Slide 1: Leading the Clean Energy Transformation
Leading the CLEAN ENERGY TRANSFORMATION Third Quarter 2022 Results and Outlook October 27, 2022
Slide 2: Forward-looking statements
This presentation is made as of the date hereof and contains “forward-looking statements” as defined in Rule 3b-6 of the Securities Exchange Act of 1934, Rule 175 of the Securities Act of 1933, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. All f
Slide 3: Investment Thesis
Investment Thesis . . . Industry-leading net zero commitments Clean Energy Leader Diversified Service Infrastructure Excellence through the Territory Renewal a Top-tier regulatory jurisdiction Strong Cash Flow Constructive & Balance Sheet Legislation Affordable Prices Premium total shareholder retur
Slide 4: Expansive Economic Development Efforts
Expansive Economic Development Efforts . . . Electric Gas Combined 2022 New Load Gotion New & Expanding Global EV Battery Load YTD 2022 Manufacturer ~200 MW ~$2,400M investment >80 agreements >2,000 jobs Gotion Hemlock Semiconductor Leading Provider of Polysilicon ~$375M investment ~170 jobs SK Silt
Slide 5: Inflation Reduction Act (IRA)
Inflation Reduction Act (IRA) . . . • Reduces customer costs by >$60M/yr (vs. Plan) • Lowers solar levelized cost of energy in MI by ~15% Supports renewable development • Enhances competitive position (owned vs. PPA) and lowers costs • Bolsters chances to own >50% of 8 GW solar opportunity • Encoura
Slide 6: Confidence in the Outlook
Confidence in the Outlook 2022 Results Amount Commentary YTD Adjusted EPS $2.29 Ahead of plan Q3 Dividend Per Share (DPS) $0.46 Consistent growth 2022 Full-Year Outlook Adjusted EPS Guidance $2.86 $2.87 – $2.89 Guidance raised Annual DPS $1.84 Up 10¢ vs. 2021 2023 Full-Year Outlook Adjusted EPS Guid
Slide 7: Industry-Leading Financial Performance
Industry-Leading Financial Performance . . . Adjusted EPSa +6% to +8% Dividend Weather Recession Recession Help Recession / Hurt Pandemic 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+ Cold M ild Hot Warm M ild Cold Summer- Hot Hot Warm M ild Pol
Slide 8: 2022 Adjusted EPS Ahead of Plan
2022 Adjusted EPS Ahead of Plan . . . Year-to-Date Three Months To-Go 11¢ 11¢ – 13¢ 11¢ $2.65 13¢ 1¢ 8¢ ✓ 11¢ $2.87 – $2.89 (3)¢ (17)¢ – (19)¢ ✓Base rates set for 2022 YTD EPS Results 2021 2022 Reported EPS $2.46 $2.27 YTD a YTD $2.18 Adjustments (0.28) 0.02 $2.29 a Adjusted EPS $2.18 $2.29 2021 Wea
Slide 9: 2022 Planned Financings Complete
2022 Planned Financings Complete . . . Financings Existing Facilities 2022 Plan YTD ($M) ($M) ~$1.7Bb of net liquidity Consumers Energy: 10-yr + 30-yr $250M First Mortgage Bonds $800 $800 $350M $450M (Nov-2023) 3.60% 4.20% CMS Energy: Hybrid / Continuous Preferred None None Contracted Equity (not is
Slide 10: Q&A Thank You! See you at EEI
Q&A Thank You! See you at EEI 10 10
Slide 11: Appendix
Appendix 11 11
Slide 12: Michigan's Strong Regulatory Construct
Michigan’s Strong Regulatory Construct . . . 2021 2022 2023 Integrated Resource Plan (IRP) ✓Jun. 30 : Filed IRP th ✓Jun. 23 : rd Settlement Approved U-21090 IRP U-21090 Electric ✓ Dec. 22 : Final Order $59M nd a ✓Sep. 15 : th b Q1 2023: Updated $292M Expected 9.9% ROE 10.25% ROE Final Order U-20963
Slide 13: Utility Sales Remain Strong
Utility Sales Remain Strong . . . a Weather-Normalized Electric Deliveries (YTD 2022 vs. YTD 2021) 2.1% 2.7%b b 0.9% (1.1)% Residential Commercial Industrial Total Residential Customer Growth Economic Development (5-Yr Avg. Customer Count) Policy Support • $1B of state incentives 105 MW • New energy
Slide 14: Credit Metrics Maintained
Credit Metrics Maintained . . . Consumers Energy S&P Moody’s Fitch Ratings Drivers Senior Secured • Strong financial A A1 A+ position Commercial Paper A-2 P-2 F-2 • Growing operating cash flow Outlook Stable Stable Stable CMS Energy • Constructive return on regulated Senior Unsecured BBB Baa2 BBB in
Slide 15: De-risking Inflationary Pressures
De-risking Inflationary Pressures . . . Near-term Risk Mitigation Episodic Cost Savings Global Risks Countermeasures Year Event Savings ✓ Executed 5-yr union contracts in 2020 2022 Palisades retirement >$90M (>40% unionized) Labor ✓ 95% non-union retention ratea 2023 Karn 1&2 coal unit $30M b retire
Slide 16: 2022 Sensitivities
2022 Sensitivities . . . Full-Year Impact Sensitivity Adj. EPS OCF 2022 Adj. EPS Sensitivities (1% Full Year in Volume) Salesa (¢) ($M) Electric Gas Electric (~37,000 GWh) + 1% + 7 + 27 Residential 4¢ 2½¢ Gas (~304 Bcf) + 1 + 3 + 13 Commercial 2½ ~½ Industrial ½ ~½ Gas Prices + 50¢ + 0 + 60 Electr
Slide 17: Endnotes
Endnotes “severe?
Slide 18: Presentation Endnotes
Presentation Endnotes a Slide 3: UBS Research, 2022 state rankings and D.C. a Slide 7: Excludes discontinued operations a Slide 8: See GAAP reconciliation on slide 20 a b Slide 9: Includes ~$438M equity forwards contracted in 2022 and ~$55M equity forwards contracted in 2020 Includes available revol
Slide 19: GAAP Reconciliation
CMS Energy provides historical financial results on both a reported (GAAP) and adjusted (non-GAAP) basis and provides forward-looking guidance on an adjusted basis. During an oral presentation, references to “earnings” are on an adjusted basis. All references to net income refer to net income availa
Slide 20: Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income
CMS ENERGY CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Unaudited) In Millions, Except Per Share Amounts Three Months Ended Nine Months Ended 9/30/22 9/30/21 9/30/22 9/30/21 Net Income Available to Common Stockholders $ 163 $ 186 $ 659 $ 711 Reconciling items: Dispo
Slide 21: Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income by Quarter
CMS ENERGY CORPORATION Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income by Quarter (Unaudited) In Millions, Except Per Share Amounts 2022 1Q 2Q 3Q Net Income Available to Common Stockholders $ 351 $ 145 $ 163 Reconciling items: Electric utility and gas utility - 11 (*) Tax impact -