2016 for the midstream segment, I might have missed this, but can you just explain what's driving that for the full year guidance? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Some of that – we are seeing a strong earnings coming across the multiple segments and sub-segments in it, and projects within that. It's tightening the guidance, pulling up that bottom end of the range. So we are seeing strong results for the year, and so we're feeling comfortable now of pulling up that bottom end of the range. Gerard M. Anderson - Chairman & Chief Executive Officer: What it doesn't include, Steve, is the increased drilling activity that we now expect. So I think (34:38) for example (34:40) calls, they're now back drilling again. They have been completing ducks (34:45) and they continue that, but we'll be drilling again in our region. And so that has the potential to help with some strength for the balance of the year. But as Peter said earlier, and particularly – it particularly sets up well for next year.

Okay. But, you noted that it does not include Southwest most recent announcement. Gerard M. Anderson - Chairman & Chief Executive Officer: Correct.

Okay. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: (35:13) would be upside to this year.

Okay. And then, one of the areas you've talked about for growth at P&I is co-generation. So I'm wondering if there's any update on new opportunities there. Gerard M. Anderson - Chairman & Chief Executive Officer: I would say that the portfolio discussions there on co-generation is as full and interesting as it's been in years. And we don't have one to tell you about that's popped yet, but I think we all feel that, out of that portfolio discussions, we're going to have some that do play through. So we hope to be able to give you a positive update sometime over the next six months.

Okay. Thank you. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you, Steve. I appreciate it.

Thank you. We move on to our next question now from Brian Chin from Bank of America. Please go ahead.

Hi. Good morning. Gerard M. Anderson - Chairman & Chief Executive Officer: Hey, Brian. Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: Good morning, Brian.

Just piggybacking off, the Swinn (36:17) question. Is there a sense of sensitivity that you can give? We've seen how many rig announcements Southwestern has announced over the last few days here. But is there a sense of sensitivity that you might be able to help us calibrate a little bit? Gerardo Norcia - President & Chief Operating Officer: We've seen two rigs move into the area that we're operating with Southwestern. So that's a very encouraging sign. So our expectation is that they'll continue to complete the ducks, as well as drill new wells with those two rigs. Gerard M. Anderson - Chairman & Chief Executive Officer: And when you say sensitivity, you're talking about upside this year and what it means for next year. Is that what I'm hearing?

That would be helpful. Yes. Gerard M. Anderson - Chairman & Chief Executive Officer: Yeah. I think that what we probably ought to do is, let our team get a better sense for kind of the pace of completions, and what we're seeing there put a fence over that (37:10). Maybe we can be clear about what we see in terms of impacts this year and next, maybe on the next call.

Great. And then, just going back to the... Gerard M. Anderson - Chairman & Chief Executive Officer: (37:20) I don't think we played it all the way through.

Understood. And then, just going back to the equity issuance question. So you gave a little bit more clarity on the equity issuance thoughts this time. Can you talk about, for the $200 million to $300 million equity issuance for the next two years to three years, should we be marginally shading our thought process on 2017 and 2018 as well, or do you still feel comfortable with the $200 million to $300 million in equity issuance over the next two years to three years? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: I'm still feeling comfortable with the $200 million to $300 million in the next two years to three years. It really does relate to the amount of capital spend we're spending at both our utilities and our non-utility business. So (38:05) we really want to maintain the strong balance sheet, thus set us up nicely. It's good even in this period of time having a strong balance sheet, so it's $200 million to $300 million until we see other way.

Excellent. Thank you very much. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you.

Thank you. As there are no further questions in the queue, I will hand back to the speaker for any additional or closing remarks. Thank you. Gerard M. Anderson - Chairman & Chief Executive Officer: We had Gregg Orrill. Did he sign off? We had heard Gregg wanted to come in with a question.

He removed himself from the queue. Thank you. Gerard M. Anderson - Chairman & Chief Executive Officer: Removed himself. Well, great. Well then, we're out of questions.

Sorry for that. He just came back. Sorry for that. He just moved back to the queue. I will take his question now if you wish. Gerard M. Anderson - Chairman & Chief Executive Officer: Pretty good.

Perfect.

Thanks Gerry.

(38:59) is open, please.

Two quick ones. On the DTE Electric variance analysis for the quarter, there was a negative $8 million around rate base and other. What was that, was that bonus depreciation? Peter B. Oleksiak - Chief Financial Officer & Senior Vice President: No, it's standard actually (39:21) depreciation on the new capital spend come again in property tax (39:27).

I got it. Okay. And then on the PSCR, when are you looking for the outcome on that? And are there any other – I guess, we've talked about the drivers in general. Is there anything else that you would point out that's noteworthy there? Gerard M. Anderson - Chairman & Chief Executive Officer: On the PSCR case?

Yeah. Gerard M. Anderson - Chairman & Chief Executive Officer: Okay. I'll have Don answer that as well in terms of when that will play out.

So in terms of the timing, I'd expect the commission order later this year, split (39:58) into next year. And again, as Gerry indicated earlier, having support from Michigan Agency for Energy and committee chairs of the legislature, all that bodes well for a good result (40:18). Gerard M. Anderson - Chairman & Chief Executive Officer: We've spent a lot of time talking to the Energy committee chairs, the MEDC, the Michigan Economic Development Corporation, and the agent, the administration, about NEXUS. So they kind of get how it fits into the gas supply picture here in the state is the state (40:35). Both we and consumers are transitioning off a lot of fuel supply from coal to gas. So they've taken the time to understand it. I think the letters of support, the statements of support are really based upon their belief that this is good for the customers, most importantly good for economic development and the state as well.

Okay. Thank you. Gerard M. Anderson - Chairman & Chief Executive Officer: Thank you. Gerard M. Anderson - Chairman & Chief Executive Officer: I think, with that, we are done with questions. So I would just reiterate what I said at the outset. Six months in we're off to a really good start financially and otherwise. So we look forward to giving you another positive update in three months. And thanks very much for joining us this morning.

Thank you. Ladies and gentlemen, this does conclude today's conference call. Thank you for participating. You may now disconnect.