Cms Energy Corporation · NYSE:CMS
Cms Energy — Investor Presentation (July 2018)
22 slides from Cms Energy's investor presentation, Jul 9, 2018
Slide 1: CMS Annual Update
CMS Annual Update July 9, 2018 FOCUSED ON WORLD CLASS PERFORMANCE
Slide 2: Forward-looking statements and non-GAAP measures
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: Welcome
Welcome . . . Safety Tailboard Agenda: • IRP Patti • Clean & Lean • EV & Autonomous Vehicles PEOPLE PLANET PROFIT • Commissioner Eubanks Discussion • Financial Review Rejji • Wrap-up / Q&A Patti & Rejji . . . and thank you for your support. 3
Slide 4: The Triple Bottom Line
The Triple Bottom Line . . . PEOPLE • PLANET • PROFIT PEOPLE PLANET PROFIT PERFORMANCE . . . world class performance delivering hometown service. 4
Slide 5: Filed Integrated Resource Plan "IRP"
Filed Integrated Resource Plan “ IRP”. . . Overview Clean and Lean File Date: June 15, 2018 No Certificate of Expected Order Date: Q2 2019 Necessity Required Supply < 225 MW Case No.: U-20165 Modular Fully utilize Capital Investment Opportunities: assets • No Change to 5-year, $10 Bn Plan (IRP inclu
Slide 6: Annual Use of Supply
Annual Use of Supply . . . . . . demonstrates waste in the system . 6
Slide 7: Solar's Unique Characteristics
Solar’s Unique Characteristics . . . 9,000 Solar matches peak (MW) system load; 50% EE & DR Programs capacity credit Shave the Peak (Zonal Resource Credits) Potential New Load Economic Development EV Overnight Charging Existing Load Average Daily Solar Load 6:00 a.m. 5:00 p.m. 6:00 a.m. . . . offer
Slide 8: Industry-Leading Climate Goals
Industry-Leading Climate Goals . . . . . . breakthrough thinking for our planet. 8
Slide 9: Protecting Michigan's Environment
Protecting Michigan’s Environment . . . Reducing Carbon Intensity Adding Renewable Energy (Since 2005) 43% Today 2024 2032 2040 50% 0 Renewables Karn Campbell Campbell 1&2 1&2 3 Retirement Retirement Retirement (2023) (2031) (2039) 38% cv 25% -50 ~45% 15% RPS By 2022 ~70% > 90% 0% -100 % '21 '24 '27
Slide 10: Future Capacity Resources
Future Capacity Resources . . . Near-Term Plan Long-Term Plan 1,500 5,000 (ZRC) Customer Savings (ZRC) a ~$30 MM Other Small Battery Existing PPAs and Surplus Load Growth Karn 1 & 2 Solar REP (2023) Plan Campbell 3 Wind (2039) Energy Solar 6,000 MWs Efficiency Karn 3 & 4 (2031) Filer City Conversion
Slide 11: Consumers Energy EV Program
Consumers Energy EV Program . . . Overview Five Components • Three-year program of initial infrastructure 1 Rebate up to $500; no limit on number of rebates Residential Charging investment with estimated program costs of $7.5 million Public / Workplace Charging 2 Rebate up to $5,000 per charger; 200
Slide 12: The Triple Bottom Line
The Triple Bottom Line . . . PEOPLE • PLANET • PROFIT PEOPLE PLANET PROFIT PERFORMANCE . . . world class performance delivering hometown service. 12
Slide 13: Commissioner Eubanks Discussion
Commissioner Eubanks Discussion
Slide 14: Simple, Perhaps Unique Model
Simple, Perhaps Unique Model . . . Plan a EPS Growth 6% - 8% Self Funding: - Cost reductions 2 - 3 pts - Sales (continued economic development & EE) 1 - Other (Enterprises, tax planning, etc.) 2 INVESTMENT SELF-FUNDED 5 - 6 pts Customer Prices “at or below inflation” < 2% _____ a Adjusted EPS (non-G
Slide 15: Customer Investment Plan Evolves
Customer Investment Plan Evolves. . . Large and Aging System Rate Base Growth Electric Gas 7% $21 Bn CAGR $15 Bn 60% 70% 40% 30% 2017 2022 . . . with incremental renewables. 15
Slide 16: Our Entire Cost Structure
Our Entire Cost Structure . . . Cost Components Residential Electric Bills a (current dollars) 100% 100% $106 $100 90% Coal to 80% Down 6% Gas / PPA Fuel and Power Costs 70% 2013 2018E 60% ~70% Residential Gas Bills 50% a O&M Costs 40% (current dollars) $85 Tax 30% Reform Taxes $62 20% Capital Inves
Slide 17: Credit Metrics Maintained
Credit Metrics Maintained . . . S&P / S&P Moody’s Fitch FFO / Average Debt a Fitch Moody’s (Dec. ‘16) (Jun.‘18) (Jul. ‘17) AA- Aa3 A+ A1 19% Consumers A A2 Secured ~18% A- A3 BBB+ Baa1 BBB Baa2 17% BBB- Baa3 < 30% HoldCo Debt BB+ Ba1 BBB+ Baa1 BBB Baa2 CMS Unsecured BBB- Baa3 BB+ Ba1 BB Ba2 Present
Slide 18: Utility Driven, Low Risk Growth
Utility Driven, Low Risk Growth . . . CMS Energy Long-Term Growth Plan Segments: • Needed system upgrades / robust backlog - Utility 5 - 7% • Affordable prices driven by cost controls 0-1 • Largely contracted & utility-like - Enterprises • Contracted generation & renewables • Refinancing high coupon
Slide 19: Consistent Growth Through Recessions and Adverse Weather
Consistent Growth Through . . . b 7% CAGR a EPS Dividend Weather Recession Recession Help _____ _____ Hurt a Adjusted EPS (non-GAAP) b Non-GAAP Cold 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Feb. Cold Mild Hot Warm Mild Cold Summer- Hot Hot Warm Mild Polar Cold
Slide 20: Compelling Investment Thesis
Compelling Investment Thesis Aging Infrastructure Strong Cash Flow & Balance Sheet Diversified Service Territory Affordable Prices Constructive Regulation 20
Slide 21: GAAP Reconciliation
GAAP Reconciliation
Slide 22: Earnings Per Share By Year GAAP Reconciliation
CMS ENERGY CORPORATION Earnings Per Share By Year GAAP Reconciliation (Unaudited) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Reported earnings (loss) per share - GAAP ($0.30) $0.64 ($0.44) ($0.41) ($1.02) $1.20 $0.91 $1.28 $1.58 $1.42 $1.66 $1.74 $1.89 $1.98 $1.64 Pre